Singapore Company Focus

Rex International Holdings

Bloomberg: REXI SP | Reuters: REXI.SI

Refer to important disclosures at the end of this report

DBS Group Research . Equity

22 Nov 2013

BUY S$0.615 STI: 3,172.38

Price Target: 12-Month S$1.15 (Prev S$1.27) Reason for Report: Company update Potential Catalyst: Drilling results, licence awards DBSV vs Consensus: Largely in line Analyst Suvro SARKAR +65 6398 7973 [email protected]

No change in potential
Foray into oil well stimulation technology through tie-up with Swiss firm could yield complementary earnings stream in future Meanwhile, progress on new licence adds and drilling plans at existing assets are all on track Balance sheet fortified by share placement Thus, recent sell down seems unjustified; reiterate BUY with adjusted TP of S$1.15

Price Relative
S$ 1.0 1.0 0.9 0.9 0.8 0.8 0.7 0.7 0.6 0.6 0.5 Jul-13 Oct-13 209 189 169 149 129 109 89 Relative Index

Rex International Holdings (LHS)

Relative STI INDEX (RHS)

Forecasts and Valuation

FY Dec (S$ m) 2012A 2013F 2014F 2015F

Another game-changing technology in hand? Rex will be investing US$20m for a 67% stake in Rexonic, which will own a proprietary environmentally-friendly, high-power ultrasound technology for commercial oil well stimulation developed by Swiss partner Ogsonic AG. This technology is intended to replace traditional chemical methods and has been shown to increase oil production from 30% to 380%, both onshore and offshore, according to management. This JV will target the oil & gas production phase, and being complementary to Rexs existing offerings in the exploration phase, offers cross-sell opportunities. Rexonic has already signed contracts with three major NOCs and could contribute a recurrent earnings stream within the next few years. Drill campaigns all on track. Drill results from the first well in Oman can be expected around end-December 2013, and the second well around 40 days later. While the developments in Oman are likely to be of much interest to the market, Rex is also aiming to drill another 5-7 offshore wells in various areas in 2014, and looking to grow its portfolio from the current 15 licences to 30 licences over the next 18-24 months, potentially providing a constant stream of newsflow and catalysts. Maintain BUY for 85% upside potential. Our TP for Rex is adjusted down to S$1.15, as we factor in a bigger share base arising from the recent share placement, as well as consideration shares issued to fund the acquisition of the Rexonic stake and an additional stake in Rex Caribbean. However, we believe the story for Rex remains intact, as highlighted above, and the recent sell down thus presents a good buying opportunity.
At A Glance Issued Capital (m shrs) Mkt. Cap (S$m/US$m) Major Shareholders Rex Partners (%) Schroders Plc (%) Free Float (%) Avg. Daily Vol.(000) 1,005 618 / 496 50.9 7.9 41.2 12,002

Revenue EBITDA Pre-tax Profit Net Profit Net Pft (Pre Ex.) EPS (S cts) EPS Pre Ex. (S cts) EPS Gth (%) EPS Gth Pre Ex (%) Diluted EPS (S cts) Net DPS (S cts) BV Per Share (S cts) PE (X) PE Pre Ex. (X) P/Cash Flow (X) EV/EBITDA (X) Net Div Yield (%) P/Book Value (X) Net Debt/Equity (X) ROAE (%) Earnings Rev (%): Consensus EPS (S cts): Other Broker Recs:

0 (1) (1) (1) (1) (0.1) (0.1) nm nm (0.1) 0.0 0.5 nm nm N/A nm 0.0 120.5 0.4 (46.1)

0 (11) (7) (7) (11) (0.6) (1.0) (413) (723) (0.6) 0.0 12.0 nm nm nm nm 0.0 5.1 CASH (9.7) (40) (1.0) B: 2

3 17 17 17 17 1.6 1.6 nm nm 1.6 0.0 13.6 39.6 39.6 nm 35.2 0.0 4.5 CASH 12.1 (2) 0.9 S: 0

12 70 70 68 68 6.2 6.2 301 301 6.2 3.7 16.2 9.9 9.9 nm 8.9 5.9 3.8 CASH 41.9 (5) 9.4 H: 0

