Mongolia Development Resources (MDR) is a real estate property developer in Mongolia that specializes in helping domestic and foreign investors invest in property development projects, especially housing. In 2011, MDR's net income grew to over 1.18 billion MNT compared to 1 billion MNT in 2010. Total assets also grew to 17.5 billion MNT. MDR currently holds 3.75 thousand square meters of residential and retail property valued at 7.51 billion MNT. In 2012, MDR targeted completing an ongoing project, expanding its land bank, and investing over 4 billion MNT to develop new real estate projects with local and international partners.

1. Mongolia Development Resources
Company Introduction Symbol: MDR Code: 524
Market data
Currency MNT
Exchange Mongolian Stock Exchange
Sector Service
Sub sector
Price as of 20Sep2012 900.00
52W high 1,599.00
52W low 900.00
1Y Target Price 1,417.35
Market cap (mln) 12,375.00
Shares out 13,750,000
Last 6 month trade value (mln) 3,602.48
Company Report | 2012 September
Mongolian development Resource (MDR) is real state property developer. MDR specializes in helping
domestic and foreign investors to invest into the property development especially into the housing
projects.
In 2011, the Company’s net income grew to over MNT 1.18 billion compared to profit of MNT 1bn in
2010 and loss of 161 million in 2009. Total assets grew to MNT 17.5bn from MNT 16.3bn in 2010.
The operational expenses, on the other hand, have decreased by 13% from 1.17bn to 1.02bn. After
purchasing commercial property in Ulaanbaatar city centre, MDR currently holds total of 3.75 thousand
sqm of residential and retail property with value of MNT 7.51bn.
Value of residential property as of end of 2011, according to independent valuation, was MNT 4.32bn, Last 6 month trade value (mln) 3,602.48
Source: MSE
Key statistics and ratios 2012 Q2 2011 2010
Total assets (thous.) 17,133,950 17,522,251 16,289,670
Liabilities (thous.) 1,840,643 2,035,132 2,016,595
Owners' equity (thous.) 15,293,307 15,487,120 14,273,075
Net sales (thous.) 304,742 2,632,495 43,598
Net profit (thous.) (193,813) 1,180,028 1,004,375
Dividend (thous.) - - -
P/E N/A 11.77 17.80
P/B 0.81 0.90 1.25
ROE (%) (1.27) 7.62 7.04
ROA (%) (1.13) 6.73 6.17
EPS Growth (%) (181.42) 17.49 (723.43)
Net profit margin (%) (63.60) 44.83 2,303.69
Book value per share 1,112.24 1,126.34 1,038.04
Source: Company data
1
Value of residential property as of end of 2011, according to independent valuation, was MNT 4.32bn,
and cost value of retail property is MNT 3.19bn. Residential part of property is under collateral with
MNT 1.82bn remaining principal (US$1.38mn equivalent) as of end of April 2012, which means loan
to property value ratio is under 25%. The Company can obtain additional loan from a bank on the
existing property to finance further projects, but the management is committed to keep loan to property
value ratio under 50%.
In 2012, the company targets to proceed with completion of DZ Business Center project, expand land
bank acquiring more land plots in UB, Tsogtsetsee and Zamiin Ud and targets to invest over MNT 4bn
to develop real estate projects together with local and international strategic partners. The Company has
pipeline of projects on hand for building land bank in Ulaanbaatar and mining towns and 2nd tier cities
such as Dalanzadgad (DZ), Tsgotstsetsii, Khanbogd, Erdenet etc.

2. Mongolia Development Resources GOLOMT SECURITIES
REAL ESTATE MARKET IN MONGOLIA MSE: Service
Listed companies 6
Total market cap. (mln) 145,357
Share of Mongolian Development Resources in the sector (%) 8.51
Stock peers - Market capitalization
According to the World Bank, revenues from Tavan Tolgoi, a coking coal mine, and Oyu Tolgoi, a copper mine, are
expected to propel real GDP growth from the current level of $7bn to $24bn in the next decade. GDP per capita,
meanwhile, is expected to soar from $3000 to $8000 by 2016. The government has also pledged to increase the
salaries of state workers by 53% in 2012.
To prepare for the expected influx of people into the city, the government is developing a “100,000 Apartments
Programme” that will see 75,000 homes built in the city and 25,000 constructed in the countryside. In January, city
officials also announced a series of projects aimed at improving Ulaanbaatar’s infrastructure, with MNT70bn
($51.28m) allocated for road repair and construction, MNT45.3bn ($33.19m) for public transportation and
MNT330m ($241,758) for the construction of 40 kindergartens.
While Mongolia’s mineral wealth is generating unprecedented optimism in the country’s property sector, key
infrastructure will need to be built at a parallel speed to new housing construction. If the government’s plans for
infrastructure works continue on schedule, there should be plenty of opportunities in accommodations development.
Price performance
Source: Company data
2

