Conversion Into Pure Port Play Comes at

April 13, 2016 COSCO Pacific Conversion Into Pure Port Play Comes at a Cost; Maintain EW Industry View In-Line Stock Rating Equal-weight Price Target HK$9.07 While we welcome the outcome of the restructuring that has converted Cosco Pacific into a pure global port operator by trading out of its container leasing (Florens) business, we cut our earnings and PT in view of sustained weakness in global trade demand. What's Changed? From: To: COSCO Pacific Price Target HK$10.94 HK$9.07 A pure play port operator: With the sale of Florens Container Holdings Ltd, port earnings now contribute 100% of CPL s bottomline, which should support a potential re-rating given the perceived valuation discount led by market concerns about its exposure to the low-return container leasing business. However, we think any immediate market optimism is likely to be constrained by a potential earnings shortfall led by the acquisition of China Shipping Ports Development (CSPD) at high valuation multiples (47.2x 2014 P/E) as well as overall demand weakness for the port industry. In our view, it will take time for CPL to demonstrate its real competency as a pure port operator by delivering solid earnings growth for the next 2-3 years. Net profit cut 9-18%: Our earnings cuts factor in the discontinuation of Florens as well as contributions from the newly acquired CSPD and Kumport terminals. However, for 2016-18e, we now project lower traffic growth at 7.2%, 5.8% and 1.6% p.a., in view of sluggish external demand for China s exports. Our earnings are 6-12% below consensus, as we expect 22% YoY and 2% YoY earnings declines in 2016 and 2017, followed by 7% growth in 2018. PT cut to HK$9.07: This reflects our lower earnings estimates, and we also allocate a higher probability to our bear case scenario (to 30% from 10%) to reflect more downside volume risks due to sustained macro headwinds. Our new PT implies 1% upside potential to current share price, so we maintain an EW. Valuation: The share price is down 20% in the past 12 months [vs 26% for HSI], and now trades at 11.5x 2016e P/E, in line with its historical mean of 12.4x, which we believe is fair. In the nearer-term, the special DPS of HK$0.8 for the business restructuring plan's approval, implies a total dividend yield of 12% for 2016, which provides some share price support. Risks: Upside risks to our price target include: 1) higher valuation multiples by the market; 2) higher-than-expected volume growth. Downside risks include: 1) currency depreciation risks; 2) overpaying for M&As. MORGAN STANLEY ASIA LIMITED+ Edward H Xu, CFA Edward.Xu@morganstanley.com Qianlei Fan, CFA Qianlei.Fan@morganstanley.com Watson Lau Watson.Lau@morganstanley.com Yufei Wu Yufei.Wu@morganstanley.com COSCO Pacific ( 1199.HK, 1199 HK ) +852 2239-1521 +852 2239-1875 +852 2239-1523 +852 2239-7505 Hong Kong/China Transportation & Infrastructure / China Stock Rating Equal-weight Industry View In-Line Price target HK$9.07 Up/downside to price target (%) 1 Shr price, close (Apr 12, 2016) HK$9.02 52-Week Range HK$11.74-7.11 Sh out, dil, curr (mn) 2,712 Mkt cap, curr (mn) US$3,154 EV, curr (mn) US$4,628 Avg daily trading value (mn) HK$57 Fiscal Year Ending 12/15 12/16e 12/17e 12/18e ModelWare EPS (US$) 0.13 0.10 0.10 0.11 Prior ModelWare EPS 0.11 0.12 0.13 - (US$) Consensus EPS (US$) 0.10 0.11 0.11 0.11 Revenue, net (US$ mn) 798 1,173 1,144 1,205 EBITDA (US$ mn) 618 653 683 749 ModelWare net inc 382 299 292 314 (US$ mn) P/E 7.8 11.5 11.8 11.0 P/BV 0.6 0.7 0.7 0.7 RNOA (%) 5.7 5.4 4.8 5.1 ROE (%) 8.0 6.2 6.0 6.4 EV/EBITDA 7.2 8.6 8.7 8.1 Div yld (%) 5.1 3.5 3.4 3.6 FCF yld ratio (%) (5.4) (20.4) (0.9) 1.1 Leverage (EOP) (%) 23.9 44.2 50.3 50.0 Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare framework = Consensus data is provided by Thomson Reuters Estimates e = Morgan Stanley Research estimates Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision. For analyst certification and other important disclosures, refer to the Disclosure Section, located at the end of this report. += Analysts employed by non -U.S. affiliates are not registered w ith FINRA, may n ot be associated person s of th e member an d may n ot be su bject to NASD/NYSE restrictions on communications w ith a subject company, public appearances and trading securities held by a research analyst account. 1

CPL: Financial Summary Exhibit 1: CPL: Financial Summary, 2014-18E Profit and Loss Statement (US$ mn) 2014 2015 2016E 2017E 2018E Ratio Analysis 2014 2015 2016E 2017E 2018E Turnover 870 798 1,173 1,144 1,205 Growth (%) Operating expenses (654) (598) (962) (942) (978) Turnover 8.9 (8.3) 47.0 (2.5) 5.3 Other operating income 23 27 2 3 3 Operating profit 14.8 (8.6) 60.7 (2.1) 3.9 Operating profit 239 227 213 205 230 Shar of profit from associates (25.2) 2.9 10.7 8.0 11.5 Finance costs (58) (43) (70) (88) (107) Share of profit from JCEs 22.5 7.9 11.8 11.8 9.9 Share of profit from associates 71 74 81 88 98 Pretax profit (53.1) 26.1 (22.3) (1.6) 8.4 Share of profit from JCEs 100 108 120 134 148 Net profit (58.3) 30.4 (21.5) (2.4) 7.4 Profit before taxation 352 444 345 340 368 Recurrent net profit 2.3 30.4 (21.5) (2.4) 7.4 Taxation (39) (41) (32) (32) (36) Port EBITDA 10.2 4.6 3.8 6.5 6.5 Minority interest (20) (21) (13) (16) (18) EBITDA (50.7) (0.5) 1.7 2.9 11.3 Net profit 293 382 299 292 314 EPS (58.5) 24.7 (21.9) (2.4) 7.4 Recurrent net profit 293 382 299 292 314 Recurrent EPS (5.7) 29.2 (21.5) (2.4) 7.4 DPS (58.4) 24.6 176.8 (72.6) 7.4 Port EBTIDA 275 288 299 319 339 EBITDA 410 408 415 427 475 Margins (%) Reported EPS, (US$ Cents) 10.4 12.9 10.1 9.8 10.6 Operating margin 27.4 28.4 18.2 17.9 19.1 Recurrent EPS (US$ Cents) 10.0 12.9 10.1 9.8 10.6 EBITDA margin 47.1 51.1 35.4 37.3 39.5 DPS (US$ Cents) 4.2 5.2 14.4 3.9 4.2 Net profit margin 33.6 47.8 25.5 25.5 26.1 Return (%) Balance Sheet (US$ mn) 2014 2015 2016E 2017E 2018E MW ROE 6.5 8.1 6.3 6.3 6.5 Net fixed assets 4,069 4,008 4,911 5,155 5,382 ROA 3.8 5.0 3.9 3.7 3.8 Jointly controlled entities 914 1,233 1,262 1,289 1,319 Associated companies 857 881 913 948 987 Gearing Investment securities 0 0 0 0 0 Net debt/equity (%) 18.8 23.9 44.2 50.3 50.0 Finance lease receivables 25 33 33 33 33 Net interest coverage (x) 7.1 9.5 5.9 4.9 4.4 Restricted bank deposits 0 0 0 0 0 Dividend Coverage 3.77 (3.52) (0.63) 0.62 1.29 Other assets 422 355 355 355 355 Non-current assets 6,287 6,511 7,475 7,782 8,077 Operational Analysis 2014 2015 2016E 2017E 2018E Bank balances and cash 1,116 909 166 112 278 CT8 throughput ('000 TEU) 1,640 1,576 1,576 1,576 1,576 Other current assets 214 252 70 1 1 PRC port throughput ('000 TEU) 54,927 56,039 59,780 63,131 63,900 Total current assets 1,330 1,161 236 112 279 Overseas port throughput ('000 TEU) 10,759 11,056 12,282 13,192 13,677 Current borrowings 430 261 261 261 261 Total throughput ('000 TEU) 67,326 68,671 73,638 77,899 79,152 Other current liabilities 474 352 116 14 14 Recurrent throughput ('000 TEU) 67,326 68,671 73,638 77,899 79,152 Total Current Liabilities 903 613 377 275 275 COSCON leasing rate (US$/TEU/day) 0.74 0.71 0.71 0.70 0.69 Net Assets 6,713 7,059 7,334 7,619 8,081 LT leasing rates (US$/TEU/day) 0.62 0.57 0.54 0.52 0.50 Long-term debt 1,578 1,811 2,061 2,311 2,561 ST leasing rates (US$/TEU/day) 0.51 0.40 0.45 0.46 0.46 Other long-term liabilities 76 75 75 75 75 Florens - utilisation rate (%) 97.7 98.1 98.3 98.4 98.4 Minority interests 316 310 323 339 357 Florens container