EFTA00915843.pdf

From: shendong(,'ta) To: Epstein Jeffrey <jeevacation@gmail.com> Subject: Fwd: Stansted proposal Date: Tue, 26 Jul 2011 01:05:21 +0000 J, The following is the initial analysis of the Stansted opportunity. I think the concerns are valid, and thus the opportunity does not seem promising. Again, enjoy your holiday. I will be in London and NY with my family starting later this week. Ma Desmond Shum DATM4Ung14: 4/: huhong(Mtl)H &fc)1 H 2011,47)923 a tfitMeklalittR+08002304015t24t) shendong(MS) RE: Stansted proposal Desmond : I have following initial issues with Stansted opportunities before going to next level analysis I. Airport in general is capital intensive, low-return industry except for those of high growth. Therefore airport privatization is usually targets for infrastructure fund/ pension fund - long-term structured fund. 2. Stansted is one of the airports regulated by UK government (Competition Commission + Civil Aviation Authority). The "Regulated Asset Base" is a common tool for regulating returns in the UK's utility and infrastructure sectors where an owner has a monopoly or quasi-monopoly position. The RAB represents the accumulated cost of the assets used by the business, net of depreciation. It is used as the base amount against which charges can be made to ensure an agreed rate of return on investment for the owner. Government reviews RAB and IRR every 5 years. For Stansted, Charges are set to provide a return on capital equal to an assumed weighted average cost of capital, which means the return is basically capped. 3. Stansted is mainly for low cost carriers (LCC) flights within UK and Europe. It had its historic high traffic (24MN) in 2006 and then declined to 18MN in 2010. Low cost airlines have been under pressure since 2008 due to high fuel price, security concern and cyclic leisure travel So in summary: Stansted has gone through declining traffic, its future traffic from LCC is of high uncertainty, but upside is capped by WACC level, downside left to investors, therefore more appropriate for long-term structured/infrastructure fund. May not be right for us Just some thoughts, let me know if you think differently and want me to take further look into next level details EFTA00915843 Ellen Original Message From: shendong(''ta) Sent: Thursday, July 21, 2011 5:27 PM To: huhong(M.t.I) Subject: Fwd: MtS Desmond Shum The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of Jeffrey Epstein Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by return e-mail or by e-mail to jeevacation®gmail.comcmailto:jeevacation®gmail.com>, and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved EFTA00915844