Primary sales volume fell as pent-up

Transcription

1 Deutsche Bank Markets Research Asia Hong Kong Industry HK Monthly Date 11 August 214 Industry Update Primary sales volume fell as pent-up demand ran out Slowed down sales volume reflecting the upswing to be short-lived Following a very strong primary market since the beginning of June, primary sales volume saw a material slow-down towards the end of July. In July, total primary sales volume -32% MoM to 1,6 units, reaffirming our view that the upswing was a short-lived one rather than a turning point of the cycle (timing of this short-lived upswing in line with the previous cycles). In our view, the slow-down in primary sales volume was attributed to pent-up demand being exhausted in the buying spree witnessed in the past 2 months. We believe primary volume may continue to fall in August as it will take time for pent-up demand to accumulate and also in the absence of major new launches. Primary volume -32% MoM as pent-up demand ran out In July, a total of 1,6 units were sold in the primary market, representing a sizeable decline of 32% MoM. In particular, Cheung Kong s Mont Vert Phase I in Tai Po is the main contributor with 435 units, followed by Wheelock/NWD/MTRC s Grand Austin in West Kowloon with 27 units, Sino- Land s Mayfair by the Sea in Tai Po with 195 units and NWD s Park Signature with 145 units. Meanwhile, we noted a marked weakness in sales momentum towards end of July, where the sell-through rates on selected launches saw a more material decline (despite project is priced conservatively), suggesting that pent-up demand is exhausted following the strong run since June. Secondary volume +14.1% MoM; CCL +2.% MoM to a 71-week high According to Land Registry, a total of 5,56 residential transactions were recorded in the secondary market in July, representing an increase of 14.1% MoM. While transaction volume in July was at the highest level since Feb-13, it is still 18% below the average monthly volume for the past 1 years. Meanwhile, the Centa-City Leading Index (CCL) was recorded at , up 2.% MoM (at the highest level in 71 weeks) and just.1% below the all-time high of registered in Mar-13. Grade A office largely steady: rents -.3% MoM; prices -.8% MoM According to the Rating and Valuation Department, rents for Grade A office decreased by.3% MoM (.4% YTD) and Grade B office by.4% MoM (2.9% YTD) in June. Prices for the Grade A office were declined by.8% MoM (-1.3% YTD) and Grade B office up by.7% MoM (1.4% YTD) in June. Overall, rental and price trends suggested that overall office market has remained steady YTD. Retail rents yet to respond to retail sales decline: rents +1.% MoM According to the Census and Statistics Department, retail sales continued its fifth consecutive monthly decline in June, with total retail sales dropping 6.9% to HK$37bn. In particular, jewelry/watches/valuable gifts (-28% YoY) dragged the performance. However, rents are yet to reflect softness in retail sales. According to the Rating and Valuation Department, retail rents rose by 1.% MoM (2.6% YTD) and prices edged up.4% MoM (1.9% YTD) in June. Prefer developers over landlords; top picks: Cheung Kong; Sino-Land; SHKP Overall, we believe weak demand is the key issue across all the sub-segments. We remain negative on the Hong Kong landlords, and reiterate our Sell ratings on Hongkong Land, Great Eagle and Hysan. For our stock recommendation on the sector, we continue to prefer Cheung Kong, Sino Land and SHKP over the landlords. Tony Tsang Jason Ching, CFA Research Analyst Research Analyst (+852) (+852) tony.tsang@db.com jason.ching@db.com Top picks Cheung Kong Hldgs (1.HK),HKD139.9 SHK Properties Ltd (16.HK),HKD115.3 Henderson Land Dev. Co. (12.HK),HKD47.35 Sino Land Co (83.HK),HKD13.32 Source: Deutsche Bank Companies Featured Deutsche Bank AG/Hong Kong Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 148/4/214. Buy Buy Buy Buy Cheung Kong Hldgs (1.HK),HKD139.9 Buy 213A 214E 215E P/E (x) EV/EBITDA (x) Price/book (x) SHK Properties Ltd (16.HK),HKD115.3 Buy 213A 214E 215E P/E (x) EV/EBITDA (x) Price/book (x) Henderson Land Dev. Co. Buy (12.HK),HKD A 213E 214E P/E (x) EV/EBITDA (x) Price/book (x) Sino Land Co (83.HK),HKD13.32 Buy 213A 214E 215E P/E (x) EV/EBITDA (x) Price/book (x) New World Dev (17.HK),HKD9.49 Hold 213A 214E 215E P/E (x) EV/EBITDA (x) Price/book (x) Source: Deutsche Bank

2 11 August 214 HK Monthly Table Of Contents Slowed down sales volume reflecting the upswing to be short-lived... 3 Primary volume -32% MoM as pent-up demand ran out... 3 Hong Kong property stocks performed at par with HSI in July... 4 HK Residential Market Update... 1 Transacted Prices of Major Housing Estates HK Commercial Market Update HK Macro Update Taking a look at valuations Page 2 Deutsche Bank AG/Hong Kong

3 11 August 214 HK Monthly Slowed down sales volume reflecting the upswing to be short-lived Primary volume -32% MoM as pent-up demand ran out In July, a total of 1,6 units were sold in the primary market, representing a sizeable decline of 32% MoM. In particular, Cheung Kong s Mont Vert Phase I in Tai Po is the main contributor with about 435 units, followed by Wheelock/NWD/MTRC s Grand Austin in West Kowloon with 27 units, Sino- Land s Mayfair by the Sea in Tai Po Phase II with 195 units, NWD s Park Signature with 145 units and Sino-Land s Mayfair by the Sea in Tai Po Phase I with 33 units. Meanwhile, we noted a marked weakness in sales momentum towards the end of July, where the sell-through rates on selected launches saw a more material decline (despite the project is priced conservatively), suggesting that pent-up demand is exhausted following the strong run since June. This has reaffirming our view that the upswing was a short-lived one rather than a turning point of the cycle (timing of this short-lived upswing is in line with those in previous cycles). In our view, the slow-down in primary sales volume was attributed to pent-up demand being exhausted in the buying spree witnessed in the past 2 months. Meanwhile, we believe primary volume may continue to fall in the month ahead as it will take time for pent-up demand to accumulate and also in the absence of major new launches. Figure 1: Weekend Primary Sales volume Units Total weekend primary sales Historical Average Source: Sing Tao, Deutsche Bank Deutsche Bank AG/Hong Kong Page 3