purchase price (US$/T 1,898 1,694 1,900 1,950 1,950 Shareholders equity 4,742 4,863 4,875 4,894 5,088 Capital Employed 6,713 7,059 7,334 7,619 8,081 Growth% CT8 throughput 0.0 (3.9) 0.0 0.0 0.0 PRC port throughput 9.0 2.0 6.7 5.6 1.2 Cash Flow Statement (US$ mn) 2014 2015E 2016E 2017E 2018E Overseas port throughput 16.5 2.8 11.1 7.4 3.7 Pretax operating profit 410 408 415 427 475 Total throughput 9.9 2.0 7.2 5.8 1.6 Depreciation and amortisation 212 210 238 255 273 Recurrent throughput 9.9 2.0 7.2 5.8 1.6 Other non-cash items (209) 311 (787) (282) (320) COSCON leasing rate (3.0) (4.0) (1.0) (1.0) (1.0) Gross Cash Flow 413 929 (135) 401 428 LT leasing rates (5.9) (8.1) (5.5) (4.2) (3.5) Capex (198) (1,100) (600) (500) (500) ST leasing rates (18.5) (20.7) 12.1 2.6 0.0 Change in working capital 32 (85) (54) (33) - Florens container purchase price (0.9) 0.3 0.2 0.1 0.1 Profit tax paid (34) (41) (32) (32) (36) Dividend income from associates/jces 172 132 142 163 180 MW Valuation 2014 2015 2016E 2017E 2018E Minority interest in net income (20) (21) (13) (16) (18) P/E 12.6 7.8 11.5 11.8 11.0 Free Cash Flow 365 (186) (692) (16) 54 P/BV 0.8 0.6 0.7 0.7 0.7 Share issues 0 0 0 0 0 EV/EBITDA 8.1 7.2 8.6 8.7 8.1 Dividend paid (77) (125) (288) (273) (120) Dividend yield 3.2 5.1 3.5 3.4 3.6 Net borrowings/repayment (258) 0 250 250 250 FCF Yield 5.7-5.4-20.4-0.9 1.1 Net Cash Flow (121) (207) (743) (54) 166 Beginning Cash 1,237 1,116 909 166 112 Ending Cash 1,116 909 166 112 278 E = Morgan Stanley Estimates; NM = Not Meaningful Source: Company Data, Morgan Stanley Research ; Note: Dividend Yield does not include special dividend. 2

Risk-Reward Snapshot: COSCO Pacific (1199.HK, HK$9.02, EW, PT HK$9.07) COSCO Pacific April 13, 2016 Risk-Reward View: Fully Valued on Current Price Levels HK$ 14 12 10 8 6 4 2 Price Target HK$9.07 Bull HK$12.43 15.8x 2016e bull case P/E HK$9.02 HK$12.43 (+38%) HK$9.07 (+1%) HK$5.93 (-34%) 0 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Price Target (Apr-17) Historical Stock Performance Current Stock Price WARNINGDONOTEDIT_RRS4RL~1199.HK~ Derived from DCF-based sum-of-the-parts, probability-weighted: bull (10%), base (60%), and bear (30%). Strong volume rebound: 10-15% port traffic growth in 2016-17e, led by improving demand outlook; tariff hikes of 5% in 2016-17e; long-term CAGR at 2% for 2014-35e. Recovery in container leasing segment. Investment Thesis Maintain EW rating given limited upside potential to our price target. Given CPL's conversion into a pure play port operator, we think a re-rating could be driven if it is able to deliver solid earnings growth in the next 2-3 years. We cut our net profit estimates by 9-18% for 2016-17 after 2015 results announcement and the disposal of container leasing with acquisition of CSPD. The stock is trading at a 2016e P/E of 11.5x look fair vs. its long-term historical average (2012-now) at 12.4x. The special DPS of HK$0.8 should provide near-term support to the share price. Key Value Drivers Volume growth Valuation of new investment projects Port tariffs Allocation of the disposal proceeds Base HK$10.09 12.8x 2016e base case P/E Bear HK$5.93 7.5x 2016e bear case P/E Moderate growth outlook: 7.2%, 5.8%, 1.6% traffic growth in 2016e, 2017e and 2018e with stable tariffs. Container leasing segment slowly recovering. Double dip: Zero volume growth in 2016-17e; no tariff hikes from 2015e onward. Container leasing segment remains sluggish. Key Upside Risks to our price target Recovery in China export and trade demand Recovery in European market Potential increase in tariffs Higher valuation multiples by the market Higher-than-expected volume growth Key Downside Risks to our price target Operating risk at specific terminals (e.g., Guangzhou Nansha, Hong Kong HIT) due to cost pressures or market competition. Double-dip in China s export growth, led by weakness in global trade demand. Exogenous risks from wars or natural disasters. Currency depreciation Overpaying for M&As 3

