We expect Hang Seng Index to decline in near term due to profit taking with a technical support at 20,800. Hang Seng Index Performance

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1 26 th April, 2016 Hang Seng Index Performance Index Performance Abs chg % Change Hong Kong Close 1-Day 1-Day 1-Mth 3-Mth Hang Seng Index 21, HSCI 2, HSCCI (Red Chips) 3, HSCEI (H-Shares) 8, Mkt T/O ($ Mn) 55, , Source: Bloomberg Market Outlook Eric Yuen - ericyuen@masonsec.com Hang Seng Index closed down 0.8% at 21,304. Market turnover decreased to $55.9 billion. AIA Group (1299) advanced 1.1% on strong quarterly operating results. Heavily weighted Tencent (700), HSBC (5) and China Mobile (941) shrank 1.8%, 1.3% and 0.9% respectively. HKEx (388) tumbled 2.1% on profit taking. Li & Fung (494) lost 2.5%. Local banks and property stocks were mixed. Tingyi (322) and Hengan Int l (1044), the best and worst performing index stock, went up 2.3% and down 2.8% respectively. HSCEI declined 1.5% led by power, railway and financial stocks. CGN Power (1816), China Longyuan (916), Huaneng Power (902) and China Resources Power (836) cut 2.3%-4.9%. China Railway Group (390), CRRC Corporation (1766) and CCCC (1800) slumped 2.5%-5.4%. Securities, insurance and banking shares in HSCEI dropped an average 2.3%, 2.0% and 1.3% respectively. Great Wall Motor (2333) and PetroChina (857) climbed 0.2%-0.5%, the most in HSCEI. We expect Hang Seng Index to decline in near term due to profit taking with a technical support at 20,800. Oversea DJIA 17, NASDAQ 4, Shanghai SE Composite 2, Crude Oil Futures (US$) Gold Futures (US$) 1, Baltic Dry Index USD / Euro Yen / USD HSCEI HSI 20-Day MA 8, , Day MA 8, , Day RSI We expect Hang Seng Index to decline in near term due to profit taking with a technical support at 20,800. Remarks: Mason Securities Ltd ( Mason Securities ) is licensed by the Securities and Futures Commission to carry on Types 1, 4, and 6 regulated activities in Hong Kong. Mason Futures Ltd is licensed by the Securities and Futures Commission to carry on Type 2 regulated activity in Hong Kong. Bullion trading service is provided by Mason Bullion Ltd. Securities Futures Bullion

