Morning Meeting Summary

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1 29 Aug 2012,Wednesday 晨会报告 Research Highlights Nil Macro Monitor Nil Sector Updates Nil HK Indices Last price chg % chg HSI Finance Properties Utilities 19, , , , Commerce&Industr 11, HSCEI 9, HSCCI 3, HKSPGEM World Indices Last price chg % chg FTSE 100 DAX 30 CAC 40 DJIA S&P500 Nasdaq Composite Nikkei 225 5, , , , , , , Company Comments 1 China Life Insurance net profit down 26% YoY China Life Insurance announced 26% decline in net profit yoy to RMB9.64bn, due to drop in insurance premium. Total premium income and billing cost decreased 5% yoy to RMB184.74bn yuan. Investment yield declined to 2.83% from 4.5%. Provision charges was RMB15.12bn yuan, surged from last year due to continued downturn in domestic stock market. [Company announcement](elena Ye) 2 Samsonite H1 profit surges on lower finance costs U.S. luggage maker Samsonite International SA said Tuesday its first-half profit quintupled from a year earlier, boosted by strong global travel demand and the absence of finance costs and charges linked to the company's 2011 listing. The company, which makes suitcases, casual bags and other travel products, said net profit for the six months ended June 30 was US$82.3 million compared with US$16.4 million. Revenue rose 14% to US$846.7 million from US$743.8 million. It didn't recommend a first-half dividend. Samsonite, which sells products under its own name and that of American Tourister, recorded finance costs of just US$6.1 million in the first half, down substantially from US$59.9 million in the year-earlier period when the company settled listing-related finance charges and the repayment of a senior credit facility. The company also said its results were lifted by revenue growth in all its geographic markets. Samsonite's net sales in Asia grew 21.3% in the first half compared with the same period a year earlier, in spite of continued weakness in the global economy. It said that net sales in the U.S. were up 28%, while in Europe, in the midst of a huge debt crisis, the company's net sales fell 2%. Samsonite is Asia-Pacific Indices Last price chg % chg KOSPI 1, TWSE 7, STI 2, India BSE 30 14, S&P/ASX 200 3, HSI One Year Aug-11 Jan-12 May-12 Aug-12 HSCEI One Year Aug-11 Jan-12 May-12 Aug-12 Source:Bloomberg China Merchants Securities (HK) Research of 14

2 in the process of expanding its product offerings. In July, the company disclosed plans to buy U.S. casual-bag company High Sierra for US$110 million in Samsonite's first major acquisition since it listed. Earlier this month, the company bought 135-year old U.S. luggage maker Hartmann for US$35 million.[wsj](ivy Zhao) Global Commodity Brent Oil Gold LME Aluminum LME Copper BDI API Coal Last price chg % chg , , , Sun art (6808.HK) announced interim results Total revenue increased by 14.4% to RMB39,416 million Net profit attributable to owners of the parent increased by 75.1% to RMB1373. million. Basic earnings per share for the period was RMB0.14. [HKEX](Tang Jingjing) 4 Yongda Auto (03669.HK) Announced Acquisition o f Yangzhou Yongda The Company announce that an indirect wholly-owned subsidiary of the Company, Shanghai Yongda Automobile Group Co., Ltd., has entered into the Equity Transfer Agreement on August with Yongda CLS, pursuant to which Shanghai Yongda Automobile Group Co., Ltd. agreed to acquire, and Yongda CLS agreed to sell, the entire equity interest in Yangzhou Yongda at a consideration of RMB10 million (equivalent to approximately HK$12,200,000). [Company Announcement] (Colleen Li) 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 0 Aug-11 Jan-12 May-12 Gold Comdty One Year chg % chg Aug-11 Dec-11 Apr-12 Aug-12 LME Alumnium Comdty One Year Aug-11 Jan-12 May -12 Aug-12 Source:Bloomberg 2 2 of 14