Investment Thesis Earnings Pressures Exist; Maintain EW We cut our PT by 17% to HK$9.07, which provides only limited upside from the current share price so we maintain our EW rating on the stock. We also cut our 2016-17e net profit by 9%-18%, to reflect the removal of Florens, and additions of CSPD and Kumport terminals, as well as a weaker traffic growth outlook. Although the business restructuring has converted CPL into a pure global port operator, we think the market is still concerned with potential earnings shortfalls due to the trading-in of CSPD assets at high valuation multiples (47.2x 2014 P/E) and overall demand weakness due to sustained global macro headwinds. In our view, it will take time for CPL to demonstrate its real competency as a pure port operator by delivering solid earnings growth for the next 2-3 years. In the nearer term, however, we view the special DPS at HK$0.8 offered by CPL as attractive. The stock is trading at 11.5x 2016e P/E and 0.7x P/BV, compared with historical means at 12.4x and 1.4x, respectively. FY2015 Review FY2015 net profit jumped 30.4% YoY to US$382m, beating MSe of US$291m and consensus of US$304m by 31%/26%, mainly led by a provision write-back of US$79m on the disposal of a 21.8% equity interest in CIMC in 2013. Excluding one-off items, recurring net profit was US$299m, up by 1.0% YoY and 3% above MSe of Rmb291m. Due to macro challenges, revenues from terminals / container leasing fell by 5.8% / 11.6% YoY, respectively, driving overall revenues down by 8.3% YoY. Gross profit decreased by 7.3% YoY, mainly led by weak performance in container leasing. Port earnings increased 6% YoY to US$224m, led by a profit turnaround of Xiamen Ocean Gate and stable performance of Piraeus. In particular, the terminals of Yantian, Qingdao Qianwan and Antwerp showed strength that drove up JCEs/associates profit by 7.9% / 2.9% YoY, respectively. COSCO Pacific also announced a final DPS of HK$0.229, bringing the total DPS to HK$0.402. This implies a 40% dividend payout ratio, in-line with FY2014 but slightly lower than MSe of 43%. 4

Exhibit 2: CPL: Summary of FY2015 Results COSCO Pacific April 13, 2016 Source: Company Data, E=Morgan Stanley Estimates Exhibit 3: CPL: FY2015 Terminals Results Exhibit 4: CPL: FY2015 Container Leasing Results Source: Company Data, Morgan Stanley Research Source: Company Data, Morgan Stanley Research 5

Exhibit 5: CPL: Terminal Throughput Volume and YoY Growth COSCO Pacific April 13, 2016 Source: Company data, Morgan Stanley Research 6

Earnings Estimates and Valuation Earnings Estimate Adjustments for 2016-17; Introducing 2018e Net Profit We cut our 2016-17e net profit forecasts by 9% and 18% to US$299m and US$292m respectively, after updating our model for the 2015 results announcement and taking into account the disposal of the container leasing business and acquisition of CSPD. We have also added in the contribution from Kumport SPA. We introduce 2018 net profit at US$314m. Detailed changes are highlighted in Exhibit 8. For container terminals, we assume 7.2%, 5.8% and 1.6% throughput growth in 2016, 2017, and 2018. We have also added contribution from Kumport SPA to the share results of associates. Our revised net profit estimates are 6%, 12% and 7% below consensus estimates for 2016-2018e respectively. Cutting PT to HK$9.07 Exhibit 6: CPL: Morgan Stanley Estimates vs. Consensus Year to Dec 31 2016E 2017E 2018E CPL (1199.HK) MS estimates USD mn 299 e 292 e 314 e Consensus estimates