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1 Morning Research Department Table of Contents 目录 20 October 2016 Industry and Company Focus 行业和公司焦点 Luk Fook (00590 HK): The Company Recorded -37% SSSG in 2Q FY2017 六福 (00590HK):2017 财年二季度同店销售增长录得 -37% Latest Reports 最新报告摘要 Company Name 公司名称 Infrastructure Sector 基建行业 Retail Sector 零售业 Alibaba Group 阿里巴巴集团 Code 代码 BABA US BABA US Title 标题 Flash Note: Jan.-Sep Urban FAI Up 8.2% YoY, In Line with Expectation 快讯 :2016 年 1-9 月城镇固定资产投资同比增 8.2%, 与预期一致 Flash Note: Total Retail Sales Up 10.7% YoY in September, In Line with Consensus 快讯 : 9 月社会消费品零售总额同比上升 10.7%, 符合预期 Flash Note: China E-Commerce GMV in 9M16 Reached RMB444 bn, up 22.2% yoy 快讯 :2016 年 9 月中国电商交易量达到人民币 4,440 亿元, 同比增长 22.2% TP 目标价 Chg 变动 Rating 评级 Chg 变动 EPS Est. Change? 盈利预测 是否改变 -- Outperform -- N -- 跑赢大市 -- 否 -- Neutral -- N -- 中性 -- 否 US$ Buy -- N US$ 买入 -- 否 Type of Report 报告类型 Title 标题 Issue Date Data Update Critical Sector Data Update 19 October 2016 数据更新行业关键数据更新 2016 年 10 月 19 日 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 9

2 HSI Performance HSCEI Performance 29,000 16,000 27,000 25,000 23,000 21,000 19,000 17,000 Oct/15 Jan/16 Apr/16 Jul/16 Oct/16 Source: Bloomberg 14,000 12,000 10,000 8,000 6,000 Oct/15 Jan/16 Apr/16 Jul/16 Oct/16 Source: Bloomberg Newly Published Key Economic Data for China, US and Europe 中美欧最新公布的重要经济数据 Country 国家 China 中国 China 中国 China 中国 U.S. 美国 Indicator 指标名称 Industrial Production (yoy) 工业增加值同比增速 Retail Sales (yoy) 社会消费品零售总额同比增速 3Q GDP growth (yoy) 第 3 季 GDP 同比增长 Housing Starts annualized (SA, '000) 年化新屋开工量 ( 季调, 千套 ) Data Period 数据期间 September 9 月 September 9 月 September 9 月 September 9 月 Source: National Bureau of Statistics of China, US Census Bureau, Bloomberg. 数据来源 : 中国国家统计局, 美国人口普查局, 彭博 Current Value 当期值 MoM / QoQ 环比变动 YoY 同比变动 Market Consensus 市场一致预期 6.1% (3.2ppts) 0.4ppts 6.4% 10.7% 0.1ppts (0.2ppts) 10.7% 6.7% 0.0ppt 0.0ppt 6.7% 1, % 0.9% 1,175 See the last page for disclaimer Page 2 of 9

3 Industry and Company Focus Luk Fook (00590 HK): The Company Recorded -37% SSSG in 2Q FY2017 Analyst: Kevin Guo What happened: The Company released operating data of the 2nd quarter of FY2017. The SSSG of the Company was -37% in 2Q FY2017, and the SSSG of Mainland and Hong Kong/Macau POS was -23% and -39%, respectively. Luk Fook opened 27 new jewellery POS in the 2nd quarter of FY2017 and has a total of 1,455 POS as of 30 September Comments and Views: The drop of jewellery retail sale of the Company was attributed to deterioration of jewellery market both in Hong Kong and Mainland. The fall of Hong Kong jewellery market has not bottom out and was worse than our expectation. We expect the drop of mainland tourists arriving Hong Kong to persist in 2016, which will adversely impact jewellery retail sales of Hong Kong. Investment suggestion: Luk Fook is a famous jewellery retailer in the Greater China market with a strong brand. The Company is expected to keep expanding its jewel retail network at lower pace due to the deterioration of jewellery market. Luk Fook relies heavily on Hong Kong and Macau market and the operating environments are not expected to improve in Our TP of the Company is HK$ with the investing rating of Sell. We will revise down our estimations. Latest Reports Flash Note: Infrastructure Sector: Jan.