3 Economic Calendar LME Copper Comdty One Year Economic Data HK:Nil US:GDP - Second Estimate Date Ticker Stock Name Earnings Results 2012/08/ CHINA MANDARIN Interim 2012/08/ SINO LAND Final 2012/08/ GRAND FIELD GP Interim 2012/08/ ENM HOLDINGS Interim 2012/08/ CHINA MERCHANTS Interim 2012/08/ FIRST PACIFIC Interim 2012/08/ WANT WANT CHINA Interim 2012/08/ BEIJING DEV Interim 2012/08/ GRANDE HOLDINGS Interim 2012/08/ SMI CORP Interim 2012/08/ MELCO INT'L DEV Interim 2012/08/ CHINA ENERGY Interim 2012/08/ SHUN TAK HOLD Interim 2012/08/ CHINA SEVENSTAR Interim 2012/08/ TST PROPERTIES Final 2012/08/ CH YUNNAN TIN Interim 2012/08/ PROSP INV HOLD Interim 2012/08/ JIANGXI COPPER Interim 2012/08/ SINO GOLF HOLD Interim 2012/08/ LUKS GROUP Interim 2012/08/ PME Interim 2012/08/ NORTH MINING Interim 2012/08/ CAPXON INT'L Interim 2012/08/ SUCCESSUNIVERSE Interim 2012/08/ DONGFENG GROUP Interim 2012/08/ KASEN Interim 2012/08/ LANSEN PHARMA Interim 2012/08/ CHINA FOODS Interim 2012/08/ SUNSHINE Interim 2012/08/ E-KONG GROUP Interim 2012/08/ CHINACOMSERVICE Interim 2012/08/ IMAGI INT'L Interim 2012/08/ INSPUR INT'L Interim 2012/08/ CHINA AGRI Interim 2012/08/ CHI O SHIPBLDG Interim 2012/08/ FOSUN INTL Interim Aug-11 Jan-12 May-12 Aug-12 BDI One Year Aug-11 Jan-12 May -12 API Coal One Year Aug-11 J an-12 May-12 Source:Bloomberg 3 of 14

4 2012/08/ Wai Chun Mining Interim 2012/08/ MEDIA CHINESE 1st Quarter 2012/08/ DONGWU CEMENT Interim 2012/08/ TRAVELSKY TECH Interim 2012/08/ FINTRONICS Interim 2012/08/ SINGYES SOLAR Interim 2012/08/ SOLARGIGA Interim 2012/08/ ETERNITY INV Interim 2012/08/ PACIFIC PLYWOOD Interim 2012/08/ DYNASTY WINES Interim 2012/08/ LEOCH INT'L Interim 2012/08/ CYPRESS JADE Interim 2012/08/ DATRONIX HOLD Interim 2012/08/ MASTERMIND CAP Interim 2012/08/ CITIC BANK Interim 2012/08/ CONVOY Interim 2012/08/ CHANGFENG AXLE Interim 2012/08/ HENGANINTL Interim 2012/08/ ZHEJIANG SHIBAO Interim 2012/08/ HUADIAN POWER Interim 2012/08/ SING TAO Interim 2012/08/ KINGWORLD Interim 2012/08/ BRILLIANCE CHI Interim 2012/08/ TELEFIELD Interim 2012/08/ KARCE INTL HOLD Interim 2012/08/ MIN RESOURCES Interim 2012/08/ SINO HOTELS Final 2012/08/ SUPERB SUMMIT Interim 2012/08/ TIANJINTIANLIAN Interim 2012/08/ XIWANG STEEL Interim 2012/08/ ABC Interim 2012/08/ SITC Interim 2012/08/ NCI Interim 2012/08/ MCC Interim 2012/08/ PUTIAN FOOD Interim 2012/08/ DATANG RENEW Interim 2012/08/ HUAYUEXPRESSWAY Interim 2012/08/ SIJIA GROUP Interim 2012/08/ CHINA COSCO Interim 2012/08/ SUNLINK INT'L Interim 2012/08/ ECOGREEN Interim 2012/08/ CSCL Interim 4 4 of 14

5 2012/08/ LINGBAO GOLD Interim 2012/08/ VINDA INT'L Interim 2012/08/ TIANJINPORT DEV Interim 2012/08/ XIAO NAN GUO Interim 2012/08/ DACHAN FOOD Interim Date Ticker Stock Name Issue Price Nil 5 5 of 14

