Industry Update. Deutsche Bank Markets Research. Industry. China Property. Property. Asia. Date 8 July 2016

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1 Deutsche Bank Markets Research Asia China Industry China Date Industry Update Wuxi tour takeaways: stable market expected for the rest of 2016 Experts expect stable market in 2H16 We hosted a property tour in Wuxi, visiting various property projects and meeting with local experts and sales teams. We found that sales volume in the city has been strong this year with the peak in March, although land oversupply in past years is helping to keep property prices stable. Experts and market participants expect sales volume for 2016 to be flat or to increase mildly. Amid strong sales momentum, the inventory period has declined from a peak of 20 months to 6-8 months. Like other Tier-2 cities, Wuxi s occupancy rates in commercial properties, office and retail, have been disappointing. Sales strengthen from late February The residential market in Wuxi in 2014 and 2015 was quite stable but suddenly turned active after Chinese New Year this year on the back of the central government's emphasis on inventory clearance. Its market recovery was about 9 months behind Tier-1 markets and about 3 months behind other core Tier-2 markets. Another driver of Wuxi s strong market has been the entrance of Suzhou investors. According to Centaline, this group of investors has accounted for about 35% of Wuxi s sales volume since February. Oversupply in past years now helping to keep prices stable Prices in the city have been stable so far this year, mainly due to oversupply of land in the previous few years. A spate of inventory clearance this year has restored the supply-demand balance in the property market. ASPs in Wuxi are about RMB8,500psm now, up from about RMB7,800psm at the end of last year. Binhu District has the highest ASPs in Wuxi at about RMB11,000psm. But they still lag Suzhou s ASPs, which are trending at about RMB20,000psm. Oversupply of office and retail space Within commercial properties, the office and retail segments are in significant oversupply. According to Centaline, the inventory period for offices is about 9 years. As a reference, the total stock of offices and retail available for presale is about 8msm, vs annual sales volume of about 800,000sqm. The municipal government has offered tax incentives to encourage enterprises to buy their own office buildings but this has had minimal impact. In the commercial projects we visited, we found that occupancy rates of offices as well as malls fall short of satisfactory. Policies are the key in the 2016 market outlook Experts have noted no signs of tightening in Wuxi up until now, unlike the recent tightening in Suzhou and Nanjing. According to Centaline, assuming no changes in policy, sales volume in Wuxi should be stable in 2H but is unlikely to go up further. Sales in Mar 2016 reached a historical high, then had MoM slowdowns in Apr, May and June. That said, YoY increases have been good. Management of Vanke, the city s market leader, expressed a similar view that sales volume will be stable or record mild growth in It expects it to be stable for the next 5-10 years. Iris Poon Research Associate (+852) iris.poon@db.com Top picks Tony Tsang Research Analyst (+852 ) tony.tsang@db.com China Jinmao (0817.HK),HKD2.19 Joy City (0207.HK),HKD1.08 Guangzhou R&F (2777.HK),HKD10.12 Longfor (0960.HK),HKD9.87 Source: Deutsche Bank Companies Featured China Jinmao (0817.HK),HKD2.19 Joy City (0207.HK),HKD1.08 Guangzhou R&F (2777.HK),HKD10.12 Longfor (0960.HK),HKD9.87 China Resources Land (1109.HK),HKD18.04 Sunac (1918.HK),HKD4.94 Agile (3383.HK),HKD4.41 Evergrande (3333.HK),HKD4.78 Yanlord Land (YNLG.SI),SGD1.12 China Vanke (2202.HK),HKD15.84 Sino Ocean (3377.HK),HKD3.23 Source: Deutsche Bank Sell Sell Sell Sell Hold Hold Deutsche Bank AG/Hong Kong Distributed on: 07/08/ :42:56GMT Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 057/04/2016.

