China / Hong Kong China Property Weekly Digest

Transcription

1 (Issue No. 244) DBS Group Research. Equity 1 Jan 218 Refer to important disclosures at the end of this report Muted start in the first week of 218 The Deputy Director of the Shanghai Municipal Administration of Planning and Land Resources announced in a press conference that Shanghai will, under the city s masterplan, continue to increase land supply for rental housing in 218. Meanwhile, Chengdu published a comment on the development and monitoring of the rental housing market, reiterating its focus to gradually extend social benefit entitlements to tenants in the city and set out specific regulatory standards for the overall operational framework of the rental housing market. Last week (1-7 January), GFA sold in 32 cities dropped by 21% w-o-w, driven primarily by a decrease in GFA sold in Tier 1 and 3 cities. Year-to-date, the GFA sold in the above cities has fallen 31.7% y-o-y. Average inventory level in key cities remained stable at 38 weeks. New launches in key Tier 1/2 cities dropped to 5,478 units. Average sell-through rate of newly launched projects in Tier 1 and 2 cities retreated to 87% dragged by a drop in sell-through rates in Tier 1 cities. The average percentage of southbound shareholding for the China property sector surged to 5.27% from 2-5 January. Shimao (813) recorded the largest increase in southbound shareholding. Average short-selling interest in the sector rose to 8%, with CR Land (119) and Renhe Commercial (1387) recording the highest figures. HSI: 31,11 ANALYST Ken HE CFA, ken_he@dbs.com Carol WU carol_wu@dbs.com Danielle WANG CFA, danielle_wang@dbs.com Jason LAM jasonlamch@dbs.com Inventory (no. of weeks of sales) of 16 cities* Jan-11 Mar-12 Jun-13 Inventory (no. of weeks) Aug-14 Nov-15 Jan weeks rolling avg New launches in 1 major cities and sell-through rate 25, 2, 15, 1, 5, 1W14 19W14 36W14 3W15 2W15 37W15 2W16 19W16 36W16 1W17 18W17 35W17 52W17 Total units launched (LHS) Sell-through rate (RHS) 6 mth average sell-through rate (RHS) 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Source: CREIS, Fang.com, DBS Vickers * Rolling 26 weeks inventory New launches in 1 major cities and sell-through rate Unit Beijing Shanghai Shenzhen Guangzh Wuhan Hangzhou Tianjin Chongqing Nanjing Chengdu 1% 6% 2% -2% 1W18 53W17 Sell-through rate (RHS) Source: CREIS, Fang.com, DBS Vickers * Rolling 26 weeks inventory ed-th / sa- CS/AH

2 Share price performance YTD Share price performance Average short selling interest as percentage of trading volume (Jan 2 Jan 5) First Sponsor Ying Li BJ North Star CC Land HSI Index Zhong An Renhe SRE Minmetals Shui On Land MSCI China Small caps SOHO Yuexiu Evergrande Glorious Greentown Yanlord China South City Powerlong CR Land Yuzhou Poly HK C Garden China SCE Agile Hopson Mid caps Greenland HK COGO COLI GZ R&F BJ Cap Land Kaisa Large caps China Jinmao Sunac CIFI Vanke Sino-Ocean KWG Longfor Shimao Sector avg: +9% -5% % 5% 1% 15% 2% 25% BJ North Star 'H' Modern Land China South City Yuexiu Property China SCE Greenland Powerlong Zhong An CIFI Holdings Yuzhou Properties Times Property Country Garden Poly (Hong Kong) Guangzhou R&F Hopson Dev Evergrande Shui On Land Sino-Ocean Land Logan Property Greentown Shimao Property Soho China KWG Property Agile Property Longfor China Vanke 'H' Sunac China China Jinmao Hldgs China Overseas Renhe Commercial CR Land Sector Avearge: 8% % 1% 2% 3% Daily trading volume (Jan 2 Jan 5) US$ mn Sunac C Garden COLI Evergrande Vanke CR Land Shimao KWG CIFI Longfor GZ R&F Sino-Ocean Greentown China Jinmao Agile Poly HK Zhong An Yuzhou China South Shui On Land COGO Yuexiu SOHO China SCE Yanlord Greenland HK BJ Cap Land BJ North Star Powerlong Hopson Minmetals Renhe Glorious Ying Li SRE CC Land First Sponsor Source: Bloomberg Finance L.P, HKEx, DBS Vickers Page 2

