Properties Sector: Minimum Down payment Increase in Shanghai and Tianjin

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1 Morning Research Department Table of Contents 目录 29 November 2016 Industry and Company Focus 行业和公司焦点 Samsonite (01910 HK): 3Q16 Financial Results Met Expectations 新秀丽 (01910 HK):2016 年 3 季度财务数据符合预期 Properties Sector: Minimum Down payment Increase in Shanghai and Tianjin 房地产行业 : 上海和天津首付比例提高 Datang Power (00991 HK): To Issue A-shares and H-shares of Billion Shares Each to China Datang Corp. 大唐发电 (00991 HK): 建议向大唐集团分别增发 A 股和 H 股各 亿股 Tingyi (00322 HK): 3Q16 Results Beat Expectation 康师傅 (00322 HK): 2016 年 3 季度业绩好于预期 Latest Reports 最新报告摘要 Company Name 公司名称 Market Strategy Code 代码 Title 标题 Flash Note: Shenzhen-Hong Kong Stock Connect Debuts on 5th December TP 目标价 Chg 变动 Rating 评级 Chg 变动 EPS Est. Change? 盈利预测 是否改变 N 市场策略快讯 : 深港通 12 月 5 日正式登场 否 Appendices:Chinese Version of the Industry and Company Focus, Latest Reports. 后附 : 行业和公司焦点, 最新报告摘要中文版 HSI Performance HSCEI Performance 29,000 16,000 27,000 25,000 23,000 21,000 19,000 14,000 12,000 10,000 8,000 17,000 Nov/15 Feb/16 May/16 Aug/16 Nov/16 Source: Bloomberg Source: Bloomberg See the last page for disclaimer Page 1 of 10 6,000 Nov/15 Feb/16 May/16 Aug/16 Nov/16

2 Industry and Company Focus Samsonite (01910 HK): 3Q16 Financial Results Met Expectations Analyst: Terry Hong What happened: Samsonite ( the Company ) announced its 3Q16 financial results as followings: (US$) 3Q15 3Q16 YoY YoY constant currency Revenue (mn) % 22.8% Net profit (mn) % -41.1% Adjusted net profit (mn) % 3.9% Basic EPS % -42.1% Source: the Company, Guotai Junan International Comments and Views: The Company s 3Q16 results were basically in line with our expectations. The Company has already completed the acquisition of Tumi on 1 August If excluding the revenue contribution from Tumi, 3Q16 revenue increased by 7.6% YoY, or 7.9% YoY on a constant currency basis. Gross margin was up by 1.7 ppt YoY to 54.9% in 3Q16 largely due to the inclusion of Tumi. Excluding Tumi, gross margin was still up by 0.5 ppt YoY to 53.7% driven mainly by a higher proportion of net sales coming from direct-to-consumer channels. Net profit plunged by 41.0% YoY mainly due to the acquisition-related costs and interest expense related to the Tumi acquisition. Excluding the factors above, net profit increased by 23.5% YoY. Investment suggestion: Management forecasts a stable and firm growth of the Company in 2017, and we look forward to seeing the synergy between Samsonite and Tumi, which further enhances the Company s competitive edge in the global market. The Company's current TP is HK$28.85 and investment rating is "Accumulate". We may maintain our TP and rating in our next company report. Properties Sector: Minimum Down payment Increase in Shanghai and Tianjin Analyst: Van Liu What happened: On 29 Nov. 2016, PBOC Shanghai Head Office and Tianjin Branch unveiled a policy package to curb the surging house prices, respectively. For Shanghai, (1) minimum down payment, on first house for permanent residents without business mortgage loans, will increase from 30% to 35%; (2) minimum down payment on second ordinary houses or with mortgage loans records, will increase to 50%; (3) minimum down payment on non-ordinary houses will increase to 70%. For Tianjin, (1) minimum down payment on first house for permanent residents will increase from 20% to 30%; (2) minimum down payment on second houses with outstanding mortgage loans will increase to 40%. Comments and Views: These policies