Please refer to the important disclosures and analyst certification on inside back cover of this document, or on our website www.macquarie.com/disclosures.

AUSTRALIA

4 December 2012 Macquarie Securities (Australia) Limited

Emerging Leaders Wrap Expanding the universe This month two stocks were added to our Emerging Leader coverage universe.

M2 Telecommunications (MTU, Outperform, $3.21 PT) We expect the stock to

outperform on a short-term view as Primus acquisition synergies drive

reasonable earnings growth (+20% EPS growth in FY13). The company has

targeted significant synergy potential in combining the two companies (~$5m pa

over the next three years or total ~$15m) in terms of enhanced buying leverage

with suppliers, cost base rationalisation and moving customers on-net which

attracts a higher gross margin. The stock is also attractive on a free cashflow

yield basis (9%-11% FY13/FY14). Longer term we believe continued

outperformance will be reliant on M2's ability to demonstrate more meaningful

organic growth than it has delivered previously or alternatively continue to

pursue acquisitions to drive future earnings. Our preference in the junior telco

space is Amcom (AMM), given the stronger organic growth profile and more

favourable market structure.

SCA Property Group (SCP, Underperform, $1.40 PT) SCP is a relatively

defensive proposition backed by a strong covenant with ~61% of gross income

derived from Woolworths‟ entities. Despite some concerns around growth with

anchor leases unlikely to breach turnover rent thresholds for at least the next

four years, SCA is a fairly low-risk proposition centred on convenience retail.

Our NAV valuation of $1.37-1.40 assumes 10-20bps of cap rate expansion given

Woolworths were unable to sell 20 of the portfolio assets in the direct market

having first announced intentions to reduce the amount of property on balance

sheet in September 2010. We have completed a detailed analysis on the

success of this divestment program in the report.

Despite several levers available to the group to ensure stable DPS growth

including corporate cost out, a structural vacancy allowance and the ability to

increase the dividend payout ratio, we forecast a flat FCF on a three-year CAGR

basis reflecting the roll off of rent guarantees and tenant incentives. On this

basis, we prefer other stocks in the sector such as CQR and initiate on SCP with

an Underperform recommendation.

ELG model portfolio performance

Our model portfolio finished up 0.14% in November compared to the Small

Ordinaries Accumulation Index, which was down 2.43%. Best performers this

month included Independence (14.5%), Horizon (14.15) and Corporate Travel

Management (12.3%). The portfolio‟s performance this month has been

impacted by positions in NRW (-35.4%), Azimuth (-23%), Alacer (-18.5%) and

Panoramic (-16%).

This month we have removed Discovery Metals, given our view there is low risk

of the Cathay Fortune bid being bettered combined with completion risks

associated with the hostile DML Board response. We have added Henderson

Group given its discount valuation and market leverage. In view of the impact of

net flows on margin, we believe there is scope for a positive margin outlook on

despite the headwinds the rest of the sector will see on retail margins in 2013

and onwards.

Macquarie Private Wealth Emerging Leaders Wrap

4 December 2012 2

Fig 1 Small Industrials EPSg Fig 2 Small Industrials MoM EPSg change (%)

Source: Macquarie Research, December 2012 Source: Macquarie Research, December 2012

Fig 3 Market Ratios

Emerging Leaders= All stocks x 100 June Year End December Year End Prices as at 04 December 12 2012 2013 2014 2015 2012 2013 2014 2015

PER (x) Macquarie Emerging Leaders 15.6 14.9 11.4 10.2 15.1 12.4 10.5 10.0 Emerging Leaders Industrials 14.2 13.3 11.7 10.7 14.0 12.3 11.1 10.3 Emerging Leaders Resources 28.8 30.2 10.4 8.5 23.0 12.8 8.6 8.9 Macquarie All Companies 13.8 14.4 12.6 11.6 14.6 13.3 12.0 11.3 All Companies ex-Resources 14.1 13.7 12.6 11.8 13.9 13.2 12.1 11.2 All Companies ex-Financials 14.6 15.8 13.1 12.0 16.3 14.0 12.4 11.5 Div Yield (%) Macquarie Emerging Leaders 4.2 4.0 4.6 5.0 3.9 4.3 4.8 5.2 Emerging Leaders Industrials 4.9 4.8 5.4 5.8 4.7 5.1 5.6 6.2 Emerging Leaders Resources 1.4 0.9 1.2 1.2 0.8 1.1 1.3 1.1 Macquarie All Companies 4.5 4.6 4.9 5.2 4.5 4.7 5.1 5.3 All Companies ex-Resources 5.1 5.2 5.5 5.8 5.1 5.4 5.7 6.0 All Companies ex-Financials 3.7 3.7 4.0 4.4 3.6 3.8 4.2 4.4 EPS Growth (%) Macquarie Emerging Leaders 4.6 12.0 30.5 11.5 3.0 24.0 18.3 5.4 Emerging Leaders Industrials -3.9 6.8 13.2 9.0 1.6 13.0 11.2 7.8 Emerging Leaders Resources 233.0 60.6 195.5 20.8 15.7 102.4 48.5 -1.9 Macquarie All Companies -3.4 -3.7 14.5 7.9 -7.5 9.7 10.5 5.2 All Companies ex-Resources 0.7 2.5 8.8 7.2 3.1 5.5 8.3 5.9 All Companies ex-Financials -5.3 -6.7 20.7 9.2 -14.7 16.4 13.2 5.4 EV/EBIT (x) Macquarie Emerging Leaders 12.0 10.7 8.7 7.8 12.0 9.3 8.1 7.7 Emerging Leaders Industrials 10.9 10.1 9.1 8.4 10.6 9.5 8.7 8.1 Emerging Leaders Resources 22.9 15.4 7.2 5.9 31.0 8.8 6.0 6.2 Macquarie All Companies 10.5 10.7 9.0 8.3 11.5 9.6 8.6 8.0 All Companies ex-Resources 13.1 11.4 10.3 9.5 12.2 10.9 9.9 9.0 All Companies ex-Financials 9.8 10.4 8.7 8.0 11.1 9.3 8.3 7.6 EV/EBITDA (x) Macquarie Emerging Leaders 8.3 7.2 6.2 5.7 8.1 6.6 5.9 5.6 Emerging Leaders Industrials 8.5 7.6 7.0 6.6 8.1 7.2 6.7 6.3 Emerging Leaders Resources 7.6 5.8 4.1 3.5 7.8 4.6 3.7 3.6 Macquarie All Companies 7.9 8.0 7.0 6.4 8.5 7.3 6.6 6.2 All Companies ex-Resources 9.4 8.7 8.0 7.5 9.2 8.4 7.8 7.3 All Companies ex-Financials 7.4 7.6 6.6 6.1 8.1 7.0 6.3 5.8 EV/EBITA (x) Macquarie Emerging Leaders 11.4 10.2 8.3 7.6 11.6 8.9 7.8 7.4 Emerging Leaders Industrials 10.9 9.7 8.8 8.2 10.5 9.2 8.5 7.9 Emerging Leaders Resources 15.7 12.8 6.7 5.6 21.3 8.0 5.7 5.8 Macquarie All Companies 10.4 10.8 9.2 8.5 11.6 9.7 8.7 8.1 All Companies ex-Resources 12.8 11.4 10.4 9.6 12.2 10.9 10.0 9.1 All Companies ex-Financials 9.8 10.5 8.8 8.1 11.2 9.4 8.4 7.8

Macquarie Equities Emerging Leaders- all companies in the ASX 300 but excluding companies in the ASX 100. Smaller Industrials- all industrial companies in the ASX 300 but excluding those in the ASX 100, including banks, insurance, property trusts. Smaller Industrials ex-Financials ex-PT- all industrial companies in the ASX 300 but excluding those in the ASX 100, ex banks, ex insurance, ex property trusts. Smaller Financials- all bank and Insurance stocks. Smaller Property Trusts. Smaller Resources- all resource stocks including gold in the ASX 300 but excluding those in the ASX 100.

