Industry Overview

 

5. INDEPENDENT MARKET RESEARCH REPORT Independent Assessment Df the Piling, Foundation and Construction Industry for Infrastructure and Buildings in Malaysia
The following is an Independent Assessment of the Piling, FDundation and Construction Industry for Infrastructure and Buildings in Malaysia prepared by Vital Factor CDnsultlng Sdn Bhd (Vital FactDr Consuiting) for inclusion in the prDspectus of Ikhmas Jaya GrDup Berhad (herein together with all or any Dne or more of its subsidiaries will be referred to as Ikhmas Group or the Group) in relatiDn to its listing on the Main Market of Bursa Malaysia Securities. 1. BACKGROUND AND BUSINESS ACTIVITIES OF IKHMAS GROUP 1.1 Background • Ikhmas Group’s principal business activities are in engineering and construction, where they are invDlved in piling and foundation works, bridge construction, building construction and Dther civil works. Over the years, the Group has established itself as a bore piling specialist in Malaysia.
• To reflect the main revenue streams for Ikhmas Group, the focus of this repDrt is on the piling, foundation and construction industry for infrastructure and buildings in Malaysia.

 

1.2 Overview of the Business Activities of Ikhmas Group (Prepared for inclusion in the Prospectus)
o ~~~:,;:~:’~~~e~~o~~~;TING 4 June 2015 The BDard Df DirectDrs Ikhmas Jaya GrDup Berhad Unit 621, 6th FIDDr, BIDCk A, Kelana Centre PDint, ND. 3, Jaian SS7/19, Kelana Jaya, 47301 Petaling Jaya, Selangor Darul Ehsan.
Dear Sirs and Madam, • Piling and foundation works, which form the largest revenue contribution of Ikhmas Group, is commonly required when constructing above ground structures including, amDng others, buildings, towers, elevated roads and bridges. Piles function as foundation tD support above ground structures. Most of the piles used today and especially for large structures and high-rise -, I Above Ground ~(Superstructure) Below Ground (Substructure) Vital Factor Consulting Sdn Bhd (Company No.: 266797vn V Square @ PJ City Cenlre (VSQ) Block 6 Level 6, Jalan Utara 46200 Petaling Jaya SeJangor, Malaysia Tel: (603) 7931-3188 Fax: (603) 7931-2188 Email;enquiries@vilalfactor.com Website: WW’N.vitatfacior.com bUildings are made of concrete. Piling involves placement of piles, either built in-situ or driven into the ground until the piles are standing firmly on solid rock or some other hard layer of material. 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d)
• There are two general methods of piling, displacement and replacement. Displacement piling uses piles that are driven into the ground, thus displacing the soil to make room for the piles. Replacement piling firstly uses a boring machine to extract the soil out. Then a skeletal reinforcement cage made from metal bars is placed down the bored hole. Wet concrete is then poured down the bored hole and left to set.

• Most of the piling and foundation works undertaken by Ikhmas Group are replacement piling, primarily bore piling. Ikhmas Group also constructs retaining walls, which is part of foundation works. Additionally, Ikhmas Group undertakes construction of basements, which is considered foundation works as it requires construction of retaining walls.
• Ikhmas Group also undertakes construction of buildings, including residential, institutional and public amenity buildings. Residential buildings include low-rise and high-rise residential bUildings, institutional buildings such as police training centre, and public amenities inclUding elevated railway stations. In some cases, when Ikhmas Group is responsible for constructing above ground buildings, it also undertakes piling and foundation works.
• Ikhmas Group is also involved in the design and construction of bridges. The latest bridge designed and constructed by Ikhmas Group was the Prai Swing Bridge in Penang.

2. OVERVIEW OF THE CONSTRUCTION INDUSTRY 2.1 Industry Structure • The overall Construction Industry consists of three sectors namely bUiiding construction, civil engineering construction and specialised construction. The Construction Industry, through the use of labour, machinery and equipment converts raw materials in the form of building materials, to various forms of bUildings, infrastructures and structures.

_ Jkhmas Group operates in all tl1e ebovEl sectors Ikhmas Jaya Group Berhad Page 2 0’45 Industry Assessment 131 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING · Creating Winning Business Solutions 00 Notes: (1) Inctudes commercial, industrial, leisure, institutional and public amenity buildings;
(2) Includes bndges, elevated highways, tunnels and airport runways:
(3) Includes water, gas, sewerage, telecommunications and power systems;
(4) Includes refineries, harbour, ports, marinas, dams, dykes and outdoor sports facilities;
(5) Include scaffolding services and bricklaying services.

• Building construction refers to the physical construction of residential and non-residential buildings and it includes new works, repairs, additions and alterations as well as erection of pre-fabricated buildings or structures on the site. Operators involved in this sector are responsibie for converting or assembling raw materials in the form of building materiais such as cement, concrete products, bricks and steei sections, bars and wires into various forms of buildings, through the use of labour, machinery and equipment.
Ikhmas Group is involved in bUilding construction including construction of residential, commercial, institutional and public amenity buildings.
• Civil engineering construction refers to the construction of physical structures and naturally built environment commonly used for public facilities and amenities. These include roads, railways, bridges, dams, seaports, airports and water, gas, sewerage, telecommunications and power systems.
Ikhmas Group is involved in civil engineering construction inclUding construction of roads, bridges, water and gas pipeline as well as sewerage treatment plant.
• Specialised construction encompasses construction of parts of buildings and civil engineering works without responsibility for the entire project. It is usually specialised in one aspect common to different structures, requiring specialised skills or equipment, such as demolition, piling and foundation work, concrete work, bricklaying, scaffolding and others. Additionally, it also inciudes installation of all kinds of utilities as well as building completion activities such as glaZing, plastering, painting, floor and wall tiling, carpentry and others. Most commonly, specialised construction activities are carried out under sub-contract to main contractors.

Ikhmas Group is involved in specialised construction mainly in piling and foundation works. 2.2 Construction Activities • Some of the main services directly relevant to the construction sector include the following: Engineering and architecture; Land and quantity surveying; Geotechnicai engineering; Earthworks; Piling and foundation works; Structure/building erection; Mechanical and electrical works; Civil works; Built environment (landscaping); Others.

5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating VVinning Busine65 Solutions ® 2.3 Type of Construction Products • There are three distinct types of construction as depicted in the diagram below:
StructuresInfrastructure

Buildings o /kf,m£1S Group Involved in these types of construcrion • Construction of bUildings is focused on physical buildings commonly used by people, such as residential, commercial, industrial, leisure and institutional buildings. Some of the types of buildings are as foliows:­
Residential buildings including terraced houses, semi-detached houses, detached houses, flats, apartments and condominiums; Commercial buildings including shop units, offices and shopping complexes; Industrial buildings including factories and warehouses; Leisure buildings including hotels, motels, serviced apartments, resorts and clubs; Institutional buildings including hospitals, educational institutions and police barracks; Public amenity buildings include railway stations, sports stadium, museums and community centres.

• Construction of infrastructure is focused on the building of structures and facilities to enable an economy to operate effectively and efficiently, and to facilitate community living, development and advancement Some of these structures include the following:­
Street, road, highway, railway, bridge and tunnel; Airport, seaport, harbour, jetty and hangar; Utilities such as water supply system, sewerage system, telecommunications, power grid, reservoir, hydroelectric dams, water pipeline and gas pipeline; Social infrastructure or public amenities such as recreational park, stadium, sporting facility and public parking space.

• Construction of other structures includes monuments, ferries wheel, offshore oil and gas platforms and silos.

 

5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING (g; Crealing Wnning Business Solulions 3. OVERVIEW OF THE PILING AND FOUNDATION INDUSTRY 3.1 Piling and Foundation Work • Piling and foundation work, sometimes also known as substructure construction, involves construction activities below ground level so as to provide adequate and safe support for structures above ground level such as buildings, bridges and elevated roadways, and raiiway tracks.
• Fundamentally, piles are the foundation that supports the above ground structure. As such, piles or the foundation should be strong enough to support the weight of the upper structure and the maximum applied loads, and remain relatively stable over a long period of time when subjected to environmental factors like strong wind, earth tremors, soil movements and effects of underground water. As such, piles are driven or built in-situ into the ground such that the piles stand on solid rock or supported by other structures or the surrounding soil.
• The foundation of a structure is designed to transmit the load of the structure to the supportive rock or other structure or surrounding soil. There are several types of foundation structures as depicted in the following diagram:

 

3.1.1 Shallow Foundation • Shallow foundation is used when surface soils are sufficiently strong and solid to support the imposed loads. The construction of shallow foundation is deemed to be simple as it does not require much expertise and is inexpensive as it requires little soil excavation. Typically. shallow foundation is used for landed residential buildings or any structures with iight loads. Shallow foundation includes spread footing foundations and maUraft foundations. Spread footing foundation is an enlarged block of reinforced concrete slab at the bottom of a single column or bearing wall that spreads the applied structural loads over a sufficiently large soil area. Usually, each coiumn and bearing wall has its own spread footing and it may be built in different shapes and sizes to accommodate individual needs such as square spread footing (or pad foundation) for single
Ikhmas Jaya Group Berhad Page 50f45 Industry Assessment 134 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING ,@ Creating Winning Business Solutions columns and continuous spread footing (or strip foundation) for load­bearing walls. It is Ihe most common type of shallow foundation used due to its low cost and ease of construction. MaUraft foundation is a large flat concrete slab, heavily reinforced with steel, which supports a number of columns and walls in its entire structure or a large part of the structure. Typically, this foundation system is only considered when the area of the spread footings exceeds about 50% of the gross area of the building. 3.1.2 Deep Foundation • Deep foundation is used to carry and transfer the load of a structure through a material or stratum with inadequate bearing, sliding or uplift capacity to a firmer stratum that is capable of supporting the load without detrimental displacement. Generally, deep foundation is used when unsuitable soils are present near the surface to support heavy design load such as high rise buildings. Deep foundation is also used to support structures built over water or lateral loads such as bridges, jetty, elevated roadways and elevated railways. Deep foundations are classified into piles and caissons. 3.1.2.1 Pile Foundation • Pile foundations are simply
End-bearing Pile Friction Pile a series of columns, designed to transmit surface loads to low lying soil or bedrock. Piles are long and slender columns which are made out of materials such as wood, steel, reinforced concrete, pre-stressed concrete and composite (combination of different materials in the same pile). Most of the piles used today and especially for large and high-rise buildings or structures are made of concrete. Generally there are two types of piles used to support surface load. The first type is called end­bearing piles where the ends of the piles sit on solid rock or hard layer of soil to provide eventual support to the surface load. The second type is called friction piles, where the piles are driven deep into the soil such that the sides of the pile in contact with the soil provide sufficient friction for the piles to support the surface load without sinking any further. Friction pile is used when solid rock or hard layer of soil is too deep. In most cases, a combination of end-bearing and friction piles are used to provide support to surface loads.
• Pile foundations consist of a group of piles connected to a pile cap. The pile cap, a large concrete block cast on the head of a group of piles, distributes the applied load to the individual piles which in turn transfers the load to the bearing ground.