2 Industry / Corporate News Eric Yuen - ericyuen@masonsec.com Fortune REIT (778) offers high dividend yield and low earnings risk Maintain BUY Maintain BUY Company s rental portfolio caters mainly to day-to-day shopping needs Risk Level: Low HK s economy is slowing but local consumption should be stable given low jobless rate Time Horizon: Long Low earnings risk and high dividend yield Since our BUY recommendation on Fortune REIT (778, $8.51) on February 18, its share price surged 7.0% but underperformed Hang Seng Index and HSCEI by 5.0% and 5.6% respectively as investors chased risky assets in the past two months amid the weakness in U.S. dollar and increase in crude oil price. As we believe Hong Kong s stock market may face profit-taking pressure in near term and U.S. Federal Reserve is likely to keep interest rate unchanged this week, the re-rating of high yield stocks such as Fortune REIT will continue in our view. Share price of Fortune REIT closed at a record high of $8.57 last Friday and declined 0.7% yesterday. Fortune REIT holds a portfolio of 17 retail properties in Hong Kong including Fortune City One, Fortune Kingswood and Ma On Shan Plaza etc. Tenants in the non-discretionary retail sectors such as supermarkets, food & beverages as well as services and education made up approximately 60% of gross rentable area, signifying the strong resilience of the company against cyclical changes in the macroeconomic environment. Hong Kong s retail sales value decreased by 3.7% in 2015 and 13.6% yoy in the first two months of 2016, mainly due to a sharp decline in tourist spending on luxury items while domestic consumption is less affected. Looking ahead, Hong Kong s GDP growth is likely to slow in 2016 but local consumption should be relatively stable as unemployment rate remains low (3.3% in 2015 compared to the lowest of 3.2% in 2014 and the highest of 7.9% in 2003 since the Asian Financial Crisis in 1997) despite a slight increase to 3.4% in 1Q16. Fortune REIT s financial results for 2015 were impressive. Total revenue and net property income grew 13.7% and 14.0% yoy to $1,882mn and $1,324mn respectively, fueled by the additional income from Laguna Plaza acquired in January 2015 and a strong rental reversion rate of 20.3%. Average occupancy rate improved to 98.8% (2014: 97.3%). Passing rent as at 31 December 2015 was $40.0 per sq.ft., up 6.8% yoy. Total borrowings costs increased by 4.8% yoy but the average cost of debt reduced to 2.15% from 2.17% in Total borrowings as a percentage of gross assets stayed at relatively low level of 30.1% against 29.4% in Income available for distribution surged 13.3% yoy to $885mn. Distribution per unit grew 12.5% yoy to $ translating into a dividend yield of 5.5%. According to Bloomberg estimates, the company s total revenue is expected to grow 5.2% in 2016 and 5.1% in Distribution per unit will increase by 2.4% to $0.480 in 2016 and 3.3% to $0.496 in 2017, translating into attractive dividend yield of 5.6%-5.8%. We maintain a BUY rating on Fortune REIT and raise our 12-month price target from $8.75 to $9.60 based on 2016 dividend yield of 5.0%. The magnitude and pace of U.S. rate hikes is the key risk factor. Recent Recommendations Stock Pick Rating Recommendation Highlights TP Xinyi Glass (868) BUY Maintain BUY on Xinyi Glass (868) as profitability for float glass sets to rebound $5.53 CMEC (1829) BUY Weakness in share price offers a good buying opportunity BUY CMEC s (1829) $6.45 Nine Dragons Paper (2689) BUY Reiterate BUY on Nine Dragons Paper (2689) on lowered forex risk and improving fundamentals $7.4 China State Construction Int l Cheap valuation by historical standard Maintain BUY China State Construction Int l BUY (3311) (3311) $14.0 Techtronic Industries (669) BUY Reiterate BUY on Techtronic Industries (669) given company s strong innovation and solid results $34.5 Chow Tai Fook (1929) SELL SELL Chow Tai Fook (1929) on expensive valuation $4.70 China Lesso (2128) BUY Reiterate BUY on China Lesso (2128) to ride on recent rebound of China s infrastructure and construction activities $6.32 Geely Automobile (175) SELL Geely Automobile (175) is no longer undervalued by historical standard or compared to peers SELL $3.60 Xinhua Winshare Publishing (811) BUY BUY Xinhua Winshare Publishing (811) ahead of A shares IPO $9.0 Ju Teng (3336) BUY Reiterate Buy on Ju Teng (3336) as we expect margin expansion to continue in 2016 $5.0

3 Technical Ideas Longfor Properties (960, $11.10) TP: $9.99 SELL Risk: Low Time Horizon: Short Longfor Properties operates in the property development, property investment and property management businesses in China. Share price was flat yesterday. 9-day RSI fell below 50. MACD also showed negative crossing, indicating a strong downward momentum ahead. SELL. Short-term target at $9.99. Cover short at $ Consensus 2016 PER: 6.7x Consensus target price: $13.85 Source: Bloomberg, Mason Securities HKEx (388, $199.70) TP: $180 SELL Risk: Low Time Horizon: Short HKEx owns and operates the stock exchange, futures exchange, and their related clearing houses in Hong Kong. The company provides the trading platforms for a range of cash and derivatives products and the facilities for processing trades. Counter retreated 2.1% yesterday with exceptional turnover after reaching strong resistance. 9-day RSI declined after reaching 80. SELL. Short-term target at $180 Cover short at $215. Source: Bloomberg, Mason Securities Consensus 2016 PER: 36.2x Consensus target price: $177.12