USD mn 320 332 336 % variance -6% -12% -7% Source: Thomson Reuters Consensus, Morgan Stanley Research estimates We continue to value CPL using a probability-weighted methodology derived from a DCF-based sum-of-theparts valuation. However, we are changing the weightings for our base-, bear- and bull-case scenarios from 70%, 10% and 20% to 60%, 10% and 30%, respectively. We lower the probability for our bull case to 10% from 20% because we see increasing pressure on macroeconomics with weak trade demand. Similarly, we raise our bear case scenario to 30% from 10% as we believe the company will be significantly affected by a slower global economic recovery as well as stagnant trade activity. Base Case: 60% weighting (previously 70%) Scenario Value: to HK$10.09 from HK$10.89 Our base-case valuation drops in part because we lower our net profit estimates by 9-18% for 2015-17, with a weaker outlook for container terminals. Moreover, we adjust our SOTP valuation to reflect the disposal of the container leasing business and added the value of CSPD. We also add the value of Kumport SPA in Turkey. In our WACC assumption for CPL s terminal valuation, we have left the variables unchanged at 14.4% cost of equity, 4.9% cost of debt and a consistent target capital structure at 67% equity and 33% debt. As a result, we apply 11.2% as a discount factor. Bull Case: 10% weighting (previously 20%) Scenario Value: to HK$12.43 from HK$13.41 previously Exhibit 7: CPL: Probability-weighted Price Target HK$ SOP valuations Prob. Prob-wt values Bull case 12.43 10% 1.24 Base case 10.09 60% 6.05 Bear case 5.93 30% 1.78 Price target 100% 9.07 Source: Morgan Stanley Research In our bull case scenario, we assume a stronger volume rebound; 10-15% port traffic growth in 2016-17e led by an improving demand outlook; tariff hikes of 5% in 16-17e, and long-term CAGR at 2% for 2014-35e. The change in our scenario value is mainly driven by our earnings cut after the disposal of container leasing business and the acquisition of CSPD. 7

Bear Case: 30% weighting (previously 10%) Scenario Value: to HK$5.93 from HK$6.40 Our bear-case scenario is based on the risk of a double dip in the global economy; nil volume growth in 2016-17e, and failure of any tariff hikes from 2016 onward. In our bear case, the magnitude of the decrease in our scenario value is the same, reflecting the same factors. The change in our scenario value is mainly driven by The change in our scenario value is mainly driven by our earnings cut after the disposal of container leasing business and the acquisition of CSPD. Exhibit 8: CPL: DCF Assumption Ports - DCF Valuation Summary Weighted average cost of capital (WACC) Equity beta 1.10 30-year risk free rate (%) 5.0 Equity risk prem ium (%) 8.5 Cost of equity (%) 14.4 Marginal cost of long-term debt (%) 6.0 Marginal tax rate (%) 19.0 Post-tax cost of debt (%) 4.9 MVE/(MVD+MVE) (%) 67.0 MVD(MVD+MVE) (%) 33.0 Weighted average cost of capital (%) 11.2 Terminal growth rate (%) 0 COSCO Pacific April 13, 2016 Source: Morgan Stanley Research estimates Exhibit 9: CPL: Forward P/E, Sep-02 to Current Exhibit 10: CPL: Forward P/B, Sep-02 to Current 25.00 3.50 25% 20.00 Mean=12.4x 3.00 2.50 Mean=1.4x 20% Forward P/E 15.00 10.00 Forward P/B 2.00 1.50 15% 10% 1.00 5.00 0.50 5% - - 0% 9/12/02 9/12/03 9/12/04 9/12/05 9/12/06 9/12/07 9/12/08 9/12/09 9/12/10 9/12/11 9/12/12 9/12/13 9/12/14 9/12/15 9/12/02 9/12/03 9/12/04 9/12/05 9/12/06 9/12/07 9/12/08 9/12/09 9/12/10 9/12/11 9/12/12 9/12/13 9/12/14 9/12/15 Forward P/E Mean +1std -1std Forward P/B Mean +1std -1std Recurring ROE Source: Bloomberg, Morgan Stanley Research Source: Bloomberg, Morgan Stanley Research 8