-Sep Urban FAI Up 8.2% YoY, In Line with Expectation Rating: Outperform 6-18m TP: n.a. Analyst: Gary Wong Report Date: Summary According to the National Bureau of Statistics of China, Jan.-Sep Urban FAI amounted to RMB42,690.6 billion, up 8.2% YoY, in line with expectation and 0.1 ppts higher than that of Jan.-Aug. In September, growth was 8.8% YoY, up 0.7 ppts MoM, the second consecutive MoM increase. There are several points worth discussing. Firstly, Jan.-Sep. private FAI growth rate was 2.5%, up 0.4 ppts MoM, the first MoM increase during the year, which was positive. Secondly, we found that investment growth for the irrigation, environment and public facilities management segment remained as the fastest growing segment for infrastructure investment, reflecting the government s emphasis on input into the environmental protection industry. Thirdly, the property development investment growth rate increased 0.4 ppts compared with that of Jan.-Aug to 5.8%, the second consecutive rebound in growth rate. This rebound was not high though, we maintain our view that the market might have already reached its peak in April. Fourthly, FAI growth of construction in progress and new started projects was 9.1% YoY and 22.6% YoY, respectively, and up 0.3 ppts and down 0.1 ppts compared with that of the period between Jan.-Aug FAI growth has seen the first rebound during the year. Under an increase in downward pressure from the economy, we expect that the Government will implement a new round of stimulus plans, especially for infrastructure construction investment. On 13 October, the Ministry of Finance, Ministry of Transport, Ministry of Environmental Protection and an additional 20 ministries announced the third batch of PPP demonstration projects, the number of projects reached 516 with a total planned investment of RMB1,170.8 billion. The total investment in transportation projects (highways, railways, etc.) is more than RMB500 billion, while municipal engineering work projects (municipal roads, sewage treatment projects, waste disposal, etc.) has a planned investment of more than RMB300 billion, a combined amount to account for over 70% of total investment. Reiterate Outperform rating for the sector. Maintain Accumulate ratings for China Railway Construction (01186 HK), China Communications Construction Company (01800 HK), China Railway Group (00390 HK) and CRRC Corporation (01766 HK), and Buy rating for Zhuzhou CRRC Times Electric (03898 HK). See the last page for disclaimer Page 3 of 9