 

Ikhmas Jaya Group Berhad Page 6 0’45 Industry Assessment 135
5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating Winning Business Solutions @. • Depending on the soil condition and structural requirements, there are a variety of methods and special equipment used for piling installation. There are three common types of pile installation methods:­(i) Driven piling method;
(ii) Jack-in piling method;

(iii) Bore piling method; Ikhmas Group undertakes all the above three types of piling methods. However, it specialises and does mostly bore piling as it is a highly specialised work, with fewer operators able to undertake bore piling compare to the other two methods. (i) Driven Pile Foundation Driven piles, also known as displacement piles, Driven Pile are installed by impact hammering, vibrating, or pushing into unexcavated soil to a design depth or resistance using some form of hammer. HammerThese hammers can generally be divided into two groups, nameiy impact and vibratory. impact hammers may be lifted manually or automatically by steam, air or diesel, and may also be single or double-acting. Meanwhile, vibratory hammers are electrically or hydraUlically powered. It uses vibrations to drive the pile into the ground. Vibratory hammers are commonly favoured among industry operators due to various advantages such as low noise emission, easy pile handling, faster pile installation and have an additional usage for removal of piies. Driven piles are commonly pre-casted in a yard Spun Piles and subsequently brought to site and driven into the soil. These types of piles are pre­manufactured from timber, steel, reinforced concrete, pre-stressed concrete, spun or composites. The most common materials used for piles are steel and concrete due to their strength and are long lasting in nature. Piles can be selected to meet the specific needs of the structure, site and soil condition, budget, availability of pile materials and capabilities of local contractors. Driven pile foundations are considered environmentally friendly as it does not produce any spoils from removal of soils and therefore are not exposed to potentially hazardous or contaminated materials. This also makes it cost effective as it does not incur additional expense for site clean-up. On the other hand, driven pile foundation usually causes noise and vibration when piles are being driven, which causes nuisance and possible damage on surrounding environment and structures. Due to such circumstance, driven pile foundation is discouraged in dense urban areas where surrounding environment is sensitive to the disturbances. Driven pile is normally used for medium loaded structures such as medium rise apartment, factories and bridges with normal span.
5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTlNG . Creating Winning Business Solutions . iftj (ii) Jack-in Pile Foundation Jack-in piling system is a modern technique by which pre-manufactured piles are hydraulically jacked into the ground as displacement piles. This method uses static force (dead weight) to push and insert piles into the ground. The popularity of jack-in foundation system especially in urban areas is due to their relatively lower noise and vibration compared to driven pile method. Jack­in pile foundation also provide other advantages such as faster construction rate, better quality control, less pile damage and cleaner site conditions as it does not require the use of stabilising liquid or drilling flUid typically used for bored pile foundation. On the flipside, jack-in piling system has its drawbacks such as the requirement of a relatively strong platform to support the large and heavy machinery and a generally larger working area to install the piles. Furthermore, jack-in piling system is limited to certain pile size and it is unable to penetrate harder layers or boulders as compared to bore piling system. (iii) Bored Pile Foundation Bored piles, generaily Step 2: A considered to be replacement Step1:A skeletal metal Step 3: piles. Bored piles are vertical hole reinforcement Concrete is is bored to cage is poured downconstructed in-situ that is the required lowered down the hole andconstructed on the specific depth the bored hole allowed to set spot that piles are required to be placed. Bored piles are formed by boring or excavating a hole into the soil to the required depth. Then a reinforcement cage made of metal rods is lowered into the hole, after which wet concrete is poured and left to set.
Bored piles can be constructed using crane mounted or track mounted hydraulic drilling rigs as well as specially designed machine equipped with buckets and grabs. To ensure soil stabilisation during the boring process, temporary or permanent casings are installed by vibrators or oscillators to support the sides of bored walls. Stabilising mud such as bentonite suspension is sometime used as well. Bore piling method offers considerable fleXibility in pile lengths and diameters to suit varying ground and soil condition. Furthermore, this method produces little noise and vibration which minimises disturbance to adjacent piles or structures. Bored pile foundation also has its setbacks as it is more costly and slower in construction compared to other piling methods. Additional costs are incurred for disposal of spoils while the process of casting piles on site requires longer time. Normally, bore piling is used for foundation of tall buildings or massive industrial complexes, elevated highways and railway tracks, large bridge over ravine and body of water, and other large superstructures.
5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING · Creating Winning Business Solutions iF.) Another pile foundation system is micropiles, which is similar to bored piles except that the piles are smaller in diameter (typically less than 300 mm). Micropiles are commonly used as additional support to existing structures that are experiencing higher loads than expected or used to stop piles from sinking due to settlement. Micropiles are also used In difficult to access sites or sites with limited working space. 3.1.2.2 Caisson • Caisson (also known as pier) Is a /Caisson -………”.
prefabricated hollow elongated box or cylinder with an open bottom with either an open or closed top. The box is sunk into the ground and workers would get into the box and excavate the soil in the box. Thus the box acts as a preventive wall from materials falling into the cavity as workers dig a hole to accommodate a pile. As such, caisson piles are similar to bored pile, except caisson piles use humans with the aid of small machine and equipment to dig a hole while bored piles used large machinery to bore a hole. • Caisson is most often used in the construction of bridge piers and other structures that require foundation beneath rivers and other bodies of water. 3.1.3 Other Foundation Works 3.1.3.1 Retaining Wall • Retaining walls are structures used to retain soil. rock or other materials in a vertical condition. As such, they provide a lateral support to vertical slopes of soil that would otherwise collapse into a more natural shape. Retaining walls are used in a wide variety of civil engineering applications inclUding embankment stabilisation, construction of basement walls, underpasses or tunnel approaches, in-ground tanks and other buried structures.
• Retaining wall systems which are commonly used for deep basement construction are:

Contiguous bored pile wall Is Top-Down View constructed using closely spaced Reinforced Pile Specified Spacing bored piles (Virtually touching each other or with specified spacing in between); Secant pile wall is constructed using Top-Down View intersected bored piles where primary Primary Pile Secondary Pile piles (which are usually reinforced) are (reinfo~~~) ‘\.. \,installed first. The secondary piles are then constructed In between primary piles once the latter gain sufficient strength;

 

Ikhmas Jaya Group Berhad Page 90f45 Industry Assessment 138 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating \Ninning BU,siness Solulfons ®. Diaphragm wall is constructed by excavating a series of rectangular panels to form a continuous wall and it is filled with reinforced concrete; Cross-Sectional View Concrete poured in \ Slurry pumped out
Cutter Soil Mix (CSM) wall is similar to a diaphragm wall with the exception that it uses a technology where cement slurry is mixed with existing soil in-situ and allowed to harden. The process utilises two sets of cutting wheels that cut the surrounding soil while at the same time blend injected cement slurry into the existing soil to form hardened rectangular panels. Cross-Sectional View
Soil nail wall is constructed by inserting steel reinforcement bars (nails) into the soil and anchoring them into the soil stratum;
5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating WInning Busine6s Solutions 19 Soldier pile wall is constructed using vertical steel piles with horizontal lagging (timber sheeting); Steel ‘H’ Piles Timber Steel sheet pile wall is constructed by driving steel sheet piles vertically into the ground to support lateral pressure. • Other types of retaining structures include, among others, gravity, cantilever, anchored earth and mechanically stabilised earth (reinforced earth) walls.
• Ikhmas Group is able to undertake a wide range of retaining walls including contiguous bored pile, secant pile, CSM, soldier pile and steel sheet pile walls.

3.1.3.2 Basement Construction • Basement construction is sometimes incorporated as part of piling and foundation works as it requires excavation of soil to various depths and retaining walis have to be bUilt to prevent the surrounding soil from collapsing into the excavated area. Basement construction is also a highly specialised work as it is commonly carried out deep below ground in adverse conditions like existing ground water, mud and limited working space. Significant engineering consideration is required to build a safe retaining wall using the appropriate wall system, as well as method of construction taking into consideration soil support, sub-soil condition, structure of basement as well as layout requirement for the entire bUilding.
• Construction of basements incorporates various methods of preventing the surrounding soil from collapsing into the excavated area. Depending on conditions, various types of retaining walls, for example contiguous bored pile wall, diaphragm wall or secant pile walls, are constructed.
• Once the retaining wails are constructed, there are two methods of constructing the basement:

Bottom-up method where soil is excavated to create a cavity for the construction of the basement. Top-down method where the ground floor level is constructed first. Thereafter, soil is excavated below the ground floor level to create a cavity to construct the next level down. This process continues until it reaches the desired depth. This approach enables the construction of structure above ground to be carried out concurrently with the structures below ground, which would reduce the time for construction. • Ikhmas Group is able to undertake the construction ofbasements.

Ikhmas Jaya Group Berhad Page 11 of 45 Industry Assessment 140 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) Actual  Forecast  8%  7.4%  6%  4%  2%  0%  2010  2011  2012  2013  2014  2015.
OVITAL FACTOR CONSULTING . Creating Wnning Business Solutions .
(I{) 4. MACROECONOMIC INDICATORS 4.1 Economic Growth in Malaysia Malaysia’s Real GOP Growth Notes: e;::;estimafes (Source: Bank Negara Malaysia)
• Overall, Malaysia’s key economic indicator in terms of real GOP grew at a compound annual growth rate (CAGR) of 5.4% between 2010 and 2014 with growth recorded every year during this period. In 2013, the Malaysian economy grew at 4.7% driven by continued strong growth in domestic demand, underpinned by robust private sector activity. Private consumption was supported mainly by favourable employment conditions and wage growth while private investment was supported by capital spending in the mining, services and manufacturing sectors.
• The more moderate overall growth performance in 2013 was largely contributed from improvements in the external sector. Demand from the advanced and regional economies were slower in the first half of 2013 leading to an overall decline in real exports during the year. However, real imports continued to expand throughout 2013 arising from the sustained growth in domestic investment and consumption, which contributed to the contraction in net exports.
• During the first quarter of 2014, the Maiaysian economy grew by 6.2% where growth was fuelled by stronger expansion in domestic demand as well as turnaround in net exports. Net exports recorded growth as exports of goods and servkes outpaced the growth of imports. Additionally, in the second quarter of 2014, the Malaysian economy registered a stronger growth of 6.4% supported by higher exports and continued strength in private domestic demand. Real exports of goods and services grew at a faster pace while growth of real imports of goods and services moderated, resulting in a significant improvement in net exports. Furthermore, positive growth from construction, manufacturing, services, agricultural and mining sectors was attributed to the growth in the second quarter of 2014.

5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING _ Creating Wnning: Bl.!sine6s Solutions ® • In the third and fourth quarter of 2014, the Malaysian economy expanded by 5.6% and 5.8% respectively, mainly supported by growth in domestic demand from private sector consumption and investment, and continued positive growth in net exports of goods and services. With strong growth evident throughout 2014, the Malaysian economy grew at 6.0% for the full year in 2014. (Source: Bank Negara Malaysia).
• During the first quarter of 2015, the Malaysian economy grew by 5.6% where growth was contributed by strong domestic demand primarily from the private sector. The strong domestic demand was partially offset by the negative contribution from net exports during the first quarter amid a decline in growth of commodity exports and resource-based manufactured exports. (Source: Bank Negara Malaysia)
• For 2015, the Malaysian economy was initialiy projected to grow between 5.0% and 6.0% back in 2014 but subsequently revised to between 4.5% and 5.5% in early 2015 amidst the weak performance of global oil prices. Nevertheless, ali economic sectors of the Malaysian economy ied by the services and manufacturing sectors are expected to continue expanding aibeit at a more moderate pace. The revised GDP growth projection was derived based on the economy matching closely to its potential output, which refers to estimation of total GDP that can be produced assuming ali resources are fuliy utilised. (Source: Bank Negara Malaysia)

