加码高端物管市场维持彩生活买入评级 彩生活服务集团 (1778:HK) BUY Unchanged. Real Estate Company Research. Bringing China to the World

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1 SWS Research Co. Ltd is a subsidiary of ShenwanHongyuan Securities. 99 East Nanjing Road, Shanghai Real Estate Company Research Bringing China to the World 4 August 2016 BUY Unchanged Market Data: 3 August Closing Price (HK$) 5.95 Price Target (HK$) 7.26 HSCEI 8,978 HSCCI 3, week High/Low (HK$) 7.48/4.71 Market Cap (USD Mn) 767 Market Cap (HK$ Mn) 5,951 Shares Outstanding (Mn) 1,000 Exchange Rate (RMB-HK$) 1.19 Price Performance Chart: 20% 0% -20% -40% Colour Life Source: Bloomberg Analyst Kris Li A ARG379 lihong@swsresearch.com (+86) Research assistant Zoe Zhang A BGZ938 HSCEI Related Reports Domestic demand, 6 June, 2016 The company does not hold any equities or derivatives of the listed company mentioned in this report ( target ), but then we shall provide financial advisory services subject to the relevant laws and regulations. Any affiliates of the company may hold equities of the target, which may exceed 1 percent of issued shares subject to the relevant laws and regulations. The company may also provide investment banking services to the target. The Company fulfills its duty of disclosure within its sphere of knowledge. The clients may contact compliance@swsresearch.com for relevant disclosure materials or log into under disclosure column for further information. The clients shall have a comprehensive understanding of the disclosure and disclaimer upon the last page. 加码高端物管市场维持彩生活买入评级 彩生活服务集团 (1778:HK) Financial summary and valuation E 2017E 2018E Revenue (Rmbm) ,029 1,300 1,633 YoY (%) 67.0% 112.6% 24.3% 26.3% 25.6% Underlying net income (Rmbm) YoY (%) 185.2% 34.0% 25.3% 24.8% 30.9% Net income (Rmbm) EPS (Rmb) Core EPS (Rmb) ROE (%) 13.4% 12.9% 15.2% 20.5% 24.7% Net Gearing (%) Net cash Net cash Net cash Net cash Net cash Dividend Yield (%) % 1.7% 2.4% 3.5% PE (x) PB (x) Core EPS is calculated as if all non-recurring items are excluded. P/E is calculated as closing price divided by each year s core EPS. 总部位于深圳的社区服务运营商彩生活服务集团及其母公司民营开发商花样年 (1777: HK) 于本周一宣布从中国最大的商业地产运营商大连万达 (3699: HK) 收购其旗下万达物业管理 100% 股权 此次收购将主要通过合伙企业幸福万象完成, 该合伙企业由花样年和平安集团分别出资约 10 亿元于 2016 年 7 月初成立 业内最大规模并购 在周二举行的电话会议中, 公司管理层表示此次收购的总交易对价将达 20 亿元, 扣除万达物业账上约 2.3 亿元的应收账款和 6.5 亿元的现金之后, 实际支付交易对价约为 12 亿元 本次收购的万达物业目标资产包中涉及 132 个项目, 集中分布在重要二三线城市的核心区域, 总面积达 6400 万方, 其中已确权面积为 4280 万方 ( 包括 2550 万方住宅物业面积和 1730 万方商业物业面积 ), 未确权面积为 2120 万方 公司管理层表示, 计划将住宅物业交由彩生活于 2015 年初收购的高端物业管理品牌 - 开元国际进行管理, 而商业物业将由花样年旗下于新三板上市的美易家进行管理, 预计将在 8 月末完成本次收购, 届时会披露更多交易细节 高端物管品牌发力 我们认为, 此次收购万达物业有助于增加彩生活在高端物业管理市场的竞争力 从物业费角度来看, 彩生活平均物业管理费为 1.5 元 / 月 / 平米, 其旗下开元国际平均收费为 2.2 元 / 月 / 平米, 而此次收购的万达住宅物业中, 普通住宅平均收费为 2 元 / 月 / 平米, 豪宅平均收费达 元 / 月 / 平米 从管理面积来看, 开元国际目前在管面积约 3300 万方, 本次收购的住宅物业共计达 2550 万方, 其中已入伙面积为 1080 万方, 去年收入达 6.3 亿元, 尚未入伙的 1470 万方将在未来 3 年内逐步交付 但需要强调的是, 花样年表示在将资产实际注入彩生活和美易家之前, 计划设置一至两年的过渡期, 在此期间, 万达物业所产生的收入将归属于该合伙企业, 而将一部分收入以咨询顾问费方式支付给开元国际 由于彩生活 2015 年咨询顾问费用为 4900 万元, 占总收入比例仅为 5.9%, 因此, 在公司披露更多交易细节之前, 我们认为此次收购对彩生活未来三年的影响将较为有限 维持买入评级 我们预计彩生活的中期业绩将符合预期, 其中总合约管理面积从年初的 3.22 亿平米增加至今年 6 月末的 3.60 亿平米 ( 全年目标为 4.0 亿平米 ), 彩富人生上半年累计投资额约 6 亿元 ( 全年目标为 亿元 ) 由于公司符合内地投资者对小盘成长股的偏好, 我们认为市场普遍预计年内推出的深港通将成为催化剂 与此同时, 更多上市同业的表现也将有助于板块整体的价值重估, 其中中海物业 (2669: HK) 目前估值为 29 倍 16 年 PE, 绿城服务 (2869: HK) 为 26 倍 16 年 PE 我们维持公司 2016/17/18 年每股核心净利分别为 0.32 元人民币 ( 同比增长 25%) 0.40 元人民币 ( 同比增长 25%) 和 0.53 元人民币 ( 同比增长 31%), 并维持目标价为 7.26 港元, 对应 19.3 倍 16 年 PE 和 4.3 倍 16 年 PB 考虑到目前股价较目标价存在约 22% 的上升空间, 我们维持彩生活买入评级

