CMS (HK) Research Highlights

Jun 16, 2014 (Monday) 晨会报告 CMS (HK) Research Highlights 2H2014 China Healthcare Equity Strategy: Crowded trade in reverse; Selective BOD 1. Recent stock correction has largely priced-in negatives. Limited fundamental impact for market leaders especially, from tender delay due to structural issues such as unresolved local conflict of interests and government antibribery investigation. Sector growth remains healthy at 2x China GDP growth. 2. Current 2014 company growth guidances remain SAFE. Leaders like Sihuan, Dawnrays, CSPC, CMS, Sinopharm continue to perform strongly Jan-Apr or year to date. 3. Increasing investment and business strategy focused on LT value/growth: drug R&D pipeline, medical services, sales network expansion, value chain integration, market consolidation. 4. Antibribery effect diminishing but not disappearing; Case-by-case impact only 5. Winning factors: Scale, flexible sales model, M&A strength and execution, mgmt LT vision/strategy 6. Reiterate BUY on market leaders Phoenix Healthcare, Essex Biotech, Dawnrays Pharma, CSPC Pharma, Sihuan Pharma, ikang Healthcare, and Sinopharm, in order of upside potential. Note that we see less negatives for medical service plays vs. drugs plays going forward. (Jonathan Hsu) HK Indices Last price chg % chg HSI Finance Properties Utilities 23,319.17 144.1 0.62 31,657.71 176.7 0.56 29,365.04 309.0 1.06 51,407.56 324.9 0.64 Commerce&Industry 14,144.32 82.45 0.59 HSCEI 10,516.98 85.32 0.82 HSCCI 4,353.64 38.10 0.88 HKSPGEM 519.59-1.55-0.30 World Indices Last price chg % chg FTSE 100 DAX 30 6,811.89-31.22-0.46 9,882.67-56.03-0.56 CAC 40 4,534.58-19.82-0.44 DJIA 16,734.19-109.69-0.65 S&P500 1,930.11-13.78-0.71 Nasdaq Composite 4,297.63-34.30-0.79 Nikkei 225 15,097.84 124.31 0.83 Asia-Pacific Indices Last price chg % chg KOSPI 1,990.85-20.80-1.03 TWSE 9,196.39-8.26-0.09 STI 3,292.46-0.55-0.02 India BSE 30 25,236.42-339.79-1.33 S&P/ASX 200 5,405.05-23.75-0.44 HSI One Year 25000 24000 Longyuan Power (916 HK, Price: HKD 8.61, Buy, TP: HKD 11.39) Wind power generation for May turned around and relieved market concern May's Wind power generation turned around (+17% YoY), relieved market concern Accelerated progress of ultra-high voltage (UHV) is expected, grid curtailment of wind power in Northern China will be significantly improved from 2015 Valuation of the company lower than historical average, sector correction already priced in negative factors Events Wind power generation of Longyuan for Feb to April in 2014 saw negative YoY growth, due to unsatisfactory wind resources in the northern regions. May s wind power generation turned around (YoY +17%), relieved market concern. Our views We expect new installed capacity to increase by more than 30% YoY for 2014, while the ratio of grid curtailment decreased to 11% for 2014 and average utilization hours increased by 4.2% YoY to 2,200 hours. Longyuan has no CDM receivables; it has no impairment risk after the one-off impairment in 2013. We believe UHV will significantly improve the transmission of wind power in Northern China from 2015, which are 23000 22000 21000 20000 19000 18000 Jun/13 Oct/13 Feb/14 Jun/14 HSCEI One Year 13000 12500 12000 11500 11000 10500 10000 9500 9000 8500 8000 Jun/13 Oct/13 Feb/14 Jun/14 Source:Bloomberg China Merchants Securities (HK) Research +852-3189-6888 1 of 17

beneficial to the wind power operators. Therefore, we recommend buying on dip in 2H2014. Adjustment to earnings forecast We revised up 2014-2015E revenue by 6.1% and 3.9% respectively, which is mainly because: 1) more new projects will be located in Guangxi, Hunan and Hubei for 2014 where are southern areas not subject to grid curtailment. We expect the ratio of grid curtailment of the company for 2014 to decrease to 11% (2013: 11.8%); 2) construction of transmission lines fell short of expectation. The new installed capacity of the company was only 1.37GW for 2013, and it is expected to rebound to 1.8GW for 2014; 3) the utilization hour is expected to rebound to 2,200 hours for 2014. Our earnings forecast on the company are similar to Bloomberg consensus. Valuation/ Key risks Our DCF TP is HK$11.39, implying 2014-2015E P/E of 21.7x and 18.3x respectively. Our current TP is 42% higher than the previous one, which is mainly because: 1) our previous view on the industry was relatively conservative; 2) we use DCF valuation (the valuation by the previous method was 18x target PE, more conservative); 3) the 2013 results of the company was 20% lower than market consensus, which sufficiently released risks, and the CAGR of net profit for 2014-2016E is 32.4%. Negative factors for the sector are already priced in, its valuation is now lower than the normal level of 17~20x PE; Longyuan is currently traded at 16.4x 2014P/E, lower than its historical average of 20x; the company is the largest wind power operator with outstanding management and profitability among its peers. (Yin Lei) Singyes Solar (750 HK) surged by more than 6% [News 1] The provincial government of Jiangsu province has released its benchmark for 1GW distributed photovoltaic (PV) power generation to its various cities. In addition, the provincial government is also confident in accomplishing its 1GW distributed target. If the benchmark can be well accomplished, they may consider elevating the benchmark with retrospective effect. Based on the progress of the project, the distributed PV in Jiangsu province shall commence construction by the end of June. Jiangsu provincial government is also considering various supports to distributed PV, including the provision of subsidies. http://business.sohu.com/20140610/n400646850.shtml [News 2] On June 3, Anbang Property & Casualty Insurance Company Limited submitted a document on new types of insurance for PV industry to the CIRC. In most cases, this will become the first type of insurance in the PRC involving the loss during the operation of PV power station. Reporters of Economy & Nation Weekly found that market participants are looking for opportunities to replace bank loans of PV projects through power generation insurance and venture capital. Apart from Anbang Insurance, several insurance companies including, Yingda Taihe Property Insurance, a subsidiary of the State Grid Corporation, as well as JLT Lixin Insurance, a foreign insurance company, are also exploring related business. 2 of 17

