HK Property (Issue No. 86)

Transcription

1 (Issue No. 86) Refer to important disclosures at the end of this report Page 1 DBS Group Research. Equity 5 April 217 Comparative analysis of retail mall performance Retail rental income peaked out at most landmark malls in 2H216 Regional and suburban malls which target local spending fared better Landmark malls saw retail rental income peaking out in 2H216. While retail rental income was higher for the majority of key landlords in 216, a closer scrutiny suggests that income had already peaked out in 2H216 after the correction in the retail market for more than two years. Swire Properties was the first among major landlords to post a decline in retail rental income, derived mainly from The Mall, Pacific Place in Admiralty. The company's retail rental revenue had hit a peak in 1H215, and fell 4 y-o-y in 216. With shrinking demand for space from luxury brands such as Burberry, the tenant mix at The Mall, Pacific Place has been reconfigured to have more F&B outlets. This has led to lower average rents. Renowned retail mall operator Wharf fared slightly better. Its landmark malls, Harbour City and Times Square, reported rental income growth of 4.3 and 5.9 year-on-year respectively in 216. However, Harbour City s retail rental income was slightly lower in 2H216 compared to first half. Retail rental income from Times Square fell by a larger 3.4 in 2H216 vs 1H216, on lower turnover rents, despite positive rental reversion. Causeway Bay versus Mongkok. Hysan's retail portfolio in Causeway Bay and Champion REIT's Langham Place Mall in Mongkok registered similar rental income growth rates of 3-4 in 216. However, Hysan's retail rental income had peaked out in 2H 216, a reflection that rental reversion has turned negative. Negative reversionary growth should continue in 217, resulting in lower retail rental income (excluding one-off compensation arising from Ralph Lauren's early termination of its lease at Lee Garden Two). On the other hand, Langham Place Mall, which targets the young and mass market segments, fared relatively better. This mall s revenue grew 6.2 in 2H 216 compared to 1H 216. That said, base retail rents should head marginally lower in 217 with turnover rents becoming crucial in determining the overall income growth for the Mall. Regional and suburban malls fared slightly better. Retail rental income growth for Sun Hung Kai Properties, the largest retail landlord in Hong Kong, remains positive but moderated to 1.5 in 2H 216 compared to the 1H 216. Its portfolio comprises many regional and suburban shopping malls such as APM, MOKO and New Town Plaza, which have been less affected by reduced tourist spending. Another regional mall, Plaza Hollywood in Diamond Hill, owned by Wharf, also posted 2.2 growth in retail revenue in 2H 216, compared to 1H 216. HSI: 24,261 ANALYST Jeff YAU CFA, jeff_yau@dbs.com Ian CHUI ianchui@dbs.com H-o-H growth of retail income 2H16 vs. 1H Langham Place Mall 2 2 Plaza Hollywood Source: DBS Vickers SHKP 's portfolio Citigate Outlet Mall -1 Hysan's portfolio Harbour City Swire's portfolio Y-o-Y growth of retail income 216 vs Times Square SHKP 's portfolio Harbour City Hysan's portfolio Langham Place Mall Plaza Hollywood -4 Swire's portfolio -3 Times Square -11 Citigate Outlet Mall Source: DBS Vickers ed JS / sa- AH

2 TABLE OF CONTENTS Share price performance 3 What were the transaction trends in primary and secondary markets? 9 What are the factors affecting residential demand and supply? 11 What projects were launched? 13 Where are the upcoming projects? 14 How about the office market? 15 How about the retail market? 16 What did corporates do? 18 Discount to NAV Property developers & investors 2 Discount to NAV band Property developers & investors 23 Price to book NAV band - REITs 26 Historical yield band - REITs 27 Any important dates to look out for? 28 Our past publications 29 Page 2

3 Share price performance Property developer index vs HSI Property developer index vs HSI (6 month) Rebased (1 Jan 1 = 1) Rebased (3 Oct 16 = 1) Jan/1 Jan/2 Jan/3 Jan/4 Jan/5 Jan/6 Jan/7 Jan/8 Jan/9 Jan/1 Jan/11 Jan/12 Jan/13 Jan/14 Jan/15 Jan/16 Jan/17 Oct/16 Nov/16 Nov/16 Dec/16 Jan/17 Feb/17 Mar/17 HK property developers share price index HSI HK property developers share price index HSI Property investor vs HSI Property investor index vs HSI (6 month) Jan/1 Jan/2 Jan/3 Jan/4 Jan/5 Jan/6 Jan/7 Jan/8 Jan/9 Jan/1 Jan/11 Jan/12 Jan/13 Jan/14 Jan/15 Jan/16 Jan/17 Oct/16 Nov/16 Nov/16 Dec/16 Jan/17 Feb/17 Mar/17 HK property investors share price index HSI HK property investors share price index HSI REIT vs HSI REIT index vs HSI (6 month) Rebased (29 Dec 6 = 1) Rebased (3 Oct 16 = 1) Jan/7 Jul/7 Jan/8 Jul/8 Jan/9 Jul/9 Jan/1 Jul/1 Jan/11 Jul/11 Jan/12 Jul/12 Jan/13 Jul/13 Jan/14 Jul/14 Jan/15 Jul/15 Jan/16 Jul/16 Jan/17 Oct/16 Nov/16 Nov/16 Dec/16 Jan/17 Feb/17 Mar/17 REITs share price index HSI REITs share price index HSI Source: Thomson Reuters; DBS Vickers Page 3

