Tencent lifted the HSI above 29,000

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1 Turnover (HK$ bn) Hang Seng Index EAST ASIA SECURITIES COMPANY LIMITED 9/F, 10 Des Voeux Road Central, Hong Kong. Dealing: Research: Facsimile: HONG KONG RESEARCH Restricted circulation Weekly Report Analyst: Kelvin Li 10 th November Tencent lifted the HSI above 29,000 HSI Weekly Movement Weekly Market Statistics 30,000 Week ended 10/11/ /11/2017 Change % ,604 28, ,994 28,908 29,137 29, Nov Mon Tue Wed Thu Fri 29,500 29,000 28,500 28,000 27,500 27,000 26,500 26,000 Hang Seng Index 29,121 28, % HS Red Chip Index 4,437 4, % HS China Enterprises Index 11,746 11, % HS Hong Kong 35 Index 3,245 3, % HS Mainland 100 Index 8,904 8, % Growth Enterprise Index % Avg Daily Turnover % (HK$ bn ) Sectoral Indices Finance 39,147 38, % Utilities 55,447 55, % Properties 38,772 38, % Comm & Ind 18,012 17, % Turnover Hang Seng Index Review & Outlook of Market Performance The Hang Seng Index surged to fresh 10-year highs after it staged V-shaped rebound on Monday. The blue-chip index opened weak early in the week and lost as much as 465 points in the morning session of Monday, as market sentiment was somehow hurt by the report that Saudi Arabia had detained a number of princes and ministers during the latest anti-corruption campaign. The HSI soon recovered nearly all of the losses on Monday and surged to above 29,000 in the next few days, amid strong buying spree in Tencent and robust southbound Connect inflows. Over the week, the blue-chip index rose points or 1.81% to 29,120.92, while the HSCEI gained 1.24% to 11, The average daily Mainboard turnover jumped to HK$117.9 billion from HK$98.9 billion in the previous week, as the local bourse recorded turnover of more than HK$100 billion for all the five trading days this week. Bellwether Tencent was under spotlight this week, after it surged to record highs near HK$400 on new game launch. The stunning performance of the IPO of China Literature (#772), which was spun off by Tencent and jumped as much as 100% on its debut, which also added steam to the tech giant. Performance of other IPOs were mixed, with Putian Communication (#1720) and Kidsland (#2122) up 83% and down 4% on their respective debuts. Other tech names like AAC Tech (#2018) (+21% w-o-w) and Sunny Optical (#2382) (+19% w-o-w) also performed strongly during the week. Meanwhile, data showed China s consumer and wholesale price inflation speeded up in October on higher energy and property prices. Growth in exports and imports stayed sound, despite slightly down from the previous month. For the coming week, investors will keep close eyes on Tencent, which will release its Q3 results on Wednesday. Tencent s net profit (non-gaap) is expected to grow by 26%-50% y-o-y in the quarter ended September Besides, investors will also pay attention to the trading debut of the heavily subscribed Yixin (#2858) on Thursday. This report has been prepared solely for information purposes and we, East Asia Securities Company Limited are not soliciting any action based upon it. Neither this document nor its contents shall be construed as an offer, invitation, advertisement, inducement or representation of any kind or form whatsoever. This document is based upon information, which we consider reliable, but accuracy and completeness are not guaranteed. Opinions expressed herein are subject to change without notice. At the time of preparing this report, we have no position in securities of the company or companies mentioned herein, while other Bank of East Asia Group companies may from time to time have interests in securities of the company or companies mentioned herein.