2 Shenzhen-based property management service provider Colour Life Services and its parent company, private developer Fantasia (1777:HK - N-R), will acquire Wanda Property Management from China s largest commercial property operator Wanda (3699:HK - BUY). The acquisition will be completed mainly through Shenzhen Xingfu Wanxing Investment Partnership, which was established in early July 2016 with PingAn Group (601318:CH O- PF) and Fantasia each contributing c.rmb1bn. We maintain our core EPS forecasts of Rmb0.32 in 16E (+25% YoY), Rmb0.40 in 17E (+25% YoY) and Rmb0.53 in 18E (+31% YoY) and our target price of HK$7.26. Maintain BUY. Large-scale acquisition. During a conference call held on 2 August, management stated that the total consideration for this acquisition is expected to reach Rmb2bn, or Rmb1.2bn excluding Rmb230m of receivables and Rmb650m of cash. The targeted asset package consists of 132 properties, mainly located in central areas of core tier-2 and tier-3 cities, with a total gross floor area (GFA) of 64.0msqm, of which 42.8msqm are contracted GFA (25.5msqm of residential properties and 17.3msqm of commercial properties) and 21.2msqm have yet to be delivered. If the acquisition completes in late August, Kaiyuan International, a high-end property management company acquired by Colour Life in early 2015, will provide consultancy services for the acquired residential properties, whereas Shenzhen Home E&E Commercial Services Group (834669:CH), Fantasia s subsidiary, will be in charge of commercial properties. Management will release more details regarding the allocation of assets later in the month. High-end expansion. We expect the acquisition of Wanda Property Management to strengthen Colour Life s penetration into the high-end residential market as management fees for its newly-acquired properties average at Rmb2.0/month/sqm for general housing, and Rmb /month/sqm for luxury housing vs Rmb1.5/month/sqm for Colour Life and Rmb2.2/month/sqm for Kaiyuan International. As a result, 10.8msqm of GFA contributed revenue of Rmb630m in 15A, while the remaining 14.7msqm will be gradually delivered over the coming three years. However, we highlight that Fantasia will allow for a transitional period of one to two years before it injects Wanda s properties into Colour Life and Home E&E. Therefore, revenue generated from these acquired properties in E will be attributable to the investment partnership, while Kaiyuan International will benefit from consultancy fees. Colour Life s consultancy fees of Rmb49m only accounted for 5.9% of its 15A total revenue, and thus we believe the acquisition s effect will be limited for at least the next three years. Maintain BUY. We expect Colour life to post 2016 interim results largely in line with our expectation as its total contracted GFA increased from 322msqm in end-2015 to 360msqm in end-june 2016 (its full year target is of 400msqm). Moreover, E-wealth management, under its value-added segment, reported aggregate investment of c.rmb600mn vs its fullyear target of Rmb1-1.5bn. We see the upcoming Shenzhen-Hong Kong Stock Connect as catalyst for the stock and expect a sector re-rating as more peers list on the Hong Kong market, where China Overseas Property Holdings (2669: HK - N-R) trades at 29x 16F PE and Greentown Service (2869: HK - N-R) trades at 26x 16F PE. We maintain our core EPS forecasts of Rmb0.32 in 16E (+25% YoY), Rmb0.40 in 17E (+25% YoY) and Rmb0.53 in 18E (+31% YoY) and our target price of HK$7.26, implying 19.3x 16E PE and 4.3x 16E PB. With c.22% upside, we maintain our BUY recommendation. Please refer to the last page for important disclosures Page 1

3 Large-scale acquisition Shenzhen-based property management service provider Colour Life Services and its parent company, private developer Fantasia (1777:HK - N-R), will acquire Wanda Property Management from China s largest commercial property operator Wanda (3699:HK - BUY). The acquisition will be completed mainly through Shenzhen Xingfu Wanxing Investment Partnership, which was established in early July 2016 with PingAn Group (601318:CH O-PF) and Fantasia each contributing c.rmb1bn. During a conference call held on 2 August, management stated that the total consideration for this acquisition is expected reach Rmb2bn, or Rmb1.2bn excluding Rmb230m of receivables and Rmb650m of cash. The targeted asset package consists of 132 properties, mainly located in central areas of core tier-2 and tier-3 cities, with a total gross floor area (GFA) of 64.0msqm, of which 42.8msqm are contracted GFA (25.5msqm of residential