Reuters Bloomberg Exchange Ticker 0341.HK 341 HK HKG 0341

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1 Deutsche Bank Markets Research Rating Hold Asia Hong Kong Consumer Company Reuters Bloomberg Exchange Ticker 0341.HK 341 HK HKG 0341 ADR Ticker CFCGY ISIN US12770C1062 Multi-brand: keyword for the new Five-Year Plan; maintaining Hold Café de Coral: one of the few multi-brand players in China/HK catering space CDC has mapped out its new Five-Year Plan with a focus on multi-brand expansion in both HK and the mainland. It initiated a multi-brand strategy as early as 1991 and now has over 10 brands across the mass catering and casual dining segments. Core CDC continues to be its mainstream but non-core brands will be the growth engine. Casual dining is the segment mgmt aims to develop further thus partnerships with overseas operators and franchisors are under consideration. Within the catering sector, we prefer a player with a multi-brand portfolio which helps it diversify into different consumer segments and maintain growth momentum. We believe CDC is the one; reiterating Hold. FY14: earnings +8% to HKD581m on sales +9% to HKD6.99bn By market, HK recorded 10% sales growth with flat segment profit; the margin narrowed by 1.3ppt to 12.4%. China sales grew by 10% and segment profit surged by 157%; the margin improved by 2.3ppt to 4%. SSSG for core CDC was 9% in HK and 4% in China, with an accelerating trend in 2HFY14. The fullyear dividend payout was 67.7% (vs. 94.9% in FY13). Net cash improved to HKD1.0bn vs. HKD772m as of end FY13. FY15: Focus on expansion with new brands and concepts CDC plans to open 50 stores (30 in HK and 20 in China) in FY15 and introduce several new brands through cooperation with overseas brand owners and franchisors. In China, expansion is focused on the Southern region while CDC is still testing the water in the Eastern Region. N.A. business remains under review with no plan to dispose. Store profitability remains very important to mgmt thus Value Meal strategy will continue with limited ASP increase. Raising target price to HKD25.5 (from HKD24.0); risks We base our DCF-based target price on a COE of 7.5%, beta of 1, and terminal growth of 2%. This translates into a P/E of 23.0x CY14E and 20.4x CY15E. Downside risks: SSSG slowdown and a further round of talks on minimum wages in HK. Upside risks: multi brand; China expansion; ASP increase. Date 26 June 2014 Forecast Change Price at 25 Jun 2014 (HKD) Price target - 12mth (HKD) week range (HKD) HANG SENG INDEX 22,867 Lydia Ling Research Analyst (+852) lydia.ling@db.com Key changes Anne Ling Research Analyst (+852) anne.ling@db.com Price target to % Sales (FYE) 7,834 to 7, % Op prof 10.4 to % margin (FYE) Net profit (FYE) to % Source: Deutsche Bank Price/price relative /12 12/12 6/13 12/13 HANG SENG INDEX (Rebased) Performance (%) 1m 3m 12m Absolute HANG SENG INDEX Source: Deutsche Bank Forecasts And Ratios Year End Mar A 2014A 2015E 2016E 2017E Sales (HKDm) 6, , , , ,519.8 Reported NPAT (HKDm) Reported EPS FD(HKD) DB EPS FD (HKD) OLD DB EPS FD (HKD) % Change 0.0% -1.9% -4.5% -4.4% DB EPS growth (%) PER (x) DPS (net) (HKD) Yield (net) (%) Source: Deutsche Bank estimates, company data 1 DB EPS is fully diluted and excludes non-recurring items 2 Multiples and yields calculations use average historical prices for past years and spot prices for current and future years, except P/B which uses the year end close Deutsche Bank AG/Hong Kong 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) 148/04/2014.