3 Average weekly trading volume US$ mn Sunac C Garden COLI Evergrande Vanke CR Land Shimao KWG Longfor GZ R&F Sino-Ocean Greentown China Jinmao Agile Poly HK Zhong An Yuzhou Shui On Land COGO Yuexiu SOHO China SCE Yanlord Greenland HK BJ Cap Land BJ North Star Hopson Minmetals Renhe Glorious Ying Li SRE CC Land China South City CIFI First Sponsor Kaisa Powerlong YTD Source: Bloomberg Finance L.P, DBS Vickers Overall southbound shareholding in CCASS w-o-w % changes of shareholding by southbound trading mn 1, 9,5 9, 8,5 8, 7,5 17-Mar Apr-17 7-Jun Jul Aug-17 8-Oct Nov Dec-17 COGO Yuexiu Evergrande Shui On Land Yuzhou China South City SOHO Renhe Poly HK Hopson China Jinmao Greenland HK Longfor Vanke Agile Sunac CR Land Greentown GZ R&F Powerlong Country Garden Kaisa China SCE BJ North Star KWG COLI CIFI Sino-Ocean Shimao -1% % 1% 2% 3% 4% 5% 6% Source: Bloomberg Finance L.P Page 3

4 Weekly sales performance of major cities Tier I cities Tier I cities: Weekly GFA sales of key cities City GFA Last week ( sm) w-o-w y-o-y % change as compared to Avg of previous 4 weeks Avg 217 Avg 216 Avg 215 Avg 214 Avg 213 Beijing 5-73% -73% -68% -53% -73% -77% -73% -8% Shanghai 164-3% -52% -42% -52% -61% -62% -48% -52% Shenzhen 66-13% 57% -13% -2% -19% -49% -15% -22% Guangzhou 96-77% -69% -58% -58% -64% -54% -39% -52% Tier I total % -58% -45% -41% -54% -6% -44% -52% Tier I cities: Weekly ASP of key cities City ASP Last week (Rmb/sm) w-o-w y-o-y % change as compared to Avg of previous 4 weeks Avg 217 Avg 216 Avg 215 Avg 214 Avg 213 Beijing 39,754-1% 6% % -9% 1% 48% 56% 69% Shanghai 24,452-23% -6% -2% -8% -8% 6% 3% 31% Shenzhen 54,219 % 2% % % % 64% 13% 146% Guangzhou 13,89-16% -16% -16% -15% -16% -8% -7% 9% Tier I total 33,79-1% -4% -4% -8% -3% 27% 52% 64% Tier I cities: YTD GFA sales of key cities Tier I cities: Avg ASP of key cities sm Shenzhen Shanghai Guangzhou Beijing Yoy (%) 8% 6% 4% 2% % -2% -4% -6% -8% 218 (LHS) 217 (LHS) Yoy (RHS) RMB/sm 6, 5, 4, 3, 2, 1, Shenzhen Shanghai Beijing Guangzhou Yoy (%) % -2% -4% -6% -8% -1% -12% -14% -16% 218 (LHS) 216 avg (LHS) Yoy (RHS) Source: Thomson Reuters, DBS Vickers Source: Thomson Reuters, DBS Vickers Page 4