4 Valuation Property developers Disc. to Mkt Last 12-m PE PE Dec-17 Dec-17 Yield Yield Company Code F Y E Cap Pric e t arget Rec om F Y 17 F Y 18 NAV NAV F Y17 F Y18 bn x x Henderson Land 12 HK Dec HOLD (41) K Wah Int'l 173 HK Dec BUY (58) Kerry Props 683 HK Dec BUY (64) Lai Sun Dev 488 HK Jul BUY (67).9.9 New World Dev 17 HK Jun BUY (57) 4.6^ 4.6 Sino Land 83 HK Jun BUY (43) SHKP 16 HK J un BUY (44) Tai Cheung 88 HK Mar HOLD (63) Wheelock & Co. 2 HK Dec BUY (17) Wing Tai Properties 369 HK Dec BUY (66) ^ Included proposed special dividend Source: Thomson Reuters, DBS Vickers Valuation Property investors Disc. to Mkt Last 12-m PE PE Dec-17 Dec-17 Yield Yield Company Code F Y E Cap Pric e t arget Recom F Y 17 F Y 18 NAV NAV F Y17 F Y18 bn x x Hang Lung Props 11 HK Dec HOLD (39) HK HKL SP Dec BUY (37) Hy san Dev 14 HK Dec HOLD (44) Swire Props 1972 HK Dec BUY (39) Wharf 4 HK Dec HOLD (27) 3.3 denominated in USD Source: Thomson Reuters, DBS Vickers Valuation Diversified Properties Disc. to Mkt Last 12-m PE PE Dec-17 Dec-17 Yield Yield Company Code F Y E Cap Pric e t arget Recom F Y 17 F Y 18 NAV NAV F Y17 F Y18 bn x x Far East Consortium 35 HK Mar BUY (67) Great Eagle 41 HK Dec HOLD (49) Source: Thomson Reuters, DBS Vickers Page 4

5 Valuation REITs Mkt Last 12-m Yield Yield Yield Price/ REIT Code FYE Cap Price Target Recom FY16A FY17F FY18F BV m (x) Champion REIT* 2778 HK Dec 27, BUY Langham Hospitality^ 127 HK Dec 6, n.a. NR New Century REIT^ 1275 HK Dec 2, n.a. NR n.a..87 Spring REIT^ 1426 HK Dec 3, n.a. NR Sunlight REIT* 435 HK J un 7, HOLD Link REIT* 823 HK Mar 121, HOLD Yuexiu REIT^ 45 HK Dec 13, n.a. NR denominated in RMB ^ DPU based on consensus Source: Thomson Reuters, *DBS Vickers Page 5

6 Trading range comparison Property developers and investors -- Last 3 month Last 3 month Last 3 month Last 2 month Last 1 month -- Last Price FY17F P/E at High Price FY17F P/E at Low Price Discount to NAV at High Price Discount to NAV at Low Price High Price Low Price High Price Low Price High Price Low Price x x Property dev elopers Henderson Land 12 HK K Wah Int'l 173 HK Kerry Properties 683 HK Lai Sun Dev 488 HK New World Dev 17 HK Sino Land 83 HK SHKP 16 HK Tai Cheung 88 HK Wheelock & Co 2 HK Wing Tai Properties 369 HK Property inv estors Hang Lung Props 11 HK HK Land^ HKL SP Hysan Dev 14 HK Swire Properties 1972 HK Wharf 4 HK Div ersified Properties Far East Consortium 35 HK Great Eagle 41 HK Sector Av erage Dev elopers Inv estors Div ersified Properties Hang Seng Index ^ denominated in USD Source: Thomson Reuters; DBS Vickers Page 6

7 Trading range comparison REITs -- Last 3 month Last 3 month Last 3 month ---- Last 2 month ---- Last 1 month -- FY17F Last FY17F Div y ield at High Div yield at Low P/BV at P/BV at High Low High Low High Low Price Price Price High Price Low Price Price Price Price Price Price Price x x REITs Champion REIT 2778 HK Langham Hospitality 127 HK New Century REIT 1275 HK Spring REIT 1426 HK Sunlight REIT 435 HK Link REIT 823 HK Yuexiu REIT 45 HK Sector Av erage - REITs Hang Seng Index 3.4 denominated in RMB Source: Thomson Reuters; DBS Vickers Page 7

