Company Comments. Hong Kong Morning Daily

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1 Oct 10, 2013 (Thursday) 晨会报告 Company Comments 1. Geely (175.HK) - To make cash payment by Oct.18 for full conversion of convertible bond On Oct.7, Geely received conversion notices from GS Capital Partners VI Fund L.P. and/or its affiliates (GS) for the full conversion of the outstanding bonds in the principal amount of RMB901,312,520 (approximately HK$1,023,125,888). The number of shares to be issued under the outstanding bonds is 555,805,023. As the outstanding conversion shares exceed the unutilised general mandate by 27,637,417 shares, Geely finally allotted and issued a total of 528,167,606 conversion shares to GS at the conversion price of HK$ per conversion share on Oct.8, 2013 and will pay cash in the amount of HK$121,051,887 to GS to satisfy the excess conversion shares by Oct.18, The conversion shares represent approximately 6% of the issued share capital of Geely. [Company Announcement] Comments: We believe the full conversion of convertible bond has the following effects: (1) Finance cost of about HK$30mn will be alleviated after the conversion; (2) Small effects on the shareholding structure. Mr. Li Shufu is still the largest shareholder with 42.62% stake. Other major shareholders include BlackRock (4.48%), Citigroup (4.41%) and JPMorgan (5.61%); (3) Issued capital share is enlarged by 6% after the conversion, but it will not affect our EPS estimates as the diluted effect is always considered in our forecast. We maintain E diluted EPS of RMB0.33, RMB0.39 and RMB0.41. We set 12-month target price at HK$5.4, and give BUY rating on the stock. (Colleen Li) 2. Longyuan (916 HK) announced September power generation data According to the company s preliminary statistics, power generation of the company amounted to 2,723,694 MWh in September, representing an increase of 29.71% compared with the corresponding period of In particular, wind power generation registered an increase of 53.26%, coal power generation registered an increase of 0.66% and other renewable energy power generation registered an increase of 25.13%. As at 30 September 2013, total power generation of the group for 2013 amounted to 24,740,204 MWh, representing an increase of 19.23% compared with the corresponding period of In particular, wind power generation registered an increase of 34.56%, coal power generation registered a decrease of 1.39%, and other renewable energy power generation registered an increase of 7.59%.[Company announcement] Comments: The year-over-year wind power generation growth for September reached a new high of this year, which beats market and our expectations. In our opinion, the strong growth may come from better wind power resource and improved wind power utilization hours. Among the top3 wind farm operators on the Hong Kong stock market, only Longyuan publishes monthly power generation data, which can be taken as an industry indicator. (Yin Lei) 3. Anta signed an endorsement contract with a new generation NBA superstar Comments:Anta Sports Products Ltd. announced that the company has signed an endorsement contract with Rajon Rondo, a new generation NBA superstar and starting point guard for the Boston HK Indices Last price chg % chg HSI Finance Properties Utilities 23, , , , Commerce&Industry 13, HSCEI 10, HSCCI 4, HKSPGEM World Indices Last price chg % chg FTSE 100 6, DAX 30 8, CAC 40 4, DJIA 14, S&P500 1, Nasdaq Composite 3, Nikkei , Asia-Pacific Indices Last price chg % chg KOSPI 2, TWSE 8, STI 3, India BSE 30 20, S&P/ASX 200 5, HSI One Year Oct-12 Feb-13 Jun-13 HSCEI One Year Oct -12 Feb-13 Jun-13 Source:Bloomberg China Merchants Securities (HK) Research of 12