5 Tier II cities Tier II cities: Weekly GFA sales of key cities City GFA Last week ( sm) w-o-w y-o-y % change as compared to Avg of previous 4 weeks Avg 217 Avg 216 Avg 215 Avg 214 Avg 213 Hangzhou 1-54% -24% -35% -29% -37% -14% 22% 13% Suzhou 78-45% -1% -47% -45% -54% -66% -51% -5% Changsha % -8% 13% -19% -19% -4% 4% -13% Ningbo 1-58% -67% -5% -28% -29% -1% 21% 8% Wuhan % -39% -31% -25% -34% -11% 8% 16% Chengdu % 94% -33% 34% 46% 62% 55% 31% Chongqing 1, % 13% 98% 15% 192% 237% 223% 216% Qingdao 314 1% -34% -9% -12% -2% 22% 76% 34% Xi'an % 37% 16% 8% 66% 112% 156% 149% Nanjing % 219% 5% 34% 4% 24% 9% 5% Dalian 64-46% -25% -4% -5% 2% 13% 46% 11% Fuzhou 27-3% -9% -75% -43% -49% -49% -37% -41% Shenyang % -5% -47% -44% -42% -35% -31% -48% Nanchang 82-14% -46% -21% -32% -41% -26% -23% 7% Changchun 216 % 12% % 26% 26% 43% 57% 48% Nanning 17 86% -6% 1% -36% -47% -33% -2% -1% Wenzhou % -28% -2% 6% 18% 78% 17% 98% Tier II total 4,632-8% -12% -8% 1% -1% 21% 43% 31% Tier II cities: Weekly ASP of key cities City ASP Last week (Rmb/sm) w-o-w y-o-y % change as compared to Avg of previous 4 weeks Avg 217 Avg 216 Avg 215 Avg 214 Avg 213 Changsha 9,68 6% 21% 3% 8% 45% 57% n.a. n.a. Chongqing 9,93 21% 17% 8% 8% 35% 35% 32% 36% Xi'an 9,885 5% 26% 2% 17% 41% 4% 28% 36% Changchun 6,768 % 17% -8% -8% % n.a. n.a. n.a. Shenyang 8,477-4% 18% % 8% 24% 34% 23% 22% Tier II total 8,948 6% 2% 1% 7% 29% 41% 28% 31% Page 5

6 Tier II cities: YTD GFA sales of key cities sm 1,6 1,4 1,2 1, Yoy (%) 25% 2% 15% 1% 5% % -5% -1% Nanjing Chongqing Chengdu Xian Changchun Suzhou Wuxi Changsha Fuzhou Hangzhou Dalian Wenzhou Qingdao Wuhan Nanchang Shenyang Nanning Ningbo 218 (LHS) 216 (LHS) Yoy (RHS) Tier II cities: Avg ASP of key cities RMB/sm 12, 1, 8, 6, 4, 2, Changsha Xian Chongqing Shenyang Changchun 218 avg (LHS) 216 avg (LHS) Yoy (RHS) Yoy (%) 5% 45% 4% 35% 3% 25% 2% 15% 1% 5% % Page 6

