Grameenphone Limited

REGULATORY CHALLENGES PRICED IN, DATA

BOOM TO CONTINUE

Investment Action
Stock rating BUY We initiate coverage on Grameenphone Limited (GRAM BD) assigning ‘BUY’
Industry view POSITIVE rating with a December 2021 fair value of BDT 421.0 per share. Our fair
value implies a total return of 52.2% (including dividend yield of 9.2%)
BDT 421.0
Fair value (Dec’ 2021) from the current price (BDT 294.0). GRAM BD has been facing regulatory
USD 5.0 uncertainty regarding BDT 125.8bn audit claim from Bangladesh Telecom-
BDT 294.0 munication Regulatory Commission (BTRC) in recent times. This has led to
Close price (23 Aug 2020) a significant fall in the company’s stock price. However, we believe that the
USD 3.5
market has under appreciated the company’s business prospect and over
Upside potential 43.0% penalized the stock for the regulatory challenges. Notably, even if we sub-
Dividend yield 9.2% tract the full amount of the contingent claim from GRAM BD’s fair value,
Total return 52.2%
the stock indicates an upside potential of 15.3% from the current price.
(Please find the scenario analysis of different outcomes of the audit dis-
DSE ticker GP
pute in the valuation segment.)
Bloomberg ticker GRAM BD

BDT 396,988mn Investment Case

Market cap  Increase in smartphone & 4G users with greater demand for internet
USD 4,681mn
will continue to fuel data boom: Increase in smartphone adoption rate
Shares outstanding (mn) 1,350 to 69.0% by 2025 from 40.0% in 2019 and higher usage per
Free float (%) 10.0% smartphone backed by deeper penetration of 4G (50.0% mobile con-
nections to use 4G by 2025 from the current level of 21.0%) will take
52wk avg. daily volume 253,634
average monthly mobile data consumption per user to 6.3GB within
BDT 73.8mn 2025 from 2.2GB today. Going forward, data price will decline at a
52wk avg. daily turnover
USD 0.87mn slower rate as the recent business performance of competitors indi-
cates that the strategy of aggressively reducing data price may not
BDT 211.0-364.9
52wk price range sustain in the long run. Taking all these factors in consideration, we
USD 2.5-4.3 forecast GRAM BD’s data revenue to increase at 19.1% CAGR over
2020-25.

 Deeper SIM penetration will drive 1.6% 5-year CAGR in voice revenue:
We expect that average minutes spent in voice calls would continue to
fall because of the shift in consumer habits. With expected stable call
rate, we estimate GRAM BD’s voice ARPU to fall to BDT 91.0 by 2025
from BDT 109.2 in 2019. However, ten percentage point increase in
unique SIM penetration to 63.0% over 2018-25 (26.0mn new unique
subscribers) in the country will help GRAM BD attain 1.6% CAGR in
voice revenue over the next five years.

 EBIDTA margin to expand 250bps by 2025: We estimate the compa-

ny’s EBITDA margin to expand 250bps to reach 65.2% over the next
five years driven by — a) implementation of Common Delivery Cen-
tre , b) digitization of services, c) reduction of advertisement expens-
Analyst es, and d) continuation of voluntary retirement scheme.
Anik Mahmood
Research Associate Investment Risk
+880 1701 205 074  As mentioned earlier, BTRC’s audit claim, worth BDT 125.8bn, remains
anik.mahmood@ucb.com.bd the most pressing issue for GRAM BD now. Significant Market Player
(SMP) and the tower sharing guideline do not pose any major threat
24 August 2020 yet.

 Finally, telecommunication industry in Bangladesh is highly regulated

and any unexpected regulatory changes like surge in taxes will hinder
GRAM BD’s business growth.

Please see penultimate page for additional important disclosures. UCB Capital Management Ltd. (“UCB”) is a foreign broker-dealer unregistered in the USA. UCB research
is prepared by research analysts who are not registered in the USA. UCB research is distributed in the USA pursuant to Rule 15a-6 of the Securities Exchange Act of 1934
solely by Rosenblatt Securities Inc., an SEC registered and FINRA-member broker-dealer.
VALUATION

Our per share fair value estimate of GRAM BD is BDT 421.0 for December 2021. Our
fair value reflects a 43.0% upside over the current share price of BDT 294.0 with a
justified P/E of 14.0x and justified EV/ EBITDA of 5.9x. We also expect a dividend yield
of 9.2% in the next twelve months – taking total return expectation to 52.2% by the
end of 2021.

For DCF valuation, we have used WACC of 13.2%. We have benchmarked the cut-off-
yield of a 10-year treasury bond (7.9%) as the risk-free rate and estimated market
risk premium of 6.0%. We have used two-stage DCF valuation. For stage-1, we have
calculated an explicit forecast of Free Cash Flow to Firm (FCFF) from 2020 to 2026. As
the growth is assumed to eventually slow down, in stage-2, we assumed the growth to
linearly fall to 3.0% in the next five years (2027-2031) and after that growing at a
terminal growth rate of 3.0% from 2031 to perpetuity.

CONTINGENT LIABILITIES ADJUSTED FAIR VALUE ALSO INDICATES UPSIDE PO-

TENTIAL

BTRC’s audit claim, worth BDT 125.8bn, remains the most pressing issue for GRAM
BD. Of the total claim made by the regulators, BDT 61.9bn is the compound interest
charged over two decades (1997-2017) at an arbitrary rate decided by BTRC. Notably,
BTRC charged its competitor Robi simple interests in the same case. Although GRAM
BD denied the allegation questioning the BTRC's audit process, the company had to
deposit a portion of the claim (BDT 20.0bn) to continue normal course of business.
The matter is sub judice but there is a reasonable chance that GRAM BD will have to
pay a portion of this liabilities. The total contingent liability of the company, including
audit claim, stood at BDT 134.0bn.

We assumed 11 different scenarios where GRAM BD pays total contingent claim net off
any amount already deposited. Even if we consider the full payment of the contingent
claims, the fair value of GRAM BD is reduced to BDT 339.0 - indicating an upside po-
tential of 15.3% over the current market price.