Comments: 1. The plan submitted by Anbang Insurance is the first PV operation insurance in China. It can be interpreted as a bullish view of the financial institutions for distributed PV projects. We can expect that banks in China will gradually allocate loans to distributed PV projects. 2. Apart from Jiangsu provincial government, distributed PV can also be promoted to the other provinces. It is expected that distributed installed capacity will reach 4GW in 2014, up 167% YoY. 3. We expect that government policies on distributed PV will be more detailed in 2H2014, and the market of distributed PV will soar outright in 2015. 4. Singyes Solar (750 HK) is the only distributed PV stock in the Hong Kong market. We recommend a BUY rating on it with TP HK$14.2. (Yin Lei) Technology - Intel raised 2Q14 guidance on stronger PC demand and longer WinXP refresh cycle Positive to Lenovo (992 HK, BUY, TP HK$10.5) Intel (INTL US) raised 2Q14 revenue guidance by 5% from $13bn to $13.7bn and 2Q14 gross margin guidance by 100bps to 64%, driven by stronger business PC demand on Win XP refresh. The company also revised up its 2014 revenue and gross margin guidance, given the continued momentum from refresh cycle for another 12-18 months. We estimate that over 1/4 of global PC is running on WinXP, implying that the replacement market will become a solid growth driver for PC supply chain in coming quarters. We believe this is in-line with Lenovo management's earlier comment on better commercial PC recovery, stabilized China PC market and slower tablet cannibalization impact. We believe Intel's revision is positive to Lenovo (992 HK, BUY, TP HK$10.50), the global largest PC maker. We reiterate our BUY call with TP HK$10.5, given its strengthening PC leadership, smartphone/tablets opportunities in EM/overseas, accelerated Moto turnaround trend with stronger product pipeline and market penetration. Our FY-15-16 EPS are US$0.066/0.109. Intel's new guidance - 2Q14 Revenue: $13.4-14bn (+5% to +10% QoQ), vs old guidance of $12.5-13.5bn (-2% to +6% QoQ) - 2Q14 Gross Margin: 64% (up 430bps QoQ), vs old guidance of 63% (up 330bps QoQ) - 2014 Revenue: positive YoY growth, vs old guidance of flat YoY growth - 2014 Gross Margin: 61% or above (up 120bps+ YoY), vs old guidance of 61% (+120bps YoY) (Alex Ng) Technology - Sino-MR data confirmed Coolpad (2369 HK, BUY, TP HK$2.73)'s No.1 position in China 4G market in May Sino-MR released China 4G shipment data in May, with Coolpad 3 of 17

surpassing Apple as No.1 position in China 4G market. Coolpad's market share was 23.1% (up 1.3ppt MoM), while Samsung's share was down 6.2ppt MoM to 18.8% and Apple down 12.4ppt to 15.7%. This is in-line with Coolpad management's earlier comment that Coolpad would take over Apple as the largest 4G brand in China market in May. In addition, we noted that other Chinese brands, such as Lenovo, OPPO, K-Touch, Huawei, ZTE, Hisense and BBK, also posted market share gains in China's 4G market in May. Besides, during Mobile Asia Expo in Shanghai last week, China Mobile's chairman revealed that CM's TD-LTE terminal shipment has reached 12mn units in Jan-Apr (vs full-yr target 100mn) while total TD-SCDMA/TD-LTE shipment was 67mn units in Jan-Apr (vs full-yr target 200mn). Given that CM's new 4G-LTE subsidy policy has started in June, we believe TD-LTE shipment will significantly accelerate in 2H14, benefiting Coolpad given its China 4G leadership and close partnership with China Mobile. Despite market concerns about 2H margin pressure on intensified competition, we expect this can be offset by Coolpad's scaling benefits, better mix from ecommerce channels and Coolcloud ecosystem. We reiterate our BUY call on Coolpad with TP of HK$2.73. Our 2014-16E EPS are HK$0.21/0.26/0.32. (Alex Ng) Overseas Macro Week in Review Overall, there were not many market impacting data releases last week in the overseas markets. The main news was the World Bank cut its economic forecast for global growth from 3.2% YoY to 2.8% YoY, primarily reflecting lower growth forecasts for the US and the BRICS. 1Q growth in the US and Eurozone were both weaker than initially expected, which has caused many forecasters to lower their full year GDP forecasts. US May retail sales growth was lower than the market expected, primarily due to a sharp upward revision of April data. Growth slowed from 0.5% MoM (revised up) to 0.3% MoM, with the growth mostly led by auto sales (up 1.4% MoM). Retail sales growth excluding auto sales was weaker, slowing from 0.4% MoM (revised up) to 0.1% MoM. The biggest drag on retail sales was clothing sales, which fell -0.6% MoM. Initial jobless claims were steady last week, up slightly from 313k (revised up) to 317k. The four week moving average edged up to 315k from 310k. Overall, labor market data continues to show gradual improvement. Eurozone April industrial production rebounded, up to 0.8% MoM from -0.4% MoM (revised down), and 1.4% YoY from 0.2% YoY (revised up). By subcategory, the strongest performing subcategories were energy production (2.5% MoM) and non-durable consumer goods (2.1% MoM). By country, Spain (1.7% MoM), Italy (0.7% MoM), Germany (0.4% MoM), and France (0.1% MoM) all registered positive growth. This rebound was in line with our expectations, as April manufacturing PMI rose sharply. It is likely that growth will moderate slightly in May. Macroeconomic data releases this week include the US CPI data, housing starts data, FOMC meeting announcement and forecasts, and the Philadelphia Fed Survey. Additionally, Germany will publish the ZEW survey. (Lynn Song) 4 of 17