properties and 17.3msqm of commercial properties) and 21.2msqm have yet to be delivered. If the acquisition completes in late August, Kaiyuan International, a high-end property management company acquired by Colour Life in early 2015, will provide consultancy services for the acquired residential properties, whereas Shenzhen Home E&E Commercial Services Group (834669:CH), Fantasia s subsidiary, will be in charge of commercial properties. Management will release more details regarding the allocation of assets later in the month. Fig 1: Shareholding structure of Colour Life and Home E&E TCL HK Mr. Pan Jun Ms. Zeng Jie Public Shareholders 15% 57% 28% Fantasia Holdings (1777.HK) 50.4% 70% Colour Life Service (1778.HK) Home E&E ( OC) Fig 2: Breakdown of total GFA (64.1msqm) of acquired Wanda properties (msqm) Residential properties Commercial properties Sub-total Revenue-bearing GFA Undelivered GFA Sub-total Unregistered GFA 21.2 Total GFA 64.1 Please refer to the last page for important disclosures Page 2

4 Fig 3: Breakdown of contracted GFA (42.9msqm) by property type 20 (msqm) Residential properties Revenue-bearing GFA Commercial properties Undelivered GFA High-end expansion We expect the acquisition of Wanda Property Management to strengthen Colour Life s penetration into the high-end residential market as management fees for its newlyacquired properties average at Rmb2.0/month/sqm for general housing,, and Rmb /month/sqm for luxury housing vs Rmb1.5/month/sqm for Colour Life and Rmb2.2/month/sqm for Kaiyuan International. As a result, 10.8msqm of GFA contributed revenue of Rmb630m in 15A, while the remaining 14.7msqm will be gradually delivered over the coming three years. However, we highlight that Fantasia will allow for a transitional period of one to two years before it injects Wanda s properties into Colour Life and Home E&E. Therefore, revenue generated from these acquired properties in E will be attributable to the investment partnership, while Kaiyuan International will benefit from consultancy fees. Colour Life s consultancy fees of Rmb49m only accounted for 5.9% of its 15A total revenue, and thus we believe the acquisition s effect will be limited for at least the next three years. Fig 4: Comparison of average property manage fees 4.0 (Rmb/month/sqm) Colour Life Kaiyuan International Wanda property - General housing Wanda property - Luxury housing Please refer to the last page for important disclosures Page 3

5 Fig 5: Actual and estimated contracted GFA and growth Fig 6: Actual and estimated revenue breakdown 1,200 (msqm) 200% 1,800 (Rmbm) 1, A 160% 1, , A 120% 1, A 80% A E 2017E 2018E 40% 2019E E 0 0 0% 2011A 2012A 2013A 2014A 2015A 2016E 2017E 2018E 2011A 2012A 2013A 2014A 2015A 2016E 2017E 2018E 2019E 2020E Property management services Engineering services Value-added services Fig 7: Valuation and TP Maintain BUY We expect Colour life to post 2016 interim results largely in line with our expectation as its total contracted GFA increased from 322msqm in end-2015 to 360msqm in end-june 2016 (its full year target is of 400msqm). Moreover, E-wealth management, under its value-added segment, reported aggregate investment of c.rmb600mn vs its full-year target of Rmb1-1.5bn. We see the upcoming Shenzhen-Hong Kong Stock Connect as catalyst for the stock and expect a sector re-rating as more peers list on the Hong Kong market, where China Overseas Property Holdings (2669: HK - N-R) trades at 29x 16F PE and Greentown Service (2869: HK - N-R) trades at 26x 16F PE. We maintain our core EPS forecasts of Rmb0.32 in 16E (+25% YoY), Rmb0.40 in 17E (+25% YoY) and Rmb0.53 in 18E (+31% YoY) and our target price of HK$7.26, implying 19.3x 16E PE and 4.3x 16E PB. With c.22% upside, we maintain our BUY recommendation. Market Cap (HK$ bn) Target Price (HK$) PE ( x ) Company Code Rating 15E 16E 17E Greentown Service 2869 HK 8.0 N-R Colour Life Services 1778 HK 6.0 Buy COPL 2669 HK 5.5 N-R Average Note: Forecasts for 2869:HK and 2669:HK are based on management guidance Please refer to the last page for important disclosures Page 4

