Yum Cha 飲茶. March 5, 2018 TALKING POINT - REVIEW RESULTS OF STOCK CONNECT STOCK LIST RESEARCH NOTES. INDICES Closing DoD%

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1 Yum Cha 飲茶 INDICES Closing DoD% Hang Seng Index (1.5) HSCEI (1.8) Shanghai COMP (0.6) Shenzhen COMP (0.6) Gold BDIY Crude Oil, WTI(US$/BBL) Crude Oil, BRENT(US$/BBL) HIBOR, 3-M 1.1 (2.6) SHIBOR, 3-M RMB/USD 6.3 (0.2) DATA RELEASES DUE THIS WEEK March 5 National People s Congress March 5 Caixin Composite PMI Feb March 5 Caixin Services PMI Feb March 7 Foreign Exchange Reserves Feb March 8 Balance of Trade Feb March 8 Exports YoY Feb March 8 Imports YoY Feb March 9 Inflation Rate YoY Feb March 9 Inflation Rate MoM Feb March 9 PPI YoY Feb Source: Bloomberg March 5, 2018 TALKING POINT - REVIEW RESULTS OF STOCK CONNECT STOCK LIST Stocks to be added to the Stock Connect universe Market 2017E 3-month Ticker Price cap 2017E 2018E PBR dividend average daily Company name (HK$m) PER (x) PER (x) (x) yield (%) turnover 87 HK Equity SWIRE PACIFIC B , n.a. 48,566, HK Equity CHINA HONGQIAO , ,283, HK Equity CHINA LIT , n.a. 192,259, HK Equity LANDING INTL ,114 n.a. n.a n.a. 102,280, HK Equity YIXIN , n.a. - 64,944, HK Equity FUTURE LAND , ,239, HK Equity CMBC CAPITAL ,467 n.a. n.a n.a. 20,812, HK Equity KAISA GROUP , ,415, HK Equity CHINESE EST H ,502 n.a. n.a n.a. 21,443, HK Equity CRYSTAL INTL , ,371, HK Equity YUZHOU PPT , ,554, HK Equity HK&S HOTELS , ,542, HK Equity HOPSON DEV HOLD , ,731, HK Equity FIRST CAP GP ,175 n.a. n.a n.a. 11,929,840 Stocks to be removed from the Stock Connect universe Market cap (HK$m) 2017E dividend yield (%) 3-month average daily turnover Ticker Price 2017E 2018E PBR Company name PER (x) PER (x) (x) 2888 HK Equity STANCHART , ,641, HK Equity KINGSTON FIN ,988 n.a. n.a n.a. 60,792, HK Equity HUISHANG BANK , ,148, HK Equity GREAT EAGLE H , ,649, HK Equity VINDA INT'L , ,294, HK Equity GUORUI PPT ,687 n.a. n.a n.a. 2,014, HK Equity REGINA MIRACLE 6.8 8, ,079, HK Equity DC HOLDINGS ,397 n.a ,789, HK Equity GLOBAL BRANDS , n.a. 23,108, HK Equity VISION FAME ,250 n.a. n.a n.a. 6,066,714 Source: Bloomberg, CGIS Research Shanghai Stock Exchange released the updated stock list for the southbound stock connect last Friday. 14 stocks are added while 10 stocks are removed. As expected, new economy names such as China Literature (0772.HK) and Yixin (2858.HK) are included in the new addition list. The stock list will become effective today. Meanwhile, we expect Shenzhen Stock Exchange will also release the updated stock list for the southbound stock connect very soon. Analyst: Wong Chi-man, CFA RESEARCH NOTES CHINA SECURITIES SECTOR - The China securities sector was one of the most underperforming sectors in 2017 because of lacklustre trading volume, along with a more stringent regulatory environment. Since the deleveraging process in the economy is still ongoing and the regulatory environment is likely to remain stringent because of the potential restructuring of the regulators, the valuation of securities companies may be capped in the near term. However, as the valuation has already reached a multi-year low in terms of PBR, it reflects most of the negatives, in our view. Therefore, we have a BUY rating on GF Securities (1776.HK; GFS), Haitong Securities (6837.HK; HTS) and CITIC Securities (6030.HK; CITICS) on the back of the cheap valuations. Short-term catalysts include listing reforms and the official inclusion of A-shares in the MSCI Emerging Markets Index in mid WEEKLY SHORT SELLING ANALYSIS - Last Friday, the HKSFC released the aggregate short positions data for February 23. We analyzed which companies may be vulnerable to short-selling activity, based on the following three criteria: (i) the net change in short positions between February 15 and February 23; (ii) short positions as a percentage of free float; and (iii) the absolute amount of short positions. According to the results of our analysis, we believe China Coal (1898.HK) requires close monitoring, based on the latest short positions outstanding. On the other hand, we note that short positions in ENN Energy (2688.HK) and Pacific Basin (2343.HK) have dropped significantly. 1