ICB Industry : Oil & Gas ICB Sector: Oil & Gas Producers Principal Business: Rex Int'l Holdings is an oil exploration & production company with concessions in Norway, ME and the US

Source of all data: Company, DBS Vickers, Bloomberg Finance L.P

www.dbsvickers.com ed: TH / sa: JC

Company Focus Rex International Holdings

How has the story progressed since IPO? Proposed first foray in Asia-Pacific region through HIREX JV. In late September, Rex announced that its 41%-owned JV HIREX Petroleum had entered into a collaboration agreement with ASX-listed Bass Strait Oil Company (BAS) to participate in specific exploration opportunities in the Gippsland Basin in Australia. HIREX and BAS will work together over the next three months, to apply the Rex Virtual Drilling technology and integrate it with conventional geological and geophysical data, to reassess the prospects of the Vic/P42 permit in the Gippsland Basin. If results of the evaluation are encouraging, HIREX may then commit to acquiring a 51% participating interest in the permit and to drilling an exploration well in the 2014/2015 timeframe. Snapshot of VIC/P42 exploration permit offshore Australia

Rex restructures its holdings in Fram and US/Caribbean assets. As the first part of the restructuring, Rex International Holdingss wholly-owned subsidiary, Rex US has entered into an agreement with Fram to exchange Rex USs 20% direct interest in Frams Colorado and North Dakota concessions into an additional stake in Fram. Before this agreement, Rex held a direct 24% interest in Fram, while its subsidiary Rex US held a 20% direct interest in the Colorado and North Dakota concessions. After the transaction as described below, Rex will hold approximately 27.7% of the issued share capital of Fram and no direct interest in the Colorado and North Dakota concessions in the US. No further capital commitments to US work programme. Rex US will convert the payment due for part of the work programme already fulfilled under the farm-in agreement between Rex US, Loyz Energy and Fram, together with a cash payment of US$4.51m to Fram, for new shares to be issued by Fram. Pursuant to this exchange, Fram and Loyz will continue with the remaining work programme from which Rex US will exit. The New Fram Shares will be issued at the same price per share as the share swap conducted between Fram and Rex International Holdings in April 2013, and in aggregate, is valued at approximately US$ 7m. The New Fram Shares constitute 3.7% of the issued share capital of Fram. By way of this exit, Rex will be saving about US$20m in capex commitments over the next two years, according to our estimates. Increased shareholding in Rex Caribbean. As the second part of the Restructuring, the Group is acquiring a larger 64.17% stake in the licence-holding company Caribbean Rex Limited, instead of the initially stated 51.99% stake. Rex International Holdings will acquire the additional stake in Caribbean Rex from Fram for approximately US$3m, by the issuance of new ordinary shares in the capital of Rex at an issue price of S$0.83 per share. Consideration for the initial stake in Caribbean Rex amounting to US$9m in cash has already been paid. Upon completion of the transaction, the three shareholders of Caribbean Rex will be Rex International Holdings (64.17%), Pareto Staur SPV I AS (34.76%) and Mr. Geoffrey Leid, CEO-designate of Caribbean Rex, in his personal capacity (1.07%). We believe this overall transaction is largely value neutral, as the increased direct stakes in Fram and Rex Caribbean offset the loss of direct interests in the US assets and limit capex commitments.

Source: Bass Strait Oil announcement dated 20 September 2013

The Vic/P42 permit (933 sq km) is 100%-owned and operated by BAS and is located approximately 40 kilometres off the coast of Victoria state in Australia and contains moderate water depths from 50 to 80 metres. The permit is located adjacent to Kingfish, Australias largest oil field, as well as the Bream, Tarwhine and Dolphin producing fields. The permit is almost entirely covered by modern 3D seismic surveys and is close to developed regional infrastructure.