2 Celtics. Rajon Rondo was a winner of the NBA championship and a four-time NBA All-star. He has been paying close attention towards the cooperation between Anta and the NBA. He is also a strong believer in Anta s basketball concept of Basketball is Priceless and is honored to participate in this basketball strategy. Before the endorsement, Rajon Rondo was one of the advertizing endorsers of Nike, and never had a pair of basketball shoes that was designated for him only. Anta meticulously designed the first basketball shoe for Rajon Rondo s battles in NBA-RR1. Despite the short period of time, the company finished product design and production, made its debut at the signing conference, and plans to release the product in major retail stores in mid-october. In order to adhere to the company s principle of value for money, RR1 is only sold at RMB399, but fully equips all the necessary functions of basketball shoes designed for top players. This is a perfect representation of Anta basketball s concept of Basketball is Priceless. Business turnaround with reasonable valuation. Buy on any major correction of the stock E EPS is HK$0.49, HK$0.53, and HK$0.57 respectively. (Ivy Zhao) A-share Research Highlights (CMS Research Center) 1. Electronics industry Focusing on stocks with higher earnings certainty before the release of quarterly results [Wu Tianxiang and Yan Fan, Oct. 8] The electronics industry will face the test of earnings preannouncements and revisions before Oct. 15. As industry sentiment on the whole was not high during the traditional peak season in Q3 and market expectations of product launchs and earnings were high, it is important to choose companies with high earnings certainty. In the long term, we are optimistic about the rise of the high-quality Chinese enterprises in the industry, considering entrepreneurship, dividend of engineers, domestic demand and capital support. We suggest investors pay attention to companies with significant earnings improvement in 2H13 or growth stocks with good results after the correction. We recommend Luxshare Precision (002475) along the Apple industry chain, the security sub-industry with high earnings certainty and the LED sub-industry with favorable trend in Q4. September data in Taiwan are relatively lackluster. For consumer electronics, focus on Apple and game machines in Q4. Recent data don t show obvious evidence of peak season effect. As Apple enters the stage of new product launches, the rise of manufacturers in mainland China accelerates. Demand for iphone 5s and iphone 5c are better than market expectation. China Mobile s TD-LTE version sales will be an important catalyst. Pay attention to related manufacturers in the cycle of game machine upgrade. Leaders in the security sub-industry have high earnings certainty. We believe LED stocks may deliver good performance in the fourth quarter. Core data: LCD panel sales amounted to US$7.02 bn in August. IDC expects smartphone shipment in mainland China to reach 360 mn this year and exceed 450 mn next year. The condition of notebook orders recovered. New version of ipad will be launched. Month-over-month NB growth is expected to reach 10-15% in September, and the growth rate is expected to continue in October. Touchscreen NB is not well received by the market, but there is turnaround opportunity in LED boosted IC orders. Subsidies on smartphones in mainland China have come to an end recently. DRAM gap continues to widen, leading to continuous price rise. Global Commodity Brent Oil Gold LME Aluminum LME Copper BDI API Coal Exchange /Currency /Bond Market USD/RMB USD/HKD 1-YR RMB NDF EUR/USD 3-M Libor 3-M Shibor 10 YR US T-Note Yield Brent Oil One Year Last price chg % chg , , , , Last price 0 Oct -12 Mar-13 Aug-13 Gold Commodity One Year Oct -12 Feb-13 Jun-13 chg % chg LME Aluminum Commodity One Year Oct -12 Feb-13 Jul-13 Source:Bloomberg 2 of 12