2 RESEARCH NOTES CHINA CEMENT WEEKLY The average cement price (nationwide) decreased 2% to RMB387/tonne compared with the price level before the Chinese New Year (CNY) holiday. The regions with a decline of RMB20-50/tonne were mainly east China, south central China and southwest China. Cement demand remained at a low level during the week, as it takes time for construction activity to resume after the CNY holiday. The decline in cement prices is not a surprise, as it is a common practice to lower prices to stimulate downstream demand just after the CNY holiday. There is an increase in cement inventory because of weak demand during CNY, but the inventory level is likely to come down once more construction activity resumes in the next one to two weeks. Cement prices are expected to rebound in late March. SNIPPETS CHINA TMT HARDWARE: IPO OF FOXCONN INDUSTRIAL INTERNET According to Chinese news flow, CSRC will discuss Foxconn Industrial Internet s (FII) IPO on 8 Mar 2018, which is line with our previous discussion that FII s IPO is likely to kick off soon, with the whole process expected to be completed by the end of Apr 2018 (based on the current information, the IPO can be completed by end of Mar 2018 if the process goes smoothly). FII s IPO process is very smooth, as: a) Hon Hai hosted a shareholders meeting on 31 Jan 2018; b) FII posted the first draft of its prospectus on 9 Feb 2018 and received the CSRC's enquiries, c) FII replied to all of the CSRC's enquiries and posted its updated draft prospectus on 22 Feb 2018; and d) FII received the CSRC s discussion on its IPO on 8 Mar It took about a month from posting the draft prospectus to seeking CSRC s approval, which shows that the Chinese government is very supportive of FII s listing. FII reported turnover of RMB172.8bn, RMB272.7bn and RMB354.5bn in 2015, 2016 and 2017, respectively. FII also reported a net profit of RMB14.4bn, RMB14.4bn and RMB15.9bn in 2015, 2016 and 2017, respectively. There is limited information on the pricing and size of FII s IPO. According to Chinese new flows, the proceeds from the IPO are estimated at RMB27bn, and most of the proceeds will be used for investment in the Industrial Internet, high-performance computing data center construction, 5G & IoT solutions, smart manufacturing (R&D and capacity expansion), and procurement of networking equipment. Chinese news flow also suggests FII s market cap will be in the range of RMB300bn to RMB500bn. We expect more details on FII s IPO to be circulated after its gets approval from the CSRC, and we expect the market to search for proxies. Some investors may treat FII as an Apple-related name, so the IPO may boost sentiment on Apple suppliers. However, we believe that FII is a symbolic name regarding the investment theme of the Industrial Internet, which is an integration of several areas, including: a) cloud computing, b) high-end manufacturing, c) Big Data, and d) highprecision equipment. We note that MIIT posted a notice on its website on 24 Feb 2018 regarding forming an Industrial Internet Task Force to take charge of development of the industrial internet in China. We believe that FII s IPO will be used as a symbolic case for promoting the Chinese government s policy on the Industrial Internet. We reiterate our view that FII will be one of the largest IPOs in the A-share market and one of the largest listed companies after the completion of the IPO. We maintain the view that Industrial Internet is one of the hottest topics in the A-share market and that it will be a major investment theme in The potential beneficiaries are: a) machine makers such as Haitian [1882.HK], solution providers such as O-Net [0877.HK] and PentaMaster [1665.HK], IT solutions and cloud computing such as Kingdee [0268.HK], Kingsoft [3888.HK] and DC Holdings [0861.HK], and communications equipment such as O-Net [0877.HK] and ZTE [0763.HK]. For details, please refer to our previous discussion. 2

3 SNIPPETS CHINA TMT HARDWARE Shimge Pump Industry Group (Shimge Pump) [ CH] announced that it is in discussion with Transsion Holdings (Transsion) regarding an asset sale and swap transaction. According to its corporate website, Transsion, which was established in 2006, is a global company dedicated to providing popular mobile communication products for local consumers in emerging markets. Transsion's sales network covers Nigeria, Kenya, Tanzania, Ethiopia, Egypt, UAE(Dubai), Saudi Arabia, India, Pakistan, Indonesia, Vietnam, Bangladesh, etc. There are four brands under Transsion: TECNO, itel, Infinix and Spice. TENCO is the high-end brand, and itel is the low-end brand; Infinix is sold only through online channels. Transsion is now a leading player in the mobile industry in Africa, with a 38% market share in 2016, according to IDC. China IC Fund and Unigroup are Transsion shareholders, but they had less than a 1% stake each as of 30 Jun Transsion s business is classified into: a) hardware handsets, tablets, home appliances and lighting, b) platforms, and c) mobile business, especially searching, payment, social networking and mobile games in African markets. Since the market is focusing mostly on smartphones and the China market, HOXV (Huawei, Oppo, Xiaomi and Vivo) is really the focus of the market, so Transsion is not on investors radar. In terms of units, Transsion shipped 120m handsets in 2017 according to IHS, up from about 80m units in Among the 210m units shipped in 2017, about 90m were feature phones and 30m units were smartphones. According to industry news flow, Transsion s ASPs were about US$10-12 per feature phone and about US$60-70 per smartphone. The key to Transsion s success is the customization of functions, especially photo and sound quality for African markets. Shares of Shimge Pump will remain suspended until the details of its transaction with Transsion are released. After completion of the transaction, Transsion will be one of the few listed handset brands. We expect Transsion to provide a profit guarantee for 2018 and 2019, and the market is likely to search for proxies to Transsion. Based on industry information, Transsion s major suppliers are mostly A-share-listed names such as Holitech Technology [ CH] displays and camera modules; FPC and Huiding [ HK finger print sensors; OFilm [ CH] dual camera modules; and MediaTek and Sreadtrum processing units. We expect the market to seek more information on Transsion and its supply chain after Shimge Pump releases the details of the transaction. We will closely monitor the process and provide more information later. 3

