Main Beneficiary of One Belt, One Road Initiative, Maintain Accumulate 一带一路 计划的主要受益者, 维持 收集. Profitability Undermined by Falling Wafer ASP, Neutral

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1 Equity Research 股票研究 Research Department 今晨焦点证券研究报告 Equity Research Report Table of Contents 目录 Weekly Overview and Trading Focus 上周回顾和本周交易提示 Upcoming key economic data and events 即将公布的重要经济数据和事件 Industry and Company Focus 行业和公司焦点 Nil. Latest Reports 最新报告摘要 Company Name 公司名称 China Communications Construction 中交建 GCL Energy 保利协鑫能源 Samsonite Poly Code 代码 HK HK HK HK HK Title 标题 Main Beneficiary of One Belt, One Road Initiative, Maintain Accumulate 一带一路 计划的主要受益者, 维持 收集 Profitability Undermined by Falling Wafer ASP, Neutral 盈利能力将受硅片售价滑落冲击, 下调至 中性 Strong Growth In Tumi Brand, Reiterate Buy TP 目标价 Chg 变动 Rating 评级 29 May 2017 Chg 变动 EPS Est. Change? 盈利预测 是否改变 HK$13.90 Accumulate -- Y HK$ 收集 -- 是 HK$0.90 Neutral Y HK$0.90 中性 是 HK$33.50 Buy -- Y 新秀丽 HK Tumi 品牌增长强劲, 重申 买入 HK$33.50 买入 -- 是 58.com Inc WUBA US 58 同城 WUBA US 1Q17 Results Above Expectations, Amazing Growth in Online Recruitment, Accumulate US$ Accumulate -- Y 2017 年第一季度业绩超预期, 在线招聘获得令人惊喜的增长, 收集 US$ 收集 -- 是 Newly Published Key Economic Data for China, and Europe 中美欧最新公布的重要经济数据 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 See the last page for disclaimer Page 1 of 10

2 HSI Performance HSCEI Performance 29,000 16,000 27,000 25,000 23,000 21,000 19,000 17,000 May/16 Aug/16 Nov/16 Feb/17 May/17 Source: Bloomberg 14,000 12,000 10,000 8,000 6,000 May/16 Aug/16 Nov/16 Feb/17 May/17 Source: Bloomberg Weekly Overview and Trading Focus (Gary Ching) 上周回顾和本周交易提示 ( 程嘉伟 ) Overview of last week 上周回顾 Hong Kong market went up with significant increase in Chinese property and Chinese insurance sectors. International rating agency Moody s downgraded the credit rating of both China and Hong Kong, but it did not affect Hong Kong stock market. Overall, HSI increased 1.8% wow to 25,639 but HSCEI increased 3.0% wow to 10,579. OPEC decided to extend the existing oil output cut to March 2018, but the oil production cut was not intensified, oil prices rebounded after dip. The FOMC s meeting minute in May revealed that most of the committees agreed to initiate the shrinkage of the Fed s balance sheet this year. Boosted by the increase in the prices of technology stocks, US markets went up with S&P 500 up 1.4% wow to 2,415 and Dow Jones Industrial Average up 1.3% wow to 21,080. Shanghai Composite Index increased 0.6% wow to 3,110. We expect that the Hong Kong stock market will be volatile in the short term. 上周港股上升, 内房股及内险股升幅明显 国际评级机构穆迪把中国和香港债权评级下调, 但没有打击股市表现 总结, 恒指按周累计上升 1.8%, 收报 25,639 点, 国指按周累计上升 3.0% 至 10,579 点 石油输出国组织 (OPEC) 决定延长目前减产协议至 2018 年 3 月, 但减产力度没有加强, 国际油价下跌后回稳 美联储 5 月会议纪要显示普遍委员同意今年内开始缩表 在科技股强势带领下美股上升 标准普尔 500 指数按周累计上升 1.4%, 收报 2,415 点, 道琼斯指数全周累计上升 1.3%, 收报 21,080 点 上证综合指数按周累计上升 0.6%, 收报 3,110 点 我们预期香港股市场短期波动 Key market data performance of last week (Gary Ching) 上周主要市场数据表现 ( 程嘉伟 ) Key data 主要数据 WoW Change 环比变动 O/N SHIBOR 隔夜 SHIBOR Decreased 11.4bps 下跌 11.4 基点 RMB middle rate 人民币中间价 Increased 88 bps 上调 88 个基点 USD/RMB onshore 在岸人民币兑美元即期汇率 Increased 295 bps 上升 295 个基点 PBoC open market operation 人民银行公开市场操作 RMB30 billion liquidity withdrawal 净回笼 300 亿人民币 US dollar index 美元指数 Increased 0.3% 上升 0.3% See the last page for disclaimer Page 2 of 10