Source: Macquarie Research, December 2012 (Note – prices are intraday)

-35

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Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12Monthly

Forecast EPS growth

for year shown (%)

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Small Industrials EPSg

FY13 FY14

SVW PPT BTT PRG

MINCDD VAH

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Others

30-Nov-1231-Oct-120.0

1.0

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8%

% Small Inds FY13E EPSg forecast

+ve

Contrib

-ve

Contributors

6.2%

Macquarie Private Wealth Emerging Leaders Wrap

4 December 2012 3

Fig 4 XSI Monthly Stock Performance Fig 5 XSR Monthly Stock Performance

Source: Macquarie Research, December 2012 Source: Macquarie Research, December 2012

Fig 6 XSO Monthly Sector Performance

Source: Macquarie Research, December 2012

Fig 7 XSI Monthly Stock Turnover Fig 8 XSI Monthly Relative Turnover

Source: Macquarie Research, December 2012 Source: Macquarie Research, December 2012

-40.00%

-30.00%

-20.00%

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$15,000,000.00

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$30,000,000.00

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SCP FLT AIX FBU JBH CSR HGG CRZ SGT ASL

20 Day Average Turnover

0.00%

50.00%

100.00%

150.00%

200.00%

250.00%

300.00%

350.00%

CCV PRG VAH AIX FLT SGT CHC CAB EHL TGA

20/250 Day Turnover

Macquarie Private Wealth Emerging Leaders Wrap

4 December 2012 4

Recommended portfolio

Portfolio performance vs index

Source: Macquarie Research, IRESS, December

2012

Portfolio performance vs index

Source: Macquarie Research, IRESS, December 2012

Monthly performance

Source: Macquarie Research, IRESS, December 2012

ELG recommended portfolio as of 2 November 2012 Company ASX No. of Avg Cost Trans Total Current Profit / Current

Code Shares Price ($) costs Cost Price ($) (Loss) Value ($) Weighting

Long positions Adelaide Brighton (ABC) 700000 3.30 11,547 2,309,490 3.18 -83,490 2,226,000 2.1% Ainsworth (AGI) 750000 2.22 8,325 1,673,325 2.42 141,675 1,815,000 1.7% ARB Corporation (ARP) 400,000 2.78 5,560 1,117,560 10.71 3,166,440 4,284,000 4.1% Alacer Gold (AQG) 400,000 4.99 9,980 2,005,980 4.27 -297,980 1,708,000 1.6% Amcom Telecom. (AMM) 1,500,000 1.25 9,375 1,884,375 1.33 110,625 1,995,000 1.9% Austbrokers (AUB) 350,000 6.44 11,269 2,253,713 7.77 465,788 2,719,500 2.6% Azimuth Resources (AZH) 3,000,000 0.47 7,050 1,417,050 0.29 -562,050 855,000 0.8% BC Iron (BCI) 500,000 3.05 7,625 2,433,608 2.87 -998,608 1,435,000 1.4% Breville Group (BRG) 750,000 3.45 12,938 2,433,608 5.90 1,991,393 4,425,000 4.2% Clough (CLO) 4,000,000 0.68 13,693 2,738,625 0.82 541,375 3,280,000 3.1% Corprorate Travel Mgmt (CTD) 500,000 1.94 4,850 974,850 3.55 800,150 1,775,000 1.7% Discovery Metals (DML) 1,400,000 1.31 9,170 1,843,170 1.66 473,830 2,317,000 2.2% Domino's (DMP) 300,000 6.15 9,225 1,854,225 10.40 1,264,478 3,118,703 3.0% Duluxgroup (DLX) 1,000,000 2.45 12,250 2,462,250 3.50 1,037,750 3,500,000 3.4% Fantastic (FAN) 750,000 2.30 8,625 1,733,625 3.05 553,875 2,287,500 2.2% Fleetwood (FWD) 150,000 5.26 3,945 792,945 8.92 545,055 1,338,000 1.3% Flexigroup (FXL) 500,000 2.25 5,625 1,130,625 3.83 784,375 1,915,000 1.8% Horizon (HZN) 5,000,000 0.34 8,442 1,688,400 0.45 536,600 2,225,000 2.1% IOOF (IFL) 400,000 6.32 12,633 2,526,570 6.52 81,430 2,608,000 2.5% Independence Group (IGO) 550,000 2.89 7,944 1,588,750 4.57 924,750 2,513,500 2.4% iiNet (IIN) 500,000 2.71 6,784 1,356,750 4.33 808,250 2,165,000 2.1% Invocare (IVC) 400,000 1.99 3,980 799,980 8.93 2,772,020 3,572,000 3.4% Kathmandu (KMD) 1,300,000 1.52 9,894 1,978,845 1.46 -87,345 1,891,500 1.8% Mirabela Nickel (MBN) 1,500,000 1.70 12,750 2,562,750 0.45 -1,887,750 675,000 0.6% Mineral Resources (MIN) 150,000 6.69 5,018 1,008,518 8.37 246,983 1,255,500 1.2% Miclyn E.O. (MIO) 1,500,000 1.70 12,750 2,562,750 2.24 797,250 3,360,000 3.2% Mermaid Marine (MRM) 750,000 2.86 10,725 2,155,725 3.29 311,775 2,467,500 2.4% NIB Holdings (MRM) 750,000 1.50 5,606 1,126,856 2.02 388,144 1,515,000 1.5% NRW Holdings (NRW) 1,000,000 3.27 16,350 3,286,350 1.33 -1,961,350 1,325,000 1.3% Panoramic (PAN) 1,750,000 1.37 11,960 2,391,900 0.53 -1,473,150 918,750 0.9% Papillon Resources (PIR) 1,000,000 1.82 9,100 1,829,100 1.64 -189,100 1,640,000 1.6% RCR Tomlinson (RCR) 1,000,000 1.72 8,600 878,370 1.69 806,630 1,685,000 1.6% REA Group (REA) 150,000 4.30 3,225 648,225 17.97 2,047,275 2,695,500 2.6% SAI Global (SAI) 750,000 1.79 8,005 1,606,880 4.30 1,618,120 3,225,000 3.1% Sirtex (SRX) 100,000 9.60 4,800 964,800 11.61 196,200 1,161,000 1.1% Skilled Group (SKE) 1,250,000 2.13 13,341 2,668,275 2.30 206,725 2,875,000 2.8% SMS Management (SMX) 400,000 6.08 12,150 2,430,090 4.94 -454,090 1,976,000 1.9% Southern Cross media (SXL) 2,200,000 1.74 19,134 3,826,825 1.12 -1,362,825 2,464,000 2.4% Super Retail Group (SUL) 525,000 3.27 4,757 2,701,290 8.91 1,976,460 4,677,750 4.5% Seven Group (SVW) 250,000 9.00 11,250 2,261,250 7.47 -393,750 1,867,500 1.8% Transpacific (TPI) 3,000,000 0.68 10,200 2,050,200 0.72 94,800 2,145,000 2.1% The Reject Shop (TRS) 200,000 11.30 11,296 2,259,240 15.20 780,760 3,040,000 2.9% Western Areas (WSA) 500,000 4.06 10,150 2,040,150 4.05 -15,150 2,025,000 1.9% Total long positions 401,895 82,257,861 16,704,342 98,962,203 94.8%

Totals 98,962,203 94.8% Cash 5,482,190 5.2%

Total value($) 104,444,394 100.0%

Opening balance (October 31, 2001) 20,000,000

Interest income to date 1,286,953 Dividend income to date 19,743,860 Transaction charges to date

XSOAI XAOAI

ELG Portfolio

Absolute performance over last month -2.43% 0.27% 0.14% Rolling 12 Mths 3.2% 14.9% 15.17% Since 31/10/01 (inception) 105.71% 125.08% 422.22% Since 1/1/12 3.24% 14.90% 15.17% Since 30/6/12 6.01% 11.71% 9.07%

Source: IRESS, Macquarie Research, December 2012

Index performance

Index Last

Month Since

Incept Since 1/1/12 Accum Indices

Last Month

Since Incept

Since 1/1/12

Small Ordinaries -2.50% 36.92% 0.22% Small Ordinaries -2.43% 105.71% 3.24% Small Industrials -0.97% 5.76% 11.78% Small Industrials -0.87% 75.79% 16.51% Small resources -5.55% 246.80% -17.83% Small resources -5.55% 313.03% -17.29% All Ordinaries -0.38% 41.84% 9.90% All Ordinaries 0.27% 125.08% 14.90% ASX 100 0.16% 17.81% 18.13% ASX 100 1.17% 104.49% 24.74% ASX 200 0.10% 16.98% 17.69% ASX 200 1.05% 102.69% 24.19% ASX 300 0.08% 16.12% 17.67% ASX 300 1.03% 100.85% 24.13% Portfolio Relative Performance Small Ordinaries 2.53% 384.7% 14.8% Small Ordinaries 2.47% 316.0% 11.8% Small Industrials 1.00% 415.9% 3.3% Small Industrials 0.91% 345.9% -1.5% Small resources 5.59% 174.9% 32.9% Small resources 5.59% 108.6% 32.3% All Ordinaries 0.42% 379.8% 5.2% All Ordinaries -0.23% 296.6% 0.2% ASX 100 -0.13% 403.9% -3.1% ASX 100 -1.14% 317.2% -9.7% ASX 200 -0.06% 404.7% -2.6% ASX 200 -1.02% 319.0% -9.1% ASX 300 -0.05% 405.5% -2.6% ASX 300 -0.99% 320.8% -9.1%

Source: IRESS, Macquarie Research, December 2012

0%

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Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12

v XSO v XSOAI

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Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12

Macquarie ELG portfolio

Small Ords

Small Ords Accum. Index

-6.0%

-1.0%

4.0%

9.0%

14.0%

19.0%

Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12

Monthly Relative Performance v Small Ords

Monthly Absolute Performance

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Emerging Leader Fundamentals

ASX Code Price

Mkt Cap ($m)

Weight in Small Ords

Adjusted Profit ($m) Adjusted EPS(c) PER(x) EV/EBIT (x) ROA (%) ROE (%) ND/Equity Div Yield

(%) DPS(c)