8 Share price movement comparison () 1-wk 2-wk 1-mth 3-mth 6-mth 1-yr YTD Henderson Land (11.) 35. (3.8) (4.5) K Wah Int'l (1.) (15.6) 12.6 Kerry Properties (33.2) 4.6 (24.9) (.5) Lai Sun Development. (2.) (31.2) (15.9) (32.5) 28.1 New World Dev.3 (2.1) (2.6) 14.7 (4.3) (16.3) (3.2) (14.1) 7. Sino Land (1.) (3.) (24.) 18.1 (9.3) 2.3 SHKP (1.4) (15.4) 2.3 (2.9) 4.7 Tai Cheung 1.8 (1.6) (1.1) (7.6) 8.7 (2.7) 9.8 Wing Tai Properties 2.6 (.7) (5.7) 5. (1.4) 4.5 Wheelock and Co (8.6) 1.5 (9.8) 33.7 Hang Lung Properties (3.7) (3.2) (2.5) (11.2) (18.9) (6.8) HK Land (15.6) (9.6) Hy san Dev elopment 1.4 (.8) (1.9) (1.3) 3.7 (8.4).9 Swire Properties n.a. (24.2) 16.8 (2.2) (4.5) Wharf Holdings (1.7) (2.5) (2.1) (5.6) (23.2) 19.9 Champion REIT (7.5) Yuexiu REIT (1.9) (1.7) Link REIT (5.) (2.8) 29.1 (4.4) 8.6 Sunlight REIT (5.9) (9.1) Spring REIT 4.1 (1.5) (2.9) n.a. n.a (17.2) 6.3 New Century REIT (.4) (.4) (12.9). n.a. n.a. (9.3) (12.1) (14.1) Great Eagle (.7) (.4) (4.9) Far East Consort.Intl HSI Index.3 (1.) (7.2).4 HSP Index (.4) (.9) (2.1) (9.2) 7.2 (2.1) (3.1) Source: Thomson Reuters Page 8

9 Residential What were the transaction trends in primary and secondary markets? Primary market transaction volume Primary market transaction value No of units 4, 3,5 3, 2,5 2, 1,5 1, 5 Feb m-o-m y-o-y 2M y-o-y Jan-9 Apr-9 Jul-9 Oct-9 Jan-1 Apr-1 Jul-1 Oct-1 Apr-11 Jul-11 Oct-11 Apr-12 Jul-12 Oct-12 Apr-13 Oct-13 Apr-14 Jul-14 Oct-14 Apr-15 Jul-15 Oct-15 Apr-16 Oct-16 m 35, 3, 25, 2, 15, 1, 5, Feb m-o-m y-o-y 2M y-o-y Jan-9 Apr-9 Jul-9 Oct-9 Jan-1 Apr-1 Jul-1 Oct-1 Apr-11 Jul-11 Oct-11 Apr-12 Jul-12 Oct-12 Apr-13 Oct-13 Apr-14 Jul-14 Oct-14 Apr-15 Jul-15 Oct-15 Apr-16 Oct-16 Source: Centaline Property Agency Source: Centaline Property Agency Secondary market transaction volume Secondary market transaction value No of units 14, 12, 1, 8, 6, 4, 2, Feb m-o-m 64.1 y-o-y 2M y-o-y Jan-9 Apr-9 Jul-9 Oct-9 Jan-1 Apr-1 Jul-1 Oct-1 Apr-11 Jul-11 Oct-11 Apr-12 Jul-12 Oct-12 Apr-13 Oct-13 Apr-14 Jul-14 Oct-14 Apr-15 Jul-15 Oct-15 Apr-16 Oct-16 m 5, 45, 4, 35, 3, 25, 2, 15, 1, 5, Feb m-o-m 83.4 y-o-y 2M y-o-y Jan-9 Apr-9 Jul-9 Oct-9 Jan-1 Apr-1 Jul-1 Oct-1 Apr-11 Jul-11 Oct-11 Apr-12 Jul-12 Oct-12 Apr-13 Oct-13 Apr-14 Jul-14 Oct-14 Apr-15 Jul-15 Oct-15 Apr-16 Oct-16 Source: Centaline Property Agency Source: Centaline Property Agency Page 9

10 Confirmor Overall Confirmor Over 7m 1,8 1,6 1,4 1,2 1, Jul-95 Jul-96 Jul-97 Jul-98 Jul-99 Jul- Jul-1 Jul-2 Jul-3 Jul-4 Jul-5 Jul-6 Jul-7 Jul-8 Jul-9 Jul-1 Jul-11 Jul-12 Jul-14 Jul-15 No. of cases of confirmor (LHS) Feb-17 2,.8, As a of total secondary registrations (RHS) Jul-95 Jul-96 Jul-97 Jul-98 Jul-99 Jul- Jul-1 Jul-2 Jul-3 Jul-4 Jul-5 Jul-6 Jul-7 Jul-8 Jul-9 Jul-1 Jul-11 Jul-12 Jul-14 Jul-15 No. of cases of confirmor (LHS) Feb-17,, As a of over $7m secondary registrations (RHS) Source: Centaline Property Agency Source: Centaline Property Agency Centa-City leading index (Secondary market price index) Residential rents (Based on saleable area) Mar m-o-m 4 ytd Mar-9 Jul-9 Nov-9 Mar-1 Jul-1 Nov-1 Mar-11 Jul-11 Nov-11 Mar-12 Jul-12 Nov-12 Mar-13 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Mar-16 Nov-16 Mom growth (RHS) CCL Index (LHS) (2) (4) psf Feb-17 Overall: -3.2 m-o-m 12.5 y-o-y Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jul-11 Jul-12 Jul-14 Jul-15 Hong Kong New Territories East Overall Kowloon New Territories West Source: Centaline Property Agency Source: Centaline Property Agency Page 1