4 Flash Note: Retail Sector: Total Retail Sales Up 10.7% YoY in September, In Line with Consensus Rating: Neutral 6-18m TP: n.a. Analyst: Andrew Song Report Date: Summary In September 2016, the nominal total retail sales of consumer goods reached RMB 2.80 trillion, which represents an increase of 10.7% YoY, in line with the mean market consensus figure compiled by Bloomberg. The real total retail sales growth for the period was 9.6%, down 0.6 ppt MoM. Analyzed by area, retail sales in urban and rural areas went up by 10.7% YoY and 11.0% YoY, respectively. By breakdown, retail sales of above designated size enterprises recorded YoY growth of 8.8%. Monthly retail sales growth in September was the highest in Jan.-Sep The growth rate of total retail sales was down 0.2 ppt YoY but up 0.1 ppt MoM. We saw growth rates gradually pick up during Jul. to Sep. Housing and transportation related categories retained decent growth and were the main drivers of total growth. Building and decoration materials increased 14.2% YoY, which was still a high number, but showed signs of slowdown. Sales of automobiles continued to record strong YoY growth of 13.1%. Gold and jewellery sales remained weak but growth has turned positive after two consecutive months of decline. Online retail sales of physical goods increased by 25.1% between Jan.-Sep., accounting for 11.7% of the total retail sales of consumer goods. Nevertheless, the growth rate is slowing down. On the other hand, sales of the top 100 retail enterprises in China rose 2.1% YoY in September, up 3.7 ppts YoY and up 2.6 ppts MoM, which was the best month ytd, according to CNCIC. Mixed performance from the categories during the period, of which sales of home appliances performed well but jewellery was still in the trough. Overall, retail sales remained weak. We do not expect a strong rebound and maintain Neutral investment rating for the retail industry. However, a boost in sports and consumption upgrades will continue to support apparel sales. Thus, we maintain Outperform for the apparel sector. We maintain Buy for Intime (01833 HK) with TP of HK$7.30 in the retail sector; Buy for Xtep (01368 HK) with TP of HK$4.90 in the apparel sector and Buy for Uni-president China (00220 HK) with TP of HK$6.90 in the food and beverage sector. Flash Note: Alibaba Group (BABA US): China E-Commerce GMV in 9M16 Reached RMB444 bn, up 22.2% yoy Rating: Buy 6-18m TP: US$ Analyst: Ray Zhao Report Date: Summary According to data published today by the National Bureau of Statistics of China, China e-commerce GMV in 9M16 reached RMB444 bn, up 22.2% yoy and 0.6ppt mom. China commodity e-commerce GMV reached RMB360 bn, up 22.5% yoy, up 1.0ppt mom. China s service e-commerce GMV reached RMB84 bn, up 20.9% yoy and down 1.0ppt mom. In 3Q16, China e-commerce GMV reached RMB1,228 bn, up 22.4% yoy, in which China s commodity e-commerce GMV reached RMB981 bn, up 22.4% yoy. China s service e-commerce GMV in 3Q16 reached RMB248 bn, up 22.6% yoy. According to the State Post Bureau of China, China express industry revenue in 9M16 reached RMB36.0 bn, up 50.2% yoy, with delivered packages of 2.8 bn units, up 47.7% yoy. In 3Q16, China express industry revenue reached RMB98.8bn, up 44.9% yoy, with delivered packages amounting to 7.9 bn units, up 49.6% yoy. China s e-commerce growth data in 9M16 was in line with our expectations. 