4 11 August 214 HK Monthly Hong Kong property stocks performed at par with HSI in July Hong Kong property stocks were up 6.9% MoM in July, slightly underperforming the Hang Seng Index at.56% MoM. In particular, Wheelock was the best performer with a share price rallying 19.8% MoM, followed by Wharf (+12.5%), Chinese Estates (+11.9%), Swire Properties (+1.8%) and New World Development (+1.%). Meanwhile, Hong Kong landlords generally performed relatively silient in the past month, with Great Eagle being the worst performance with share price up.7% MoM, followed by Hongkong Land (+.9%) and Hang Lung (+2.3%). Figure 2: 1-month share price performance for HK developers/landlords Hopewell Great Eagle Hongkong Land Shun Tak Langham Hospitality Investments Hang Lung Wing Tai Properties MTRC K. Wah Int'l Hysan Dev Link REIT Kerry Properties Sino Land Henderson Land SHKP Cheung Kong New World Dev Swire Properties Chinese Estates Wharf Wheelock.%.7%.9% 1.% 1.4% 2.3% 2.7% 3.4% 4.1% 4.4% 4.8% 5.4% 6.% 7.6% 9.% 9.4% 1.% 1.8% 11.9% 12.5% 19.8% Page 4 Deutsche Bank AG/Hong Kong

5 11 August 214 HK Monthly Figure 3: 3-months share price performance for HK developers/landlords Hongkong Land Langham Hospitality Investments Hopewell Wing Tai Properties Shun Tak Great Eagle MTRC Hang Lung Swire Properties K. Wah Int'l Chinese Estates Kerry Properties Link REIT Hysan Dev Wharf Henderson Land Sino Land SHKP Cheung Kong New World Dev Wheelock -3.9% -2.% 1.1% 1.5% 4.2% 4.7% 5.5% 6.1% 7.7% 9.3% 11.3% 12.2% 13.4% 14.3% 15.7% 16.2% 16.6% 18.7% 2.2% 21.3% 21.5% Deutsche Bank AG/Hong Kong Page 5

6 11 August 214 HK Monthly Figure 4: Hong Kong property valuations DB Trade Report Mkt Cap 12M Daily T/O 8 Aug Target Implied Est. NAV EPS PE(x) Company Ticker Rating Ccy Ccy USDm USDm Price Price Upside NAV Disc 13A 14F 15F 13A 14F 15F Covered Cheung Kong 1 HK Buy HKD HKD 41, % % SHKP 16 HK Buy HKD HKD 4, % % Wharf 4 HK Buy HKD HKD 23, % % MTRC 66 HK Buy HKD HKD 22, % % Henderson Land 12 HK Buy HKD HKD 18, % % Hongkong Land HKL SP Sell USD USD 16, % 8.5-2% Hang Lung 11 HK Buy HKD HKD 13, % % Link REIT 823 HK Buy HKD HKD 12, % % New World Dev 17 HK Hold HKD HKD 1, % % Sino Land 83 HK Buy HKD HKD 1, % % Hysan Dev 14 HK Sell HKD HKD 5, % % Kerry Properties 683 HK Hold HKD HKD 4, % % Great Eagle 41 HK Sell HKD HKD 2, % % Shun Tak 242 HK Hold HKD HKD 1, % % Langham Hospitality 127 HK Buy HKD HKD % % Investments Not Rated Swire Properties 1972 HK NR HKD HKD 19, NA NA NA NA Wheelock 2 HK NR HKD HKD 1, NA NA NA NA Chinese Estates 127 HK NR HKD HKD 5, NA NA NA NA NA NA NA Hopewell 54 HK NR HKD HKD 3, NA NA NA NA K. Wah Int'l 173 HK NR HKD HKD 1, NA NA NA NA Wing Tai Properties 369 HK NR HKD HKD NA NA NA NA Overall average -33% Source: Deutsche Bank, Company, Bloomberg Finance LP Consensus estimates for companies NR Page 6 Deutsche Bank AG/Hong Kong

7 11 August 214 HK Monthly Figure 5: Hong Kong property valuations (cont d) Company Covered EPS growth % BVPS PB(x) DPS Dividends yield % Net gearing % Ticker FY13 FY14F FY15F FY13 FY14F FY15F FY13 FY14F FY15F FY13 FY14F FY15F FY13 FY14F FY15F FY13 FY14F FY15F Cheung Kong 1 HK 2 5 () SHKP 16 HK (4) (9) Wharf 4 HK MTRC 66 HK (14) Henderson Land 12 HK Hongkong Land HKL SP 2 (8) (3) Hang Lung 11 HK Link REIT 823 HK New World Dev 17 HK (21) (15) Sino Land 83 HK 24 (23) (5) Hysan Dev 14 HK Kerry Properties 683 HK 8 () Great Eagle 41 HK (8) (4) Shun Tak 242 HK (15) Langham Hospitality 127 HK (12) Investments Not Rated Swire Properties 1972 HK (15) Wheelock 2 HK Chinese Estates 127 HK NA NA NA NA NA NA NA NA NA NA NA NA Hopewell 54 HK (9) (4) K. Wah Int'l 173 HK (57) (28) Wing Tai Properties 369 HK (26) 73 (39) NA NA Overall average (1) Source: Deutsche Bank, Company, Bloomberg Finance LP Consensus estimates for companies NR Deutsche Bank AG/Hong Kong Page 7

8 11 August 214 HK Monthly Figure 6: HK Disc to NAV 3% 2% 1% % -1% -2% -3% -4% -5% -6% -7% -8% Sector Disc to NAV -1SD Avg +1SD Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Source: Deutsche Bank Figure 7: HK P/E 35 Sector P/E -1SD Avg +1SD Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Figure 8: HK P/B 1.8 Sector P/B -1SD Avg +1SD Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Page 8 Deutsche Bank AG/Hong Kong

9 11 August 214 HK Monthly Figure 9: Developer Disc to NAV 8% Developer Disc to NAV -1SD Avg +1SD 6% 4% 2% % -2% -4% Figure 1: Developer P/E 35 Developer P/E -1SD Avg +1SD % 5-8% Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Source: Deutsche Bank Source: Deutsche Bank Figure 11: Developer P/B Figure 12: Landlord Disc to NAV 2.5 Developer P/B -1SD Avg +1SD 4% Landlord Disc to NAV -1SD Avg +1SD 2. 2% 1.5 % 1. -2% -4%.5-6%. Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1-8% Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Source: Deutsche Bank Source: Deutsche Bank Figure 13: Landlord P/E 5 Investor P/E -1SD Avg +1SD Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Figure 14: Landlord P/B 1.4 Investor P/B -1SD Avg +1SD Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Source: Deutsche Bank Source: Deutsche Bank Deutsche Bank AG/Hong Kong Page 9