2 China Wuxi tour takeaways Experts expect a stable market in 2H16 We hosted a property tour of Wuxi, visiting various property projects and meeting with local experts and sales teams. We found that sales volume in the city has been strong so far this year and had peaked in March. However, due to land oversupply in the past few years, property prices in the city have been stable. Experts and market participants expect sales volume for 2016 to be stable or increase mildly. As a result of strong sales momentum, the inventory period has declined from the peak of 20 months to 6-8 months now. For commercial properties, like many Tier-2 cities, occupancy rates for both offices and retail properties have been disappointing. Details of the projects we visited Meeting with Centaline Centaline, which entered Wuxi in 2006, has been in the city for 10 years. Recently, it added e-commerce operations. There are about 150 property agents in Wuxi. Most are local. The secondary market is quite small in Wuxi. The ratio of primary vs secondary market in terms of sales volume is about 6:1. Recently, both the property market and the land market have been very strong. The residential market in 2014 and 2015 was quite stable. The market suddenly became very strong after the Chinese New Year on the back of the central government's focus on inventory clearance. Another reason for the strong market has been the entrance of investors from Suzhou into the Wuxi property market. According to Centaline, about 35% of the sales volume since Feb 2016 has been contributed by investors from Suzhou. Mortgages in Wuxi are offered at 85-88% of the PBOC benchmark. In addition, mortgage approval now takes 1 week, compared with 1 month last year. ASPs in Wuxi are about RMB8,500psm now. ASPs at the end of last year were about RMB7800psm. At the moment, ASPs in Wuxi are cheaper than those in Suzhou. ASPs in Suzhou are now about RMB20,000psm. In Wuxi, ASPs are highest in Binhu District at about RMB11,000psm. Among the buyers, about 25% are first-time homebuyers, 30% first-time upgraders, and 15% second-time upgraders. The average age of first-time homebuyers is about 27-28, and the average age of first-time upgraders is about Inventory in 2015 was about 7msm, and inventory period was once as high as 20 months. Now, inventory is about 3.5msm, and inventory period is about 6 months. Up to this moment, there are no signs of tightening in Wuxi unlike the recent tightening in Suzhou and Nanjing. According to Centaline, assuming no changes in policy, sales volume in Wuxi should remain stable for 2H but is unlikely to go up further. In addition, sales in Mar 2016 reached a historical high, and have shown MoM slowdowns in Apr, May and June. That said, sales showed good YoY increases. Recently, developers have become more aggressive in land purchases. Page 2 Deutsche Bank AG/Hong Kong

3 China According to Centaline, Vanke and Greentown both provide good property management services. Centaline believes projects with good property management command better pricing. On commercial properties, there is a significant oversupply in office and retail properties. According to Centaline, the inventory period for offices is about 9 years. As a reference, the total stock of offices and retail available for presale is about 8msm, vs annual sales volume of about 800,000sqm. The municipal government offers tax incentives to encourage enterprises to buy their own office buildings but this has had a minimal impact. Hang Lung - Center 66 The project is in the Chongan District CBD. The mall is located at the intersection of two subway lines in Wuxi. It is connected to the subway station, and at the connection point, daily people traffic is about 10,000 during weekdays and 40,000 during weekends. Lettable area is about 51,000sqm. Efficiency is about 50%. Overall occupancy is now about 80%, so vacancy is about 20% but that 20% includes space (about 11% of total) reserved for the construction of office tower 2. Excluding this reserved space, average occupancy is about 90%. On weekdays, people traffic flow is about 38,000 per day, and on weekends, about 42,000 per day. Overall retail sales have been up slightly YoY YTD. We visited the mall at about 1pm on a weekday and saw a good crowd of shoppers on B1 floor, which has a good number of F&B outlets (e.g. Starbucks, Ichido, Xin Wang Tea Restaurant), supermarket (Ole) and fashion brands (e.g. Uniqlo). The 1st floor consists mainly of international brands and Apple Shop. We also saw a good crowd of shoppers on the first floor. The 6th floor consists mainly of F&B outlets (Din Tai Fung, Xin Wang Restaurant, South Beauty, Saigon Funyo), bookstore (Popular) and saloon (Tony Studio). In office tower 1, average rent is about RMB3.5-4psm per day. Wharf - IFS Located in the Nanchang District, the project is a 339m mega-tower project that includes offices, hotel, and 800 car parking spaces. Offices are located on 5/F-65/F, and a Macro Polo hotel is planned for 79-88F. The office spaces are divided into four zones: Zone 1 in 8-15F, Zone 2 in 16-30F, Zone 3 in 35-49F, and Zone 4 in 51-66F. For now, Zone 1 and Zone 4 have been put on the market to be leased. It was completed in 2013 and leasing started in The total GFA of offices is 142,000sqm. About 40,000sqm have been leased or about 25% of the office space has been leased. The average rent is about RMB3psm per day. The average lease period is 3 years. Some tenants like to lease for longer terms like 5 years; those leases will have a rent increase in the 3rd or 4th year. The occupancy level is not high now, but the company is taking a long-term view on the project. Deutsche Bank AG/Hong Kong Page 3