Rec 2012E 2013E 2014E 2012E 2013E 2014E 2013E 2014E 2013E 2014E 2013E 2013E 2013E 2013E 2013E

GICS 1010 Energy AQA 2.32 955.39 0.49 -53.2 -57.1 -97.6 -13.1 -13.7 -23.4 nmf nmf -14.3 -19.8 -7.1 -8.5 -33.0 0.0 0.0 Outperform AWE 1.30 678.75 0.80 14.8 37.0 49.6 2.8 7.1 9.5 18.3 13.7 8.9 7.0 6.5 4.2 4.8 0.0 0.0 Outperform CVN 0.07 64.67 0.00 -2.5 10.1 4.7 -0.4 1.2 0.5 5.9 13.9 2.9 2.5 16.6 12.1 -30.7 0.0 0.0 DLS 1.50 640.52 0.66 10.2 35.9 58.9 3.1 8.8 13.9 17.0 10.8 9.3 5.2 20.5 17.4 13.3 0.0 0.0 Neutral ERA 1.23 636.80 0.23 -141.3 -166.7 -126.5 -27.3 -32.2 -24.4 nmf nmf -0.3 -0.4 -14.9 -15.8 -37.8 0.0 0.0 Underperform HZN 0.45 503.21 0.51 3.5 24.3 80.5 0.3 2.2 7.1 20.7 6.3 11.2 4.0 11.5 14.4 72.9 0.0 0.0 Outperform KAR 4.90 1084.96 0.95 -16.8 -15.5 -19.1 -7.6 -7.0 -8.6 nmf nmf -45.4 -42.4 -3.1 -2.6 -9.7 0.0 0.0 Outperform MIO 2.24 624.15 0.27 62.6 68.9 78.3 22.6 24.7 28.1 9.1 8.0 9.7 8.7 13.4 18.9 44.2 2.8 6.2 Outperform MPO 0.44 108.17 0.13 -12.8 -3.5 30.8 -5.2 -1.4 10.8 nmf 4.1 -7.4 1.8 -2.9 -2.0 -16.4 0.0 0.0 Outperform NXS 0.14 179.53 0.20 -27.0 -14.9 -11.0 -2.0 -1.1 -0.8 nmf nmf -35.0 -63.9 -1.2 -5.3 21.6 0.0 0.0 Neutral RES 0.34 89.54 0.00 0.6 -2.4 -8.6 0.2 -0.9 -3.3 nmf nmf -16.0 -15.7 -1.8 -1.8 145.1 0.0 0.0 Outperform RIA 0.11 71.71 0.00 -10.2 -6.5 36.3 -2.2 -0.6 2.3 nmf 4.6 -5.0 1.4 -3.5 -2.2 -5.5 0.0 0.0 Outperform ROC 0.47 317.70 0.38 42.8 62.4 70.2 6.2 9.1 10.3 5.1 4.5 2.4 2.3 30.0 26.4 -45.5 0.0 0.0 Outperform TAP 0.68 162.87 0.18 0.1 -3.4 40.1 0.0 -1.4 16.6 nmf 4.1 -9.1 0.7 -2.3 -1.7 -2.3 0.0 0.0 Outperform Total 6117.98 0.00 -129.1 -31.4 186.5 65.3 17.1 295.6 10.8 0.2 -0.6 -4.9 0.3

GICS 1510 Materials ABC 3.18 2026.89 1.62 152.3 162.7 185.9 23.9 25.5 29.2 12.5 10.9 9.4 8.3 14.0 15.9 28.4 6.0 19.0 Outperform AMX 0.34 82.91 0.09 -45.9 -26.9 38.1 -19.7 -10.9 15.4 nmf 2.2 -1.4 1.1 -22.6 -182.3 15,574.9 0.0 0.0 Neutral AQG 4.27 1224.96 0.37 109.0 181.3 153.7 38.1 63.0 53.4 6.8 8.0 3.8 4.6 13.7 11.3 -20.6 0.0 0.0 Outperform AQP 0.72 348.10 0.14 -153.6 -1.2 41.0 -32.9 -0.2 8.8 nmf 8.2 30.3 6.7 1.3 -0.2 15.3 0.0 0.0 Outperform BCI 2.87 298.08 0.00 50.6 51.9 61.0 50.4 49.3 58.1 5.8 4.9 3.2 2.7 31.5 35.1 -59.3 4.9 14.0 Outperform BDR 1.08 801.58 0.88 -31.7 164.3 159.2 -4.5 22.8 22.1 4.7 4.9 4.7 3.8 70.1 124.1 -32.4 0.0 0.0 Outperform BKW 11.31 1671.82 0.00 78.8 75.1 88.9 53.4 50.9 60.2 22.2 18.8 16.5 14.5 5.1 4.5 14.4 3.6 40.5 Outperform BTR 1.10 180.71 0.17 -4.2 -2.8 12.5 -3.4 -1.8 7.4 nmf 14.8 -52.4 10.1 -4.0 -3.4 -30.6 0.0 0.0 Outperform DLX 3.50 1291.45 1.44 79.6 82.7 87.4 21.7 22.4 23.6 15.7 14.8 11.3 10.9 18.8 45.0 98.4 4.6 16.0 DML 1.66 805.96 0.83 -20.7 82.8 97.0 -4.5 17.1 20.0 9.7 8.3 7.4 6.7 24.0 27.9 -3.5 0.0 0.0 Outperform EVN 1.86 1316.77 0.97 63.4 120.0 163.3 10.0 17.0 23.1 11.0 8.1 7.2 5.4 12.8 10.8 -9.0 2.2 4.0 Outperform GRR 0.23 265.76 0.11 39.5 30.3 40.4 3.4 2.6 3.5 8.8 6.6 2.6 1.8 4.5 4.0 -1.9 0.0 0.0 Neutral GRY 0.63 252.29 0.24 -5.9 -3.9 -7.8 -1.8 -1.1 -2.2 nmf nmf -24.7 -33.2 -3.2 -2.2 4.8 0.0 0.0 Outperform HIG 0.16 106.36 0.12 -12.7 -14.4 -22.1 -1.6 -1.4 -1.9 nmf nmf -20.8 -164.7 -2.5 -8.1 -61.5 0.0 0.0 Outperform IGO 4.57 1064.27 1.21 2.7 17.9 45.0 1.2 7.4 18.6 61.8 24.6 35.5 13.7 3.1 2.8 -8.5 0.4 2.0 Outperform KCN 4.86 737.88 0.80 75.0 89.8 117.0 52.7 59.4 77.3 8.2 6.3 7.3 5.7 10.5 11.1 0.8 5.3 26.0 Neutral LSA 1.37 125.52 0.00 8.0 40.8 43.0 10.2 39.9 42.0 3.4 3.3 2.2 1.8 34.6 54.3 -46.0 0.0 0.0 Outperform MBN 0.45 394.46 0.38 -105.4 -51.6 -2.0 -15.7 -5.9 -0.2 nmf nmf -53.5 17.2 -1.4 -12.0 74.7 0.0 0.0 Outperform MCR 1.05 196.68 0.23 0.2 -8.2 -7.0 0.1 -4.3 -3.7 nmf nmf -9.3 -10.9 -7.7 -5.8 -44.0 3.8 4.0 Neutral MGX 0.65 703.43 0.47 190.3 170.6 164.6 17.6 15.7 15.1 4.1 4.3 2.0 2.1 12.3 12.5 -25.2 6.2 4.0 Neutral NFE 0.45 219.42 0.15 2.6 38.1 45.5 0.6 7.7 9.2 5.8 4.8 5.4 4.9 13.2 12.3 -0.2 0.0 0.0 Neutral NUF 5.84 1534.29 1.19 101.4 110.6 124.0 38.7 42.2 47.3 13.9 12.4 8.9 8.3 7.9 7.2 28.8 1.6 9.1 Underperform PAN 0.53 134.23 0.14 -11.0 -25.3 -15.4 -5.7 -9.9 -6.0 nmf nmf -2.7 -4.5 -8.6 -8.5 -7.9 0.0 0.0 Outperform PEM 0.28 211.56 0.12 16.3 41.2 49.0 2.0 5.2 6.2 5.3 4.5 4.7 4.1 10.1 10.5 17.4 0.0 0.0 Neutral PIR 1.64 429.46 0.38 -5.4 -3.6 -7.4 -2.0 -1.1 -2.3 nmf nmf -95.8 -93.9 -9.2 -9.1 -23.0 0.0 0.0 Outperform SBM 1.64 798.00 0.91 130.8 112.5 151.5 44.7 25.6 34.5 6.4 4.7 5.3 3.3 15.1 18.4 -9.3 0.0 0.0 Underperform SFR 8.22 1255.39 0.88 -23.9 273.6 260.6 -15.9 181.0 172.5 4.5 4.8 4.2 3.9 52.9 107.7 1.4 0.0 0.0 Neutral TRY 4.16 379.89 0.37 31.4 84.3 91.3 35.3 94.7 102.5 4.4 4.1 2.3 2.1 62.9 49.0 -38.6 1.3 5.3 Outperform WSA 4.05 727.93 0.66 40.2 2.2 29.5 22.3 1.2 16.2 335.6 25.0 34.2 14.4 3.8 0.8 80.0 1.5 6.0 Outperform YAL 0.83 825.20 0.00 -30.3 -170.5 128.3 68.9 -17.1 12.9 nmf 6.4 -7,257.4 9.3 0.0 -11.2 282.8 0.0 0.0 Neutral Total 21253.77 0.00 822.7 1,847.0 2,534.8 12.2 8.5 8.5 6.4 9.3 10.5 24.1 2.0