2 Model updated:25 June 2014 Running the numbers Asia Hong Kong Reuters: 0341.HK Hold Bloomberg: 341 HK Price (25 Jun 14) HKD Target Price HKD Week range HKD Market Cap (m) HKDm 13,947 USDm 1,799 Company Profile Cafe De Coral Holdings Limited, through its subsidiaries, operates quick service restaurants, fast casual dining, institutional catering and specialty restaurant chains, and food manufacturing business. Price Performance Jun 12Sep 12Dec 12Mar 13Jun 13Sep 13Dec 13Mar 14 Margin Trends HANG SENG INDEX (Rebased) E 16E 17E EBITDA Margin EBIT Margin Growth & Profitability Solvency E 16E 17E Sales growth (LHS) ROE (RHS) E 16E 17E Fiscal year end 31-Mar E 2016E 2017E Financial Summary DB EPS (HKD) Reported EPS (HKD) DPS (HKD) BVPS (HKD) Weighted average shares (m) Average market cap (HKDm) 10,536 12,591 14,162 13,947 13,947 13,947 Enterprise value (HKDm) 8,474 10,530 11,850 11,337 10,979 10,570 Valuation Metrics P/E (DB) (x) P/E (Reported) (x) P/BV (x) FCF Yield (%) Dividend Yield (%) EV/Sales (x) EV/EBITDA (x) EV/EBIT (x) Income Statement (HKDm) Sales revenue 5,956 6,394 6,990 7,727 8,572 9,520 Gross profit 3,967 4,304 4,717 5,225 5,809 6,462 EBITDA ,074 1,193 1,326 Depreciation Amortisation EBIT Net interest income(expense) Associates/affiliates Exceptionals/extraordinaries Other pre-tax income/(expense) Profit before tax ,002 Income tax expense Minorities Other post-tax income/(expense) Net profit DB adjustments (including dilution) DB Net profit Cash Flow (HKDm) Cash flow from operations ,105 1,139 1,266 Net Capex Free cash flow Equity raised/(bought back) Dividends paid Net inc/(dec) in borrowings Other investing/financing cash flows Net cash flow Change in working capital Balance Sheet (HKDm) Cash and other liquid assets ,035 1,333 1,691 2,100 Tangible fixed assets 1,580 1,767 1,812 1,818 1,790 1,747 Goodwill/intangible assets Associates/investments 1,190 1,286 1,288 1,288 1,288 1,288 Other assets Total assets 4,074 4,414 4,568 4,903 5,268 5,673 Interest bearing debt Other liabilities 1,039 1,256 1,123 1,258 1,398 1,551 Total liabilities 1,052 1,282 1,130 1,266 1,405 1,558 Shareholders' equity 3,021 3,130 3,434 3,634 3,859 4,112 Minorities Total shareholders' equity 3,022 3,132 3,437 3,637 3,862 4,115 Net debt ,028-1,325-1,683-2,092 Key Company Metrics Sales growth (%) DB EPS growth (%) EBITDA Margin (%) EBIT Margin (%) Payout ratio (%) ROE (%) Capex/sales (%) Capex/depreciation (x) Net debt/equity (%) Net interest cover (x) nm nm nm nm nm nm Source: Company data, Deutsche Bank estimates Net debt/equity (LHS) Net interest cover (RHS) Lydia Ling lydia.ling@db.com Page 2 Deutsche Bank AG/Hong Kong

3 Company update Valuation raising target price from HKD24 to HKD25.5; maintaining Hold Café De Coral is one of the few multi-brand players in the China/HK catering space. It initiated multi-brand strategy as early as 1991 and now has more than 10 brands across the mass catering and casual dining segments. In the next five years, the company will further implement such a strategy in both HK and China. Core CDC continues to be its mainstream but non-core brands will become the growth engine. Casual dining is the segment management aims to develop further; therefore, partnerships with overseas operators and franchisors are under consideration. Within the catering sector, we prefer a player with a multi-brand portfolio which helps it diversify into different consumer segments and maintain growth momentum. We believe CDC is the one, and it is therefore trading at a premium to its peers. We believe the stock is fairly priced, and maintain our Hold recommendation. The FY14 results came out broadly in line with our forecast. The 4% discrepancy in earnings vs. our estimate mainly lies in the lower other gains. We are therefore cutting our FY15-16E EPS by 4% as we accordingly lower our estimate for other gains. We also introduce our estimate for the year of FY2017 and use a new cost of equity of 7.5% (old: 7.1%) for HK. As a result, we raise our target price by 6% to HKD25.5. This translates into a P/E of 23.0x CY14E and 20.4x CY15E. We derive our target price using Deutsche Bank s new COE of 7.5% (2.7% riskfree rate and 4.9% ERP for the HK market), and terminal growth of 2% (in line with our forecasts for other Hong Kong consumer stocks). We use the Hong Kong COE as most of the company s business is in Hong Kong, and we continue to use a beta of 1. Figure 1: Change in DB forecasts YE Mar HKDm New forecast Old forecast New vs. old forecast Market consensus vs. consensus FY2014 FY2015 FY2016 FY2014 FY2015 FY2016 FY2014 FY2015 FY2016 FY2014 FY2015 FY2016 FY2014 FY2015 FY2016 Sales 6,990 7,727 8,572 7,010 7,834 8, % -1.4% -2.2% 6,995 7,680 8, % 0.6% 1.6% YoY growth 9.3% 10.5% 10.9% 9.6% 11.7% 11.9% Gross profit 4,717 5,225 5,809 4,746 5,321 5, % -1.8% -2.7% YoY growth 9.6% 10.8% 11.2% 10.3% 12.1% 12.1% GPM 67.5% 67.6% 67.8% 67.7% 67.9% 68.1% EBIT % -4.8% -4.7% % -4.6% -6.6% YoY growth 5.3% 14.5% 12.8% 10.5% 14.6% 12.7% EBITM 9.7% 10.1% 10.2% 10.2% 10.4% 10.5% Net profit % -4.5% -4.4% % -3.9% -4.7% YoY growth 6.6% 14.3% 13.0% 11.3% 14.6% 12.9% Net margin 8.3% 8.6% 8.8% 8.7% 8.9% 9.0% Source: Deutsche Bank estimate, Bloomberg Finance LP Deutsche Bank AG/Hong Kong Page 3