11 What are the factors affecting residential demand and supply? Real GDP growth Unemployment rate (2) (4) (6) (8) (1) 4Q16: 3.1 y-o-y 1Q5 3Q5 1Q6 3Q6 1Q7 3Q7 1Q8 3Q8 1Q9 3Q9 1Q1 3Q1 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 9 Dec-16 -Feb-17: 3.3 Nov-16 -: Jan/1 Jan/2 Jan/3 Jan/4 Jan/5 Jan/6 Jan/7 Jan/8 Jan/9 Jan/1 Jan/11 Jan/12 Jan/13 Jan/14 Jan/15 Jan/16 Source: CEIC Source: CEIC 3-mth HIBOR vs Prime rate Effective mortgage rate Mar mth HIBOR:.94 Prime rate: 5 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jul-11 Jul-12 Jul-14 Jul-15 3-mth HIBOR HK Prime rate Mar-17: 1.74 Feb-17: 1.79 Jan-96 Jan-97 Jan-98 Jan-99 Jan- Jan-1 Jan-2 Jan-3 Jan-4 Jan-5 Jan-6 Jan-7 Jan-8 Jan-9 Jan-1 Source: CEIC Source: CEIC, DBS Vickers Page 11

12 Housing affordability private households Rental yields (mass market projects) (Based on Saleable Area) Prime base Feb HIBOR base Feb Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan- Jan-1 Jan-2 Jan-3 Jan-4 Jan-5 Jan-6 Jan-7 Jan-8 Jan-9 Jan-1 Prime base HIBOR base Jan-96 Jan-97 Jan-98 Jan-99 Jan- Jan-1 Jan-2 Jan-3 Jan-4 Jan-5 Jan-6 Jan-7 Jan-8 Jan-9 Jan-1 Source: Centaline Property Agencys Source: Centaline Property Agency Yield spread Housing supply (2) (4) (6) (8) (1) Max: Jun Jan-96 Jan-97 Jan-98 Jan-99 Jan- Jan-1 Jan-2 Jan-3 Jan-4 Jan-5 Jan-6 Jan-7 Jan-8 Jan-9 Jan-1 No of units 4, 35, 3, 25, 2, 15, 1, 5, E 218E 219E 22E 221E Completion Average Average completion (96-16) 17,827 units No of primary units sold Source: CEIC, Centaline Property Agency, DBS Vickers Source: DBS Vickers Page 12

13 What projects were launched? Project Launches (Mar 217) Launch Projects Location Developer Total Units Units sold sold ASP (psf) Mar-17 Eden Manor Sheung Shui Henderson Land , Mar-17 Seanorama Ma On Shan Cheung Kong Property ,3 Mar-17 Monterey Tseung Kwan O Wheelock ,7 Mar-17 Cullinan West West Kowloon SHKP 1, ,5 Mar-17 Vibe Centro Kai Tak Poly Property (HK) , Mar Aberdeen Street Sheung Wan Private developer , Source: DBS Vickers Occupation permits issued (Jan 217) Projects Location Location Dev elopers No of units 44 Stubbs Road Mid-levels HK Private developer Shiu Fai Terrace Mid-levels HK Chinese Estates Shanghai Street J ordan Kln Private developer 19 Axis Hung Hom Kln Henderson Land 12 Source: Buildings Department Page 13

14 Where are the upcoming projects? Pre-sale consent granted (Feb 217) Project Dev elopers Location Location No. of unit Vibe Centro Poly Property Group Kln Kai Tak 93 Source: Lands Department Pre-sale consent pending approval (Feb 217) Project Dev elopers Location Location No. of unit IL 938 URA HK Central 185 Lot 385 in DD 352 & Extension HKR NT Discovery Bay 196 RBL 119 Nan Fung Group HK Island South Tai Tam Road National Electronics Consortium HK Island South 7 NKIL 6525 K&K Property Kln Kai Tak 822 NKIL 6541 Wheelock & Co. Kln Kai Tak 648 Edition 178 Global Convention NT Kwai Chung 136 STTL 581 (Ph1) SHKP NT Ma On Shan 353 STTL 581 (Ph2) SHKP NT Ma On Shan 67 IL 8949 (Ph1) - HK Mid-levels Shiu Fai Terrace Chinese Estates HK Mid-levels 24 IL 927 RP (Ph1) SHKP HK North Point Clear Water Bay V ice Chairman of Agile NT Sai Kung 8 Marin Point Far East Consortium NT Sha Tau Kok 261 NKIL 6538 Emperor Int'l/URA Kln Sham Shui Po 136 Mount Vienna Hanison Construction Holdings Ltd NT Shatin 12 STTL 565 Wing Tai Props/Manhattan Realty NT Shatin 69 STTL 567 Wing Tai Props/Manhattan Realty NT Shatin 158 STTL 587 Wang On Group NT Shatin 336 SIL 854 Wing Tai Props HK Shau Kei Wan 75 TPTL 213 Billion Development NT Tai Po 667 L'Aquatique MCC NT Tsing Lung Tau 198 TWTL 41 (Ph3) - NT Tsuen Wan 97 TWTL 41 (Ph3A) - NT Tsuen Wan 1,436 TWTL 417 Chinachem NT Tsuen Wan 953 T Plus Chun Wo NT Tuen Mun 356 CPTL 18 and TMTL 99 New World NT Tuen Mun 1 Lot 2131 in DD121 New World NT Yuen Long 123 Park Vista (Ph2A) SHKP NT Yuen Long 683 Source: Lands Department Page 14