10 11 August 214 HK Monthly HK Residential Market Update Figure 15: No of Transactions in Primary Market Unit 8, 7, 6, 5, 4, 3, 2, 1, - Jan-99 Aug-99 Mar- Oct- May-1 Dec-1 Jul-2 Feb-3 Sep-3 Apr-4 Nov-4 Jun-5 Jan-6 Aug-6 Mar-7 Oct-7 May-8 Dec-8 Jul-9 Feb-1 Sep-1 Apr-11 Nov-11 Jun-12 Jan-13 Aug-13 Mar-14 HK$ M Figure 16: No of Transactions in Secondary Market Unit 16, 14, 12, 1, 8, 6, 4, 2, - Jan-99 Jul-99 Jan- Jul- Jan-1 Jul-1 Jan-2 Jul-2 Jan-3 Jul-3 Jan-4 Jul-4 Jan-5 Jul-5 Jan-6 Jul-6 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jul-12 Jan-13 Jul-13 HK$ M Volume (# transactions) - LHS Average Value Per Transaction (HK$mn) Average Volume (# transactions) - LHS Volume (# transactions) - LHS Average Value Per Transaction (HK$mn) Average Volume (# transactions) - LHS Source: Midland, Deutsche Bank Source: Midland, Deutsche Bank Figure 17: Annual Residential Volume Units 35, 3, 25, 2, 15, 1, 1-year average: 13,962 units 5-year average: 12,287 units 5, Source: Midland, Deutsche Bank Page 1 Deutsche Bank AG/Hong Kong

11 11 August 214 HK Monthly Figure 18: CCL Index CCL Index Jan-95 Jan-97 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-13 CCL(LHS) Average Source: Centaline, Deutsche Bank Figure 19: HK Rating & Valuation Department Residential Price Indices - All Residential Figure 2: HK Rating & Valuation Department Residential Price Indices - Class A Residential All Residential Class A Residential Aug 93 Aug 94 Aug 95 Aug 96 Aug 97 Aug 98 Aug 99 Aug Aug 1 Aug 2 Aug 3 Aug 4 Aug 5 Aug 6 Aug 7 Aug 8 Aug 9 Aug 1 Aug 11 Aug 12 Aug 13 - Aug-93 Aug-94 Aug-95 Aug-96 Aug-97 Aug-98 Aug-99 Aug- Aug-1 Aug-2 Aug-3 Aug-4 Aug-5 Aug-6 Aug-7 Aug-8 Aug-9 Aug-1 Aug-11 Aug-12 Aug-13 Source: CEIC, Deutsche Bank Source: CEIC, Deutsche Bank Figure 21: HK Rating & Valuation Department Residential Price Indices - Class B Residential Figure 22: HK Rating & Valuation Department Residential Price Indices - Class C Residential Class B Residential Class C Residential Aug 93 Aug 94 Aug 95 Aug 96 Aug 97 Aug 98 Aug 99 Aug Aug 1 Aug 2 Aug 3 Aug 4 Aug 5 Aug 6 Aug 7 Aug 8 Aug 9 Aug 1 Aug 11 Aug 12 Aug 13 Aug 93 Aug 94 Aug 95 Aug 96 Aug 97 Aug 98 Aug 99 Aug Aug 1 Aug 2 Aug 3 Aug 4 Aug 5 Aug 6 Aug 7 Aug 8 Aug 9 Aug 1 Aug 11 Aug 12 Aug 13 Source: CEIC, Deutsche Bank Source: CEIC, Deutsche Bank Deutsche Bank AG/Hong Kong Page 11

12 11 August 214 HK Monthly Figure 23: HK Rating & Valuation Department Residential Price Indices - Class D Residential Figure 24: HK Rating & Valuation Department Residential Price Indices - Class E Residential Class D Residential Class E Residential Aug 93 Aug 94 Aug 95 Aug 96 Aug 97 Aug 98 Aug 99 Aug Aug 1 Aug 2 Aug 3 Aug 4 Aug 5 Aug 6 Aug 7 Aug 8 Aug 9 Aug 1 Aug 11 Aug 12 Aug 13 Aug 93 Aug 94 Aug 95 Aug 96 Aug 97 Aug 98 Aug 99 Aug Aug 1 Aug 2 Aug 3 Aug 4 Aug 5 Aug 6 Aug 7 Aug 8 Aug 9 Aug 1 Aug 11 Aug 12 Aug 13 Source: CEIC, Deutsche Bank Source: CEIC, Deutsche Bank Figure 25: Weekly primary sales volume Figure 26: Weekly secondary volume (Top 35 estates) Units Total weekend primary sales Historical Average Nov-1 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Mar-14 May-14 Source: Sing Tao, Deutsche Bank Source: Midland, Deutsche Bank Figure 27: Future residential supply 8 (' units) Source: Deutsche Bank Completed but unsold Under construction and unsold Total Available Page 12 Deutsche Bank AG/Hong Kong

13 11 August 214 HK Monthly Figure 28: Trend of home rents Jan- Jul- Jan-1 Jul-1 Jan-2 Jul-2 Jan-3 Jul-3 Jan-4 Jul-4 Jan-5 Jul-5 Jan-6 Jul-6 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jul-12 Jan-13 Jul-13 Source: Midland, Deutsche Bank Figure 29: Confirmor s transactions since SSD 2, 1,8 1,6 1,4 1,2 1, Oct-1 Dec-1 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Number of Confirmor's Transactions - LHS Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 2% 2% 2% 1% 1% 1% 1% 1% % % % % of Confirmor's Transactions in Secondary Market - RHS Source: Deutsche Bank Deutsche Bank AG/Hong Kong Page 13