4 Industry Note China Securities Sector Last Price TP Company Ticker Rating Wong Chi Man Head of Research (852) Mark Lau Research Analyst (852) CITICS 6030 HK BUY HTS 6837 HK BUY GFS 1776 HK BUY Company PER PBR ROAA ROAE (x) (x) (%) (%) CITICS HTS GFS Sources: Company, CGIS Research Updated as of March 2, 2018 FY2018E March 5, 2018 Short-term outlook remains unexciting but valuations at multi-year lows; Listing reforms a potential catalyst The China securities sector was one of the most underperforming sectors in 2017 because of lacklustre trading volume, along with a more stringent regulatory environment. Since the deleveraging process in the economy is still ongoing and the regulatory environment is likely to remain stringent because of the potential restructuring of the regulators, the valuation of securities companies may be capped in the near term. However, as the valuation has already reached a multi-year low in terms of PBR, it reflects most of the negatives, in our view. Therefore, we have a BUY rating on GF Securities (1776.HK; GFS), Haitong Securities (6837.HK; HTS) and CITIC Securities (6030.HK; CITICS) on the back of the cheap valuations. Short-term catalysts include listing reforms and the official inclusion of A-shares in the MSCI Emerging Markets Index in mid Trading volume remained subdued. Average daily turnover (ADT) in the A-share market was only RMB461bn in 2017, down 11% year on year, which largely explained the poor share price performance of securities companies last year. In 2M2018, ADT remained in roughly the same range as in 2017 (Figure 2). A substantial rebound in ADT in the near term seems unlikely because: (i) the authorities still emphasize the importance of the deleveraging process to reduce the risk to the overall financial system; and (ii) we are likely to see a major overhaul in the regulatory regime (i.e. CSRC, CBRC and CIRC) after the National People s Congress meeting in March. This limits the room for financial innovation before the reorganization is completed. Listing reform a potential catalyst. To improve the mix of listed companies in the A-share market, the authorities have become much more aggressive in the past few months in introducing more new economy companies in the A-share market. One of the most notable examples is the very fast IPO-review process for Foxconn Industrial Internet, which is expected to have a market cap of about RMB500bn. In addition, there are news reports about the potential introduction of CDR, which may allow Chinese ADRs and red chip companies to return to the A-share market without unwinding the VIE/WVR (weighted voting rights) structure. CSC Financial and CICC to be major beneficiaries of listing reforms. In 1H2017, the investment banking business accounted for 25.5% and 20.4% of the net revenue of CSC Financial (6066.HK) and CICC (3908.HK), respectively (Figure 3). They are likely to benefit from the listing reforms, if more new economy companies return to the A-share market. In fact, CICC is the lead underwriter for Foxconn Industrial Internet. Meanwhile, in our coverage universe, investment banking business accounted for 13.2% and 12.7% of the net revenue of GFS and HTS in 1H17, respectively. Multi-year low valuation; waiting for catalysts. CITICS, HTS and GFS are trading at 1.11x, 0.86x and 1.03x 2018E PBR, near multi-year lows (Figure 6-11). Their share price performance may remain unexciting in the near term because of the lacklustre ADT and the stringent regulatory environment. However, further downside risk should be limited, as we believe most of the negatives are reflected. More progress in listing reforms and the official inclusion of A-shares in the MSCI Emerging Markets Index are near-term catalysts. Given the very low valuation, currently we have a BUY rating on CITICS, HTS and GFS (Figure 5). 1

5 Figure 1: Peer valuations Company Ticker Rating China securities companies Sources: Bloomberg, CGIS Research Price (Local currency) Market cap (US$m) PER (x) PBR (x) ROE (%) ROA (%) E 2018E E 2018E E 2018E E 2018E CITIC 6030 HK Equity BUY , Haitong 6837 HK Equity BUY , China Galaxy 6881 HK Equity NR , Guangfa 1776 HK Equity BUY , HTSC 6886 HK Equity NR , CICC 3908 HK Equity NR , Everbright 6178 HK Equity NR , China Merchants 6099 HK Equity NR , China Securities 6066 HK Equity NR , Guotai Junan 2611 HK Equity NR , Simple average Figure 2: ADT of A-share market (RMB bn) Sources: WIND Info, CGIS Research Figure 3: Net revenue breakdown (1H17) CITIC Securities Haitong Securities GF Securities Huatai Securities China Galaxy Securities CICC Everbright Securities CMS CSC Financial GTJA Securities Ticker Net revenue breakdown Brokerage 21.4% 15.0% 20.1% 25.0% 36.5% 24.9% 31.4% 31.5% 27.9% 24.0% Investment banking 9.9% 12.7% 13.2% 8.3% 2.5% 20.4% 7.9% 17.3% 25.5% 11.8% Asset management 14.3% 7.1% 18.0% 14.0% 5.5% 5.3% 5.0% 9.8% 6.2% 8.0% Others 2.9% 0.9% 0.8% 0.7% 4.0% 12.7% 8.4% 3.6% 3.6% 0.9% Commission and fee income 48.4% 35.8% 52.1% 48.1% 48.5% 63.2% 52.7% 62.2% 63.1% 44.7% Net interest income 6.9% 13.6% 3.8% 21.2% 27.0% 0.6% 17.4% 16.3% 15.0% 25.8% Net investment gains 24.1% 36.0% 43.7% 29.7% 24.3% 37.4% 21.9% 22.4% 22.2% 28.5% Others 20.5% 14.6% 0.3% 1.0% 0.2% -1.1% 8.0% -0.9% -0.4% 1.0% Sources: Companies, CGIS Research 2

6 Figure 4: ECM league table of the A-share market (2017) Figure 5: Valuation summary Name of Brokerage Firm Gross Total (RMB m) Company HTS CITICS GFS CITIC Securities 700,010 Ticker 6837.HK 6030.HK 1776.HK CSC Financial 552,676 Rating BUY BUY BUY China Merchants Securities 405,790 Beta Guotai Junan Securities 376,352 CICC 328,333 Cost of equity 9.7% 9.4% 9.9% Tebon Securities Co. Ltd 281,129 Medium-term ROE 10.0% 10.1% 11.0% Haitong Securities 250,872 Growth rate 7% 7% 7% Everbright Securities 209,979 PBR = (ROE-g)/(COE-g) Huatai Securities 204,312 Target price GF Securities 190,619 Upside 29.8% 14.7% 32.6% BOC International 149,534 China Development Bank Securities 129,272 Source: CGIS Research Guosen Securities 123,971 Ping An Securities 121,701 Industrial Securities 108,586 Sources: WIND, CGIS Research 3

7 Figure 6: PBR range of CITICS Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 Rolling forward PBR (x) Sources: Bloomberg, CGIS Research Average +1 Standard deviation -1 Standard deviation Figure 7: PER range of CITICS Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 Rolling forward PER (x) Sources: Bloomberg, CGIS Research Average +1 Standard deviation -1 Standard deviation Figure 8: PBR range of HTS Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Rolling forward PBR (x) Sources: Bloomberg, CGIS Research Average +1 Standard deviation -1 Standard deviation Figure 9: PER range of HTS Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Rolling forward PER (x) Sources: Bloomberg, CGIS Research Average +1 Standard deviation -1 Standard deviation Figure 10: PBR range of GFS Figure 11: PER range of GFS Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Rolling forward PBR (x) Average +1 Standard deviation -1 Standard deviation Sources: Bloomberg, CGIS Research Rolling forward PER (x) Average +1 Standard deviation -1 Standard deviation Sources: Bloomberg, CGIS Research 4