GICS 2010 Capital Goods AAX 2.53 313.40 0.27 42.0 42.5 40.9 33.7 33.9 32.6 7.5 7.8 5.0 5.3 12.5 15.3 -5.5 7.5 19.0 Neutral ALS 1.93 181.32 0.20 13.7 18.6 22.3 14.5 19.8 23.6 9.7 8.1 7.6 6.7 5.8 4.6 15.0 6.8 13.0 ASB 0.52 188.39 0.00 11.0 20.5 45.9 4.5 7.8 12.7 6.7 4.1 8.7 4.5 4.6 6.2 33.9 0.0 0.0 ASL 2.15 665.11 0.64 117.2 125.9 142.7 38.2 40.6 45.4 5.3 4.7 4.4 3.9 13.7 16.1 53.7 6.7 14.5 Neutral BKN 4.66 788.66 0.86 107.0 110.2 112.2 64.3 64.5 64.2 7.2 7.3 6.8 6.9 11.4 14.7 53.6 9.0 42.0 Neutral CDD 5.95 828.12 0.94 77.7 84.5 88.3 64.2 60.0 62.4 9.9 9.5 7.6 7.3 12.2 14.9 15.5 6.4 38.0 Neutral CLO 0.82 635.71 0.00 51.5 73.9 80.3 6.7 9.5 10.3 8.6 8.0 5.6 5.1 16.4 19.8 -35.8 4.0 3.3 Outperform CSR 1.93 976.58 1.14 90.3 48.7 70.7 17.8 9.6 14.0 20.1 13.8 10.9 7.1 4.1 3.9 0.7 3.1 6.0 Neutral EHL 0.52 322.34 0.37 71.2 49.3 53.1 11.3 7.8 8.4 6.6 6.1 7.2 6.8 8.1 7.6 53.6 8.7 4.5 Neutral

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ASX Code Price

Mkt Cap ($m)

Weight in Small Ords

Adjusted Profit ($m) Adjusted EPS(c) PER(x) EV/EBIT (x) ROA (%) ROE (%) ND/Equity Div Yield

(%) DPS(c)

Rec 2012E 2013E 2014E 2012E 2013E 2014E 2013E 2014E 2013E 2014E 2013E 2013E 2013E 2013E 2013E

FGE 3.66 315.38 0.23 56.7 62.1 65.3 67.8 72.0 75.8 5.1 4.8 2.6 2.4 15.7 33.7 -68.1 4.6 17.0 Outperform GNG 0.70 105.00 0.00 13.1 9.3 11.7 8.7 6.2 7.8 11.3 8.9 6.0 4.7 19.0 22.8 -80.6 11.4 8.0 Neutral GWA 1.70 518.00 0.54 45.6 34.0 41.3 15.1 11.1 13.2 15.3 12.9 11.3 10.0 8.2 7.8 38.3 6.5 11.0 Neutral LYL 5.29 205.01 0.00 22.2 22.3 18.2 57.4 57.8 47.0 9.2 11.3 5.7 7.2 29.6 34.6 -49.7 6.2 33.0 Neutral MAH 0.27 204.39 0.19 56.1 20.5 54.3 7.6 2.6 7.1 10.2 3.8 5.8 2.9 4.9 5.6 42.0 0.0 0.0 Neutral NWH 1.33 369.53 0.42 97.1 85.5 88.5 34.8 30.6 31.7 4.3 4.2 3.1 3.0 15.5 24.4 6.2 12.1 16.0 Outperform PPX 0.06 38.38 0.00 -54.4 -32.4 -29.5 -9.0 -5.3 -4.9 nmf nmf -8.5 -10.6 -1.6 -7.5 65.5 0.0 0.0 Neutral RCR 1.69 223.15 0.25 31.3 38.4 40.9 22.5 27.9 29.7 6.0 5.7 3.7 3.4 11.9 16.3 -21.5 5.3 9.0 Outperform RQL 0.32 79.68 0.00 13.6 12.1 13.4 5.5 4.9 5.3 6.6 6.0 5.0 4.5 12.7 11.6 18.8 3.1 1.0 Outperform RWH 2.35 235.91 0.00 17.1 19.2 21.2 17.1 19.1 21.1 12.3 11.1 11.2 10.2 10.5 13.7 71.4 3.4 8.0 Outperform SVW 7.47 2296.35 0.83 299.2 356.4 331.1 96.7 114.8 106.7 6.5 7.0 6.8 7.2 10.7 15.8 82.1 5.4 40.0 Outperform WDS 0.54 77.44 0.00 10.7 10.3 12.1 7.3 7.0 8.1 7.7 6.6 5.6 4.8 6.6 5.8 8.5 6.1 3.3 Outperform Total 9567.86 0.00 1,190.0 1,211.9 1,324.9 8.4 7.5 6.6 6.1 9.3 11.9 35.9 5.8

GICS 2020 Commercial& Professional Services CAB 3.87 466.07 0.49 66.0 71.6 73.3 54.8 59.5 60.9 6.5 6.4 5.9 5.7 19.3 22.2 32.8 9.8 38.0 Underperform MIN 8.37 1551.24 1.34 177.0 173.2 210.1 96.3 93.5 113.4 9.0 7.4 6.4 5.3 17.1 18.4 19.9 5.5 46.0 Outperform PRG 1.93 227.49 0.26 30.2 30.5 32.9 25.4 25.6 27.6 7.5 7.0 6.5 5.6 6.5 8.0 20.5 6.8 13.0 Neutral SAI 4.30 888.94 0.98 53.3 57.9 67.1 26.3 28.3 32.8 15.2 13.1 13.9 12.0 9.8 15.4 48.3 3.7 15.7 Outperform SKE 2.30 537.02 0.53 52.4 58.6 63.7 22.5 25.1 27.3 9.2 8.4 6.5 6.0 12.3 12.7 5.5 6.4 14.7 Outperform SLM 2.45 391.54 0.00 45.3 27.1 30.9 28.4 17.0 19.4 14.4 12.6 14.9 15.0 7.4 10.9 -28.6 7.6 18.5 Neutral TPI 0.72 1128.67 0.72 64.1 79.0 98.8 5.0 5.0 6.3 14.3 11.4 9.2 8.5 6.6 3.6 45.8 0.0 0.0 Neutral TSE 1.70 871.18 0.90 106.0 117.2 128.2 19.6 22.6 24.5 7.5 6.9 9.0 8.4 6.4 10.9 47.0 8.2 14.0 Neutral WHG 1.01 267.85 0.00 21.8 23.9 26.9 8.2 8.9 10.1 11.3 10.0 8.7 7.8 8.8 8.8 12.4 7.4 7.5 Outperform Total 6330.00 0.00 616.3 638.9 732.0 9.8 8.6 8.4 7.5 9.2 10.2 32.9 5.3

GICS 2030 Transportation AIX 3.15 1955.31 2.21 57.5 -13.3 86.6 9.3 -2.1 14.0 nmf 22.6 7.7 6.5 11.3 -0.7 -3.1 3.3 10.5 KSC 1.81 163.80 0.00 16.4 19.6 21.8 18.7 21.7 23.4 8.3 7.7 6.6 6.4 8.5 8.5 25.4 7.2 13.0 Outperform MQA 1.60 765.65 0.72 135.9 184.4 197.1 28.7 38.0 40.3 4.2 4.0 13.6 11.6 5.5 -56.5 nmf 6.2 10.0 Outperform MRM 3.29 735.96 0.80 51.0 57.2 63.1 22.7 25.1 27.3 13.1 12.1 9.3 8.6 15.6 16.8 30.4 3.6 12.0 Outperform QUB 1.54 1426.79 1.03 22.2 72.0 79.5 3.3 7.7 8.5 20.0 18.2 12.8 12.0 7.7 7.0 35.9 2.9 4.4 Neutral VAH 0.44 1080.54 0.50 61.5 65.8 147.2 2.8 2.9 5.8 15.4 7.6 14.2 8.1 3.5 6.3 55.2 0.0 0.0 Underperform Total 6128.05 0.00 344.6 385.8 595.2 16.5 11.0 11.8 9.6 6.3 9.0 175.0 3.1

GICS 2510 Automobiles & Components FWD 8.92 535.50 0.47 53.2 38.2 44.8 88.4 62.5 71.9 14.3 12.4 9.3 7.9 17.4 16.4 9.6 8.5 76.0 Neutral Total 535.50 0.00 53.2 38.2 44.8 14.3 12.4 9.3 7.9 17.4 16.4 9.6 8.5