There is an upside potential even if we consider the payment of full contingent liability (net
off deposit)

Claim payable Claim payable Per share Fair value Upside over Total return
(%) (BDT bn) Impact considering current price (%)
(BDT) claim (BDT) (%)

0.0% 421.0 43.2% 52.4%

10.0% 11.0 8.2 412.0 40.1% 49.3%
20.0% 22.0 16.3 404.0 37.4% 46.6%
30.0% 33.1 24.5 396.0 34.7% 43.9%
40.0% 44.1 32.7 388.0 32.0% 41.2%
50.0% 55.1 40.8 380.0 29.3% 38.4%
60.0% 66.1 49.0 372.0 26.5% 35.7%
70.0% 77.2 57.2 363.0 23.5% 32.7%
80.0% 88.2 65.3 355.0 20.7% 29.9%
90.0% 99.2 73.5 347.0 18.0% 27.2%
100.0% 110.2 81.6 339.0 15.3% 24.5%
Principal only 48.3 35.8 385.0 31.0% 40.1%
Source: UCBCML Research

24 August 2020 2
VALUATION

RELATIVE TO PEERS GRAM BD IS TRADING AT ATTRACTIVE MULTIPLES

For peer company analysis, we have looked into several local and regional companies
involved in the telecommunication business. Notably, compared to peer companies’
median forward EV/EBITDA multiple of 5.5x and median forward P/E multiple of 17.1x,
GRAM BD is trading at significantly high discount (forward EV/EBITDA 4.4x and for-
ward P/E 10.1x).

On the other hand, no domestic peer company is listed in Dhaka Stock Exchange
(DSE). However, Robi Axiata (Robi), the second-largest carrier in Bangladesh, ex-
pressed its intention to get listed in the bourse. Robi has been planning to float 10.0%
or 523.8mn shares at BDT 10.0 each. The inclusion of Robi in the capital market would
give investors a comparable. However, financially GRAM BD is in a superior position to
Robi. So, we view that multiple wise GRAM BD would deem cheaper.

GRAM BD is trading at lower multiples than regional peers

Operator Country Share price Market cap Revenue EBITDA Return on Forward Forward
(USD) (USD mn) (USD mn)* margin* equity* P/E EV/EBITDA

Robi** Bangladesh 0.12 617 881 38.5% 0.3% 69.8x 2.3x

China Mobile China 7.72 158,118 107,127 37.0% 9.9% 10.9 2.4
China Unicom China 0.84 25,780 41,723 28.1% 3.6% 13.0 1.9

Bharti Airtel India 7.05 38,433 11,669 37.6% -43.3% 95.2 8.6
Vodafone Idea India 0.12 3,402 6,109 33.1% -225.2% n.m. 6.8

Indosat Indonesia 0.17 909 1,887 30.6% 13.1% n.m. 3.4

XL Axiata Indonesia 0.17 1,812 1,816 39.5% 3.8% 20.2 4.5

Axiata Group Malaysia 0.74 6,781 6,003 36.4% 8.7% 28.3 5.0
Digi.com Malaysia 1.01 7,827 1,538 55.9% 215.0% 25.3 12.0
Globe Telecom Philippines 43.78 5,842 2,938 43.4% 28.8% 13.2 5.4
PLDT Philippines 27.95 6,040 3,336 46.5% 20.1% 12.0 5.7
StarHub Ltd Singapore 0.90 1,557 1,733 22.4% 34.8% 3.1 5.9
Dialog Axiata Sri Lanka 0.06 496 644 32.9% 15.2% 14.0 2.8

Taiwan Mobile Taiwan 3.50 9,844 4,159 23.3% 19.2% 25.1 8.0

Far EasTone Taiwan 2.14 6,970 2,803 29.3% 12.2% 28.4 9.4

Peer Median*** 17.1 5.5

GRAM BD Bangladesh 3.35 4,517 1,692 62.7% 91.8% 10.1 4.4

*Revenue, EBITDA margin and return on equity is calculated based on latest annual number

**We considered offer price—BDT 10.0 as stock price for Robi.

***While calculating peer median forward P/E and EV/EBITDA, we did not consider Robi

Source: Capital IQ (as on 18 August 2020)

24 August 2020 3
VALUATION

GRAM BD IS HOVERING AROUND HISTORICAL LOW

Revenue of GRAM BD grew at 6.9% CAGR over 2012-17 to BDT 128.4bn in 2017.
PAT grew at a CAGR of 9.4% to BDT 27.4bn, and the EBITDA margin expanded by
390bps during the same period. Backed by these strong fundamentals, stock price
touched a historical all-time high of BDT 510.7 in early 2018.

Since 2018 regulators started to tighten the grip on the sector. The telecom watch-
dog introduced uniform call rate in August 2018 and then launched Mobile Number
Portability (MNP) service in October 2018. BTRC started putting pressure on GRAM
BD to recover the disputed audit claim from early 2019. In February 2019 and again
in May 2019, the regulator attempted to impose restrictions on GRAM BD as an SMP
operator. These events dampened investors’ confidence. As a result, the stock price
of GRAM BD tanked to BDT 219.5 in Early 2020.

GRAM BD’s 12-month forward EV/EBITDA and P/E multiple have ranged from 3.1x to
7.7x and 7.1x to 19.8x respectively since January 2016. However, currently the scrip
is trading at 12-month forward EV/EBITDA and P/E multiple of 4.4x and 10.1x re-
spectively reflecting the unpredictability of regulatory domain.

12-month forward P/E multiple of GRAM BD has ranged from 7.1x to 19.8x since 2016

700.0
19.8x
600.0
17.4x
Stock price (BDT)

500.0
14.9x
400.0 12.4x
300.0 10.0x

200.0 7.1x

100.0

0.0
3-Jun-16

3-Apr-17

3-Sep-17

3-Aug-20
3-Jan-16

3-Nov-16

3-May-19

3-Oct-19
3-Feb-18

3-Mar-20
3-Dec-18
3-Jul-18

Source: UCBCML Research

We cannot ignore regulatory uncertainties GRAM BD has been facing in recent times.
However, low unique SIM and data penetration indicates significant room for growth.
Moreover, GRAM BD has always been generous in sharing profit with its sharehold-
ers; the company normally maintains ~100% pay-out ratio. We view that investors
have over penalized the scrip. GRAM BD is trading at significant discount, even if we
consider the full payment of the contingent claims, and all the challenges the compa-
ny is facing.