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Company Focus Rex International Holdings

Snapshot of current investments in operating companies and concession areas of RIH Group
Asset Signed/ Awarded Terms (years) Working Interest# (%) 80.0% Operator Plans & programmes Type of reserve/ resource Gross 2P reserves Gross 2C resources Reserves/ resources

Fram (27.7% stake) Colorado/ N. Dakota 2012 As long as producing Fram Operating 2Q-2013: 80 well programme started 20.4 0.27

Lime Petroleum Norway (65% stake) Norway: PL503 Norway: PL503B Norway: PL616 Norway: PL498 Norway: PL707 Norway: PL708 Oman: Block 50 UAE: RAK Onshore UAE: RAK Offshore UAE: Sharjah Inniss-Trinity South Erin Cory Moruga Block E 2009 2011 2012 2009 2013 2013 2011 2012 2010 2011 10+20 10+20 10+20 10+20 5 5 3+3+20 1.5+2+20 3+3+20 3+20 12.5% 12.5% 5.0% 5.0% 10.0% 10.0% 64.0% 100.0% 59.0% 100% Lotos Lotos Edison S.P.A Lotos Edison S.P.A Lundin Lime Petroleum Lime Petroleum Lime Petroleum Lime Petroleum 2013: 2 wells 2H13: Seismic acquisition 2014: 1 well each 2276.7 Unknown 60.9 426.0 2-3 wells in 2014 Net unrisked resources* Unknown

Lime Petroleum (65% stake) Middle East assets

Net unrisked resources*

Rex Caribbean (64.2% stake) 2013 2013 2013 100.0% 75.0% 51.0% Rex Caribbean Rex Caribbean Rex Caribbean 2 commitment wells in 2013/14 OOIP OOIP 20.0 40.0

* Net unrisked resources as disclosed by Hibiscus Petroleum, which owns 35% of Lime Petroleum and is RIHs partner in ME/ Norway assets. # Working Interest is at associate/ JV/ subsidiary level Note: OOIP refers to Original Oil in Place. Source: Company, DBS Vickers

US drilling campaign progress largely on track. While there have been some delays in the drilling process owing to unexpected weather conditions, SGX-listed Loyz Energy announced in late October that first oil has been drawn from the North Dakota and Colorado assets in the US. Loyz has a 20% net revenue interest in the asset, while the remaining is held by Fram, following the exit of Rex US. According to Loyz Energy management, the first well was spudded in North Dakota on 7 May 2013 and production flow is already underway in the Schlak #3 well in North Dakota, where initial flow tests indicate varying flow rates up to 50 barrels per day. In Colorado, flow tests are being carried out now and will continue over the next few weeks, the results of which will be announced in due course.

Oman drill results expected in the near term, plans for further drilling campaigns in 2014 firming up. Our recent update from management indicates that the first offshore well is on track to be drilled in Oman within the next two weeks and drill results could be expected around end-December 2013 at the earliest. The results from the second well in Oman can be expected around 40 days after the first well. Apart from the developments in Oman, which are likely to be of much interest to the market in terms of adding further credibility to Rexs exploration technology advantage, Rex is also aiming to drill another 5-7 offshore wells in 2014. Two of these wells will likely be drilled at its Norwegian concessions, one each in RAK Offshore and Sharjah under Lime Petroleums Middle East portfolio, and the remaining in other regions to be identified, potentially in SE Asia and Oceania.

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Company Focus Rex International Holdings

Joint venture formed in well stimulation. Rex has recently formed a joint venture company Rexonic AG with Swiss firm Ogsonic AG, wherein Rex will hold a 66.7% stake and Ogsonic the remaining 33.3%. The total consideration of this stake acquisition will be US$20m to be satisfied via U$10m cash and US$10m worth of new shares in the capital of Rex to Ogsonic. The new shares will be issued at a price of S$0.787 (7-day VWAP preceding the signing of the agreement with Ogsonic). Ultrasound technology instead of chemicals for well cleaning. Rexonic will own the worlds first environmentally-friendly, high-power ultrasound technology for commercial oil well stimulation that has shown to increase oil production from 30% to 38%, both onshore and offshore. The proprietary, patented technology is highly efficient in cleaning the production well bore from typical oil production inhibitors such as wax, paraffin and salt deposits, thereby significantly increasing the flow of oil into the well bore, as pore space and permeability are restored. The technology can be used for stimulating oil wells with declining production, as well as reviving wells with low output.