4.2 Construction Sector • The performance of the construction sector, which is a key indicator of a nation’s development, has an impact on the local economy and directly affects operators that are involved in the Piling, Foundation and Construction Industry. The construction sector is commonly associated with having a strong multiplier effect on the economy. This is because each construction project will require its own set of raw material, semi-finished and finished goods and use of machinery and equipment as weli as skilied, semi-skilied and unskilied labour. Real GOP Growth of the Construction Sector Actual  Forecast  20%  18.6%
2010 2011 2012 2013 2014 2015e
Note: e=estimates (Source: Bank Negara Malaysia)
5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING . ‘. Creating Wnn;ng BU,siness Solutions (It • The construction sector in 2013 grew by 10.9% driven by robust expansion in the civil engineering, residential and non-residential sub-sectors. The civil engineering sub-sector continued to expand albeit at a slower pace foHowing the completion of major infrastructure and oil and gas related projects such as the Second Penang Bridge, Sabah-Sarawak Gas Pipeline and Sabah Oil and Gas Terminal. Besides these projects, ongoing projects such as Klang Valley Mass Rapid Transit Sungai Buloh-Kajang Hne (KVMRT Line 1), Light Rail Transit (LRT) extension line, and Tanjung Bin and Manjung power plant were the key drivers of growth in the civii engineering sub-sector in 2013. The residential sub-sector was contributed by high rise and high end properties in Klang VaHey, Penang and Johor while a pick-up in commercial and industrial projects contributed to the non-residential sub-seclor.
• In 2014, the construction sector grew further by 11.6%. During the first quarter of 2014, the construction sector grew by 18.9% and this was attributed to an expansion in the residential sub-sector with the construction of high-rise projects in the Klang VaHey, Penang and Johor. This was supported by a stronger growth performance in the commercial and industrial as weH as civil engineering sub-sectors within the overaH construction sector. On-going projects in the civil engineering sub-sectors such as the KVMRT Line 1, LRT extension line, Tanjung Bin and Manjung power plants, and the expansion of the North-South Expressway remained as the key drivers of growth for this sub-sector. (Source: Bank Negara Malaysia)
• In the second quarter of 2014, the construction sector recorded a more moderate pace of growth of 9.9% foHowing the exceptionally strong growth in the previous quarter. The growth in the second quarter was driven mainly by the residential and non-residential sub-sectors. The residential sub-sector was supported by construction activities of high-end properties in Johor and Klang VaHey. Growth was also supported by the non-residential sub-sector where construction activities of offices and retail buildings, factories and institutions of higher learning were active. In addition, rail and utility projects such as the KVMRT Line 1, LRT extension and Tanjung Bin power plant supported the civil engineering construction sub-sector. (Source: Bank Negara Malaysia) .
• In the third quarter of 2014, the construction sector continued its growth at 9.6% driven mainly by the residential and non-residential sub-sectors. The residential sub-sector continued to record firm growth attributed by construction of high-end properties in the Klang Valley, Penang and Johor, while on-going construction of offices and retail projects and storage facilities contributed to the growth in the non-residential sub-sector. Meanwhile, new and existing infrastructure projects contributed to the civil engineering sub­sector in the third quarter of 2014.
• The construction sector grew at a more moderate pace of 8.7% in the fourth quarter of 2014. Similarly, the growth was mainly contributed by the residential and non-residential sub-sectors. Growth from residential sub­sector was supported by development of mass-market and affordable housing segments while non-residential sub-sectors saw higher construction activity for industrial and commercial bUildings. On the other hand, the civil engineering sub-sector in the fourth quarter was weaker as most large infrastructure projects are nearing its completion.
• During the first quarter of 2015, the construction sector grew by 9.7% which was mainly supported by growth in the residential and non-residential sub-

 

5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING A””Creating Winning Business Solutions ,. sectors. The residential sub-sectors were underpinned by construction of both mass and high-end market properties. The expansion of the non­residential sub-sectors was supported by construction activity for industrial and commercial buildings. The civil engineering sub-sector also recorded moderate growth during the first quarter supported by large infrastructure projects in the utility and transportations segments. • For 2015, the construction sector is projected to grow at a more moderate pace at 10.3% following several years of robust growth, due in part to lower housing approvals and property launches in the residential SUb-sector. Nevertheless, sustained growth is projected for the non-residential sub-sector driven by higher construction activities for commercial and industrial properties. Furthermore, existing and new civil engineering projects will continue to provide additional support to the construction sector. 5. DEMAND AND SUPPLY CONDITIONS • The performance of the Piling, Foundation and Construction Industry is interdependent on the overall performance of the construction and property development industry. As such, the following section analyses the overall demand and supply conditions of the construction sector in Malaysia by examining the value of construction work completed as well as construction projects awarded.
• Additionally, this section will cover the overall supply and demand conditions of the property development industry in Malaysia by examining existing stock and supply for properties that will be coming on-stream into the market.

5.1 Construction Work Completed 5.1.1 Types of Construction Activity Value of Construction Work Completed in Malaysia Value of Construction Work Completed in Malaysia, by Types of Construction Activity 40CAGR (2010-2014) = 14.0%150 40% 25.5%
32.3 / .~–,,-~.,.t2.7% 12.8% 5 7o/g/J ~==-;;:
1.~:.~_~ __~ “,· 102.5 ‘2_ 100 0% c .2 ~ ~20 §. 12 ·40%” “‘ 50 l 5.01 2010 2011 2012 2013 2014 • ReskifmUal” (CAGR: 25.5%) GNon·Residential…. (CAGR: 6.1%)·8_o._V·.JL-=-o==2c::o=’o==::2c.:o1::’=~_2c.:0’::2==::20=’~3==2:::0c.:’4’___….J_Value -Growth Rate _Civil Engineering (CAGR: 20.0%) uSpecial Trnde (CAGR; -2.9%)
ARefers to buifdings; Notes: (1) Ali construction works completed referred to in this section covers ali main contractors with project value of RM500, 000 and above and registered with CIDB.
(2) Special trade refers to construction of paris of buifdings and civil engineering works without responsibility for the entire project. It is usualiy specialised work applied across different structures or buifdings or projects, requiring specialised skilis and/or equipment.

(Source: Depariment of Statistics) 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING .. Creating Wnning Bvsiness Solutions ® • Construction activities in Malaysia have been vibrant since 2010 with value of construction work completed growing at a CAGR of 14.0% between 2010 and 2014. In 2014, the value of construction work completed grew by 12.8% to RM102.5 billion largely attributed to the ongoing non-residential building and civil engineering construction activities whereby the former grew by 17.1% to RM34.3 billion and the latter grew by 1.2% to RM32.7 billion.
• In 2014, construction of residential and non-residential buildings represented 63% of total construction works in Malaysia. Residential building construction in 2014 were mainly driven by high rise and high-end properties in Klang Valley, Penang and Johor while non-residential building construction were driven by a pick-up in commercial and industrial projects (Source: Bank Negara Malaysia).
• In 2014, civil engineering construction constituted 32% of total construction works completed in Malaysia. These include, among others, the development of Floating Liquefied Gas 1 Project (FLNG 1) and Sabah Ammonia -Urea Plant (SAMUR) projects, and electricity power plants in Manjung and Seberang Prai, the ongoing KVMRT Line 1, LRT extension line, expansion of Kuantan Port, extension of DUKE, construction of West Coast Expressway and Central Spine Road from Bentong to Kuala KraL (Source: Ministry of Finance)

Value of Construction Work Completed in Malaysia, by Types of Construction Activity Based on First Quarter of 2014 and 2015 Growth Q1 Q1 Rate 2014 2015 %j Value of Construction Work Completed in Malaysia …… 24,973 28,741 15.1 By types of construction activity:­Residential BUilding.. . . 7,202 8,606 19.5 Non-Residential Building . 8,052 10,006 24.3 Civil Engineering . 8.399 8,753 4.2 Speciai Trade . 1,320 1,376 4.2 All units in RM Million except percentages: ‘Total does not add-up due to rounding: Notes: (1) All construction works completed referred to in this section covers all main contractors with project value of RM500, 000 and above and registered with GlOB.
(2) Special trade refers to constnuction of parts of buildings and civil engineering works without responsibility for the entire project. It is usually specialised work applied across different stnuctures or buildings or projects, requiring specialised skiiis and/or equipment.

(Source: Department of Statistics) • In the first quarter of 2015, the value of construction work compieted in Malaysia amounted to RM28.7 billion. This represented a double digit growth by 15.1% compared to the corresponding quarter in 2014 of RM25.0 billion. Notably, residential and non-residential sub-sectors in the first quarter of 2015 recorded double digit growth compared to the corresponding quarter in the preceding year. Residential sub-sector was supported by construction activities for both mass-market and high-end market properties. Growth in value of non-residential construction for the first quarter of 2015 was driven by industrial and commercial buildings. Ikhmas Jaya Group Berhad Page 16 of 45 Industry Assessment 145 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating Wllflmg Busine63 Solutions ~k) • Meanwhile, the value of construction work done for the civil engineering sub­sector recorded moderate growth supported by utility and transportation projects. Special trade sub-sector also recorded growth during the first quarter of 2015 which was supported by construction activities such as piling, earthworks, electrical and system installation as well as building completion and finishing works. 5.1.2 Construction by Project Owner Value of Construction Work Completed in Malaysia, by Project Owner and Types of Construction Activity I CAGR 2010-14 2010 2011 2012 2013 2014 (%j Private Sector ……………………. 30,475 40,369′ 53,022 63,199 72,696 24.3 By types of construction activ/ty:­Residential Building…………… 10.631 14,747 19.625 23,581 28,296 27.7 Non-Residential Building ……. 12,022 14,544 19,386 22,619 27,334 22.8 Civil Engineering ………………. 4,640 7,768 10,948 13,827 13,090 29.6 Special Trade …………………… 3,182 3,309 3,063 3,172 3,976
5.7 Public Sector …………………….. 30,317 23,889 27,645 27,676′ 29,850 (OA) By types of construction activity:­Residential Building…………… 1,677 1,309 1,243 1,382 2,221 7.3 Non-Residential Building ……. 15,070 10,672 8,095 6,684 6,981 (175) Civil Engineering ……….. 11,103 10,536 17,256 18,474 19,599 15.3 Special Trade …………………… 2,467 1,372 1,051 1,135 1,049 (192)
Growth 01 01 Rate 2014 2015 (% Private Sector ……………………. 18,118′ 19,671′ 8.il By types of construction activity:-
Residenlial Building…………… 6,709 8,029 19.7 Non-Residential Building …… 6,471 7,991 23.5 Civil Engineering ………………. 3,880 2,667 (31.3) Special Trade ………. …………. 1,057 983
(7.0) Public Sector …………………….. 6,855’ 9,070 32.3 By types of construction activity:­Residential Building…… 493 577 17.2 Non-Residential Building ….. 1,581 2,015 27.5 Civil Engineering …… 4,519 6,085 34.7 Special Trade …………………… 263 393 49.5
5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d)
All units in RM Million except percentages; ‘Total does not add-up due to rounding; Notes: (1) All construclion works completed referred to in this section covers all main contractors with project value of RM500,OOO and above and registered with GlOB.
(2) Special trade refers to construction of parts of bUiidings and civii engineering works without responsibility for the entire project. It is usually specialised work applied across different structures or buiidings or projects, requiring specialised skills and/or equipment.

(Source: Department of Stalistics) • The private sector is the main driver of construction work in 2014. Between 2010 and 2014, the private owned construction projects recorded strong growth with CAGR of 24.3%. In 2014, based on the contribution of private owned construction projects to the value of construction work completed of RM72.7 billion, the majority of works completed was channelled to the construction of residential and non-residential building representing 38.9% and 37.6% of private sector construction works respectively. Notably, the ongoing ETP projects as well as the five economic growth corridors initiated by the Malaysian Government are the main factors in attracting higher private investment activity.
• Meanwhile, public owned construction projects declined at a compound annual rate of 0.4% between 2010 and 2014. In 2014, the majority of the public owned construction works completed was channelled to civil engineering construction representing 65.7% of public sector construction projects. This include, among others, projects from Tenaga Nasional Berhad’s expansion in power generation and transmission system and Prasarana Malaysia Berhad’s (formerly known as Syarikat Prasarana Negara Berhad) investment in the extension of Kelana Jaya and Ampang LRT lines (Source: MinistlY of Finance).
• Private owned construction projects continued to be the main driver of construction works in the first quarter of 2015 representing 68.4% of total construction works completed compared to 72.6% in the corresponding period in 2014. In the first quarter of 2015, both private and public owned construction projects recorded growth by 8.6% and 32.3% respectively compared to the corresponding period in 2014.
• Notably, all pUblic owned construction projects recorded double digit growth in the first quarter of 2015. Growth of pUblic owned residentiai projects were mainly attributed to the construction of several Government related housing projects such as housing projects by Syarikat Perumahan Nasional Berhad and National Housing Department (JPN).
• As the economy continue to grow, more private investment activities took place and developers embarked on new construction projects. This is in line with the Government’s aim to push the private sector as the main driver of the economy.