3 2. LED industry Government subsidy many come in by year-end, LED penetration to further improve [Yan Fan, Zhang Liangyong, and Huang Yu, Oct. 9] We expect sentiment of the LED industry to improve significantly during the season for stocking up in Q4 amid expectations of a new round of subsidy to be introduced at year-end. Stock market performance of the LED industry may be boosted, as market penetration of the more cost-effective LED lighting may beat expectation. We maintain OUTPERFORM on the industry. We give Sanan Optoelectronics (600703), Zhejiang Yankon (600261), Shenzhen Jufei (300303) STRONG BUY rating, and Shenzhen Refond (300241), and Guangzhou Hongli (300219) BUY rating. LED market players expect a new round of subsidy to be introduced in the fourth quarter. DisplaySearch estimates the subsidy may influence 10 mn large-size TVs (about RMB2 bn - RMB3 bn). Major manufacturers in mainland China have also confirmed this view. We believe bidding result of the campaign to promote efficient lighting in 2013 will become a catalyst for the LED industry. Manufacturers remain optimistic on Q4. The condition of orders of major LED companies in mainland China has improved since September compared with July and August. Backlight manufacturers have ensured demand from TV manufacturers. Demand for LED lighting remains stable with slight increase. Manufacturers in Taiwan are optimistic about quarter-over-quarter revenue growth in Q4. In our opinion, industry sentiment may not be low during the traditional low season this year. In addition, year-over-year growth may accelerate significantly in Q4, given the low industry sentiment in the second half of last year. We believe rapid decrease in prices will trigger more demand, and increase in market penetration of LED lighting may beat expectation. What to Watch LME Copper Commodity One Year Oct -12 Feb-13 Jul-13 BDI One Year Oct -12 Feb-13 Jul-13 API Coal One Year Oct -12 Mar-13 J ul-13 Source:Bloomberg Economic Data HK:Nil US:Initial Claims Date Ticker Stock Name Earnings 2013/10/ FAR EAST GLOBAL 3rd Quarter Date Ticker Stock Name Issue Price Nil 3 of 12

4 China Merchants Securities (Hong Kong) Stock Pool Update Weekly Stock Price Latest 12- Month Upside EPS EPS P/E 1-Month Short Name Rating Code Currency Price Target Price Potential Currency 2013E 2014E 2015E 2013E 2014E 2015E Performance Analyst Textiles, Apparel & Luxury Goods 589 Ports Neutral HKD % RMB % Ivy Zhao 1880 Belle Buy HKD % RMB % Ivy Zhao 1368 Xtep Neutral HKD % RMB % Ivy Zhao 2020 Anta Sports Neutral HKD % RMB % Ivy Zhao Degrees Neutral HKD % RMB % Ivy Zhao 1968 Peak Sport Neutral HKD % RMB % Ivy Zhao 2331 Li Ning Buy HKD % RMB N.A % Ivy Zhao 3818 China Dongxiang Buy HKD % RMB % Ivy Zhao 953 Meike Neutral HKD % RMB % Ivy Zhao 1234 China Lilang Buy HKD % RMB % Ivy Zhao 891 Trinity Buy HKD % RMB % Ivy Zhao 873 C Taifeng Bed Buy HKD % RMB % Ivy Zhao Metals & Mining 1818 Zhaojin Mining Neutral HKD % RMB % Li Xiang 2899 Zijin Mining Neutral HKD % RMB % Li Xiang 358 Jiangxi Copper Buy HKD % RMB % Li Xiang 3993 Cmoc Neutral HKD % RMB % Li Xiang 2600 Chalco Sell HKD % RMB N.A. N.A. N.A. -0.4% Li Xiang 1378 China Hongqiao Buy HKD % RMB % Li Xiang 486 Rusal Sell HKD % USD % Li Xiang 3948 Yitai Coal Buy HKD % RMB % Li Xiang 4 of 12