extended the One Policy for One City. Down payment rising will deteriorate purchase powers of residents, thus curb housing demands. Therefore, we believe that these adjustments are likely to cool the property market in Shanghai and Tianjin. Nevertheless, the benign supply and demand relationship and strong rigid demands will still support the Shanghai and Tianjin property market in the long run. We expect that minimum down payment may increase further in cities where there are upside moments in ASP and land costs. We think the policy environment is likely to continue to tighten. Investment suggestion: Our current investment rating for the property sector is Outperform due to its attractive valuation, strong sales growth in 2016 and fundamental improving. However, policies tightening are likely to cool the overheating property market and exert pressures on the property sector valuation. We will downgrade our investment rating for the property sector as neutral in the next industry report. Property developers with less high-cost land banks and lower leverage ratio should See the last page for disclaimer Page 2 of 10

3 perform better in the future. Our top pick this month is Longfor Properties (00960 HK) due to its strong contracted sales, stable profitability and healthy financial position. Currently, our investment rating is Buy and the target price is HK$13.22, which represents a 29% discount to its 2016E NAV and also implies 7.0x 2016 underlying PER and 1.0x 2016PBR. Datang Power (00991 HK): To Issue A-shares and H-shares of Billion Shares Each to China Datang Corp. Analyst: Leo Wu What happened: Datang Power International ( the Company ) made announcements on 28 Nov., which proposed to issue new A-share and H-share by billion shares each, and all of the new shares will be subscribed by the parent company, China Datang Corp. ( CDC ). The issue prices are RMB3.56 per share and HKD2.12, which represented 10.55% discount to the last A-share closing price and 1.92% premium to the last H-share closing price. The gross total proceeds will amount to approximately RMB9.95 billion and HKD5.925 billion. The Company s total share number will increase from current billion (with approximately billion A-share and billion H-shares) to 18.9 billion (with approximately billion A-share and billion H-share), implying a 29.6% dilution for other shareholders, and the total share holding ratio for CDC will increase from current 34.77% to 54.07%. This proposed issuance requires approval from independent share holders. Comments and Views: Compared with previous A-shares issuance announcements, the latest announcements have added H-share issuance, and it is now clear that CDC will subscribe all of the newly issued shares, which will make CDC from a relative controlling shareholder to an absolute controlling shareholder. We think that it is possible for CDC to enhance its support to the Company after becoming the absolute controlling shareholder, such as accelerating the process of power asset injection to the Company. This proposed share issuance will increase the Company s equity fund, and reduce the net gearing as well as the interest expense in the new few years. However, we also think that the issuance prices are relatively low and the dilution to the current shareholders is quite significant. Investment suggestion: The increase of market trading volume and coal price will weigh on the profitability of coal-fired power plants. We maintain our "Neutral" rating for Datang Power International and TP of Tingyi (00322 HK): 3Q16 Results Beat Expectation Analyst: Barney Wu What happened: The Company posted its 3Q16 results. Key fundamentals are as following: 1-3Q (USD million) YoY 3Q (USD million) YoY Turnover 6, % 2, % Shareholder's Profit % % EPS (USD cents) % % Source: the Company. Comments and Views: Tingyi s results in 3Q16 were better than expectations. Revenue declined by 1.52% YoY to USD 2,722 million, while shareholder s profit fell by 1.00% YoY to USD143 million, representing a significant improvement from 2Q16. In 3Q16, the increase of turnover was mainly contributed to the rebound in beverage revenue, which rose by 3.55% YoY to USD1,696 million. Meanwhile, sales of instant noodles amounted to USD969 million, down 8.75% YoY, slightly smaller than 2Q16. Revenue of tea products grew the fastest YoY in beverages, mainly due to the Company increased the promotion of tea products in diversified ways. For instance, Master Kong ice tea cooperated with NBA and Disney, and Master Kong green tea planted in a hit TV series "Zhu Xian", both See the last page for disclaimer Page 3 of 10

4 have achieved good results. The Company adopted a multi-tier prices strategy to meet as much as possible customers needs. Although its current high-end product growth is still relatively weak, the Company has consolidated the low-and mid-end products market share, especially in mid-end instant noodles, which recorded improved YoY growth of revenue in 3Q16 due to the corresponding adjustment in the price. Investment suggestion: The Company is going to change its presentation currency from USD to RMB on 1 January The change in the presentation currency could reduce the impact of any fluctuations of RMB. The Company s 2016 turnover in RMB is expected to increase 5%-6% compared to in USD. We expect the Company's earnings in 4Q16 will maintain the momentum of U-shaped recovery. We could upgrade our investment rating to "Accumulate" and revise up TP in the coming report. Latest Reports Flash Note: Market Strategy: Shenzhen-Hong Kong Stock Connect Debuts on 5th December Analyst: Gary Ching Report Date: Summary Regulators announced that the Shenzhen-Hong Kong Stock Connect (SZ-HK Connect) Scheme will commence on 5th December The SFC and exchanges in both China and Hong Kong have given a joint announcement on 25th November 2016, that SZ-HK Connect will commence officially on 5th December Operation of SZ-HK Connect is similar to the Shanghai-Hong Kong Stock Connect (SH-HK Connect) and has 881 eligible stocks for Northbound trading, while eligible stocks for Southbound trading have increased by 102 to a total of 417 stocks. The Shenzhen Stock Exchange indicated that if the list of eligible stocks changes after market close on 2nd December, China Innovation Market Service Company Limited will announce the updated list. More diverse scope of investments will further develop the mutual market asset ("MMA") system. The design of SZ-HK Connect is based on the existing laws, regulations and operation of SH-HK Connect, therefore, both systems are similar. Currently, SH-HK Connect covers mainly large-cap blue-chip stocks. SZ-HK Connect will focus on mid-to-small cap stocks, thereby making the MMA system more comprehensive. As the MMA system is getting mature, it is expected that additional products (such as ETFs) will be included in the MMA scheme and further diversify investable asset pools in the future. The MMA scheme provides an ideal way for international investors to further explore the China's A-share market through Hong