4 Risks. Key downside risks: 1) SSSG slowdown; 2) the central kitchens failing to deliver a profit margin improvement; 3) a macro slowdown that could cause consumers to trade down; and 4) a new round of minimum wage increases in HK. Potential upside catalysts: 1) non-core brands picking up growth momentum; 2) China expansion, 3) ASP increase, and 4) a drop in raw material prices. Figure 2: One-year forward P/E band Figure 3: One-year forward P/E vs. historical average 35 HK$ Café de Coral - 1-year forward PER band chart 30 Café de Coral - 1-year forward PER vs historical avg 30 +2sdv: 26x 25 3yr avg: 22.2x sdv: 20x yr avg: 21.4x 10yr avg: 19.2x 15 Avg:14x Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12-1sdv: 8x -2sdv: 2x Jan-13 Jan yr foreward PE 3yr avg 5yr avg 10yr avg Jan-95 Jul-95 Jan-96 Jul-96 Jan-97 Jul-97 Jan-98 Jul-98 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 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 Source: Deutsche Bank, Datastream Source: Deutsche Bank, Datastream New Five-Year Plan: Expansion, Succession and Sustainability. Expansion for growth in HK and mainland with new concepts and brands Multi-brand strategy; new brands take time to contribute to growth. The company s core brand CDC now has 156 stores in HK, and we therefore believe this has already well penetrated the market. We expect it will maintain a stable but limited growth under this single brand. Therefore, we like Café De Coral s multi-brand strategy, which encourages it to diversify into different customer segments and maintain a growth engine. Meanwhile, this helps it attain favorable lease terms from landlords given a wide brand portfolio for them to choose from. In HK, it already has more than 10 brands, with new brands such as Mixian Sense, PizzaStage, 85 Degree C, Shanghai Lao Lao, Noodle Lane, and Ichigyo Sushi. Should the new brands work out, CDC will also bring them into the mainland market. However, it takes time for new brands to build up scale and contribute to growth. In the short term, core brand CDC remains its key revenue contributor (>70% of sales). Focus on mass catering and casual dining segment. Management thinks HK is not a saturated market to them as they can gain market share from its peers. CDC has been the leader in the fast food segment but not yet in the casual dining segment for both Chinese and non-chinese food. The company will further develop this segment with new concepts and brands through its internal capacity and through cooperation with renowned overseas brand owners and franchisors such as from Korea and Japan. Southern China remains the focus of development in mainland. This is due to the similarity of the dining culture between Southern China and Hong Kong. In the short term, the company aims to build up CDC and Spaghetti House as the leading brands in Southern China. Then, the company may consider Page 4 Deutsche Bank AG/Hong Kong