Three key elements to the proprietary technology. The process involves setting up the required electrical power supply system, converting it to mechanical energy, and finally the right resonating system/tuning fork to ensure it functions at the depths of the well perforation zone. The alternating low-pressure and high-pressure waves lead to ultrasonic shear waves in the well and surrounding rock, which reduces the friction in the media and improves oil flow into the well bore. The ultrasonic waves create cavitation, which causes mechanical removal of particles and reduces the viscosity of the liquid without the use of chemical agents and steam generators. Stretches Rexs business model all the way from exploration phase to production phase. Rexonics enhanced oil recovery technology will be a good complement to Rexs core competence in oil exploration using the proprietary Rex Technologies. Like Rex Technologies, Rexonics ultrasound technology can be considered game-changing, but in the early adoption stage. Once ramped up, Rexonic will contribute a complementary, recurring revenue stream to Rexs main activities in oil exploration.

Rexs enhanced position in the E&P value chain with the addition of Rexonic

Source: Company, DBS Vickers

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Company Focus Rex International Holdings

Key advantages of Rexonics technology

Advantages over competing technologies Less cost intensive, higher efficiency, better results More environmental-friendly, creates no pollution unlike chemicals Almost no production downtime required Effects are longer lasting Easier and faster set-up of equipment Effects of Rexonics ultrasound technology Removal of paraffins, wax and asphaltene deposits Destroys salt formations in the capillaries Reduction of surface tension in the capillaries Destruction of colloid formations Unclogging of injected particles

Source: Company, DBS Vickers

Ogsonic has been operating since 2008. Ogsonic AG was founded as a spin-off of a leading industrial ultrasonic application provider to solely concentrate on the development and production of ultrasonic solutions for the oil and gas industry. The founding members are current CEO Mr. Andreas Karl Kuhne, a veteran in the financial services and startup areas, and CTO Mr. Peter Spenger, who previously owned and managed the industrial ultrasonic company, Telsonic AG, for more than 17 years. The first pilot tests of the technology were conducted in 2009 in Mexico and Romania.

Demonstrated significant increase in oil production. According to management, the technology has showed that it is possible to increase oil production by 30% to 380% across both onshore and offshore wells in test conditions in Central and South America. This can result in significant earnings accretion for oil producers. A simple case study shown below shows that a 30% enhancement in production for an existing 100bopd well can result in revenue increase of more than US$1m per year if the production can be sustained. The returns on investment can be, thus, quite attractive.

Examples of well stimulation tests undertaken by Ogsonic in the past

bopd 235 bopd 1865 107% 116 197% 39 49 380% 65% 83 137 899

Onshore Central America 2009 Before

Onshore Central America 2010 After

Offshore South America 2013 Before

Offshore Central America 2011 After

Source: Company, DBS Vickers

Case study on the impact of a successful stimulation of a clogged well, assuming 30% increase in production
Existing daily production of clogged well Enhanced daily production after Rexonic stimulation Increase in daily production Crude oil price Increase in revenue per day Increase in revenue per year 100bopd 130bopd 30% US$100/bbl US$3,000 US$1.1m

Source: Company, DBS Vickers

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Company Focus Rex International Holdings

Contracts have already been signed, showing commerciality of the technology. In a reassuring sign for investors, management of Ogsonic indicated that they have so far signed contracts with three major national oil companies in South/ Central America and Asia. The contracts can either be service based where the well stimulations will be carried out by the companys own team and payments will be day rate-based or a licence fee-based model, where the well stimulations will be carried out by the customers team using technology licensed from the company. Service

model contracts usually tend to be open-ended, with the customer requesting for well stimulations as and when required on a recurring basis. Management also indicated that current contracts run into 2016, and the company should be profitable within the next few years, given that there are sizeable opportunities to gain market share in the global well stimulation market likely worth more than US$20bn, covering close to 750,000 operating wells worldwide.

Key features of possible operating business models for Rexonic

Service Model Well stimulations carried out by Rexonics own team and equipment Licensing Model Licences for Rexonic technology sold, allowing contracted service providers to use the technology with their personnel but under Rexonics expert supervision and training Revenue from well treatments on daily rate basis Worldwide data collection for R&D purposes Revenue from licences and training Fast and worldwide roll out of technology without huge investment

Source: Company, DBS Vickers

Balance sheet bolstered by share placement. To part finance the acquisition of its 67% stake in Rexonic and invest in other new business opportunities, Rex has also placed out 70m new shares through a private placement exercise at a placement price of S$0.755 per share in late October, raising up to approximately S$52.85m gross proceeds. The

placement price of S$0.755 per placement share represented a discount of 9.6% to the 1-day VWAP price of S$0.8356 for each share on 25 October 2013. With the proceeds from this placement adding on to the gross IPO proceeds of S$85m, we believe Rex is sufficiently capitalised to deliver on its organic and inorganic growth strategies.