4 China In 2016, the financial sector has not been doing that well, hence there has been a wave of tenant exits. Next door is another new office building, Maoye Building, with GFA of about 110,000sqm. Rents are about 10-15% cheaper than IFS's. Occupancy is only about 15%. Wanda - Binhu Wanda Plaza The mall opened in The targets for 2016 included total rental income of RMB149mn. Total target retail sales value is about RMB1.5bn in 2016, which includes RMB440mn from department stores. Total retail GFA is 93,000sqm, including 19,000sqm of walking street space. For Wanda department store, the target business revenue is about RMB438mn, and the target profit is about RMB4.8mn. Daily traffic flow is about 55,000 for weekdays and 70,000 for weekends. The target occupancy cost to retail sales ratio for non-department stores is about 14% for Wuxi has four Wanda Plazas, among which Binhu Wanda Plaza has the best location. Meeting with Vanke local management Normally annual sales value in Wuxi is about RMB50bn with GFA of 6msqm. However, sales volume in 6M16 exceeded 3msm and local management is expecting annual sales volume of 7-8msqm. Prices in the city have been stable this year so far, mainly due to the oversupply of land in the previous few years. After inventory clearance this year, the supply-demand balance in the property market has been restored. Inventory period level in the city dropped from the peak value of months to 7-8 months at the moment. The local management staff added that property prices go up significantly when the inventory period is shorter than 6 months. This is mainly because the number of inventory units that are accepted and bought by the market would be less than the total number of available units, since some units cannot be sold. The market recovery has begun since Mar 2016, about 9 months behind the Tier-1 cities and about 3 months behind other core Tier-2 cities. And as in other cities, sales volume has started to normalize since April but the magnitude of decline in Wuxi is not as significant as in Tier-1 and core Tier-2 cities. The market performance in Wuxi is expected to be stable over the year. Investors in the city are mainly from Suzhou, because prices in Wuxi are significantly lower than those in Suzhou after Suzhou s rapid prices increases during Page 4 Deutsche Bank AG/Hong Kong

5 China The city s population is about 4m or about 6-7m if suburban areas are included. However, management believes population growth will not result in a strong market like in Tier-1 and core Tier-2 cities. Instead, the market would be driven by upgrading demand and hence stay stable in the next 5-10 years. Vanke s market share in the city is about 7% now and the developer is targeting to achieve 20% in three years. Growth would be both organic and via M&As. R&F Royal Territory The project is located in the Taihu New Town area in Binhu District, directly north of local government offices. The new town has been planned for about ten years and the city s government has relocated there for about 3 years. Land area of the project is about 111kpsm and aboveground GFA is about ksqm. 24 buildings provide a total of 1,414 units. Total car parking spaces in the project are 2,232. Currently phase 1 of the new CBD in Taihu New Town has commenced operations and many leading financial services companies have moved in. Phase 2 will be delivered in 2017 and phase 3 is under construction. Overall 60% of the property buyers are local citizens. Expected ASPs in the upcoming launch are about RMB18k psm (fully fitted) and RMB6k psm for standard decoration. ASPs in the first launch (end-2014) of mid-rise units were 13-16k psm (fully fitted), then went up to RMB17-18k psm. Those of villas were RMB22-24k psm (bare shell) then later rose to RMB27-28k psm. About 800 units have been launched and most of these have been sold. Deutsche Bank AG/Hong Kong Page 5

6 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jan-06 Jun-06 Dec-06 May-07 Nov-07 Apr-08 Oct-08 Mar-09 Sep-09 Feb-10 Aug-10 Jan-11 Jul-11 Dec-11 Jun-12 Nov-12 May-13 Nov-13 Apr-14 Oct-14 Mar-15 Jan-06 Jun-06 Dec-06 May-07 Nov-07 Apr-08 Oct-08 Mar-09 Sep-09 Feb-10 Aug-10 Jan-11 Sep-15 Feb-16 Jul-11 Dec-11 Jun-12 Nov-12 May-13 Nov-13 Apr-14 Oct-14 Mar-15 Sep-15 Feb-16 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 China A look at valuations Figure 1: China Prop Disc to NAV (since 2006) 40% Figure 2: China Prop Disc to NAV (MktCap weighted) 40% 20% 20% 0% -20% -40% -60% 0% -20% -40% -60% -80% -80% Sector Avg Discount to NAV Mean +1SD -1SD Source: Bloomberg Finance LP, Deutsche Bank, Sector Avg Disc to NAV (MktCap Wtd) Mean +1SD -1SD Source: Bloomberg Finance LP, Deutsche Bank, Figure 3: China Prop Sector P/E (Since 2006) 45.0x 40.0x 35.0x 30.0x 25.0x 20.0x 15.0x 10.0x 5.0x 0.0x Figure 4: China Prop Sector P/E (MktCap weighted) 40.0x 35.0x 30.0x 25.0x 20.0x 15.0x 10.0x 5.0x 0.0x Sector Avg P/E Mean +1SD -1SD Source: Bloomberg Finance LP, Deutsche Bank, Sector Avg P/E (MktCap Wtd) Mean +1SD -1SD Source: Bloomberg Finance LP, Deutsche Bank, Figure 5: China Prop Sector P/B (Since 2006) 4.5x 4.0x 3.5x 3.0x 2.5x 2.0x 1.5x 1.0x Figure 6: China Prop Sector P/B (MktCap weighted) 6.0x 5.0x 4.0x 3.0x 2.0x 0.5x 0.0x 1.0x 0.0x Sector Avg P/B Mean +1SD -1SD Sector Avg P/B (MktCap Wtd) Mean +1SD -1SD Source: Bloomberg Finance LP, Deutsche Bank, Source: Bloomberg Finance LP, Deutsche Bank, Page 6 Deutsche Bank AG/Hong Kong