A-share Research Highlights (CMS Research Center) 1. Comments on financial and monetary data (May 2014) - Targeted relaxation showing effects [Xie Yaxuan, Zhao Wenli, Zhang Yiping, Yan Ling, Zhao Ke, June 13, 2014] Event: According to data released by the People s Bank of China on June 12, 2014: as at end of May 2014, the balance of M2 (broad money) was RMB11.823 billion, up 13.4% YoY, rising 0.2pct compared to end of last month. M1 (narrow money) grew 5.7% YoY, rising 0.2pct compared to end of last month. The scale of social financing was RMB1.40 trillion in April, down RMB145.4 billion MoM. Comments: 1. Total amount of social financing was RMB1.40 trillion in May, up 217.4 billion from the same period last year. New credit and bond financing are the main driving factors for the YoY growth in the scale of social financing, contributing a total of 258.1 billion YoY growth. This was the realization of targeted monetary relaxation on broad financing data, which indicated the gradual release of policy effects. 2. Growth of M2 was 13.4% in May, rebounding 0.2pct from last month, which was better than market expectation. The targeted relaxation of policy was conducive to the steady growth of broad money. The targeted RRR cut and refinancing measures promoted recovery of the banks credit creation ability, which helped resolve the problem of poor transmission channel of interest rates. Owing to this influence, the scale of new credit was 870.8 billion in May, up by about 100 billion from last month, which was significantly better than market expectation. 3. The amount of new RMB deposits was 1.37 trillion in May, up significantly MoM, but continued to fall YoY. The balance of RMB deposits grew 10.6% YoY, down by 5.6pct from the same period last year, which reflected the suppression on the ability to absorb deposits by commercial banks imposed by internet financing and other financial innovations. 4. RMB exchange rate continued to weaken, of which the influence upon debt structure and willingness of the private sector to hold currency was becoming more obvious. The size of loans in foreign currency dropped by RMB16.2 billion in May, while there was still RMB136.3 billion of new foreign currency deposits in March, hence the demand of foreign currency loans retreated significantly. 5. The financial and monetary data in May further indicated the influence of targeted monetary policy relaxation. The recovery of credit scale could guarantee the source of funds for the pro-growth investment projects. The ample interbank liquidity could help the steady growth of bond financing scale. The continuously improving situation of funds-in-place could promote the pro-growth policy to reveal the effects of underpinning economic support as soon as possible, hence strengthening financial support for the real economy. Global Commodity Last price chg % chg Brent Oil 113.62 1.02 0.91 Gold LME Aluminum LME Copper BDI API Coal Exchange /Currency /Bond Market USD/RMB USD/HKD 1-YR RMB NDF EUR/USD 3-M Libor 3-M Shibor 1,274.4 1.01 0.08 1,844.0-23.00-1.23 6,620.0-70.00-1.05 939.00-34.00-3.49 79.95 0.55 0.69 Last price chg % chg 6.15 0.00 0.00 7.75 0.00 0.00 6.21 0.00 0.00 1.36 0.24 0.18 0.53 0.00 0.00 4.78-0.01-0.21 10 YR US T-Note Yield 2.59-0.01-0.38 Brent Oil One Year 120 115 110 105 100 95 90 Jun/13 Nov/13 Apr/14 Gold Commodity One Year 1450 1400 1350 1300 1250 1200 1150 1100 1050 Jun/13 Oct/13 Feb/14 Jun/14 LME Aluminum Commodity One Year 2000 1950 1900 1850 1800 1750 1700 1650 1600 1550 Jun/13 Oct/13 Mar/14 Source:Bloomberg Building Material Industry Investment Strategy 2H2014 Cement Stocks Mixed whilst Modern Building Materials May Grow [Wang Jingjing and Han Chuang, June 12, 2014] 5 of 17

Since 2H2013, supply end in Yangtze River Delta and Beijing, Tianjin and Hebei has been improving. In particular, Yangtze River Delta has been benefiting from the coordination of the leading enterprises under a sound demand and supply framework, whilst Beijing, Tianjin and Hebei were relying on the government s policies in controlling haze and eliminating obsolete production capacities. However, improvement in the supply end in those areas could not continue to benefit the cement industry due to unsatisfactory demand since the beginning of the year. LME Copper Commodity One Year Property demand in Yangtze River Delta will continue to suffer from potential downside risks in 2H14, it is estimated that a weak demand of 2% can be maintained under the support of infrastructure and private sector demand, whilst the demand and supply framework will still be weak. Demand in Beijing, Tianjin and Hebei mainly relies on relevant integrated planning and implementation, but it is expected that such implementation is not likely to be extensively initiated this year and demand will just be stable. Infrastructure demand in Xinjiang continued rapid growth, the market is expected to pick up next year following incorporating most of the new capacity this year. We believe that the Yangtze River Delta market has stabilized, relevant cement shares are recommended for short-term trading except Conch (600585 CH) which has nationwide presence. Xinjiang and Beijing, Tianjin and Hebei are near the bottom of the market, of which the growth of Xinjiang is more certain and capacity is to be incorporated. Demand and supply in Beijing, Tianjin and Hebei are to be improved and attention should be paid on government policies and related implementation. Industry growth and increase in companies market shares are the two gauges in measuring growth potential. Weixing New Building Materials (002372 CH) has basically established its own brands and channels, it has also been reforming its sales models. We believe that its current market share of around 5% will continue to increase in future. Oriental Yuhong (002271 CH) has been enjoying the advantage of being a single leader, it still has huge growth potential as its market share is just around 4% at the moment. The integrated ceiling industry is still in the process of rapid substitution of traditional ceiling. As a leader in the industry, Youpon Ceiling (002718 CH) is expected to outperform the sector. In addition, Beijing New Building Material (000786 CH) still continues steady growth and we continue to recommend it. Among the downstream demand of glass, more than 70% is concentrated in the property sector. Sales of properties only increased 0.6% for January to April. In addition, effective capacity was up 13.0%, and there are 43 production lines under construction, of which around half of those have been completed and pending operation. Under the pressure from both supply and demand sides, glass prices may continue to drop for the year and investment opportunities have yet to be seen. Risk reminder: Macro-economic downturn and plunge of property market. 6 of 17

What to Watch 8000 Economic Data HK:Nil US:Nil Date Ticker Stock Name Earnings 2014/06/16 00262 DESON DEV INT'L 2014/06/16 00282 NEXT MEDIA 2014/06/16 00321 TEXWINCA HOLD 2014/06/16 00768 UBA INVESTMENTS 2014/06/16 01428 BRIGHT SMART 2014/06/16 08145 TSO 2014/06/16 08260 ZEBRA STRAT Date Ticker Stock Name Issue Price 6000 Jun/13 Oct/13 Mar/14 BDI One Year 2500 2000 1500 1000 500 0 Jun/13 Oct/13 Feb/14 API Coal One Year 90 88 86 84 82 80 78 76 74 Jun/13 Oct/13 Feb/14 Source:Bloomberg 7 of 17