Kong, and it helps the internationalization of China s financial market. SZ-HK Connect will further enhance Hong Kong markets trading activities. Statistics for SH-HK Connect show that up through last Friday, the average daily turnover (ADT) through the southbound trading link accounted for 3.6% of the HK market ADT since launch, and accounted for 7.6% since 16 August. Since the launch of SH-HK Connect, southbound trading witnessed net fund inflows of HK$ billion and the weighted average performance of eligible shares beat the HSI by 14.9 pts. Combining SH-HK Connect and SZ-HK Connect, the daily southbound quota will be doubled to RMB21 billion. We expect the HK market to further benefit from increased trading activities. Under the background of RMB/USD continuing suppression and continual capital outflows from China, we expect net capital inflows in MMA proceeds. The U.S. dollar is expected to further strengthen in the short term; therefore, RMB is under pressure against the U.S. dollar. Also, new applications for both Qualified Domestic Institutional Investors (QDII) and RMB Qualified Domestic Institutional Investors (RQDII) were suspended. As a result, we expect more and more institutional investors in China to allocate their assets to the Hong Kong equity market through MMA. The net capital flow of SH-HK Connect since its launching has been from China to Hong Kong, and we believe this trend will continue. The SZ-HK Connect start date has finally been announced and we believe that the Hong Kong stock market will benefit from it in the long-term. But we expect market volatility in the short-term. Although the U.S. markets See the last page for disclaimer Page 4 of 10

5 responded positively after the U.S. presidential election, we saw deeper adjustments in Hong Kong, which underperformed overseas markets.. The latest data indicators point to steady growth for the Chinese economy despite foreign trade performance being strongly correlated with the development of other economies. Further tightening of policies in China's domestic property markets have been observed in some tier-1 and tier-2 cities, but we expect China's current monetary policies to remain unchanged. The RMB remains suppressed in the short- to mid-term. The market expects that the Fed must raise interest rates in December. Donald Trump, U.S. president elect, has unveiled his political plan for the first 100 days. Markets are concerned about the effects of his trading policy on the global economy. The ECB has expressed a non-urgent tone lately on extension of its asset purchase scheme. This week, OPEC will hold a meeting to discuss oil-production freeze, and Italy is calling for a referendum on its constitution. South Korea's Parliament will vote on the impeachment of the president as earlier as Friday. These have added uncertainties to the markets. Chinese Translation 中文翻译 行业和公司焦点 新秀丽 (01910 HK):2016 年 3 季度财务数据符合预期 分析员 : 洪学宇 事件描述 : 新秀丽 ( 公司 ) 公布了其 2016 年 3 季度财务数据如下 : ( 美元 ) 3Q15 3Q16 同比 固定汇率同比 收入 ( 百万 ) % 22.8% 净利润 ( 百万 ) % -41.1% 调整净利润 ( 百万 ) % 3.9% 基本每股收益 % -42.1% 资料来源 : 公司, 国泰君安国际 观点评论 : 公司 2016 年 3 季度的业绩基本符合我们的预期 公司已于 2016 年 8 月 1 日完成了对 Tumi 的收购 若剔除 Tumi 的收入贡献,2016 年 3 季度收入同比增长 7.6%, 或按固定汇率计同比增长 7.9% 2016 年 3 季度毛利率同比上升 1.7 个百分点至 54.9%, 主要由于计入了 Tumi 若剔除 Tumi, 毛利率仍 上升 0.5 个百分点至 53.7%, 主要受益于来自直销渠道的收入占比提高 净利润同比大幅下降 41.0%, 主要受到收购 Tumi 相关的成本及利息开支所影响 若剔除上述因素, 净利润则同比上升 23.5% 投资建议 : 管理层预测 2017 年公司将保持稳定且有力的增长, 并且我们期待看到新秀丽和 Tumi 之间的 协同效应, 这将进一步加强公司在全球市场的竞争优势 目前公司的目标价是 港元, 投资评级为 收 集 我们可能会在下一份公司报告中维持公司的目标价及投资评级 See the last page for disclaimer Page 5 of 10