3 EUR/USD spot rate 欧元兑美元 Decreased 0.2% 下跌 0.2% WTI oil 纽约期油 Decreased 1.1% 下跌 1.1% Spot price of gold 黄金现货价格 Increased 0.9% 上升 0.9% Source: Bloomberg 数据来源 : 彭博 Trading focus of this week (Gary Ching) 本周交易提示 ( 程嘉伟 ) Upcoming key economic data and events (Gary Ching) 即将公布的重要经济数据和事件 ( 程嘉伟 ) Market Previous Date Country Data / events Consensus Value 日期国家数据 / 事件市场一致预期前值 30 May 5 月 30 日 March S&P/Case-Shiller 20 Home Price Indices, mom, SA 3 月标普 /Case-Shiller20 城市房价指数 ( 季调, 环比 ) Change 变动 0.90% 0.69% 0.21ppts 31 May 5 月 31 日 China 中国 May Official Manufacturing PMI 5 月官方制造业 PMI (0.2ppts) 31 May 5 月 31 日 Europe 欧洲 May Euro-zone CPI (yoy) 5 月欧元区 CPI 同比增速 1.5% 1.9% (0.4ppts) 01 June 6 月 01 日 Europe 欧洲 May Markit Euro-zone Manufacturing PMI (Final) 5 月 Markit 欧元区制造业 PMI( 终值 ) ppt 01 June 6 月 01 日 May ISM Manufacturing 5 月 ISM 制造业指数 (0.2ppts) 02 June 6 月 02 日 May Chg in Nonfarm Payrolls (mom '000) 5 月非农就业人数增减 ( 环比, 千人 ) (12.3%) 02 June 6 月 02 日 May Unemployment Rate 5 月失业率 4.4% 4.4% 0ppt 02 June 6 月 02 日 Europe 欧洲 April Euro-zone PPI (yoy) 4 月欧元区 PPI 同比增速 4.5% 3.9% 0.6ppts Note: All the forecasts in the above table are based on market consensus from Bloomberg. 注 : 上表中所有预测都基于彭博的市场一致预期 See the last page for disclaimer Page 3 of 10

4 Industry and Company Focus Nil. Latest Reports China Communications Construction (01800 HK): Main Beneficiary of One Belt, One Road Initiative, Maintain Accumulate Rating: Accumulate 6-18m TP: HK$13.90 Analyst: Gary Wong Report Date: Summary China Communications Construction s (01800 HK) 1Q17 revenue increased 0.1% YoY to RMB82,699 million. Net profit increased 36.2% YoY to RMB3,141 million. Results were better than expected. Overall gross margin dropped 0.4 ppts YoY to 12.7%. In 1Q17, the Company signed new contracts worth RMB124.6 billion, up 37.7% YoY. The One Belt, One Road initiative will be the main driver to sustain the Company s revenue growth from overseas projects. Domestic investment projects and construction can maintain stable growth. Infrastructure construction revenue is expected to accelerate at a CARG of 9.0% in In 2016, the dredging segment s revenue dropped 9.6% YoY, while the heavy machinery manufacturing segment recorded 7.9% YoY increase in revenue. We expect the dredging segment to rebound in 2017 and growth in heavy machinery manufacturing purely depends on the increase of overseas ports construction demand. Our EPS estimates for FY17-FY19 are RMB1.172, RMB1.302 and RMB1.438, respectively. We believe that One belt, One Road brings positive effects to infrastructure construction revenue growth. However, the increasing debt level and with borrowing rates bottoming out in 2016, finance costs may increase to a higher degree than expected in FY17-FY19. Overall, we think the current valuation is attractive and raise the TP to HKD13.90, representing 8.5x FY18 EV/EBITDA. Maintain Accumulate. GCL Poly Energy (03800 HK): Profitability Undermined by Falling Wafer ASP, Neutral Rating: Neutral 