China Merchants Securities (Hong Kong) Stock Pool Update Weekly 2014-6-16 Stock Code Short Name Rating Price Currency Latest Price 12- Month Target Price Upside Potential EPS Currency EPS P/E 1-Month 2013E 2014E 2015E 2013E 2014E 2015E Performance Analyst Textiles, Apparel & Luxury Goods 589 Ports Neutral HKD 3.45 4.00 16% RMB 0.55 0.56 0.64 5.0 4.9 4.3-5.2% Ivy Zhao 1880 Belle Neutral HKD 7.99 7.89-1% RMB 0.52 0.54 0.60 12.3 11.7 10.6-0.8% Ivy Zhao 1368 Xtep Buy HKD 3.38 4.00 18% RMB 0.29 0.31 0.33 9.3 8.7 8.1 4.3% Ivy Zhao 2020 Anta Sports Buy HKD 11.42 13.47 18% RMB 0.57 0.61 0.66 16.0 14.9 13.8-1.7% Ivy Zhao 1361 361 Degrees Neutral HKD 1.88 1.71-9% RMB 0.10 0.11 0.12 14.9 13.6 12.4 3.3% Ivy Zhao 1968 Peak Sport Buy HKD 2.13 2.50 17% RMB 0.12 0.12 0.12 14.1 14.1 14.1-3.6% Ivy Zhao 2331 Li Ning Buy HKD 5.95 5.20-13% RMB -0.05 0.27 0.30 N.A. 17.8 15.6 7.2% Ivy Zhao 3818 China Dongxiang Buy HKD 1.44 1.59 10% RMB 0.04 0.05 0.06 26.0 22.4 20.1 3.6% Ivy Zhao 1234 China Lilang Buy HKD 5.11 5.25 3% RMB 0.43 0.44 0.46 9.4 9.2 8.9-1.0% Ivy Zhao 891 Trinity Buy HKD 1.84 2.46 34% HKD 0.14 0.14 0.15 13.1 13.4 12.4-3.7% Ivy Zhao Metals & Mining 1818 Zhaojin Mining Neutral HKD 4.35 4.70 8% RMB 0.25 0.24 0.17 13.8 14.4 20.3-2.0% Li Xiang 2899 Zijin Mining Neutral HKD 1.73 1.57-9% RMB 0.10 0.10 0.08 13.7 13.7 17.2-6.5% Li Xiang 358 Jiangxi Copper Sell HKD 12.84 10.20-21% RMB 1.03 0.81 0.66 9.9 12.6 15.4 1.1% Li Xiang 3993 CMOC Neutral HKD 3.82 3.10-19% RMB 0.19 0.20 0.21 15.7 15.5 14.6 0.3% Li Xiang 2600 Chalco Neutral HKD 2.85 2.80-2% RMB 0.07-0.07-0.06 32.3 N.A. N.A. 0.7% Li Xiang 1378 China Hongqiao Buy HKD 5.40 6.20 15% RMB 0.95 1.08 1.32 4.5 4.0 3.3 4.1% Li Xiang 486 Rusal Neutral HKD 3.81 3.10-19% USD -0.21 0.04 0.05 N.A. 12.3 9.8 8.2% Li Xiang Environmental Protection 257 CHINA EVERBRIGHT Buy HKD 10.58 12.20 15% HKD 0.30 0.38 0.48 35.3 27.8 22.0 10.0% Li Xiang 895 DONGJIANG Buy HKD 25.80 N.A. RMB 0.60 0.80 1.07 N.A. N.A. N.A. N.A. Li Xiang 8 of 17

Stock Price Latest 12- Month Upside EPS EPS P/E 1-Month Short Name Rating Code Currency Price Target Price Potential Currency 2013E 2014E 2015E 2013E 2014E 2015E Performance Analyst ENVIRONMENTAL Auto & Others 1211 BYD Company Neutral HKD 43.70 32.90-25% RMB 0.27 0.69 1.03 128.4 50.3 33.7 12.5% Colleen Li 489 Dongfeng Group Buy HKD 13.20 14.17 7% RMB 1.13 1.26 1.29 9.3 8.3 8.1 29.4% Colleen Li 175 Geely Auto Buy HKD 2.74 5.04 84% RMB 0.32 0.36 0.38 6.8 6.0 5.7-3.2% Colleen Li 2333 Greatwall Motor Buy HKD 30.70 43.40 41% RMB 2.74 3.40 3.82 8.9 7.2 6.4 13.5% Colleen Li 1114 Brilliance Chi Buy HKD 13.22 12.00-9% RMB 0.71 0.80 0.89 14.8 13.1 11.8 7.3% Colleen Li 425 Minth Group Buy HKD 14.12 13.20-7% RMB 0.78 0.87 0.97 14.4 12.9 11.6 17.5% Colleen Li 1728 Zhengtong Auto Buy HKD 4.29 5.85 36% RMB 0.55 0.81 1.11 6.2 4.2 3.1 13.5% Colleen Li 881 Zhongsheng Hldg Neutral HKD 9.81 10.30 5% RMB 0.58 0.71 0.99 13.4 11.0 7.9 2.6% Colleen Li 1766 CSR Buy HKD 6.07 8.08 33% RMB 0.31 0.40 0.45 15.5 12.0 10.7 4.3% Colleen Li 3898 CSR Times Electric Buy HKD 24.45 32.03 31% RMB 1.10 1.35 1.62 17.6 14.4 12.0 6.5% Colleen Li Oil & Gas 857 Petro China Buy HKD 9.49 11.20 18% RMB 0.71 0.74 0.78 10.6 10.2 9.7 2.7% Michael Yuk 386 Sinopec Corp Buy HKD 7.44 7.52 1% RMB 0.57 0.66 0.68 10.4 9.0 8.6 5.5% Michael Yuk 883 CNOOC Buy HKD 13.86 17.00 23% RMB 1.44 1.56 1.69 7.6 7.1 6.5 5.8% Michael Yuk 603 China Oil & Gas Neutral HKD 1.30 1.45 12% HKD 0.09 0.12 0.15 14.4 10.8 8.7 4.0% Michael Yuk 342 Newocean Energy Buy HKD 5.93 9.83 66% HKD 0.55 0.56 0.75 10.8 10.6 7.9 23.0% Michael Yuk 467 United Energy Gp Buy HKD 1.15 2.00 74% HKD 0.09 0.12 0.16 12.4 9.5 7.2-1.7% Michael Yuk Oil & Gas Services/Equipment 3899 CIMC Enric Buy HKD 10.76 13.88 29% RMB 0.51 0.58 0.67 16.7 14.7 12.7-0.4% Michael Yuk 3337 Anton Oilfield Buy HKD 5.38 5.50 2% RMB 0.18 0.22 0.29 23.7 19.4 14.7 0.8% Michael Yuk 1251 SPT Energy Group Buy HKD 6.20 N.A. RMB 0.20 0.23 0.32 N.A. N.A. N.A. N.A. Michael Yuk 1938 Chu Kong Pipe Buy HKD 2.80 3.80 36% RMB 0.04 0.28 0.40 55.6 7.9 5.6 22.3% Michael Yuk 9 of 17