5 introducing its other leading HK brands into the mainland. Meanwhile, it is still reviewing its Eastern China business to work out the right business model (menu price/dining environment). Store profitability remains hard core. The company has a stringent measure for new openings, to make sure each store is profitable. It will choose to close new stores if they have been loss making for two to three years. At the store level, it wants to provide a Value For Money option to its customers therefore the Value Meal strategy will continue. The ASP will be maintained at HKD It will make price adjustments on selective items to factor in CPI inflation. Meanwhile, it will carry out more direct purchasing in order to lower costs. Succession Plan and Sustainability Programs: to develop a professional management team These two initiatives are more interactive with the aim of developing a professional management team for sustainable growth in the long term. While the operating system should be optimized for efficiency improvements, management also highlighted the importance of social responsibility and corporate governance, more concretely, i.e., energy saving, food safety, transparent internal control. Management believes that a good social image will also help drive growth. These efforts aim to help the company evolve from a family business into a professionally-managed one. Many key management members are now approaching retirement age, therefore developing the next generation of leaders is a top priority either through internal mentorship and knowledge transfer or by bringing in new people from outside. FY2015 outlook Accelerating new openings with a total of 50 stores (30 in HK and 20 in China). Last year, the company failed to achieve its annual target of 50 new stores (20 in HK and 30 in China). The actual opening was 23 stores with a miss on the mainland, as it focused on store profitability rather than store growth. This year, it will accelerate opening in both HK and China (mainly Southern region). Staff costs remain the key challenge. The next round of a new minimum wage in HK will be implemented in May The recent talks on the new minimum wage level have seen it proposed at HKD32/hour (from current HKD30), a c.7% increase. The company hopes its better sssg and efficiency improvements could help offset the rising labor costs. No plan to dispose of the Machu Kok business in the short term. This is because: 1) the company has made full impairment provision of goodwill therefore there will be no further impact on P&L; 2) this business is profitable at the EBITDA level; 3) there is no need for investment given it is a franchised model. Management might consider selling the business when the US market turns better and there is the potential for a good pricing to be offered. Dividend payout: still targeted at 70%. Management commented that the lower payout in FY14 is because the company wants to save more cash for the next five-year development including M&A and new openings. However, the company is still targeting a 70% payout for FY15. Deutsche Bank AG/Hong Kong Page 5

6 Capex this year will be HKD420m vs. HKD320m for FY14. This will be mainly used for new store openings. Production facilities. The company has moved the key production units in HK to its new central food processing plant in Tai Po (with completion in April 2013). With the new centralized production facility, the company has seen an improvement in efficiency, production capacity and energy saving. The Guangzhou facility is still underutilized, with a utilization rate of c.30%. The Dongguan facility has made full use of its production capacity and also evolved in supplying food products including ham and sausages to external parties as well as to catering businesses. FY14 results review The FY14 results came out broadly in line with our expectations although the bottom line was c.4% below our estimate due to the absence of gains from the disposal of PP&E (a loss of HKD9.8bn in FY14 vs. a gain of HKD41.8bn in FY13). Net profit rose by 8% to HKD581m on 9% growth in sales to HKD6.99bn. In 2HFY14, its net profit rose by 9% and sales grew by 10%. No special dividend was proposed for FY14. The company declared a final DPS of HKD0.51, bringing the full-year DPS to HKD0.68 (vs. HKD0.9 in FY13). This represents a 67.7% payout ratio (vs. 94.9% in FY13). It has net cash of HKD1.0bn as of end FY14 vs. HKD772m as of end FY13. As of end March 2014, the company has 331 stores in HK, 123 in China and 140 in North America. Hong Kong: sssg accelerated in 2HFY14; margin remains under pressure Hong Kong operations recorded turnover growth of 10% to HKD5.589bn, accounting for 80% of group sales. SSSG was 9% for core brand CDC (7% in 1HFY14) and 10% for Super Super Congee & Noodles (11% in 1HFY14), mainly driven by traffic growth. During the year, it net added two stores for core CDC, four for Super Super Congee & Noodles and net closed one for Oliver s Super Sandwiches, making a total of 153, 32 and 20 for each. Segment profit remained flat at HKD694m, with the margin narrowing 1.3ppt to 12.4% due to the absence of a disposal gain from a property (vs. HKD60m in FY13). Excluding such impact, the margin has improved, according to management. When asked about any impact on the HK operation from the slowdown in mainland tourists, management noted a limited impact at CDC s stores in Mong Kok, TST, and CWB, but stressed that local consumers are the company s focus. China: on a recovery path with improved profitability PRC sales grew by 10% to HKD1.237bn, contributing 18% of group sales. SSSG was 4% (3% in 1HFY14). Segment profit surged by 157% to HKD50m, with the margin improving by 2.3ppt to 4%. This was mainly attributed to its Value Meal strategy which effectively drove its store traffic. In 2HFY14, its segment profit rose by 208% but the top line grew by only 6%. Page 6 Deutsche Bank AG/Hong Kong