4 RSI Indicator Overbought (9-day RSI> 80) Tickers 10, 45, 112, 148, 172, 173, 210, 220, 226, 241, 251, 291, 319, 484, 521, 526, 607, 903, 976, 1028, 1220, 1243, 1568, 1636, 1833, 2010, 2098, 2371, 3326 Oversold (9-day RSI<20) Tickers 303, 555, 622, 861, 997, 1421 Exceptional Turnover & Price Movements Stock Stock Last Price ($) Price Change (%) Turnover / 3-mth daily avg turnover Target price up / downside (%)* Rating*^ Real Nutriceutical N/A N/A N/A Tungtex Holdings N/A N/A N/A Alibaba Health Information N/A N/A N/A CST Mining N/A N/A N/A Silverman N/A N/A N/A Rexlot N/A N/A N/A Dah Sing Banking Pacific Basin Shipping N/A Evergrande Real Estate Cogobuy Source: Bloomberg, Mason Securities; *Based on consensus estimates ^ The Rating indicates analysts opinions on the security. It is calculated by converting analysts recommendations into a number from 1-5 and taking the average. 5 is the best while 1 is the worst PER*

5 A-H Share Premium / Discount (%) Average AH Shanghai Listed -38.3% Premium/Discount (%) Shenzhen Listed -40.5% Remark: Shenzhen-listed stocks are not included in the upcoming cross-border stock trading pilot program H Share A Share A-H Shares Shanghai Listed Company Name A Close (RMB) H Close (HKD) AH Price Gap (%) H Share A Share A-H Shares Shanghai Listed Company Name A Close (RMB) H Close (HKD) AH Price Gap (%) Luoyang Glass China Life Insurance Beijing Jingcheng Haitong Securities Shenji Group Air China First Tractor China Shipping SSC China Shenhua China Guangshen Railway GAC Group CRCC Nanjing Panda ABC Shanghai Electric BoComm Yanzhou Coal China Merchants China Shipping Bank of China Anhui Expressway Shanghai Pharm Chongqing Iron China Everbright Guangzhou Huatai Securities Co Zhengzhou Coal ICBC China Oilfield CPIC China Cosco Citic Securities Datang Intl Power Tsingtao Brewery Sinopec Shanghai CCB Tianjin Capital Sinopec Chalco Shanghai Fosun Dalian Port Ping An Insurance Beijing North Star Fuyao Glass MCC Jiangsu Express Sichuan Anhui Conch Magang Dongfang Electric A-H Shares Shenzhen Listed BBMG Shandong Molong New China Life Zhejiang Shibao Jiangxi Copper Northeast Electric China Coal Energy Shandong Xinhua China Eastern Hisense Kelon Great Wall Motor Zoomlion Heavy Petrochina Dongjiang Env Zijin Mining BYD China Minsheng Shandong Chenming Huaneng Power Livzon Pharm Guangzhou Pharm China Vanke Huadian Power Xinjiang Goldwind CCCC China International CRRC Corp ZTE Corp China Southern Angang Steel Shenzhen Express GF Securities Co Ltd China Railway Weichai Power China Citic Bank

6 HSI & HSCEI Constituents Performance Price Change (%) Index 5 D 1 M 3 M vs 3M High Hang Seng Index Hang Seng China Ent Index Outperform Underperform Mixed Banking (HK), Property (HK), Ports, IT Hardware Coal, Power Airlines, Consumer, Gaming, Insurance Price Change (%) Price Change (%) Stock vs 3M Stock vs 3M Company Name 5 D 1 M 3 M Company Name 5 D 1 M 3 M High High 322 Tingyi China Mobile Wharf Cathay Pac Air AIA Bank of China Galaxy ABC Lenovo China Cinda MTR Corporation CITIC Ltd Henderson Land China Mengniu CLP Hldgs BOCOM China Res Land China Unicom GreatWall Motor HSBC Hldgs PetroChina CCB China Vanke ICBC Hang Seng Bank CNBM Belle Int'l China Life Sino Land New China Life Link REIT China Shenhua Dalian Wanda BYD Company HK & China Gas Ping An Kunlun Gas CM Bank Want Want Minsheng Bank Swire Pacific 'A' Tencent CK Property Haitong Securities China Mer Hldgs HKEx Hang Lung Prop Anhui Conch SHK Prop Li & Fung CKI Holdings CGN Power Dongfeng Group China Telecom Tsingtao Brew CITIC Securities Bank of E Asia HTSC New World Dev Longyuan Power BOC Hong Kong Air China CK Hutchison CRRC Sands China China Resources Power Assets GF Securities CNOOC Hengan Int'l China Overseas China Pacific PICC P&C China Railway Sinopec Corp PICC Group China Oilfield Huaneng Power CITIC Bank China Comm Cons Sinopharm