6 Fig 8: Historical one-year forward PE PE ratio (x) -1 Std Average +1 Std Fig 9: Historical one-year forward PB PB ratio (x) -1 Std Average +1 Std Please refer to the last page for important disclosures Page 5

7 Appendix, Financial statements Fig 1: Forecast Income Statement ( 000 RMB) 2012A 2013A 2014A 2015A 2016E 2017E 2018E Property management services 104, , , , , ,807 1,009,798 Engineering services 59,494 51,623 87, , , , ,420 Community leasing, sales and other services 32,143 44,643 65, , , , ,206 Revenue 196, , , ,645 1,029,061 1,300,109 1,633,423 Cost of Sales (102,342) (89,422) (79,405) (373,189) (431,821) (503,254) (585,022) Gross Profit 94, , , , , ,855 1,048,402 Other gains and losses (2,312) (10,122) (11,943) (26,822) (30,872) (39,003) (49,003) Other Income 1,586 4,289 4,241 13,765 10,291 13,001 16,334 Selling and distribution expenses (5,809) (1,915) (1,687) (16,322) (20,581) (26,002) (32,668) Administrative expenses (45,037) (60,276) (92,864) (216,870) (267,556) (299,025) (326,685) Expenses recharged to residential communities under commission basis 18,460 17,348 20,029 47,182 46,308 65,005 81,671 Operating profit 61,053 92, , , , , ,051 Finance costs (582) (630) (1,920) (11,082) (15,436) (19,502) (22,868) Listing expenses - (22,854) (16,282) Others 390 1,448 2,377 7,776 9,262 10,401 13,067 Profit before tax 60,861 70, , , , , ,251 Income tax expense (15,996) (25,467) (61,347) (69,428) (88,737) (135,467) (196,628) Profit for the year 44,865 45, , , , , ,623 Profit for the year from discontinued operations (529) Profit and total comprehensive income for the year 44,336 45, , , , , ,623 Non-controlling interests 904 1,100 4,811 14,217 17,994 14,651 15,949 Profit attr to shareholders 43,432 44, , , , , ,674 Dividends paid ,033 84, , ,486 Basic EPS Diluted EPS DPS Underlying EPS Fig 2: Forecast Balance Sheet: ( 000 RMB) 2012A 2013A 2014A 2015A 2016E 2017E 2018E PP&E 10,357 23,513 67, , , , ,453 Investment properties 12,620 26,758 29,790 88,804 90, , ,321 Interest in an associate & JV 1,235 1,675 2,241 7,440 7,547 9,534 11,979 Intangible assets , , ,123 91, ,340 Others 42,319 67, , , , , ,646 Non-current assets 66, , ,574 1,130, ,628 1,138,083 1,290,738 Inventories 1, ,106 1,306 1,522 1,770 Trade receivables 21,575 49, , , , , ,610 Other receivables and prepayments 28,772 43,339 69, , , , ,864 Payments on behalf of residents 46,089 43,966 86, , , , ,610 Amounts due from customers for contract works 45,749 43,892 41,113 34,328 65,746 83, ,358 Amounts due from fellow subsidiaries 330,850 32,153 20,157 46,548 57,170 72,228 90,746 others 89,125 14,367 15,325 73,955 57,170 72,228 90,746 Restricted bank deposits , , , ,076 1,143,396 Bank balances and cash 24, , , , , , ,054 Current assets 589, ,593 1,209,157 1,588,525 2,110,646 2,605,352 3,273,154 Total assets 655, ,467 1,599,731 2,719,156 3,032,274 3,743,435 4,563,891 Share capital ,315 79,325 79,325 79,325 79,325 Reserves 106, , ,286 1,180,066 1,317,790 1,546,338 1,881,527 Majority interests 106, ,925 1,071,601 1,259,391 1,397,115 1,625,663 1,960,852 Non-controlling interests 1,937 4,778 15,663 41,341 62,012 93, ,224 Total equity 108, ,703 1,087,264 1,300,732 1,459,127 1,718,681 2,091,076 Deferred tax liabilities ,385 54,033 41,082 62,716 91,031 Amount due to a non-controlling shareholder 1,348 1,091 1, ,183 1,716 2,488 Borrowings due after one year , , ,800 60,900 Corporate bonds 100, , ,000 Please refer to the last page for important disclosures Page 6