7 China A look at valuations Figure 7: China property valuation table DB Trade Report Mkt Cap 12M Daily T/O 8 Jul Target Implied Est. NAV EPS PE(x) Company Ticker Rating Ccy Ccy USDm USDm Price Price Upside NAV Disc 15A 16E 17E 15A 16E 17E Covered Wanda 3699 HK Hold HKD CNY 27, % % CSCEC CH CNY CNY 24, % % China Vanke - A CH Sell CNY CNY 30, % % China Vanke - H 2202 HK Hold HKD CNY 30, % % CR Land 1109 HK HKD HKD 16, % % Poly - A CH CNY CNY 16, % % Evergrande 3333 HK Sell HKD CNY 8, % % NA NA NA Country Garden 2007 HK Sell HKD CNY 9, % % Gemdale CH Sell CNY CNY 7, % % Longfor 960 HK HKD CNY 7, % % GLP GLP SP SGD USD 6, % % CSCI 3311 HK HKD HKD 5, % % Shimao 813 HK Sell HKD CNY 4, % % Sino-Ocean 3377 HK Hold HKD CNY 3, % % R&F 2777 HK HKD CNY 4, % % China Jinmao 817 HK HKD HKD 3, % % BJ North Star - H 588 HK HKD CNY 1, % % BJ North Star - A CH CNY CNY 1, % % Joy City 207 HK HKD CNY 1, % % KWG 1813 HK Hold HKD CNY 1, % % Yuexiu 123 HK Sell HKD CNY 1, % % Agile 3383 HK Sell HKD CNY 2, % % Sunac 1918 HK Sell HKD CNY 2, % % Greentown 3900 HK HKD CNY 1, % % Yanlord YLLG SP Sell SGD CNY 1, % % Kaisa 1638 HK Hold HKD CNY 1,033 NA % % NA NA Central China 832 HK HKD CNY % % Not Rated SOHO China 410 HK NR HKD CNY 2, NA NA NA NA Hui Xian REIT HK NR CNY CNY 2, NA NA NA NA Shui On 272 HK NR HKD CNY 2, NA NA NA NA Hopson 754 HK NR HKD HKD 1, NA NA NA NA CIFI 884 HK NR HKD CNY 1, NA NA NA NA Poly 119 HK NR HKD HKD NA NA NA NA Greenland HK 337 HK NR HKD CNY NA NA NA NA Glorious 845 HK NR HKD CNY NA NA NA NA BC Land 2868 HK NR HKD CNY 1, NA NA NA NA Yuzhou 1628 HK NR HKD CNY 1, NA NA NA NA Powerlong 1238 HK NR HKD CNY NA NA NA NA Fantasia 1777 HK NR HKD CNY NA NA NA NA C C Land 1224 HK NR HKD HKD NA NA NA NA NA NA NA Aoyuan 3883 HK NR HKD CNY NA NA NA NA Minmetals 230 HK NR HKD HKD NA NA NA NA NA NA Far East Global 830 HK NR HKD HKD NA NA NA NA NA NA NA E-House EJ US NR USD USD NA NA NA NA NA NA Overall average -42% Source: Deutsche Bank estimates, Company data, Bloomberg Finance LP Consensus estimates for companies NR Deutsche Bank AG/Hong Kong Page 7