24 August 2020 4
INVESTMENT THESIS

INCREASE IN SMARTPHONE & 4G USERS WITH GREATER DEMAND FOR INTER-

NET WILL CONTINUE TO FUEL DATA BOOM

Despite the addition of ~10.0mn internet subscribers every year for the past five
years, the internet penetration of Bangladesh is 41.0% - low compared to Asia Pacific
(48.0%) or global (59.0%) standard. Compared to peers, Bangladesh was late to join
the 4G party - it has been only two and a half years since 4G was launched in Bang-
ladesh. During this short time, mobile data usage has increased by twofold. However,
we cannot deny the fact that low data price is the primary catalyst behind this vora-
cious appetite for data consumption. Bangladesh has ranked 19th in the global index
for cheapest mobile data rates.

Data price fell by half since the introduction of 4G and stood at BDT 28.0/GB in
1Q’20. While we do expect to see further cut in data price, the rate will slow down as
cheap data price would take a toll on the profitability of the operators. On the other
hand, we expect data consumption to continue to grow at ~25.0% CAGR over the
next five years. This growth will come from two factors - high growth in the number
of smartphone users, including growth in rural areas, and an increase in average us-
age per smartphone.

Compared to the regional peers both data price and volume is one of the lowest in Bangla-
desh

1.4

Thailand
1.2
Average price per gigabyte (USD)

Malaysia

1.0

Nepal
0.8 Myanmar
Pakistan
Indonesia
0.6 China
Vietnam
Sri Lanka
Bangladesh
0.4

0.2

India
0.0
0.0 3.0 6.0 9.0 12.0 15.0

Average gigabyte per user

*Based on December 2019 data

Source: cable.co.uk, UCBCML Research

Access to cheap smartphones would widen the magic door of internet: Smartphones
are the primary medium of internet access in Bangladesh. The average price of a
smartphone in Bangladesh fell from USD 168.0 in 2012 to USD 100.0 in 2019. Even
at this price level, smartphones are still unaffordable to many. However, multination-
al brands such as Samsung, Vivo, Oppo, and Lava have decided to build local plants
tempted by tax incentives offered by the government. We expect the average price
of a smartphone to fall to USD 60.0 by 2025 gradually as locally manufactured
smartphones would be 15.0%-20.0% cheaper than the imported ones. According to
the industry insiders, falling price of smartphones at that level would increase the
smartphone adoption rate to 69.0% by 2025 from 40.0% in 2019.

24 August 2020 5
INVESTMENT THESIS

Smartphone adoption rate of Bangladesh (40.0%) is low compared to regional peers

89.0%

74.0%
89.0%

83.0%
87.0%
84.0%

84.0%

83.0%

72.0%
70.0%

70.0%
69.0%

68.0%
67.0%

67.0%
49.0%
40.0%

40.0%

Japan
India
Pakistan
Bangladesh

Asia Pacific
Vietnam

Malaysia
China

Indonesia
2019 2025

Source: GSMA Intelligence and UCBCML Research

Social media, audio, and video traffic combined account for ~60.0% of all internet
traffic in Bangladesh, which is low compared to the global average of ~75.0%. Ac-
cording to industry insiders, half the mobile connections in Bangladesh would use 4G
services by 2025, which is only 21.0% now. The deeper penetration of 4G would ena-
ble users to discover more online entertainment options. We expect mobile data vol-
ume in Bangladesh to reach 6.3GB from current 2.2GB fueled by an increase in data-
intensive content and more affordable data plans.

Price fall of mobile data will slowdown: The average price of mobile data fell by
54.9% since the 4G launch. We observed that Robi and Banglalink, major competi-
tors of GRAM BD, have been more aggressive in cutting price.

Data consumption of the industry is increasing on the back of falling prices

61.9

2.50 75.00

2.2

Average price per gigabyte (BDT)

53.9

1.9
Average gigabyte per user

1.7
47.1

2.00 60.00
1.6
43.1

1.4

1.50 45.00
37.9

1.00 30.00
1.2

34.4

32.2

30.4
1.1

28.0
0.9
0.8

0.50 15.00

0.00 0.00
1Q'18*

2Q'18

3Q'18

4Q'18

1Q'19

2Q'19

3Q'19

4Q'19

1Q'20

Average gigabyte per user (AGBPU) Average price per gigabyte (BDT)

Considered the average data volume and price of GRAM BD, Robi, and Banglalink

Source: UCBCML Research

While being financially stable, GRAM BD can withstand prolonged price war, but oth-
er operators are not that privileged. With limited upside in the voice segment, small
operators will have no other options but to tap in the growth potential of the data
segment. There is also possibility that regulator would introduce a floor price for data
similar to the voice which will benefit all the operators. We view that data price
would continue to decline in the absence of any floor; however, the rate will slow
down. We expect data price to reach ~BDT 17.5/GB in the next five years gradually.

24 August 2020 6
INVESTMENT THESIS
GRAM BD is financially stronger than Robi and Banglalink
Operators GRAM BD Robi Banglalink
Market share 46.2% 29.7% 21.1%
Subscriber (mn) 74.5 48.0 34.0
Active data user (mn) 40.4 32.3 22.5
Revenue CAGR (2014-19) 7.0% 8.6% 0.7%
Data revenue CAGR (2014-19) 51.1% 48.8% 39.2%
EBITDA margin (2019) 62.7% 38.5% 34.0%
Average gigabyte per user (AGBPU) 2.2 2.5 1.7
Average price per gigabyte (APPGB) (BDT) 31.5 27..0 23.0
Data ARPU (BDT) 70.1 67.2 39.4
Blended ARPU (BDT) 156.0 124.0 113.0
*All data represent 1Q’20 unless otherwise stated

Source: Company filings

Increase in data volume would offset fall in data price: We view that rising
smartphone penetration would allow GRAM BD to record volume-based growth while
improving per capita income level would increase average data consumption. We es-
timate that active internet users of GRAM BD would reach 62.0mn by 2025 from the
current 41.0mn. The remarkable growth in data volume and active internet users
would comfortably offset the fall in data price. We forecast data revenue to grow at
19.1% CAGR over 2020-25.