15 How about the office market? Office rentals Office capital values psf/mth Premium Central Feb-17:.1 m-o-m Aug-7 Dec-7 Apr-8 Aug-8 Dec-8 Apr-9 Aug-9 Dec-9 Apr-1 Aug-1 Dec-1 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 psf/mth 35, 3, 25, 2, 15, 1, 5, Overall Central Feb-17 33,245psf, 1.7 m-o-m Sep-7 Jan-8 May-8 Sep-8 Jan-9 May-9 Sep-9 Jan-1 May-1 Sep-1 May-11 Sep-11 May-12 Sep-12 May-13 Sep-13 May-14 Sep-14 May-15 Sep-15 May-16 Sep-16 Premium Central Traditional Central Overall Central Source: Knight Frank Source: Knight Frank Office vacancy Office vacancy in Central Central Wanchai/ Causeway Bay HK East Feb-17 Tsimshatsui Kowloon East Overall () Jun-1 Dec-1 Jun-11 Dec-11 Jun-12 Dec-12 Feb-17: 1.5 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Office Vacancy - Central Dec-16 Source: Jones Lang LaSalle Source: Hudson Global Resources (HK) Page 15

16 How about the retail market? Private retail rent index Private retail price index Rental Index (1999=1) m-o-m.6 y-o-y Price Index (1999=1) m-o-m 2 y-o-y Jan/93 Jan/94 Jan/95 Jan/96 Jan/97 Jan/98 Jan/99 Jan/ Jan/1 Jan/2 Jan/3 Jan/4 Jan/5 Jan/6 Jan/7 Jan/8 Jan/9 Jan/1 Jan/11 Jan/12 Jan/13 Jan/14 Jan/15 Jan/16 Jan/17 5 Jan/93 Jan/94 Jan/95 Jan/96 Jan/97 Jan/98 Jan/99 Jan/ Jan/1 Jan/2 Jan/3 Jan/4 Jan/5 Jan/6 Jan/7 Jan/8 Jan/9 Jan/1 Jan/11 Jan/12 Jan/13 Jan/14 Jan/15 Jan/16 Jan/17 Source: Rating and Valuation Department Source: Rating and Valuation Department Overall retail sales growth Monthly retail sales growth of jewelleries/watches Yoy, 4 Feb-17: -5.7 y-o-y 2M17: -3.2 y-o-y Yoy, 8 Feb-17: 2.5 y-o-y 2M17: -1.1 y-o-y (1) (2) (2) (3) Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jul-11 Jul-12 Jul-14 Jul-15 (4) Jan-Feb 8 Jun-8 Oct-8 Mar-9 Jul-9 Nov-9 Apr-1 Aug-1 Dec-1 May-11 Sep-11 Jan-Feb 12 Jun-12 Oct-12 Mar-13 Nov-13 Apr-14 Aug-14 Dec-14 May-15 Sep-15 Jan-Feb 16 Jun-16 Oct-16 Source: CEIC Source: CEIC Page 16

17 Monthly retail sales growth of consumer durable goods Monthly retail sales growth of supermarket items Yoy, (1) (2) (3) Feb-17: y-o-y 2M17: y-o-y Jan-Feb 8 Jun-8 Oct-8 Mar-9 Jul-9 Nov-9 Apr-1 Aug-1 Dec-1 May-11 Sep-11 Jan-Feb 12 Jun-12 Oct-12 Mar-13 Nov-13 Apr-14 Aug-14 Dec-14 May-15 Sep-15 Jan-Feb 16 Jun-16 Oct-16 Yoy, (5) Feb-17: y-o-y 2M17: -3.5 y-o-y Jan-Feb 8 Jun-8 Oct-8 Mar-9 Jul-9 Nov-9 Apr-1 Aug-1 Dec-1 May-11 Sep-11 Jan-Feb 12 Jun-12 Oct-12 Mar-13 Nov-13 Apr-14 Aug-14 Dec-14 May-15 Sep-15 Jan-Feb 16 Jun-16 Oct-16 Source: CEIC Source: CEIC Visitor arrivals growth overall Visitor arrivals growth China Yoy, (1) (2) (3) Feb-17: -2.7 y-o-y 2M17: 1.4 y-o-y Jan/8 Jul/8 Jan/9 Jul/9 Jan/1 Jul/1 Jan/11 Jul/11 Jan/12 Jul/12 Jan/13 Jul/13 Jan/14 Jul/14 Jan/15 Jul/15 Jan/16 Jul/16 Jan/17 Yoy, (1) (2) (3) (4) Feb-17: -6.8 y-o-y 2M17: 1.1 y-o-y Jan/8 Jul/8 Jan/9 Jul/9 Jan/1 Jul/1 Jan/11 Jul/11 Jan/12 Jul/12 Jan/13 Jul/13 Jan/14 Jul/14 Jan/15 Jul/15 Jan/16 Jul/16 Jan/17 Source: CEIC Source: CEIC Page 17