5 Stock Price Latest 12- Month Upside EPS EPS P/E 1-Month Short Name Rating Code Currency Price Target Price Potential Currency 2013E 2014E 2015E 2013E 2014E 2015E Performance Analyst 1088 China Shenhua Buy HKD % RMB % Li Xiang Auto & Others 1211 Byd Company Neutral HKD % RMB % Colleen Li 489 Dongfeng Group Buy HKD % RMB % Colleen Li 175 Geely Auto Buy HKD % RMB % Colleen Li 2333 Greatwall Motor Neutral HKD % RMB % Colleen Li 1114 Brilliance Chi Buy HKD % RMB % Colleen Li 425 Minth Group Buy HKD % RMB % Colleen Li 1728 Zhengtong Auto Buy HKD % RMB % Colleen Li 881 Zhongsheng Hldg Neutral HKD % RMB % Colleen Li Oil & Gas 857 Petro China Buy HKD % RMB % Michael Yuk 386 Sinopec Corp Buy HKD % RMB % Michael Yuk 883 Cnooc Buy HKD % RMB % Michael Yuk 603 China Oil & Gas Neutral HKD % HKD % Michael Yuk 342 Newocean Energy Buy HKD % HKD % Michael Yuk 467 Unitedenergy Gp Buy HKD % HKD % Michael Yuk Oil & Gas Services/Equipment 3899 Cimc Enric Buy HKD % RMB % Michael Yuk 569 Ch Automation Buy HKD % RMB % Michael Yuk 3337 Anton Oilfield Buy HKD % RMB % Michael Yuk 1938 Chu Kong Pipe Buy HKD % RMB % Michael Yuk 2883 China Oilfield Buy HKD % RMB % Michael Yuk 3303 Jutal Oil Ser Buy HKD % RMB % Michael Yuk 5 of 12

6 Stock Price Latest 12- Month Upside EPS EPS P/E 1-Month Short Name Rating Code Currency Price Target Price Potential Currency 2013E 2014E 2015E 2013E 2014E 2015E Performance Analyst 1623 Hilong Buy HKD % RMB % Michael Yuk Property 688 China Overseas Buy HKD % HKD % DuanFeiqin 410 Soho China Neutral HKD % HKD % DuanFeiqin 813 Shimao Property Neutral HKD % HKD % DuanFeiqin 1109 China Res Land Buy HKD % HKD % DuanFeiqin 2777 R&F Properties Buy HKD % HKD % DuanFeiqin 2007 Country Garden Neutral HKD % HKD % DuanFeiqin 3383 Agile Property Neutral HKD % HKD % DuanFeiqin 3333 Evergrande Buy HKD % HKD % DuanFeiqin 960 Longfor Ppt Buy HKD % HKD % DuanFeiqin 1813 Kwg Property Neutral HKD % HKD % DuanFeiqin 3366 Oct (Asia) Buy HKD % HKD % DuanFeiqin 3900 Greentown China Buy HKD % HKD % DuanFeiqin 754 Hopson Dev Hold Buy HKD % HKD % DuanFeiqin 1918 Sunac Buy HKD % HKD % DuanFeiqin Consumer Discretionary 3308 Golden Eagle Neutral HKD % RMB % TangJingjing 1212 Lifestyle Neutral HKD % HKD % TangJingjing 1833 Intime Buy HKD % RMB % TangJingjing 178 Sa Sa Buy HKD % HKD % TangJingjing Telecommunication 941 China Mobile Neutral HKD % RMB % Jeff Hao 762 China Unicom Buy HKD % RMB % Jeff Hao 6 of 12

7 Stock Price Latest 12- Month Upside EPS EPS P/E 1-Month Short Name Rating Code Currency Price Target Price Potential Currency 2013E 2014E 2015E 2013E 2014E 2015E Performance Analyst 728 China Telecom Buy HKD % RMB % Jeff Hao Information Technology 700 Tencent Buy HKD % RMB % Jeff Hao 3888 Kingsoft Buy HKD % RMB % Jeff Hao 1661 Wisdom Buy HKD % RMB N.A. Jeff Hao 777 Netdragon Buy HKD % RMB % Jeff Hao 354 Chinasoft Neutral HKD % RMB % Jeff Hao 268 Kingdee Neutral HKD % RMB % Jeff Hao Port 144 China Mer Hold Neutral HKD % HKD % Kate Li 1199 Cosco Pacific Buy HKD % USD % Kate Li Shipping 368 Sinotrans Ship Buy HKD % USD % Kate Li 316 Ooil Buy HKD % USD % Kate Li 2866 Cscl Neural HKD % RMB N.A % Kate Li Alternative Energy 3800 Gcl-Poly Energy Buy HKD % HKD % Yin Lei 712 Comtec Solar Buy HKD % RMB % Yin Lei 750 Singyes Solar Buy HKD % RMB % Yin Lei 2208 Goldwind Buy HKD % RMB % Yin Lei 916 Longyuan Power Neutral HKD % RMB % Yin Lei 1798 Datang Power Neutral HKD % RMB % Yin Lei 816 Huadian Fuxin Buy HKD % RMB % Yin Lei 579 Jingneng Buy HKD % RMB % Yin Lei 7 of 12