6 房地产行业 : 上海和天津首付比例提高分析员 : 刘斐凡 事件描述 : 在 2016 年 11 月 29 日, 人行上海总部和天津分行公布了一个关于抑制房价过快上涨的政策包 对于上海,(1) 购买首套住房且没有住房贷款记录的首付比例, 由 30% 上调至 35%;( 2) 购买二套普通住房或拥有住房贷款记录的首付比例, 调整为 50%;( 3) 非普通住宅的首付比例提高到 70% 对于天津, (1) 居民首套房首付比例从 20% 提高到 30%;3) 二套房且住房贷款未结清的的首付比例提高到 40% 观点评论 : 这些政策是对 一城一策 的延续 首付比例提高将会恶化居民的购买力, 从而抑制住房需求 因此, 我们相信这些调整很有可能为上海和天津楼市降温 尽管如此, 从长期来看, 良好的供需关系和强劲的刚需仍将支持上海和天津的房地产市场 我们预计首付比例会在销售均价及土地成本有上升趋势的城市进一步提升 我们认为政策环境会继续收紧 投资建议 : 基于房地产行业有吸引力的估值, 2016 年强劲的销售增长以及正在改善的基本面, 我们目前房地产行业的评级为 跑赢大市 然而, 政策收紧很有可能为过热的房地产市场降温并对房地产行业的估值施加压力 我们会在下一篇行业报告中将房地产行业的投资评级下调至 中性 对于拥有更少高成本土储和更低的杠杆比率的房地产开放商应会在未来表现更好 由于其强劲合约销售, 稳定的盈利能力及健康的财务状况, 我们这个月的首选是龙湖地产 (00960 HK) 目前, 我们的投资评级为 买入, 目标价为 港元, 相当于 2016 年 NAV 有 29% 的折让, 也相当于 7.0 倍 2016 年的核心市盈率和 1.0 倍 2016 年的市净率 大唐发电 (00991 HK): 建议向大唐集团分别增发 A 股和 H 股各 亿股分析员 : 吴逸超 事件描述 : 大唐发电 ( 公司 ) 发布公告, 建议分别发行约 亿 A 股和 亿 H 股, 全部由公司的母公司大唐集团认购 发行价格分别为 3.56 元人民币以及 2.12 元港币, 较最新的 A 股及 H 股收市价分别有 10.55% 的折让以及 1.92% 的溢价 总募集资金约为 亿人民币以及 亿港币, 发行完成后公司的总发行股本将由目前的 亿股 ( 其中 A 股约 亿股,H 股约 亿股 ) 增加至约 189 亿股 ( 其中 A 股约 亿股,H 股约 亿股 ), 意味着其余股东的持股比例将被摊薄约 29.6%, 而大唐集团的总持股比例将由目前的约 34.77% 上升至 54.07% 此次发行尚需独立股东批准 观点评论 : 和此前公告的 A 股发行相比, 此次公告增加了 H 股发行, 且明确了所有新发行股票将均由大唐集团认购, 这将导致大唐集团由目前的相对控股地位上升至绝对控股地位 我们认为大唐集团在获得对公司的绝对控股地位之后, 可能将回提高对公司的支持力度, 例如加快集团发电资产注入上市公司的进度 此次发行可增加公司资本金, 降低公司负债率和未来年度的利息支出 然而, 此次增发价格偏低, 对现有股东摊薄较多 投资建议 : 市场交易电量的增加和煤价的上升都将使火电公司的盈利承压 我们维持对大唐发电的 中性 评级, 当前目标价为 2.40 港元 See the last page for disclaimer Page 6 of 10

7 康师傅 (00322 HK): 2016 年 3 季度业绩好于预期分析员 : 吴宇扬 事件描述 : 公司公布 2016 年第 3 季度业绩, 主要指标表现如下 : 1-3 季度 ( 百万美元 ) 变动第 3 季度 ( 百万美元 ) 变动营业额 6, % 2, % 股东盈利 % % 每股盈利 ( 美分 ) % % 资料来源 : 公司 观点评论 : 康师傅 2016 年第 3 季度业绩好于预期 公司营业额同比下降 1.52% 至 亿美元, 股东净利同比下降 1.00% 至 1.43 亿美元, 情况均较第 2 季度有较大改善 第 3 季度康师傅营收改善主要归功于饮料收入的反弹, 其同比上涨 3.55% 至 亿美元 同时, 康师傅方便面收入为 9.69 亿美元, 同比下降 8.75%, 跌幅较第 2 季度有小幅缩小 饮料中茶品的营收同比增幅最快, 主要归因于公司加大了对不同茶系列的品牌推广 康师傅冰红茶和 NBA 及迪士尼进行合作, 绿茶植入了热播电视剧 诛仙, 均取得了不错的效果 公司采用多价格带策略去满足尽量多的客户需求 虽然目前来看高端产品增长还是相对乏力, 但中低端产品已经巩固住了市场份额, 尤其是中端方便面因价格相应地调整 3 季度营收情况有较大改善 投资建议 : 公司将于 2017 年 1 月 1 日将呈列货币由美元改为人民币 更改呈列货币可以减少人民币波动对财务报表造成的影响 预计 2016 年公司以人民币计价的营收相较于美元计价将多增加 5-6 个百分点 康师傅最坏的时候已经过去了, 第 3 季度业绩迎来触底反弹 我们预计公司的盈利在第四季度将维持 U 型复苏势头 我们或于下一份报告中上调投资评级至 收集 并上调目标价 最新报告 快讯 : 市场策略 : 深港通 12 月 5 日正式登场分析员 : 程嘉伟报告日期 : 报告摘要 监管部门宣布深港通 12 月 5 日正式开通 中国及香港两地证监会及交易所在 11 月 25 日联合宣布, 深港通将于 12 月 5 日正式启动 深港通操作与沪港通大致相同, 深股通合资格股票数目为 881 只, 港股通则新增 102 只股份至 417 只股份 深圳交易所指,12 月 2 日收市后, 若港股通股票名单发生变化, 中国创盈市场服务将公布更新后的股票名单 更多元化投资目标有助深化互联互通机制 深港通 是参照 沪港通 现有法律 监管和营运框架建立, 所以两者运作大致相同 目前沪港通两地合资格股份主要为大型蓝筹股, 加入深港通覆盖的中小型股份使互联互通机制更全面 随着互联互通机制转趋成熟, 预期更多产品 ( 如 ETF) 将纳入互联互通范畴, 未来可投资标的还将进一步多元化 互联互通提供一个理想渠道透过香港让国际投资者更了解内地 A 股市场, 有助中国金融市场国际化 进一步增加香港市场的交易活动 根据沪港通统计数据, 由沪港通开通至今, 港股通日均成交额在全市场的占比为 3.6%, 从 8 月 16 日宣布至今占比则为 7.6% 沪股通开通至今港股通净流入资金 3,621.7 亿港元, 合资格股份开通至今加权平均表现跑赢恒指 14.9 百分点 结合深港通和沪港通, 港股通每日额度将翻倍至 210 亿人民币 我们预期香港市场将进一步受惠于深港通带来的交易量上升 See the last page for disclaimer Page 7 of 10

8 在人民币兑美元贬值短期受压及内地资金外流的背景下, 预期北水南下情况持续 由于预期美元将持续走强, 人民币兑美元贬值压力短期仍然存在, 加上合格境内机构投资者 (QDII) 及人民币合格境内机构投资者 (RQDII) 暂停新申请, 预计更多内地机构投资者透过互联互通投资港股作资产配置 由沪港通开通至今总体资金是由内地净流入香港市场, 预期这个情况将持续 深港通终于开通了, 长远为香港市场带来正面的 但预期短期波动 美国在选后虽外围市场反应正面, 但香港市场近期调整 美国未来正式政策落实仍存在不确定性 最新数据显示中国经济增长总体基本平稳, 惟贸易受制于外围经济发展 内地部分一二线城市继续推出遏止楼价过热措施, 但预期中国货币政策维持不变 人民币中短期兑美元下行压力仍大 市场预期美联储 12 月一定加息 美国候任总统特朗普宣布首百日大计, 市场关注其贸易政策会否影响全球经济 欧洲央行最新表示无需过急决定是否延长资产购买计划 本周石油输出国组织将举行减产会议, 以及意大利修宪进行公投, 南韩国会最快在周五表决总统弹劾, 为市场增添不确定性 See the last page for disclaimer Page 8 of 10