5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) o~::~~:n~~:?~e~~~~~L TING ® 5.1.3 Construction by Location of Project Value of Construction Work Completed by Location of Project (State) j CAGR i 2010-14 2010  2011  2012  2013  2014 1  (‘!oj  MALAYSIA  60,792A  64,256  60,667  90,675A  102,547A  i  14.0  Selangor  11,514  15,062  18,159  22,365  25,189 I I  21.6  Federal Territories·  8,541  9,162  11,325  14,381  17,288  I  19.3  Johor  8,143  7,851  10,386  12,639  17,004 I  20.2  Sarawak  5,811  5,299  7,713  8,036  7,564  6.8  Penang  3,987  4,544  5,282  5,340  6,174  11.6  Sabah  5,884  5,924  7,362  5,832  6,164  1.2  Perak  2,631  2,634  4,470  5,995  5,566  20.6  Pahang  3,188  2,858  3,357  4,230  4,990  11.9  Negeri SembiIan  2,798  3,133  3,160  3,628  4,309  11.4  Terengganu  2,641  2,254  2,502  2,966  2,991  3.2  Melaka  1,771  1,785  3,149  2,224  2,117  4.6  Kedah  2,092  2,123  2,351  1,997  1,838  (3.2)  Kelantan  1,274  1,202  1,168  927  960  (6.8)  Perlis  518  427  283  314  394  (6.6)
Growth Q1 Q1 Rate 2014 2015 (‘!oj MALAYSIA 24,973 28,741 A 15.1 Selangor 5,970 7,555 26.5 Federal Territories * 4,303 5,144 19.5 Johor 3,994 4,794 20.0 Sarawak 1,649 2,207 33.8 Penang 1,424 1,414 (0.7) Sabah 1,430 1,466 2.5 Perak 2,105 1,600 (24.0) Pahang 1,090 1,406 29.0 Negeri SembiIan 1,138 952 (16.3) Terengganu 723 725 0.3 Melaka 468 561 19.9 Kedah 412 517 25.5 Kelantan 154 294 90.9 Perlis 113 105 (7.1) All units in RM Million except percentages; ATotal does not add-up due to rounding; ‘includes Kuala Lumpur, Putrajaya and Labuan Notes: (1) All construction works completed referred to in this section covers all main contraclors with project value of RM500, 000 and above and registered with CIDB. (Source: Department of Statistics) 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating Wnning Busine5S Solutions ® • The value of construction works completed in all states and federal territories in Malaysia recorded growth between 2010 and 2014, except for Kedah, Kelantan and Perlis.
• Selangor continued to record the highest value of construction work done between 2010 and 2014 growing at a CAGR of 216%. In 2014, Selangor recorded RM25.2 billion of construction work done or 24.6% among the states and federal territories in Malaysia. This was followed by the combined Federal Territories of Kuala Lumpur, Putrajaya, and Labuan which recorded RM17.3 billion of construction work done. Johor was the next largest contributor to the value of construction work done with RM17.0 billion. The contribution of these two states and three federal territories accounted for more than 50% of the total value of construction work done in Maiaysia in 2014. Most of the mega construction projects such as, among others, KVMRT Line 1, LRT extension, Iskandar Malaysia and Tanjung Bin power plant are located in these two states and three federal territories.
• Among the states and federal territories in Malaysia, Selangor recorded the highest growth rate between 2010 and 2014 with CAGR of 21.6%.
• In the first quarter of 2015, Selangor maintained its position as the state which contributed the highest value of construction work done representing 26.3% in Malaysia, followed by the combined Federal Territories of Kuala Lumpur, Putrajaya and Labuan, and Johor.
• The value of construction works completed in all states and federal territories in Malaysia recorded growth in the first quarter of 2015 compared to the corresponding period in 2014, except for Penang, Perak, Negeri Sembilan and Perlis.

5.2 Construction Work Awarded Total Volume of Construction Projects Awarded Total Value of Construction Projects Awarded GAGR (2010-2014) = 13.2% 240 12,000 CAGR (2010*2014) = -0.4% 50%
50% 1BO 0% ~ 9.000 ‘~•a. ‘0 ~ 6,000 3,000 _Value –Growth Rate_Volume -·-Growth Rale
Note: Total volume and value of construction projects awarded are based on information provided by contractors to CIDB as at 31 March 2015 and figures are subject to change due to late notification. (Source: Construction Industry Development Board Malaysia) • The total volume of construction projects awarded decreased at a compound annual rate of 0.4% between 2010 and 2014. However, the vaiue of construction projects awarded increased at a CAGR of 13.2% during the same period. The value of construction projects awarded in 2012 increased by 28.3% to RM127.6 billion. Among the projects awarded in 2012, majority 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating Wnrling Business-Solutions ® of the contribution came from seven mega infrastructure projects each with contract value equal and more than RM1.0 billion which totalled to RM19.2 billion. Most of the projects were Entry Point Projects (EPP) (Refer to Section 11.4 ofthis report for further information on EPP) , as follows: IProjects Awarded Location Underground works for Klang Valley MRT Kuala Lumpur  Contract Value (RM billion)  Expected Completion Date  8.3  2016  Tanjung Bin coal-fired power plant Johor  4.8  2016  Kuala Fourth lane widening for PLUS highway Lumpur, of Shah Alam Interchange -Rawang -Selangor and Jalan Duta and Nilai (U) Interchange -Negeri Seremban/Port Dickson InterchanQe Sembilan  1.4  2015  System works for Klang Valley MRT Kuala Lumpur  1.4  2017  Viaduct gUideway for Klang Valley MRT PackaQe V4 Kuala Lumpur  1.2  2017  Viaduct guideway for Klang Valley MRT Package V1 Kuala Lumpur  1.1  2016  LRT Ampang Line extension works Kuala Lumpur  1.0  2016
(Source: Construction Indust!}’ Development Board Malaysia) • The total volume and value of construction projects awarded in 2013 increased by 1.9% and 2.7% respectively. Compared to the previous year, there were only five mega projects with contract value more than RM1.0 billion awarded in 2013 which totalled to RM16.4 billion. These projects were mainly engineering, procurement, construction and commissioning (EPCC) contracts for utility and oil and gas related industry. (Source: Construction Industry Development Board Malaysia)
• Based on preliminary information provided by CIOB, 7,180 construction projects were awarded in 2014 which totalled RM149.5 billion. In terms of volume, this was a decrease in comparison to 2013 which registered 8,040 projects valued at RM131.0 billion. However, in terms of value of construction projects awarded, it was an increase by 14.1%. Based on preliminary information proVided by CIOB, there were 12 mega projects with contract value more than RM1.0 billion awarded in 2014 which totalled to RM29.8 billion. These projects were mainiy non-residential, residential and infrastructure projects located in Johor, Negeri Sembilan, Sabah and Wilayah Persekutuan. (Source: Construction Industry Development Board Malaysia)
• Notably, between July and August 2014, there were 13 major contracts awarded for the development of Pengerang Integrated Petroleum Complex (PIPC) in Johor. Of the contracts awarded, five were EPCC contracts for the refinery and steam cracker component of the project while the remaining eight were for the construction of common facilities and infrastructure of the complex (Source: Vital Factor Consulting analysis).

5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING  Creating Winning Business Solutions  .~)  5.3  Residential Properties  5.3.1  Current Supply  Existing Stock of Residential Properties in Malaysia  Building Completions of Residential Properties in  Malaysia
CAGR (2010·2014):: -0.8% CAGR (2010w 2014):: 2.1% 6,000 10% 150 9.7% 13.~_~·7% 20%2.5% 2.3% 2.3%2.0% 1.8%–_._–.
0%S S -3.4~ /-­Q Q 8125 ~ ·30% ~:; 5,000 4,832 ·34.0%-10% ,!lc ” c ::::> 100 “‘0 ‘0·20% “~ 4,000 •E, ~ , 75z ·30% z 3,000 ·40% 50 2010 2011 2012 2013 2014
2011 2012 2013 2014 _Exisling Stock ………Growth Rate
_Completed UnHs –Growth Rate
Notes: (1) Existing stocks refers to units that have been issued with a certificate of fitness (CF)I temporary certificate of fitness (TCF)I certificate of completion and compliance (CCC) prior to the review period plus units completed and issued with CFITCFICCC Within the review period;
(2) Building completions compn’ses units where the building construction works are completed and a

CFITCFICCC is issued within the review period; (Source: Valuation and Property Services Department, Ministry of Finance) • In the residential sub-sector, the existing stock increased at a CAGR of 2.1 % between 2010 and 2014. In contrast, building completions of residential properties in Maiaysia declined at a compound annual rate of 0.8% between 2010 and 2014. Nonetheless, the number of building completions of residential properties in Malaysia recorded growth at 18.7% in 2014. The growth in existing stock between 2010 and 2014 indicates a continuing supply of residential properties in the market in Malaysia. 5.3.2 Future Supply Future Supply of Residential Properties in Malaysia CAGR 2010-14  2010  2011  2012  2013  2014  %  Starts …………………….  84,486  115,578  138,407  145,779  155,667  16.5  incoming Supply ………  533,605  553,844  628,655  692,475  759,220  9.2  Planned Supply …  676,459  596,060  610,679  593,856  646,049  (1.1 )  Notes:
(1) Starts include buildings where foundation and footing works of low-rise buildings or works below ground level including piling and foundation of high-rise buildings have started. It does not include site clearing, level1ing and laying of infrastructure;
(2) Incoming supply comprises units where physical construction works are in progress including Starts and CFITCFICCC has not been issued during the review period;
(3) Planned supply comprises units with building plan approval obtained but have not

started physical construction works. (Source: Valuation and Property Services Department, Ministry of Finance) Ikhmas Jaya Group Berhad Page 22 of 45 Industry Assessment 151 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating Wnning Business Solutiohs (i¢ • The future supply of residential properties in Malaysia has been increasing in terms of new starts and incoming supply which experienced an increase in CAGR of 16.5% and 9.2% respectiveiy between 2010 and 2014. Meanwhile, the planned supply of residential properties in Malaysia decline at a compound annual rate of 1.1% between 2010 and 2014. However, this is not an indication of a slowdown in the residential property in Malaysia as the pianned supply of residential properties registered growth of 8.8% in 2014 compared to the previous year.
• The future supply of residentiai properties, particularly affordable housing is foreseen to remain in focus in the coming years. Based on the Budget 2015, the Malaysian Government continues to address housing supply through PR1 MA, Syarikat Perumahan Nasional Berhad (SPNB) and National Housing Department (JPN). The following are the future supply of residential properties that are planned by the Malaysian Government in the Budget 2015:

RM644 million is allocated to JPN for the development of Program Perumahan Rakyat which involves the construction of 26,000 housing units; PR1 MA will prOVide 80,000 units with an allocation of RM1.3 billion whereby saies price of PR1 MA homes will be lower by 20% than market prices; SPNB to build 12,000 units of Rumah Mesra Rakyat, 5,000 units of Rumah Idaman Rakyat and 20,000 units of Rumah Aspirasi Rakyat. (Source: Budget 2015, Ministry of Finance) • The abovementioned future supply of residential properties indicates continuing opportunities for contractors that are invoived in residential property construction. 5,4 Commercial Properties 5,4.1 Current Supply Current Supply of Commercial Properties in Malaysia CAGR 2010-14 2010 2011 2012 2013 2014 % Shop Units Existing Stock (1) 367,347 371,666 381,904 392,304 405,015 2.5 · .BulI9Jn,gC~.mp’l~tio~s. ~’! “..’ ,8,,~ 49, . 6.,~.25.””. ?,??,5.,.,..~,~6?”” ..9,5,20, .”.” ,4,0,. Shopping Complexes Existing Stock (2)………….. 10,661 11,592 12,028 12,447 12,997
5.1 · .El~iI9Jn!l.Co,mp.I~.tl~~s. ~2)” ••”.,,5~~. . __ ?,Ql” __ ,..’!j.l,~ __ .,..,,45?,.”,.., 6.~0. __ “” ,6,?,. Purpose-Built Offices Existing Stock (2) .. 16,781 17,680 18,824 18,990 19,553 39 (2.3)Building Completions m .. 464 624 472 142 424 Notes: (1) In lerms of units;
(2) In terms of thousand square metres. (Source: Valuation and Property SelVices Department, Ministry of Finance)

 