7 North America: full impairment provision of goodwill North America sales declined by 15% to HKD164, due to the economic slowdown and unfavorable weather. The company made a full impairment provision of goodwill (HKD46m) in FY14. Segment loss was HKD15.5m, vs. a segment loss of HKD6.2m in FY13. Other financial highlights GPM improved by 0.2ppt to 67.5%. This is attributed to: 1) menu price adjustments; and 2) more direct purchasing. The staff cost ratio increased slightly by 0.2ppt to 26.6%. The rental cost ratio remained flat at 11%. The utilities expense ratio dropped by 0.2ppt to 5.7%. The D&A ratio declined by 0.1ppt to 3.9%. The A&P ratio also remained stable at 1.2%. Deutsche Bank AG/Hong Kong Page 7

8 Figure 4: P&L assumptions YE Mar HK$m F 2016F 2017F Sales 4,290 4,674 4,883 5,333 5,956 6,394 6,990 7,727 8,572 9,520 HK 3,598 3,932 4,068 4,352 4,784 5,074 5,589 6,218 6,918 7,697 China ,126 1,237 1,361 1,511 1,684 North America Growth % Sales 10% 9% 4% 9% 12% 7% 9% 11% 11% 11% HK 9% 9% 3% 7% 10% 6.06% 10.16% 11.26% 11.25% 11.26% China 44% 33% 24% 25% 26% 16.26% 9.86% 10.00% 11.01% 11.49% North America 0% -23% -19% 8% -5% -5% -15% -10% -4% -3% Mix% Sales 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% HK 84% 84% 83% 82% 80% 79% 80% 80% 81% 81% China 9% 11% 13% 14% 16% 18% 18% 18% 18% 18% North America 7% 5% 4% 4% 3% 3% 2% 2% 2% 1% Segment results HK China North America (24) (18) (0) (2) (1) (6) (16) (10) (5) (5) Growth % Segment results 13.8% 8.5% 16.3% 0.5% -8.4% 15.5% 5.3% 14.5% 12.8% 11.7% HK 12.9% 8.5% 9.7% -7.6% 4.3% 30.9% 0.1% 3.7% 11.1% 10.6% China 17.0% -9.6% 46.7% 10.8% -51.8% -36.2% 157.4% 35.9% 22.1% 21.6% North America 2.2% -24.2% -98.1% 370.0% -11.2% 329.1% 149.7% -35.6% -50.0% 0.0% Margin % Segment results 11.2% 11.2% 12.4% 11.4% 9.4% 10.1% 9.7% 10.1% 10.2% 10.3% HK 12.8% 12.7% 13.5% 11.7% 11.07% 13.67% 12.41% 11.57% 11.55% 11.49% China 11.6% 7.9% 9.3% 8.3% 3.1% 1.7% 4.0% 5.0% 5.5% 6.0% North America -7.5% -7.4% -0.2% -0.8% -0.7% -3.2% -9.5% -6.7% -3.5% -3.6% Other Gains, net Total cost (3,826) (4,174) (4,326) (4,813) (5,461) (5,810) (6,330) (6,980) (7,724) (8,569) COGS (3,585) (3,917) (4,051) (4,529) (5,143) (5,484) (5,971) (6,594) (7,308) (8,120) Adminstrative expenses (241) (257) (275) (284) (318) (326) (359) (386) (416) (450) OR COGS & Adminstrative Expense (3,826) (4,174) (4,326) (4,813) (5,461) (5,810) (6,330) (6,980) (7,724) (8,569) Cost of Raw materials and consumables used (1,342) (1,509) (1,520) (1,718) (1,990) (2,090) (2,274) (2,502) (2,763) (3,057) Depreciation & Amortisation (171) (171) (189) (225) (244) (257) (274) (296) (316) (345) Operating lease rentals (479) (511) (546) (599) (668) (709) (760) (840) (931) (1,034) Employee benefit expense (1,063) (1,143) (1,186) (1,316) (1,513) (1,688) (1,862) (2,077) (2,325) (2,601) % growth COGS & Adminstrative Expense 10.2% 9.1% 3.6% 11.3% 13.5% 6.4% 9.0% 10.3% 10.7% 10.9% Cost of Raw materials and consumables used 12.7% 12.4% 0.7% 13.1% 15.8% 5.1% 8.8% 10.0% 10.4% 10.7% Depreciation & Amortisation 1.1% -0.5% 10.7% 19.1% 8.5% 5.2% 6.7% 8.1% 6.7% 9.3% Operating lease rentals 11.7% 6.6% 6.9% 9.8% 11.5% 6.2% 7.1% 10.5% 10.9% 11.1% Employee benefit expense 9.1% 7.5% 3.8% 10.9% 15.0% 11.6% 10.3% 11.5% 11.9% 11.9% % of sales COGS & Adminstrative Expense -89.2% -89.3% -88.6% -90.2% -91.7% -90.9% -90.6% -90.3% -90.1% -90.0% Cost of Raw materials and consumables used -31.3% -32.3% -31.1% -32.2% -33.4% -32.7% -32.5% -32.4% -32.2% -32.1% Depreciation & Amortisation -4.0% -3.6% -3.9% -4.2% -4.1% -4.0% -3.9% -3.8% -3.7% -3.6% Operating lease rentals -11.2% -10.9% -11.2% -11.2% -11.2% -11.1% -10.9% -10.9% -10.9% -10.9% Employee benefit expense -24.8% -24.4% -24.3% -24.7% -25.4% -26.4% -26.6% -26.9% -27.1% -27.3% EBIT % growth 14% 9% 16% 0% -8% 16% 5% 14% 13% 12% Margin 11% 11% 12.4% 11.4% 9.4% 10.1% 9.7% 10.1% 10.2% 10.3% Finance cost/income Assoicates Profit bef tax Income tax expense (93) (101) (105) (105) (91) (100) (107) (127) (143) (160) Effective tax rate -18.2% -18.5% -17.0% -17.0% -16.0% -15.5% -15.5% -16.0% -16.0% -16.0% Minority interests Net Profit % growth 14% 5% 16% 0% -7% 14% 7% 14% 13% 12% Margin 9.8% 9.5% 10.5% 9.6% 8.0% 8.5% 8.3% 8.6% 8.8% 8.8% Source: Deutsche Bank estimates, company data Page 8 Deutsche Bank AG/Hong Kong

