1. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Value Investing Du Haowei Matthew Pay Navin Prasad Hubert Yan

2. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Disclaimer: This research material has been prepared by NUS Invest. NUS Invest specifically prohibits the redistribution of this material in whole or in part without the written permission of NUS Invest. The research officer(s) primarily responsible for the content of this research material, in whole or in part, certifies that their views are accurately expressed and they will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this research material. Whilst we have taken all reasonable care to ensure that the information contained in this publication is not untrue or misleading at the time of publication, we cannot guarantee its accuracy or completeness, and you should not act on it without first independently verifying its contents. Any opinion or estimate contained in this report is subject to change without notice. We have not given any consideration to and we have not made any investigation of the investment objectives, financial situation or particular needs of the recipient or any class of persons, and accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of the recipient or any class of persons acting on such information or opinion or estimate. You may wish to seek advice from a financial adviser regarding the suitability of the securities mentioned herein, taking into consideration your investment objectives, financial situation or particular needs, before making a commitment to invest in the securities. This report is published solely for information purposes, it does not constitute an advertisement and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. The research material should not be regarded by recipients as a substitute for the exercise of their own judgement. Any opinions expressed in this research material are subject to change without notice. ©2016 NUS Invest

3. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Outline: ●Introduction & Background ●Investing Methodology & Examples ●Limitations & Real-World Alternatives

4. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Introduction & Background “Ben Graham taught me that price is what you pay but value is what you get. Whether we’re talking about stock or socks, I like paying for quality merchandise marked down “

5. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Definition Strategy of selecting stock that trades for less than its intrinsic value. Value investors select stocks of companies that they believe to be undervalued

6. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 History of Value investing  Developed in the 1920’s  Defensive approach to investing  His investment far outpaced market returns by 12%

7. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Fundamentals of Value Investing  Intrinsic Value  Margin of safety  Contradicts Efficient Market hypothesis(EMH)

8. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Value Investing vs Growth Investing  Investors focus on future potential  Purchase companies that trade hire than intrinsic value  Seeks capital appreciation  Volatile

9. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Methodology & Examples The way to profit

10. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Size of Enterprise > $100Mil Current Ratio >= 2X Long-Term Debt Vs Net Current Assets NCA > LTD Earnings Stability +ve in last 5 years

11. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Dividends Record 10 Years Earnings Growth EPS Growth P/E Ratio P/E E/P Price to Assets Ratio P/E * P/B

12. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Price to Net Current Assets Ratio Price Current Assets less Total Liabilities 120%

13. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Asset Table:Book Value:Multiplier:Liquidating Value: No. of Shares: Liquidating Value Per Share Cash Assets25100%25 100 0.25 Receivables5080%400.4 Inventories6066.75%410.41 Long Term Fixed Assets 8015%120.12 Total Liabilities: 80Liabilities Per Share: 0.8 Share Price: $0.25Liquidating Value per Share: $0.38

14. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Important Points Non-Recurrent Items recognised as Income Extraordinary Write-down of Inventories Appraisals must not be regarded as income Asset Mark-Downs to reduce Depreciation Expense Depreciation Amount must be close to cash spent on maintenance of P,P,E Goodwill A/C Reserves Accounting, kept for favourable years

15. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Limitations & Real-World Alternatives (Can this philosophy really make you money?)

16. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Top-Performing Value Investors InvestorFundCAGR Total ReturnTime Period Walter SchlossSchloss Partnership15%600x 1955 – 2000 (45 years) Warren BuffetBerkshire Hathaway19%6000x 1965 - Present (50 years) Seth KlarmanBaupost Group23%610x 1983 – Present (32 years) George Soros / Jim RogersQuantum Fund26%10300x 1969 – 2009 (40 years) Peter LynchFidelity Magellan29%27x 1977 – 1990 (13 years)

17. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 BUT WAIT… S&P500 v iShares S&P 500 Value ETF (IVE)

18. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 BUT WAIT… Intrinsic Value is subjective “Value Traps” Time-Horizon Subject to macro-economic forces Changing investing environment

19. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Apple v Amazon 2-Yr Revenue Growth: 37% 2-Yr Net Income Growth: 44% Net Cash: >US$150B 2-Yr Revenue Growth: 44% 2-Yr Net Income Growth: NM Net Cash: $2B

20. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Apple v Amazon

21. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Alternative Real-World Strategies: High Dividend Yield: NYSE: VYM v S&P 500 Strong, stable Cash Flow Mature, established companies Low P/E, P/B etc.

22. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Alternative Real-World Strategies: “Shareholder Yield” Strategy: NYSE: SYLD v S&P 500 Based on highest (Buybacks + Dividend) Mature, established companies Low P/E, P/B etc.

23. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Alternative Real-World Strategies: Emerging Markets – NYSE: EEM v S&P 500 High-Growth Discounted for macro risks

24. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Alternative Real-World Strategies: Small Caps – S&P 600 v S&P 500 High-Growth Away from Wall Street’s eyes

25. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Alternative Real-World Strategies: Technology – NYSE: XLK v S&P 500 “Tech will dominate the world” Exponential Growth (IoT, AI etc.) Value of intangibles & scalability

26. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Conclusion (So what does Value Investing mean for you?)

27. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Conclusion “Value” takes on many forms FA, TA, QF not mutually exclusive Many ways to invest!

28. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 One Last Thing…

29. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 AgePerson APerson B 21 $ 10,9000 22 $ 22,7810 23 $ 35,7310 24 $ 49,8470 25 $ 65,2330 26 $ 82,0040 27 $ 100,285 $ 10,900 28 $ 120,210 $ 22,781 29 $ 141,929 $ 35,731 30 $ 165,603 $ 49,847 31 $ 180,507 $ 65,233 Person A: Invest $10,000 from age 21 to 30 only Person B: Invest $10,000 every year from age 27 onwards Assume Market Yearly Return Rate: 9% When does Person B’s savings catch up? AGE 65

30. DISCLAIMER AND DISCLOSURES: Please read the disclaimer and the disclosures which can be found within this report NUS Invest 2015 nusinvest.com Value Investing 17 th March 2016 Thank you