8 China Figure 8: China property valuation table (continued) EPS growth % BVPS PB(x) DPS Dividend yield % Net gearing % Company Ticker 15A 16E 17E 15A 16E 17E 15A 16E 17E 15A 16E 17E 15A 16E 17E 15A 16E 17E Covered Wanda 3699 HK CSCEC CH China Vanke - A CH China Vanke - H 2202 HK CR Land 1109 HK Poly - A CH Evergrande 3333 HK Country Garden 2007 HK Gemdale CH Longfor 960 HK GLP GLP SP NA CSCI 3311 HK Shimao 813 HK Sino-Ocean 3377 HK R&F 2777 HK China Jinmao 817 HK BJ North Star - H 588 HK BJ North Star - A CH Joy City 207 HK KWG 1813 HK Yuexiu 123 HK Agile 3383 HK Sunac 1918 HK Greentown 3900 HK Yanlord YLLG SP Kaisa 1638 HK NA NA NA NA NA NA Central China 832 HK Not Rated SOHO China 410 HK Hui Xian REIT HK Shui On 272 HK Hopson 754 HK NA NA NA NA NA NA CIFI 884 HK Poly 119 HK Greenland HK 337 HK Glorious 845 HK NA NA BC Land 2868 HK Yuzhou 1628 HK Powerlong 1238 HK NA NA NA Fantasia 1777 HK C C Land 1224 HK NA NA NA NA NA NA NA NA NA 26.7 NA NA Aoyuan 3883 HK NA NA Minmetals 230 HK -40 NA NA NA NA NA NA NA NA NA NA NA Far East Global 830 HK NA NA NA NA NA NA NA NA NA NA NA NA E-House EJ US 10 NA NA NA NA NA NA NA Overall average Source: Deutsche Bank estimates, Company data, Bloomberg Finance LP Consensus estimates for companies NR Page 8 Deutsche Bank AG/Hong Kong

9 China Appendix 1 Important Disclosures Additional information available upon request Disclosure checklist Company Ticker Recent price* Disclosure China Jinmao 0817.HK 2.20 (HKD) 7 Jul 16 NA China Resources Land 1109.HK (HKD) 7 Jul 16 NA China Vanke 2202.HK (HKD) 7 Jul 16 6,9 *Prices are current as of the end of the previous trading session unless otherwise indicated and are sourced from local exchanges via Reuters, Bloomberg and other vendors. Other information is sourced from Deutsche Bank, subject companies, and other sources. For disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this research, please see the most recently published company report or visit our global disclosure look-up page on our website at Important Disclosures Required by U.S. Regulators Disclosures marked with an asterisk may also be required by at least one jurisdiction in addition to the United States. See Important Disclosures Required by Non-US Regulators and Explanatory Notes. 6. Deutsche Bank and/or its affiliate(s) owns one percent or more of any class of common equity securities of this company calculated under computational methods required by US law. Important Disclosures Required by Non-U.S. Regulators Please also refer to disclosures in the Important Disclosures Required by US Regulators and the Explanatory Notes. 6. Deutsche Bank and/or its affiliate(s) owns one percent or more of any class of common equity securities of this company calculated under computational methods required by US law. 9. Deutsche Bank and/or its affiliate(s) owns one percent or more of any class of common equity securities of this company calculated under computational methods required by India law. For disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this research, please see the most recently published company report or visit our global disclosure look-up page on our website at Analyst Certification This report covers more than one security and was contributed to by more than one analyst. The views expressed in this report accurately reflect the views of each contributor to this compendium report. In addition, each contributor has not and will not receive any compensation for providing a specific recommendation or view in this compendium report. This report and report accurately covers reflect more than the personal one security views and of each was prepared by more than one about analyst. the subject The views issuers expressed covered in by this compensation the securities for providing of those issuers. specific In recommendation addition, the undersigned or view in lead this analysts report. Foo have Leung/Iris not and will Poon not receive any each, The issuers compensation views and expressed the for securities providing in this of report a those specific issuers. accurately recommendation In addition, reflect the the or personal undersigned view in views this report. lead of the analyst Foo undersigned Leung/Iris has not lead and Poon analyst will not about receive the any subject Deutsche Bank AG/Hong Kong Page 9

