We expect Hang Seng Index to trade range between 18,000 and 20,000 in March. Hang Seng Index Performance. Index Performance.

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1 1 st March, 2016 Hang Seng Index Performance Index Performance Abs chg % Change Hong Kong Close 1-Day 1-Day 1-Mth 3-Mth Hang Seng Index 19, HSCI 2, HSCCI (Red Chips) 3, HSCEI (H-Shares) 7, Mkt T/O ($ Mn) 64, , Source: Bloomberg Market Outlook Eric Yuen - ericyuen@guoco.com Hang Seng Index closed down 1.3% at 19,111. Market turnover increased to $64.0 billion. Heavily weighted HSBC (5) was little changed. AIA Group (1299) and China Mobile (941) shrank 2.3%-2.7%. HKEx (388) cut 2.5% on analyst downgrade. Local banking and property stocks were mixed. New World Development (17) and BOC Hong Kong (2388) advanced 1.0%-1.6%. CK Property (1113) and Hang Seng Bank (11) plunged 0.5%-1.6%. Food & beverage counters ended lower. Tingyi (322), Want Want China (151) and China Mengniu (2319) tumbled 1.9%-3.7%. Belle Int l (1880) slumped 4.9%, the most in Hang Seng Index. Decline in China s stock markets weighed on Chinese stocks. HSCEI fell 1.5% led by oil, power and railway stocks. PetroChina (857), Sinopec (386), CNOOC (883) and China Oilfield Services (2883) slid 2.3%-3.5%. China Longyuan (916), the worst performing HSCEI stock, lost 4.5%. CGN Power (1816) and Huaneng Power (902) retreated 1.8%-2.3%. China Railway Group (390), CCCC (1800) and CRRC Corporation (1766) decreased 1.7%-2.7%. Insurance, securities and banking shares in HSCEI dropped an average 2.1%, 1.6% and 1.1% respectively. We expect Hang Seng Index to trade range between 18,000 and 20,000 in March. Oversea DJIA 16, NASDAQ 4, Shanghai SE Composite 2, Crude Oil Futures (US$) Gold Futures (US$) 1, Baltic Dry Index USD / Euro Yen / USD HSCEI HSI 20-Day MA 7, , Day MA 8, , Day RSI We expect Hang Seng Index to trade range between 18,000 and 20,000 in March. Remarks: GuocoCapital Ltd is licensed by the Securities and Futures Commission to carry on Types 1, 4, and 6 regulated activities in Hong Kong. GuocoCapital Futures Ltd is licensed by the Securities and Futures Commission to carry on Type 2 regulated activity in Hong Kong. Bullion trading services provides by GuocoCapital Bullion Ltd. Securities Futures Bullion Corporate Finance

2 Industry / Corporate News Eric Yuen - ericyuen@guoco.com China State Construction Int l (3311) is expected to deliver strong earnings results Maintain BUY Maintain BUY Risk Level: Medium Time Horizon: Long Leading construction company in China with a proven earnings record Plans to achieve new contracts of not less than $78bn in 2016, up 11.4% yoy China State Construction International (3311, CSCI, $11.94) dropped 11.3% year-to-date compared to a loss of 12.8% for Hang Seng Index and 18.1% for HSCEI over the same period. The resilience of its share price is supported by positive fundamentals. CSCI is a well-managed construction company in China with a strong execution capability and proven track record of delivering decent earnings growth. From 2011 to 2014, the company s revenue and earnings increased at a CAGR of 28.1% and 31.9% respectively. EPS CAGR during the period was 26.1% due to dilution from share placement in July Gross margin expanded from 12.2% in 2012 to 13.7% in 2013 and 13.8% in The margin improvement is partly attributable to acquisition of more projects from China which enjoys higher gross margin compared with those in Hong Kong and Macau. Net margin was relatively stable at 10.0%-10.8% in the past three financial years. CSCI s new contract value surged 32.3% in 2014 but only 16.3% in 2015 due to a slowdown of China s economy. Management s target for new contracts to be awarded in 2016 is no less than $78.0bn, representing an 11.4% increase over the previous year. In January 2016, the company recorded new contract value of $7.84bn and hence achieved 10.1% completion of the full year target. As of 31 January 2016, the company s on-hand contract value amounted to $206.6bn among which the backlog was approximately $131.2bn, equivalent to 3.8x the company s revenue in For the first nine months of 2015, the company s operating revenue grew 14% yoy to $2.56bn while the aggregate amounts of operating profit and the share of profits of joint ventures increased by 23% yoy to $3.49bn. Full year earnings results will be released on March 22. According to Bloomberg estimates, the company s earnings are expected to reach $4.23bn in 2015 and $5.20bn in 2016, up 22% in both years. EPS growth will be 20% in 2015 and 23% in Traded at 2016 PER of 9.1x with projected EPS growth of 23% in 2016, valuation of CSCI is undervalued compared to its 5-year average forward PER of 13.7x. Maintain BUY with unchanged 12-month price target of $14.3 based on 2016 PER of 11.0x. Recent Recommendations Stock Pick Rating Recommendation Highlights TP Fairwood (52) BUY BUY Fairwood (52) on strong earnings growth momentum and high dividend yield $24.4 Shenzhou Int l (2313) BUY Reiterate BUY on Shenzhou Int l (2313) amid positive 2016 sales guidance from Adidas $45.7 Fortune REIT (778) BUY BUY Fortune REIT (778) on high dividend yield and low earnings risk $8.75 Galaxy Entertainment (27) BUY Recommend to BUY on Galaxy Entertainment (27) ahead of next week s earnings surprise $32.2 SMIC (981) HOLD Downgrade SMIC (981) to HOLD on disappointing quarterly results $0.69 China High Speed Transmission (658) BUY Reiterate BUY on China High Speed Transmission (658) on attractive valuation $8.78 ANTA Sports (2020) HOLD Downgrade ANTA Sports (2020) to HOLD due to disappointing trade fair results for 3Q16 $20.20 Techtronic Industries (669) BUY Reiterate BUY on Techtronic Industries (669) amid Home Depot s strong 4Q15 earnings and rosy 2016 outlook $34.9 Sino Land (83) BUY Sino Land (83) is well prepared to acquire cheap land bank in future $11.8 Nine Dragons Paper (2689) BUY Reiterate BUY on Nine Dragons Paper (2689) on lowered forex risk and improving fundamentals $6.02