5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating Wnl1ing Business Solutions ®. • Generally, the current supply of commercial properties in Malaysia grew between 2010 and 2014, with the exception of purpose built offices which registered a decline of a compound annual rate of 2.3% in terms of building completions. Nevertheless, in 2014, the completion of purpose-buiit offices of approximately 424,000 square metres more than double compared to approximately 142,000 square metres in 2013.
• In 2014, there were 23 purpose-built offices that were compieted bringing in approximately 424,000 square metres in space. The new purpose-built offices in 2014 were mainly located in Klang Valley including, among others, Menara Kembar Bank Rakyat in KL Sentral; Menara Shell and 1 Sentrum in Jalan Tun Sambathan; Menara Hap Seng 2 in Jalan P Ramlee; Menara LGB in Taman Tun Dr. Ismail; and Menara TSR in Mutiara Damansara. (Source: Valuation Property Services Department, Ministry of Finance)
• In 2014, the compietion of shopping complexes grew by 52.7% to apprOXimately 690,000 square metres which consisted of 27 buildings. Major complexes that made its debut during the year includes, among others, 101 City Mall in Dengkil, Selangor; Nu Sentrai and Quill City Mall in Kuala Lumpur; AEON in Bukit Mertajam, Penang; Kip Mart in Meiaka; AEON Taiping and Taiping Mall in Perak; Palm Mall in Seremban, Negeri Sembilan; and Permaisuri Mall in Miri, Sarawak. (Source: Valuation Property Services Department, Ministry of Finance)

5.4.2 Future Supply Future Supply of Commercial Properties in Malaysia CAGR 2010-14 2010 2011 2012 2013 20141 % Shop Unils Slarts{1l…………………… 8,200 12,143 15,210 17,956 17,429 20.7
Incoming Supply {1l………. 47,648 51,138 60,794 70,276 78,763 13.4
· ‘p1.”n~~~ .S~Jlel~ ~:J.”, ”’, ?0,506 ?:J.,5f~~ 59,1??5 59,597 1?8,Ei.49 32.. Shopping Complexes Slarts(2J 440 316 193 263 378 (3.7) Incomin9 Supply 12l…….. 1,966 1,445 1,412 1,255 1,260 (10.5) 2 · ‘p1.”nn.ed .E;!JJlPi>’ 1}.”.”,,., •••••1,.i:!3~ 4.i:!6 41.i:! •…….1~3….•…9~3….•(15,?).
Purpose-Buill Offices Starts 12l. .. 603 428 186 291 153 (29.1 ) Incoming Supply 121 .. 2,639 2,208 2,027 2,140 1,713 (10.2) Planned Supply 121 .. 1,645 862 683 534 535 (24.5) Notes: (1) In terms of units;
(2) In terms oflhousand square metres. (Source: Valuation and Property SeNices Department, Ministry of Finance)

 

• Generaliy, there has been a decline in the future supply of commercial properties specifically shopping complexes and purpose built-offices between 2010 and 2014, However, in 2014, the future supply of shopping complexes grew in terms of starts, incoming supply and planned supply with growth recorded at 43.8%, 0.4% and 92.9% respectively. Incoming supply of Ikhmas Jaya Group Berhad Page 24 of 45 Industry Assessment 153 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d)
shopping complexes in 2014 were mainly located in Kuala Lumpur while planned supply of shopping complexes was mainly located in Johor. (Source: Valuation and Property Services Department, Ministry of Finance) • For purpose-built offices, in 2014, there were another 80 bUildings consisting of 1.71 million square metres in incoming supply and 24 buildings with approximately 535,000 square metres in planned supply. Majority of this future supply of purpose-built offices are located in Kuala Lumpur. (Source: Valuation and Property Services Department, Ministry of Finance)
• Meanwhile, the future supply of shop units in Malaysia experienced growth amidst the slowdown in the supply of commercial properties.

5.5 Demand Dependencies • The demand for piling, foundation and construction services is dependent on a number of factors, and some of the major factors are as follows: Soclo-economic factors including, among others, GOP, GNP, population, urbanisation and employment rate. Growth in such socio­economic factors will stimulate investment and development activities in both the private and public sectors for the construction sector. Micro and macroeconomic factors. Demand for piling, foundation and construction services is also dependent on local monetary and fiscal policies adopted by the government including interest rates, money supply, lending policies, balance of payments, and consumer price index. Government initiatives. Various initiatives such as the 11 th Malaysia Plan, Economic Transformation Programmes, Government Transformation Programmes and Corridors Transformation Programmes consisting of numerous infrastructure and development projects. This in turn will stimulate investments from local and foreign parties. Availability of loans given to developers and contractors. Availability of loans is predicated by many factors including market liquidity, financial institutions’ internal lending policies, as well as Bank Negara policies, financial measures and guidelines. 5.6 Supply Dependencies • The Piling, Foundation and Construction Industry is dependent on a number of factors such as input materials that impact on the timing and cost of construction, as well as loans to provide financing to commence and complete the construction. 5.6.1 Input Materials • BUilding materials are the inputs for the Piling, Foundation and Construction Industry. As such, the supply and cost of building materials have a direct impact on the industry. Some of the main Input building materials used on the Piling, Foundation and Construction Industry are as follows: Cement and concrete products (inclUding hydraulic cement, ready­mixed concrete, bricks, blocks, roofing tiles, piles, polesiposts, beams and culverts); 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating Wnning BU,sinellsSoJutions (” Clay and refractory construction materials (including refractory bricks, clay roofing tiles, ceramic wall and floor tiles, clay pipes and ceramic sanitary ware); Basic iron and steel products (including long products such as angles, shapes, sections, bars and rods, and flat products comprising coils, sheets, plates, tubes and pipes); Metal products (including fabricated structure and parts of structures of iron, steel or aluminium, metal containers, metal household articles, nails, screw, bolts, etc.); Wood and wood products (including plywood, hardwood, veneer, particle board, block board, mouldings and builders’ carpentry and joinery, and reconstituted wood based panel); Non-metallic minerals (Including aggregates, sand and gravel, clay & earth materials, limestone, kaolin, silica sand, feldspar, mica and barytes).
• Sufficient and continuous supply of input materials are important to ensure construction is not delayed as this may increase the financing costs for contractors. Local Production of Cement and Concrete Products I CAGR 2010·14 2010 2011 2012 2013 2014 % Cement (‘000 tonnes)…………… 19,762 21,198 21,726 21,457 22,446
3.2 Growth rate (%)…….= ….. 1.6 7.3 2.5 (1.2L.. 4.6 Ready-Mix Concrete (‘000 m3) …••……………………. 7,932 10,934 13,082 14,906 16,068 19.3
_(3roil;th rateJ~.L·· ………..··,,=,.· 6.2 37.8 19.6 13.9 7.8
.—-_..-HydraUlic Cement (RM Million) ……………………….. 4,418 4,847 5,197 5,509 6,015 8.0 Growth Rate (%) ………… 1.4 9.7 7.2 6.0 92
(Source: Department of Statistics) • Between 2010 and 2014, local production of cement and concrete products generally grew with the highest growth recorded from ready·mix concrete with a CAGR of 19.3%. Local Production of Clay and Refractory Construction Materials I CAGR 2010·14 2010 2011 2012 2013 2014 % Earthen Bricks (million units)…. 410 621 706 468 414 0.2 ..§”‘2-,.,th ral~) ,=.~. —‘1,,0.,,2..,2__~5,,1″‘.4’—-‘13.8 (33.7) …{1.,,1.,,64-_ Ceramic Tiles (‘000 m’) 85,644 82,086 90,699 88,694 74,666 (3.4) Growth rate (%)…….. 7.4 (4.2) 10.5 (2.2) (15.8)
(Source: Department of Statistics) • Between 2010 and 2014, local production of earthen bricks increased marginally at a CAGR of 0.2% while local production of ceramic tiles declined at a compound annual rate of 3.4%. Ikhmas Jaya Group Berhad Page 26 of45 Industry Assessment 155 5. INDEPENDENT MARKET RESEARCH REPORT (Cant’d) OVITAL FACTOR CONSULTING . Creating INinning Business So!LJlions rI¢ Local Production of Wood and Wood Products CAGR 2010·14 2010 2011 2012 2013 % 3Plywood (‘000 m) . 4,095 3,797 3,658 3,652 (4.2) Growth rate (%)””‘~”~”‘~”~””””~””””o.,..”,12.0 (7.3) _.._–,”=_–‘-‘=_ @JL.1J,1l__ Veneer Sheets (‘000 m3) • ..•••…. 1,017 912 872 883 Growth rate (%) . 34.9 (10.3) J4.5)__ 1.3 Laminated Board, Particleboard and Other Panels and Board
(RM million) . 1,669 1,901 1,845 1,782 1,881 3.0 Growth rate (%) . 6.9 13.9 (2.9) (3.5) 5.6 (Source: Department of Statistics) • Between 2010 and 2014, sales value of the manufacture of laminated board, particleboard, and other panels and board grew at a CAGR of 3.0%. During the same period, the local production of plywood and veneer sheets declined at a compound annual rate of 4.2% and 9.6% respectively. Local Production of Basic Metals and Metal Products CAGR 2010-14 2010 2011 2012 2013 2014 I (%) Basic Iron and Steel Products (RM Million) . 19,638 22,094 21,577 21,983 21,766 2.6 .. growthrate (~L.”.,.” ..,.,.,.”.,.,.,.,.,.,’ 19.7 12.5 .12. 3) 19 .JI(!).” …'”.”-“.,…” …….,…-_… ”
Other Basic Precious and Non-Ferrous Metals (RM Million) . 5,941 6,886 6,189 6,127 7,593 6.3 ..gr()t”t~,.”teJ~L,.””,.,., ..,.·· 40.0 15.9 .JI(!,I) JLiJ)………… 23.9
Structural Metal Products (RM Million) . 1,520 1,909 2,035 1,998 1,892 5.6 Growth rate (%) . (8.6) 25.6 6.6 (1.8) (5.3) (Source: Department of Statistics) • Between 2010 and 2014, the sales value of the manufacture of basic metals and metal products registered grow1h. However, in 2014, both basic iron and steel products, as well as, structural metal products dropped in production in terms of sales value. Local Production of Non-Metallic Minerals
CAGR  2009-13  2009  2010  2011  2012  2013  Aggregates (‘000 tonnes)….  86,497  101,809  118,510  110,339  115,000  7.4  . growth rate(%)., “”‘,.,.,’,.. …..J1,O  …. 17J  … …164 _..  (69). …..1:2  Sand and gravel (‘000  tonnes)  .  17,382  30,698  37,339  28,592  29,000  13.7  Growth rate (%)  ..  (29.0)  76.6  21.6  (23.4)  1.4

p=pre/iminary; Based on latest statistics availabfe. (Source: Minerals and Geoscience Department Mataysia) 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULllNG A”:-‘-Creating INinning Business Solutions ‘. • Between 2009 and 2013, local production of aggregates, and sand and gravel registered a compound annual growth of 7.4% and 13.7% respectively based on preliminary figures. Import Value of Basic Metals and Metal Products CAGR 2010·14 2010 2011 2012 2013 2014 % Iron and Steel (RM Million)….. …C3.rrJ.\Nih.raJ~..rJ§)•.”.•.”.••.,.”.•.••.,.,.•.•.•.•”.. . Non-Ferrous Metals (RM Million) .. _C3.Cg.””t~.H.”t~ (J§L”,..”” “,.”,,,,, Manufactures of Metals, n.e.s. (RM Million) . Growth rate (%) . 18,194 21,532 22,667 1~,:J. . J..~•.:J.. .. ~,:3.  23,660 _….. ..4.4  24,066 J.?..  7.2  19,681 23,337 1~L .._ YL6  22,167 (!i,(JL  30,044 _.. :3.!i,~  29,818 _ (()·~!.  10.9  9,430 16.1  9,673 2.6  10,122 4.6  10,835 7.0  11,887 9.7  6.0
Note: n.e.s. =not elsewhere specified;(Source: Department of Statistics) • Between 2010 and 2014, the import value of basic metals and metal products registered growth. 5.6.2 Loans to the Construction Sector • One of the critical supply dependencies for the Piling, Foundation and Construction Industry is the availability of financial resources to support construction activities. Loans to the Construction Sector and Selected Type of Construction Total Construction Sector……. Selected Type of Construction Sub-Sector: Civil Engineering …………….. Residential …………………….. Commercial Complexes …… Infrastructure………………….. 2010 38.421  2011 40,284  2012 44,238  2013 49,647  2014 57,826  CAGR 2010·14 (%) 10.8  14,613 8,382 3,109 4,393  15,836 8,179 3,127 5.417  18.453 9,454 4,085 3,501  20,022 11,777 4,194 3,943  21,679 12,844 5,507 5,922  10.4 11.3 15.4 7.8
Note: Loans by Commercial Banks, Islamic Banks and Merchant Banks. (Source: Bank Negara Malaysia) • The loans to the construction sector grew at a CAGR of 10.8% between 2010 and 2014. In 2014, the loans to the construction of civil engineering, residential, commercial complexes and infrastructure construction represented 37.5%, 22.2%, 9.5% and 10.2% of the total loans to the construction sector respectively.
• The continuing growth in loans to the construction sector from financial institutions in Malaysia indicates robust construction activities. Conversely, the generally low rate of growth in loans for the construction sector would imply that operators would have to rely more on alternative source of capital to fund their business activities and growth.