8 Stock Price Latest 12- Month Upside EPS EPS P/E 1-Month Short Name Rating Code Currency Price Target Price Potential Currency 2013E 2014E 2015E 2013E 2014E 2015E Performance Analyst Food & Beverage 322 Tingyi Buy HKD % USD % Ling Hua 2319 Mengniu Dairy Buy HKD % RMB % Ling Hua 506 China Foods Neutral HKD % HKD % Ling Hua 151 Want Want China Neutral HKD % USD % Ling Hua 345 Vitasoy Buy HKD % HKD % Ling Hua Machinery & Equipment 1157 Zoomlion Buy HKD % RMB % Jiao Yiding Electricity 902 Huaneng Power Buy HKD % RMB % Vera Liang 991 Datang Power Buy HKD % RMB % Vera Liang Pharmaceuticals & Medical Devices 2348 Dawnrays Pharma Buy HKD % RMB % Jonathan Hsu US Stock BIDU Baidu Inc Buy USD % USD % Mike Chen SINA Sina Corp Buy USD % USD N.A % Mike Chen SOHU Sohu.Com Inc Neutral USD % USD % Mike Chen NTES Netease Inc Buy USD % USD % Mike Chen QIHU Qihoo 360 Buy USD % USD % Mike Chen YOKU Youku Tudou Inc Neutral USD % USD N.A. N.A % Mike Chen EDU New Oriental Education Buy USD % USD % Mike Chen DANG Dangdang Neutral USD % USD N.A. N.A. N.A. 8.8% Mike Chen CTRP Ctrip Buy USD % USD % Mike Chen HMIN Home Inns Neutral USD % USD % Mike Chen 8 of 12

9 HSI Index Components Performance HSCEI Index Components Performance Last price Code Name Price Chg 1D Chg 1D Code Name Price (%) (%) 1 CHEUNG KONG TSINGTAO BREW-H CLP HLDGS LTD JIANGSU EXPRES-H HONG KG CHINA GS MAANSHAN IRON-H WHARF HLDG SINOPEC SHANG-H HSBC HLDGS PLC ANGANG STEEL-H POWER ASSETS HOL JIANGXI COPPER-H HANG SENG BK CHINA PETROLEU-H HENDERSON LAND D CHINA RAIL GR-H HUTCHISON WHAMPO DONGFENG MOTOR-H SUN HUNG KAI PRO CHINA COMM SER-H NEW WORLD DEV ZHEJIANG EXPRESS SWIRE PACIFIC-A BEIJING CAP AI-H BANK EAST ASIA CHINA TELECOM-H MTR CORP AIR CHINA LTD-H SINO LAND CO PETROCHINA CO-H HANG LUNG PROPER HUANENG POWER-H CHINA MERCHANT ANHUI CONCH-H CITIC PACIFIC CHINA CONST BA-H CHINA RES ENTERP DATANG INTL PO-H CATHAY PAC AIR CHINA CITIC BK-H ESPRIT HLDGS CHINA SHENHUA-H CHINA PETROLEU-H HARBIN ELECTRIC HONG KONG EXCHNG CHINA SHIPPING-H LI & FUNG LTD YANZHOU COAL-H YUE YUEN INDUS CHINA RAIL CN-H CHINA OVERSEAS IND & COMM BK-H TENCENT HOLDINGS CHINA COM CONS-H CHINA UNICOM HON CHINA COAL ENE-H PETROCHINA CO-H CHINA COSCO HO-H CNOOC LTD PING AN INSURA-H CHINA CONST BA-H PICC PROPERTY & CHINA MOBILE ALUMINUM CORP-H CHINA SHENHUA-H CHINA LIFE INS-H COSCO PAC LTD SHANGHAI ELECT-H IND & COMM BK-H GUANGZHOU R&F -H FIH MOBILE LTD CHINA SHIPPING-H PING AN INSURA-H CHINA OILFIELD-H BOC HONG KONG HO ZIJIN MINING-H ALUMINUM CORP-H CHINA NATL BDG-H CHINA LIFE INS-H BANK OF COMMUN-H BANK OF COMMUN-H CHINA MERCH BK-H BANK OF CHINA-H BANK OF CHINA-H CHINA MOLYBDENUM of 12

10 A+H Company Performance Last price Name(H) Code (H) Price (H) Code (A) Price (A) Spread (%) BEIREN PRINT-H TIANJIN CAP-H NORTHEAST ELEC-H SHENJI GROUP-H CHONGQING IRON-H NANJING PANDA-H SHANDONG XINHU-H SINOPEC YIZHEN-H BEIJING NORTH-H JINGWEI TEXTIL-H ALUMINUM CORP-H YANZHOU COAL-H HISENSE KELON -H SINOPEC SHANG-H DATANG INTL PO-H GUANGZHOU SHIP-H CHINA SHIPPING-H JIANGXI COPPER-H SHENZHEN EXPRE-H DONGFANG ELECT-H ZTE CORP-H GUANGZHOU BAIYUN HUADIAN POWER-H ANHUI EXPRESS-H CHINA SOUTHERN-H CHINA CITIC BK-H MAANSHAN IRON-H LUOYANG GLASS-H BANK OF CHINA-H AIR CHINA LTD-H CHINA MERCH BK-H BANK OF COMMUN-H GUANGSHEN RAIL-H CHINA PETROLEU-H TSINGTAO BREW-H IND & COMM BK-H HUANENG POWER-H CHINA LIFE INS-H WEICHAI POWER-H PING AN INSURA-H ANGANG STEEL-H JIANGSU EXPRES-H ANHUI CONCH-H of 12