GICS 2520 Consumer Durables & Apparel BBG 0.92 440.63 0.43 33.5 36.1 58.8 10.4 9.8 12.3 9.3 7.5 9.8 7.7 3.2 3.5 13.6 0.0 0.0 Neutral GUD 8.35 595.70 0.67 44.1 41.8 45.1 63.5 59.4 64.0 14.1 13.0 9.3 8.6 15.0 15.8 18.7 10.2 85.0 Neutral Total 1036.33 0.00 77.7 77.9 103.9 12.1 10.1 9.5 8.2 5.3 5.9 14.6 5.9

GICS 2530 Consumer Services AAD 1.43 568.82 0.59 32.3 40.4 47.2 10.0 10.8 11.8 13.2 12.1 13.0 11.5 7.9 9.0 39.4 8.5 12.2 Neutral AGI 2.42 779.07 0.30 39.8 40.1 53.8 14.0 12.4 16.7 19.4 14.5 14.3 10.7 25.4 22.7 -29.5 2.5 6.0 Outperform CTD 3.55 266.15 0.00 11.7 13.9 15.4 16.2 18.3 20.2 19.4 17.6 13.1 11.7 21.2 24.9 -10.0 2.8 10.0 Outperform DMP 10.61 744.74 0.00 26.9 31.1 35.0 37.6 42.9 48.2 24.7 22.0 16.9 15.0 22.6 25.5 -21.0 3.0 32.0 Neutral FLT 27.00 2704.18 1.70 200.2 213.6 230.3 198.7 211.8 227.9 12.7 11.8 8.2 7.8 13.5 23.6 -45.4 4.5 121.0 Neutral IVC 8.93 982.57 1.10 44.9 49.3 52.3 41.1 45.1 47.9 19.8 18.6 14.0 13.4 10.1 31.5 117.3 4.0 36.0 Outperform NVT 4.32 1621.59 1.20 73.1 80.5 91.0 19.5 21.5 24.3 20.1 17.8 14.4 12.8 18.8 33.6 42.9 4.4 18.8 Neutral SGH 2.00 341.07 0.00 33.4 37.7 39.7 21.2 21.5 22.3 9.3 9.0 7.0 6.9 10.7 14.7 43.4 3.3 6.6 Neutral Total 8008.19 0.00 462.3 506.5 564.7 16.0 14.6 11.2 10.3 13.5 21.5 3.4 4.3

GICS 2540 Media APN 0.30 198.46 0.14 68.2 73.7 79.1 10.5 10.7 10.9 2.8 2.8 4.7 4.6 9.6 12.0 44.0 17.9 5.4 Underperform EGG 0.44 37.67 0.00 -0.9 9.1 9.7 -1.0 10.6 11.4 4.1 3.9 1.6 1.6 4.7 5.2 -13.7 0.0 0.0 Neutral PRT 0.81 296.73 0.00 33.2 33.3 35.6 9.0 9.0 9.6 9.0 8.4 7.3 7.0 15.7 20.3 60.0 8.4 6.8 Outperform REA 17.97 2366.91 0.00 87.0 101.1 116.0 66.3 76.8 88.0 23.4 20.4 16.7 14.4 39.7 36.7 -75.1 2.1 38.4 Outperform SGN 1.13 446.42 0.00 43.0 47.9 49.3 11.9 12.0 12.4 9.3 9.1 6.3 6.2 10.3 11.3 15.7 7.5 8.4 SXL 1.12 789.44 0.72 100.1 91.1 95.6 14.2 12.9 13.6 8.7 8.3 7.8 7.6 7.2 5.9 36.4 8.1 9.1 Outperform TEN 0.37 524.58 0.38 9.7 -0.7 19.9 0.9 0.0 1.4 nmf 26.3 22.6 12.6 2.0 -0.1 6.5 0.0 0.0 Underperform Total 4660.21 0.00 340.3 355.5 405.2 13.6 12.1 9.3 8.5 8.8 8.6 20.9 4.5

GICS 2550 Retailing AHE 3.02 787.26 0.00 64.1 73.0 77.2 24.7 28.1 29.7 10.7 10.2 9.5 9.1 10.1 15.7 118.9 6.6 20.0 Neutral ARP 10.71 776.27 0.77 38.5 43.5 48.2 53.1 60.0 66.5 17.8 16.1 12.8 11.7 28.5 26.8 -28.9 2.8 30.0 Outperform BRG 5.90 767.56 0.61 46.0 53.0 57.0 34.9 40.2 43.2 14.7 13.7 9.8 9.1 25.1 28.4 -32.3 4.5 26.5 Outperform FAN 3.05 313.36 0.00 22.0 25.3 27.4 21.4 24.6 26.7 12.4 11.4 8.8 8.1 19.3 22.2 1.5 4.9 15.0 Outperform

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ASX Code Price

Mkt Cap ($m)

Weight in Small Ords

Adjusted Profit ($m) Adjusted EPS(c) PER(x) EV/EBIT (x) ROA (%) ROE (%) ND/Equity Div Yield

(%) DPS(c)

Rec 2012E 2013E 2014E 2012E 2013E 2014E 2013E 2014E 2013E 2014E 2013E 2013E 2013E 2013E 2013E

JBH 9.93 981.59 1.10 104.6 109.3 116.3 104.0 110.8 117.1 9.0 8.5 6.6 6.2 20.2 52.9 75.4 6.7 67.0 Outperform KMD 1.46 291.24 0.33 27.2 31.7 39.1 13.6 15.9 19.6 9.2 7.4 6.5 5.4 16.8 13.8 15.0 6.3 9.2 Outperform PBG 0.60 543.18 0.63 72.8 75.7 77.9 7.9 8.3 8.5 7.2 7.0 5.6 5.5 10.3 10.8 22.9 7.6 4.5 Outperform PMV 6.32 981.25 0.66 68.2 70.5 74.9 43.6 45.0 47.8 14.0 13.2 8.9 8.3 6.1 5.6 -14.8 5.7 36.0 Neutral SFH 0.64 123.03 0.00 -2.8 5.0 8.5 -1.4 2.6 4.4 24.5 14.4 13.9 9.5 5.1 8.8 -16.7 0.0 0.0 Underperform SUL 8.91 1749.77 1.34 95.0 123.3 141.0 55.2 62.7 71.4 14.2 12.5 10.5 9.5 13.8 17.1 43.4 3.9 35.0 Outperform TGA 1.88 274.45 0.31 29.1 29.2 30.0 20.7 20.0 20.5 9.4 9.1 7.0 6.7 21.1 19.9 12.6 5.3 9.9 Neutral TRS 15.20 396.60 0.44 20.0 21.1 27.7 76.0 80.5 105.4 18.9 14.4 12.6 9.8 19.6 28.4 32.6 3.3 50.0 Outperform WTF 4.81 1018.45 0.71 58.0 60.0 67.2 27.1 27.9 31.3 17.2 15.4 10.3 9.2 30.6 59.4 -143.4 5.4 26.0 Neutral Total 9004.02 0.00 642.8 720.5 792.5 12.1 11.0 8.9 8.2 13.5 16.3 18.8 5.1

GICS 3020 Food, Beverage & Tobacco GFF 0.67 1310.22 1.29 96.5 113.7 138.1 5.5 5.8 7.1 11.5 9.5 8.7 8.1 8.8 8.4 36.8 6.0 4.0 Outperform TGR 1.42 207.75 0.00 22.2 25.7 26.7 15.1 17.6 18.2 8.1 7.8 7.0 6.8 8.2 8.5 20.4 6.2 8.8 Neutral Total 1517.98 0.00 118.7 139.4 164.8 10.8 9.2 8.4 7.9 8.7 8.4 33.8 6.0 GICS 3510 Health Care Equipment & Services API 0.47 226.97 0.00 22.1 24.7 26.0 4.5 5.1 5.3 9.2 8.7 6.4 6.2 4.2 4.3 26.4 6.5 3.0 Outperform SIP 0.68 795.50 0.89 50.3 54.8 53.8 4.3 4.7 5.2 14.5 12.9 8.7 7.8 6.9 8.3 -11.4 6.1 4.1 Neutral Total 1022.48 0.00 72.3 79.5 79.8 12.8 11.5 7.7 7.1 5.4 6.4 6.5 6.1

GICS 3520 Pharmaceuticals, Biotechnology & Life Sciences ACR 2.86 476.18 0.52 7.4 7.9 36.3 4.4 4.8 21.8 60.1 13.1 46.8 8.8 16.3 14.9 -38.5 4.1 11.7 Neutral MSB 6.00 1722.80 1.06 -71.1 -14.3 -24.2 -25.3 -5.0 -8.5 nmf nmf -66.1 -47.7 -3.1 -2.9 -40.0 0.0 0.0 Underperform SRX 11.61 647.47 0.00 17.1 21.6 27.4 30.3 38.2 48.5 30.4 24.0 25.7 20.1 23.0 27.3 -21.0 0.7 8.6 Outperform Total 2846.45 0.00 -46.7 15.2 39.5 96.1 41.3 217.3 50.6 1.3 2.5 -37.3 0.8