Data ARPU would reach BDT 115.16 by 2025. Data revenue to service revenue would reach 41.4%

Particulars 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E

Active internet user (mn) 37.1 40.6 41.4 45.2 49.0 53.0 57.2 61.6

AGBPU (GB) 1.0 1.7 2.7 3.5 4.2 4.9 5.6 6.3

APPGB (BDT) 56.9 40.0 26.0 22.9 21.2 19.6 18.6 17.7

Data ARPU (BDT) 57.0 64.0 70.0 82.8 91.6 99.9 109.0 115.9

Data revenue (BDT bn) 25.5 29.9 34.4 43.0 51.8 61.1 72.1 82.6

Data revenue - growth 21.3% 17.0% 15.4% 24.9% 20.3% 18.0% 17.9% 14.6%

Data revenue % of service revenue 19.2% 20.8% 23.7% 27.7% 31.3% 34.8% 38.4% 41.4%

Source: Company filings, UCBCML research

VOICE REVENUE WOULD BE DRIVEN BY DEEPER SIM PENETRATION

Low penetration of mobile internet makes Bangladesh one of the very few countries
where voice revenue is still growing. AMPU (average minute per user) of GRAM BD
fell by ~5.5% yearly since 2017, while the average call rate has increased by 4.9%
after regulators fixed the minimum call rate for all mobile operators at BDT 0.45 per
minute. As such, voice revenue grew at 7.5% CAGR in the last three years. We esti-
mate that voice revenue would grow at 1.6% CAGR over the next five years, driven
by 4.7% CAGR growth in subscriber base and stable voice tariff.

Subscriber base will continue to grow as unique penetration to reach Asian stand-
ard: Unique SIM penetration in Bangladesh stands at ~53.0% - low compared to
peer countries such as Indonesia, Philippines, and Vietnam or Asia Pacific region. We
expect penetration level to get in line with the current Asia Pacific’s standard
(~63.0%) by 2025 driven by increasing per capita income and availability of mobile
phones & services at affordable prices. The increase of unique SIM penetration by ten
percentage point over 2018-25 indicates 26.0mn additional unique subscriber.

24 August 2020 7
INVESTMENT THESIS

Unique SIM penetration of Bangladesh to reach 63.0% by 2025 from 53.0% in 2018- addi-
tion of 26mn unique subscriber

77.0%

80.0%
82.0%

81.0%
84.0%

85.0%
87.0%
69.0%

71.0%

72.0%

75.0%
66.0%
64.0%

64.0%
63.0%

63.0%
55.0%
53.0%

Japan
India

Asia Pacific

China
Bangladesh

Vietnam

Malaysia
Indonesia

Philippines
2018 2025

Source: GSMA Intelligence and UCBCML Research

As operators have been facing intense competition in the data segment, they are
unlikely to raise another war in the voice front. We expect call rate would remain
stable at BDT 0.72/minute in the next five years due to competitive pressure. How-
ever, the additional subscribers would mostly consist of young people who are more
interested in video watching, web browsing, and social media scrolling instead of
making calls. Moreover, voice calls can be done through apps like Messenger,
Whatsapp, Imo, Skype and these options are considerably cheaper. We expect that
minute usage would continue to fall as the use of these apps would increase with
deeper internet penetration. As such, we estimated voice ARPU to fall to BDT 91.0 by
2025 from BDT 109.2 in 2019.

While voice ARPU would continue to fall voice revenue would grow at 1.6% CAGR over 2020-25

Particulars 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E

Subscriber (mn) 72.7 76.5 75.9 80.0 83.7 87.6 91.5 95.5

Average minutes per user (AMPU) 234.0 217.0 210.0 204.0 198.0 192.0 186.0 181.0

Average price per minute (APPM) 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7

Voice ARPU (BDT) 108.7 109.2 105.9 102.7 99.7 96.7 93.8 91.0

Voice revenue (BDT bn) 90.0 97.8 96.5 98.6 100.1 101.6 102.9 104.3

Voice revenue % of service revenue 67.8% 68.1% 66.5% 63.5% 60.6% 57.8% 54.8% 52.3%

Source: Company filings, UCBCML research

VISIBLE ROOM FOR MARGIN EXPANSION

We estimate that the EBITDA margin of GRAM BD would increase by 250bps in the
next five years and reach 65.2% by 2025. Implementation of Common Delivery Cen-
tre (CDC), digitization of transaction, reduction of advertisement expenses, and in-
troduction of voluntary retirement scheme (VRS) would be the catalysts behind the
increasing EBITDA margin.

Implementation of Common Delivery Centre (CDC): Telenor, the parent company of

GRAM BD, is rolling out different schemes to optimize the usage of recourses. As part
of it, Telenor introduced CDC in early 2018. Under the project, the telecom operator
will outsource technological and network-related services from international vendors.
Implementation of the CDC would improve the margin by lowering the staff and day
to day operational costs. Successful implementation of the CDC can increase the effi-
ciency of some units as high as 30.0%.

24 August 2020 8
INVESTMENT THESIS

Digitization of transaction: Inclusion of digital means to facilitate transactions like

recharge through digital channels has lowered operating expenses. As people are
becoming more dependent on the digital platform than a physical distribution chan-
nel, the cost of operation is expected to decrease.

Voluntary retirement scheme: GRAM BD also offered VRS in the past four years
(2016-2019) to which 831 employees responded. The introduction of VRS has result-
ed in the gratuity expense of BDT 1,062mn, BDT 236mn, and BDT 820mn in 2017,
2018, and 2019 respectively. VRS would result in an increase in salaries and person-
nel costs in the short run due to gratuity expenses. However, after that one-time
expense, the salaries expense would decline.

831 employees responded in the last four years (2016-2019) for VRS

2016 2017 2018 2019

No. of employees 2,651 2,397 2,313 2,161

Voluntary retirement 348 276 53 154

Gratuity expense (BDT mn) 944 1,062 236 820

Source: Annual report

Reduction of advertisement expenses: GRAM BD has substantially decreased the ad-

vertisement cost by reducing the duration of advertisements and shifting to digital
platforms such as social media. On top of that, outsourcing parts of the value chain
like customer service would magnify the EBITDA margin.

24 August 2020 9
INVESTMENT RISK

CONTINGENT LIABILITIES POSE THE BIGGEST THREAT

BTRC claimed BDT 125.8bn from GRAM BD over an unpaid audit claim in April 2019.
The company denied the allegation and refused to pay questioning the BTRC's audit
process. The total contingent liability of the company, including this audit claim,
stood at BDT 134.0bn.

Contingent liability possess great risk to GRAM BD

Contingent liability BDT (bn)

Total claim by BTRC 84.9

Total claim by NBR 47.7
Interest for delayed payment to Bangladesh Railway 1.3

Total contingent liability 134.0

Less: Deposit 23.7
Contingent liability net off deposit 110.3
Source: Annual report

In July last year, the telecom regulator stopped issuing No Objection Certificates
(NOCs) to GRAM BD for importing network expansion equipment to pressurize the
company for prompt payment while the original title suit is still pending at the lower
court. The BTRC also barred it from offering new service packages and issuing new
SIM cards until the audit claim clearance. These restrictions hampered GRAM BD's
normal course of business and service quality.

