Investment Daily. Market Overview. 24 March The Hang Seng Index is expected to trade at 20,400 to 20,800 today. Technical Analysis

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1 24 March 2016 Major Market Indicators Mkt. Turn.(mn) 63,800 65,400 80,100 Stock Advances Stock Declines HSI 20,615 20,666 20,684 Change HSI Turn.($bn) HSCEI 8,873 8,900 8,928 Change HSCEI Turn.($bn) HSI Technical Indicators 10-days MA 20, days MA 19, days MA 23, days RSI Primary resistance 21,000 Primary support 20,068 HSCEI Technical Indicators 10-days MA 8, days MA 8, days MA 10, days RSI Primary resistance 9,400 Primary support 8,638 HSI Futures Mar 20,645 20,607 20,675 Volume 105,545 92,358 88,244 Open interests 98, , ,647 Apr 20,630 20,602 20,666 Volume 18,944 9,114 4,630 Open interests 24,474 11,299 6,422 Market Overview The Hang Seng Index is expected to trade at 20,400 to 20,800 today Before the Easter holiday, equities traded within narrow range. HSI closed at 20,615 points, decreasing 51 points. HSCEI closed at 8,873 points, dropping 26 points. Turnover for the whole day was $63.8 billion. Henan (1044) faced selling pressure after releasing the annual result. The price dropped over 4% which is the worst blue chip performer. Geely (175) will introduce new model of SUV at this week, supporting the stock price rose 10%, however, other peers remained flat. US oil inventory increased much above expectation. Besides, recent Federal Official members turned more supportive on interest rate hike, US dollar move higher. As a result, oil price dropped near 4% on Wednesday, oil stocks also turned weak. Besides, Nike share price fell obviously as its latest results announcement is below forecast. The Dow and the Nasdaq closed 80 points (to 17,503) and 53 points (to 4,769) lower respectively. Local blue chips performed weak in the US ADR market, we expect HK market to open lower today. However, ahead of Easter long holiday, we expect investors to stay sideline. Initial resistance is expected to see at 100 Day SMA. Technical Analysis Hang Seng Index 14-day RSI is located above 60, which was the RSI peak in the last rebounding wave. Adding that the index has been rebounding over 10% from the trough of the declining wave, the upside potential for the index may become smaller. However, since other indicators like MACD doesn t deteriorate, it s not appropriate to look too bearish to the market. One thing worth noting is that the index has been closing at around 20,600 points for the fourth trading day. It needs to be further observed if the index is forming a rounding top. The first resistance is 21,000 points, and the next resistance is 21,400 points. In addition, the first support will be the middle of the Bollinger Band 20,068 points, and the next support is the bottom of the Band 19,086 points. HSI Chart HSCEI Futures Mar 8,892 8,883 8,927 Volume 128,416 78,444 88,977 Open interests 238, , ,448 Apr 8,898 8,891 8,936 Volume 62,629 15,500 9,507 Open interests 95,146 51,874 41,071 Sources:etnet

2 Daily Focus China Telecom(0728.HK): Net Profit Slightly Better than Expectation China Telecom(0728.HK) FY15 net profit rose 13.4% yoy to Rmb20.1bn. Its EPS is Rmb0.25 while final DPS stayed flat at HK$ Stock Info China government has launched several policies on telecom sector, including Closed price 3.91 mobile data rollover as well as lower broadband unit transmission fee. Together Forward P/E (X) 12.7 with the previous business tax to value-added tax policy, its FY15 service revenue rose 2% yoy to Rmb293.3bn (mobile revenue rose 3.5% yoy to Rmb142.6bn). China government implemented mobile data rollover policy in 4Q15, it has a Rmb2bn revenue impact on the Group in It is expected that it will have higher impact in Dividend yield (%) week high week low RSI China Telecom net mobile addition is 12.28mn (to 198mn) in Of which 4G net addition was 51.38mn (to 58.46mn). China Telecom said that 2016 target 4G net additions to exceed 60mn monthly ARPU for 4G user is Rmb78, while overall is Rmb With anticipated much higher base of 4G, 4G monthly ARPU is likely to decline while China Telecom will seek to keep overall ARPU unchanged. China Telecom 2015 capex Rmb109.1bn, rose 41.9% yoy, it is mainly due to 4G and optical fibere investment. The Group capex will lower to Rmb97bn in Thanks to anticipated low single digit subscribers growth, as well as ARPU turned stable, We expect China Telecom 2016 net profit to increase at mid single digit. Current valuation is 12.7x FY16 price to earnings ratio, while dividend yield is 2.4%, its attractiveness slightly inferior to China Mobile. AP Rentals(1496.HK): IPO Brief AP Rentals is a leading equipment rental service company in with the capability of providing a wide range of construction, E&M engineering, Event and entertainment equipment and related value-add services. The Group s rental fleet comprises its owned equipment fleet and equipment which they rent from suppliers. The Group was the third largest in construction equipment rental industry in (3.4% share) and the largest in Macau(4.2% share). In fact, the top five market players construction equipment rental industry in and Macau accounted for 20.6% and 14.3% market share each. The Group has participated in many large scale projects including some of the Ten major infrastructure projects in. Industry sector IPO Brief Equipment Rental Service Issue price (HK$) Total share offer size (HK$000mn) Historical P/E(x) Sponsors Dealing of shares Apr 8 BOSC International The Group offered a wide range of equipment and high quality comprehensive rental services. Its rental equipment covers power and energy equipment, high-reach equipment and material handling equipment. In fact, the Group has a very strong position for power and energy equipment as well as high-reach equipment in and Macau. More than 60% of the Group s rental income from rented equipment. Of which, Kanamoto is the Group s major supplier, 24 March