GICS 4020 Diversified Financials BTT 2.25 605.23 0.00 41.5 54.5 56.6 14.5 18.8 19.4 12.0 11.6 8.6 8.3 11.0 10.6 -8.9 7.1 16.0 Neutral FXL 3.83 1099.16 0.85 60.4 69.6 83.3 21.7 24.6 29.5 15.5 13.0 11.7 10.3 12.6 25.7 252.7 3.8 14.5 Outperform HGG 1.87 2077.06 1.32 200.9 185.7 207.5 18.7 17.3 19.3 10.8 9.7 12.5 11.1 6.7 15.6 -11.9 6.1 11.4 Outperform IFL 6.52 1498.26 1.53 96.4 104.3 121.2 41.6 44.8 52.1 14.5 12.5 11.8 9.9 6.5 12.9 -3.0 6.2 40.3 Outperform PPT 31.23 1311.06 1.47 67.6 65.2 86.2 162.1 156.3 206.7 20.0 15.1 13.6 10.3 7.0 23.3 -48.1 3.1 98.4 Neutral PTM 3.75 2105.05 1.02 126.4 123.3 133.3 22.5 21.9 23.7 17.1 15.9 11.5 10.7 58.3 46.8 -94.2 5.6 20.9 Underperform Total 8695.82 0.00 593.2 602.5 688.2 14.0 12.2 11.7 10.3 9.9 18.1 1.8 5.3

GICS 4030 Insurance AUB 7.77 442.77 0.00 27.4 30.5 32.9 49.5 54.3 57.9 14.3 13.4 10.0 9.7 10.4 18.4 -7.6 4.4 34.0 Outperform NHF 2.02 886.79 0.00 61.9 62.9 69.7 13.4 14.3 15.9 14.1 12.7 9.1 7.8 10.1 20.2 nmf 4.2 8.5 Outperform Total 1329.55 0.00 89.3 93.4 102.6 14.2 13.0 10.0 9.7 10.4 19.5 -7.6 4.3

GICS 4040 Real Estate ABP 2.05 911.99 0.63 76.8 83.8 88.1 19.3 18.6 18.8 11.0 10.9 14.9 15.4 5.3 7.4 47.8 8.0 16.5 Underperform ALZ 2.96 1707.47 0.79 137.4 144.7 153.4 23.8 25.1 26.6 11.8 11.1 11.1 10.8 6.6 7.2 61.4 7.4 22.0 Outperform CHC 3.15 941.00 0.79 52.5 66.3 70.9 17.8 22.4 23.8 14.1 13.2 12.4 11.5 8.5 9.2 6.3 5.9 18.5 Outperform CQR 3.58 1196.07 1.11 84.7 93.9 99.6 28.3 29.2 30.3 12.2 11.8 13.9 13.1 7.3 9.2 72.5 7.5 26.9 Neutral FKP 0.20 438.95 0.29 94.7 107.3 104.1 6.2 5.2 4.6 3.7 4.3 8.4 8.6 4.4 8.6 44.7 7.7 1.5 Neutral GOZ 2.15 839.13 0.00 57.7 77.6 78.4 17.7 19.8 18.9 10.9 11.4 12.6 12.2 7.4 10.0 94.3 8.5 18.3 Underperform LEP 2.34 423.29 0.00 13.0 15.8 12.4 8.2 9.8 7.5 23.9 31.2 21.4 23.2 4.3 4.9 122.8 6.7 15.8 PPC 1.05 335.46 0.00 20.2 15.6 25.2 6.3 4.9 7.9 21.5 13.3 22.1 15.4 3.9 6.1 86.6 0.0 0.0 Neutral SCP 1.45 849.70 0.41 39.2 76.1 6.7 13.0 21.6 11.1 16.0 8.1 4.9 4.2 45.8 3.9 5.7 Underperform Total 6793.35 0.00 537.0 644.2 708.2 12.3 11.2 12.7 11.8 6.0 8.1 57.9 6.7

GICS 4510 Software & Services CRZ 7.68 1810.64 1.87 71.6 81.8 91.1 30.6 35.0 39.0 22.0 19.7 15.5 14.0 66.1 59.9 -34.6 3.6 28.0 Neutral

CSV 0.48 135.63 0.11 -22.2 15.3 20.2 -7.8 5.6 7.5 8.5 6.4 10.6 7.7 3.7 5.6 -10.5 33.6 16.2 Neutral IRE 8.23 1058.54 0.94 52.4 54.1 60.9 39.9 41.3 46.5 19.9 17.7 16.2 13.5 33.0 45.4 -53.8 4.4 36.0 Neutral OKN 1.20 110.07 0.00 9.9 10.7 11.9 10.9 11.8 13.1 10.2 9.2 7.0 6.3 10.4 9.9 -14.1 9.4 11.3 Neutral RDF 1.49 164.48 0.00 15.1 13.5 15.6 13.6 12.1 14.1 12.2 10.6 7.7 6.6 12.4 11.6 -10.1 6.1 9.0 RKN 2.39 310.62 0.00 18.5 20.2 22.0 14.2 15.7 17.1 15.2 14.0 11.9 11.1 33.2 39.8 10.4 3.9 9.4 Underperform SMX 4.94 342.73 0.37 30.6 26.1 28.9 43.7 37.4 41.4 13.2 11.9 8.4 7.6 22.5 21.3 -32.0 5.1 25.0 Neutral TNE 1.40 427.53 0.00 23.6 26.2 28.9 7.5 8.4 9.3 16.7 15.1 11.8 10.7 26.2 33.3 -65.2 4.3 6.0 Outperform Total 4360.26 0.00 199.3 248.0 279.6 17.6 15.6 13.0 11.4 21.2 24.6 -25.7 5.2

GICS 5010 Telecommunication Services AMM 1.33 325.24 0.00 17.0 21.3 26.7 7.1 8.8 11.1 15.1 12.0 10.4 8.3 16.2 18.5 7.2 4.7 6.2 Outperform HTA 0.03 407.18 0.00 -298.5 -337.9 -232.2 -2.2 -2.5 -1.7 nmf nmf -2.2 -3.3 -28.2 -42.0 51.6 0.0 0.0 Underperform IIN 4.33 698.16 0.54 42.0 58.0 56.9 27.5 36.8 36.1 11.8 12.0 8.9 9.4 13.7 19.1 53.5 4.2 18.0 Outperform SGT 2.61 41612.74 0.44 3,012.8 2,752.0 2,926.2 18.9 17.2 18.3 15.1 14.2 13.7 13.0 11.2 15.1 33.4 4.7 12.3 Outperform TPM 2.32 1841.63 0.76 112.8 129.9 142.2 14.3 16.4 17.9 14.2 13.0 10.2 9.7 20.2 20.6 3.9 3.5 8.2 Outperform Total 44884.95 0.00 2,886.0 2,623.3 2,919.9 -17.9 -68.6 14.8 13.7 10.2 13.0 33.2 4.6

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ASX Code Price

Mkt Cap ($m)

Weight in Small Ords

Adjusted Profit ($m) Adjusted EPS(c) PER(x) EV/EBIT (x) ROA (%) ROE (%) ND/Equity Div Yield

(%) DPS(c)

Rec 2012E 2013E 2014E 2012E 2013E 2014E 2013E 2014E 2013E 2014E 2013E 2013E 2013E 2013E 2013E

GICS 5510 Utilities DUE 2.09 2333.77 0.00 47.5 96.4 140.0 4.7 8.4 11.9 25.0 17.5 13.7 12.7 6.5 7.0 323.0 7.9 16.5 ENV 0.90 1443.00 0.82 73.8 102.1 129.8 4.8 6.4 7.9 14.0 11.4 12.1 11.0 9.3 16.7 354.8 7.1 6.4 Neutral EPW 1.94 336.90 0.00 17.0 23.8 33.0 10.4 13.7 17.8 14.2 10.9 8.2 7.3 8.1 13.8 76.5 5.2 10.0 Outperform IFN 0.28 213.43 0.25 -55.9 3.0 24.8 -7.3 0.4 3.3 69.9 8.6 25.4 19.6 2.2 0.6 212.7 0.0 0.0 Outperform Total 4327.11 0.00 82.4 225.3 327.5 21.0 14.3 13.6 12.3 6.4 8.3 291.9 7.0

Source: IRESS, Macquarie Research, December 2012

Macquarie Private Wealth Emerging Leaders Wrap

4 December 2012 9

This month‟s earning revisions

Stock Analyst Ccy Year Forecast

Period Current

EPS Previous

EPS % change Reason

AGI.AU Lachlan Fitt AUD 2013 FY1 12.45 11.98 3.9% AGM trading update. See Essentials 22 November. AGI.AU Lachlan Fitt AUD 2014 FY2 16.72 16.14 3.6%

AIR.NZ Russell Shaw NZD 2013 FY1 13.35 11.65 14.6% Updated model for profit update. See Essentials 29 November. AIR.NZ Russell Shaw NZD 2014 FY2 16.56 11.92 38.9%

ASB.AU Andrew Wackett AUD 2013 FY1 7.77 17.92 -56.6% Updated for capital raising. See Essentials 27 November. ASB.AU Andrew Wackett AUD 2014 FY2 12.68 31.06 -59.2%