6 China Merchants Securities (Hong Kong) Stock Pool Update Weekly Stock Twelve Month EPS P/E Net Profits(Mn) Short Name Rating Currency Code Target Price(HK$) 2012E 2013E 2014E 2012E 2013E 2014E 2012E 2013E 2014E Analyst Commercial Banks 5 HSBC HLDGS PLC Neutral USD ,252 18,236 20,950 Ye Lian 1288 AGRICULTURAL BANK-H Buy 4.40 RMB , , ,803 Ye Lian 939 CHINA CONST BA-H Buy 6.80 RMB , , ,191 Ye Lian 998 CHINA CITIC BK-H Buy 5.10 RMB ,871 39,324 42,749 Ye Lian 1398 IND & COMM BK -H Buy 6.20 RMB , , ,702 Ye Lian 2888 STANDARD CHARTER Outperform USD ,376 6,050 6,285 Ye Lian 3328 BANK OF COMMUN-H Outperform 5.84 RMB ,473 60,353 65,302 Ye Lian 3968 CHINA MERCH BK-H Buy RMB ,665 49,130 52,422 Ye Lian 3988 BANK OF CHINA-H Outperform 3.40 RMB , , ,861 Ye Lian 3618 CHONGQING RURA-H Buy 4.80 RMB ,253 6,650 8,297 Ye Lian Textiles, Apparel & Luxury Goods 589 PORTS DESIGN LTD Neutral 8.30 RMB Ivy Zhao 1880 BELLE INTERNATIO Outperform RMB ,023 5,737 6,730 Ivy Zhao 1368 XTEP INTERNATION Neutral 2.74 RMB ,003 1,102 Ivy Zhao 2020 ANTA SPORTS PROD Neutral 4.80 RMB , ,046 Ivy Zhao DEGREE Outperform 2.38 RMB ,003 1,015 1,115 Ivy Zhao 1968 PEAK Buy 1.83 RMB Ivy Zhao 2331 LI NING CO LTD Buy 5.31 RMB Ivy Zhao 3818 CHINA DONGXIANG Neutral 0.72 RMB Ivy Zhao 953 MEIKE INTERNATIONAL Buy 0.35 RMB Ivy Zhao 1234 CHINA LILANZ LTD Outperform 6.75 RMB ,058 Ivy Zhao 6 of 14 6

7 Stock Twelve Month EPS P/E Net Profits(Mn) Short Name Rating Currency Code Target Price(HK$) 2012E 2013E 2014E 2012E 2013E 2014E 2012E 2013E 2014E Analyst 891 TRINITY Buy 7.44 RMB Ivy Zhao 873 INT L TAIFENG Buy 2.86 RMB Ivy Zhao Materials 1863 SIJIA GROUP CO LTD Buy 4.59 RMB Ivy Zhao Metals & Mining 1818 ZHAOJIN MINING-H Buy RMB ,273 2,389 2,204 Li Xiang 2899 ZIJIN MINING GRP Buy 3.90 RMB ,219 6,999 7,100 Li Xiang 358 JIANGXI COPPER-H Neutral RMB ,775 6,720 5,629 Li Xiang 3993 CHINA MOLYBDENUM Outperform 3.50 RMB ,144 1,291 1,370 Li Xiang 2600 ALUMINUM CORP-H Outperform 3.60 RMB Li Xiang CHINA HONGQIAO 1378 GROUP LTD Buy 7.70 RMB ,475 7,291 6,296 Li Xiang 486 UNITED CO RUSAL PLC Buy 7.10 USD ,571 2,152 2,518 Li Xiang Auto & Others 1211 BYD CO. LTD Neutral RMB ,673 2,502 2,817 Colleen Li 489 Dongfeng Motor-H Buy RMB ,854 12,113 12,101 Colleen Li 175 Geely Auto Buy 3.45 RMB ,777 1,954 2,159 Colleen Li 2333 Great Wall Mot-H Buy RMB ,347 4,917 5,406 Colleen Li 1114 Brilliance Auto Outperform 8.10 RMB ,107 2,760 3,512 Colleen Li 425 Minth Group Ltd Buy RMB Colleen Li 1728 China Zhengtong Buy 7.28 RMB ,561 2,255 Colleen Li 881 Zhongsheng Group Buy RMB ,110 1,980 2,937 Colleen Li Oil & Gas 857 PetroChina - H Outperform RMB , , ,778 Michael Yuk 7 of 14 7