8 Key financials GF Securities (01776.HK) Income Statement (RMB'000, except for per share amount) Year ended 31 Dec E 2018E Equities 3,439,400 4,949,900 13,803,088 5,338,243 4,211,754 4,120,423 Investment banking 308,100 1,552,300 1,441,856 2,169,565 2,247,125 2,562,741 Futures and options 279, , , , , ,000 Asset management 205,100 1,124,500 3,597,426 4,159,583 3,427,742 3,552,485 Others 167, , ,900 1,381, ,496 1,034,416 Commission and fee income 4,399,400 8,217,300 20,046,440 13,390,788 11,211,117 11,650,065 Interest income 2,349,217 4,324,638 12,336,200 7,830,720 7,605,721 8,085,239 Net investment gains 2,525,131 3,604,956 10,396,215 6,510,790 8,361,200 10,182,206 Total revenue 9,273,748 16,146,894 42,778,855 27,732,298 27,178,038 29,917,509 Other income and gains 58,114 16,581 (46,040) (244,375) 160, ,000 Total revenue and other income 9,331,862 16,163,475 42,732,815 27,487,923 27,338,038 30,017,509 Staff costs (2,947,619) (4,345,926) (10,913,683) (6,586,871) (6,590,102) (6,966,248) Commission and fee expenses (105,542) (240,813) (461,441) (375,942) (313,911) (326,202) Interest expenses (1,378,567) (2,757,676) (8,942,914) (6,542,655) (6,475,610) (6,934,110) Others (1,815,828) (2,507,650) (4,898,877) (3,680,259) (2,734,149) (3,028,840) Operating expenses (6,247,556) (9,852,065) (25,216,915) (17,185,727) (16,113,772) (17,255,400) Operating profit 3,084,291 6,311,430 17,515,900 10,302,196 11,224,265 12,762,109 Non-recurrent items Income before tax 3,477,313 6,648,595 17,805,712 10,705,060 11,605,043 13,191,192 Income tax expense (664,747) (1,503,082) (4,193,359) (2,295,738) (2,611,135) (2,968,018) Minority interests (65) (122,945) (411,339) (379,215) (359,756) (408,927) Net income 2,812,501 5,022,568 13,201,014 8,030,107 8,634,152 9,814,247 Recurring net income 2,812,501 5,022,568 13,201,014 8,030,107 8,634,152 9,814,247 EPS (RMB) Recurring EPS (RMB) DPS (RMB) A-share average daily turnover 196,668, ,014,286 1,045,302, ,090, ,911, ,000,000 Brokerage market share of GFS (%) Net commission rate of GFS (%) Margin financing balance 19,945,100 64,356,200 66,951,690 54,085,000 56,002,610 63,877,161 Staff cost-to-income (%) Cost-to-income (%) Cost-to-income (ex-impairment) Grow th Rates: Commission and fee income 10% 87% 144% -33% -16% 4% Interest income 52% 84% 185% -37% -3% 6% Net investment gains 50% 43% 188% -37% 28% 22% Total revenue and other income 28% 73% 164% -36% -1% 10% Operating profit 33% 105% 178% -41% 9% 14% Recurring net income 28% 79% 163% -39% 8% 14% Recurring EPS 28% 79% 104% -39% 8% 14% Margins and Ratios: Adjusted operating margin 38.8% 47.9% 52.6% 50.7% 54.3% 55.9% Adjusted net margin 36.1% 39.1% 40.8% 40.4% 44.1% 45.1% Effective tax rate 19% 23% 24% 21% 23% 23% Sources: Company data, CGIS Research estimates 5

9 Key financials GF Securities (01776.HK) Balance Sheet (RMB'000, except for per share amount) Finance Ratios As at 31 Dec E 2018E E 2018E Financial assets 46,783,207 71,531, ,926, ,742, ,636, ,334,697 PER(x) Advances to customers 20,490,654 64,695,844 68,969,706 58,186,338 58,002,610 65,877,161 EPS grow th (%) Others 10,652,117 30,234,496 42,709,314 32,711,110 17,594,754 19,163,307 Yield (%) Cash held on behalf of customers 25,227,415 48,995,919 88,640,516 67,251,310 61,895,203 67,226,441 Payout ratio (%) Bank balances and cash 6,146,696 18,203,433 17,609,937 13,046,174 11,488,586 9,675,279 PBR(x) Total current assets 109,300, ,661, ,855, ,937, ,617, ,276,886 Total asset/equity (x) Non-client asset/net asset (x) PPE, net 1,043,274 1,287,461 1,579,745 1,761,438 1,482,957 1,535,105 ROAA (%) Financial assets 3,634,831 2,747,766 20,184,887 24,114,878 25,701,015 29,401,015 ROAE (%) Others 3,313,977 2,403,306 4,476,890 7,987,814 5,641,961 6,106,044 Total non-current assets 7,992,082 6,438,533 26,241,522 33,864,130 32,825,932 37,042,164 Revenue breakdown (%) Equities Total assets 117,292, ,099, ,097, ,801, ,443, ,319,050 Investment banking Futures and options Accounts payable to brokerage clinets 31,609,231 71,465, ,137,085 85,726,525 74,385,915 80,620,753 Asset management Financial assets sold under repo 19,399,797 50,717,726 85,395,761 50,549,266 70,000,000 80,000,000 Others Due to banks and other financial institutions 5,300,000 1,123,000 1,750,000 10,606, Commission and fee income Others 14,202,625 42,223,828 57,975,624 69,690,417 53,246,114 61,685,932 Interest income Total current liabilities 70,511, ,530, ,258, ,572, ,632, ,306,685 Net investment gains Bank and other borrowings 11,979,740 26,030,664 72,270,186 58,274,033 72,000,000 90,000,000 Others 57,802 7,161,539 3,747,530 3,601,382 2,131,280 2,131,280 Total non-current liabilities 12,037,542 33,192,203 76,017,716 61,875,415 74,131,280 92,131,280 Total liabilities 82,549, ,722, ,276, ,448, ,763, ,437,965 Shareholders' equity 34,604,666 39,610,880 77,519,274 78,530,210 84,496,982 91,289,276 Minority interests 138,310 1,766,576 2,301,555 2,823,126 3,182,882 3,591,809 Book value per share Dupont analysis (as % of average total assets) Equities 3.3% 2.8% 4.2% 1.4% 1.2% 1.1% Investment banking 0.3% 0.9% 0.4% 0.6% 0.6% 0.7% Futures and options 0.3% 0.1% 0.1% 0.1% 0.1% 0.1% Asset management 0.2% 0.6% 1.1% 1.1% 1.0% 0.9% Others 0.2% 0.2% 0.3% 0.4% 0.3% 0.3% Commission and fee income 4.2% 4.6% 6.1% 3.4% 3.1% 3.0% Interest income 2.3% 2.4% 3.7% 2.0% 2.1% 2.1% Net investment gains 2.4% 2.0% 3.2% 1.7% 2.3% 2.6% Other income and gains 0.1% 0.0% 0.0% -0.1% 0.0% 0.0% Total revenue and other income 9.0% 9.0% 13.0% 7.1% 7.6% 7.8% Operating expenses -6.0% -5.5% -7.7% -4.4% -4.5% -4.5% Operating profit 3.0% 3.5% 5.3% 2.6% 3.1% 3.3% Income tax expense -0.6% -0.8% -1.3% -0.6% -0.7% -0.8% Recurring net income (ROAA) 2.7% 2.9% 4.1% 2.2% 2.5% 2.7% Leverage (x) Non-client asset/net asset (x) ROAE 8.3% 13.5% 22.5% 10.3% 10.6% 11.2% Sources: Company data, CGIS Research estimates 6