Stock Price Latest 12- Month Upside EPS EPS P/E 1-Month Short Name Rating Code Currency Price Target Price Potential Currency 2013E 2014E 2015E 2013E 2014E 2015E Performance Analyst 2883 China Oilfield Buy HKD 19.28 21.00 9% RMB 1.42 1.52 1.61 10.8 10.1 9.5 6.1% Michael Yuk 3303 Jutal Oil Ser Buy HKD 1.77 1.90 7% RMB 0.08 0.10 0.11 17.6 14.0 12.8 26.4% Michael Yuk 1623 Hilong Buy HKD 4.13 5.10 23% RMB 0.16 0.28 0.29 20.0 11.8 11.4-1.0% Michael Yuk Property 688 China Overseas Buy HKD 19.86 22.56 14% HKD 2.29 2.30 2.68 8.7 8.6 7.4 4.2% DuanFeiqin 1109 China Res Land Buy HKD 14.82 17.00 15% HKD 1.69 1.83 1.85 8.8 8.1 8.0-2.0% DuanFeiqin 3333 Evergrande Buy HKD 3.70 4.38 18% HKD 0.84 0.97 0.98 4.4 3.8 3.8 8.8% DuanFeiqin 3900 Greentown China Buy HKD 7.72 18.80 144% HKD 3.17 3.33 3.49 2.4 2.3 2.2 3.6% DuanFeiqin 754 Hopson Dev Hold Buy HKD 7.55 12.20 62% HKD 1.72 1.98 2.22 4.4 3.8 3.4 4.6% DuanFeiqin 978 Ch Merchant Land Buy HKD 1.13 2.30 104% HKD 0.15 0.21 0.28 7.5 5.3 4.1 20.2% DuanFeiqin Property 1918 SUNAC Buy HKD 4.20 6.66 59% HKD 1.07 1.26 1.41 3.9 3.3 3.0 0.5% LiYiqian DuanFeiqin Property 798 Optics Valley Union Buy HKD 1.06 N.A. RMB 0.08 0.15 0.23 N.A. N.A. N.A. N.A. DuanFeiqin Consumer Discretionary 1833 Intime Buy HKD 7.19 10.30 43% RMB 0.52 0.60 0.69 11.0 9.5 8.3-8.4% Gloria Wang 1700 Springland Neutral HKD 2.97 4.10 38% RMB 0.28 0.32 0.36 8.4 7.4 6.6 14.7% Gloria Wang 493 GOME Buy HKD 1.27 1.64 29% RMB 0.05 0.06 0.07 20.2 16.8 14.4-5.2% Gloria Wang 653 Bonjour Holdings Neutral HKD 1.24 1.58 27% HKD 0.09 0.11 0.12 13.8 11.3 10.3 1.6% Gloria Wang 1169 Haier Electronics Buy HKD 20.20 24.40 21% RMB 0.80 0.95 1.17 20.0 16.9 13.7 13.6% Gloria Wang 178 Sa Sa International Buy HKD 5.50 8.20 49% HKD 0.35 0.41 0.47 15.7 13.4 11.7-1.8% Gloria Wang Telecommunication 941 China Mobile Neutral HKD 75.80 78.00 3% RMB 6.02 5.34 5.27 10.0 11.3 11.4 0.9% Jeff Hao 10 of 17

Stock Price Latest 12- Month Upside EPS EPS P/E 1-Month Short Name Rating Code Currency Price Target Price Potential Currency 2013E 2014E 2015E 2013E 2014E 2015E Performance Analyst 762 China Unicom Neutral HKD 11.96 11.34-5% RMB 0.44 0.65 0.76 21.6 14.6 12.5-2.6% Jeff Hao 728 China Telecom Neutral HKD 3.87 3.45-11% RMB 0.22 0.25 0.28 14.0 12.3 11.0-4.2% Jeff Hao Information Technology 2988 Tencent Buy HKD 127.60 N.A. RMB 1.66 2.45 3.15 N.A. N.A. N.A. N.A. Jeff Hao 3888 Kingsoft Buy HKD 23.75 37.05 56% RMB 0.55 0.63 0.95 34.3 29.9 19.8 4.6% Jeff Hao 623 SinoMedia Buy HKD 6.73 8.07 20% RMB 0.64 0.73 0.83 8.3 7.3 6.4 1.1% Jeff Hao 1661 Wisdom Buy HKD 4.52 7.00 55% RMB 0.14 0.20 0.29 25.6 17.9 12.4 16.8% Jeff Hao 777 Netdragon Buy HKD 14.64 20.34 39% RMB 0.32 0.65 0.82 36.2 17.8 14.1 16.4% Jeff Hao 354 Chinasoft Neutral HKD 2.46 2.00-19% RMB 0.08 0.10 0.13 24.4 18.8 15.3 11.8% Jeff Hao 268 Kingdee Neutral HKD 2.70 1.40-48% RMB 0.05 0.08 0.10 42.9 28.2 20.6 22.7% Jeff Hao Port 144 China Merchant Hldg Neutral HKD 24.15 26.43 9% HKD 1.67 1.75 2.05 14.5 13.8 11.8 1.1% Kate Li 1199 Cosco Pacific Buy HKD 10.86 12.46 15% USD 0.25 0.12 0.13 5.6 11.7 10.8 6.9% Kate Li Shipping 368 Sinotrans Shipping Neutral HKD 2.24 2.40 7% USD 0.00 0.01 0.01 289.0 57.8 36.1 5.2% Kate Li 316 OOIL Buy HKD 42.00 51.00 21% USD 0.08 0.21 0.37 67.7 25.8 14.6 12.0% Kate Li 2866 CSCL Neural HKD 1.99 1.82-9% RMB -0.22 0.01 0.05 N.A. 157.9 31.6 8.2% Kate Li Alternative Energy 3800 GCL-Poly Energy Buy HKD 2.59 2.83 9% HKD -0.04 0.11 0.18 N.A. 23.6 14.4 12.1% Yin Lei 750 Singyes Solar Buy HKD 12.24 14.23 16% RMB 0.75 1.02 1.14 13.0 9.5 8.5 16.6% Yin Lei 2208 Goldwind Buy HKD 9.38 12.30 31% RMB 0.16 0.37 0.55 46.5 20.1 13.5 13.6% Yin Lei 916 Longyuan Power Buy HKD 8.80 11.39 29% RMB 0.26 0.42 0.50 26.9 16.6 14.0 10.7% Yin Lei 1798 Datang Renewable Power Sell HKD 1.11 0.74-33% RMB 0.03 0.03 0.04 29.4 29.4 22.0 0.0% Yin Lei 11 of 17