8 Stock Twelve Month EPS P/E Net Profits(Mn) Short Name Rating Currency Code Target Price(HK$) 2012E 2013E 2014E 2012E 2013E 2014E 2012E 2013E 2014E Analyst 386 Sinopec - H Buy RMB ,140 94,822 98,764 Michael Yuk 883 CNOOC Outperform RMB ,717 69,381 70,703 Michael Yuk 603 China Oil & Gas Outperform 0.85 HKD Michael Yuk 342 NewOcean Energy Buy 2.20 HKD Michael Yuk Oil & Gas Services/Equipment 3899 CIMC Enric Outperform 5.30 RMB Michael Yuk 569 China Automation Buy 2.50 RMB Michael Yuk 3337 Anton Oilfield Neutral 1.50 RMB Michael Yuk 1938 Chu Kong Petroleum and Natural Gas Steel Pipe Underperform 3.50 RMB Michael Yuk 2883 COSL - H Neutral RMB ,685 5,200 5,675 Michael Yuk Property 16 SHK PPT Buy HKD ,661 18,588 19, HANG LUNG PPT Buy HKD ,097 6,081 6,987 1 CHEUNG KONG Buy HKD ,897 25,337 25, CHINA OVERSEAS Buy HKD ,527 12,508 14, SOHO CHINA Buy 7.58 HKD ,080 5,555 7, SHIMAO PROPERTY Buy HKD ,205 3,981 5,570 8 of 14 8

9 Stock Twelve Month EPS P/E Net Profits(Mn) Short Name Rating Currency Code Target Price(HK$) 2012E 2013E 2014E 2012E 2013E 2014E 2012E 2013E 2014E Analyst 1109 CHINA RES LAND Buy HKD ,024 10,811 12, R&F PROPERTIES Buy HKD ,801 5,671 6, COUNTRY GARDEN Buy 4.20 HKD ,813 5,670 6, BJ CAPITAL LAND Buy 4.16 HKD ,055 1,298 1, AGILE PROPERTY Buy HKD ,322 6,162 7, EVERGRANDE REAL Buy 7.92 HKD ,288 19,177 21, LONGFOR Outperform HKD ,226 6,623 8, KWG PROPERTY Buy 7.56 HKD ,823 2,228 2, OCT (ASIA) Buy 4.00 HKD Greentown China Underperform 6.84 HKD ,274 6,495 6, SUNAC China Neutral 3.52 HKD ,296 3,798 4,291 Consumer Discretionary 3308 Golden Eagle Buy RMB ,441 1,764 2,373 Tang JingJing 9 of 14 9

10 Stock Twelve Month EPS P/E Net Profits(Mn) Short Name Rating Currency Code Target Price(HK$) 2012E 2013E 2014E 2012E 2013E 2014E 2012E 2013E 2014E Analyst 1212 LIFESTYLE INTL Neutral HKD ,918 1,962 2,162 Tang JingJing INTIME DEPARTMENT 1833 STORE Buy RMB ,142 1,374 Tang JingJing Telecommunication 941 CHINA MOBILE Neutral RMB , , ,009 Jeff Hao 762 CHINA UNICOM Neutral RMB ,143 6,375 7,537 Jeff Hao 728 CHINA TELECOM Buy 5.62 RMB ,789 20,737 24,811 Jeff Hao Information Technology 700 TENCENT Neutral RMB ,452 18,160 23,500 Jeff Hao 354 CHINASOFT INTERNATIONAL Buy 3.50 RMB Jeff Hao 268 KINGDEE Buy 2.20 RMB Jeff Hao Port China Merchants Holdings 144 Internatinal Outperform HKD ,436 5,012 5,430 Kate Li 1199 COSCO Pacific Buy USD Kate Li Alternative Energy GCL-Poly Energy Holding 3800 Ltd Buy 1.54 HKD ,974 2,915 Lei Yin 819 Tianneng Power Buy 6.05 RMB ,003 Lei Yin Healthcare 1099 Sinopharm Neutral RMB ,915 2,365 2,816 Alex Ng 2607 Shanghai Pharm Underperform RMB ,835 2,270 2,650 Alex Ng 3933 United Lab Intl Underperform 3.20 HKD Alex Ng 10 of 14 10

