HSI lost 971-pts on a 3-day losing streak

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1 Turnover (HK$ bn) Hang Seng Index 9/F, 10 Des Voeux Road Central, Hong Kong. Dealing: Research: Facsimile: HONG KONG RESEARCH Restricted circulation Weekly Report Analyst: Kelvin Li 11 th August HSI lost 971-pts on a 3-day losing streak HSI Weekly Movement Weekly Market Statistics 29,000 Week ended 11/8/ /8/2017 Change % ,563 27,690 27,855 27,757 27,444 26,884 28,500 28,000 27,500 27,000 Hang Seng Index 26,884 27, % HS Red Chip Index 4,199 4, % HS China Enterprises Index 10,573 11, % HS Hong Kong 35 Index 3,123 3, % HS Mainland 100 Index 7,765 7, % Aug Mon Tue Wed Thu Fri 26,500 26,000 25,500 25,000 Growth Enterprise Index % Avg Daily Turnover % (HK$ bn ) Sectoral Indices Finance 36,180 37,853-1, % Utilities 58,263 58, % Properties 37,228 37, % Comm & Ind 16,121 16, % Turnover Hang Seng Index Review & Outlook of Market Performance The Hang Seng Index tumbled on profit taking during the week, amid rising political tension between the US and North Korea. The Mainboard turnover topped HK$120 billion and HK$130 billion on Thursday and Friday, respectively, which marked the highest since August Over the week, the HSI lost 679 points or 2.5% to 26,883.51, after it touched a fresh two-year high at 27, The HSCEI slumped 3.9% to 10, The average daily Mainboard turnover rose to HK$107.0 billion from HK$92.2 billion in the previous week. Profit taking on Tencent (#700) after it hit a fresh high at HK$333 on Wednesday dragged on the HSI heavily towards the weekend. Nonetheless, the tech giant finished the week slightly down by 0.26%. The PRC financials like ICBC (#1398) (-5.9% w-o-w) and Ping An (#2318) (-4.8% w-o-w) were amongst the big losers. On the other hand, index heavyweight China Mobile lent support to the local bourse with a 5.2% gain after it announced a surprised special dividend, otherwise the HSI would have seen much bigger losses. Meanwhile, the PRC food and beverage plays like Want Want China (#151) (+6.8% w-o-w) and Tingyi (#322) (+9.1%) bucked market weakness and performed well, after peer Uni-President China (#220) (+20.3%) reported better-than-expected results in the second quarter. On the economic front, China said the consumer price index (CPI) rose 1.4% in July, below market expectation of a 1.5% rise. The producer price index (PPI) rose 5.5% in July, which was in line with consensus forecast. Investors will keep close eyes on the interim results of those outperformers like Tencent and Geely (#175) on Wednesday and Ping An on Thursday. Besides, the HS index quarterly review on 16 th August will also draw much market attention, with Sunny Optical (#2382) and Techtronic Industries (#669) being the possible new HSI members. Profit taking may continue next week, but the HSI is expected to see initial support near the 26,300 level. 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 11th August 21,844.01* 6,216.87* 19,729.74* 3,279.12# 1, ,559.33# 10, th August 22, , , , , , , Change % -1.1% -2.1% -1.1% -1.4% -0.4% -1.2% -1.7% Remark: (*) closing as of 10 th August 2017; (#) closing as of 17:00 11 th August 2017 Major Changes in Index Constituent s (Week ended 11 th August 2017) Hang Seng Index (HSI) Code Closing W-O-W Change Remarks / Comments Absolute % Wharf (Holdings) HK$ HK$ % Wharf outperformed, after it revealed in its interim results announcement that it had submitted application to HKEx to spin off its HK$230 billion investment property portfolio by way of introduction. Hang Seng China Enterprises Index (HSCEI) Code Closing W-O-W Change Remarks / Comments Absolute % Dongfeng Group HK$9.80 +HK$ % Dongfeng bucked market weakness and was the biggest gainer in the HSCEI during the week, after the automaker said sales volume of its passenger and commercial vehicles grew 1.7% and 46% y-o-y in July, respectively. Hang Seng China-Affiliated Corporations Index (HSCCI) Code Closing W-O-W Change Remarks / Comments Absolute % China Mobile HK$ HK$ % Despite a set of unexciting 1H17 results, the PRC top mobile jumped after it surprised investors with a hefty special dividend of HK$3.2 per share to celebrate the 20 th listing anniversary. 2