10 Key financials Haitong Securities (6837.HK) Income Statement (RMB'000, except for per share amount) Year ended 31 Dec E 2018E Equities 4,228,623 5,939,819 15,852,454 6,406,529 5,106,714 5,078,576 Investment banking 736,777 1,309,095 1,644,980 2,619,300 2,577,527 2,906,351 Asset management 731,324 1,202,203 2,465,127 1,641,855 1,917,244 2,052,123 Futures/derivatives 461, , , ,135 1,227,625 1,573,036 Others 592, ,866 1,370,081 1,492,474 1,387,455 1,461,761 Commission and fee income 6,751,188 9,516,170 21,812,616 12,711,293 12,216,566 13,071,848 Interest income 3,670,965 7,699,971 18,322,037 16,180,548 15,625,645 17,310,641 Net investment gains 2,150,038 5,708,662 11,057,133 6,107,923 8,215,053 9,353,940 Total revenue 12,572,191 22,924,803 51,191,786 34,999,764 36,057,263 39,736,429 Other income and gains 230, ,063 4,093,767 7,492,492 5,000,000 5,500,000 Total revenue and other income 12,802,734 23,666,866 55,285,553 42,492,256 41,057,263 45,236,429 Staff costs (2,621,465) (4,131,308) (7,829,712) (6,168,040) (6,760,629) (7,450,110) Commission and fee expenses (848,704) (1,295,519) (3,842,160) (1,746,284) (2,343,601) (2,644,096) Interest expenses (1,484,370) (4,340,189) (13,566,443) (12,340,937) (11,669,383) (12,776,694) Others (2,510,387) (3,646,790) (9,409,814) (11,275,703) (8,661,994) (9,458,306) Operating expenses (7,464,926) (13,413,806) (34,648,129) (31,530,964) (29,435,607) (32,329,207) Operating profit 5,337,808 10,253,060 20,637,424 10,961,292 11,621,656 12,907,222 Share of profits of associates 116, , , , , ,004 Non-recurrent items Income before tax 5,454,748 10,420,394 21,118,869 11,161,727 11,967,159 13,278,226 Income tax expense (1,173,754) (2,301,371) (4,277,553) (2,231,209) (2,513,103) (2,655,645) Minority interests (245,970) (408,400) (1,022,465) (887,184) (850,865) (849,806) Net income 4,035,024 7,710,623 15,818,851 8,043,334 8,603,190 9,772,774 Recurring net income 4,035,024 7,710,623 15,818,851 8,043,334 8,603,190 9,772,774 EPS (RMB) Recurring EPS (RMB) DPS (RMB) A-share average daily turnover 196,668, ,014,286 1,045,302, ,090, ,911, ,000,000 Brokerage market share of Haitong (%) Net commission rate of Haitong (%) Margin financing balance 19,848,211 57,169,592 60,659,240 44,707,720 48,009,027 54,585,938 Staff cost-to-income (%) Cost-to-income (%) Cost-to-income (ex-impairment) Grow th Rates: Commission and fee income 30% 41% 129% -42% -4% 7% Interest income 28% 110% 138% -12% -3% 11% Net investment gains -11% 166% 94% -45% 34% 14% Total revenue and other income 19% 85% 134% -23% -3% 10% Operating profit 31% 92% 101% -47% 6% 11% Recurring net income 33% 91% 105% -49% 7% 14% Recurring EPS 33% 91% 71% -49% 7% 14% Margins and Ratios: Adjusted operating margin 49.9% 55.0% 49.0% 16.6% 30.0% 30.5% Adjusted net margin 41.8% 47.0% 49.9% 42.7% 42.9% 43.7% Effective tax rate 22% 22% 20% 20% 21% 20% Sources: Company data, CGIS Research estimates 7