5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating Wooing Business Solutions ®. 6. COMPETITIVE ANALYSIS 6.1 Nature of Competition in the Industry • In general, operators in the Piling, Foundation and Construction Industry in Malaysia faces normal competitive conditions, which is similar to a free enterprise environment characterised by the following:
There are no undue government regulations or licensing requirements such that very few interested operators are able to comply with such regulations and licensing requirements; The industry is not dominated by a single or small number of operators, and customers have sufficient choice of operators to meet their requirements; Operators may enter and leave the industry freely based on commercial or personal reasons; No singie or small group of operators is large enough to dictate pricing, and pricing are commoniy the result of supply and demand conditions plus influence by other factors of differentiations, perceived benefits and strategic reasons by operators.
• While there are no undue government regulations and licencing requirements, operators still need to comply with various technical and regulatory requirements including:

Registration of contractors with Construction Industry Development Board (CIDB); Registration with Ministry of Finance (for tendering of Government jobs); Registration, licencing and professional memberships of technical and professional personnel and tradespeople, for example, civil engineers, geotechnical engineers, surveyors, machine operators and electricians While such regulatory, licencing and other restrictions exist, they are not deemed to be unduly anti-competitive as there continue to be large numbers of operators for all the various categories of piling, foundation and construction works in Malaysia. • In such an environment, the industry is subjected to normai supply and demand conditions moderated by the price mechanism. As with most free enterprise environment, competition is based on a number of factors, including, among others, the following: Quality of service; Cost competitiveness; Prompt service and timely delivery; Operator’s capabilities and capacities; Operator’s market reputation.
6.2 Operators in the Industry • Competition in the Piling, Foundation and Construction Industry is predicated by the number of players in the industry: As at 31 December 2014, there were approximately 67,833 contractors registered with the Construction Industry Development Board of Malaysia (CIOB) of which 5,618 contractors were registered with grade G7. Based on track records, financial resources and personnel resources, these companies are classified by the CIDB Ikhmas Jaya Group Berhad Page 29 of 45 Industry Assessment 158 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING · Creating VVinning Business Solutions ® into seven categories, ranging from G1 to G7. The grades indicate the size of each company’s tendering capacity and G7 contractors are able to undertake projects of unlimited capacity. As at 30 April 2015, there were approximateiy 5,709 operators registered with CIOB under the category of Piling Works for Civil Engineering Construction of which 2,211 operators were registered with grade G7. As at 30 April 2015, there were approximately 996 operators registered with CIDB under the category of Piling Works for Building Construction of which 372 operators were registered with grade G7. As at 30 April 2015, there were approximately 7,667 operators registered with CIOB under the category of Bridge Construction for Civil Engineering Construction of which 1,833 operators were registered with grade G7. (Source: Construction Industry Development Board) 6.2.1 Piling and Foundation Works • In 2014, there were approximately 240 operators that provide Piling and Foundation Works in Malaysia, of which approximately 55 operators were engaged in bore piling works (Source: Vital Factor Consulting analysis).
• The following are the Top 10 operators that are engaged in bore piling works in Malaysia.

Ranking of Top 10 Bore Piling Operators in Malaysia based on Company/Group Revenue … • •• • • “- CompanylGroup  Business Activities  1  Bauer (Malaysia) Sdn Bhd  Piling and foundation, construction of subsoil, excavation and drilling works, engineering and contract management services, rental of specialised construction equipment, sales of spare parts and accessories, and fabricated equioment as well as investment hoidinq Provision of piling and foundation services, inclUding civil enqineerinq and reiated activities Piling and foundation, geotechnical services and related Droducts as well as hire of heavy machineries Principally engaged in piling and foundation works, construction of bridges and buildings, and other civil works Providing geotechnical services and related products as weli as hire of heavy machineries Foundation and geotechnical works Foundation and geotechnical contractor Geotechnical engineerjng work especially in the design and construction of retaining structure and foundation  2  Econpile Holdings Berhad  3  Sunway Geotechnics (M) Sdn Bhd  4  lkhmas Group  5  Pintaras Jaya Berhad  6  Geohan Sdn Bhd  f—-_7  Biaxis (M) Sdn Bhd  8  Geopancar Sdn Bhd  9  Aneka Jaringan Sdn Bhd  Foundation and geotechnicai works Contractor works in piling, roofing, tiling and renovation 10  City Piling & Construction Sdn Bhd
Ikhmas Jaya Group Berhad Page 30 of 45 Industry Assessment 159 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating IfoIinnillg Business Solutions (R) Notes: (1) The ranking of bore piling operators is based on the latest availabte revenue of the company or group revenue as at May 2015. Revenue figures consist of revenue that is derived from carrying out bore piling works, as welf as other business activities.
(2) All the above operators are registered with GlOB under Grade G7 contractors with the exception

of Bauer (M) Sdn Bhd who is a GlOB foreign registered contractor. (Source: Vital Factor Gonsulting anaiysis)
6.2.2 Construction of Infrastructure and Buildings • The following are some of the CIDB Grade G7 operators that are engaged in the construction of infrastructure and buildings in Malaysia (listed in alphabetically order): Ahmad Zaki Resources Berhad; Bina Puri Holdings Berhad; Gabungan AQRS Berhad; Gadang Engineering (M) Sdn Bhd; Gamuda Berhad; Hock Seng Lee Berhad; IJM Construction Sdn Bhd; Ikhmas Group; lreka Corporation Berhad; Kimlun Corporation Berhad; MMC Corporation Berhad; MRCB Engineering Sdn Bhd; Mudajaya Corporation Berhad; Muhibbah Engineering (M) Bhd; Naim Engineering Sdn Bhd; Pembinaan Mitrajaya Sdn Bhd; Putrajaya Perdana Berhad; Sunway Construction Group Berhad; TRC Synergy Berhad; UEM Construction Sdn Bhd; WCT Construction Sdn Bhd.
Note: This is not an exhaustive list. (Source: Vital Factor Gonsuiting anaiysis)
7. MARKET SIZE AND SHARE Market Size • In 2014, the market size for Piling and Foundation Works in Malaysia was estimated at RM1.7 billion based on value of gross output of piling and foundation works (Source: Vital Factor Consulting analysis) Market Share • In 2014, Ikhmas Group had a market share of approximately 9% of Piling and Foundation Works in Malaysia. This is based on the Group’s revenue of RM160.7 million derived from piling and foundation for the financial year ended 31 December 2014 (Source· Vital Factor Consulting analysis). Ikhmas Jaya Group Berhad Page 31 of 45 Industry Assessment 160 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating VV1nning Business Solutions ® 8. GOVERNMENT REGULATIONS AND INCENTIVES 8.1 Government Regulations And Licences • Some of the relevant laws, regulations and policies that are applicable to operators in the Piling, Foundation and Construction Industry are provided in the following sections. 8.1.1 Registration of Contractors -CIDB • Under the Construction Industry Development Board of Malaysia Act 1994, it is mandatory for all builders, contractors and sub-contractors, whether local or foreign, to register with the Construction Industry Development Board (CIDB), before undertaking or executing any construction work in Malaysia.
• The Contractor Registration Certificate (PPK) is a certificate issued by CIDB to recognise contractors that have been registered with CIDB according to the grade and category as specified. The certificate is valid for a minimum period of 1 year and a maximum term not exceeding 3 years, unless cancelled, suspended or revoked earlier by the CIDB.
• There are three categories of registration as follows: Building Construction; Civil Engineering Construction; Mechanical and Electrical.
• The scope of registration for local contractors is further classified into seven grades and is differentiated by their respective tender capacities:
• Effective from 15 October 2012, the Malaysian Government had implemented the ‘Sistem Satu Pendaftaran Kontraktor’ (SSPK). SSPK is the amalgamation of registration process in CIDB and Construction Services Centre (PKK) to provide a platform for contractor database integration. Upon the implementation of the new system, all contractor licenses issued by PKK in relation to participation in tenders called by the Government authorities, statutory bodies, regulatory authorities or entities in the public sector are cancelled and replaced with the Government Works Procurement Certificate (SPPK) issued by CIDB. Nevertheless, the issuance of the Bumiputera Status Certificate (STB) for the identification of bumiputera status remains under the control and supervision of PKK.

Grade·  fenderCapacity {RM}  G1  Not exceeding 200,000  G2  Not exceeding 500,000  G3  Not exceeding 1 million  G4  Not exceeding 3 million  G5  Not exceeding 5 million  G6  Not exceeding 10 million  G7  No limit
(Source: Construction Indusfry Development Board) 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING : Creating VV’inning Business Solutions ® 8.1.2 Registration with the Ministry of Finance • Companies that are supplying or tendering for the supply of products and services to the Malaysian Government must be registered with the Ministry of Finance (Source: Ministry of Finance). 8.1.3 Construction Industry Payment and Adjudication Act (CIPAAj • The Construction Industry Payment and Adjudication Act 2012 (CIPAA) was gazetted on 22 June 2012 and it has come into force on 15 April 2014. As such, the Act only applies to disputes relating to payment following contracts signed after the date the Act was enforced. The primary objective of this legislation is to address cash flow problems in the construction sector in Malaysia. It is intended to facilitate regular and timely payment by the removal of conditional payments as well as provide a mechanism for speedy dispute resolution through adjudication.
• The CIPAA also provides remedies for the recovery of payment upon conclusion of the adjUdication process as well as other remedies such as a right to suspend work or reduce the rate of work progress or even to secure payment directly from the principal.
• The CIPAA applies to every construction contract which are made in writing relating to construction work carried out wholly or partly in Malaysia with the exception of construction of owner occupied residential property of less than four storeys high.
• The Act applied equally to the Government of Malaysia as weli as the private sector covering a wide range of construction related projects such as building construction, oil and gas reiated projects, petrochemical industry, telecommunication, utilities, infrastructure, supply contracts and consultancy contracts.
• However, the Act is exempted for Government contracts for any construction works that involve emergency, natural disaster, unforeseen circumstances and matters of national security and security related facilities.
• Additionally, Government contracts for any construction works with contract sum of RM20 million and below are given temporary exemption until 31 December 2015 for matters related to the timeline for submissions stipulated under the provisions of CIPAA.

8.1.4 Environmental Regulations • Environmental Impact Assessment (EIA) is a study to identify, predict, evaluate and communicate information about the impacts on the environment of a proposed project and to detail out the mitigating measures prior to project approval and implementation. The EIA is a planning tool for preventing environmental problems due to an action. It ensures that potential problems are identified and addressed at an early stage of the project. This will essentially avoid costly mistakes in project implementation, either due to the environmental damages that are likely to arise during project implementation, or modifications that maybe required subsequently. Ultimately, the EIA is conducted to ensure that the proposed project is environmentally acceptable. 5. INDEPENDENT MARKET RESEARCH REPORT (Cant’d) OVITAL FACTOR CONSULTING @ Creating Wnning Bqsincss Solutions • Under the Environmental Quality (Prescribed Activities) (Environmental Impact Assessment) Order 1987, an EIA is required to be conducted for certain prescribed activities with specific condition prior to approval and commencement of project. This includes, amongst others, construction of expressways, railways, dams, housing development and Mass Rapid Transport projects. For instance, housing development covering an area of 50 hectares and above is required to perform an EIA prior to its commencement. (Source: Departmenf of Environmenf) 9. SUBSTITUTE PRODUCTS AND SERVICES • There are no substitutes to piling and foundation works. Piling and foundation works are mandatory when buildings, infrastructures or other structures are constructed on land or over water and cavernous space. This is because all above ground buildings and structures that are not mobile will need to be firmly secured in place to ensure the safety of the building, infrastructure or other structure.
• There are no substitutes to construction works. This is because buildings, infrastructures and other structures are required in today’s society incorporating the community, commerce, industries and government.