3. Mongolia Development Resources GOLOMT SECURITIES
Key financials 2009 2010 2011 2012E 2013E Shareholders analysis
EBITDA Shareholders concentration (as of June 2012)
Revenue growth (%)* 25.80 102.45 59.01 14.24 15.61 Above 5% holders: 6 (86.40%)
EPS growth (%) (74.48) 674.90 110.81 86.24 17.30 Below 5% holders: 266 (13.60%)
* Non-operational revenue included Source: SCHCD
Assumptions DCF Sensitivity Management:
WACC 22.00% Assumed Perpetual Growth %
Perpetual Growth 5.00% WACC% 4.00 5.00 6.00
Fair value per share 23.00
22.00
21.00
Conclusion
1,332.35
1,448.29
1,580.70
The unique geographical characteristic of the city, where major business and retail streets stretch less
than a mile, presents tremendous value growth opportunities of such properties. Currently, average
residential units cost $2000.00 per sq meter, whereas retail units cost $4000-$5000 per sq meter.
CEO: Mr. Utegenov has over 8 year experience in finance and
investment banking, as well as real estate development. Prior to
joining MDR he had worked as a General Director of Ansher
Capital Kazakhstan.
Mr. Utegenov also worked as a Business Development Manager at
a real estate development company in Almaty for two years. He has
over 4 year experience in Banking, at Project Finance Department
of one of the largest banks in Central Asia. Being a Deputy Head of
International Loans department he administered a USD 800mn loan
portfolio which included large infrastructure project financed by
6,229,5752,851,700 5,310,9611,352,711174,566
1,389.86
1,417.4
1,417.35
1,307.011,284.34
1,509.04 1,542.63
Order Block as of 17Sep2012 Bids Offers
Total bids: MNT 5,000 1,000
Total offers: MNT 200
Total: 5,000 1,200
3
residential units cost $2000.00 per sq meter, whereas retail units cost $4000-$5000 per sq meter.
Based on the DCF model, our one year target price is at MNT 1417, assuming 22% WACC and 5%
perpetual growth.
We assumed lower growth rate due to the growing number of funds investing in Mongolian real estate
market. However, the growing population and income level should support the upward trend in real
estate market.
portfolio which included large infrastructure project financed by
international financial institutions.
Mr. Utegenov holds a degree of BA in Economics with honors
from the University of Sheffield, 2002.
1,199,000 1,000.00
9,000.00 999.17
Bid Price Offer Price
45,000,000 9,000.00 999.00

4. General:
Company introduction This part gives general background info about company, it's operation and recent projects
Symbol Security's trade symbol on the listed stock exchange
Code Security's code
Price and Volume The graphic presentation of historical price and volume of the security
Shareholders Information of major shareholders
Industry graphic The graphic comparison of sales growth, EPS and market cap of industry peers
Market data:
Currency Currency in which the security traded
Exchange Stock exchange where the security is traded
Industry Industry in which the companies main operation is
Sector Operation sector of the company
52 week high The highest price of the security in the last 52 weeks
52 week low The lowest price of the security in the last 52 weeks
Market cap (share price) x (outstanding shares)
Outstanding Shares Number of stocks currently held by investors
Last 6 month trade value Total trade value of the share in last 6 months
Key statistics and ratios:
Total asset Value of the company's total asset reported on last balance sheet statement
Total debt Total long term debt on company's balance sheetTotal debt Total long term debt on company's balance sheet
Equity Equity claim of owners and shareholders of the company plus profit/loss
Net Sales
Net Profit
Dividend Dividend per share
EPS
Contact us:
P/E Ulaanbaatar, Mongolia # 111, M-100 building, Khoroo #1, Chingeltei district
Tel: 976-7012-1530 E-mail: info@golomtsecurities.com
Fax: 976-7012-1529 Web: www.golomtsecurities.com
P/B A ratio used to compare a stock's market value to its book value.
ROE Disclaimer
ROA
Net Profit Margin It measures how much out of every dollar of sales a company actually keeps in earnings
Book value per share
The revenue generated by the company after the deduction of returns, allowances for damaged or
missing goods and any discounts allowed
Also referred to as the net income or net earnings is a measure of the profitability of a company after
accounting for all costs
This document has been prepared by the Golomt Securities for information purpose only. The views
expressed are the views of the analyst and are subject to change based on market and other conditions
and factors. The information provided does not constitute investment advice or other recommendations
and should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a
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accuracy is not guaranteed. Past performance is no guarantee for future results. Accordingly you must
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securities/transactions before investing or transacting.
An indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how
efficient management is at using its assets to generate earnings.
In simple terms it would be the amount of money that a holder of a common share would get if a
company were to liquidate
The portion of a company's profit allocated to each outstanding share of common stock. Earnings per
share serves as an indicator of a company's profitability
A valuation ratio of a company's current share price compared to its per-share earnings. It's
usually more useful to compare the P/E ratios of one company to other companies in the same industry,
to the market in general or against the company's own historical P/E.
The amount of net income returned as a percentage of shareholders equity. Return on equity measures
a corporation's profitability by revealing how much profit a company generates with the money
shareholders have invested.