14 11 August 214 HK Monthly Figure 3: Upcoming land sales Lot No. Location Use Site Area (ha) Site availability estimated to be in the first half of Rolled Over Sites (i) Residential YTIL 42 Lei Yue Mun Path, Lei Yue Mun, Kowloon Residential R1.324 STTL 587 Tai Po Road, Tai Wai, Sha Tin Residential R3.716 (ii) Commercial/Business KIL Middle Road, Kowloon Commercial / Office / Hotel.263 New Sites (i) Residential STTL 598 Hang Kwong Street, Ma On Shan, Sha Tin Residential R2.31 TMTL 512 Lok Chui Street, Area 59, Tuen Mun Residential R TMTL 513 Yan Ching Street, Area 1, Tuen Mun Residential R TWTL 393 Yeung Uk Road, Tsuen Wan Residential and Commerical / Hotel TMTL 515 King Sau Lane, Area 4, Tuen Mun Residential R FSSTL 255 Junction of Luen Hing Street, Wo Fung Street and Luen Shing Street, Luen Wo Hui, Fanling Residential R2.28 Lot 758 in DD 332 Cheung Sha, Lantau Island Residential R3.482 STTL 61 Yiu Sha Road, Whitehead, Ma On Shan, Sha Tin Residential R (ii) Commercial/Business TCTL 38 Area 53a, Tung Chung, Lantau Island Hotel 1.14 KCTL 495 Junction of Castle Peak Road and Kin Chuen Street, Kwai Chung Business.2781 Site availability estimated to be in the second half of Rolled Over Sites (i) Residential NKIL 6534 Junction of Fuk Wa Street / Camp Street / Fuk Wing Street, Cheung Sha Wan, Kowloon Residential R1.315 TMTL 541 So Kwun Wat Road, Area 56, Tuen Mun Residential R TMTL 5 Kwun Chui Road, Area 56, So Kwun Wat, Tuen Mun Residential R KIL & 324 Reclamation Street / 445 & 447 Shanghai Street, Mong Kok, Kowloon Residential R1.252 KIL 1124 Junction of Soy Street and Shanghai Street, Mong Kok, Kowloon Residential R1.625 Lot 1181 in DD 215 Hong Kin Road, Tui Min Hoi, Sai Kung Residential R NKIL 652 Fung Shing Street, Ngau Chi Wan, Kowloon Residential R2.694 (ii) Commercial/Business IL 8947 KIL AIL 462 NKIL Gloucester Road and Lockhart Road, Hong Kong (ex-wan Chai Hotel / Commercial / Community & Police Station cum Wan Chai Police Married Quarters) Cultural Junction of Argyle Street and Canton Road, Kowloon (ex-mong Kok Market Site) Yip Kan Street and Wong Chuk Hang Road, Hong Kong (ex-aberdeen Fire Station) Junction of Hung Yip Street, Wai Yip Street, Shun Yip Street and Hoi Bun Road, Kwun Tong, Kowloon.3971 Commercial / Office / Hotel.121 Business.176 Commercial / Office.6815 Source: The Lands Department, Deutsche Bank Page 14 Deutsche Bank AG/Hong Kong

15 11 August 214 HK Monthly Figure 3: Upcoming land sales Cont d Lot No. Location Use Site Area (ha) New Sites (i) Residential NKIL 6532 Lung Cheung Road, Beacon Hill, Kowloon (opposite to Lung Cheung Road Lookout) Residential R TPTL 223 Lo Fai Road, Tai Po Residential R TPTL 229 Lo Fai Road, Tai Po Residential R TPTL 225 Junction of Fo Chun Road and Pok Yin Road, Pak Shek Kok, Tai Po Residential R2 2 TPTL 226 Fo Chun Road, Pak Shek Kok, Tai Po Residential R2 2 TPTL 227 Chong San Road, Pak Shek Kok, Tai Po Residential R2 2 TPTL 228 Fo Yin Road, Pak Shek Kok, Tai Po Residential R IL Queen's Road East, Wan Chai, Hong Kong Residential R TPTL 222 Ting Kok Road near Fung Yuen, Tai Po Residential R RBL 121 Wong Ma Kok Road, Stanley, Hong Kong Residential R RBL 122 Wong Ma Kok Road, Stanley, Hong Kong Residential R3.43 TMTL 523 Castle Peak Road - Tai Lam, Tuen Mun Residential R2.94 TMTL 517 Castle Peak Road - Castle Peak Bay, Area 48, Tuen Mun Residential R2.293 TMTL 539 Junction of Hoi Wing Road and Hang Fu Street, Area 16, Tuen Mun Residential R1.47 NKIL 6542 Yin Ping Road, Tai Wo Ping, Kowloon Residential R (ii) Commercial / Business NKIL 6313 Source: The Lands Department, Deutsche Bank Junction of Cheung Yip Street, Sheung Yee Road and Wai Yip Street, Kowloon Bay, Kowloon Commercial / Office.3795 Figure 31: Residential prices and real mortgage rates Figure 32: Residential prices and nominal mortgage rates Jan-93 Oct-93 Jul-94 Apr-95 Oct-96 Jul-97 Apr-98 Jan-99 Oct-99 Jul- Apr-1 Jan-2 Oct-2 Jul-3 Apr-4 Jan-5 Oct-5 Jul-6 Apr-7 Jan-8 Oct-8 Jul-9 Apr-1 Jan-11 Oct-11 Jul-12 Apr-13 Residential Prices Index (1999=1)(LHS) Real Mortgage Rate % (RHS) -1 Jan-93 Nov-93 Sep-94 Jul-95 May-96 Mar-97 Nov-98 Sep-99 Jul- May-1 Mar-2 Jan-3 Nov-3 Sep-4 Jul-5 May-6 Mar-7 Jan-8 Nov-8 Sep-9 Jul-1 May-11 Mar-12 Jan-13 Nov-13 Residential Prices Index (1999=1)(LHS) Nominal Mortgage Rate % (RHS) Source: RV&D, Bloomberg Finance LP, Midland, Deutsche Bank Source: RV&D, Bloomberg Finance LP, Midland, Deutsche Bank Deutsche Bank AG/Hong Kong Page 15

16 11 August 214 HK Monthly Transacted Prices of Major Housing Estates Figure 33: Taikoo Shing Figure 34: South Horizons 14, 12, 1, 8, 6, 4, 2, Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 12, 1, 8, 6, 4, 2, Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Source: Midland, Deutsche Bank Source: Midland, Deutsche Bank Figure 35: Whampoa Garden Figure 36: Mei Foo Sun Chuen 12, 1, 8, 6, 4, 2, Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 8, 7, 6, 5, 4, 3, 2, 1, Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Source: Midland, Deutsche Bank Source: Midland, Deutsche Bank Figure 37: Sceneway Garden Figure 38: Telford Garden 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Source: Midland, Deutsche Bank Source: Midland, Deutsche Bank Page 16 Deutsche Bank AG/Hong Kong

17 11 August 214 HK Monthly Figure 39: Luk Yeung Sun Chuen Figure 4: Kingswood Villas 9, 8, 7, 6, 5, 4, 3, 2, 1, Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 6, 5, 4, 3, 2, 1, Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Source: Midland, Deutsche Bank Source: Midland, Deutsche Bank Figure 41: Metro City Figure 42: Sunshine City 9, 8, 7, 6, 5, 4, 3, 2, 1, Jul-96 Jul-98 Jul- Jul-2 Jul-4 Jul-6 Jul-8 Jul-1 Jul-12 9, 8, 7, 6, 5, 4, 3, 2, 1, Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Source: Midland, Deutsche Bank Source: Midland, Deutsche Bank Figure 43: City one shatin Figure 44: Discovery Park 9, 8, 7, 6, 5, 4, 3, 2, 1, Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Source: Midland, Deutsche Bank Source: Midland, Deutsche Bank Deutsche Bank AG/Hong Kong Page 17