8 Redeemable shares 6,614 Non-current liabilities 1,686 8,429 8, , , , ,419 Trade payables 21,444 20,851 25,975 80,231 95, , ,005 Other payables and accruals 49,290 93, , , , , ,771 Receipts on behalf of residents 77,700 96,804 72, , , , ,222 Amounts due to customers for contract works 616 2,784 8,195 17,141 29,988 34,948 40,626 Amount due to an associate 2,126 2, ,040 7,197 8,388 9,750 Other amounts due 363,288 40,050 7,717 34,953 41,983 48,927 56,877 Borrowings due within one year , , , , ,669 Tax liabilities 31,607 45,910 83, ,010 98, , ,475 Current liabilities 546, , ,492 1,073,575 1,227,882 1,538,523 1,918,396 Total liabilities 547, , ,467 1,418,424 1,573,147 2,024,754 2,472,815 Total equity and liabilities 655, ,467 1,599,731 2,719,156 3,032,274 3,743,435 4,563,891 Fig 3: Forecast Cash Flow Statement: ( 000 RMB) 2012A 2013A 2014A 2015A 2016E 2017E 2018E Cash generated from operations 66,949 58,032 83, , , , ,033 Income taxes paid (8,653) (13,437) (25,981) (64,633) (88,737) (135,467) (196,628) Net cash from operating activities 58,296 44,595 57, , , , ,405 Acquisitions (2,940) (20,436) (31,796) (486,209) (450,974) (521,841) (565,328) Others (130,931) 383,846 (305,866) (415,237) (498,284) (548,113) (575,518) Net cash from investing activities (133,871) 363,410 (337,662) (901,446) (949,258) (1,069,954) (1,140,846) Interest paid (582) (193) (1,557) (11,215) (125,440) (168,094) (202,782) Net borrowing (40,000) (70) 127, ,746 3,897 36,966 92,716 Net proceeds in issue of new shares 749,527 Issue of share upon exercise of share option 43, Listing expense paid (20,598) (15,309) Proceeds from issue of corporate bonds 100, , ,000 Dividend paid (71,033) (84,200) (123,064) (180,486) Others 110,480 (329,850) (33,547) 27, , , ,982 Net cash from financing activities 69,898 (286,872) 821, , , , ,430 Net increase in cash and cash equivalents (5,677) 121, ,918 (267,553) 246, , ,989 Cash and cash equivalents at beginning of year 30,657 24, , , , , ,065 Cash and cash equivalents at end of the year 24, , , , , , ,054 Please refer to the last page for important disclosures Page 7

9 Information Disclosure: The views expressed in this report accurately reflect the personal views of the analyst. The analyst declares that neither he/she nor his/her associate serves as an officer of nor has any financial interests in relation to the listed corporation reviewed by the analyst. None of the listed corporations reviewed or any third party has provided or agreed to provide any compensation or other benefits in connection with this report to any of the analyst, the Company or the group company(ies). A group company(ies) of the Company confirm that they, whether individually or as a group (i) are not involved in any market making activities for any of the listed corporation reviewed; or (ii) do not have any individual employed by or associated with any group company(ies) of the Company serving as an officer of any of the listed corporation reviewed; or (iii) do not have any financial interest in relation to the listed corporation reviewed or (iv) do not, presently or within the last 12 months, have any investment banking relationship with the listed corporation reviewed. Undertakings of the Analyst I (We) am (are) conferred the Professional Quality of Securities Investment Consulting Industry by the Securities Association of China and have registered as the Securities Analyst. I hereby issue this report independently and objectively with due diligence, professional and prudent research methods and only legitimate information is used in this report. I am also responsible for the content and opinions of this report. I have never been, am not, and will not be compensated directly or indirectly in any form for the specific recommendations or opinions herein. Disclosure with respect to the Company The company is a subsidiary of ShenwanHongyuan Securities. The company is a qualified securities investment consulting institute approved by China Securities Regulatory Commission with the code number ZX0065. Releasing securities research reports is the basic form of the securities investment consulting services. The company may analyze the values or market trends of securities and related products or other relevant affecting factors, provide investment analysis advice on securities valuation/ investment rating, etc. by issuing securities research reports solely to its clients. The Company fulfills its duty of disclosure within its sphere of knowledge. The clients may contact compliance@swsresearch.com for the relevant disclosure materials or log into for the