6-18m TP: HK$0.90 Analyst: Jun Zhu Report Date: Summary 1Q17 operating results were worse than expectated, mainly due to falling wafer ASP. In 1Q17, poly-silicon volume went up YoY by 6.9%, external sales dropped YoY by 43.4% and ASP went up YoY by 23.6%. On the other hand, wafer volume was up by 19.2% YoY, external sales up 10.6% YoY, but ASP fell 29.4% YoY. GCL Suzhou New Energy Ltd., a subsidiary running the wafer business of GCL group, announced a YoY earnings decline of 92.4% in 1Q17, posing an alert to the outlook of the GCL group in Solar materials price recovery is not sustainable and the price is expected to remain under pressure in 2H17. Multi-crystalline wafer price rebounded by 5.6% over the last 1-month period following a sharp drop of 29.8% YoY in 1Q17. We expect both the poly-silicon and multi wafer prices to remain under pressure following the solar installation rush in 1H17. As the outlook remains quite uncertain, we have trimmed our earnings estimates from FY17 to FY19. Considering the uncertain outlook for the solar industry coupled with plunging solar materials prices, we have trimmed down our earnings forecasts for the next few years. Our revised EPS estimates from FY17 to FY19 are RMB 0.080, RMB and RMB 0.119, respectively. We cut our TP to HKD 0.90 and reduce the rating to Neutral. Our new TP corresponds to 10.0x/ 7.3x/ 6.7x FY17/ FY18/ FY19 PER or 0.7x FY17/ FY18 PBR. See the last page for disclaimer Page 4 of 10

5 Samsonite (01910 HK): Strong Growth In Tumi Brand, Reiterate Buy Rating: Buy 6-18m TP: HK$33.50 Analyst: Terry Hong Report Date: Summary 1Q17 top line beat expectations. Revenue increased by 29.1% YoY to US$733 million, driven largely by the inclusion of Tumi. Excluding the 18.3% revenue contribution from Tumi, 1Q17 constant currency revenue increased by 5.7% YoY. Net profit increased by 4.1% YoY to US$37.0 million, which was primarily due to higher GPM and partially offset by increased operating expenses and finance costs. On 5 May 2017, Samsonite completed the acquisition of ebags. ebags is a leading online retailer of bags and related accessories for travel with business mostly in market. Total purchase cost of US$105 million was paid in cash. The acquisition of ebags will benefit Samsonite s direct-to-consumer e-commerce business in North America and worldwide, but we don't expect ebags to be profitable during Raise TP to HK$33.50 and reiterate Buy. Tumi maintained very strong growth momentum in 1Q17, which we believe will continue in , driven by network expansion in North America, Asia and Europe. We revise up EPS forecasts by 4.0%, 6.5% and 6.8% to US$0.193, US$0.230 and US$0.264, respectively. The new TP represents 22.4x/18.8x/16.4x 2017/2018/2019 PER, respectively. Risks: 1) unexpected appreciation of the dollar against other currencies, 2) liquidity and solvency risks triggered by heavy debt obligations related to the Tumi acquisition, and 3) decline in the global tourism industry. 