Exhibit 11: CPL: New vs. Old Estimates, 2016-18E COSCO Pacific April 13, 2016 New Estimation Original Estimation New Estimation Original Estimation New Estimation Original Estimation 2016E 2016E 2017E 2017E 2018E 2018E TEU TEU % Chng TEU TEU % Chng TEU TEU % Chng Pearl River Delta 21,826,082 22,230,825-2% 22,721,173 23,129,039-2% 23,379,270 23,379,270 0% COSCO-HIT 1,575,858 1,557,995 1% 1,575,858 1,557,995 1% 1,575,858 1,575,858 0% Yantian Int'l Terminals (Phase 1& II & III) 12,773,971 13,114,389-3% 13,412,670 13,770,108-3% 13,815,050 13,815,050 0% Guangzhou Nansha Phase II 4,621,226 4,834,551-4% 4,621,226 4,834,551-4% 4,621,226 4,621,226 0% Quanzhou Pacific Container Terminal - Fujian 1,307,210 1,266,548 3% 1,385,643 1,342,541 3% 1,468,782 1,468,782 0% Xiamen Yuanhai Container Terminal 1,158,923 1,038,364 12% 1,297,994 1,162,967 12% 1,427,794 1,427,794 0% Jinjiang Pacific Terminal 388,893 418,979-7% 427,782 460,876-7% 470,561 470,561 0% Yantze River Delta 10,037,753 10,527,457-5% 10,722,933 11,260,850-5% 10,722,933 10,722,933 0% Shanghai Pudong Int'l Container Terminals 2,558,283 2,493,725 3% 2,609,449 2,543,600 3% 2,609,449 2,609,449 0% Zhangjiagang Win Hanversk Container Terminals 705,910 629,034 12% 727,087 647,905 12% 727,087 727,087 0% Yangzhou Yuanyang Int'l Port 530,317 540,472-2% 578,045 589,114-2% 578,045 578,045 0% Nanjing Port Longtan Container Terminals 2,897,128 2,937,331-1% 3,157,870 3,201,690-1% 3,157,870 3,157,870 0% Yanshan Phase II na na na na na na na na na Ningbo Beilun Port Phase 4 (Berth 7) 1,274,115 1,606,255-21% 1,350,562 1,702,631-21% 1,350,562 1,350,562 0% Ningbo Beilun Port Phase 5 2,072,000 2,320,640-11% 2,299,920 2,575,910-11% 2,299,920 2,299,920 0% Bohai Rim 27,555,631 28,010,370-2% 29,242,031 29,744,273-2% 29,311,173 29,311,173 0% Qingdao Qianwan Terminal 18,015,690 17,928,365 0% 18,916,475 18,824,784 0% 18,916,475 18,916,475 0% Dalian Port Terminal (Dagaowan Phase II) 2,894,261 3,264,356-11% 3,241,573 3,656,079-11% 3,241,573 3,241,573 0% Yingkou Container Terminal 1,700,550 1,571,287 8% 1,836,594 1,696,990 8% 1,836,594 1,836,594 0% Tianjin Five Continents Int'l Terminal 2,750,149 2,887,052-5% 2,942,660 3,089,146-5% 2,942,660 2,942,660 0% Tianjin Port Euroasia Int'l Terminal 2,194,980 2,359,309-7% 2,304,729 2,477,274-7% 2,373,871 2,373,871 0% Overseas 10,604,351 10,971,132-3% 11,363,548 11,763,883-3% 11,738,286 11,738,286 0% COSCO-PSA Terminal 1,648,434 1,671,690-1% 1,730,856 1,755,275-1% 1,730,856 1,730,856 0% Antwerp Gateway 2,216,837 2,279,793-3% 2,394,184 2,462,177-3% 2,585,718 2,585,718 0% Suez Canal Container Terminal - Port Said, Egypt 3,249,488 3,516,010-8% 3,574,437 3,867,612-8% 3,574,437 3,574,437 0% Piraeus Container Terminal S.A. 3,489,592 3,503,638 0% 3,664,072 3,678,820 0% 3,847,275 3,847,275 0% Total 70,023,818 71,739,784-2% 74,049,686 75,898,045-2% 75,151,662 75,151,662 0% New Estimation Old Estimation New Estimation Old Estimation New Estimation Old Estimation Year to Dec (US$ Mn) 2016E 2016E % Chng 2017E 2017E % Chng 2018E 2018E % Chng Turnover Container leasing 79 311-75% 0 320-100% 0 0 na Income from finance lease and container mgt. 5 50-91% 0 50-100% 0 0 na Container handling, transportation and storage 13 13 0% 14 14 0% 16 16 0% Container terminal operations 1077 558 93% 1129 585 93% 1189 1189 0% Total 1173 933 26% 1144 970 18% 1205 1205 0% Operating expenses -962-726 33% -942-756 25% -978-978 0% Other income 2 2-21% 3 3-11% 3 3 0% Operating profit before finance costs 213 209 2% 205 217-6% 230 230 0% Operating profit margin (%) 18.2% 22.4% -4% 17.9% 22.4% -4% 19.1% 19.1% 0% Less: Finance costs -70-47 50% -88-47 87% -107-107 0% Segment results Container leasing 18 102-83% 0 105-100% 0 0 na Disposal gain 0 0 na 0 0 na 0 0 na Container leasing, net 18 102-83% 0 105-100% 0 0 na Dividend income