ASL.AU Andrew Wackett AUD 2013 FY1 40.59 44.61 -9.0% Updated for profit warning. See Essentials 23 November. ASL.AU Andrew Wackett AUD 2014 FY2 45.36 51.12 -11.3%

BDR.AU Mitch Ryan AUD 2012 FY1 -4.55 -3.39 -34.2% Inclusion of Duckhead resource in production profile. See Essentials 9 November. BDR.AU Mitch Ryan AUD 2013 FY2 22.84 17.16 33.1%

BKW.AU Liam Farlow AUD 2013 FY1 50.91 53.45 -4.7% FY12 AGM. See Essentials 28 November. BKW.AU Liam Farlow AUD 2014 FY2 60.23 60.23 0.0%

BRG.AU Adam Simpson AUD 2013 FY1 40.17 38.97 3.1% Upgrades follow AGM commentary that indicated a very strong start to the year. See Essentials 15 November. BRG.AU Adam Simpson AUD 2014 FY2 43.19 42.18 2.4%

CAB.AU Jodie Bannan AUD 2013 FY1 59.45 59.45 0.0% Lowered FY14 EPS by 5% following loss of Sydney metro bus contracts See Essentials 8 November. CAB.AU Jodie Bannan AUD 2014 FY2 60.89 64.34 -5.4%

CDD.AU Cameron Pierce AUD 2013 FY1 60.03 67.46 -11.0% Earnings adjustments post announcement re 1H13 guidance. See Essentials 22 November. CDD.AU Cameron Pierce AUD 2014 FY2 62.42 71.26 -12.4%

CSR.AU Liam Farlow AUD 2013 FY1 9.62 8.04 19.6% 1H13 result.See Essentials 15 November. CSR.AU Liam Farlow AUD 2014 FY2 13.97 14.05 -0.6%

CVN.AU Kirit Hira AUD 2013 FY1 1.17 1.25 -6.2% Adjusted forecasts post 3Q12 results See Essentials 5 November. CVN.AU Kirit Hira AUD 2014 FY2 0.50 0.52 -4.1%

DLS.AU Kirit Hira AUD 2013 FY1 8.82 9.58 -7.9% Adjusted forecasts following A$50m capital raising. See Essentials 20 November DLS.AU Kirit Hira AUD 2014 FY2 13.87 15.33 -9.5%

DLX.AU Cameron Pierce AUD 2013 FY1 22.36 22.50 -0.6% FY12 result. See Essentials 15 November. DLX.AU Cameron Pierce AUD 2014 FY2 23.61 24.18 -2.4%

EHL.AU Andrew Wackett AUD 2013 FY1 7.81 10.80 -27.7% Updated FY13 assumptions following profit warning. See Essentials 12 November. EHL.AU Andrew Wackett AUD 2014 FY2 8.41 11.42 -26.4%

ERA.AU Michael Bogusz AUD 2012 FY1 -27.29 -21.68 -25.8% Analyst roundtable and revised production and earnings guidance. See Essentials 28 November. ERA.AU Michael Bogusz AUD 2013 FY2 -32.20 -29.84 -7.9%

FPH.NZ Stephen Hudson NZD 2013 FY1 12.99 12.97 0.2% Updating for first half result. FPH.NZ Stephen Hudson NZD 2014 FY2 12.50 13.93 -10.3%

FWD.AU Andrew Wackett AUD 2013 FY1 62.53 73.76 -15.2% Updated assumptions following AGM.See Essentials 26 November. FWD.AU Andrew Wackett AUD 2014 FY2 71.93 80.66 -10.8%

GNG.AU Andrew Wackett AUD 2013 FY1 6.21 8.90 -30.2% Updated for profit warning. See Essentials 20 November. GNG.AU Andrew Wackett AUD 2014 FY2 7.83 9.76 -19.8%

HGG.AU Neil Welch GBP 2012 FY1 12.18 12.64 -3.6% We have updated our estimates for the latest market assumptions and 3Q IMS. HGG.AU Neil Welch GBP 2013 FY2 11.35 12.19 -6.9%

HZN.AU Kirit Hira USD 2013 FY1 2.25 2.62 -14.0% Adjustment to 2014 production profile. See Essentials 23 November. HZN.AU Kirit Hira USD 2014 FY2 7.28 6.90 5.6%

IFT.NZ Stephen Hudson NZD 2013 FY1 10.74 10.01 7.3% Post 1H13 upgrades due to higher than expected IEA result and higher forecast TPW earnings on Snowtown II. See Essentials 14 November. IFT.NZ Stephen Hudson NZD 2014 FY2 14.96 9.98 49.9%

KIP.NZ Stephen Hudson NZD 2013 FY1 6.02 6.60 -8.8% Minor adjustments post 1H13 result. KIP.NZ Stephen Hudson NZD 2014 FY2 6.37 6.80 -6.3%

KSC.AU Russell Shaw AUD 2013 FY1 21.74 20.46 6.3% Update for strong trading conditions. See Essentials 14 November. KSC.AU Russell Shaw AUD 2014 FY2 23.38 22.36 4.6%

LYL.AU Andrew Wackett AUD 2013 FY1 57.77 57.61 0.3% Updated for AGM commentary. See Essentials 22 November. LYL.AU Andrew Wackett AUD 2014 FY2 46.98 60.84 -22.8%

MAH.AU Andrew Wackett AUD 2013 FY1 2.64 3.66 -28.0% Updated following AGM. See Essentials 12 November. MAH.AU Andrew Wackett AUD 2014 FY2 7.05 7.08 -0.5%

MIN.AU Andrew Wackett AUD 2013 FY1 93.49 99.30 -5.8% Updated for lower Q1 fe prices and half year splits. See Essentials 14 November. MIN.AU Andrew Wackett AUD 2014 FY2 113.38 117.33 -3.4%

MPO.AU Kirit Hira AUD 2013 FY1 -1.42 3.12 -145.5% Adjusted forecasts following October ops update. See Essentials 30 November. MPO.AU Kirit Hira AUD 2014 FY2 10.84 8.16 32.9%

NFE.AU Lee Bowers USD 2012 FY1 0.66 3.00 -78.1% SepQ operating result, revised CY12 guidance and recent equity issuance. See Essentials 6 November. NFE.AU Lee Bowers USD 2013 FY2 8.01 13.25 -39.5%

NHF.AU Tim Lawson AUD 2013 FY1 14.33 14.03 2.2% Earnings upgrades following Tower Medical NZ acquisition. See Essentials 5 November. NHF.AU Tim Lawson AUD 2014 FY2 15.87 14.64 8.3%

NVT.AU Jodie Bannan AUD 2013 FY1 21.46 22.02 -2.5% Reduced FY13 EPS by 2.5% and 3% respectively following AGM commentary pointing to weaker Workforce Services EBITDA. See Essentials 21 November. NVT.AU Jodie Bannan AUD 2014 FY2 24.26 25.10 -3.3%

NWH.AU Andrew Wackett AUD 2013 FY1 30.64 37.62 -18.6% Updated for profit warning. See Essentials 29 November. NWH.AU Andrew Wackett AUD 2014 FY2 31.72 38.76 -18.2%

NXS.AU Kirit Hira AUD 2013 FY1 -1.12 -1.00 -11.8% Adjusted forecasts following 3Q12 results. See Essentials 5 November NXS.AU Kirit Hira AUD 2014 FY2 -0.82 -1.01 18.2%

OKN.AU Jodie Bannan AUD 2013 FY1 11.76 13.22 -11.1% Reduced FY13 EPS by 11.1% reflecting reduced Federal Government demand. See Essentials 22 November. OKN.AU Jodie Bannan AUD 2014 FY2 13.09 16.24 -19.4%

PRG.AU Jodie Bannan AUD 2013 FY1 25.56 24.50 4.3% Increased FY13 EPS by 4.3% reflecting lower interest and tax, partially offset by weaker Property Services earnings. See Essentials 22 November. PRG.AU Jodie Bannan AUD 2014 FY2 27.63 25.88 6.7%

ROC.AU Kirit Hira USD 2012 FY1 6.42 6.01 7.0% Adjusted forecasts post 3Q12 result. See Essentials 5 November ROC.AU Kirit Hira USD 2013 FY2 9.50 8.70 9.1%

RQL.AU Andrew Wackett AUD 2013 FY1 4.86 4.74 2.4% Updated for AGM commentary. See Essentials 30 November. RQL.AU Andrew Wackett AUD 2014 FY2 5.35 5.17 3.4%

RWH.AU Adam Simpson AUD 2013 FY1 19.14 19.85 -3.5% Minor revisions following 1Q update that showed lower container sales due to timing of camp sales but good RWH.AU Adam Simpson AUD 2014 FY2 21.11 21.58 -2.2%

Macquarie Private Wealth Emerging Leaders Wrap

4 December 2012 10

Stock Analyst Ccy Year Forecast

Period Current

EPS Previous

EPS % change Reason

growth in rental revenues. See Essentials 13 November.