58.com Inc (WUBA US):1Q17 Results Above Expectations, Amazing Growth in Online Recruitment, Accumulate Rating: Accumulate 6-18m TP: US$55.00 Analyst: Ray Zhao Report Date: Summary 58.com Inc ( 58.com or the Company ) posted 1Q17 results above expectations. In 1Q17, revenue reached USD288.2 mn, up 24.6% yoy, above expectations. Non GAAP operating profit reached USD31.5 mn. Non GAAP net profit reached USD15.3 mn. 2Q17 revenue guidance reached between USD327.7 mn and USD342.3 mn, up between 10.0% and 14.9%. Revenue guidance for FY17 and FY18 was in line. Key points: 1) 58.com s paying membership accounts growth slightly accelerated. Total paying membership accounts reached 2.21 mn, up 21.7% yoy, up 3.7 ppt qoq, in which paying membership accounts from 58.com s app platform reached 1.35 mn, up 30.6% yoy. 2) Online recruitment business grew very fast. Online recruitment business revenue increased by 50% yoy, accounting for 30% of its total revenue, with paying membership accounts of 0.6 mn, up around 100% yoy. 3) 58.com s profit margin is expected to improve steadily. We slightly revise up our FY17-FY18 non GAAP net operating margin assumptions to 16.1% and 20.4%. Raise Target Price to USD55.00 but maintain investment rating as "Accumulate". 58.com has dominated China s online blue collar recruitment market. We expect 58.com and Tencent to cooperate steadily. We have revised up our FY17-FY19 non GAAP net profit estimates to USD132.9 mn, USD211.7 mn, and USD300.4 mn, respectively. Raise TP to USD55.00, representing 5.5x 2018 PS and 41.4x 2018 non GAAP PE. See the last page for disclaimer Page 5 of 10

6 Newly Published Key Economic Data for China, and Europe (Gary Ching) 中美欧最新公布的重要经济数据 ( 程嘉伟 ) Country 国家 Indicator 指标名称 Data Period 数据期间 Current Value 当期值 MoM / QoQ 环比变动 YoY 同比变动 Market Consensus 市场一致预期 Real GDP growth qoq (2nd edition) 真实 GDP 季环比增速 ( 第 2 次修訂 ) 1Q 第 1 季 1.2% (0.9ppts) 0.4ppts 0.9% Durable Goods New Orders, mom, SA, Preliminary 经季调耐用品订单 ( 环比, 初值 ) April 4 月 (0.7%) (3.0ppts) (4.0ppts) (1.5%) University of Michigan Consumer Sentiment (Final) 密西根大学消费者信心指数 ( 終值 ) May 5 月 ppts 2.4ppts 97.5 Source: Bureau of Economic Analysis, US Census Bureau, The University of Michigan, Bloomberg 数据来源 : 经济分析局 人口普查局 密歇根大学 彭博 Chinese Translation 中文翻译 行业和公司焦点 Nil. 最新报告 中交建 (01800 HK): 一带一路 计划的主要受益者, 维持 收集 评级 : 收集 6-18m 目标价 : HK$13.90 分析员 : 黄家玮报告日期 : 报告摘要 中交建 (01800 HK)2017 年首季营业收入同比增长 0.1% 至 亿元 ( 人民币, 下同 ) 净利润同比增长 36.2% 至 亿元 业绩好于预期 毛利率同比下滑 0.4 个百分点至 12.7% 期内公司新签合同同比增长 37.7% 至 1,246 亿元 一带一路 计划将是维持公司海外项目收入增长的主要动力, 而国内投资项目和建设维持稳定增长 我们预计公司 2016 年 年的基建收入达到 9.0% 的年均复合增长率 于 2016 年, 疏浚业务录得同比 9.6% 的收入下跌, 而重型机械生产业务则录得同比 7.9% 的收入上升 我们预计疏浚业务将在 2017 年反弹, 重型机械生产业务的增长将倚靠海外港口建设需求的增长 我们对 2017 至 2019 年的每股盈利预测分别为 元, 元及 元 我们相信 一带一路 将为基建收入增长 带来正面影响 而债务增长和贷款利率于去年见底回升或可能对 2017 年至 2019 年的融资成本带来超于预期的增加 总体而言, 我们认为现估值吸引并提高目标价至 港元, 相当于 8.5 倍 2018 年 EV/EBITDA 维持 收集 评级 See the last page for disclaimer Page 6 of 10