18 11 August 214 HK Monthly HK Commercial Market Update Figure 45: FPD Residential Indices Figure 46: FPD Grade A Office Indices Luxury Residential Rent Luxury Residential Price Mass Residential Price Grade 'A' Office Rent Grade 'A' Office Price Source: Savills, Deutsche Bank Source: Savills, Deutsche Bank Figure 47: FPD Retail Indices 4 35 Figure 48: Grade-A Office Yield S Average SD Prime Street Shop Rent Shopping Centre Rent Source: Savills, Deutsche Bank Source: Rating & Valuation Department, Deutsche Bank Figure 49: Retail Yield Figure 5: Cap rate of Grade A and Grade B office S Average -1SD Grade A yield Grade B yield Source: Rating & Valuation Department, Deutsche Bank Source: Rating & Valuation Department, Deutsche Bank Page 18 Deutsche Bank AG/Hong Kong

19 11 August 214 HK Monthly Figure 51: Retail sales value and volume index Figure 52: Cap rate vs Rental 1,4 1,2 1, Jan-81 Jan-83 Jan-85 Jan-87 Jan-89 Jan-91 Jan-93 Jan-95 Jan-97 Jan-99 Jan-1 Jan-3 Jan-5 Jan-7 Jan-9 Jan-11 - HK: Retail Sales Value Index: All Retail Outlets (1/4-9/5=1) HK: Retail Sales Vol Index: All Retail Outlets (1/4-9/5=1) Central office capital value index Central office rental index Source: Deutsche Bank Source:JLL, Deutsche Bank Figure 53: JLL Office Rental Index Figure 54: JLL Office Capital Value Index JLL Office Rental Index 1,4 1,3 1,2 1,1 1, JLL Office Capital Value Index Overall Central Wanchai/Causeway Bay Tsim Sha Tsui HK East Overall Central Wanchai/ Causeway Bay Tsim Sha Tsui HK East Source:JLL, Deutsche Bank Source:JLL, Deutsche Bank Figure 55: Retail sales value and volume index Figure 56: Retail Capital Value Index 37 JLL Retail Rental Index 36 JLL Retail Capital Value Index High Street Shops Prime Area Retail Centers Retail Capital Value Index Source:JLL, Deutsche Bank Source:JLL, Deutsche Bank Deutsche Bank AG/Hong Kong Page 19

20 11 August 214 HK Monthly Figure 57: New Grade A Office Supply by Districts HK Island (Mn Sq.ft. Net) Core Central Fringe Central Wanchai/ Causeway Bay New Supply: 214 HK Island East Kowloon/NT West KLN/ TST/ Hung Hom Other Areas Developer 1 Cheung Yue street.18 Billion Development tsun Yip street.31 Billion Development Chong Yip street.23 Billion Development nkil Goldin Total New Supply: New Supply: 215 kil Wheelock 18 Wai Yip street (ktil 174).41 Sun hung kai Properties / Wong's International Total New Supply: & Beyond New Supply 7 Queen's road Central.16 Wheelock Queen's road Central.17 New World Development 1 harcourt road.42 Hutchison 1 Chater road.51 Hongkong land 14 Wang tai road.19 First group 2 ng Fong street.27 Billion Development nkil Wheelock 98 how ming street (ktil 24).97 Transport International holdings / Sun hung kai Properties 123 hoi Bun road.51 Wheelock 979 king's road, taikoo Place 1.71 Swire Properties sttl Billion Development SttL Billion Development Total New Supply: 216 & Beyond Total supply 214 & Beyond Source: Colliers International, Deutsche Bank Page 2 Deutsche Bank AG/Hong Kong

21 11 August 214 HK Monthly HK Macro Update Figure 58: Hong Kong Interbank Rate 3 Month 18 % Figure 59: HK-US Prime Spread 2.5 % Figure 6: Real Prime Rate Figure 61: HK Unemployment Rate (%) % Source: Census and Statistics Department, Deutsche Bank Figure 62: Median Monthly Household Income - Including Bonus(HK$) 24, 22, 2, 18, 16, 14, 12, 1, Mar 93 Mar 95 Mar 97 Mar 99 Mar 1 Mar 3 Mar 5 Mar 7 Mar 9 Mar 11 Mar 13 Median Monthly Household Income - Including Bonus(HK$) Source: Census and Statistics Department, Deutsche Bank Figure 63: Median Monthly Household Income - Excluding Bonus(HK$) 24, 22, 2, 18, 16, 14, 12, 1, Mar-93 Mar-95 Mar-97 Mar-99 Mar-1 Mar-3 Mar-5 Mar-7 Mar-9 Mar-11 Median Monthly Household Income - Excluding Bonus(HK$) Source: Census and Statistics Department, Deutsche Bank Mar-13 Deutsche Bank AG/Hong Kong Page 21

22 11 August 214 HK Monthly Figure 64: HK Nominal Wage Index (Sep 1992=1) % 14% 12% 1% 8% 6% 4% 2% % -2% -4% Figure 65: HK Real GDP (YoY Growth) 15% 1% 5% % -5% -1% HK Nominal Wage Index (Sep 1992=1) YoY Chg Source: CEIC, Deutsche Bank Source: Census and Statistics Department, Deutsche Bank Figure 66: HK Real GDP (Seasonally adjusted QoQ Growth) 8% 6% 4% 2% % -2% -4% Jul-9 Jul-92 Jul-94 Jul-96 Jul-98 Jul- Jul-2 Jul-4 Jul-6 Jul-8 Jul-1 Source: Census and Statistics Department, Deutsche Bank Jul-12 Figure 67: Average price to income ratio of HK Number of years Q822Q842Q862Q882Q92Q922Q942Q962Q982Q2Q22Q42Q62Q82Q12Q12 Average home price / income ratio (years) Average (since 2Q82) +1SD (since 2Q82) -1SD (since 2Q82) Source: RV&D, CEIC, Bloomberg Finance LP,Deutsche Bank Figure 68: Average affordability ratio of HK % 14 (Monthly Mortgage Payment/Monthly Income - Median Flats) 12 Less Affordable Average (Ex 93-97) Average (1985-Now) More Affordable Figure 69: Affordability - unadjusted 14 % Mar-85 Mar-86 Mar-87 Mar-88 Mar-89 Mar-9 Mar-91 Mar-92 Mar-93 Mar-94 Mar-95 Mar-96 Mar-97 Mar-98 Mar-99 Mar- Mar-1 Mar-2 Mar-3 Mar-4 Mar-5 Mar-6 Mar-7 Mar-8 Mar-9 Mar-1 Mar-11 Mar-12 Mar-13 Mar-14 Affordability ratio (unadjusted) Average -1SD +1SD Source: RV&D, CEIC, Bloomberg Finance LP,Deutsche Bank Source: RV&D, Bloomberg Finance LP,Deutsche Bank Page 22 Deutsche Bank AG/Hong Kong