SGT.AU Andrew Levy SGD 2013 FY1 22.10 24.62 -10.2% EPS downgrades driven by adjustments to Bharti Airtel forecasts. See Essentials 15 November. SGT.AU Andrew Levy SGD 2014 FY2 22.73 25.82 -12.0%

SLM.AU Jodie Bannan AUD 2013 FY1 16.97 19.22 -11.7% Incorporated capital management and lowered FY13 EPS to reflect tough conditions for retail. See Essentials 15 November. SLM.AU Jodie Bannan AUD 2014 FY2 19.40 20.26 -4.2%

SVW.AU Andrew Wackett AUD 2013 FY1 114.82 99.39 15.5% Updated FY13 assumptions following AGM. See Essentials 16 November. SVW.AU Andrew Wackett AUD 2014 FY2 106.72 105.19 1.5%

TAP.AU Kirit Hira AUD 2012 FY1 0.00 -0.09 98.0% Adjusted forecasts following 3Q12 result. See Essentials 5 November. TAP.AU Kirit Hira AUD 2013 FY2 -1.39 -1.41 1.1%

TGA.AU Jodie Bannan AUD 2013 FY1 19.96 20.47 -2.5% Reduced FY13 EPS by 2% reflecting softer assumptions for NCML. See Essentials 21 November. TGA.AU Jodie Bannan AUD 2014 FY2 20.53 20.81 -1.4%

TRS.AU Adam Simpson AUD 2013 FY1 80.48 80.00 0.6% Raise our rollout assumptions from 60 over FY13 and FY14 to 70. See Essentials 23 November. TRS.AU Adam Simpson AUD 2014 FY2 105.42 101.35 4.0%

VAH.AU Russell Shaw AUD 2013 FY1 2.87 3.93 -27.0% Update for 1Q traffic and Tiger & Skywest acquisitions. See Essentials 15 November. VAH.AU Russell Shaw AUD 2014 FY2 5.75 5.85 -1.6%

WHS.NZ Warren Doak NZD 2013 FY1 22.67 22.26 1.8% 1Q13 sales report. See Essentials 6 November. WHS.NZ Warren Doak NZD 2014 FY2 25.00 25.38 -1.5%

Source: Macquarie Research, December 2012

Macquarie Private Wealth Emerging Leaders Wrap

4 December 2012 11

Recommendation changes Stock Analyst Current Rec Previous Rec Change Reason

FWD.AU Andrew Wackett Neutral Outperform Downgrade

Downgrade to Neutral. Fleetwood has a sound balance sheet, exposure to long-term growth industries (Retirement, Recreation and Resources) and a solid dividend yield. See Essentials 26 November.

HGG.AU Neil Welch Outperform Neutral Upgrade

We have upgraded our rating to Outperform reflecting the leverage to European asset re-rating, the stocks discounted earnings rating and premium yield.

VAH.AU Russell Shaw Underperform Neutral Downgrade

Downgrade to Underperform. Although we like the strategic rationale for acquiring Skywest and Tiger, we see earnings risks to the downside with weak demand and rising costs, and it should take time to turn Tiger around. See Essentials 15 November.

Source: Macquarie Research, December 2012

Macquarie Private Wealth Emerging Leaders Wrap

4 December 2012 12

Emerging Leaders articles published in November: Click the link to access web version article:

Kingsgate Consolidated September qtr proves tough

Drillsearch Energy Wet gas pilot production interrupted

Transpacific Industries Volumes drop off

REA Group Option value

Resource Generation Boxes ticked…time to execute

Transfield Services Guidance confirmed but risk remains

Macmahon Holdings Wins big at FMG

Perpetual Target in sight

GUD Holdings Sunbeam off the boil

BT Investment Management Full year with Hambro

Independence Group NL Another belter at Long

NIB Holdings Tower Heist

Northern Iron No bid

Cabcharge Australia Dodging bullets

Domino's Pizza Enterprises Confirms delivery

Beadell Resources Duckhead fits the bill

Agrium Some of the shine rubs off

Macmahon Holdings AGM confirms new strategy

Emeco Cuts

NIB Holdings Hips, hearts, knees and toes

Perseus Mining Time for a re-rate

Paladin Energy Kayelekera impaired… again

Royal Wolf Solid start

DuluxGroup Delivers in a down market

Salmat Capital returned post BPO sale

Breville Group Good start

Seven Group Holdings AGM optimism

Shopping Centres Australasia (SCA) Juicy yield but mind the SCAffolding

Drillsearch Energy Bauer continues to grow

Automotive Holdings Group Solid start

Arrium Tonnage on track

Mineral Resources Changes at the top

GR Engineering Services Cuts FY13

Drillsearch Energy Raising capital to restore the cushion

Navitas Total enrolments turn positive

Thorn Group Lacking growth options in FY13

Lycopodium FY13 OK, 14 looking softer

Programmed Maintenance Banking on a stronger 2H

Cardno Margin peaking

Oakton Federal Government tightens the belt

Ainsworth Game Technology Reels spinning in the right direction

Aspen Group Simplifying

Macquarie Private Wealth Emerging Leaders Wrap

4 December 2012 13

Emerging Leaders articles published in November (cont): Click the link to access web version article:

Lynas Corporation Ship it in

Cabcharge Australia Black and White

Mineral Resources 1.5mt shipped in Q1

Mermaid Marine Solid start

Ausdrill Softness bites

Horizon Oil Managing its exposure in PNG

The Reject Shop Rapidly taking share

Air New Zealand Lord of the wings

Fleetwood Corporation Tough half

ERM Power Oakey outlook tougher, retail still strong

Technology One Double digit growth despite the macro

Austal Raises

Brickworks Waiting for rate cuts to impact

Charter Hall Retail REIT „10…it‟s the magic number‟

Energy Resources of Australia End of an era

Clough More PNG LNG work

Transfield Services Targeting growth in oil & gas

Peet Green shoots

NRW Holdings Revenue solid, margins not

Molopo Energy Still on the learning curve

Resource Equipment Pre tax profit up over 30% to October

Macquarie Private Wealth Emerging Leaders Wrap

4 December 2012 14

Important disclosures:

Recommendation definitions

Macquarie - Australia/New Zealand Outperform – return >3% in excess of benchmark return Neutral – return within 3% of benchmark return Underperform – return >3% below benchmark return Benchmark return is determined by long term nominal GDP growth plus 12 month forward market dividend yield

Macquarie – Asia/Europe Outperform – expected return >+10% Neutral – expected return from -10% to +10% Underperform – expected return <-10%

Macquarie First South - South Africa Outperform – expected return >+10% Neutral – expected return from -10% to +10% Underperform – expected return <-10%

Macquarie - Canada Outperform – return >5% in excess of benchmark return Neutral – return within 5% of benchmark return Underperform – return >5% below benchmark return

Macquarie - USA Outperform (Buy) – return >5% in excess of Russell 3000 index return Neutral (Hold) – return within 5% of Russell 3000 index return Underperform (Sell)– return >5% below Russell 3000 index return

Volatility index definition*

This is calculated from the volatility of historical price movements. Very high–highest risk – Stock should be expected to move up or down 60–100% in a year – investors should be aware this stock is highly speculative. High – stock should be expected to move up or down at least 40–60% in a year – investors should be aware this stock could be speculative. Medium – stock should be expected to move up or down at least 30–40% in a year. Low–medium – stock should be expected to move up or down at least 25–30% in a year. Low – stock should be expected to move up or down at least 15–25% in a year. * Applicable to Australian/NZ/Canada stocks only

Recommendations – 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations

Financial definitions

All "Adjusted" data items have had the following adjustments made: Added back: goodwill amortisation, provision for catastrophe reserves, IFRS derivatives & hedging, IFRS impairments & IFRS interest expense Excluded: non recurring items, asset revals, property revals, appraisal value uplift, preference dividends & minority interests EPS = adjusted net profit / efpowa* ROA = adjusted ebit / average total assets ROA Banks/Insurance = adjusted net profit /average total assets ROE = adjusted net profit / average shareholders funds Gross cashflow = adjusted net profit + depreciation *equivalent fully paid ordinary weighted average number of shares All Reported numbers for Australian/NZ listed stocks are modelled under IFRS (International Financial Reporting Standards).

Recommendation proportions – For quarter ending 30 Sept 2012

AU/NZ Asia RSA USA CA EUR

Outperform 50.00% 56.85% 61.54% 41.38% 63.19% 44.15% (for US coverage by MCUSA, 7.35% of stocks covered are investment banking clients)

Neutral 36.62% 25.14% 27.69% 52.13% 30.77% 30.57% (for US coverage by MCUSA, 9.31% of stocks covered are investment banking clients)

Underperform 13.38% 18.02% 10.77% 6.49% 6.04% 25.28% (for US coverage by MCUSA, 0.00% of stocks covered are investment banking clients)

Company Specific Disclosures: Macquarie and its affiliates collectively and beneficially own or control 1% or more of any class of Ausdrill Limited's equity securities. Macquarie and its affiliates collectively and beneficially own or control 1% or more of any class of NRW Holdings Limited's equity securities. Important disclosure information regarding the subject companies covered in this report is available at www.macquarie.com/disclosures.

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