3Q was the off-season for China e-commerce; seasonality effects might become stronger from Jul. to Nov. China s e-commerce players strengthen their holiday promotions in Jun. and Nov., and as a result, consumers should spend more and more on online e-commerce platforms in Jun. and Nov. In 1Q and 3Q, consumers may have cut their online spending in the off-season due to budget constraints. In 2015, 11M15 GMV growth reached its highest 2H15 level of 33.0%. We estimate that Tmall s Double 11 Singles' Day promotion GMV might reach between RMB125 bn-rmb130 bn, up 36.9%-43.4% yoy, 10.5%-11.0% of its 4Q16 GMV. However, current market rumors indicate that Tmall s Double 11 Singles' Day promotion GMV may reach RMB150 bn, above our expectation. Tmall s Double 11 Singles' Day promotion will incorporate many stars in order to attract buyers. 1) Tmall See the last page for disclaimer Page 4 of 9

5 will closely combine star resources and live promotions. There are 3 stages for Tmall s Double 11 Promotion: a build-up period (Before 1 Nov.), a warm-up period (1 Nov. to 10 Nov.), and Double 11 day. In the build-up period, all sellers should launch their live programs around 3 themes: Global Fashion, Global Intelligence and Global Life. In the warm-up period, Tmall will launch an official program named Discovery. In Discovery, both brands and stars should help consumers to discover good products through their live channels. During Double 11 day, the theme is Crazy Boss. All stars and brands should directly promote and sell products through their live channels. 2) Alibaba Group will make Tmall s Double 11 Singles' Day Evening a famous marketing IP. In Tmall Double 11 Singles' Day Evening, Tmall will invite lots of Chinese famous stars, including Huang Xiaoming, Fan Bingbing, Zhao Wei, TFboys, and so on. David Hill has been invited to be the director of the evening and he is also the director of Super Bowl and the producer of American Idol. The evening will be held in Shenzhen Gymnasium and be broadcasted live by Zhejiang TV Station. Maintain investment rating for the e-commerce sector as Outperform. We think that Jul. to Nov. will create a favorable seasonal factor for China e-commerce and it might be a good opportunity to buy e-commerce stock in this period. Maintain the investment rating for Alibaba Group as "Buy", with TP of USD120.00, representing 30.7x FY18E non GAAP PE. Our investment rating for JD US is "Neutral", with TP of USD22.00, representing 0.8x FY16E PS. Chinese Translation 中文翻译 行业和公司焦点 六福 (00590HK):2017 财年二季度同店销售增长录得 -37% 分析员 : 郭勇 事件描述 : 公司公布了 2017 财年第二季度的主要运营数据 2017 财年第二季度公司同店销售增长为 -37%, 其中大陆和港澳门店的同店销售增长分别为 -23% 和 -39% 六福在 2017 财年第二季度新开了 27 家新的珠宝零售点, 截至 2016 年 9 月 30 日共拥有 1,455 家珠宝零售点 观点评论 : 公司珠宝零售额的大幅下降归因于香港和大陆珠宝市场的恶化 香港珠宝零售市场的下降仍未见底, 且差于我们的预期 我们预计 2016 年大陆访港游客数量下降的情况将会持续, 这将对公司香港的珠宝零售产生负面影响 投资建议 : 六福是一家在大中国区具有强劲品牌的知名珠宝零售商 由于珠宝市场的恶化, 预计公司将以较慢的速度扩张其珠宝零售网络 公司严重依赖于香港和澳门市场, 港澳市场的经营环境预计在 2016 年将难有改善 我们对公司的目标价是 港元, 投资评级为 卖出 我们将会下调我们的盈利预测 See the last page for disclaimer Page 5 of 9