Funding position of Rex

Amount of funds raised Pre-listing (at asset & subsidiary level) Pre-IPO funding (excluding share swap with Fram) Gross IPO proceeds Net private placement proceeds S$114.3m (US$90m) S$35.6m (US$28m) S$85.3m S$50.5m

Intended use of IPO proceeds Investment in new opportunities Drilling in Middle East concessions Drilling in Norwegian licences Repayment of loan to Rex Partners General working capital Listing expenses

S$85.3m S$15.7m S$12.4m S$23.6m S$2.4m S$25.9m S$5.3m

Intended use of private placement proceeds New opportunities in Asia-Pacific New opportunities in existing markets Investment in Rexonic

S$50.5m S$17.7m S$16.7m S$16.1m

Source: Company, DBS Vickers

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Company Focus Rex International Holdings

Valuation diluted to an extent by issuance of new shares. Our TP for Rex is adjusted down to S$1.15, as we factor in a bigger share base arising from the placement shares issued, as well as the consideration shares issued to fund the acquisition of the Rexonic stake and an additional stake in Rex Caribbean. To recap, our valuation for Rex is based on a sum of the parts enterprise value comprising: i) Its 27.7%

stake in Fram Exploration, which holds 80% interest in the US concessions, ii) A 65% stake in Lime Petroleum, which holds several exploratory licences in the Middle East and Norway, iii) A 64.2% stake in Rex Caribbean, which has interests in three licence areas in Trinidad & Tobago, and iv) The recently acquired 67% stake in Rexonic, a provider of ultrasound-powered oil well stimulation services.

Summary of valuation for Rex International Holdings

Sum of the Parts Valuation Value of 27.7% stake in Fram US Value of 65.0% stake in Lime Petroleum Value of 64.2% stake in Rex Caribbean Value of 66.7% stake in Ogsonic Total No of shares at IPO (m) No. of placement shares issued (m) No. of consideration shares issued to Ogsonic (m) No. of consideration shares issued to Fram (m) Total share base (m) Equity Value (US$m) 75.0 765.6 150.7 20.0 991.2 1,004.7 70.0 15.8 4.5 1,095.0 Equity Value (S$m) 93.7 957.0 188.3 25.0 1,239.0 Value per Share (S$) 0.09 0.87 0.17 0.02 1.15

Source: DBS Vickers Estimates

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Company Focus Rex International Holdings

Income Statement (S$ m)

FY Dec 2012A 2013F 2014F 2015F

Revenue Cost of Goods Sold Gross Profit Other Opng (Exp)/Inc Operating Profit Other Non Opg (Exp)/Inc Associates & JV Inc Net Interest (Exp)/Inc Exceptional Gain/(Loss) Pre-tax Profit Tax Minority Interest Preference Dividend Net Profit Net Profit before Except. EBITDA Growth Revenue Gth (%) EBITDA Gth (%) Opg Profit Gth (%) Net Profit Gth (%) Margins & Ratio Gross Margins (%) Opg Profit Margin (%) Net Profit Margin (%) ROAE (%) ROA (%) ROCE (%) Div Payout Ratio (%) Net Interest Cover (x)

0 0 0 (1) (1) 0 (1) 0 0 (1) 0 0 0 (1) (1) (1) N/A nm nm nm N/A N/A N/A (46.1) (32.1) (15.1) N/A NM

0 0 0 (6) (6) 0 (4) 0 4 (7) 0 0 0 (7) (11) (11) N/A (797.4) (1,121.2) (459.1) N/A N/A N/A (9.7) (9.5) (9.3) N/A NM

3 (1) 2 (13) (11) 0 28 0 0 17 0 0 0 17 17 17 N/A nm (71.0) nm 69.1 (434.7) 669.6 12.1 12.1 (7.7) 0.0 NM