9 Research Department 研究部 Grace Liu 刘谷 Head of Research, Market Strategy, Petrochemicals 主管, 市场策略 石化 (852) Noah Hudson Noah Hudson Consumer (Hotels), Gaming 消费 ( 酒店 ) 博彩 noah.hudson@gtjas.com (86755) Gary Wong 黄家玮 Environmental Protection, Infrastructure 环保 基建 gary.wong@gtjas.com.hk (852) Leo Wu 吴逸超 Coal, Electricity 煤炭 电力 wuyichao@gtjas.com (86755) Ray Zhao 赵睿 Conglomerate, E-commerce 综合 电子商务 zhaorui@gtjas.com (86755) Square Chui 徐惠芳 Futures 期货 square.chui@gtjas.com.hk (852) Kevin Guo 郭勇 Raw Materials, Gas 原材料 燃气 kevin.guo@gtjas.com (86755) Ricky Lai 黎柏坚 Telecommunications, Internet 电信 互联网 ricky.lai@gtjas.com.hk (852) Dayton Wang 王庆鲁 Insurance, Fixed-income 保险 债券 dayton.wang@gtjas.com.hk (852) Richard Cao 曹柱 Banking 银行 caozhu013592@gtjas.com (86755) Jun Zhu 朱俊杰 Clean Energy, Electric Equipment 清洁能源 电力设备 junjie.zhu@gtjas.com.hk (852) Andrew Song 宋涛 Consumer (Retailing), Home Appliances 消费 ( 零售 ) 家电 andrew.song@gtjas.com.hk (852) Van Liu 刘斐凡 Property 房地产 liufeifan@gtjas.com (86755) Sean Xiang 向宇豪 Machinery, Construction Materials 机械 建材 xiangyuhao@gtjas.com (86755) Terry Hong 洪学宇 Consumer (Apparel) 消费 ( 服装 ) hongxueyu@gtjas.com (86755) Johnny Wong 王俊浩 Macroeconomics, Property 宏观 房地产 johnny.wong@gtjas.com.hk (852) Toliver Ma 马守彰 Aviation, Automobiles & Components 航空 汽车 toliver.ma@gtjas.com.hk (852) Spencer Fan 范明 Shipping & Logistics, Ports, 航运物流 港口 fanming@gtjas.com (86755) Barney Wu 吴宇扬 Consumer (Food & Beverage, Household Products) 消费 ( 食品饮料 日用品 ) wuyuyang@gtjas.com (86755) Gary Ching 程嘉伟 Market Strategy 市场策略 gary.ching@gtjas.com.hk (852) Jake Wang 汪昌江 Research Assistant 研究助理 wangchangjiang@gtjas.com (86755) Wiley Huang 黄重钧 Research Assistant 研究助理 wiley.huang@gtjas.com.hk (852) Danny Law 罗沛达 Research Assistant 研究助理 danny.law@gtjas.com.hk (852) David Liu 刘静骁 Research Assistant 研究助理 david.liu@gtjas.com.hk (852) Kay Mai 麦梓琪 Research Assistant 研究助理 maiziqi@gtjas.com (86755) Esabella Zhao 赵舒蔓 Research Assistant, Translator 研究助理 翻译员 zhaoshuman013399@gtjas.com (86755) Penny Pan 潘凌蕾 Secretary, Translator 秘书 翻译员 penny.pan@gtjas.com.hk (852) See the last page for disclaimer Page 9 of 10

10 Company Rating Definition The Benchmark: Hong Kong Hang Seng Index / NASDAQ Composite Index Time Horizon: 6 to 18 months Rating Definition Buy Relative Performance >15%; or the fundamental outlook of the company or sector is favorable. Accumulate Relative Performance is 5% to 15%; or the fundamental outlook of the company or sector is favorable. Neutral Relative Performance is -5% to 5%; or the fundamental outlook of the company or sector is neutral. Reduce Relative Performance is -5% to -15%; or the fundamental outlook of the company or sector is unfavorable. Sell Relative Performance <-15%; or the fundamental outlook of the company or sector is unfavorable. Sector Rating Definition The Benchmark: Hong Kong Hang Seng Index / NASDAQ Composite Index Time Horizon: 6 to 18 months Rating Definition Outperform Relative Performance >5%; or the fundamental outlook of the sector is favorable. Neutral Relative Performance is -5% to 5%; or the fundamental outlook of the sector is neutral. Underperform Relative Performance <-5%; or the fundamental outlook of the sector is unfavorable. DISCLOSURE OF INTERESTS (1) Except for Shenzhen International Holdings Limited (00152 HK), the Analysts and their associates do not serve as an officer of the issuer mentioned in this Research Report. (2) The Analysts and their associates do not have any financial interests in relation to the issuer mentioned in this Research Report. (3) Except for SMI Holdings Group Limited (00198 HK), Guotai Junan International Holdings Limited (01788 HK), Binhai Investment Company Limited (02886 HK) and Link