Eventually, GRAM BD moved to the court, seeking a temporary injunction on the

BTRC's move to realize the claim. Finally, the court asked GRAM BD to deposit BDT
20.0bn in two instalments to maintain the injunction. BTRC gradually started issuing
NOCs since March 2020 after GRAM BD complied with the court's order. Notably, the
deposited BDT 20.0bn only ensures injunction on BTRC's move to realize the claim
and adjustable to the final claim. The original title suit is still pending at the district
court and awaiting the verdict.

Of the BTRC's total claim, BDT 61.9bn is the interest charged over two decades.
BTRC imposed compound interests on GRAM BD but charged its competitor Robi sim-
ple interests in the same case. If the court agrees to dismiss the interest payment,
payable contingent claim will be reduced to BDT 48.3bn (per share impact BDT 35.8).
Under such circumstances, the fair value of GRAM BD becomes BDT 385.0.

We assumed 11 different scenarios where GRAM BD pays total contingent claim net
off any amount already deposited. Even if we consider the full payment of the contin-
gent claims, the fair value of GRAM BD reduced to BDT 339.0 - indicating an upside
potential of 15.3% over the current market price.

24 August 2020 10
INVESTMENT RISK

There is an upside potential even if we consider the payment of full contingent liability (net
off deposit)

Claim payable Claim payable Per share Fair value Upside over Total return
(%) (BDT bn) Impact considering current price (%)
(BDT) claim (BDT) (%)

0.0% 421.0 43.2% 52.4%

10.0% 11.0 8.2 412.0 40.1% 49.3%
20.0% 22.0 16.3 404.0 37.4% 46.6%
30.0% 33.1 24.5 396.0 34.7% 43.9%
40.0% 44.1 32.7 388.0 32.0% 41.2%
50.0% 55.1 40.8 380.0 29.3% 38.4%
60.0% 66.1 49.0 372.0 26.5% 35.7%
70.0% 77.2 57.2 363.0 23.5% 32.7%
80.0% 88.2 65.3 355.0 20.7% 29.9%
90.0% 99.2 73.5 347.0 18.0% 27.2%
100.0% 110.2 81.6 339.0 15.3% 24.5%
Principal only 48.3 35.8 385.0 31.0% 40.1%
Source: UCBCML Research

SIGNIFICANT MARKET POWER (SMP) RESTRICTIONS WILL HAVE INSIGNIFI-

CANT IMPACT

The telecom regulator of Bangladesh declared GRAM BD a SMP operator in February

2019 and came up with four restrictions twice. But the company managed to put
those on halt by challenging the restrictions in High Court. However, in December
2019, the High Court cleared the regulator's way to bring the SMP guidelines into
effect.

In June 2020, BTRC has issued three directives under the SMP guidelines, and GRAM
BD agreed to comply with the instructions.

Regulator imposed three restriction on GRAM under SMP regulation

Restrictions Impact

GRAM BD will have to secure prior approval from the BTRC be- This will increase GRAM BD’s response time to react to com-
fore rolling out or changing any conditions of any packages or petitor’s offerings. However, customers base of GRAM BD is
offers. loyal. As such, we view that this restriction will not have any
significant impact on GRAM BD.

If a user wants to switch to another network, they will have to Since the introduction of Mobile number portability (MNP)
stay with the new carrier for at least 90 days. But subscribers service, GRAM BD has been able to increase the subscriber
can now abandon GRAM BD after 60 days. base. We view that this restriction will not have any signifi-
cant impact on GRAM BD.

GRAM BD will continue to pay BDT 0.10/minute to a carrier if a Before, the restriction, interconnection rate was BDT 0.10/
GRAM BD customer makes a call to that carrier. In contrast, the minute for all carriers. Now, the off-net call rate of other
other three carriers will, in turn, pay BDT 0.07/minute to GRAM carriers might reduce. Customers of GRAM BD is used to
BD. pay the current off-net rate. As such, we expect no major
impact.

Source: Newspapers, UCBCML research

24 August 2020 11
INVESTMENT RISK

TOWER SHARING MIGHT INCREASE THE COST

Previously telecom operators used to build, own and operate their towers across the
country. The number of towers for each of them varies widely depending upon their
capital allocation and appetite to grow. Therefore, the service quality for each of
these companies is not consistent across the country. However, the scenario changed
in November 2018 when BTRC issued licenses to four firms to build mobile phone
towers and run operations in a bid to separate the network business from mobile
phone operators. As per the guidelines, operators cannot set up the tower without
the agreement with any of the tower companies.

GRAM BD and edotco, one of the tower companies, reached service level agreement
(SLA) and submitted the deal to BTRC for approval in July 2019. Unfortunately, in-
stead of approving the SLA, BTRC tried to impose a non-negotiated common agree-
ment on the operator fixing the rent. Mobile operators are asking BTRC not to fix the
charges and leave it to bilateral negotiations for the sake of fair competition among
the concerned parties. So far, the matter is still undecided. The stagnant situation is
hampering GRAM BD’s network expansion. Moreover, the profitability of the company
might get affected if BTRC remains strict on fixing the rent.

UNFAVORABLE TAX REGIME MIGHT HAMPER GROWTH PROSPECT

The Telecom sector is heavily taxed in Bangladesh compared to regional peers; the
corporate tax rate is 40.0% for GRAM BD for being a listed company (for non-listed
telecom operators, the rate is 45.0%). On the contrary, the corporate tax rate for
mobile phone operators is 30.0% in Pakistan and Nepal, 28.0% in Sri Lanka, 22.0%
in India, and 20.0% in Afghanistan. Moreover, the operators share 5.5% of their
gross revenue with the government, while contributing another 1.0% to social obliga-
tion fund.

According to industry insiders, a reduction of Supplementary Duty (SD) by five per-

centage points could bring 5.2mn new subscriber under the umbrella of telecommuni-
cation services. Ironically, instead of reducing it, the government has increased SD
on the use of any mobile services by five percentage points to 15.0% in the FY21
budget. Besides supplementary duty, mobile phone users also have to pay 15.0%
VAT and one percent surcharge on their bills, which takes the total tax for mobile
phone usage to 33.3%.