3 Technical Ideas Travelsky Technology (696, $11.72) TP: $12.89 BUY Risk: Medium Time Horizon: Short Travelsky Technology provides information technology solutions for China's air travel and tourism industries. The company provides electronic travel distribution systems, or ETD, in China, develops airport passenger processing and air cargo systems, owns and operates realtime network for China's civil aviation industry, and operates Internet-based travel platform. Counter rose 0.9% yesterday. 9-day RSI surged above 50. MACD also showed positive crossing, indicating a strong upward momentum ahead. BUY. Short-term target at $ Cut loss at $ Source: Bloomberg, GuocoCapital Consensus 2016 PER: 17.1x Consensus target price: $15.33 Peak Sport (1968, $1.79) TP:1.60 SELL Risk: Medium Time Horizon: Short Peak Sport Products manufactures athletic shoes. Counter lost 3.8% yesterday. 9-day RSI dropped below 50 while MACD also showed negative crossing, indicating a strong downward momentum ahead. SELL. Short-term target at $1.60. Cover short at $1.90. Consensus 2016 PER: 8.2x Consensus target price: $2.65 Source: Bloomberg, GuocoCapital

4 RSI Indicator Overbought (9-day RSI> 80) Tickers Oversold (9-day RSI<20) Tickers 91, 687, 689, 1293, 1386, 1421, 2066, 2668, 6836, , 460, 787, 853, 911, 1004, 1076, 1236, 1269, 1323, 2343, 2399, 3788 Exceptional Turnover & Price Movements Stock Stock Last Price ($) Price Change (%) Turnover / 3-mth daily avg turnover Target price up / downside (%)* Rating*^ EPI Holdings N/A N/A N/A BYD Electronic Shengjing Bank Convoy Financial N/A N/A N/A Towngas China Yanzhou Coal Mining N/A Walker Group N/A N/A N/A Suncorp Technologies N/A N/A N/A 2016 PER* Source: Bloomberg, GuocoCapital 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.

5 A-H Share Premium / Discount (%) Average AH Shanghai Listed -41.0% Premium/Discount (%) Shenzhen Listed -44.3% 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 Guangzhou Pharm SSC China Shenhua Shenji Group Huadian Power Intl Yanzhou Coal China Life Insurance Chongqing Iron ABC China Shipping BoComm GAC Group Huaneng Power Intl Beijing Jingcheng China Everbright China Haitong Securities Zhengzhou Coal Bank of China Shanghai Electric Shanghai Pharm MCC Guangshen Railway Guangzhou ICBC Nanjing Panda Sinopec China Oilfield China Merchants First Tractor Shanghai Fosun China Cosco CCB Anhui Expressway Citic Securities Datang Intl Power Tsingtao Brewery China Coal Energy CPIC BBMG Huatai Securities Co Beijing North Star Anhui Ltd Conch Sinopec Shanghai Ping An Cement Insurance Petrochem Magang Fuyao Group Glass Dongfang Electric Jiangsu Express Chalco Sichuan A-H Shares Shenzhen Listed Jiangxi Expressway Copper Zhejiang Shibao Tianjin Capital Shandong Molong China Environment Eastern Northeast Petroleum Electric Airlines CCCC Shandong Develop Xinhua New China Life Hisense Pharm Kelon China Insurance Railway Zoomlion Heavy Great Group Wall Motor Xinjiang Industry Goldwind Petrochina Dongjiang Sci&Tec Env Shenzhen Express China Vanke China Southern BYD Zijin Air Mining Shandong Chenming Air China Angang Paper Steel China Minsheng China International CRCC Bank Livzon Marine Pharm CRRC Corp ZTE Corp China Shipping Weichai Power Development Dalian Port GF Securities Co Ltd China Citic Bank