10 Security Price Security Price China Historical recommendations and target price: China Jinmao (0817.HK) (as of 7/7/2016) 3.50 Previous Recommendations Strong Market Perform Underperform Not Rated Suspended Rating Current Recommendations Hold Sell Not Rated Suspended Rating 0.50 *New Recommendation Structure as of September 9, Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Date Oct 15 Jan 16 Apr 16 **Analyst is no longer at Deutsche Bank 1. 11/08/2014:, Target Price Change HKD3.88 Tony Tsang 4. 25/08/2015:, Target Price Change HKD3.40 Tony Tsang 2. 26/03/2015:, Target Price Change HKD3.92 Tony Tsang 5. 22/03/2016:, Target Price Change HKD3.25 Tony Tsang 3. 30/07/2015:, Target Price Change HKD3.72 Tony Tsang Historical recommendations and target price: China Resources Land (1109.HK) (as of 7/7/2016) Previous Recommendations Strong Market Perform Underperform Not Rated Suspended Rating Current Recommendations Hold Sell Not Rated Suspended Rating 5.00 *New Recommendation Structure as of September 9, Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Date Oct 15 Jan 16 Apr 16 **Analyst is no longer at Deutsche Bank 1. 30/12/2014:, Target Price Change HKD25.59 Tony Tsang 6. 13/05/2015:, Target Price Change HKD31.64 Tony Tsang 2. 22/03/2015:, Target Price Change HKD25.94 Tony Tsang 7. 02/08/2015:, Target Price Change HKD30.01 Tony Tsang 3. 23/03/2015:, Target Price Change HKD26.50 Tony Tsang 8. 24/08/2015:, Target Price Change HKD28.37 Tony Tsang 4. 26/04/2015:, Target Price Change HKD30.35 Tony Tsang 9. 21/03/2016:, Target Price Change HKD28.67 Tony Tsang 5. 04/05/2015:, Target Price Change HKD32.30 Tony Tsang Page 10 Deutsche Bank AG/Hong Kong

11 Security Price China Historical recommendations and target price: China Vanke (2202.HK) (as of 7/7/2016) Previous Recommendations Strong Market Perform Underperform Not Rated Suspended Rating Current Recommendations Hold Sell Not Rated Suspended Rating *New Recommendation Structure as of September 9, Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Date Oct 15 Jan 16 Apr 16 **Analyst is no longer at Deutsche Bank 1. 18/08/2014: Downgrade to Hold, Target Price Change HKD15.15 Jason Ching 2. 03/11/2014: Upgrade to, Target Price Change HKD18.00 Jason Ching 4. 31/03/2015:, Target Price Change HKD19.80 Jason Ching 5. 28/12/2015: Downgrade to Sell, Target Price Change HKD18.70 Jason Ching 3. 07/12/2014:, Target Price Change HKD19.10 Jason Ching 6. 15/03/2016: Upgrade to Hold, Target Price Change HKD19.00 Jason Ching Equity rating key : Based on a current 12- month view of total share-holder return (TSR = percentage change in share price from current price to projected target price plus pro-jected dividend yield ), we recommend that investors buy the stock. Sell: Based on a current 12-month view of total shareholder return, we recommend that investors sell the stock Hold: We take a neutral view on the stock 12-months out and, based on this time horizon, do not recommend either a or Sell. Newly issued research recommendations and target prices supersede previously published research. Regulatory Disclosures 1.Important Additional Conflict Disclosures Equity rating dispersion and banking relationships % 16 % 36 % 11 % 15 % 20 % Hold Sell Companies Covered Asia-Pacific Universe Cos. w/ Banking Relationship Aside from within this report, important conflict disclosures can also be found at under the "Disclosures Lookup" and "Legal" tabs. Investors are strongly encouraged to review this information before investing. 2.Short-Term Trade Ideas Deutsche Bank equity research analysts sometimes have shorter-term trade ideas (known as SOLAR ideas) that are consistent or inconsistent with Deutsche Bank's existing longer term ratings. These trade ideas can be found at the SOLAR link at Deutsche Bank AG/Hong Kong Page 11

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13 China loss. The longer the maturity of a certain cash flow and the higher the move in the discount factor, the higher will be the loss. Upside surprises in inflation, fiscal funding needs, and FX depreciation rates are among the most common adverse macroeconomic shocks to receivers. But counterparty exposure, issuer creditworthiness, client segmentation, regulation (including changes in assets holding limits for different types of investors), changes in tax policies, currency convertibility (which may constrain currency conversion, repatriation of profits and/or the liquidation of positions), and settlement issues related to local clearing houses are also important risk factors to be considered. The sensitivity of fixed income instruments to macroeconomic shocks may be mitigated by indexing the contracted cash flows to inflation, to FX depreciation, or to specified interest rates these are common in emerging markets. 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