23 11 August 214 HK Monthly Figure 7: Affordability sqm flat Figure 71: Affordability All households % (Monthly Mortgage Payment (4-69.9sqm flat)/monthly Income) Less Affordable Less Affordable 9% 8% 7% All Household affordability (Monthly Instalment/Median Household Income) 1 6% 8 6 Banks' Threshold (5% of Monthly Income) 5% 4% 3% 4 2% 2 More Affordable Jan-85 Jan-86 Jan-87 Jan-88 Jan-89 Jan-9 Jan-91 Jan-93 Jan-95 Jan-97 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-13 More Affordable 1% % Affordability Ratio - P base Affordability Ratio - H base Source: Deutsche Bank Source: Deutsche Bank Figure 72: Affordability Private households Less Affordable 12% 1% 8% 6% 4% 2% Private Household affordability (Monthly Instalment/Median Household Income) Figure 73: Transaction vs Stock & HK GDP % 2% 15% 1% 5% More Affordable % Affordability Ratio - P base Affordability Ratio - H base transaction vs stock (RHS) % Private property stock / HK GDP (LHS) Source: Deutsche Bank Source: Deutsche Bank Figure 74: Number of domestic households by monthly household income and type of housing in 1Q 214 1Q14 Monthly household income (HK$) Type of housing Public rental housing Subsidized sale flats Private permanent housing Temporary housing (') (') (') (') (') < 4, , - 5, , - 7, , - 9, , - 14, , - 19, , - 24, , and over ,148.6 Total , ,416.2 Source: Census and Statistics Department, Deutsche Bank Total Deutsche Bank AG/Hong Kong Page 23

24 11 August 214 HK Monthly Taking a look at valuations Figure 75: Developer Disc to NAV Figure 76: Landlord Disc to NAV 8% 6% Developer Disc to NAV -1SD Avg +1SD 4% Landlord Disc to NAV -1SD Avg +1SD 4% 2% 2% % % -2% -2% -4% -4% -6% -8% Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1-6% -8% Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Figure 77: Developer P/E 35 Developer P/E -1SD Avg +1SD Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Figure 78: Landlord P/E 5 Investor P/E -1SD Avg +1SD Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Figure 79: Developer P/B Figure 8: Landlord P/B 2.5 Developer P/B -1SD Avg +1SD 1.4 Investor P/B -1SD Avg +1SD Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Page 24 Deutsche Bank AG/Hong Kong

25 11 August 214 HK Monthly Figure 81: Cheung Kong - Discount to NAV 4% Discount to NAV -1SD Average +1SD 3% 2% 1% % -1% -2% -3% -4% -5% -6% -7% Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Figure 82: SHKP - Discount to NAV 4% Discount to NAV -1SD Average +1SD 2% % -2% -4% -6% -8% Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Figure 83: Henderson - Discount to NAV 6% 4% 2% % -2% -4% -6% -8% Jan-95 Jan-1 Jan-4 Jan-7 Jan-1 Jan-13 Discount to NAV -1SD Average +1SD Figure 84: New World Development - Discount to NAV 1% Discount to NAV -1SD Average +1SD % -1% -2% -3% -4% -5% -6% -7% -8% -9% Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Figure 85: Hang Lung - Discount to NAV 6% Discount to NAV -1SD Average +1SD 4% 2% % -2% -4% -6% -8% -1% Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Figure 86: Sino Land - Discount to NAV 4% Discount to NAV -1SD Average +1SD 2% % -2% -4% -6% -8% -1% Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Deutsche Bank AG/Hong Kong Page 25

26 11 August 214 HK Monthly Figure 87: HK Land - Discount to NAV 4% Discount to NAV -1SD Average +1SD 2% % -2% -4% Figure 88: Kerry - Discount to NAV 25% Discount to NAV -1SD Average +1SD 2% 15% 1% 5% % -6% -8% Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1-5% -1% Aug-96 Aug-97 Aug-98 Aug-99 Aug- Aug-1 Aug-2 Aug-3 Aug-4 Aug-5 Aug-6 Aug-7 Aug-8 Aug-9 Aug-1 Aug-11 Aug-12 Aug-13 Figure 89: Wharf - Discount to NAV 2% 1% % -1% -2% -3% -4% -5% -6% -7% -8% -9% Discount to NAV -1SD Average +1SD Jan-97 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-13 Figure 9: Great Eagle - Discount to NAV % Discount to NAV -1SD Average +1SD -1% -2% -3% -4% -5% -6% -7% -8% -9% Oct-5 Mar-6 Aug-6 Jan-7 Jun-7 Nov-7 Apr-8 Sep-8 Feb-9 Jul-9 Dec-9 May-1 Oct-1 Mar-11 Aug-11 Jun-12 Nov-12 Apr-13 Sep-13 Feb-14 Figure 91: Hysan - Discount to NAV 2% Discount to NAV -1SD Average +1SD 1% % -1% -2% -3% -4% -5% -6% -7% -8% Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Figure 92: Link REIT - Discount to NAV 5% Discount to NAV -1SD Average +1SD 4% 3% 2% 1% % -1% -2% Sep-11 Nov-11 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Mar-14 May-14 Page 26 Deutsche Bank AG/Hong Kong

27 11 August 214 HK Monthly Figure 93: Cheung Kong - PE Figure 94: SHKP - PE PE -1SD Average '+1SD 3 25 PE -1SD Average '+1SD Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 5 Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Figure 95: Henderson - PE Figure 96: New World Development - PE 8 PE -1SD Average '+1SD 5 PE -1SD Average '+1SD Dec-93 Dec-96 Dec-99 Dec-2 Dec-5 Dec-8 Dec-11-1 Jun-95 Jun-96 Jun-97 Jun-98 Jun-99 Jun- Jun-1 Jun-2 Jun-3 Jun-4 Jun-5 Jun-6 Jun-7 Jun-8 Jun-9 Jun-1 Jun-11 Jun-12 Jun-13 Figure 97: Hang Lung - PE 6 PE -1SD Average '+1SD Figure 98: Sino Land - PE 3 PE -1SD Average +1SD Jan-93 Jan-95 Jan-97 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-13 Jun-95 Jun-96 Jun-97 Jun-98 Jun-99 Jun- Jun-1 Jun-2 Jun-3 Jun-4 Jun-5 Jun-6 Jun-7 Jun-8 Jun-9 Jun-1 Jun-11 Jun-12 Jun-13 Deutsche Bank AG/Hong Kong Page 27