3 while hiring expenses paid to Kanamoto accounted for 90% of its total hiring expenses. In fact, Kanamoto is one of the leading construction equipment rental groups in Japan. Although AP Rentals overall revenue achieved 20% annual growth from FY13 to FY15, its net profit just rose at a much lower rate of 10% yoy. Besides, HK public infrastructure project pace is likely to delay, which might hurt the Group s future revenue growth. We believe that the Group is not very sttractive, we rate Neutral. Get Nice Fin (1469) IPO brief Get Nice Fin is a financial service provider in, which is spin-off from Get Nice Holdings (64). The Company targets niche market segment of high-net-worth individuals. The financial services provided including (i) broking services, (ii) securities margin financing services and (iii) corporate finance advisory services. At the eight months ended 30 November, securities margin financing services and broking services accounted 63.6% and 35.7% of total revenue. Both revenue and net profit showed obvious growth of the Company in the last few fiscal year. For the eight months ended 30 November, the revenue and profit Industry sector IPO Brief Financial Service Issue price (HK$) Total share offer size (HK$000mn) Historical P/E(x) Sponsors Southwest Securities Dealing of shares Apr 8 was 348 million and 232 million respectively, which already exceed the annual result of FY2015. As the stock market was burning hot at the middle of 2015, stimulating the revenue from securities margin financing services and broking services. However, the trading activities declined of stock market Since November of 2015, the revenue of broking services decreased. The Company still maintained a consistent interest income due to slightly increasing of outstanding margin loans. The Company operates securities broking business via the wholly-owned subsidiary Get Nice Securities. It belongs to Category C Exchange Participant (firms ranked after 65 in terms of share of total trading turnover). For the nine months ended 30 September 2015, Get Nice Securities ranked 111 out of 496 active Stock Exchange Participants. The profit of Get Nice Fin grew fast in the past few fiscal years. Notwithstanding, the trading turnover of stock market slid from the beginning of It exerted negative influence to the Company s broking services. We concern the interest income from securities margin financing services may experience a slower growth in the coming future. Also, as Get Nice Securities belongs to the Category C Exchange Participant, it faces vigorous competition. We expect the broking services are difficult to have definite growth. In terms of valuation, based on its IPO price of HK$1-1.4, its historical P/E was times and P/B was 2.1 to 2.9 times. The average P/E and P/B of peers are 19x and 1.4x respectively, so the valuation is not attractive. Thus, we rate Neutral March