12 (4) 8 (15) (7) 0 77 0 0 70 (2) 0 0 68 68 70 375.0 302.7 40.0 301.3 68.5 (54.9) 565.7 41.9 41.7 (4.0) 58.6 NM

Revenue mainly from Rex Caribbean assets

Proceeds from sale of successful discoveries

Margins Trend
543.0% 343.0% 143.0% -57.0% -257.0% -457.0%
Operating Margin % Net Income Margin %

2014F

2015F

Source: Company, DBS Vickers

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Company Focus Rex International Holdings

Quarterly / Interim Income Statement (S$ m)
FY Dec 1Q2013 2Q2013 3Q2013

Revenue Cost of Goods Sold Gross Profit Other Oper. (Exp)/Inc Operating Profit Other Non Opg (Exp)/Inc Associates & JV Inc Net Interest (Exp)/Inc Exceptional Gain/(Loss) Pre-tax Profit Tax Minority Interest Net Profit Net profit bef Except. EBITDA Growth Revenue Gth (%) EBITDA Gth (%) Opg Profit Gth (%) Net Profit Gth (%) Margins Gross Margins (%) Opg Profit Margins (%) Net Profit Margins (%)

0 0 0 0 0 0 (1) 0 0 (1) 0 0 (1) (1) (1)

0 0 0 0 0 0 0 0 0 (1) 0 0 (1) (1) (1)

0 0 0 (3) (3) 0 (2) 0 4 (2) 0 0 (2) (6) (6)

Gain on sale of stake in HIREX

N/A nm nm nm N/A N/A N/A

N/A 51.4 19.4 51.5 N/A N/A N/A

N/A (715.9) (1,432.1) (131.1) N/A N/A N/A

Balance Sheet (S$ m)

FY Dec 2012A 2013F 2014F 2015F

Net Fixed Assets Invts in Associates & JVs Other LT Assets Cash & ST Invts Inventory Debtors Other Current Assets Total Assets ST Debt Creditor Other Current Liab LT Debt Other LT Liabilities Shareholders Equity Minority Interests Total Cap. & Liab. Non-Cash Wkg. Capital Net Cash/(Debt) Debtors Turn (avg days) Creditors Turn (avg days) Inventory Turn (avg days) Asset Turnover (x) Current Ratio (x) Quick Ratio (x) Net Debt/Equity (X) Net Debt/Equity ex MI (X) Capex to Debt (%) Z-Score (X)

0 0 7 0 0 0 0 7 2 0 0 0 0 5 0 7 0 (2) N/A N/A N/A 0.0 0.0 0.0 0.4 0.4 0.0 NA

0 0 75 57 0 0 0 132 0 0 0 0 0 132 0 132 0 57 N/A N/A N/A 0.0 N/A N/A CASH CASH N/A NA

0 0 87 62 0 0 0 149 0 0 0 0 0 149 0 149 0 62 N/A N/A N/A 0.0 176.9 176.9 CASH CASH N/A NA

0 0 130 49 0 0 0 179 0 0 2 0 0 177 0 179 (2) 49 N/A N/A N/A 0.1 29.7 29.7 CASH CASH N/A NA

Investments in JV/ assocs (exploration/ drilling)

IPO proceeds and share placement proceeds

Source: Company, DBS Vickers

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Company Focus Rex International Holdings

Cash Flow Statement (S$ m)

FY Dec 2012A 2013F 2014F 2015F

Capital Expenditure
10 9 8 7 6 5 4 3 2 1 0 2012A 2013F 2014F 2015F

Pre-Tax Profit Dep. & Amort. Tax Paid Assoc. & JV Inc/(loss) Chg in Wkg.Cap. Other Operating CF Net Operating CF Capital Exp.(net) Other Invts.(net) Invts in Assoc. & JV Div from Assoc & JV Other Investing CF Net Investing CF Div Paid Chg in Gross Debt Capital Issues Other Financing CF Net Financing CF Currency Adjustments Chg in Cash Opg CFPS (S cts) Free CFPS (S cts)

(1) 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.0 0.0

(7) 0 0 4 0 0 (2) (9) 0 (65) 0 0 (74) 0 0 133 0 133 0 57 (0.2) (1.0)