11 Key financials Haitong Securities (6837.HK) Balance Sheet (RMB'000, except for per share amount) Finance Ratios As at 31 Dec E 2018E E 2018E Financial assets 56,908, ,149, ,916, ,947, ,100, ,100,363 PER(x) Advances to customers 26,531,096 64,883,359 76,324,967 63,212,920 64,663,707 72,906,086 EPS grow th (%) Others 20,019,422 41,889,579 71,333, ,922,381 96,386, ,268,033 Yield (%) Cash held on behalf of customers 33,777,588 62,592, ,066,661 87,496,620 73,409,774 86,010,000 Payout ratio (%) Bank balances and cash 18,809,405 23,111,153 51,124,559 31,721,171 38,660,999 26,475,576 PBR(x) Total current assets 156,046, ,626, ,765, ,300, ,221, ,760,058 Total asset/equity (x) Non-client asset/net asset (x) PPE, net 1,171,604 1,210,145 1,317,178 1,615,839 1,620,125 1,585,992 ROAA (%) Financial assets 5,074,255 9,024,602 33,522,971 45,353,442 35,350,000 40,600,000 ROAE (%) Others 6,831,580 38,761,337 67,842,816 72,595,616 77,166,222 85,242,455 Total non-current assets 13,077,439 48,996, ,682, ,564, ,136, ,428,447 Revenue breakdown (%) Equities Total assets 169,123, ,622, ,448, ,865, ,358, ,188,505 Investment banking Asset management Accounts payable to brokerage clients 40,429,567 80,766, ,026, ,059,287 89,197, ,478,000 Futures/derivatives Financial assets sold under repo 26,111,914 59,807,864 90,951,854 43,638,525 56,610,309 66,120,345 Others Due to banks and other financial institutions 6,916,395 34,077,574 32,799,527 49,884,220 43,500,000 39,000,000 Commission and fee income Others 13,200,026 46,471,975 83,244,832 98,123,355 93,586, ,024,474 Interest income Total current liabilities 86,657, ,124, ,022, ,705, ,894, ,622,819 Net investment gains Bank and other borrowings - 4,537,684 9,330,007 14,489,442 15,000,000 14,000,000 Others 18,360,543 54,696, ,168, ,712, ,581, ,641,980 Total non-current liabilities 18,360,543 59,233, ,498, ,202, ,581, ,641,980 Total liabilities 105,018, ,357, ,521, ,907, ,476, ,264,799 Shareholders' equity 61,506,991 68,364, ,694, ,130, ,202, ,394,760 Minority interests 2,598,167 3,899,772 9,233,126 11,828,274 12,679,139 13,528,945 Book value per share Dupont analysis (as % of average total assets) Equities 2.9% 2.3% 3.4% 1.1% 0.9% 0.9% Investment banking 0.5% 0.5% 0.4% 0.5% 0.5% 0.5% Asset management 0.5% 0.5% 0.5% 0.3% 0.3% 0.3% Futures/derivatives 0.3% 0.2% 0.1% 0.1% 0.2% 0.3% Others 0.4% 0.3% 0.3% 0.3% 0.2% 0.2% Commission and fee income 4.6% 3.6% 4.7% 2.2% 2.2% 2.2% Interest income 2.5% 3.0% 3.9% 2.8% 2.8% 2.9% Net investment gains 1.5% 2.2% 2.4% 1.1% 1.5% 1.6% Other income and gains 0.2% 0.3% 0.9% 1.3% 0.9% 0.9% Total revenue and other income 8.7% 9.1% 11.9% 7.5% 7.3% 7.6% Operating expenses -5.1% -5.1% -7.5% -5.5% -5.2% -5.4% Operating profit 3.6% 3.9% 4.4% 1.9% 2.1% 2.2% Income tax expense -0.8% -0.9% -0.9% -0.4% -0.4% -0.4% Recurring net income (ROAA) 2.9% 3.1% 3.6% 1.6% 1.7% 1.8% Leverage (x) Non-client asset/net asset (x) ROAE 6.7% 11.9% 18.0% 7.4% 7.6% 8.2% Sources: Company data, CGIS Research estimates 8

12 Key financials CITIC Securities (6030.HK) Income Statement (RMB'000, except for per share amount) Year ended 31 Dec E 2018E Investment banking 2,217,436 3,516,440 4,563,090 5,470,917 4,184,978 5,087,194 Brokerage 6,493,275 10,365,206 22,713,891 12,574,497 10,922,175 11,219,580 Trading 398, , , , , ,668 Asset management 1,489,344 4,503,850 6,449,325 6,860,180 6,295,208 6,565,116 Others 100, , , , , ,000 Commission and fee income 10,698,835 18,915,358 34,252,523 25,774,772 22,400,241 24,014,558 Interest income 4,089,746 7,850,808 15,621,547 11,232,779 13,184,583 16,006,825 Net investment gains 5,259,499 10,204,336 19,510,014 8,265,068 10,459,780 11,707,785 Total revenue 20,048,080 36,970,502 69,384,084 45,272,619 46,044,603 51,729,168 Other income and gains 230, ,356 3,537,585 4,792,153 8,000,000 9,000,000 Total revenue and other income 20,278,737 37,345,858 72,921,669 50,064,772 54,044,603 60,729,168 Staff cost (5,076,588) (9,463,242) (14,797,624) (11,507,497) (11,012,746) (11,402,569) Commission and fee expenses (1,060,676) (1,798,997) (4,621,076) (3,331,110) (3,567,762) (3,823,468) Interest expenses (3,260,336) (6,900,792) (12,830,544) (8,884,626) (10,234,578) (12,567,887) Others (4,246,060) (6,569,743) (14,033,038) (12,430,139) (14,195,354) (15,903,000) Operating expenses (13,643,660) (24,732,774) (46,282,282) (36,153,372) (39,010,441) (43,696,924) Operating profit 6,635,077 12,613,084 26,639,387 13,911,400 15,034,163 17,032,244 Share of profits of associates 166, , , , , ,000 Share of profits of JCEs 44,654 (8,616) (18,821) (438) (2,265) - Exceptional items - 2,179,457 2,226 1,748 2,311 - Income before tax 6,846,091 15,421,947 27,287,144 14,262,559 15,534,209 17,632,244 Income tax expense (1,538,044) (3,560,448) (6,926,800) (3,281,419) (3,883,552) (4,408,061) Minority interests (64,130) (524,305) (560,551) (615,971) (524,280) (595,088) Net income 5,243,917 11,337,194 19,799,793 10,365,169 11,126,377 12,629,094 Recurring net income 5,243,917 9,702,601 19,797,567 10,363,421 11,124,066 12,629,094 EPS (RMB) Recurring EPS (RMB) DPS (RMB) A-share average daily turnover 196,668, ,014,286 1,045,302, ,090, ,911, ,000,000 Brokerage market share CITICS 6.2% 6.5% 6.3% 5.8% 5.6% 5.6% Margin financing balance 33,420,286 72,101,290 74,010,000 62,639,640 70,935,900 81,298,205 Staff cost-to-income 31.8% 33.0% 26.7% 30.4% 27.4% 25.7% Cost-to-income 58.4% 56.0% 52.0% 63.2% 62.6% 61.6% Cost-to-income (ex-impairment) 56.2% 53.9% 47.5% 58.1% 61.1% 60.0% Grow th Rates: Commission and fee income 50.9% 76.8% 81.1% -24.8% -13.1% 7.2% Interest income 88.3% 92.0% 99.0% -28.1% 17.4% 21.4% Net investment gains 44.2% 94.0% 91.2% -57.6% 26.6% 11.9% Total revenue and other income 55.1% 84.2% 95.3% -31.3% 7.9% 12.4% Recurring EPS 23.8% 85.0% 85.5% -47.7% 7.3% 13.5% Margins and Ratios: Adjusted operating margin 40.7% 43.3% 44.5% 27.6% 21.8% 22.7% Adjusted net margin 33.8% 36.2% 39.2% 33.2% 36.1% 37.4% Effective tax rate 22% 23% 25% 23% 25% 25% Sources: Company data, CGIS Research estimates 9