18 What did corporates do? Major corporate actions Date Ev ent 1-Mar A China-based consortium won the tender for Wong Chuk Hang MTR station Ph1 residential project. 1-Mar Sino Land (83.HK) won the tender for Central Peel Street URA project (GFA: 84,3sf) 1-Mar Wharf (4.HK) announced it would consider spinning off some of its investment properties via distribution in specie. 1-Mar Henderson (12.HK) begins selling Mega Cube in Kowloon Bay. 1-Mar NWD (17.HK) and Henderson (12.HK) consolidated the ownership of a residential/commercial property at Homantin for 413m. 15-Mar A Chinese conglomerate beat 15 other competitors to win the tender for Kai Tak residential site (NKIL6563) for 13,5psf (GFA 55,11sf). 17-Mar Hysan (14.HK) buys 9 Nan Fong Road property from parent company for 75m. 2-Mar 28 developers submit expression of interest for URA's redevelopment project in Tai Kok Tsui (GFA 54,9sf.) 24-Mar UnionPay bans Chinese customers from swiping UnionPay cards to buy property in Hong Kong. 29-Mar SEA Group (251.HK) submits application to Town Planning Board to redevelop Holiday Inn Hotel in Causeway Bay into a commercial building. 31-Mar Tender for Central Murray Road car park site (IL951) will begin and will close on12- May. Source: DBS Vickers, local press, HKEx, Lands Department Page 18

19 Stake change by major shareholders Great Eagle (14.HK) Name of substantial shareholder No. of shares inv olv ed Buy/Sell Average price per share No. of shares interested of issued share capital Date of relev ant ev ent Lo Ka Shui 321, Buy ,54, Mar-17 Lo Ka Shui 4, Buy ,219, Mar-17 Lo Ka Shui 7, Buy ,819, Mar-17 Lo Ka Shui 28, Buy ,812, Mar-17 Lo Ka Shui 88, Buy ,64, Mar-17 Lo Ka Shui 2, Buy ,516, Mar-17 Lo Ka Shui 655, Buy ,316, Mar-17 Lo Ka Shui 67, Mar-17 Lo Ka Shui 1,5, Buy ,646, Mar-17 Lo Ka Shui 17, Buy ,146, Mar-17 Lo Ka Shui 28, Buy ,976, Mar-17 Lo Ka Shui 184, Buy ,948, Mar-17 Lo Ka Shui 41, Buy ,764, Mar-17 Lo Ka Shui 48, Buy ,723, Mar-17 Lo Ka Shui 492, Buy ,675, Mar-17 Champion REIT (2778.HK ) Name of substantial shareholder No. of shares inv olv ed Buy/Sell Average price per share No. of shares interested of issued share capital Date of relev ant ev ent Great Eagle 13,761,193 Buy 4.5 3,813,985, Mar-17 Great Eagle 36, Buy ,8,224, Mar-17 Great Eagle 5, Buy ,8,188, Mar-17 Great Eagle 5, Buy ,799,688, Mar-17 Great Eagle 5, Buy ,799,188, Mar-17 Great Eagle 5, Buy ,798,688, Mar-17 Great Eagle 5, Buy ,798,188, Mar-17 Source: HK Exchange Page 19

20 Discount to NAV Property developers & investors Property developers Henderson Land K.Wah International (1) (2) (3) (4) (5) (6) (7) Jan-7 Jan-8-1SD: -48-2SD: -63 Jan-9 Jan-1 +2SD: +1SD: -16 Average: -32 (35) (4) (45) (5) (55) (6) (65) (7) (75) (8) (85) Sep-9 +2SD: SD: -57 Average: -63-1SD: -69-2SD: -75 Jul-1 May-11 Apr-12 Feb-13 Dec-13 Oct-14 Aug-15 Kerry Properties New World Development 4 2 (2) (4) (6) (8) (1) Jan-7 Jan-8-1SD: -68-2SD: -93 Jan-9 Jan-1 +2SD: 9 +1SD: -17 Average: -42 (1) (2) (3) (4) (5) (6) (7) (8) (9) -1SD: -65-2SD: -8 +2SD: SD: -36 Average: -51 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jul-11 Jul-12 Jul-14 Jul-15 Sino Land (2) (4) (6) -1SD: -53-2SD: SD: 7 +1SD: -13 Average: -33 (8) Jan-7 Jan-8 Jan-9 Jan-1 Source: Thomson Reuters, DBS Vickers Page 2