28 11 August 214 HK Monthly Figure 99: HK Land - PE Figure 1: Kerry - PE 6 5 PE -1SD Average '+1SD PE -1SD Average '+1SD Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Aug-96 Aug-97 Aug-98 Aug-99 Aug- Aug-1 Aug-2 Aug-3 Aug-4 Aug-5 Aug-6 Aug-7 Aug-8 Aug-9 Aug-1 Aug-11 Aug-12 Aug-13 Figure 11: Wharf - PE Figure 12: Great Eagle - PE PE -1SD Average '+1SD 1 8 PE -1SD Average '+1SD Jan-97 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-13-2 Jan-97 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-13 Figure 13: Hysan - PE 4 PE -1SD Average '+1SD Figure 14: Link REIT - PE 31 PE SD 5 19 Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 17 Sep-11 Nov-11 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Mar-14 May-14 Page 28 Deutsche Bank AG/Hong Kong

29 11 August 214 HK Monthly Figure 15: Cheung Kong - PB 3. PB -1SD Average '+1SD 2.5 Figure 16: SHKP - PB 1.8 PB -1SD Average '+1SD Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1. Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Figure 17: Henderson - PB 3.5 Figure 18: New World Development - PB 2.5 PB -1SD Average '+1SD Dec-93 Dec-96 Dec-99 Dec-2 Dec-5 Dec-8 Dec-11. PB -1SD Average '+1SD Jun-95 Jun-96 Jun-97 Jun-98 Jun-99 Jun- Jun-1 Jun-2 Jun-3 Jun-4 Jun-5 Jun-6 Jun-7 Jun-8 Jun-9 Jun-1 Jun-11 Jun-12 Jun-13 Figure 19: Hang Lung - PB 2.5 PB -1SD Average '+1SD 2. Figure 11: Sino Land - PB 2.5 PB -1SD Average +1SD Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1. Jun-95 Jun-96 Jun-97 Jun-98 Jun-99 Jun- Jun-1 Jun-2 Jun-3 Jun-4 Jun-5 Jun-6 Jun-7 Jun-8 Jun-9 Jun-1 Jun-11 Jun-12 Jun-13 Deutsche Bank AG/Hong Kong Page 29

30 11 August 214 HK Monthly Figure 111: HK Land - PB 1.4 PB -1SD Average '+1SD Figure 112: Kerry - PB 2.5 PB -1SD Average '+1SD Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1.5. Aug-96 Aug-97 Aug-98 Aug-99 Aug- Aug-1 Aug-2 Aug-3 Aug-4 Aug-5 Aug-6 Aug-7 Aug-8 Aug-9 Aug-1 Aug-11 Aug-12 Aug-13 Figure 113: Wharf - PB Figure 114: Great Eagle - PB PB -1SD Average '+1SD PB -1SD Average '+1SD Jan-97 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-13 Jan-97 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-13 Figure 115: Hysan - PB 1.2 PB -1SD Average '+1SD Jan- Jan-2 Jan-4 Jan-6 Jan-8 Jan-1 Figure 116: Link REIT - PB 1.7 PB -1SD Average '+1SD Dec-5 May-6 Oct-6 Mar-7 Aug-7 Jan-8 Jun-8 Nov-8 Apr-9 Sep-9 Feb-1 Jul-1 Dec-1 May-11 Oct-11 Mar-12 Aug-12 Jan-13 Jun-13 Nov-13 Apr-14 Page 3 Deutsche Bank AG/Hong Kong

31 11 August 214 HK Monthly Appendix 1 Important Disclosures Additional information available upon request Disclosure checklist Company Ticker Recent price* Disclosure Cheung Kong Hldgs 1.HK (HKD) 8 Aug 14 14,15,17 SHK Properties Ltd 16.HK (HKD) 8 Aug 14 14,17 Henderson Land Dev. Co. 12.HK (HKD) 8 Aug 14 NA Sino Land Co 83.HK (HKD) 8 Aug 14 NA New World Dev 17.HK 9.48 (HKD) 8 Aug 14 14,15 *Prices are sourced from local exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies Important Disclosures Required by U.S. Regulators Disclosures marked with an asterisk may also be required by at least one jurisdiction in addition to the United States. See Important Disclosures Required by Non-US Regulators and Explanatory Notes. 14. Deutsche Bank and/or its affiliate(s) has received non-investment banking related compensation from this company within the past year. 15. This company has been a client of Deutsche Bank Securities Inc. within the past year, during which time it received non-investment banking securities-related services. Important Disclosures Required by Non-U.S. Regulators Please also refer to disclosures in the Important Disclosures Required by US Regulators and the Explanatory Notes. 17. Deutsche Bank and or/its affiliate(s) has a significant Non-Equity financial interest (this can include Bonds, Convertible Bonds, Credit Derivatives and Traded Loans) where the aggregate net exposure to the following issuer(s), or issuer(s) group, is more than 25m Euros. For disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this research, please see the most recently published company report or visit our global disclosure look-up page on our website at Analyst Certification The views expressed in this report accurately reflect the personal views of the undersigned lead analyst about the subject issuers and the securities of those issuers. In addition, the undersigned lead analyst has not and will not receive any compensation for providing a specific recommendation or view in this report. Tony Tsang Deutsche Bank AG/Hong Kong Page 31

32 11 August 214 HK Monthly Historical recommendations and target price: Cheung Kong Hldgs (1.HK) (as of 8/8/214) Previous Recommendations Security Price Strong Buy Buy Market Perform Underperform Not Rated Suspended Rating Current Recommendations Buy Hold Sell Not Rated Suspended Rating 2. *New Recommendation Structure as of September 9,22. Aug 12 Nov 12 Feb 13 May 13 Aug 13 Date Nov 13 Feb 14 May /3/213: Buy, Target Price Change HKD /7/214: Buy, Target Price Change HKD /3/214: Buy, Target Price Change HKD15. Historical recommendations and target price: SHK Properties Ltd (16.HK) (as of 8/8/214) 14. Previous Recommendations Security Price Strong Buy Buy Market Perform Underperform Not Rated Suspended Rating Current Recommendations Buy Hold Sell Not Rated Suspended Rating 2. *New Recommendation Structure as of September 9,22. Aug 12 Nov 12 Feb 13 May 13 Aug 13 Date Nov 13 Feb 14 May /9/212: Buy, Target Price Change HKD /9/213: Buy, Target Price Change HKD /3/213: Buy, Target Price Change HKD /2/214: Buy, Target Price Change HKD124.7 Page 32 Deutsche Bank AG/Hong Kong