7 Tier III cities Tier III cities: Weekly GFA sales of key cities City GFA Last week ( sm) w-o-w y-o-y % change as compared to Avg of previous 4 weeks Avg 217 Avg 216 Avg 215 Avg 214 Avg 213 Dongguan 15-46% -28% -31% -4% -4% -46% -4% -28% Baotou 8 % -8% % 2% 22% 44% 45% 5% Xuzhou % -19% -7% % 11% 53% 78% 62% Yangzhou 98 39% 189% 31% 3% 51% 112% 145% 72% Huizhou 4-41% -37% -35% -37% -61% -42% -23% -38% Lianyungang % 17% 8% -5% 19% 47% 72% 37% Shantou 86-19% -11% -34% -25% 4% 148% 369% 295% Jiujiang 85 % 69% n.a. 5% 62% 78% 13% 162% Shaoguan 31-7% 37% -19% -12% -15% 37% 6% 49% Zhoushan 26-74% -51% -5% -3% -5% 16% 61% 28% Dongying 39-13% -43% -2% -17% 5% 7% 18% -2% Huaian 112-9% -77% 4% -29% -4% -11% 15% 1% Wuhu 87-32% 32% 14% 1% -2% 89% 124% 14% Jiaozuo 16-31% -8% -46% -26% -21% -14% 64% -23% Zhaoqing 6-23% -25% 22% 6% 18% 47% 122% 83% Tier III total 1,334-28% -28% -1% -8% 3% 38% 83% 56% Tier III cities: Weekly ASP of key cities City ASP Last week (Rmb/sm) w-o-w y-o-y % change as compared to Avg of previous 4 weeks Avg 217 Avg 216 Avg 215 Avg 214 Avg 213 Dongguan 16,872-4% 13% % 3% 21% 73% 85% 95% Baotou 6,25 % 16% % 9% 23% 21% 22% 22% Shantou 9,52 9% 1% 11% 4% 16% 18% 18% 7% Zhaoqing 7,622-6% 36% -6% 11% 41% 46% 34% 27% Tier III total 9,275 % 22% % 7% 27% 36% 35% 33% Page 7

8 Tier III cities: YTD GFA sales of key cities sm Yoy (%) 25% 2% 15% 1% 5% % -5% -1% Jiangyin Jiujiang Shaoguan Wuhu Lianyungang Baotou Shantou Xuzhou Zhaoqing Dongguan Huizhou Dongying Zhoushan 218 (LHS) 216 (LHS) Yoy (RHS) Huaian Tier III cities: Avg ASP of key cities RMB/sm 1, 5, Zhaoqing Shaoguan Shantou Jiujiang Yoy (%) 45% 4% 35% 3% 25% 2% 15% 1% 5% % 218 avg (LHS) 216 avg (LHS) Yoy (RHS) Page 8

9 Inventory level No. of weeks to digest inventory Avg = Beijing Shenzhen Zhoushan Guangzhou Dongying Huizhou Hangzhou Suzhou Nanning Jiujiang Fuzhou Ningbo Shanghai Nanjing Trend: No. of weeks to digest inventory weeks Tier 3 Tier 1 Tier 2 2 Jan-11 Mar-12 Jun-13 Aug-14 Nov-15 Jan-17 Tier I average Tier II average Tier III average Notes: 1. Based on 26 weeks average sales 2. Tier I cities include: Beijing, Shanghai, Guangzhou, and Shenzhen; Tier II cities include: Hangzhou, Suzhou, Ningbo, Nanjing, Fuzhou, and Nanning Tier III cities include: Huizhou, Zhoushan and Dongying Page 9