analysts' qualifications,the arrangement of the quiet period and the affiliates shareholdings. Introduction of Share Investment Rating Security Investment Rating: When measuring the difference between the markup of the security and that of the market s benchmark within six months after the release of this report, we define the terms as follows: Trading BUY: Share price performance is expected to generate more than 20% upside over a 6-month period. BUY: Share price performance is expected to generate more than 20% upside over a 12-month period. Outperform: Share price performance is expected to generate between 10-20% upside over a 12-month period. Hold: Share price performance is expected to generate between 10% downside to 10% upside over a 12-month period. Underperform: Share price performance is expected to generate between 10-20% downside over a 12-month period. SELL: Share price performance is expected to generate more than 20% downside over a 12-month period. Industry Investment Rating: When measuring the difference between the markup of the industry index and that of the market s benchmark within six months after the release of the report, we define the terms as follows: Overweight:Industry performs better than that of the whole market; Equal weight: Industry performs about the same as that of the whole market; Underweight:Industry performs worse than that of the whole market. We would like to remind you that different security research institutions adopt different rating terminologies and rating standards. We adopt the relative rating method to recommend the relative weightings of investment. The clients decisions to buy or sell securities shall be based on their actual situation, such as their portfolio structures and other necessary factors. The clients shall read through the whole report so as to obtain the complete opinions and information and shall not rely solely on the investment ratings to reach a conclusion. The Company employs its own industry classification system. The industry classification is available at our sales personnel if you are interested. HSCEI is the benchmark employed in this report. Please refer to the last page for important disclosures Page 8

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All the trademarks, service marks and marks used herein are trademarks, service marks or marks of the Company, and no one shall have the right to use them at any circumstances without the prior consent of the Company. This report may be translated into different languages. The Company does not warrant that the translations are free from errors or discrepancies. This report is for distribution in Hong Kong only to persons who fall within the definition of professional investors whether under the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong) (the SFO ) or the Securities and Futures (Professional Investor) Rules (Chapter 571D of the laws of the Hong Kong under the SFO). This report is for distribution in the United Kingdom only to persons who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) order 2001 (as amended) (the Order ) or (ii) are persons falling within Article 49(2)(a) to (d) ( High Net Worth Companies, Unincorporated Associations, etc ) of the Order (All such persons together being referred to as Relevant Persons ). This document is directed only at Relevant Persons. Other Persons who are not Relevant Persons must not act or rely upon this document or any of its contents. Distribution in Singapore If distributed in Singapore, this report is meant only for Accredited Investors and Institutional Investors as defined under Section 4A of the Securities and Futures Act of Singapore. If you are not an Accredited Investor or an Institutional Investor, you shall ignore the report and its contents. The Singapore recipients of the report are to contact the Singapore office of Shenwan Hongyuan Singapore Private Limited at , or in respect of any matters arising from, or in connection with, the report. Please refer to the last page for important disclosures Page 9