Stock Price Latest 12- Month Upside EPS EPS P/E 1-Month Short Name Rating Code Currency Price Target Price Potential Currency 2013E 2014E 2015E 2013E 2014E 2015E Performance Analyst 182 China Wind Power Buy HKD 0.70 1.10 57% HKD 0.02 0.04 0.06 35.0 17.5 11.7 27.3% Yin Lei 819 Tianneng Power Buy HKD 2.91 6.65 129% RMB 0.16 0.57 1.10 14.4 4.1 2.1 12.8% Yin Lei Food & Beverage 322 Tingyi Buy HKD 21.60 24.90 15% USD 0.08 0.11 0.11 34.8 26.5 25.3-1.4% Ling Hua 2319 Mengniu Dairy Buy HKD 35.50 47.00 32% RMB 0.90 1.24 1.54 31.3 22.7 18.3-9.4% Ling Hua 151 Want Want China Neutral HKD 10.54 13.05 24% USD 0.05 0.06 0.07 27.2 22.7 19.4-12.3% Ling Hua 345 Vitasoy Neutral HKD 10.42 11.60 11% HKD 0.33 0.36 0.39 31.6 28.9 26.7 0.0% Ling Hua Machinery & Equipment 1157 Zoomlion Neutral HKD 5.39 4.66-14% RMB 0.51 0.49 0.52 8.4 8.7 8.2 3.7% Jiao Yiding 631 Sany International Neutral HKD 1.79 1.47-18% RMB 0.12 0.12 0.13 12.4 11.8 10.9-0.6% Jiao Yiding 3339 Lonking Buy HKD 1.36 2.06 51% RMB 0.11 0.13 0.16 9.8 8.3 6.7-4.2% Jiao Yiding Engineering 1829 CMEC Buy HKD 5.09 7.01 38% RMB 0.54 0.63 0.68 7.5 6.4 5.9 0.0% Jiao Yiding Electricity 902 Huaneng Power Buy HKD 8.00 9.65 21% RMB 0.74 0.77 0.86 8.6 8.2 7.4 2.3% Vera Liang 991 Datang Power Neutral HKD 3.18 3.30 4% RMB 0.27 0.33 0.39 9.4 7.7 6.5 9.3% Vera Liang 1071 Huadian Power Buy HKD 4.48 4.40-2% RMB 0.56 0.61 0.65 6.4 5.8 5.5 3.9% Vera Liang 2380 China Power Buy HKD 2.89 3.60 25% RMB 0.40 0.41 0.47 5.7 5.6 4.9 4.0% Vera Liang Semi and Hardware Technology 992 Lenovo Buy HKD 9.90 10.50 6% USD 0.06 0.07 0.11 21.3 18.2 11.6 15.0% Alex Ng 2382 Sunny Optical Neutral HKD 9.77 8.37-14% RMB 0.41 0.54 0.73 18.9 14.4 10.6 10.8% Alex Ng 732 Truly Buy HKD 4.80 7.15 49% HKD 0.56 0.67 0.79 8.6 7.2 6.1 11.6% Alex Ng 2018 AAC Tech Neutral HKD 48.90 40.00-18% RMB 1.83 2.16 2.48 21.2 18.0 15.7 13.7% Alex Ng 2618 TCL Comm Buy HKD 9.44 8.52-10% HKD 0.28 0.76 0.96 33.7 12.4 9.8 15.1% Alex Ng 12 of 17

Stock Price Latest 12- Month Upside EPS EPS P/E 1-Month Short Name Rating Code Currency Price Target Price Potential Currency 2013E 2014E 2015E 2013E 2014E 2015E Performance Analyst 2369 Coolpad Group Buy HKD 1.89 2.73 44% HKD 0.10 0.19 0.26 18.9 10.0 7.3-42.7% Alex Ng Pharmaceuticals & Medical Devices 2348 Dawnrays Pharma Buy HKD 5.70 8.20 44% RMB 0.19 0.25 0.32 23.7 17.8 14.3-2.7% Jonathan Hsu 460 Sihuan Pharm Buy HKD 4.81 11.00 129% RMB 0.25 0.30 0.36 15.2 12.8 10.5-43.6% Jonathan Hsu 1177 Sino Biopharm Buy HKD 6.20 6.70 8% HKD 0.09 0.18 0.22 68.9 34.4 28.2 0.5% Jonathan Hsu 1093 CSPC Pharm Buy HKD 6.35 8.00 26% HKD 0.18 0.23 0.29 36.3 27.6 22.1 4.4% Jonathan Hsu 1099 Sinopharm Buy HKD 21.30 24.40 15% RMB 0.66 0.82 1.01 25.6 20.6 16.7 6.0% Jonathan Hsu 2877 Shineway Pharm Neutral HKD 13.90 12.30-12% RMB 0.91 0.78 0.89 12.1 14.1 12.4 1.5% Jonathan Hsu 1515 Phoenix Healthcare Buy HKD 10.86 16.60 53% RMB 0.13 0.23 0.28 66.3 37.5 30.8-0.4% Jonathan Hsu 1061 Essex Bio-tech Buy HKD 2.70 4.12 53% HKD 0.10 0.12 0.14 27.0 22.5 19.3 3.5% Jonathan Hsu Industrial Goods 2283 TK group Buy HKD 1.20 1.74 45% HKD 0.14 0.18 0.21 8.6 6.7 5.7 4.4% Ling Hua Macau Gaming 27 Galaxy Buy HKD 58.20 79.90 37% HKD 2.39 2.96 3.91 24.4 19.7 14.9-1.4% Angela HAN LEE 880 SJM Sell HKD 19.64 16.30-17% HKD 1.39 1.51 1.71 14.2 13.0 11.5-3.7% Angela HAN LEE 13 of 17