Total tax for mobile service usage has increased significantly

FY15 FY16 FY17 FY18 FY19 FY20 FY21

Effective VAT* 15.0% 15.5% 15.8% 15.8% 15.8% 16.5% 17.3%

SD 3.0% 5.0% 5.0% 5.0% 10.0% 15.0%

Surcharge 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%

Total 15.0% 19.5% 21.8% 21.8% 21.8% 27.5% 33.3%

*Effective VAT rate includes VAT on SD

Source: UCBCML Research

The prices of spectrum, optical fiber, tower management, and import cost of telecom-
munication equipment in Bangladesh are among the highest. The tax duty for import-
ing any telecommunication equipment is minimum 25.0%, which is way too high
compared to any other sector. The resulting burden on the industry eventually trick-
les down to the consumer, hampering the sector's growth.

24 August 2020 12
COMPANY PROFILE

Grameenphone Limited (GRAM BD) was incorporated on 10 October 1996 as a private

limited company and converted to a public limited company on 25 June 2007. The
company is primarily involved in providing mobile telecommunication service (voice,
data, customer equipment). Currently, GRAM BD, the largest telecommunications pro-
vider in Bangladesh, holds a 46.2% market share with 74.5mn customers. Major com-
petitors of the company, Robi, Banglalink, and Teletalk, hold 29.7%, 21.1%, and 2.9%
market share respectively.

GRAM BD is a subsidiary of Telenor group - a leading telecommunications company

across the Nordics and Asia. Among the mobile operators of Telenor, GRAM BD is the
most profitable venture.

EBITDA margin of GRAM BD is the highest among the mobile operators of Telenor

62.7%

50.6% 52.4% 52.8%

46.4%
36.5% 37.6%
32.4%
26.0%

Sweden
Denmark

Finland

Pakistan

Bangladesh
Malaysia
Thailand

Norway

Myanmar
*Based on latest annual number
Source: Telenor company filings

The company was the first operator to introduce GSM technology in Bangladesh. Cur-
rently, GRAM BD offers services in the 900 MHz, 1800 MHz, and 2100 Mhz frequency
bands. The company got the license to provide 4G/LTE services in February 2018.
With over 16,000 towers across the country, GRAM BD currently covers 99.6% of the
population and 96.0% of the geography.

The company got listed in DSE and Chittagong Stock Exchange (CSE) in 2009. As of
July 2020, GRAM BD has a market capitalization of USD 4.1bn – making it the largest
company on the Dhaka Stock Exchange (DSE) in terms of market capitalization.

Shareholding structure of GRAM BD - June 2020

Telenor Mobile Communications AS (55.8%)

Grameen Telecom (34.2%)

Local institutions (4.2%)

Other foreign investors (3.4%)

Public (2.4%)

Source: DSE & company filings

24 August 2020 13
COMPANY PROFILE

Board of directors of GRAM BD is considered one of the best in the country

Name Designation Background

Jørgen C. Arentz Rostrup Chairman Jørgen C. Arentz Rostrup was appointed to the Board on June 9, 2020 and is
also the Chair of Grameenphone Board.Jørgen Rostrup has more than 20 years’
business experience in an international context and comes from the position as
CFO in Telenor Group, a position he has held since November 2016.

M Shahjahan Non-Executive Mr. M Shahjahan was appointed to the Board on 26 June 2006 and is also chair
Director of the Company’s Treasury Committee. He is the former Managing Director of
Grameen Bank.

Md. Ashraful Hassan Non-Executive Mr. Md. Ashraful Hassan was appointed to the Board on 20 January 2010. He
Director currently serves as Managing Director of Grameen Telecom and is engaged in
promoting and providing easy access to GSM cellular services in rural Bangla-
desh.

Haakon Bruaset Kjoel Non-Executive Mr. Haakon Bruaset Kjoel was appointed to the Board on 14 September 2011.
Director He is a senior corporate and public affairs professional with extensive experi-
ence from the telecom and digital industries in Europe and Asia. He is currently
the Chief Strategy and Transformation Officer of Telenor Group’s mobile opera-
tor in Thailand, dtac.

Parveen Mahmud, FCA Non-Executive Ms. Parveen Mahmud, FCA served three terms in the Council and Past Presi-
Director dent of the Institute of Chartered Accountants of Bangladesh (ICAB). She was
the first female President of ICAB for the year 2011 and also the first female
Board member in the South Asian Federation of Accountants (SAFA), the apex
accounting professional body of the SAARC.

Oivind Burdal Non-Executive Mr. Oivind Burdal was appointed to the Board on 18 May 2016. In 2004, he
Director joined the Legal Department of Telenor ASA where he has practiced and held
managerial positions in several areas. In August 2017, he was appointed Vice
President, Head of Group Legal Asia in Telenor ASA.

Irfan Wahab Khan Non-Executive Mr. Irfan Wahab Khan was appointed to the Board on 14 July 2019. Mr. Irfan is
Director the EVP, Head of Emerging Asia cluster Telenor Group, Chair of Telenor Myan-
mar, Chair of Telenor Microfinance Bank and CEO of Telenor Pakistan since
2016. Prior to that, Mr. Irfan served as Deputy CEO of Telenor Pakistan for two
years.

Lars Erik Tellmann Non-Executive Mr. Lars Erik Tellmann was appointed to the Board on 11 December 2019 and
Director he is also Chair of the Company’s HSSE Committee. Mr. Tellmann is Senior Vice
President and Head of Portfolio Management & Business Development Asia,
Telenor Group.

Dr. Salehuddin Ahmed Independent Dr. Salehuddin Ahmed was appointed to the Board on 12 December 2018 as an
Director Independent Director and he is also Chair of the Company’s Audit Committee.
He was appointed as the Governor of the Bangladesh Bank (Central Bank) in
May 2005, for a term of four years up to 30 April 2009.

Source: Company website

24 August 2020 14
INDUSTRY OVERVIEW

The telecom industry in Bangladesh has witnessed rapid growth for more than a dec-
ade. Unique subscriber penetration in Bangladesh rose to almost 53% in 2018 from
only 1% in 2003 due to the rapid adoption of telecommunication services. Currently,
Bangladesh is the fifth largest mobile market in Asia and the ninth-largest in the
world.