13 Key financials CITIC Securities (6030.HK) Balance Sheet (RMB'000, except for per share amount) Finance Ratios As at 31 Dec E 2018E E 2018E Financial assets 121,176, ,302, ,784, ,476, ,312, ,752,427 PER(x) Advances to customers 34,301,932 74,135,256 75,523,403 65,021,193 73,535,900 84,298,205 EPS grow th (%) Others 12,181,898 22,007,589 17,930,312 28,051,520 31,450,000 36,550,000 Yield (%) Cash held on behalf of customers 40,125,321 96,840, ,553, ,876, ,878, ,712,832 Payout ratio (%) Bank balances and cash 27,684,624 37,967,189 68,906,892 36,713,034 26,010,483 22,779,619 PBR(x) Total current assets 235,470, ,252, ,698, ,139, ,187, ,093,084 Total asset/equity (x) Non-client asset/net asset (x) PPE, net 3,637,404 1,222,324 3,856,121 3,923,261 8,307,257 7,883,157 ROAA (%) Financial assets 13,009,348 10,863,766 12,508,463 38,975,935 39,122,549 43,123,529 ROAE (%) Others 19,237,208 22,287,586 29,044,797 26,400,155 26,960,618 27,731,955 Total non-current assets 35,883,960 34,373,676 45,409,381 69,299,351 74,390,424 78,738,641 Revenue breakdown (%) Investment banking Total assets 271,354, ,626, ,108, ,438, ,577, ,831,725 Brokerage Trading Accounts payable 45,196, ,845, ,456, ,397, ,878, ,712,832 Asset management Financial assets sold under repo 55,704, ,914, ,788, ,414, ,500, ,000,000 Others Due to banks and other financial institutions 4,710,000 11,751,000 18,033,000 19,550,000 13,500,000 15,500,000 Commission and fee income Others 47,097,184 89,053, ,934,854 96,581, ,801, ,246,852 Interest income Total current liabilities 152,707, ,564, ,213, ,943, ,679, ,459,684 Net investment gains Bonds payable 26,177,108 43,167,363 67,835,803 69,752,175 90,000,000 68,000,000 Others 3,067,448 7,762,611 6,322,274 9,954,544 5,700,000 6,400,000 Total non-current liabilities 29,244,556 50,929,974 74,158,077 79,706,719 95,700,000 74,400,000 Total liabilities 181,952, ,494, ,371, ,650, ,379, ,859,684 Shareholders' equity 87,688,485 99,098, ,137, ,695, ,581, ,759,949 Minority interests 1,713,610 2,032,815 2,599,311 3,092,724 3,617,004 4,212,092 Book value per share Dupont analysis (as % of average total assets) Investment banking 1.0% 0.9% 0.8% 0.9% 0.7% 0.7% Brokerage 3.0% 2.8% 4.1% 2.1% 1.8% 1.6% Trading 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% Asset management 0.7% 1.2% 1.2% 1.1% 1.0% 1.0% Others 0.0% 0.1% 0.0% 0.1% 0.1% 0.1% Commission and fee income 3.0% 5.0% 6.3% 4.2% 3.6% 3.5% Interest income 1.1% 2.1% 2.9% 1.9% 2.1% 2.3% Net investment gains 1.5% 2.7% 3.6% 1.4% 1.7% 1.7% Other income and gains 0.1% 0.1% 0.6% 0.8% 1.3% 1.3% Total revenue and other income 5.6% 9.9% 13.3% 8.3% 8.7% 8.9% Operating expenses -3.8% -6.6% -8.4% -6.0% -6.3% -6.4% Operating profit 1.8% 3.4% 4.9% 2.3% 2.4% 2.2% Income tax expense -0.4% -0.9% -1.3% -0.5% -0.6% -0.6% Recurring net profit (ROAA) 2.4% 2.7% 3.7% 1.8% 1.9% 1.9% Leverage (x) Non-client asset/net asset (x) ROAE 6.0% 10.4% 16.6% 7.4% 7.6% 8.2% Sources: Company data, CGIS Research estimates 10