HSI Index Components Performance Code Name Price Chg 1D (%) Last price HSCEI Index Components Performance Code Name Price Chg 1D 1 CHEUNG KONG 136.2 1.1 168 TSINGTAO BREW-H 60.20-2.2 2 CLP HLDGS LTD 63.60 0.4 177 JIANGSU EXPRES-H 9.17 0.1 3 HONG KG CHINA GS 16.84 0.4 323 MAANSHAN IRON-H 1.65-0.6 4 WHARF HLDG 57.55 3.1 338 SINOPEC SHANG-H 2.11 0.0 5 HSBC HLDGS PLC 81.35 0.3 347 ANGANG STEEL-H 4.72-0.8 6 POWER ASSETS HOL 66.50 1.1 358 JIANGXI COPPER-H 12.84 0.2 11 HANG SENG BK 128.5 0.0 386 SINOPEC CORP-H 7.44 1.8 12 HENDERSON LAND D 46.40 0.1 390 CHINA RAIL GR-H 3.79 0.0 13 HUTCHISON WHAMPO 105.6 0.6 489 DONGFENG MOTOR-H 13.20 3.0 16 SHK PPT 107.0 0.8 552 CHINA COMM SER-H 3.70 1.7 17 NEW WORLD DEV 8.90-0.2 576 ZHEJIANG EXPRESS 7.75-1.7 19 SWIRE PACIFIC-A 95.00 0.8 694 BEIJING CAP AI-H 5.26 1.0 23 BANK EAST ASIA 32.35 0.5 728 CHINA TELECOM-H 3.87-0.3 66 MTR CORP 29.45 1.4 753 AIR CHINA LTD-H 4.77 1.9 83 SINO LAND CO 12.66 0.8 857 PETROCHINA CO-H 9.49 0.4 101 HANG LUNG PROPER 23.45 0.6 902 HUANENG POWER-H 8.00-0.6 144 CHINA MERCHANT 24.15 5.2 914 ANHUI CONCH-H 27.35-1.1 267 CITIC PACIFIC 13.34-0.2 939 CHINA CONST BA-H 5.87 1.2 291 CHINA RES ENTERP 21.60 0.9 991 DATANG INTL PO-H 3.18 1.0 293 CATHAY PAC AIR 14.52 0.6 998 CHINA CITIC BK-H 4.70-0.2 330 ESPRIT HLDGS 11.16-1.1 1088 CHINA SHENHUA-H 22.15 0.5 386 SINOPEC CORP-H 7.44 1.8 1133 HARBIN ELECTRIC 4.73-1.5 388 HKEX 146.3 0.0 1138 CHINA SHIPPING-H 4.88-0.4 494 LI & FUNG LTD 11.14 0 0.7 1171 YANZHOU COAL-H 6.28-0.3 551 YUE YUEN INDUS 25.65 2.8 1186 CHINA RAIL CN-H 6.88 2.1 688 CHINA OVERSEAS 19.86 1.3 1398 IND & COMM BK-H 4.96 1.9 700 TENCENT 116.1 0.4 1800 CHINA COM CONS-H 5.52 0.7 762 CHINA UNICOM HON 11.96 0 1.4 1898 CHINA COAL ENE-H 4.21-1.2 857 PETROCHINA CO-H 9.49 0.4 1919 CHINA COSCO HO-H 3.11-1.6 883 CNOOC LTD 13.86 1.9 2318 PING AN INSURA-H 61.70 0.5 939 CHINA CONST BA-H 5.87 1.2 2328 PICC PROPERTY & 11.84 0.2 941 CHINA MOBILE 75.80 0.0 2600 ALUMINUM CORP-H 2.85-1.4 1088 CHINA SHENHUA-H 22.15 0.5 2628 CHINA LIFE INS-H 21.40 0.2 1199 COSCO PAC LTD 10.86 0.0 2727 SHANGHAI ELECT-H 3.01 1.4 1398 IND & COMM BK-H 4.96 1.9 2777 GUANGZHOU R&F -H 9.95 0.3 2038 FIH MOBILE LTD 4.52 0.2 2866 CHINA SHIPPING-H 1.99-1.5 2318 PING AN INSURA-H 61.70 0.5 2883 CHINA OILFIELD-H 19.28 1.1 2388 BOC HONG KONG HO 23.10 0.5 2899 ZIJIN MINING-H 1.73 0.6 2600 ALUMINUM CORP-H 2.85-1.4 3323 CHINA NATL BDG-H 7.04-0.6 2628 CHINA LIFE INS-H 21.40 0.2 3328 BANK OF COMMUN-H 5.38 0.6 3328 BANK OF COMMUN-H 5.38 0.6 3968 CHINA MERCH BK-H 15.04 0.7 3988 BANK OF CHINA-H 3.76 0.5 3988 BANK OF CHINA-H 3.76 0.5 3993 CMOC-H 3.82 2.1 (%) 14 of 17

A+H Company Performance Last price Name(H) Code (H) Price (H) Code (A) Price (A) Spread (%) NORTHEAST ELEC-H 42 1.13 000585 2.31 155.2 SHENJI GROUP-H 300 2.58 600806 4.40 112.9 JINGCHENG MAC 187 3.39 600860 5.73 111.0 TIANJIN CAP-H 1065 4.80 600874 7.98 107.5 CHONGQING IRON-H 1053 1.37 601005 2.25 105.0 SHANDONG XINHU-H 719 3.35 000756 5.50 104.9 SINOPEC YIZHEN-H 1033 1.77 600871 2.78 96.1 SINOPEC SHANG-H 338 2.11 600688 3.22 90.5 JINGWEI TEXTIL-H 350 6.89 000666 9.90 79.4 BEIJING NORTH-H 588 1.94 601588 2.52 62.1 DATANG INTL PO-H 991 3.18 601991 3.55 39.4 ALUMINUM CORP-H 2600 2.85 601600 3.06 34.0 BAIYUNSHAN PH-H 874 23.95 600332 25.54 33.1 YANZHOU COAL-H 1171 6.28 600188 6.63 31.8 MAANSHAN IRON-H 323 1.65 600808 1.56 18.0 JIANGXI COPPER-H 358 12.84 600362 12.06 17.2 CHINA SOUTHERN-H 1055 2.49 600029 2.33 16.8 CHINA CITIC BK-H 998 4.70 601998 4.39 16.6 HISENSE KELON -H 921 9.90 000921 9.03 13.9 DONGFANG ELECT-H 1072 12.86 600875 11.61 12.7 SHENZHEN EXPRE-H 548 4.00 600548 3.59 12.0 ANHUI EXPRESS-H 995 4.92 600012 4.34 10.1 GUANGSHEN RAIL-H 525 2.85 601333 2.51 9.9 ZTE CORP-H 763 15.40 000063 13.12 6.3 CHINA SHIPPING-H 1138 4.88 600026 4.09 4.6 GUANGZHOU SHIP-H 317 13.73 600685 0.00 0.0 LUOYANG GLASS-H 1108 3.53 600876 7.73 0.0 NANJING PANDA-H 553 4.52 600775 0.00 0.0 IND & COMM BK-H 1398 4.96 601398 3.74-5.9 BANK OF CHINA-H 3988 3.76 601988 2.80-7.1 HUADIAN POWER-H 1071 4.48 600027 3.30-8.1 BANK OF COMMUN-H 3328 5.38 601328 3.88-10.0 AIR CHINA LTD-H 753 4.77 601111 3.32-13.1 SINOPEC CORP-H 386 7.44 600028 5.13-13.9 HUANENG POWER-H 902 8.00 600011 5.51-14.0 CHINA MERCH BK-H 3968 15.04 600036 10.22-15.2 TSINGTAO BREW-H 168 60.20 600600 40.82-15.4 CHINA LIFE INS-H 2628 21.40 601628 14.46-15.7 PING AN INSURA-H 2318 61.70 601318 40.83-17.4 JIANGSU EXPRES-H 177 9.17 600377 5.89-19.8 ANGANG STEEL-H 347 4.72 000898 2.87-24.1 ANHUI CONCH-H 914 27.35 600585 16.41-25.1 WEICHAI POWER-H 2338 31.10 000338 18.08-27.4 15 of 17