6 最新报告 快讯 : 基建行业 :2016 年 1-9 月城镇固定资产投资同比增 8.2%, 与预期一致 评级 : 跑赢大市 6-18m 目标价 : n.a. 分析员 : 黄家玮报告日期 : 报告摘要 据中国国家统计局的数字显示, 2016 年 1-9 月城镇固定资产投资额为 426,906 亿元 ( 人民币, 下同 ), 同比增 8.2%, 与预 期一致, 较 1-8 月的提高 0.1 个百分点 ; 单以 9 月计同比增 8.8%, 环比提高 0.7 个百分点, 连续两个月出现环比 增速回升 我们认为数据有几点值得讨论 首先,1-9 月民间固定资产投资增速为 2.5%, 环比提高 0.4 个百分点, 为年内首次 增速环比提高, 属正面 ; 第二, 我们发现水利 环境和公共设施投资继续成为基建投资里增速最高的分部, 反映政府 维持侧重对环保行业的投入 第三, 房地产开发投资增速较 2016 年 1-8 月增速提高 0.4 个百分点至 5.8%, 虽然增速 连续两个月回升, 但提高动力不大, 维持市场可能已于 4 月见顶的预测 第四, 施工项目投资增速及新开工项目增速 为 9.1% 及 22.6%, 分别较 2016 年 1-8 月增加 0.3 个百分点及减少 0.1 个百分点 固定资产投资整体增速出现年内的首次回升 在经济下行压力加大的情况下, 我们认为政府将会推出新的刺激措施, 特别是新的基建投资项目 财政部 交通运输部 环保部等 20 个部委于 10 月 13 日公布了第三批 PPP 示范项目名 单, 项目数量达 516 个, 计划总投资额达到 11,708 亿元 其中, 交通运输类项目 ( 高速公路 铁路等 ) 总投资规模超 过 5,000 亿元, 其次为市政工程类 ( 市政道路 污水处理项目 垃圾处理等 ) 项目, 总投资额超过 3,000 亿元, 两者占 比超过 70% 重申行业 跑赢大市 评级 维持中国铁建 (01186 HK) 中交建 (01800 HK) 中国中铁 (00390 HK) 及中 国中车 (01766 HK) 的 收集 评级, 及株洲中车时代电气 (03898 HK) 的 买入 评级 快讯 : 零售业 :9 月社会消费品零售总额同比上升 10.7%, 符合预期 评级 : 中性 6-18m 目标价 : n.a. 分析员 : 宋涛报告日期 : 报告摘要 2016 年 9 月, 社会消费品零售总额为人民币 2.80 万亿元, 同比名义升 10.7%, 与彭博财经统计的市场平均预期值一 致 9 月社会消费品零售总额实际增速为 9.6%, 月环比下降 0.6 个百分点 分地区来看, 城市与农村区域分别升 10.7% 及 11.0% 分类来看, 限额以上企业商品零售额同比增长 8.8% 9 月的月度零售销售增幅为 2016 年 1 至 9 月最高 社会消费品零售总额增速同比下降 0.2 个百分点, 但月环比上升 0.1 个百分点 我们看到 7 至 9 月份增速在逐步提高 住房和交通相关的品类继续增长迅速并且成为增长的主要动力 建材装修类商品同比上升 14.2%, 数值仍然较高但出现了增速放缓迹象 汽车销售继续录得同比 13.1% 的强劲增长 金银珠宝销售依旧疲弱, 但是增速在连续两个月的下降后由负转正 网上实物商品销售在 1 至 9 月同比上升 25.1%, 占社会消费品零售总额的 11.7%, 但增速开始放缓 另一方面, 根据中华商业信息网数据, 全国百家重点大型零售企业销售额在 9 月同比上升 2.1%, 增速同比提高 3.7 个 百分点, 月环比提升 2.6 个百分点, 是今年以来最好 期内各品类表现不一, 家电表现出色但金银珠宝则仍处于低谷 总体而言零售销售依然疲弱 我们认为零售行业还看不到显著复苏并维持行业 中性 评级 然而, 运动热潮以及消 费升级将继续支撑服装消费 我们维持服装行业 跑赢大市 评级 在零售行业, 我们维持银泰商业 (01833 HK) 买入 评级和目标价 7.30 港元 ; 服装行业, 特步国际 (01368 HK) 买入 评级和目标价 4.90 港元 ; 食品饮料行业, 统一企业 中国 (00220 HK) 买入 评级和目标价 6.90 港元 See the last page for disclaimer Page 6 of 9

7 快讯 : 阿里巴巴集团 (BABA US):2016 年 9 月中国电商交易量达到人民币 4,440 亿元, 同比增长 22.2% 评级 : 买入 6-18m 目标价 : US$ 分析员 : 赵睿报告日期 : 报告摘要 中国统计局公布数据 : 中国电商交易量在 2016 年 9 月达到 4,440 亿元 ( 人民币, 下同 ), 同比增长 22.2%, 月环 比上升 0.6 个百分点 其中实物电商交易量达到 3,600 亿元, 同比增长 22.5%, 月环比上升 1.0 个百分点 服务业 电商交易量达到 840 亿元, 同比增长 20.9%, 月环比下降 1.0 个百分点 2016 年 3 季度中国电商交易量达到 12,280 亿元, 同比增长 22.4%, 其中实物电商交易量达到 9,810 亿元, 同比增长 22.4%, 服务业电商交易量达到 2,480 亿 元, 同比增长 22.6% 根据中国邮政局,2016 年 9 月中国快递行业收入为 360 亿元, 同比增长 50.2% 快递包裹 量达到 28 亿个, 同比增长 47.7% 2016 年 3 季度中国快递业收入达到 988 亿元, 同比增长 44.9%, 快递包裹达 到 79 亿个, 同比增长 49.6% 我们认为 9 月份的电商数据符合预期 3 季度是季节性淡季, 从 7 月到 11 月电商季节性效应会增强 中国电商公 司越来越强化节日促销, 特别是在 6 月和 11 月 消费者也在 6 月和 11 月加大了网络消费开支 但是他们可能会在 淡季削减网上开支, 基于预算约束 在 2015 年,11 月份的电商增速达到 33.0%, 为下年最高点 我们预期天猫双 11 光棍节的交易量将达到 1,250 亿到 1,300 亿, 同比上升 36.9% 至 43.4%, 相当于 10.5% 至 11.0% 的 2016 年 4 季 度交易量 但是目前市场传言天猫双十一交易量的目标为 1,500 亿, 超过我们预期 天猫双十一将邀请大量明星资源吸引买家 1) 天猫会将明星资源和直播促销紧密结合 天猫双十一营销会分为造势 期 (11 月 1 日之前 ), 预热期 (11 月 1 日到 10 日 ), 和双十一当天三个阶段 在造势期, 商家将围绕全球时尚, 全 球智能, 和全球生活三个主题开展直播 在预热期, 天猫会制作 发现 的节目, 邀请明星和品牌一起直播帮消费者 发现好货 在双十一当天, 天猫的主题为 Boss 也疯狂, 邀请品牌和明星在直播间直接进行销售 2) 阿里巴巴集 团旨在将双十一晚会打造成重要的营销 IP 天猫双十一晚会将会邀请大量国内著名明星, 包括黄晓明, 赵薇, 范冰冰, TFboys 等等 天猫邀请美国著名导演 David Hill 来导演晚会, 他也是美国超级碗的导演和美国偶像的制片人 晚会 将在深圳体育馆举行, 并由浙江卫视独家直播 维持电商行业投资评级为 跑赢大市 我们认为 7 月到天猫双十一促销会产生正面的季节性影响, 是买入电商股 的重要机会 重申阿里巴巴集团 买入 的投资评级, 目标价 120 美元, 相当于 30.7 倍的 2018 年非 GAAP 的预 测市盈率 京东的投资评级为 中性, 目标价 22.0 美元, 相当于 0.8 倍的 2016 年市销率 See the last page for disclaimer Page 7 of 9