21 Property developers (continued) Sun Hung Kai Properties Tai Cheung 4 (2) 2 +2SD: 12 (3) (2) (4) (6) -1SD: -46-2SD: SD: -7 Average: -27 (4) (5) (6) (7) (8) +2SD: -46-1SD: -7 +1SD: -54-2SD: -78 Average: -62 (8) Jan-7 Jan-8 Jan-9 Jan-1 (9) Jan-7 Jul-7 Feb-8 Aug-8 Feb-9 Sep-9 Mar-1 Sep-1 Apr-11 Oct-11 Apr-12 Oct-12 May-13 Nov-13 May-14 Dec-14 Jun-15 Dec-15 Wheelock & Co. Sector average 2 1 (1) (2) (3) (4) (5) (6) Jan-7 +2SD: -2 +1SD: -15 Average: -28-1SD: -41-2SD: -54 Jan-8 Jan-9 Jan (1) (2) (3) (4) (5) (6) Jan/7 Jan/8-1SD: -41-2SD: -55 Jan/9 Jan/1 Jan/11 Jan/12 +2SD: 1 +1SD: -13 Average: -27 Jan/13 Jan/14 Jan/15 Jan/16 Jan/17 Source: Thomson Reuters, DBS Vickers Page 21

22 Property investors Hang Lung Properties Hong Kong Land 4 2 (2) (4) (6) (8) 2 +2SD: SD: 2 (1) Average: -2 (2) (3) (4) -1SD: -43 (5) (6) -2SD: -66 (7) +2SD: 3 +1SD: -12 Average: -27-1SD: -42-2SD: -57 Jan-7 Jan-8 Jan-9 Jan-1 Jan-7 Jan-8 Jan-9 Jan-1 Hysan Swire Properties (1) (2) (3) (4) (5) (6) (7) (8) Jan-7 +2SD: SD: -29-1SD: -5-2SD: -6 Jan-9 Feb-13 Average: -4 Feb-15 Feb-17 (5) (15) (25) (35) (45) (55) (65) -1SD: -44-2SD: -53 Jun-12 Nov-12 Apr-13 Sep-13 Jun-14 +2SD: SD: -25 Average: -35 Nov-14 Apr-15 Sep-15 Feb-16 Nov-16 Wharf Sector average (1) (2) (3) (4) (5) (6) (7) Jan-7 Jan-8 +2SD: -3 Average: -3-1SD: -43-2SD: -57 Jan-9 Jan-1 +1SD: (1) (2) (3) (4) (5) (6) (7) Jan-7 Feb-9-1SD: -38-2SD: -52 Mar-11 Apr-13 +2SD: 3 +1SD: -1 Average: -27 May-15 Source: Thomson Reuters, DBS Vickers Page 22

23 Discount to NAV band Property developers & investors Property developers Henderson Land K Wah International Jan-7 Jan-8 Jan-9 Jan-1 1. Sep-9 Jul-1 May-11 Apr-12 Feb-13 Dec-13 Oct-14 Aug-15 Kerry Properties New World Development Jan-7 Jan-8 Jan-9 Jan Jan-7 Jan-8 Jan-9 Jan Sino Land Jan-7 Jan-8 Jan-9 Jan-1 Source: Thomson Reuters, DBS Vickers Page 23

24 Property developers (continued) Sun Hung Kai Properties Tai Cheung Jan-7 Jan-8 Jan-9 Jan-1 Jan-7 Jul-7 Feb-8 Aug-8 Feb-9 Sep-9 Mar-1 Sep-1 Apr-11 Oct-11 Apr-12 Oct-12 May-13 Nov-13 May-14 Dec-14 Jun-15 Dec-15 Wheelock & Co Jan-7 Jan-8 Jan-9 Jan-1 Source: Thomson Reuters, DBS Vickers Page 24

25 Property investors Great Eagle Hang Lung Properties Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jul-11 Jul-12 Jul-14 Jul-15 Jan-7 Jan-8 Jan-9 Jan-1 Hysan Swire Properties Jan-7 Sep-8 May-1 Oct-13 Jun-15 Feb Jun-12 Nov-12 Apr-13 Sep-13 Jun-14 Nov-14 Apr-15 Sep-15 Feb-16 Nov-16 Wharf Jan-7 Jan-8 Jan-9 Jan-1 Source: Thomson Reuters, DBS Vickers Page 25

26 Price to book NAV band - REITs REITs Champion REIT Link REIT x.7x.5x.3x.2x x 1.5x 1.3x 1.x.8x Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jul-11 Jul-12 Jul-14 Jul-15 Jan-7 Dec-7 Nov-8 Oct-9 Sep-1 Aug-11 Jul-12 Jun-13 May-14 Apr-15 Mar-16 Feb-17 Sunlight REIT x.7x x.4x.3x 1.. Jan-7 Apr-8 Aug-9 Dec-1 Mar-12 Nov-14 Feb-16 Source: Thomson Reuters, DBS Vickers Page 26

27 Historical yield band - REITs REITs Champion REIT Link REIT Champion REIT Mid 14 Floor 24 Ceiling 4 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jul-11 Jul-12 Jul-14 Jul Jan-7 Dec-7 Ceiling 3 Link REIT Nov-8 Sep-9 Aug-1 Jul-11 Jun-12 Floor 7 May-13 Apr-14 Mar-15 Mid 5 Feb-16 Sunlight REIT Sunlight REIT Ceiling 5 2. Mid Jan-7 Apr-8 Aug-9 Dec-1 Mar-12 Floor 25 Nov-14 Feb-16 Source: Thomson Reuters, DBS Vickers Page 27