GRAM BD LEADS THE OLIGOPOLISTIC MARKET

The telecommunication industry in Bangladesh is oligopolistic in nature - three opera-

tors hold ~97.0% of the total subscriber. Due to increased competition, a six-player
market has turned out to be a four-player one. Robi (Axiata) merged with Airtel
(Bharti Airtel) in 2016 to get operational efficiency. Citycell, the country's first mobile
operator, left the market after a long period of struggle to survive in the industry.
Banglalink and state-owned mobile operator Teletalk have watched their subscriber
base to wane over the years. GRAM BD is the market leader in terms of both sub-
scriber and revenue share.

Revenue share - GRAM BD holds 52.6% share Subscriber market share - GRAM BD holds 46.2% share

GRAM BD (52.6%) GRAM BD (46.2%)

Robi (28.3%) Robi (29.7%)
Banglalink (16.9%) Banglalink (21.1%)
Teletalk (2.2%) Teletalk (2.9%)

*Based on 1Q’20 data *Based on June 2020 data

Source: UCBCML research Source: BTRC

High spectrum cost: In the last auction occurring in February 2018, the spectrum
price was the highest in the world. According to global standard, the cost of 1 MHz
spectrum should be a maximum of USD 15mn, whereas it is nearly double in Bangla-
desh. Such a high price is restraining the telecom operators from improving the ser-
vice quality. Moreover, uncertainty regarding the auction calendar is hindering the
operators for aiming efficient capital budgeting.

Spectrum price in Bangladesh per MHz (USD mn) is the highest in the world

31.0
27.0

20.0 21.0

12.0

2008 2011 2013 2018 2018

1800 MHz 900 Mhz 2100 MHz 2100 MHz 1800 MHz
1800 MHz

Source: UCBCML research

24 August 2020 15
INDUSTRY OVERVIEW

Spectrum price normalized with ARPU (price per MHz per connection) (USD)

Spectrum Bangladesh Thailand India Germany Turkey South

1800 MHz 0.66 0.63 0.53 0.16 0.13 0.10

2100 MHz 0.58 0.25 0.47 n.a. 0.33 0.08

Source: GSMA

Despite high spectrum prices, Bangladesh remains one of the most profitable coun-
tries to operate mobile operations due to the dense population.

DATA WILL CONTINUE TO DRIVE TOPLINE IN THE FUTURE

The two key service offerings of the industry are voice calls and mobile internet, with
the former dominating the companies' revenue. Bangladesh's population of 168mn is
expected to grow by 1.1% per year. Young and middle-aged people, the primary us-
ers of mobile communication devices, constitute ~60% of the population. The de-
mographics of a relatively young population, compared to more developed countries
mean that, over the next decade, there remains significant upside for subscriber
growth. Unique SIM penetration in Bangladesh is expected to reach 63.0% by 2025
from 53.0% in 2018. The ten percentage point increase in unique SIM penetration
indicates a 26mn additional unique subscribers.

On the other hand, only half the subscribers use internet services on their phones.
Smartphones are gradually becoming more affordable to people. With increased
smartphone adoption and deeper 4G penetration, mobile internet is poised to witness
tremendous growth in the upcoming years.

We expect the voice segment to grow, driven by a growing subscriber base. However,
voice ARPU would decrease in the coming years due to the fall in minute usage. On
the contrary, data ARPU will grow further in the coming years due to increased data
consumption and new subscriber addition.

23.0% of the industry revenue came from data in 2019. We expect the contribution to
reach 45.0% by 2025

75.0 23.0% 25. 0%

20.3%
60.0 16.9%
20. 0%

45.0 12.1%
BDT bn

15. 0%

30.0 8.2% 10. 0%

4.4%
15.0 5. 0%

0.0 0. 0%

2014 2015 2016 2017 2018 2019

Data revenue (industry) Data revenue - % of total industry revenue

Source: UCBCML research

24 August 2020 16
INDUSTRY OVERVIEW

THE INDUSTRY IS GOING THROUGH SIGNIFICANT REFORMS AND REGULATORY

CHALLENGES

In the past few years, the telecom industry of Bangladesh has seen some significant
development and reforms. Some recent regulatory developments and challenges hav-
ing potential market impact are discussed here;

The industry witnessed some major regulatory changes in past few years

Regulation/challenges Description

Significant Market Power (SMP) After legal battles, GRAM BD was finally declared SMP in 2020. Regulators imposed
three restrictions on GRAM BD. These are-

 GRAM BD will have to secure prior approval from the BTRC before rolling out or
changing any conditions of any packages or offers.

 If a user wants to switch to another network, they will have to stay with the new
carrier for at least 90 days. But subscribers can now abandon GRAM BD after 60
days.

 GRAM BD will continue to pay BDT 0.10/minute to a carrier if a GRAM BD customer

makes a call to that carrier. In contrast, the other three carriers will, in turn, pay
BDT 0.07/minute to GRAM BD.

BTRC audit claim Following an audit, BTRC claimed BDT 125.8bn from GRAM BD, and BDT 8.7bn from
Robi, in taxes and late fees accumulated over the several years. Of the total, the prin-
cipal audit claim from Robi was BDT 3.2bn and BDT 63.9bn from GRAM BD. Both the
operators claimed that the audit report is devoid of rationality and started legal battle
against BTRC.

To pressure the operators, BTRC stopped issuing No Objection Certificates (NOC) to

import network expansion equipment, offer new service packages, and release new
SIM cards until the audit claim clearance. The step by BTRC affected the whole indus-
try, including the equipment suppliers and backward linkage industry, forcing network
expansion to stagnate and affecting investment efforts.

The court ordered Robi to deposit BDT 1.4bn in five equal installments, and GRAM BD
to deposit BDT 20.0bn in two installments to secure NOC from BTRC. After the two
operators had complied court's order, BTRC started to issue NOC gradually. However,
the original title suits regarding the legitimacy of the claim are still pending in court,
and the operators hope to reclaim the deposit.

Uniform call rate Uniform call rate was introduced in August 2018. Previously, the floor price for On-net
voice call was BDT 0.25, and for Off-net, it was BDT 0.60 per minutes while the ceiling
price was BDT 2.0 per minutes. Now, the floor price for both the on-net and off-net
calls stands at BDT 0.45 per minutes.

Mobile number portability (MNP) MNP is a service where mobile phone users can switch their operators without changing
their numbers. MNP was introduced to push mobile operators to improve their service
quality. However, the service did not get traction. Only ~1.0mn mobile phone users
out of a total 161.3mn took the MNP services since its launch in October 2018.