Recently Published Research Date published Name of report Analyst 13-Jun-14 2H14 Oil & Gas Industry Outlook Michael Yuk 12-Jun-14 HK Stock Market Machinery Sector Outlook Yiding JIAO 10-Jun-14 Eurozone Monthly Chart Book (June 2014) Lynn Song, Cliff Zhao, David Xie 10-Jun-14 China Wind Power Operator Yin Lei 9-Jun-14 Truly International (732 HK) Alex Ng 5-Jun-14 China Dongxiang (3818 HK ) Ivy Zhao 4-Jun-14 Belle(1880 HK) Ivy Zhao 4-Jun-14 Environmental protection Li Xiang 4-Jun-14 May Eurozone Flash HICP inflation Lynn Song, Cliff Zhao, David Xie 3-Jun-14 Macau Gaming Angela Han Lee 3-Jun-14 ikang Healthcare Group (KANG US) Jonathan Hsu 30-May-14 Kingsoft (3888.HK) Jeff Hao 30-May-14 SPT Energy (1251.HK) Michael Yuk 30-May-14 HK Stock Market Fund Flows Lynn Song, Cliff Zhao, David Xie 28-May-14 HK Market Strategy Bi-weekly Cliff Zhao, Zi chen Xu, George Chen 27-May-14 SinoMedia(623 HK) Jeff Hao 26-May-14 Tingyi Holding (322 HK) Hua Ling 23-May-14 Dongjiang Environmental(895 HK) Li Xiang 23-May-14 May Eurozone Flash Composite PMI Lynn SONG 22-May-14 China Gas Distributors Michael Yuk 21-May-14 Sunac China Holdings Limited (1918 HK) Kate Li, Duan Feiqin 19-May-14 GCL -Poly Energy (3800 HK) Yin Lei 19-May-14 China Hardware Technology Alex Ng 16-May-14 Environmental protection solid waste treatment Li Xiang 16-May-14 Eurozone 1Q14 GDP unchanged Lynn Song, Cliff Zhao, David Xie 15-May-14 Japan 1Q14 GDP exceeded forecasts Lynn Song, Cliff Zhao, David Xie 14-May-14 Zoomlion (1157 HK) Yiding Jiao 14-May-14 Takeaways from the Expert Conference of the Ministry of Ivy Zhao 12-May-14 HK Market Strategy Bi-weekly_(Vol. 08,2014) Cliff Zhao, Zi chen Xu, George Chen 12-May-14 Chinese Property Duan Feiqin 8-May-14 Dawnrays Pharma (2348.HK) Jonathan Hsu 8-May-14 Metals and Mining Sector Li Xiang 8-May-14 Optics Valley Union(798 HK) Duan Feiqin 8-May-14 Retail Remains Slump, E-comm Grows quickly Ivy Zhao 7-May-14 Bottom XINJIANG of Form Goldwind-H(2208.HK) Yin Lei 6-May-14 SANY HEAVY EQUIP(631.HK) Yiding JIAO 6-May-14 Hong Kong Property Kate Li 6-May-14 Datang International (991.HK) Vera Liang 2-May-14 20 in 20: Eurozone Monthly Chart Book (May 2014) Lynn Song, Cliff Zhao, David Xie 2-May-14 April Eurozone Flash HICP inflation rebounded to 0.7% Lynn Song, Cliff Zhao, David Xie 30-Apr-14 YoY Sinopec (386 HK) Michael Yuk 16 of 17

RATING DEFINITION & DISCLAIMER INDUSTRY OVERWEIGHT NEUTRAL UNDERWEIGHT DEFINITION Expected to outperform the market index by > 10% over the next 12 months Expected to outperform or underperform the market index by 10% or less over the next twelve months Expected to underperform the market index by >10% over the next 12 months COMPANY BUY NEUTRAL SELL DEFINITION Expected to outperform the market index by >10% over the next twelve months Expected to outperform or underperform the market index by 10% or less over the next twelve months Expected to underperform the market index by >10% over the next twelve months DISCLAIMER This document is prepared by China Merchants Securities (HK) Co., Limited ( CMS HK ). CMS HK is a licensed corporation to carry on Type 1 (dealing in securities), Type 2 (dealing in futures), Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the Securities and Futures Ordinance (Chapter 571). This document is for information purpose only. Neither the information nor opinion expressed shall be construed, expressly or impliedly, as an advice, offer or solicitation of an offer, invitation, advertisement, inducement, recommendation or representation of any kind or form whatsoever to buy or sell any security, financial instrument or any investment or other specific product. The securities, instruments or strategies discussed in this document may not be suitable for all investors, and certain investors may not be eligible to participate in some or all of them. Certain services and products are subject to legal restrictions and cannot be offered worldwide on an unrestricted basis and/or may not be eligible for sale to all investors. The information and opinions, and associated estimates and forecasts, contained herein have been obtained from or are based on sources believed to be reliable. CMS HK, its holding or affiliated companies, or any of its or their directors, officers or employees ( CMS Group ) do not represent or warrant, expressly or impliedly, that it is accurate, correct or complete and it should not be relied upon. CMS Group will not accept any responsibility or liability whatsoever for any use of or reliance upon this document or any of the content thereof. The contents and information in this document are only current as of the date of their publication and will be subject to change without prior notice. Past performance is not indicative of future performance. Estimates of future performance are based on assumptions that may not be realized. The analysis contained herein is based on numerous assumptions. Different assumptions could result in materially different results. Opinions expressed herein may differ or be contrary to those expressed by other business divisions or other members of CMS Group as a result of using different assumptions and/or criteria. This document has been prepared without regard to the individual financial circumstances and investment objectives of the persons who receive it. Use of any information herein shall be at the sole discretion and risk of the user. Investors are advised to independently evaluate particular investments and strategies, take financial and/or tax advice as to the implications (including tax) of investing in any of the securities or products mentioned in this document, and make their own investment decisions without relying on this publication. CMS Group may have a long or short position, make markets, act as principal or agent, or engage in transactions in securities of companies referred to in this document and may also perform or seek to perform investment banking services or provide advisory or other services for those companies. This document is for the use of intended recipients only and this document may not be reproduced, distributed or published in whole or in part for any purpose without the prior consent of CMS Group. CMS Group will not be liable for any claims or lawsuits from any third parties arising from the use or distribution of this document. This document is for distribution only under such circumstances as may be permitted by applicable law. This document is not directed at you if CMS Group is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. In particular, this document is only made available to certain US persons to whom CMS Group is permitted to make available according to US securities laws, but cannot otherwise be made available, distributed or transmitted, whether directly or indirectly, into the US or to any US person. This document also cannot be distributed or transmitted, whether directly or indirectly, into Japan and Canada and not to the general public in the People s Republic of China (for the purpose of this document, excluding Hong Kong, Macau and Taiwan). 17 of 17