11 Recently Published Research Date published Name of report Analyst 26-Sep-13 Wisdom Holdings Group (1661.HK) Jeff Hao 25-Sep-13 Sunac China (1918 HK) Duan Feiqin 25-Sep-13 China Hardware Technology Alex Ng 24-Sep-13 TENCENT HOLDINGS(00700.HK) Jeff Hao 24-Sep-13 Comment on German elections Lynn Song, Cliff Zhao, David Xie 23-Sep-13 Hilong Holding Ltd. (01623.HK) Michael Yuk 23-Sep-13 HK Stock Market Strategy Comments George Chen, Cliff Zhao 16-Sep-13 Special Report on the Path back to Normalization II Qing Li, Cliff Zhao, David Xie 16-Sep-13 Great Wall Mot-H (02333.HK) Colleen Li 16-Sep-13 HK Stock Market Strategy Report Cliff Zhao, George Chen 12-Sep-13 CHINA MERCHANTS HOLDINGS (144.HK) Kate Li 12-Sep-13 EVERGRANDE REAL(3333.HK) Duan Feiqin 12-Sep-13 Qihoo 360 Technology (QIHU.N) Mike Chen 10-Sep-13 Anton Oilfield Services (03337.HK) Michael Yuk 10-Sep Field Visit to U.S.-Listed Chinese Companies Mike Chen 10-Sep-13 MINTH GROUP LTD (425 HK) Colleen Li 10-Sep-13 Beijing Enterprise Water (371.HK) Yin Lei 9-Sep-13 ZOOMLION HEAVY-H(1157.HK) Yiding Jiao 9-Sep-13 Report on the German elections Lynn Song, Cliff Zhao, David Xie 9-Sep-13 China Oil & Gas Group (00603.HK) Michael Yuk 6-Sep-13 BIOSTIME INTERNA(1112.HK) Ling Hua 6-Sep-13 Kingsoft (03888.HK) Jeff Hao 4-Sep-13 SUNAC CHINA HOLD (1918.HK) Duan Feiqin 4-Sep-13 Economic Outlook 4Q2013 David Xie, Cliff Zhao, Qing Li, Lynn Song 4-Sep-13 Overseas Economic Outlook 4Q2013 Cliff Zhao, Qing Li, Lynn Song,David Xie 4-Sep-13 Wisdom Holdings Group (1661.HK) Jeff Hao 3-Sep-13 ZHONGSHENG GROUP (881 HK) Colleen Li 3-Sep-13 PORTS DESIGN LTD(589 HK) Ivy Zhao 2-Sep-13 Monthly Review Cliff Zhao, George Chen 2-Sep-13 CHINA SHIPPING CONT-H (2866.HK ) Kate Li, Colleen Li 2-Sep-13 Forecast of August Economic Data David Xie, Cliff Zhao, Qing Li 2-Sep-13 Sinopec (00386.HK) Michael Yuk 30-Aug-13 COSCO PACIFIC (1199.HK ) Kate Li, Colleen Li 29-Aug-13 TINGYI HOLDING (322 HK) Hua Ling 29-Aug-13 XINJIANG GOLDWIND (2208.HK) Yin Lei 28-Aug-13 Comment on HSBC August Flash PMI David Xie, Cliff Zhao, Qing Li 28-Aug-13 DATANG INTL PO-H(991.HK) Vera Liang 28-Aug-13 EVERGRANDE REAL(3333.HK) Duan Feiqin 27-Aug-13 Chu Kong Petroleum Michael Yuk 27-Aug-13 Wisdom Holdings Group (1661.HK) Jeff Hao 27-Aug-13 NetEase Inc. (NTES.O) Mike Chen 27-Aug-13 XTEP INTERNATIONAL(1368.HK) Ivy Zhao 11 of 12

12 RATING DEFINITION & DISCLAIMER INDUSTRY OVERWEIGHT NEUTRAL UNDERWEIGHT DEFINITION Expected to outperform the market index by > 10% over the next 12 months Expected to outperform or underperform the market index by 10% or less over the next twelve months Expected to underperform the market index by >10% over the next 12 months COMPANY BUY NEUTRAL SELL DEFINITION Expected to outperform the market index by >10% over the next twelve months Expected to outperform or underperform the market index by 10% or less over the next twelve months Expected to underperform the market index by >10% over the next twelve months DISCLAIMER This document is prepared by China Merchants Securities (HK) Co., Limited ( CMS HK ). CMS HK is a licensed corporation to carry on Type 1 (dealing in securities), Type 2 (dealing in futures), Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the Securities and Futures Ordinance (Chapter 571). This document is for information purpose only. Neither the information nor opinion expressed shall be construed, expressly or impliedly, as an advice, offer or solicitation of an offer, invitation, advertisement, inducement, recommendation or representation of any kind