10 Share price performance and peer valuations Valuation comparison 3-mth daily Net Disc/ 9-J an Mkt trading 12-m EPS gth PE PE Yield Yield ROE ROE Gearing P/Bk NAV (Prem) Price Cap v alue Recom target 17F 18F 17F 18F 17F 18F 17F 18F 1H17A 1H17 to NAV Company Name Code HK$ US$bn US$m HK$ % % x x % % % % % x HK$ % Large cap China Overseas* 688 HK BUY (17) (12.4) CR Land* 119 HK BUY (2) China Vanke 'H'* 222 HK BUY (66.6) Country Garden* 27 HK BUY Evergrande* 3333 HK BUY (.2) Longfor* 96 HK BUY Sunac China 1918 HK NR n.a (48.4) Av erage (11.2) Mid cap Agile Property* 3383 HK HOLD BJ Cap Land 'H' 2868 HK NR n.a. (13) n.a n.a. n.a. China J inmao Hldgs* 817 HK HOLD CIFI Holdings 884 HK NR n.a n.a. n.a. Future Land 13 HK NR n.a n.a. n.a. Greentown 39 HK NR n.a Guangzhou R&F 2777 HK NR n.a Kaisa Group 1638 HK NR n.a. (228) n.a. n.a n.a. n.a. n.a. KWG Property 1813 HK NR n.a Logan Property* 338 HK BUY Shimao Property* 813 HK HOLD 13.5 (11) Sino-Ocean Land* 3377 HK BUY Yanlord Land*^ YLLG SP BUY 2.25 (4) Yuexiu Property* 123 HK BUY 1.91 (7) Av erage# Small cap China Aoyuan 3883 HK NR n.a n.a. n.a. Central China* 832 HK BUY China Merchants Land 978 HK NR n.a n.a. n.a n.a. n.a. n.a. China SCE 1966 HK NR n.a. (15) n.a. n.a. China South City*^^ 1668 HK BUY 2.77 (73) (12.8) COGO* 81 HK BUY Gemdale Props 535 HK NR n.a CASH 1.1 n.a. n.a. Greenland 337 HK BUY (7) Hopson Dev 754 HK NR n.a. (66) n.a. n.a n.a. n.a. LV GEM 95 HK NR n.a. (1) n.a. n.a n.a. n.a. Minmetals Land 23 HK NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a n.a n.a. n.a. Modern Land (China) 117 HK NR n.a. (5) n.a. n.a. Poly (Hong Kong) 119 HK NR n.a n.a. n.a. Powerlong 1238 HK NR n.a n.a. n.a. Shui On Land* 272 HK HOLD (49) SRE Group 127 HK NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a n.a. n.a. n.a. Sunshine 1 China 268 HK NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a n.a. n.a. n.a. Times Property 1233 HK NR n.a n.a. n.a. Wuzhou Int'l 1369 HK NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a n.a. n.a. n.a. Yuzhou Properties 1628 HK NR n.a Zhong An 672 HK NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a n.a. n.a. n.a. Av erage# Av erage (Ov erall)# ~ ^ Denominated in SGD for price ~ Simple average discount to NAV; Market cap weighted average NAV = -4% # Exclude outliners ~~Gross Gearing ^^ FY16: 17F; FY17: FY18F; FY18: FY19F Source: Thomson Reuters, *DBS Vickers Page 1

11 Historical valuations 9-Jan Company name Code Price HK$ Current Hist avg + 1 s.d. - 1 s.d. Current (FY17) Hist avg + 1 s.d. - 1 s.d. Current Hist avg Agile Property 3383 HK Central China 832 HK China Overseas 688 HK (12.4) 13.8 (2.5) China Vanke-H 222 HK (66.6) China Vanke-A* 2 CH (73.3) (1.4) (33.5) COGO 81 HK (2.8) Country Garden 27 HK (3.5) CR Land 119 HK China Evergrande 3333 HK 29.2 (.2) China Jinmao 817 HK Longfor 96 HK Shimao Property 813 HK Shui On Land 272 HK Sino-Ocean Land 3377 HK SOHO China 41 HK 4.88 n.a (.8) Greenland 337 HK Yanlord Land^ YLLG SP Sector average 22.3** 45.9~ 39.1~ 52.8~ ~ 7.6~ 5.5~.7.8~.9~.6~ * Share price denominated in RMB ^ Share price denominated in SGD ** Exclude Soho China ~ 21-YTD Source: Thomson Reuters, DBS Vickers NAV discount / (premium) (%) PE (x) PB (x) + 1 s.d. - 1 s.d. Page 11