14 Strategy March 5, 2018 Short Selling Analysis for February 23 The weekly selling analysis has resumed, as the data release schedule returned to normal. Last Friday, the HKSFC released the aggregate short positions data for February 23. We analyzed which companies may be vulnerable to short-selling activity, based on the following three criteria: (i) the net change in short positions between February 15 and February 23; (ii) short positions as a percentage of free float; and (iii) the absolute amount of short positions. We must emphasize this is only an objective quantitative analysis based on official data; the analysis does NOT imply that we feel uncomfortable with the corporate governance or fundamentals of some companies. According to the results of our analysis, we believe China Coal (1898.HK) requires close monitoring, based on the latest short positions outstanding. On the other hand, we note that short positions in ENN Energy (2688.HK) and Pacific Basin (2343.HK) have dropped significantly. Short positions in China Coal increased significantly. As Figure 1 shows, short positions in China Coal rose 26.3% during the week ended February 23. The outstanding short positions were equivalent to 4% of its free float. Some investors may be expecting weakness in coal prices post-cny, in our view, as heating demand for coal is likely to weaken as the weather gets warmer. Meanwhile, short positions in China Literature rose 18.8% during the same period; the outstanding short positions were equivalent to 5.4% of its free float. However, as the stock was just included in the Stock Connect universe after market close last Friday, we believe it may not be good timing to short the stock in the near term. Significant decline in short positions in ENN Energy and Pacific Basin. Outstanding short positions in ENN Energy and Pacific Basin dropped 18.3% and 15.7%, respectively, during the week ended February 23 (Figure 2). We believe some investors began to cut their short positions, as the share price performance of ENN Energy was quite resilient amid the volatile market in February. Meanwhile, the rebound in freight rates (BDI, BSI and BHSI) since mid-february may be the reason investors cut their short positions in Pacific Basin. Wong Chi Man Head of Research (852) cmwong@chinastock.com.hk Recap: Source of data. The HKSFC releases the aggregate short positions in all eligible stocks every Friday with a delay of one week. The HKEx releases the data on short-selling activity on a daily basis (without a one-week delay), but investors do not know whether the short positions are covered or not later. Therefore, the usefulness of the HKSFC data is that it provides the outstanding short positions in each stock, and investors can trace the net change on a weekly basis. However, there are still some limitations, as this data set cannot cover short-selling activity using OTC derivative products. Three angles to analyzing the data. (i) The net change in short positions between February 15 and February 26; (ii) short positions as a percentage of free float; and (iii) the absolute amount of the short positions Mark Lau Research Analyst (852) marklau@chinastock.com.hk 1

15 Figure 1: Top 50 short selling stocks (ranked by net change between February 15 and February 23, descending order) Ticker Company name reportable short positions on Feb 23 (shares) reportable short positions on Feb 23 Sources: HKSFC, Bloomberg, CGIS Research % of free float Change in short positions compared with Feb 15 Price on Feb 23 Price on Mar 02 Price change during the period Market cap (HK$m) 2017E PER (x) 2018E PER (x) PBR (x) 2017E Dividend yield (%) reportable short positions on Feb 23/ 3- month average daily turnover 161 AVIC IHL 68, , % Increase from nill % 7,335 n.a. n.a n.a GOLDIN FIN HOLD 1,522,000 5,859, % Increase from nill % 26,285 n.a. n.a n.a SOUNDWILL HOLD 63, , % Increase from nill % 4,340 n.a. n.a n.a HKTV 170, , % Increase from nill % 2,541 n.a. n.a n.a SUNEVISION 584,005 3,229, % Increase from nill % 12, HENGXING GOLD 200,000 2,068, % Increase from nill % 9,620 n.a. n.a n.a JNBY 144,500 1,898, % Increase from nill % 7, EMPEROR WATCH&J 9,099,488 3,457, % 265.5% % 2,512 n.a. n.a POLY CULTURE 387,800 5,824, % 158.7% % 3,641 n.a. n.a n.a RENTIAN TECH 10,350,000 3,829, % 109.9% % 4,292 n.a. n.a n.a VITASOY INT'L 1,054,000 21,923, % 94.5% % 21, I-CABLE COMM 6,405,577 1,281, % 89.9% % 1,185 n.a. n.a n.a CH UNIENERGY 354,000 4,127, % 80.6% % 8,975 n.a. n.a n.a SPARKLE ROLL 5,336,000 3,735, % 76.5% % 3,311 n.a. n.a n.a KERRY LOG NET 1,053,750 11,506, % 66.9% % 18, CH OVS G OCEANS 11,883,159 48,245, % 53.4% % 13, FIT HON TENG 19,343,000 78,919, % 49.7% % 28, n.a YITAI COAL 348,670 4,086, % 48.6% % 35, n.a EVERG HEALTH 11,845,000 33,639, % 42.2% % 26,611 n.a. n.a n.a HUA HONG SEMI 3,360,000 48,787, % 41.5% % 15, LEE'S PHARM 4,157,045 49,219, % 40.9% % 7, CIFI HOLD GP 33,126, ,557, % 40.1% % 48, PHOENIX TV 7,628,000 7,780, % 38.5% % 4,844 n.a. n.a n.a JOY CITY PPT 11,314,000 14,821, % 35.8% % 18, WISDOM EDU INTL 7,794,000 46,530, % 34.1% % 12, HISENSE KELON 7,455,600 76,792, % 33.7% % 19, C FIN INT INV 27,548,628 8,126, % 31.3% % 3,401 n.a. n.a n.a CICC 29,185, ,712, % 30.8% % 60, SHENZHOU INTL 2,262, ,926, % 29.8% % 113, TAI UNITED HOLD 3,795,000 4,022, % 29.1% % 5,408 n.a. n.a n.a EB SECURITIES 1,361,000 12,602, % 28.3% % 68, YUZHOU PPT 17,594,240 89,554, % 27.6% % 20, BOCOM INTL 1,779,000 4,020, % 26.6% % 6, JINJIANG HOTELS 21,152,000 71,070, % 26.4% % 19, CHINA COAL 78,629, ,288, % 26.3% % 77, GIORDANO INT'L 23,148,970 88,429, % 26.2% % 6, HSBC HOLDINGS 90,639,333 7,219,422, % 26.0% % 1,544, SFCE 37,780,205 13,600, % 25.0% % 1, n.a n.a CHI SILVER GP 19,663,967 39,721, % 22.8% % 3,102 n.a. n.a n.a BJ CAPITAL LAND 9,928,000 45,172, % 22.3% % 14, n.a SUMMIT ASCENT 39,943,540 35,150, % 22.0% % 1, SWIREPROPERTIES 18,291, ,811, % 21.6% % 157, DAHSING BANKING 2,001,718 35,390, % 21.6% % 24, LIVZON PHARMA 696,715 42,708, % 21.4% % 42, CNLP 11,555,025 27,500, % 21.4% % 6,895 n.a n.a CHINA AOYUAN 28,520, ,392, % 21.4% % 17, SEA HOLDINGS 1,111,337 17,736, % 20.6% % 10,767 n.a. n.a n.a GREENLAND BROAD 10,884,000 12,407, % 18.9% % 3,978 n.a. n.a n.a CHINA LIT 11,046, ,861, % 18.8% % 69, n.a NWS HOLDINGS 2,141,268 32,547, % 18.8% % 58,