10, RELIANCE AND VULNERABILITY TO IMPORTS • As bUilding materials are main inputs for the construction of buildings, infrastructure and structures, the supply of these materials will affect contractors. Generally, major building materials used in the construction sector such as piles, tiles, iron and steel materials, cement and concrete materials are widely availabie locally and overseas.
• Most of the bUlky and basic bUilding materials such as iron and steel materials, earth, sand, bricks, roofing tiles and cement are available locally. They are also available on the international markets as these building materials are common products. However, due to the higher cost factors of imported bUilding materials and the price-sensitive nature of the operators, most bUilding materials are sourced locally. As such, contractors are normally not vuinerable to imports.
• Piling and foundation works require, among others, specialised machinery
and equipment. Some of these include: bore piling machine; rotary piling machine; continuous flight auger piling machine; hydraulic diaphragm wall grab; mechanical diaphragm wall grab; grout pumps.
• Most of these specialised machinery and equipment are imported. Nevertheless, they are readily avaiiable in many overseas countries. As such, operators within the piling and foundation works industry are not vulnerable to imports of such specialised machinery and equipment.

Ikhmas Jaya Group Berhad Page 34 of 45 Industry Assessment 163 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTlNG · Creating Wnoing Business SoltiUons l’!!) 11. PROSPECTS ANO OUTLOOK OF THE PILING, FOUNDATION AND CONSTRUCTION INDUSTRY IN MALAYSIA • The prospects and outlook of the Piling, Foundation and Construction Industry in Malaysia are generally dependent on the following factors: Socio-economic conditions; Performance of the construction industry; Government initiatives that drive growth in the building and construction industry; and Infrastructure and major developments projects up to 2020. 11.1 Socio-Economlc Conditions 11.1.1 Economic Growth • A growing economy provides the impetus for private and public investment which would have a positive flow-on effect on the Piling, Foundation and Construction Industry. Between 2010 and 2014, real GOP of the Malaysian economy grew at a CAGR of 5.4%; In 2014, the Malaysian economy registered a real GOP growth of 6.0%; As for 2015, the Malaysian economy is forp.casted to grow between 4.5% and 5.5%; Between 2016 and 2020, the Malaysian economy is forecasted to grow at a CAGR of 5 to 6%.
(Sources: Bank Negara Malaysia; Department of Statistics, 11’b Malaysia Plan) 11.1.2 Population Growth Malaysia’s Mid-year Population Size C_g:~gBI~Qlq:~(j14L=r~-1’o~]L.i5PiBi~Ql<1:?Q?fjL”,..1•..1.1§..J Actual Forecast36 ,,, 34.3 , ,
,, 32.4 ,, 30.3 : 30.529.9
29.5
28.6 24 2010 2011 2012 2013 2014 20151 20201 20251 Notes: f =forecast; (Source: Department of Statistics)
• Malaysia’s total population grew at a CAGR of 1.4% between 2010 and 2014 and it is projected to reach 34.3 million by 2025. The continuing growth of Malaysia’s population will drive the development of residential properties and surrounding infrastructure which in turn will spur the overall construction sector. . 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating IMnnmg Business Solutions @. 11.1.3 Increasing Urbanisation Malaysia’s Urbanisation Rate 90%  Actual  Forecast  ~  80%  ~ Cl E 70% ~ u ~ ~ Q.  60%  50%  2000  2005  2010  20151  20201  20251
Note: f=forecast; (Source: Vital Faclor Consulling analysis)
• The urbanisation rate in Malaysia increased by 10.0% over a ten-year period between 2000 and 2010. The shift in popUlation from rural to urban areas is expected to continue, with urbanisation forecasted to reach 79.6% by 2025.
• In order to facilitate the increasing density in urban cities, the Malaysian Government has implemented several initiatives to enhance the liveability of urban cities. Under the 11 1h Malaysia Plan, Government and Economic Transformation Programmes, several urban transformation plans were identified such as investments in urban public transport, new township developments as well as urban rejuvenation of heritage buildings (Refer to Section 11.4 of this report for detailed information on government initiatives). (Source: Ministry of Finance)
• The continuing migration of population to urban cities would augur deveiopments of residential and non-residential buiidings as well as infrastructure. Furthermore, there is higher demand for high rise building in dense urban area due to limited land space. This in turn would continue to provide opportunities to operators in the Piling, Foundation and Construction Industry.

11.2 Loan • As a supplier of physical property structures, the construction sector is indirectly related to the demand for the properties itself. The demand to purchase properties is dependent on the availability of financiai support from financial institution. Availability of loans are predicated on several factors including the following from the lenders’ perspective: Liquidity in the market; Financial institutions’ internal lending policies; Government policies; Bank Negara Malaysia policies and guidelines.
O5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) VITAL FACTOR CONSULTING Creal)ng Winning Business SolulklhS iii>.. Loans for Purchase of Properties in Malaysia CAGR  2010-14  2010  2011  2012  2013  2014  %  Purchases  of  residential property …..  237,440  268,819  303,369  344,038  389,954  13.2  Growth rate (%)………..  13.2  13.2  12.9  13.4  13.3  .~._~~  Purchases  of  non­ residential property …..  90,738  110,039  131,518  154,897  178,050  18.4  Growth rate (%)………..  22.5  21.3  19.5  17.8  14.9
Note: All units are in RM million, except percentages; Loans by Commercial Banks, Islamic Banks and Merchant Banks. (Source: Bank Negara Malaysia)
• Between 2010 and 2014, loans for property purchases grew strongly with year-an-year double digit growth rates. The strong growth in loans indicates sUfficient financing iiquidity in the property market to support demand for properties.
• The continuing growth in loans for the purchase of residential and non­residential properties will continue to support demand for such properties, and sustaining operators who are performing construction for these types of properties.