from unlisted container terminals 2 2-21% 3 3-17% 3 3 0% Container terminal and related facilities 194 105 84% 202 109 86% 227 227 0% Loss from River Tade Terminal 0 0 na 0 0 na 0 0 na Disposal gain 0 0 na 0 0 na 0 0 na Container terminal and related facilities, net 196 108 82% 205 112 83% 230 230 0% Others 0 0 na 0 0 na 0 0 na Operating profit after finance cost 143 162-12% 117 170-31% 122 122 0% Depreciation and amortisation 238 252-6% 255 270-5% 273 273 0% EBITDA (include share of profits from asso. and JCEs) 415 415 0% 427 444-4% 475 475 0% Share of profit from associated companies 81 89-9% 88 97-9% 98 98 0% Shanghai Container Terminal (10%) 0 0 0 0 0 0 Shanghai Pudong Int'l Container Terminal (30%) 26 25 4% 27 26 4% 28 28 0% Chong Hing Bank (20%) 0 0 na 0 0 na 0 0 na CIMC (16.23% to 21.8% by end-07, disposed at May 2013) 0 0 na 0 0 na 0 0 na Belgium Antwerp Gateway (20%) 7 8-9% 8 9-9% 9 9 0% Dalian Port Container Terminal (20%) -3 0 nm -3 0 na -2-2 na New terminal projects 0 0 na 0 0 na 0 0 na Suez Canal Terminal (20%) 7 9-23% 8 11-22% 8 8 0% Yantian terminal (15%) 68 70-3% 73 75-3% 80 80 0% Shanghai Yixian Road & Bridge 0 0 na 0 0 na 0 0 na Share of profit from jointly controlled entities 120 117 3% 134 131 3% 148 148 0% COSCO-HIT (50%) 17 17 3% 17 17 3% 17 17 0% Qingdao Qianwan Terminal (20%) 44 43 1% 50 49 1% 61 61 0% COSCO-PSA Terminal (49%) 8 8-6% 9 10-6% 9 9 0% COSCO Logistics (49%) 0 0 na 0 0 na 0 0 na Yangzhou Yuanyang Int'l Ports (55.59%) 0 0 na 0 0 na 0 0 na Yingkou Container Terminals (50%) 1 0 nm 2 1 nm 3 3 nm Qingdao Cosport Terminal (50%) 0 0 na 0 0 na 0 0 na Nanjing Longtan (20%) 3 3-5% 4 4-4% 4 4 0% Guangzhou Nansha Port Phase II (39%) 0 0 na 0 0 na 0 0 na Ningbo Phase 4 (berth 7) (20%) 10 10 0% 9 9 0% 9 9 0% Ningbo Phase 5 (20%) 3 5-46% 6 8-32% 5 5 0% Dalian Automobile Teriminals (30%) 2 2 na 2 2 na 2 2 na Tianjin Euroasia Terminal (30%) -1 2-151% 0 2-99% 0 0 0% Profit before taxation 345 368-6% 340 397-15% 368 368 0% Profit after taxation 313 345-9% 308 373-18% 332 332 0% Net profit 299 330-9% 292 356-18% 314 314 0% Recurrent Net Profit 299 330-9% 292 356-18% 314 314 0% Source: Morgan Stanley Research (E) estimates 9

Exhibit 12: CPL: Base-case Scenario Sum-of-the-parts Valuation COSCO Pacific April 13, 2016 2016E 2016E 2016E Net Profit Valuation Valuation Methodology US$m US$m PE (x) Container terminals - HK 17.3 466.5 27.0 HK CT8 East - 50% DCF 17.3 252.3 14.6 ACT - 40% Cost of investment 214.2 Container terminals - China and overseas 189.2 3474.3 18.4 Pearl River Delta Guangzhou Nansha Phase II - 39% DCF 3.3 22.0 6.7 Yantian Phase I, II, III and West Port - 14% DCF 68.3 716.0 10.5 Quanzhou Pacific Container Terminal - 71.4% DCF 9.1 123.6 13.6 Xiamen Haicang - 70% DCF -6.2 0.0 0.0 Jinjiang Pacific Terminal - 80% DCF 1.1 5.0 4.7 Taicang Terminal Cost of investment 2.0 27.7 14.0 Yangtze River Delta WCT Phase 1-30% DCF 26.1 270.3 10.4 Zhangjiagang Terminals - 51% DCF 1.8 32.1 18.3 Yangzhou Yuanyang Int'l Port - 55.59% DCF 2.2 18.3 8.4 Nanjing Port Longtan Container Terminals - 20% DCF 3.1 38.1 12.2 Ningbo Phase 4 (berth 7) - 20% DCF 10.3 79.0 7.7 Ningbo Phase 5-20% DCF 2.8 37.4 13.3 Bohai Bay (Dayaowan Phase II) - 20% Dalian Automobile Terminal - 30% Cost of invetment na 15.0 na QQCT - 20% Dalian Port Terminal DCF DCF 45.7-2.9 1033.6-21.9 22.6 7.5 Yingkou Container Terminals - 50% DCF 1.2 10.7 9.1 Tianjin Five Continents -14% (Dividend accounting) DCF 0.7 12.4 18.3 Tianjin Port Euroasia Int'l Terminal - 30% DCF -0.8 6.5-8.4 Overseas COSCO-PSA - 49% DCF 7.5 76.8 10.2 Antwerp Gateway - 20% DCF 7.4 86.9 11.8 Suez Canal - 20% DCF 6.8 21.0 3.1 Piraeus terminal DCF 30.3 479.9 15.9 Kao Ming Terminal - 10% effective Cost of investment 0.9 8.0 9.4 Kumport SPA (25.8% effective; 40% of 64.5%) Cost of investment 376.0 Container terminals - total 206.5 3940.8 19.1 CSPD - 100% P/E 39.6 396.5 10.0 Unallocated interest income/(expense) -70.0-175.1 Unallocated corporate expenses 0.0 0.0 Sub-total 299.4 4162.1 Less: Unpaid capex on existing projects after end-2016-300.0 Total 299.4 3862.1 12.9 Total number of shares as of Dec 2016 2966.6 2966.6 Per share (HK$) 10.09 Source: Morgan Stanley Research (E) Estimates 10