11 Stock Twelve Month EPS P/E Net Profits(Mn) Short Name Rating Currency Code Target Price(HK$) 2012E 2013E 2014E 2012E 2013E 2014E 2012E 2013E 2014E Analyst 460 Sihuan Pharm Buy 3.90 RMB ,100 1,403 1,694 Alex Ng 867 China Medical Systems Neutral 4.50 USD ,165 1,610 Alex Ng Food Products 322 TINGYI HLDG CO Sell USD Ling Hua 2319 CHINA MENGNIU DA Neutral HKD ,882 2,419 2,860 Ling Hua 506 CHINA FOODS LTD Outperform 8.17 HKD ,127 1,404 Ling Hua 168 TSINGTAO BREW-H Neutral HKD ,171 2,602 2,040 Ling Hua 151 WANT WANT CHINA Neutral 9.65 HKD ,280 5,227 6,399 Ling Hua 606 CHINA AGRI-INDUS Buy 6.16 HKD ,319 3,697 4,688 Ling Hua US Stock BIDU BAIDU INC Buy USD ,619 2,720 3,126 Mike Chen SINA SINA CORP Neutral USD ,647 70, ,439 Mike Chen SOHU SOHU.COM Buy USD Mike Chen NTES NETEASE INC Buy USD Mike Chen QIHU QIHOO 360 TECHNOLOGY Outperform USD Mike Chen YOKU YOUKU.COM Buy USD Mike Chen FMCN FOCUS MEDIA HOLDINGS Buy USD Mike Chen NEW ORIENTAL EDUCATION & EDU TECHNOLOGY Buy USD Mike Chen CTRP CTRIP.COM Buy USD Mike Chen HMIN HOME INNS & HOTELS MANAGEMENT Outperform USD Mike Chen 11 of 14 11

12 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 FOXCONN INTL HLD 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 14

13 A+H Company Performance Last price Name(H) Code (H) Price (H) Code (A) Price (A) Spread (%) SINOPEC YIZHEN-H NANJING PANDA-H NORTHEAST ELEC-H SHENJI GROUP-H TIANJIN CAP-H GUANGZHOU SHIP-H HISENSE KELON -H SHANDONG XINHU-H CHONGQING IRON-H BEIREN PRINT-H SINOPEC SHANG-H JINGWEI TEXTIL-H BEIJING NORTH-H ALUMINUM CORP-H DATANG INTL PO-H GUANGZHOU PHAR-H YANZHOU COAL-H HUADIAN POWER-H CHINA SHIPPING-H DONGFANG ELECT-H SHENZHEN EXPRE-H MAANSHAN IRON-H HUANENG POWER-H GUANGSHEN RAIL-H JIANGXI COPPER-H ANHUI EXPRESS-H CHINA SOUTHERN-H AIR CHINA LTD-H CHINA CITIC BK-H BANK OF CHINA-H ANGANG STEEL-H ZTE CORP-H IND & COMM BK-H CHINA PETROLEU-H BANK OF COMMUN-H CHINA LIFE INS-H LUOYANG GLASS-H WEICHAI POWER-H TSINGTAO BREW-H JIANGSU EXPRES-H CHINA MERCH BK-H PING AN INSURA-H ANHUI CONCH-H of 14

14 RATING DEFINITION & DISCLAIMER RATING OVERWEIGHT NEUTRAL UNDERWEIGHT DEFINITION Expected to outperform the market index over the next twelve months Expected to outperform or underperform the market index over the next twelve month Expected to underperform the market index over the next twelve months RATING BUY OUTPERFORM NEUTRAL UNDERPERFORM SELL DEFINITION Expected to outperform the market index by >20% over the next twelve months Expected to outperform the market index by 10-20% over the next twelve months Expected to outperform or underperform the market index by <10% over the next twelve month Expected to underperform the market index by 10-20% over the next twelve months Expected to underperform the market index by >20% over the next twelve months DISCLAIMER This document is prepared by China Merchant Securities (HK) Co., Limited ( CMS ). CMS 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 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, invitation, advertisement, inducement, recommendation or representation of any kind or form whatsoever or any financial instrument in any jurisdiction where such advice, offer, invitation, advertisement or solicitation would be illegal. 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, its holding or affiliated companies, or any of its or their directors, officers or employees ( CMS Group ) do not represent and warrant that it is accurate, correct or complete and it should 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 will be subject to change without prior notice. Use of any information herein shall be at the sole discretion and risk of the user. Investors are advised to make their own investment decisions without relying on this publication. CMS Group may have a position, make markets or act as principal or engage in transactions in securities of companies referred to in this document and may also perform or seek to perform investment banking 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 prior consent of CMS. China Merchants Securities (HK) Co., Ltd 48/F, One Exchange Square, Central, Hong Kong Website: Tel: (852) Fax: (852) of 14