6 HSI & HSCEI Constituents Performance Index 5 D 1 M 3 M vs 3M High Hang Seng Index Hang Seng China Ent Index Price Change (%) Outperform Gaming, Gas, Oil Underperform Mixed Cement, Coal, Infrastructure, IT Hardware, Power, Securities, Stock Exchange, Airlines, Automobile, HK Bank, PRC Bank, Conglomerate, Global Player, Insurance, HK Property, PRC Property 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 17 New World Dev CNBM CM Bank Hengan Int'l Link REIT ICBC China Vanke HK & China Gas HSBC Hldgs Tsingtao Brew BYD Company CITIC Securities BOC Hong Kong Huaneng Power Cathay Pac Air Wharf Tencent China Mer Hldgs Sino Land CRRC CLP Hldgs China Oilfield AIA China Shenhua China Telecom China Res Beer Henderson Land CK Property Power Assets Li & Fung China Overseas Ping An Kunlun Gas CGN Power Swire Pacific 'A' Lenovo Sands China Haitong Securities Galaxy GreatWall Motor Entertainment Sinopec Corp PICC Group SHK Prop China Resources China Res Land China Power Comm Cons China Cinda China Mengniu CNOOC China Dairy Pacific Sinopharm Want Insurance Want BOCOM Minsheng Bank China Unicom Dalian Wanda MTR Corporation HTSC CITIC Bank Belle Int'l CK Hutchison Longyuan Power Hang Hldgs Seng Ltd Bank PICC P&C PetroChina China Life CCB Anhui Conch CITIC Ltd China Railway Bank of China Air China Hang Lung Prop GF Securities HKEx Dongfeng Group ABC New China Life Bank of E Asia Tingyi China Mobile

7 Upcoming Events Date Stock Company Name Event Mar Dah Chong Hong Final Mar Dynagreen Environmental Protection Final Mar 1 41 Great Eagle Holdings Final Mar Lee & Man Chemical Final Mar Lee & Man Paper Manufacturing Final Mar Vanke Property Overseas Final Mar China Wah Yan Healthcare Final Mar Colour Life Services Final Mar Fantasia Holdings Final Mar 2 51 Harbour Centre Development Final Mar HKEx Final Mar Liu Chong Hing Investment Final Mar China Agri-Products Exchange Final Mar Giordano International Final Mar Prosperity REIT Final Mar Dongfeng Motor Final Mar China Chengtong Development Final Mar Long Ji Tai He Holding Final Mar Orient Overseas International Final Mar Shenwan Hongyuan HK Final Mar Zhengzhou Coal Mining Machinery Final Disclosures Investment Rating System Ratings Description GuocoCapital s investment rating system is Buy Expected positive return of > 10 % divided into investment ratings, risk rating Investment Ratings Hold Expected return range of ~ ±10 % and investment time horizon. The rating Sell Expected negative return > 10% scale is subject to change upon periodic High (H) 90-day volatility of > 50% review of market by research department. Risk Ratings Medium (M) 90-day volatility of > 30-50% Assigned ratings are based on company Low (L) 90-day volatility of < 30% and sector historical performance and analysts intrinsic valuation of the stock Long (L) 6 12 Months 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 GuocoCapital 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 GuocoCapital nor any of its associated companies, (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. GuocoCapital (or one of its affiliates) or their officers, directors, analysts, or employees may or may not have a position in or with respect to the securities covered herein, and may, as principal or agent, buy and sell such securities or commodities. However, it is hereby declared that the writer, at the time of writing, does not have any interest in any of the securities covered in this report. An employee, analyst, officer, or a director of GuocoCapital, or its affiliates, may serve as a director for companies covered in this report. GuocoCapital (or one of its affiliates) may from time to time perform investment banking or other services or solicit investment banking or other business for any company covered in this report. GuocoCapital Ltd is licensed by the Securities and Futures Commission to carry on Types 1, 4, and 6 regulated activities in Hong Kong. GuocoCapital Futures Ltd is licensed by the Securities and Futures Commission to carry on Type 2 regulated activity in Hong Kong.