2 US & Regional Markets Weekly Update Date US US JAPAN SINGAPORE MALAYSIA BANGKOK TAIPEI Dow Jones NASDAQ Nikkei Avg STI KLSE Index SET Index Weighted Index 10th November 23,461.94* 6,750.05* 22, ,421.62# 1, ,692.63# 10, rd November 23, , , , , , , Change % -0.3% -0.2% +0.6% +1.2% +0.1% -0.5% -0.6% Remark: (*) closing as of 9 th November 2017; (#) closing as of 17:00 10 th November 2017 Major Changes in Index Constituent s (Week ended 10 th November 2017) Hang Seng Index (HSI) Cathay Pacific Airways HK$ HK$ % The third largest shareholder Kingboard Chemical (00148) was reported on Monday to sell its entire 9.6% interest or 378 million shares of Cathay to rival Qatar Airways at an average price of HK$13.65 for HK$5.16 billion. The selling price represented a minor 3.4% premium to last Friday s close. Cathay fell for five straight days during the week after the sale report. Hang Seng China Enterprises Index (HSCEI) PICC Group HK$4.19 +HK$ % PICC Group surged to two-year highs, amid strong buying spree from the southbound Connect investors. Investors chased after the counter, as it was trading at a deep discount against its PRC insurer peers in terms of priceto-book ratio. Meanwhile, the insurer reported in late October that its life and health insurance operations were gaining traction in 3Q17. Hang Seng China-Affiliated Corporations Index (HSCCI) China Merchants Ports COSCO SHIPPING Ports HK$8.64 -HK$ % HK$ HK$ % Port operators were among the losers, after China reported slightly weakerthan-expected exports in October. Exports grew 6.9% y-o-y (in US$ terms) in October, down from the rise of 8.1% in September and also weaker than consensus forecast of a 7.1% growth. Imports rose 17.2% y-o-y, down from an 18.7% rise in September. 2

3 Summary of US Economic News Indicator Change/Index Comments Initial jobless claims week ended 4 th November ,000 Initial jobless claims rose 10,000 to 239,000 last week. The rise in claims was higher than expected, as some states continued to clear backlog claims delayed by hurricanes in late September. Forthcoming Important Announcements / Events 13 th November 2017 (Monday) HK : Razer (01337) trading debut Vertical International (08375) trading debut C. P. Pokphand (00043) Q3 results CT Enterprise (03839) Q3 results Honma Golf (06858) interim results Midas (01021) Q3 results Next Media (00282) interim results Pou Sheng (03813) Q3 results Sino Harbour (01663) interim results Samsonite (01910) Q3 results SouthGobi (01878) Q3 results Tingyi (00322) Q3 results VMEP (00422) Q3 results Yue Yuen Industrial (00551) Q3 results US : JD.com Inc. Q3 results 14 th November 2017 (Tuesday) HK : Capxon (00469) interim results China Gold International (02099) Q3 results Hanison (00896) interim results ISDN (01656) Q3 results KPA-BM (02663) interim results SMIC (00981) Q3 results Wharf (00004) special interim dividend US : Producer price index October th November 2017 (Wednesday) HK : World-Link (06083) trading debut Shuang Yun (01706) trading debut Asia Pioneer Entertainment (08400) trading debut Fineland Real Estate (08376) trading debut Ali Health (00241) interim results CSPC Pharmaceutical (01093) Q3 results Fulum (01443) interim results Global Brands (00787) interim results HKR International (00480) interim results Man Wah (01999) interim results Parkson (03368) Q3 results SOHO China (00410) special interim dividend Tencent (00700) Q3 results US : Consume price index October 2017 Retail sales October 2017 NetEase Inc Q3 results 3

4 Forthcoming Important Announcements / Events 16 th November 2017 (Thursday) HK : Unemployment & underemployment Sep-Nov 2017 Bestway Global (03358) trading debut Bortex Global (08118) trading debut Indigo Star (08373) trading debut Sun Hing Printing (01975) trading debut Yixin (02858) trading debut Agritrade (01131) interim results Boshiwa (01698) final results & interim results Joyce Boutique (00647) interim results Noble Century (02322) interim results Oriental Press (00018) interim results Tern Properties (00277) interim results Texwinca (00321) interim results U-Right (00627) interim results United Energy (00467) special dividend US : Initial jobless claims week ended 11 th November 2017 Industrial production October 2017 Wal-Mart Stores Inc Q3 results 17 th November 2017 (Friday) HK : GT Steel Construction (08402) trading debut Truly (00732) Q3 results Wanjia (00401) interim results US : Housing starts October

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