4 Shanghai- Stock Connect Statistics Northbound Southbound RMB(bn) HKD(bn) Balance Balance as % of Quota Amount Top 10 Most Actively Traded Stocks (Northbound) Stock Name Stock code Buy Trades Sell Trades Turnover HUNDSUN TECHNOLOGIES ,090, ,398, ,488,571 SHENZHEN KINGDOM TECHNOLOGY ,635, ,058, ,694,068 CHIFENG JILONG GOLD MINING ,163, ,425, ,589,057 ZHEJIANG CHINA COMMODITIES CITY ,293,343 77,697, ,990,941 INDUSTRIAL BANK ,364, ,695, ,059,225 PING AN INSURANCE ,153,984 87,547, ,701,530 CITIC SECURITIES ,093,711 45,843, ,937,059 KWEICHOW MOUTAI ,310,054 24,928, ,238,598 JILIN YATAI ,214,683 1,472, ,687,469 CHINA STATE CONSTRUCTION ENGINEERING ,194,606 20,463, ,658,163 Sources: HKEx Top 10 Most Actively Traded Stocks (Southbound) Stock Name Stock code Buy Trades (HKD Sell Trades (HKD) Turnover (HKD) CHINA ZHONGWANG ,196,600 48,387,780 90,584,380 CHINA TAIPING ,924,996 22,469,316 69,394,312 HKEX 388 9,822,790 49,698,580 59,521,370 KINGSOFT ,869,040 35,320,940 56,189,980 GAC GROUP ,492,560 7,076,920 51,569,480 GEELY AUTO ,050,650 39,793,600 50,844,250 CHINA SHENHUA ,365,410 11,348,950 48,714,360 COGOBUY ,238, ,780 47,896,200 CCB ,357,370 7,416,900 46,774,270 ICBC ,261,950 19,276,730 41,538,680 Other Statistics Ten Most Actively Traded Stocks Stock Name Code Change Closed Price Turnover(Million) TENCENT % PING AN % CHINA OVERSEAS % CHINA MOBILE % CHINA LIFE % IMAX CHINA % HKEX % HSBC HOLDINGS % GEELY AUTO % CCB % March

5 Ten Short sell Stocks Stock Name Code Short Sell Turnover Short Sell Ratio TENCENT HK M 2.46B 22.61% CHINA LIFE HK M 1.11B 19.98% HENGAN INT'L HK M M 36.29% HSBC HOLDINGS HK M M 25.54% CCB HK M M 29.21% PING AN HK M 1.30B 16.03% CNOOC HK M M 40.94% CHINA MOBILE HK M 1.19B 16.22% AIA HK M M 21.08% CHINA OVERSEAS HK M 1.28B 11.68% Source: AAStocks Economic Calendar Date Country Event Survey Prior Mon United States Feb Existing Home Sales 5,310,000 5,470,000 Japan Market closed: Vernal Equinox Day Henderson Land(12) China Rev Power (836) CSPC Pharma(1093) China Rev Land (1109) Haier Elec(1169)Annual Result Tue Shenzhen Int'l(152) Geely(175) Tingyi(322) Huaneng Power(902) Long Yuan(916) Hengan(1044) China Coal(1898) Mengniu(2319) China State Con (3311)Annual Result Wed United States Feb New Home Sales 510, ,000 Eurozone Mar Consumer Confidence China EB(165) TVB(511) Kerry Log(636) China Telecom(728) Petrochina(857) Anhui Conch(914) Citic Bank(998) AAC Tech (2018) China Life(2628) Wasion Group (3383) GEL-Poly Energy(3800) Citic Sec(6030)Annual Result Thur United States Feb Durable Goods Orders -2.5% 4.7% Initial Claims 265,000 Mar Markit US Manufacturing PMI Eurozone Mar Markit Eurozone Manufacturing PMI Citic(267) Conch Venture(586) CNOOC (883) Huadian Power(1071) BAIC Motor(1958) Greatwall Motor(2333) CGS(6881)Annual Result Fri United States, Market closed: Good Friday Japan Feb Natl CPI 0.3% 0.0% Sinopharm(1099) GAC Group(2238) CPIC(2601) Zijin(2899) CNBM(3323) Greentown (3900)Annual Result Disclaimer Some of KGI Asia Ltd. equity research and earnings estimates are available electronically on KGIEWORLD.COM. Please contact your KGI representative for information. The information and opinions in this report are those of KGI Asia Ltd. internal research activity. KGI Asia Ltd. does not make any representation or warranty, express or implied, as to the fairness, accuracy, completeness or correctness of the information and opinions contained in this report. The information and opinions contained in this report are subject to change without any notice. No person accepts any liability whatsoever for any loss however arising from any use of this report or its contents. This report is not to be construed as an invitation or offer to buy or sell securities and/or to participate in any investment activity. This report is being supplied solely for informational purposes and may not be reproduced or published (in whole or in part) for any purpose without the prior written consent of KGI Asia Ltd.. Members of the KGI group and their affiliates may provide services to any companies and affiliates of such companies mentioned herein. Members of the KGI group, their affiliates and their directors, officers and employees may from time to time have a position in any securities mentioned herein March