7 保利协鑫能源 (03800 HK): 盈利能力将受硅片售价滑落冲击, 下调至 中性 评级 : 中性 6-18m 目标价 : HK$0.90 分析员 : 朱俊杰报告日期 : 受硅片售价大跌影响,2017 年一季度业绩差于预期 多晶硅于一季度的产量 销量和均价分别同比上升 6.9% 下降 43.4% 以及上升 23.6% 而硅片于期内的产量和销量分别录得 19.2% 和 10.6% 的同比上升, 但销售均价则同比大跌 29.4% 运营集团硅片业务的子公司保利协鑫( 苏州 ) 新能源有限公司公布一季度盈利同比倒退 92.4%, 为集团 2017 年的展望提供了预警 光伏材料的价格回升不可持续并预计于 2017 下半年继续承压 多晶硅片的价格在经历了一季度同比 29.8% 的急剧下滑后, 已于过去一个月里回升 5.6% 我们预计光伏材料( 多晶硅及多晶硅片 ) 的价格将于 2017 上半年的光伏抢装潮后继续承压 在前景充满不确定性下, 我们下调了 2017 至 2019 的盈利预测 鉴于光伏行业前景的不确定性以及光伏材料的价格暴跌, 我们调低了我们对公司未来几年的盈利预测 我们经调整后的 2017/ 2018/ 2019 财年的每股净利分别为人民币 0.080, 人民币 及人民币 我们下调公司的投资评级至 中性, 目标价削减至 0.90 港元 我们新的目标价相当于公司 10.0 倍 / 7.3 倍 / 6.7 倍 2017/ 2018/ 2019 年市盈率或 0.7 倍 2017/ 2018 年市净率 新秀丽 (01910 HK): Tumi 品牌增长强劲, 重申 买入 评级 : 买入 6-18m 目标价 : HK$33.50 分析员 : 洪学宇 报告日期 : 年一季度收入超出预期 收入同比增长 29.1% 至 733 百万美元, 主要由于 Tumi 的加入而带动 剔除由 Tumi 带来的 18.3% 的收入贡献后,2017 年 1 季度固定汇率收入同比增长 5.7% 净利润同比上涨 4.1% 至 37.0 百万美元, 主要由于毛利率改善, 但被上涨的运营费用及财务费用所部分抵消 新秀丽于 2017 年 5 月 5 日完成对 ebags 的收购 ebags 是一家领先的旅游箱包和相关配件的网上零售商, 其业务主要在市场 总收购代价为 105 百万美元, 以现金支付 ebags 的收购将会有利于新秀丽在北美市场以及全球市场推行其直接面向消费者的电商业务, 然而我们预期 ebags 在 年期间并不会实现盈利 提升目标价至 港元并重申 买入 Tumi 在 2017 年 1 季度保持了强劲的增长动能, 并且我们相信随着其在北美 亚洲和欧洲的网络扩张, 该动能可在 年继续 我们分别上调 年每股盈利预测 4.0% 6.5% 和 6.8% 至 美元 美元和 美元 新的目标价分别相当于 22.4 倍 /18.8 倍 /16.4 倍 2017/2018/2019 年市盈率 风险因素 :1) 美元相对其他货币超预期的升值 ;2) 收购 Tumi 相关的沉重债务引发流动性和偿付风险 ;3) 全球旅游行业的下滑 See the last page for disclaimer Page 7 of 10

8 58 同城 (WUBA US): 2017 年第一季度业绩超预期, 在线招聘获得令人惊喜的增长, 收集 评级 : 收集 6-18m 目标价 : US$55.00 分析员 : 赵睿报告日期 : 同城 ( 公司 )2017 年第一季度业绩超出预期 2017 年第一季度收入达到 百万美元, 同比增 24.6%, 超出预期 非 GAAP 经营利润达到 31.5 百万美元 非 GAAP 盈利达到 15.3 百万美元 2017 年第二季度收入指引在 百万美元至 百万美元, 同比增长 10.0% 至 14.9% 但是 2017 和 2018 财年全年指引符合预期 要点 :1)58 同城的付费会员账户增长略微加快 总付费会员账户数量达到 2.21 百万, 同比增长 21.7%, 较上个季度提高 3.7 个百分点 其中 58 同城平台的付费会员账户达到 1.35 百万, 同比增长 30.6% 2) 在线招聘业务增长非常快 招聘业务收入同比增长超过 50%, 占总收入 30%, 其中招聘业务付费会员账户达到 60 万, 同比约增长 100% 3) 58 同城的利润率预期稳步增长 我们调高了对 58 同城 2017 财年和 2018 财年的非 GAAP 经营利润率假设至 16.1% 和 20.4% 提高目标价至 美元, 维持投资评级为 收集 58 同城已经主宰了中国在线蓝领招聘市场 我们期待 58 同城和腾讯开展更深入合作 我们提高了 财年的非 GAAP 盈利预测至 百万美元,211.7 百万美元, 和 百万美元 提高目标价至 美元, 相当于 5.5 倍 2018 年预测市销率和 41.4 倍的 2018 年非 GAAP 市盈率 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) 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) 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) Kay Mai 麦梓琪 Health care 医药 maiziqi@gtjas.com (86755) David Liu 刘静骁 Petrochemicals 石化 david.liu@gtjas.com.hk (852) Jake Wang 汪昌江 Coal, Electricity 煤炭 电力 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) Gary Yang 杨光 Research Assistant 研究助理 gary.yang@gtjas.com.hk (852) Danny Deng 邓协 Research Assistant 研究助理 danny.deng@gtjas.com.hk (852) 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), Link Holdings Limited (08237 HK), GFI MSCI A I-R (CNY) (83156 HK),GFI MSCI A I(03156 HK) and CAM SCSMALLCAP(03157 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 Modern Land (01107 HK) / China Aoyuan Property (03883 HK) / SMI Holdings Group (00198 HK) / Evergrande Real Estate (03333 HK) / GOME Electrical Appliances (00493 HK) / Dongjiang Environmental- H shares (00895 HK) / Xiao Nan Guo Restaurants (03666 HK) / Sundart Holdings Ltd. (01568 HK) / China Singyes Solar Technologies (00750 HK) / China Wood Optimization (01885 HK) / Anhui Conch Cement- H shares (00914 HK) / 361 Degrees (01361 HK) / Powerlong Real Estate (01238 HK) / Huaneng Renewables- H shares (00958 HK) / Huaneng Power- H shares (00902 HK) / AviChina Industry & Technology- H shares (02357 HK) / China Power (02380 HK) / Sinotruk (03808 HK) / Tianyun International (06836 HK) / Huishang Bank- H shares (03698 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