or form whatsoever to buy or sell any security, financial instrument or any investment or other specific product. The securities, instruments or strategies discussed in this document may not be suitable for all investors, and certain investors may not be eligible to participate in some or all of them. Certain services and products are subject to legal restrictions and cannot be offered worldwide on an unrestricted basis and/or may not be eligible for sale to all investors. The information and opinions, and associated estimates and forecasts, contained herein have been obtained from or are based on sources believed to be reliable. CMS HK, its holding or affiliated companies, or any of its or their directors, officers or employees ( CMS Group ) do not represent or warrant, expressly or impliedly, that it is accurate, correct or complete and it should not be relied upon. CMS Group will not accept any responsibility or liability whatsoever for any use of or reliance upon this document or any of the content thereof. The contents and information in this document are only current as of the date of their publication and will be subject to change without prior notice. Past performance is not indicative of future performance. Estimates of future performance are based on assumptions that may not be realized. The analysis contained herein is based on numerous assumptions. Different assumptions could result in materially different results. Opinions expressed herein may differ or be contrary to those expressed by other business divisions or other members of CMS Group as a result of using different assumptions and/or criteria. This document has been prepared without regard to the individual financial circumstances and investment objectives of the persons who receive it. Use of any information herein shall be at the sole discretion and risk of the user. Investors are advised to independently evaluate particular investments and strategies, take financial and/or tax advice as to the implications (including tax) of investing in any of the securities or products mentioned in this document, and make their own investment decisions without relying on this publication. CMS Group may have a long or short position, make markets, act as principal or agent, or engage in transactions in securities of companies referred to in this document and may also perform or seek to perform investment banking services or provide advisory or other services for those companies. This document is for the use of intended recipients only and this document may not be reproduced, distributed or published in whole or in part for any purpose without the prior consent of CMS Group. CMS Group will not be liable for any claims or lawsuits from any third parties arising from the use or distribution of this document. This document is for distribution only under such circumstances as may be permitted by applicable law. This document is not directed at you if CMS Group is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. In particular, this document is only made available to certain US persons to whom CMS Group is permitted to make available according to US securities laws, but cannot otherwise be made available, distributed or transmitted, whether directly or indirectly, into the US or to any US person. This document also cannot be distributed or transmitted, whether directly or indirectly, into Japan and Canada and not to the general public in the People s Republic of China (for the purpose of this document, excluding Hong Kong, Macau and Taiwan). 12 of 12