11.3 Performance of the Construction Industry • The performance of the construction industry has an impact on the local economy and directly affects operators that are involved in the Piling, Foundation and Construction Industry. Between 2010 and 2014, real GOP of the construction industry in Malaysia grew at a CAGR of 11.3%; In 2014, the construction industry in Malaysia registered a real GOP growth of 11.6%; As for 2015, Malaysia’s construction industry is forecasted to grow at 10.3%; Between 2016 and 2020, the construction industry in Malaysia is forecasted to grow at a CAGR of 10.3%.
(Sources: Bank Negara Malaysia; Department of Statistics, 11′” Malaysia Plan) Ikhmas Jaya Group Berhad Page 37 of 45 Industry Assessment 166 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING , Creating \Mnning Business Solutions ® Value of Construction Work Completed CAGR (2010-2014)::. 14.0% 150
40% 25.5% ~12.7% 12.8% 1.3% 5.:~~.5 1100 0% ” 1[ a: 50 -40% o -80% 2010 2011 2012 2013 2014 .Value ……Growlfl Rate Total Loans to the Construction Sector CAGR (2010-2014) = 10.8%80 30% 9.8% 12.2% _.• _~?.5% 4.7% 4,8% …….’—-…–­0% 57.8’2 60 ~ -30%!!O,. a: 40 ·60% 20 ·90% 2012 2013 2014 ……Growth Rata
Note: Aft construction works completed referred to in this Note: Loans by Gommercial Banks, Islamic Banks and section covers aft main contractors with project value of Merchant Banks RM500,OOO and above and registered with GlOB. (Source: Bank Negara Malaysia) (Source: Department of Statistics) • The construction industry has shown consistent growth since 2010 to reach RM102.5 billion in 2014. Similarly loans to the construction sector grew consistently since 2010. All these indicators augur well for the Piling, Foundation and Construction Industry in Malaysia. 11.4 Government Initiatives that Drive Growth in the Piling, Foundation and Construction Industry • The Malaysian Government has introduced various initiatives that may benefit the operators within the Piling, Foundation and Construction Industry. Some of these initiatives in the 11 th Malaysia Plan, Economic Transformation Programmes, Government Transformation Programmes and Corridors Transformation Programmes are discussed below: 11 th(il Malaysia Plan (11 MP) The 11 MP is the framework implemented by the Malaysian Government and to be executed between 2016 and 2020 with the aim of ensuring Malaysia transitions into an advanced economy and inclusive nation. One of the key focuses of the 11 MP is the transformation of the construction industry by enhancing knowledge content, driving productivity, fostering sustainable practices and increasing global competitiveness. Additionally, several initiatives and construction projects were planned and are to be implemented during the Eleventh Plan inclUding, among others: Government related residential project such as Program Perumahan Rakyat Malaysia (PR1 MA), Rumah Idaman Rakyat and Rumah Mesra Rakyal. Civil engineering and non-residential projects such as Tun Razak Exchange, KL 118 Tower, Refinery and Petrochemicals Integrated Development (RAPID) and Pan­Borneo Highway. Construction and upgrading of roads and highways, such as Pan Borneo Highway to link the Sarawak Corridor of Renewable Energy (SCORE) and Sabah Development Corridor (SDC); Ikhmas Jaya Group Berhad Page 38 of 45 Industry Assessment 167 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d)
(ii) Central Spine Road and Kota Bahru-Kuala Krai Highway to increase connectivity in East Coast Economic Region (ECER); 3,000km of paved roads including construction of new roads and upgrading of existing un-paved roads. Public transportation such as KVMRT Line 2, LRT Line 3, monorail for Putrajaya and Cyberjaya, as well as the Bus Rapid Transit (BRT) KL -Klang corridor. Construction of new Mukah Airport and relocation of Lawas Short Take-Off and Landing (STOL) airport in Sarawak. Upgrade of Langkawi International Airport, Kedah and Suitan Ismail Petra Airport in Kelantan to cater for the expected increase in passengers. New power plants to replace retiring plants and meet the growing peak demand (Source: 11’h Malaysia Plan, Economic Planning Unit) Economic Transformation Programme (ETP) The ETP is a progressive framework identifying various economic sectors and strategies to transform Malaysia into a high-income and developed nation by 2020. One of the NKEA that benefits the construction sector under the ETP is the Greater Kuala Lumpur I Klang Valley (KLlKV) plan. A total of RM172 billion would be required to fund various projects that have been identified for the Greater KLlKV plan, which are aimed at, among others, attracting multinational corporations (MNC), revitalising certain locations to enhance attractiveness for residential and commercial purposes and improving public transportation network systems. Among the key Entry Point Projects (EPP) within this NKEA are as follows: integrated urban Mass Rapid Transit (MRT) system forming the backbone of Klang Valley region. The first line, namely Sungai Buloh -Kajang line had begun construction in 2012 and it is expected to complete by 2017. In the Budget 2015, the Government announced the rollout of the second MRT line at an estimated cost of RM23 billion. The construction works for MRT Line 2 linking Sungai Butoh, Serdang and Putrajaya is expected to commence by 2016. ; High Speed Rail (HSR) system connecting Kuala Lumpur to Singapore which is due for completion by 2020; River of Life project which is a redevelopment of Kiang River into a vibrant waterfront with high economic and commercial value; Development of the Sepang International City, an integrated and sustainable eco-city, with a gross development value of RM48 billion; (Sources: Performance Management & Delivery Unit (PEMANDU); Budget 2015, Ministry of Finance; Vital Factor Consulting analysis) O5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) VITAL FACTOR CONSULTING , Creating Wnn;ng Business Solutions (~) (iii) Government Transformation Programme (GTP) The GTP is a broad based initiative aimed at addressing key areas of concern to Malaysians while supporting the country’s transformation into a developed and high-income nation. A clear road map spanning nine years in three stages, namely GTP 1.0 (2010-2012), GTP 2.0 (2013-2015) and GTP 3.0 (2016-2020), was drawn up to ensure that the GTP delivered quick and tangible results. The transformation programme identified 7 National Key Results Areas (NKRA) upon the evaluation of the nation’s demands of the Government. Within GTP 2.0, the NKRA which may benefit construction operators are as follows: The Urban Public Transport NKRA was implemented to improve the urban public transport system in Kuala Lumpur and the Greater Klang V”liley specifically. Iniliatives within this NKRA such as the enhancement and extension of KTM Komuter and the extension of the Kelana Jaya and Ampang LRT lines would benefit the construction sector. The Cost of Living NKRA was implemented to offer immediate relief for the nation via immediate-term measures, while assessing strategies that will address the rising cost of living over the long term. ‘Perumahan Rakyat 1Malaysia’ (PR 1MA) is an initiative within this NKRA to plan, develop, construct and maintain affordable housing for middle-income households in key urban areas. PR1 MA had been mandated to build 500,000 affordable houses by 2018. As of March 2015, nearly 120,000 houses nationwide under the PR1MA have been approved for construction and construction works have already started in Johor Bahru, Kedah, Melaka, Negeri Sembilan, Perak and Kuala Lumpur. The Rural Development NKRA supports the goal of becoming a high-income nation by transforming rural areas into vibrant economic centres. The initiative within this NKRA that would benefit the construction sector is the upgrading of rural roads. According to Budget 2015, a sum of RM4.5 billion is allocated, particularly in Sabah and Sarawak to provide and upgrade rural facilities and infrastructure which include, among others, the construction of 635km of rural roads including logging roads in Sabah and Sarawak. Furthermore, a total of RM27 billion is provided for the 1,663 km Pan-Borneo Highway project. (Sources: Performance Management & Delivery Unit (PEMANDU); Perbadanan PR1 MA Malaysia; Budget 2014 and Budget 2015, Ministry of Finance; Vital Factor Consulting analysis) 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d)
(iv) The Corridors and Cities Transformation Programme The Corridors and Cities Transformation Programme complements other government initiatives such as the 10MP. ETP and GTP. The goai of the programme is to develop five regional secondary cities and their corresponding economic corridors by focusing on their competitive advantage and industry strengths. The following table provides a summary of the five corridors: Corridor  Iskandar Malavsia  Northern Corridor Economic Region  East Coast Economic Sabah Region Development Corridor Corridor  Sarawak Corridor of Renewable Energy  Development Period  2006 -2025  2007 -2025  2007 -2020 200S -2025  200S -2030  Main City and State  Johor Bahru. Johor  Georgetown, PenanQ  Kuantan, Kota Kinabalu. PahanQ Sabah  Kuching, Sarawak  Focus Sectors  Creative industries, education, financial services, healthcare, logistics, tourism, electrical and electronics industry, oleo chemicals, food-and agro­processinQ.  Agriculture, logistlcs, education, manufacturing and tourism.  Agriculture, Agriculture, education, logistics, manufacturing manufacturing r oil and gas, and tourism. petrochemical 5 and tourism.  Aluminium, glass, marine engineering, metal-based industry, oil and gas, timber~based industry, tourism, aquaculture, livestock, palm oil and tourism.  Expected Investment (RM billion)  3S3  177  110 113  334  Total Committed Investment (RM billion)  156.5″  47.0·  68.S· 138.1··  32.9·  Total Realised Investment (RM billion)  79.2**  47.0·  S.1· 50.4** I  22.0·
Notes: ·Since beginning of Development Period until End-June 2014; ··Since beginning of Development Pen’od until End October 2014; (SouICes: Iskandar Region Development Authority; Northern Corridor Implementation Authon·ty; East Coast Economic Region Development Council; Sabah Economic Development and Investment Authority; Regional Comdor Development Authority; Ministry of Finance Mataysia; Malaysian Investment Development Authority) Ikhmas Jaya Group Berhad Page 41 of 45 Industry Assessment 170 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating Winnin9 Business Solutions .’.’11.5 Infrastructure and Major Development Projects up to 2020 • In the BUdget 2015, the Government announced several construction projects to be implemented in 2015, as follows: Estimated Total Construction Cost Construction Proiect Pengerang Integrated Petroleum Complex (PIPC) project  (RM Billion) 69  1,663-km Pan-Borneo Highway comprising 936 km in Sarawak and 727 km in Sabah  27  56-km Klang Valley MRT Line 2 linking Sunga; Buloh -Serdang -Putraiava  23  LRT 3 linking Bandar Utama ­Shah Alam -Klang  9  59-km Sungai-Besi -Ulu Klang Expressway  5.3  276-km West Coast Expressway from Taiping to Banting  5  Rural facilities and infrastructure development  4.5  47-km Damansara -Shah Alam Highway (DASH)  4.2  Air Langat 2 Water Treatment Plant  3  36-km Eastern Klang Valley Expressway (EKVE)  1.6  1Malaysia People’s Housing Scheme (PR1MA)  1.3  People’s Housing Programme (PPR)  0.6
Upgrading the East Coast railway line along Gemas Mentakab, 0.2 Jerantut -Sungai Yu and Gua Musang -Tumpat (Sources: Budget 2015, Ministry of Finance; Vital Factor Consulting analysis) • Besides the above mentioned construction projects, some of the continuing and proposedlplanned infrastructure and major development projects in Malaysia include, among others: KVMRT line phases 3; Serdang -Kinrara -Putrajaya Expressway (SKIP); Gemas -Johor Bahru electrified double track railway; Kuala Lumpur -Singapore high-speed rail (HSR) link; Kuala Terengganu City Centre (KTCC) drawbridge; Third Klang bridge over Klang river; Bandar Malaysia; Infrastructure and mixed developments in Iskandar Malaysia; Rubber Research Institute (RRI) land development in Sungai Buloh; River of Life project focusing on the transformation of Klang and Gombak rivers into a vibrant and liveable waterfront location; Sepang International City; Bus Rapid Transit (BRT) KL to Klang; Monorail in Putrajaya and Cyberjaya.
(Sources: Ministry of Finance; Construction Industry Development Board; Ministry of Works; Vital Factor Consulting analysis) • The numerous infrastructure and major development projects create opportunities for operators in the Piling, Foundation and Construction Industry in Malaysia up to 2020. 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating Wnning Business Solutions ® 12. THREATS AND RISK ANALYSIS 12.1 Global Economic Slowdown • Any prolonged andlor widespread economic slowdown would affect consumer and business confidence. Any uncertainty in the global and local economies would have an effect on the level of investments in the private sector. This will correspondingly have a negative impact on construction activities. Mitigating Factors • As evident in the past, the Malaysian Government’s continued prompt policy flexibility in implementing pro-growth measures to support the country’s growth momentum, by raising domestic demand to compensate for slower external growth. This has assisted Malaysian companies to counter some of the effects of the slowdown in the global economy.
• Furthermore, various initiatives introduced by the Malaysian Government including the 11 th Malaysia Plan, Economic Transformation Plan, Government Transformation Plans and the development of the five regional economic corridors, particularly the implementation of construction projects, will continue to provide opportunities to the operators in the Piling, Foundation and Construction Industry.
• These initiatives are expected to generate domestic business activities and domestic consumption, which will in turn help to counter the slowdown in the local economy.

12.2 Fluctuation in Prices of Major BUilding and Construction Materials • The major building and construction materials are cement and concrete materials, and iron and steel materials. As cement and concrete materials, and iron and steel materials are commodities, prices of these building and construction materials are subjected to the fluctuations in global market prices. In some situations, an increase in the price of these raw materials may not be easily passed onto customers and would conversely have an impact on profit margins. Alternatively, if an increase in cost is passed onto customers, the operator will be at a competitive disadvantage in its pricing during the tendering process. Mitigating Factors • Operators may enter into iong-term or fixed-price contract with key suppliers to mitigate against any risk of price increase in the major building and construction materials. Operators with strong financial strength may be able to purchase and maintain stock of key raw materials to create a cushion against price fluctuations. Nevertheless, as these building and construction materials are commodities and therefore are subjected to world prices, all operators that use these materials are equally affected by price fluctuations. 5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating Wririing Busiriess-Solu[[ons (~) 12.3 Implementation of Goods and Services Tax o In the Budget 2014, the Government announced that the existing sales tax and service tax will be aboiished and will be replaced by the Goods and Services Tax (GST) which was effective from 1 April 2015 onwards. The Malaysian Goods and Services Tax Act 2014 was gazetted on 19 June 2014. The GST will be appiied to all goods and services unless they are not within the scope of GST. For the construction sector, the implementation of GST may impact on the selling price of the constructed products. Mitigating Factors o The GST is a broad base tax and all operators in the Piling, Foundation and Construction Industry will be equally affected. 12.4 Property Overhang o Property overhang is commoniy due to an oversupply of new launches relative to the demand for new property.
o The following is an analysis of the property overhang situation in the past five

years: Between 2010 and 2014, the number of residential property and shop units overhang in Malaysia decreased at a compound annual rate of 15.5% and 6.0% respectively. This indicates that the property overhang situation has been improving. (Source: Valuation and Property Services Department, Ministry of Finance) o A persistently high level of unsold property or an increase in property overhang will have an impact on property developments where there maya decrease in demand for properties. This in turn may indirectly have an impact on the operators within the Piling, Foundation and Construction Industry. Mitigating Factors o The Government had implemented measures to ensure stability in housing prices and to control speculative activity in the property development sector. These measures that are applicable to residential and commercial properties include, among others, the upward revision of the Real Property Gains Tax, tightening of the lending policies. prohibition on property developers from implementing projects that have features of Developers Interest Bearing Scheme (DIBS) and increase in the minimum price of property that can be purchased by foreign individuals and companies.
o The Government had launched the My First Home Scheme programme under the Budget 2011 to assist young adults with income below RM3,000 per month to purchase their first home with maximum property value of RM220,000. In the following Budget 2012, the maximum property value allowed was increased to RM400,000 effective from 1 January 2012. Subsequently, in the BUdget 2013 announcement, the Government raised the income iimit to RM5,000 per month for individual loans and RM10,000 per month for joint loans of spouses. In the Budget 2015, the Government raised the ceiling price of property purchased under this scheme to RM500,000 as well as increased the eligibility of borrower’s age from 35 to 40 years old.

5. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) OVITAL FACTOR CONSULTING Creating IJIJInning Bu:s;ness Solutions ® With Cagamas Berhad providing guarantee on the 10% down payment, home buyers under this programme are allowed to obtain 100% financing loan from financial institutions without having to pay the down payment. • The above programme is aimed at stimulating demand for properties and house ownership in Malaysia particUlarly for the low to middle income group. This would indirectly create opportunities for operators within the Piling, Foundation and Construction Industry in Malaysia. 12.5 Competition from Other Piling Contractors • As at 30 April 2015, there were approximately 5,709 operators registered with CIDB under the category of Piling Works for Civil Engineering Construction of which 2,211 operators were registered with grade G7. Furthermore, there were approximately 996 operators registered with CIDB under the category of Piling Works for Building Construction of which 372 operators were registered with grade G7. In this respect, operators within the Piling, Foundation and Construction Industry that specializes in piling and foundation works do face competition. Mitigating Factors • Generally, competition among piling contractors will be somewhat moderated by operators with competitive advantages including a high degree of integration in terms of evaluation, design, construction, engineering consultancy and engineering seNices to faciiitate better quality and cost control. We, Vital Factor Consulting, have prepared this report in an independent and objective manner and have taken all reasonable consideration and care to ensure the accuracy and completeness of the report. It is our opinion that the report represents a true and fair assessment of the industry within the limitatiDns of, amDng others, secondary statistics and infDrmatiDn, and primary market research. Our assessment is fDr the overall industry and may nDt necessarily reflect the individuai performance of any company. We dD not take any responsibilities for the decisiDns Dr actions Df readers of this document. This repDrt should nDt be taken as a recDmmendation to buy Dr not to buy the shares of any cDmpany. YDU rs sincerely
WDoiTan Managing DirectDr

 

 

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