7 Upcoming Events Date Stock Company Name Event Apr Anhui Conch Cement Quarter Apr Bank of China Quarter Apr BBMG Corporation Quarter Apr BOC Hong Kong Quarter Apr China Communications Construction Quarter Apr Dalian Port Quarter Apr Huadian Power Quarter Apr Huaneng Power Quarter Apr Metallurgical Corp of China Quarter Apr Ping An Insurance Quarter Apr Guangzhou Baiyunshan Pharm Final Apr Bank Of Tianjin Dividend Apr Shandong Chenming Paper Final Apr China Coal Energy Quarter Apr China Vanke Quarter Apr China CITIC Bank Quarter Apr Cosco Pacific Quarter Apr CRRC Corporation Quarter Apr Datang Int l Power Quarter Apr Guangzhou Automobile Quarter Apr Guangshen Railway Final Apr Haitong Securities Quarter Apr Maanshan Iron & Steel Quarter Apr Sinopec Shanghai Petrochem Quarter Apr Tianjin Capital Environ Quarter Apr Vinda International Quarter Disclosures Investment Rating System Ratings Description Mason Securities Limited s investment Buy Expected positive return of > 10 % rating system is divided into investment Investment Ratings Hold Expected return range of ~ ±10 % ratings, risk rating and investment time Sell Expected negative return > 10% horizon. The rating scale is subject to change upon periodic review of market by High (H) 90-day volatility of > 50% research department. Assigned ratings are Risk Ratings Medium (M) 90-day volatility of > 30-50% based on company and sector historical Low (L) 90-day volatility of < 30% performance and analysts intrinsic Long (L) 6 12 Months valuation of the stock Investment Time Medium (M) 3 6 Months Horizon Short (S) Less than 1 Month Note: 90-day volatility is measured from the security s standard deviation of day to day logarithmic historical price changes. The 90-day price volatility equals the annualized standard deviation of the relative price change for the 90 most recent trading days closing price, expressed as a percentage Mason Securities Limited 12/F, The Center 99 Queen s Road Central Hong Kong Tel: (852) Fax: (852) This report is for information only and is not to be construed as investment advice or as an offer to buy or sell securities or financial instruments. Your investment decision should be based upon your personal investment objectives and should be made only after evaluating the stock s expected performance and risk. While the report is compiled using sources believed to be reliable, no assurance or guarantee is given regarding its accuracy or completeness. Neither Mason Securities Limited nor any of its affiliates, nor any employees or other persons connected with any of them, accepts any responsibility or liability arising from any use of this report. To the extent permitted under applicable law, the above-mentioned companies or individuals may have used the research materials before publication. Mason Securities Limited (or any of its affiliates) and their respective officers, directors, analysts, or employees may or may not have a position in or with respect to the securities or financial instruments covered herein, and may, as principal or agent, buy and sell such securities or financial instruments. However, it is hereby declared that the writer, at the time of writing, does not have any interest in any of the securities or financial instruments covered in this report. An employee, analyst, officer, or a director of Mason Securities Limited( or any of its affiliates), may serve as a director for companies covered in this report. Mason Securities Limited (or any of its affiliates) may from time to time perform investment banking or other services or solicit investment banking or other business for any companies covered in this report. Mason Securities Limited is licensed by the Securities and Futures Commission to carry on Types 1, 4, and 6 regulated activities in Hong Kong. Mason Futures Limited is licensed by the Securities and Futures Commission to carry on Type 2 regulated activity in Hong Kong. Bullion trading service is provided by Mason Bullion Limited.