8 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 [email protected] (86755) Gary Wong 黄家玮 Environmental Protection, Infrastructure 环保 基建 [email protected] (852) Leo Wu 吴逸超 Coal, Electricity 煤炭 电力 [email protected] (86755) Ray Zhao 赵睿 Conglomerate, E-commerce 综合 电子商务 [email protected] (86755) Square Chui 徐惠芳 Futures 期货 [email protected] (852) Kevin Guo 郭勇 Raw Materials, Gas 原材料 燃气 [email protected] (86755) Ricky Lai 黎柏坚 Telecommunications, Internet 电信 互联网 [email protected] (852) Dayton Wang 王庆鲁 Insurance, Fixed-income 保险 债券 [email protected] (852) Richard Cao 曹柱 Banking 银行 [email protected] (86755) Jun Zhu 朱俊杰 Clean Energy, Electric Equipment 清洁能源 电力设备 [email protected] (852) Andrew Song 宋涛 Consumer (Retailing), Home Appliances 消费 ( 零售 ) 家电 [email protected] (852) Van Liu 刘斐凡 Property 房地产 [email protected] (86755) Sean Xiang 向宇豪 Machinery, Construction Materials 机械 建材 [email protected] (86755) Terry Hong 洪学宇 Consumer (Apparel) 消费 ( 服装 ) [email protected] (86755) Johnny Wong 王俊浩 Macroeconomics, Property 宏观 房地产 [email protected] (852) Toliver Ma 马守彰 Aviation, Automobiles & Components 航空 汽车 [email protected] (852) Spencer Fan 范明 Shipping & Logistics, Ports, 航运物流 港口 [email protected] (86755) Barney Wu 吴宇扬 Consumer (Food & Beverage, Household Products) 消费 ( 食品饮料 日用品 ) [email protected] (86755) Gary Ching 程嘉伟 Market Strategy 市场策略 [email protected] (852) Jake Wang 汪昌江 Research Assistant 研究助理 [email protected] (86755) Wiley Huang 黄重钧 Research Assistant 研究助理 [email protected] (852) Danny Law 罗沛达 Research Assistant 研究助理 [email protected] (852) David Liu 刘静骁 Research Assistant 研究助理 [email protected] (852) Kay Mai 麦梓琪 Research Assistant 研究助理 [email protected] (86755) Esabella Zhao 赵舒蔓 Research Assistant, Translator 研究助理 翻译员 [email protected] (86755) Penny Pan 潘凌蕾 Secretary, Translator 秘书 翻译员 [email protected] (852) See the last page for disclaimer Page 8 of 9

9 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), China All Access (Holdings) Limited (00633 HK), Guotai Junan International Holdings Limited (01788 HK), Binhai Investment Company Limited (02886 HK) and Link Holdings Limited (08237 HK), Guotai Junan and its group companies do not hold equal to or more than 1% of the market capitalization of the issuer mentioned in this Research Report. (4) Guotai Junan and its group companies have had investment banking relationships with Modern Land (01107 HK) / GOME Electrical Appliances (00493 HK) / China Wood Optimization (01885 HK) / Anhui Conch Cement- H shares (00914 HK) / 361 Degrees (01361 HK) / China All Access (00633 HK) / Huaneng Renewables- H shares (00958 HK) / Hengdeli (03389 HK) / Sundart Holdings Ltd. (01568 HK) / China Dredging Environment Protection (00871 HK) / AviChina Industry & Technology- H shares (02357 HK) / China Power (02380 HK) / Sinotruk (03808 HK) / Xiao Nan Guo Restaurants (03666 HK) / China Aoyuan Property (03883 HK) / SMI Holdings Group (00198 HK) / Chanjet Information Technology- H shares (01588 HK) / Tianyun International (06836 HK) / China U-Ton (06168 HK) / Huaneng Power- H shares (00902 HK) / Shanghai Electric- H shares (02727 HK) / Powerlong Real Estate (01238 HK) / Huishang Bank- H shares (03698 HK) / Bosideng (03998 HK) / WH Group (00288 HK) mentioned in this Research Report within the preceding 12 months. 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 and 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 9 of 9