33 11 August 214 HK Monthly Historical recommendations and target price: Henderson Land Dev. Co. (12.HK) (as of 8/8/214) 7. Previous Recommendations Security Price Strong Buy Buy Market Perform Underperform Not Rated Suspended Rating Current Recommendations Buy Hold Sell Not Rated Suspended Rating 1. *New Recommendation Structure as of September 9,22. Aug 12 Nov 12 Feb 13 May 13 Aug 13 Date Nov 13 Feb 14 May /1/212: Buy, Target Price Change HKD /3/214: Buy, Target Price Change HKD57.36 Historical recommendations and target price: Sino Land Co (83.HK) (as of 8/8/214) 18. Previous Recommendations Security Price Strong Buy Buy Market Perform Underperform Not Rated Suspended Rating Current Recommendations Buy Hold Sell Not Rated Suspended Rating *New Recommendation Structure as of September 9,22. Aug 12 Nov 12 Feb 13 May 13 Aug 13 Date Nov 13 Feb 14 May /2/213: Buy, Target Price Change HKD /2/214: Buy, Target Price Change HKD16. Deutsche Bank AG/Hong Kong Page 33

34 11 August 214 HK Monthly Historical recommendations and target price: New World Dev (17.HK) (as of 8/8/214) 16. Previous Recommendations Security Price Strong Buy Buy Market Perform Underperform Not Rated Suspended Rating Current Recommendations Buy Hold Sell Not Rated Suspended Rating 2. *New Recommendation Structure as of September 9,22. Aug 12 Nov 12 Feb 13 May 13 Aug 13 Date Nov 13 Feb 14 May /1/212: Buy, Target Price Change HKD /1/213: Hold, Target Price Change HKD /11/212: Downgrade to Hold, Target Price Change HKD /2/214: Hold, Target Price Change HKD /2/213: Hold, Target Price Change HKD /3/214: Hold, Target Price Change HKD8.86 Equity rating key Buy: Based on a current 12- month view of total share-holder return (TSR = percentage change in share price from current price to projected target price plus pro-jected dividend yield ), we recommend that investors buy the stock. Sell: Based on a current 12-month view of total shareholder return, we recommend that investors sell the stock Hold: We take a neutral view on the stock 12-months out and, based on this time horizon, do not recommend either a Buy or Sell. Notes: 1. Newly issued research recommendations and target prices always supersede previously published research. 2. Ratings definitions prior to 27 January, 27 were: Buy: Expected total return (including dividends) of 1% or more over a 12-month period Hold: Expected total return (including dividends) between -1% and 1% over a 12- month period Sell: Expected total return (including dividends) of -1% or worse over a 12-month period Equity rating dispersion and banking relationships % 22 % 4 % 23 % Buy Hold Sell Companies Covered 6 % 1 % Cos. w/ Banking Relationship Asia-Pacific Universe Page 34 Deutsche Bank AG/Hong Kong

35 11 August 214 HK Monthly Regulatory Disclosures 1. Important Additional Conflict Disclosures Aside from within this report, important conflict disclosures can also be found at under the "Disclosures Lookup" and "Legal" tabs. Investors are strongly encouraged to review this information before investing. 2. Short-Term Trade Ideas Deutsche Bank equity research analysts sometimes have shorter-term trade ideas (known as SOLAR ideas) that are consistent or inconsistent with Deutsche Bank's existing longer term ratings. These trade ideas can be found at the SOLAR link at 3. Country-Specific Disclosures Australia and New Zealand: This research, and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act and New Zealand Financial Advisors Act respectively. Brazil: The views expressed above accurately reflect personal views of the authors about the subject company(ies) and its(their) securities, including in relation to Deutsche Bank. The compensation of the equity research analyst(s) is indirectly affected by revenues deriving from the business and financial transactions of Deutsche Bank. In cases where at least one Brazil based analyst (identified by a phone number starting with +55 country code) has taken part in the preparation of this research report, the Brazil based analyst whose name appears first assumes primary responsibility for its content from a Brazilian regulatory perspective and for its compliance with CVM Instruction # 483. EU countries: Disclosures relating to our obligations under MiFiD can be found at Japan: Disclosures under the Financial Instruments and Exchange Law: Company name - Deutsche Securities Inc. Registration number - Registered as a financial instruments dealer by the Head of the Kanto Local Finance Bureau (Kinsho) No Member of associations: JSDA, Type II Financial Instruments Firms Association, The Financial Futures Association of Japan, Japan Investment Advisers Association. Commissions and risks involved in stock transactions - for stock transactions, we charge stock commissions and consumption tax by multiplying the transaction amount by the commission rate agreed with each customer. Stock transactions can lead to losses as a result of share price fluctuations and other factors. Transactions in foreign stocks can lead to additional losses stemming from foreign exchange fluctuations. "Moody's", "Standard & Poor's", and "Fitch" mentioned in this report are not registered credit rating agencies in Japan unless Japan or "Nippon" is specifically designated in the name of the entity. Reports on Japanese listed companies not written by analysts of Deutsche Securities Inc. (DSI) are written by Deutsche Bank Group's analysts with the coverage companies specified by DSI. Qatar: Deutsche Bank AG in the Qatar Financial Centre (registered no. 32) is regulated by the Qatar Financial Centre Regulatory Authority. Deutsche Bank AG - QFC Branch may only undertake the financial services activities that fall within the scope of its existing QFCRA license. Principal place of business in the QFC: Qatar Financial Centre, Tower, West Bay, Level 5, PO Box 14928, Doha, Qatar. This information has been distributed by Deutsche Bank AG. Related financial products or services are only available to Business Customers, as defined by the Qatar Financial Centre Regulatory Authority. Russia: This information, interpretation and opinions submitted herein are not in the context of, and do not constitute, any appraisal or evaluation activity requiring a license in the Russian Federation. Kingdom of Saudi Arabia: Deutsche Securities Saudi Arabia LLC Company, (registered no ) is regulated by the Capital Market Authority. Deutsche Securities Saudi Arabia may only undertake the financial services activities that fall within the scope of its existing CMA license. Principal place of business in Saudi Arabia: King Fahad Road, Al Olaya District, P.O. Box 3189, Faisaliah Tower - 17th Floor, Riyadh, Saudi Arabia. United Arab Emirates: Deutsche Bank AG in the Dubai International Financial Centre (registered no. 45) is regulated by the Dubai Financial Services Authority. Deutsche Bank AG - DIFC Branch may only undertake the financial services activities that fall within the scope of its existing DFSA license. Principal place of business in the DIFC: Dubai International Financial Centre, The Gate Village, Building 5, PO Box 5492, Dubai, U.A.E. This information has been distributed by Deutsche Bank AG. Related financial products or services are only available to Professional Clients, as defined by the Dubai Financial Services Authority. Deutsche Bank AG/Hong Kong Page 35