Separation of tower business from the Previously telecom operators used to build, own and operate their towers across the
operators country. According to the guideline, operators cannot set up the tower without the
agreement with any of the tower companies. The guideline has not been implemented
yet due to disagreement between operators and regulators.

Source: UCBCML research

24 August 2020 17
KEY FINANCIALS (GRAM BD)

Income statement (BDT mn) 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E
Revenue 132,832 143,656 145,261 155,402 165,185 175,592 187,700 199,389
EBITDA 79,316 90,103 91,604 98,697 105,633 113,045 121,685 130,087
EBIT 56,777 66,652 67,501 73,141 78,403 84,036 90,894 97,273
PBT 54,848 63,899 65,289 70,392 76,356 82,637 90,167 97,104
PAT 33,363 34,517 37,636 40,578 44,016 47,637 51,977 55,976

Balance sheet (BDT mn) 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E
Non-current assets 125,345 127,735 143,912 140,829 137,486 134,747 132,977 131,989
Current assets 13,369 20,999 13,041 15,272 17,100 19,987 21,830 23,691
Cash and cash equivalents 5,932 13,761 6,771 9,639 12,027 15,403 17,599 19,775
Total assets 138,713 148,734 156,954 156,101 154,586 154,734 154,807 155,680
Shareholder's equity 36,836 38,347 39,525 40,945 41,751 42,127 42,793 43,407
Non-current liabilities 18,914 19,961 18,369 17,041 15,948 15,062 14,362 13,824
Current liabilities 82,963 90,426 99,059 98,115 96,887 97,545 97,652 98,449

Cash flow statement (BDT mn) 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E
Net cash flow from operating activities 60,413 57,393 43,501 69,437 74,093 81,230 86,604 92,726
Net cash flow from investing activities (30,200) (14,263) (20,280) (22,473) (23,888) (26,271) (29,021) (31,825)
Net cash flow from financing activities (36,699) (35,308) (30,210) (44,095) (47,817) (51,583) (55,387) (58,725)
Net increase in cash (6,486) 7,822 (6,989) 2,868 2,388 3,376 2,196 2,176

Operating data 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E
No. of subscriber (mn) 72.73 76.50 75.95 80.00 83.73 87.55 91.48 95.52
Market share of GRAM BD 46.3% 46.1% 45.8% 46.3% 46.5% 46.8% 47.0% 47.3%
Active internet user (mn) 37.1 40.6 41.4 45.2 49.0 53.0 57.2 61.6
Avg. revenue per user (ARPU) (BDT) 160.4 160.4 158.8 166.1 168.2 170.9 174.7 177.7
Avg. minute per user (AMPU) (min) 234.0 217.0 210.5 204.2 198.1 192.1 186.3 180.8
Average price per minute (APPM) (BDT) 0.66 0.72 0.72 0.72 0.72 0.72 0.72 0.72
Avg. gigabytes per user (AGBPU) 1.0 1.7 2.7 3.5 4.2 4.9 5.6 6.3
Avg. price per gigabyte (APPGB) (BDT) 56.9 40.0 26.0 22.9 21.2 19.6 18.6 17.7
Data revenue - % of service revenue 19.2% 20.8% 23.7% 27.7% 31.3% 34.8% 38.4% 41.4%

Key ratios 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E
Growth YoY
Revenue 3.4% 8.1% 1.1% 7.0% 6.3% 6.3% 6.9% 6.2%
EBITDA 8.2% 13.6% 1.7% 7.7% 7.0% 7.0% 7.6% 6.9%
EBIT 13.7% 17.4% 1.3% 8.4% 7.2% 7.2% 8.2% 7.0%
PAT 21.7% 3.5% 9.0% 7.8% 8.5% 8.2% 9.1% 7.7%

Margins
EBITDA margin 59.7% 62.7% 63.1% 63.5% 63.9% 64.4% 64.8% 65.2%
EBIT margin 42.7% 46.4% 46.5% 47.1% 47.5% 47.9% 48.4% 48.8%
PBT margin 41.3% 44.5% 44.9% 45.3% 46.2% 47.1% 48.0% 48.7%
PAT margin 25.1% 24.0% 25.9% 26.1% 26.6% 27.1% 27.7% 28.1%

Per share data

EPS (BDT) 24.7 25.6 27.9 30.1 32.6 35.3 38.5 41.5
BVPS (BDT) 27.3 28.4 29.3 30.3 30.9 31.2 31.7 32.1

Return and valuation

ROIC 66.1% 64.1% 59.1% 62.2% 70.5% 80.4% 92.6% 104.8%
ROE 92.7% 91.8% 96.7% 100.9% 106.5% 113.6% 122.4% 129.9%
ROA 24.8% 24.0% 24.6% 25.9% 28.3% 30.8% 33.6% 36.1%
Dividend payout 113.3% 50.9% 96.9% 96.5% 98.2% 99.2% 98.7% 98.9%
Dividend yield 9.5% 4.4% 9.2% 9.9% 10.9% 11.9% 12.9% 13.9%
EV/EBITDA* 5.2x 4.6x 4.5x 4.2x 3.9x 3.6x 3.4x 3.2x
P/E* 11.9x 11.5x 10.5x 9.8x 9.0x 8.3x 7.6x 7.1x
P/B* 10.8x 10.4x 10.0x 9.7x 9.5x 9.4x 9.3x 9.1x
*Based on current price of 23 August 2020

24 August 2020 18
Disclaimer
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Recommendation Type Holding period (if not otherwise mentioned) Absolute Return Potential

Buy 12 Months More than +15%

Neutral/ Hold 12 Months Between +15 % and -5 %
Underweight 12 Months Less than -5 %

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lyses, that (1) the views expressed in this report reflect his or her personal views about all of the subject companies and securi-
ties and (2) no part of his or her compensation was, is or will be directly or indirectly dependent on the specific recommend a-
tions or views expressed in this report. The research analyst(s) named on this report are not registered / qualified as resea rch
analysts with FINRA.

It has not been determined in advance whether and in what intervals this document will be updated. Unless otherwise stated
current prices refer to the most recent trading day’s closing price.

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Md. Hasib Reza, CFA Head of Research hasib.reza@ucb.com.bd +880 1755 658 997
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Shadman Sadique Kamal Research Associate shadman.kamal@ucb.com.bd +880 1701 205 096

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