3 Major Results Announcements During the Week China Mobile (00941) 1H2017 Net profit y-o-y change RMB62.7 billion +3% Drivers of performance China Mobile said net profit grew by a tepid 3% in 1H17 with a slightly depressed profit margin amid unrest industry rivalry during the first half. Share price w-o-w chg +5.2% CLP Holdings (00002) HK$5.9 billion -4% CLP reported a slip in 1H17 profit, owing to weaker earnings from its PRC and Australian operations. -1.9% HKEx (00388) HK$3.5 billion +17% HKEx reported decent earnings growth in the first half on a 10% rise in revenue and effective cost control. -7.2% MTRC (00066) HK$7.5 billion +46% MTRC reported strong earnings growth in 1H17 on robust gains on property development and investment property revaluation. Excluding these propertyrelated gains, its recurring profit fell 8% owing to losses from its newly operated railway lines. -3.4% PCCW (00008) HK$1.3 billion +49% PCCW reported a sharp 49% y-o-y rise in 1H17 net profit, largely thanks to gain from disposal of its UK broadband operation. +0.9% Wharf (Holdings) (00004) HK$8.4 billion +26% Underlying profit grew 22% y-o-y in 1H17, supported by robust earnings from property development. +1.8% Summary of US Economic News Indicator Change/Index Comments Productivity Q Non-farm productivity grew 0.9% in Q2 2017, up from a 0.1% rise in Q1 and slightly higher than market expectation of a 0.8% growth. Producer price index July 2017 Initial jobless claims week ended 5 th August % +4,000 PPI dipped 0.1% in July, bucking consensus forecast of a slightly 0.1% rise, which echoed the Fed s concerns over disinflation. Initial jobless claims surged 4,000 to 244,000, higher than market expectation of a rise to 241,000. 3

4 Forthcoming Important Announcements / Events 14th August 2017 (Monday) HK : China Suntien (00956) interim results Elec & Eltek (01151) interim results IPE Group (00929) interim results Midas (01021) interim results Modern Land (01107) interim results QHD Port (03369) interim results Ronshine China (03301) interim results Sunny Optical (02382) interim results TK Group (02283) interim results West China Cement (02233) interim results WH Group (00288) interim results Wheelock (00020) interim results US : No important announcement/event 15th August 2017 (Tuesday) HK : Anta Sports (02020) interim results Billion Industrial (02299) interim results Bloomage Biotech (00963) interim results CAR Inc (00699) interim results Champion REIT (02778) interim results Cheming Paper (01812) interim results China Everbright International (00257) interim results China Lilang (01234) interim results China Oceanwide (00715) interim results Datang Power (00991) interim results HAECO (00044) interim results Nexteer (01316) interim results Sany International (00631) interim results Sun Hung Kai Co (00086) interim results Tenfu (06868) interim results Texhong Textile (02678) interim results Value Partners (00806) interim results Yestar Health (02393) interim results Yip s Chemical (00408) interim results US : Retail sales July th August 2017 (Wednesday) HK : Asia Financial (00662) interim results Cathay Pacific Airways (00293) interim results CGM New Energy (01811) interim results China Aoyuan (03883) interim results China Dongxiang (03818) interim results China HK Bridge (02323) interim results China Resources Power (00836) interim results China SCE Property (01966) interim results Geely Automobile (00175) interim results Hopewell Holdings (00054) final results Hopewell Infrastructure (00737) final results Ju Teng (03336) interim results Kingdee (00268) interim results Longfor Properties (00960) interim results Techtronic Industries (00669) interim results Tencent (00700) interim results Towngas China (01083) interim results Yida China (03639) interim results US : Housing starts July 2017 FOMC minutes 4

5 Forthcoming Important Announcements / Events 17 th August 2017 (Thursday) HK : Unemployment & underemployment statistics May-Jul 2017 Asia Satellite (01135) interim results Beijing Capital Land (02868) interim results CEOVU (00798) interim results Aluminum Corp of China (02600) interim results China Grand Pharmaceutical (00512) interim results CR Asia (00831) interim results Daqing Dairy (01007) interim results Dasheng Agriculture Finance (01103) interim results Genting HK (00678) interim results Glorious Sun (00393) interim results Goldlion (00533) interim results KAZ Minerals (00847) interim results Parkson Group (03368) interim results Ping An (02318) interim results Ping An Securities (00231) interim results Stella (01836) interim results Swire Pacific (00019) interim results Swire Properties (01972) interim results TPV Technology (00903) interim results Transport International (00062) interim results Wynn Macau (01128) interim results YOFC (06869) interim results US : Initial jobless claims week ended 12 th August 2017 Industrial production July 2017 Index of leading economic indicators July 2017 Wal-Mart Stores Inc Q2 results 18 th August 2017 (Friday) HK : Baiyunshan (00874) interim results Bank of Chongqing (01963) interim results Bank of Qingdao (03866) interim results China Power Clean Energy (00735) interim results China Resources Gas (01193) interim results China Merchants Bank (03968) interim results CRRC Times Electric (03898) interim results Datang Renewables (01798) interim results Fit Hong Teng (06088) interim results Future Land (01030) interim results HEC Pharmaceutical (02336) interim results Huarong International Financial (00993) interim results Jinchuan (02362) interim results Jutal Oil Services (03303) interim results KB Laminates (01888) interim results Kingboard Chemical (00148) interim results Lenovo Group (00992) quarterly results Lifestyle Properties (02183) interim results Miramar Hotel (00071) interim results Phoenix TV (02008) interim results Road King Infrastructure (01098) interim results Shengjing Bank (02066) interim results Shenzhen Expressway (00548) interim results Sinopec SEG (02386) interim results SITC (01308) interim results Tian An (00028) interim results Tibet Water (01115) interim results Yuexiu Property (00123) interim results Zhaojin Mining (01818) interim results Zijin Mining (02899) interim results US : Consumer sentiment (preliminary) August

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