12 DBSVHK recommendations are based an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>2% 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, >1% for large caps) HOLD (-1% to +15% total return over the next 12 months for small caps, -1% to +1% for large caps) FULLY VALUED (negative total return i.e. > -1% over the next 12 months) SELL (negative total return of > -2% over the next 3 months, with identifiable catalysts within this time frame) Share price appreciation + dividends Completed Date: 1 Jan 218 1:58:21 (HKT) Dissemination Date: 1 Jan :49:25 (HKT) Sources for all charts and tables are DBS Vickers unless otherwise specified. GENERAL DISCLOSURE/DISCLAIMER This report is prepared by DBS Vickers (Hong Kong) Limited ( DBSV HK ). This report is solely intended for the clients of DBS Bank Ltd., DBS Bank (Hong Kong) Limited (DBS HK), DBSV HK, and DBS Vickers Securities (Singapore) Pte Ltd. ( DBSVS ), its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSV HK. The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS Bank Ltd., DBS HK, DBSV HK, DBSVS, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the DBS Group ) have not conducted due diligence on any of the companies, verified any information or sources or taken into account any other factors which we may consider to be relevant or appropriate in preparing the research. Accordingly, we do not make any representation or warranty as to the accuracy, completeness or correctness of the research set out in this report. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group, may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies. Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed, it may not contain all material information concerning the company (or companies) referred to in this report and the DBS Group is under no obligation to update the information in this report. This publication has not been reviewed or authorized by any regulatory authority in Singapore, Hong Kong or elsewhere. There is no planned schedule or frequency for updating research publication relating to any issuer. The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that: (a) (b) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein. Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets. Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report. DBSVUSA, a US-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-making. Page 12

13 ANALYST CERTIFICATION The research analyst(s) 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(s) 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 the report. The research analyst (s) primarily responsible for the content of this research report, in part or in whole, certifies that he or his associate 1 does not serve as an officer of the issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the management of the issuer or the new listing applicant) and the research analyst(s) primarily responsible for the content of this research report or his associate does not have financial interests 2 in relation to an issuer or a new listing applicant that the analyst reviews. DBS Group has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately. There is no direct link of DBS Group's compensation to any specific investment banking function of the DBS Group. COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBS Bank Ltd, DBS HK, DBSVS, DBSV HK or their subsidiaries and/or other affiliates have proprietary positions in China Overseas Land & Investment Limited (688 HK), China Resources Land Limited (119 HK), China Vanke Company Limited 'H' (222 HK) and Sino- Ocean Group Holding Limited (3377 HK) recommended in this report as of 8 Jan 218. DBS Bank Ltd, DBS HK, DBSVS, DBSV HK or their subsidiaries and/or other affiliates have proprietary positions in Yanlord Land Group Limited (YLLG SP) and China Vanke Company Limited (2 CH) recommended in this report as of 29 Dec Neither DBS Bank Ltd, DBS HK nor DBSV HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research Report. 3. Compensation for investment banking services: DBS Bank Ltd, DBS HK, DBSVS, DBSV HK, their subsidiaries and/or other affiliates of DBSVUSA have received compensation, within the past 12 months for investment banking services from China Overseas Grand Oceans Group (81 HK), China Jinmao Holdings (817 HK), Sino-Ocean Group Holding Limited (3377 HK) and Yanlord Land Group Limited (YLLG SP) as of 3 Nov DBS Bank Ltd, DBS HK, DBSVS, DBSV HK, their subsidiaries and/or other affiliates of DBSVUSA have managed or co-managed a public offering of securities for China Jinmao Holdings (817 HK), Sino-Ocean Group Holding Limited (3377 HK) and Yanlord Land Group Limited (YLLG SP) in the past 12 months, as of 3 Nov 217. DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction 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. 5. Disclosure of previous investment recommendation produced: DBS Bank Ltd, DBSVS, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA may have published other investment recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12 months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by DBS Bank Ltd, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA in the preceding 12 months. 1 An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst. 2 Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at arm's length, or investments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant. Page 13