Holdings Limited (08237 HK), Guotai Junan and its group companies do not hold equal to or more than 1% of the market capitalization of the issuer mentioned in this Research Report. (4) Guotai Junan and its group companies have had investment banking relationships with China Aoyuan Property (03883 HK) / Zhejiang Expressway- H shares (00576 HK) / Modern Land (01107 HK) / GOME Electrical Appliances (00493 HK) / China Wood Optimization (01885 HK) / Anhui Conch Cement- H shares (00914 HK) / 361 Degrees (01361 HK) / Powerlong Real Estate (01238 HK) / China All Access (00633 HK) / Huaneng Renewables- H shares (00958 HK) / Hengdeli (03389 HK) / Sundart Holdings Ltd. (01568 HK) / China Dredging Environment Protection (00871 HK) / AviChina Industry & Technology- H shares (02357 HK) / China Power (02380 HK) / Sinotruk (03808 HK) / Xiao Nan Guo Restaurants (03666 HK) / SMI Holdings Group (00198 HK) / Chanjet Information Technology- H shares (01588 HK) / Tianyun International (06836 HK) / China U-Ton (06168 HK) / Huaneng Power- H shares (00902 HK) / Shanghai Electric- H shares (02727 HK) / Huishang Bank- H shares (03698 HK) / Bosideng (03998 HK) / WH Group (00288 HK) mentioned in this Research Report within the preceding 12 months. (5) Guotai Junan and its group companies are not making a market in the securities mentioned in this Research Report. (6) Guotai Junan and its group companies have not employed an individual serving as an officer of any issuers mentioned in this Research Report. There is no officer of any issuers mentioned in this Research Report associated with Guotai Junan and its group companies. DISCLAIMER This Research Report does not constitute an invitation or offer to acquire, purchase or subscribe for securities by Guotai Junan Securities (Hong Kong) Limited ("Guotai Junan"). Guotai Junan and its group companies may do business that relates to companies covered in research reports, including investment banking, investment services, etc. (for example, the placing agent, lead manager, sponsor, underwriter or invest proprietarily). Any opinions expressed in this report may differ or be contrary to opinions or investment strategies expressed orally or in written form by sales persons, dealers and other professional executives of Guotai Junan group of companies. Any opinions expressed in this report may differ or be contrary to opinions or investment decisions made by the asset management and investment banking groups of Guotai Junan. Though best effort has been made to ensure the accuracy of the information and data contained in this Research Report, Guotai Junan does not guarantee the accuracy and completeness of the information and data herein. This Research Report may contain some forward-looking estimates and forecasts derived from the assumptions of the future political and economic conditions with inherently unpredictable and mutable situation, so uncertainty may contain. Investors should understand and comprehend the investment objectives and its related risks, and where necessary consult their own financial advisers prior to any investment decision. This Research Report is not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation or which would subject Guotai Junan and its group companies to any registration or licensing requirement within such jurisdiction Guotai Junan Securities (Hong Kong) Limited. All Rights Reserved. 27/F., Low Block, Grand Millennium Plaza, 181 Queen s Road Central, Hong Kong. Tel.: (852) Fax: (852) Website: See the last page for disclaimer Page 10 of 10