28 Any important dates to look out for? Major upcoming events April Apr Unemployment rate J an Mar Apr CPI Mar 217 May May Retail statistics for March May GDP 1Q17 12-May IL951 (Murray Road car park) tender close 19-May Unemployment rate Feb Apr 217 June J un Retail statistics for April J un CPI May J un Unemployment rate Mar May J un Wage and payroll stat for March J un Retail statistics for May 217 Source: Census and Statistics Department, Lands Department, HK Exchange, DBS Vickers Page 28

29 Our past publications February Feb (Sunlight REIT) 1HFY17 result preview 6 Feb () Small could be pretty 8 Feb (Sunlight REIT) Embracing challenges 1 Feb (K Wah International) Lucrative K.City on sale 1 Feb (Hysan Development ) FY16 results preview 17 Feb (Sino Land ) Interim result preview 2 Feb (Henderson Land ) Hotel value crystallised 2 Feb (K Wah International) Overwhelming response to launch of K.City 21 Feb (New World Development) Interim results preview 22 Feb (Champion REIT) FY16 final result preview 23 Feb (New World Development) Building a better future 23 Feb (Hysan Development ) Challenging rental outlook 23 Feb (Sino Land ) Strong war chest for more accretive acquisitions 23 Feb (Great Eagle ) FY16 final results preview 27 Feb ( Sector) Sky is the limit 27 Feb (SHKP ) Interim result preview 28 Feb (Champion REIT) Three Garden Road shines March Mar (SHKP ) Leader of the pack 1 Mar (Great Eagle ) Crystallises value of US office 1 Mar (Hongkong Land) FY16 final results preview 3 Mar (Hongkong Land) A bargain 6 Mar (Far East Consortium) Unlocking hotel value 6 Mar () Office supply emerging in Kowloon West 6 Mar (Hongkong Land) Stepping up pace on regional residential investments 7 Mar (Wharf Holdings) FY16 final results preview 7 Mar (Wheelock) FY16 final results preview 9 Mar (Champion REIT) Takeaways from Post Results NDR in Singapore 1 Mar (Wharf Holdings) Simpler is better 13 Mar (Wheelock) Residential sales to unlock value 13 Mar (Swire Properties ) FY16 final results preview 15 Mar (K Wah International) FY16 final results preview 16 Mar (Kerry Properties ) FY16 final results preview 17 Mar (Swire Properties ) China rentals a bright spot 17 Mar (Henderson Land ) FY16 final results preview 2 Mar (Kerry Properties ) Unexpected dividend hike 2 Mar ( Sector) Panic buying 22 Mar (Henderson Land ) V alue unlocking 22 Mar (K Wah International) Enhanced earnings profile, strong financial muscle 22 Mar (Lai Sun Development) FY17 interim result preview 24 Mar (Wing Tai Properties) Steady climb 24 Mar (Lai Sun Development) Strong development earnings visibility 3 Apr ( Sector) Investment drive Source: DBS Vickers Page 29

30 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: 5 Apr :31:36 (HKT) Dissemination Date: 5 Apr :37:2 (HKT) GENERAL DISCLOSURE/DISCLAIMER This report is prepared by DBS Vickers (Hong Kong) Limited ( DBSVHK ). This report is solely intended for the clients of DBS Bank Ltd., DBS Vickers Securities (Singapore) Pte Ltd. ( DBSVS ) and DBSVHK, 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 DBSVHK. 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., DBSVS and DBSVHK, 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 marketmaking. Page 3

31 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. DBSVHK and its subsidiaries do not have a proprietary position in the securities recommended/mentioned in this report as of 3 Apr 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. DBS Bank Ltd., DBSVS, DBSVHK, DBSVUSA, their subsidiaries and/or other affiliates have a net long position exceeding.5 of the total issued share capital in Yuexiu Real Estate Investment Trust (45 HK) recommended in this report as of 31 Mar DBS Bank Ltd., DBSVS, DBSVHK, DBSVUSA, their subsidiaries and/or other affiliates beneficially own a total of 1 of any class of common equity securities of Yuexiu Real Estate Investment Trust (45 HK) as of 31 Mar Compensation for investment banking services: DBS Bank Ltd., DBSVS, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA have received compensation, within the past 12 months for investment banking services from Far East Consortium International Limited (35 HK) and SEA Holdings Limited (251 HK) as of 28 Feb 217. DBS Bank Ltd., DBSVS, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA have managed or co-managed a public offering of securities for Far East Consortium International Limited (35 HK) and SEA Holdings Limited (251 HK) in the past 12 months, as of 28 Feb 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. 6. 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 31

32 RESTRICTIONS ON DISTRIBUTION General Australia Hong Kong Indonesia Malaysia 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 ) or DBS Vickers (Hong Kong) Limited ( DBSVHK ), which are 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. This report is being distributed in Hong Kong by DBSVHK which is licensed and regulated by the Hong Kong Securities and Futures Commission. 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 United States Other jurisdictions Wong Ming Tek, Executive Director, ADBSR This report is distributed in Singapore by DBS Bank Ltd (Company Regn. 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This research report is being distributed in The Dubai International Financial Centre ( DIFC ) 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. 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 32