14 RESTRICTIONS ON DISTRIBUTION General Australia 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. This report is being distributed in Australia by DBS Bank Ltd. ( DBS ) or DBS Vickers Securities (Singapore) Pte Ltd ( DBSVS ). DBS holds Australian Financial Services Licence no DBSVS is exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 21 ( CA ) in respect of financial services provided to the recipients. Both DBS and DBSVS are regulated by the Monetary Authority of Singapore under the laws of Singapore, and DBSVHK is regulated by the Securities and Futures Commission of Hong Kong under the laws of Hong Kong, which differ from Australian laws. Distribution of this report is intended only for wholesale investors within the meaning of the CA. Hong Kong Indonesia Malaysia This report is being distributed in Hong Kong by DBS Bank Ltd, DBS Bank (Hong Kong) Limited and DBS Vickers (Hong Kong) Limited, all of which are registered with or licensed by the Hong Kong Securities and Futures Commission to carry out the regulated activity of advising on securities. This report is being distributed in Indonesia by PT DBS Vickers Sekuritas Indonesia. This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from ADBSR are to contact the undersigned at in respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies. Singapore Thailand United Kingdom Dubai International Financial Centre Wong Ming Tek, Executive Director, ADBSR This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No E) or DBSVS (Company Regn No G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at for matters arising from, or in connection with the report. This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd. This report is produced by DBSVHK which is regulated by the Hong Kong Securities and Futures Commission This report is disseminated in the United Kingdom by DBS Vickers Securities (UK) Ltd ( DBSVUK ). DBSVUK is authorised and regulated by the Financial Conduct Authority in the United Kingdom. In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVUK. This communication is directed at persons having professional experience in matters relating to investments. Any investment activity following from this communication will only be engaged in with such persons. Persons who do not have professional experience in matters relating to investments should not rely on this communication. This research report is being distributed by DBS Bank Ltd., (DIFC Branch) having its office at PO Box 56538, 3 rd Floor, Building 3, East Wing, Gate Precinct, Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates. DBS Bank Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This research report is intended only for professional clients (as defined in the DFSA rulebook) and no other person may act upon it. Page 14

15 United Arab Emirates United States Other jurisdictions This report is provided by DBS Bank Ltd (Company Regn. No E) which is an Exempt Financial Adviser as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. This report is for information purposes only and should not be relied upon or acted on by the recipient or considered as a solicitation or inducement to buy or sell any financial product. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situation, or needs of individual clients. You should contact your relationship manager or investment adviser if you need advice on the merits of buying, selling or holding a particular investment. You should note that the information in this report may be out of date and it is not represented or warranted to be accurate, timely or complete. This report or any portion thereof may not be reprinted, sold or redistributed without our written consent. This report was prepared by DBSVHK. DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate. 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 (Hong Kong) Limited 18 th Floor Man Yee building, 68 Des Voeux Road Central, Central, Hong Kong Tel: (852) , Fax: (852) Company Regn. No Page 15

16 DBS Regional Research Offices HONG KONG DBS Vickers (Hong Kong) Ltd Contact: Carol Wu 18th Floor Man Yee Building 68 Des Voeux Road Central Central, Hong Kong Tel: Fax: Participant of the Stock Exchange of Hong Kong Ltd MALAYSIA AllianceDBS Research Sdn Bhd Contact: Wong Ming Tek (12854 U) 19th Floor, Menara Multi-Purpose, Capital Square, 8 Jalan Munshi Abdullah 51 Kuala Lumpur, Malaysia. Tel.: Fax: general@alliancedbs.com SINGAPORE DBS Bank Ltd Contact: Janice Chua 12 Marina Boulevard, Marina Bay Financial Centre Tower 3 Singapore Tel: Fax: equityresearch@dbs.com Company Regn. No E INDONESIA PT DBS Vickers Sekuritas (Indonesia) Contact: Maynard Priajaya Arif DBS Bank Tower Ciputra World 1, 32/F Jl. Prof. Dr. Satrio Kav. 3-5 Jakarta 1294, Indonesia Tel: Fax: research@id.dbsvickers.com THAILAND DBS Vickers Securities (Thailand) Co Ltd Contact: Chanpen Sirithanarattanakul 989 Siam Piwat Tower Building, 9th, 14th-15th Floor Rama 1 Road, Pathumwan, Bangkok Thailand 133 Tel Fax: research@th.dbs.com Company Regn. No Securities and Exchange Commission, Thailand Page 16