9 Appendix 1 Important Disclosures Additional information available upon request Disclosure checklist Company Ticker Recent price* Disclosure 0341.HK (HKD) 25 Jun 14 NA *Prices are sourced from local exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies 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 The views expressed in this report accurately reflect the personal views of the undersigned lead analyst(s) about the subject issuer and the securities of the issuer. In addition, the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendation or view in this report. Lydia Ling Historical recommendations and target price: (0341.HK) (as of 6/25/2014) Security Price Previous Recommendations Strong Buy Buy Market Perform Underperform Not Rated Suspended Rating Current Recommendations Buy Hold Sell Not Rated Suspended Rating 5.00 *New Recommendation Structure as of September 9, Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Date Sep 13 Dec 13 Mar /06/2012: Hold, Target Price Change HKD /06/2013: Hold, Target Price Change HKD /11/2012: Hold, Target Price Change HKD /12/2013: Hold, Target Price Change HKD /04/2013: Hold, Target Price Change HKD22.50 Deutsche Bank AG/Hong Kong Page 9

10 Equity rating key Equity rating dispersion and banking relationships Buy: 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 Buy or Sell. Notes: 1. Newly issued research recommendations and target prices always supersede previously published research. 2. Ratings definitions prior to 27 January, 2007 were: Buy: Expected total return (including dividends) of 10% or more over a 12-month period Hold: Expected total return (including dividends) between -10% and 10% over a 12- month period Sell: Expected total return (including dividends) of -10% or worse over a 12-month period % 39 % 22 % 22 % 7 % 12 % Buy Hold Sell Companies Covered Cos. w/ Banking Relationship Asia-Pacific Universe Page 10 Deutsche Bank AG/Hong Kong

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