Exhibit 13: Global Port Operators Valuation Comps Sheet COSCO Pacific April 13, 2016 Last px Target MS Mkt Cap Mkt Cap Share Price Perf. 52-wk CURR 4/12/16 Price Rating (LC Mn) (USD Mn) 1-mo 3-mo 12-mo High Low Ports China Merchants Holdings (International) Co. Ltd.* HKD 23.60 24.58 E 71,616 9,236 7% 10% -29% 36.80 19.80 Cosco Pacific Ltd.* HKD 9.02 10.94 E 24,458 3,154 8% 21% -12% 11.74 7.11 Xiamen International Port Co Ltd CNY 1.71 NC NC 4,580 591 10% 5% -56% 5.78 1.29 Tianjin Port Development Holdings Ltd HKD 1.20 NC NC 7,143 921 7% 4% -43% 2.77 0.99 Dalian Port PDA Co Ltd CNY 6.13 NC NC 26,906 4,159 60% 29% -12% 10.64 3.47 Shanghai International Port Group Co Ltd CNY 5.23 NC NC 121,198 18,733 3% -6% -30% 11.09 4.48 Shenzhen Chiwan Wharf Holdings Ltd CNY 16.76 NC NC 9,803 1,515 3% 14% -33% 28.00 12.10 Tianjin Port Holdings Co Ltd CNY 9.64 NC NC 16,145 2,495 10% 3% -51% 22.90 8.11 Ningbo Port Co Ltd CNY 6.50 NC NC 83,200 12,860 10% -20% 10% 13.45 5.45 Shenzhen Yan Tian Port Holdings Co Ltd N/A 6.99 NC NC 13,576 2,098 4% -7% -41% 14.98 5.74 Hutchison Port Holdings Trust* USD 0.49 0.47 E 33,097 4,268 1% -2% -28% 0.70 0.41 DP World* USD 19.01 27.00 O 15,778 15,778 5% 3% -19% 23.90 16.50 Hamburger Hafen und Logistik AG* EUR 13.29 13.00 E 931 1,062-1% 2% -34% 20.97 11.86 Santos Brasil Participacoes SA BRL 13.02 NC NC 1,734 497-9% 17% 20% 15.29 10.35 Global Ports Investments PLC* USD 3.15 5.35 E 602 602 21% -3% -44% 11.00 2.45 P/E (x) P/B (x) ROE(%) EV/EBITDA (x) Dividend Yield (%) 15 16E 17E 15 16E 17E 15 16E 17E 15 16E 17E 15 16E 17E China Merchants Holdings (International) Co. Ltd.* 15.9 13.4 12.9 1.1 1.0 1.0 7.1 7.8 7.8 10.7 9.1 8.9 3.4 4.4 4.5 Cosco Pacific Ltd.* 7.8 11.5 11.8 0.6 0.7 0.7 8.0 6.2 6.0 7.2 8.6 8.7 5.1 3.5 3.4 Xiamen International Port Co Ltd 12.3 11.3 10.6 0.8 0.7 NA 6.3 6.5 NA 3.7 3.5 NA 3.1 3.3 3.6 Tianjin Port Development Holdings Ltd 8.2 7.9 7.6 NA NA NA NA NA NA 4.9 5.2 5.3 5.3 5.3 5.2 Shanghai International Port Group Co Ltd 17.6 17.3 16.1 2.1 1.9 1.7 11.7 10.9 10.8 11.0 10.5 10.2 2.9 3.0 3.3 Shenzhen Chiwan Wharf Holdings Ltd 21.9 20.0 18.7 2.5 2.3 2.2 11.3 11.7 11.7 8.7 8.2 7.6 2.4 2.5 2.7 Tianjin Port Holdings Co Ltd 12.5 12.4 11.5 1.1 1.0 1.0 8.9 8.5 8.6 NA NA NA 2.4 2.5 2.6 Ningbo Port Co Ltd 27.7 30.2 29.1 2.5 2.4 2.3 9.2 7.9 7.7 NA NA NA 1.2 1.1 1.4 Shenzhen Yan Tian Port Holdings Co Ltd 31.5 NA NA 2.4 NA NA 7.5 NA NA NA NA NA NA NA NA Chinese Median 15.9 12.9 12.4 1.6 1.0 1.4 8.5 7.9 8.2 8.0 8.4 8.7 3.0 3.2 3.4 Hutchison Port Holdings Trust* 20.5 20.4 19.7 0.8 0.8 0.8 3.9 3.8 4.1 10.6 10.6 10.2 8.4 8.3 8.5 DP World* 19.1 16.5 14.4 1.9 1.7 1.5 10.4 10.9 11.6 12.2 10.3 9.5 1.5 1.7 2.0 Hamburger Hafen und Logistik AG* 17.3 16.7 14.3 1.9 1.8 1.7 11.7 10.9 12.4 6.4 5.8 5.3 3.7 3.9 3.9 Santos Brasil Participacoes SA 36.5 28.8 17.7 1.2 1.2 1.1 3.2 4.1 6.6 7.3 7.7 7.9 3.9 2.1 3.5 Global Ports Investments PLC* 4.5 5.6 3.5 1.3 1.1 0.8 37.7 23.3 30.6 5.6 5.6 4.0 0.0 0.0 5.8 Foreign Median 19.1 16.7 14.4 1.3 1.2 1.1 10.4 10.9 11.6 7.3 7.7 7.9 3.7 2.1 3.9 Mixed Median 17.6 16.6 14.3 1.6 1.2 1.3 9.0 8.5 9.7 8.0 8.4 8.7 3.0 2.7 3.4 * indicates covered companies Source: E = Morgan Stanley Research estimates. NA = Not available. Source: Thomson Reuters, Morgan Stanley Research. 11

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