17 0 0 (28) 0 0 (11) 0 0 (10) 27 0 17 0 0 0 0 0 0 6 (1.0) (1.0)

70 0 (2) (77) 0 0 (8) 0 0 (38) 73 0 35 (40) 0 0 0 (40) 0 (13) (0.8) (0.8)

Capital Expenditure (-)

Drilling and exploration capex offset by proceeds from potential sale of asset

Source: Company, DBS Vickers

Target Price & Ratings History

S$ 0.93 0.83 0.73 0.63 0.53 0.43 Jul-13 Sep-13 Closing Price 0.93 Target Price 1.27

S.No. 1:

Date 23 Sep 13

Rating Buy

Note : Share price and Target price are adjusted for corporate actions.

Source: DBS Vickers

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Company Focus Rex International Holdings

DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return i.e. > -10% over the next 12 months) SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)

Share price appreciation + dividends

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ANALYST CERTIFICATION The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of 22 Nov 2013, the analyst and his / her spouse and/or relatives who are financially dependent on the analyst, do not hold interests in the securities recommended in this report (interest includes direct or indirect ownership of securities, directorships and trustee positions).

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Company Focus Rex International Holdings

COMPANY-SPECIFIC / REGULATORY DISCLOSURES DBS Vickers Securities (Singapore) Pte Ltd and its subsidiaries do not have a proprietary position in the company mentioned as 1. of 20-Nov-2013 2. DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBS Vickers Securities (USA) Inc ("DBSVUSA"), a U.S.-registered brokerdealer, may beneficially own a total of 1% or more of any class of common equity securities of the company mentioned as of 22 Nov 2013. Compensation for investment banking services: i. DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA may have received compensation, within the past 12 months, and within the next 3 months receive or intends to seek compensation for investment banking services from the company mentioned. DBSVUSA does not have its own investment banking or research department, nor has it participated in any investment banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.

3.

ii.

RESTRICTIONS ON DISTRIBUTION General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. Australia This report is being distributed in Australia by DBSVR and DBSVS, which are exempted from the requirement to hold an Australian financial services licence under the Corporation Act 2001 [CA] in respect of financial services provided to the recipients. DBSVR and DBSVS are regulated by the Monetary Authority of Singapore [MAS] under the laws of Singapore, which differ from Australian laws. Distribution of this report is intended only for wholesale investors within the meaning of the CA. This report is being distributed in Hong Kong by DBS Vickers (Hong Kong) Limited which is licensed and regulated by the Hong Kong Securities and Futures Commission. This report is being distributed in Singapore by DBSVR, which holds a Financial Advisers licence and is regulated by the MAS. This report may additionally be distributed in Singapore by DBSVS (Company Regn. No. 198600294G), which is an Exempt Financial Adviser as defined under the Financial Advisers Act. Any research report produced by a foreign DBS Vickers entity, analyst or affiliate is distributed in Singapore only to Institutional Investors, Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chap. 289 of Singapore. Any distribution of research reports published by a foreign-related corporation of DBSVR/DBSVS to Accredited Investors is provided pursuant to the approval by MAS of research distribution arrangements under Paragraph 11 of the First Schedule to the FAA. This report is being distributed in the UK by DBS Vickers Securities (UK) Ltd, who is an authorised person in the meaning of the Financial Services and Markets Act and is regulated by The Financial Services Authority. Research distributed in the UK is intended only for institutional clients. This report is being distributed in Dubai/United Arab Emirates by DBS Bank Ltd, Dubai (PO Box 506538, 3 Floor, Building 3, Gate Precinct, DIFC, Dubai, United Arab Emirates) and is intended only for clients who meet the DFSA regulatory criteria to be a Professional Client. It should not be relied upon by or distributed to Retail Clients. DBS Bank Ltd, Dubai is regulated by the Dubai Financial Services Authority. Neither this report nor any copy hereof may be taken or distributed into the United States or to any U.S. person except in compliance with any applicable U.S. laws and regulations. In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions. DBS Vickers Research (Singapore) Pte Ltd 12 Marina Boulevard, Level 40, Marina Bay Financial Central Tower 3, Singapore 018982 Tel. 65-6327 2288 Company Regn. No. 198600295W
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Hong Kong

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Dubai/ United Arab Emirates United States

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