China / Hong Kong Market Focus

Monday market blog Refer to important disclosures at the end of this report

DBS Group Research . Equity 7 March 2016

Adding Hongqiao to top picks

sa- AH

Weekly market wrap

Hong Kong equities rebounded in the first week of March thanks in part to China’s RRR cut. Market sentiment improved as the HSI climbed above its 50 day moving average (pg 9). ETF flows turned positive for both Hong Kong and A-share ETFs (pg 7). HKD also strengthened, likely a reflection of inflows (pg 10). Short selling retreated slightly, but was still relatively high at 11.3% compared to 12.0% in the previous week (pg 9). Results announcements last week were also more benign (pg 5). Disappointments were concentrated in the consumer space, while Hong Kong properties reported generally upbeat figures.

Focus of the week

Giordano (709.HK) as a dividend yield play. Weak 4Q sales due to a warmer winter were a culprit for Giordano’s disappointing 2015 results. Our analyst gave the stock a HOLD call but I believe Giordano’s risk-reward is attractive for two reasons. For one, Hong Kong’s weather became colder than normal in 1Q16. More importantly, Giordano’s trailing dividend yield is still high at 7.8% despite the recent bounce. Historically, Giordano’s share price has performed well after exceeding 7.5% (pg 2). We project dividends can grow moderately thanks to net cash of HK$0.69 per share and improving margins. If Giordano re-rates back to offer 6% dividend yield, this implies a share price of HK$4.5, or 30% upside. Here is the link to Alice Hui’s Giordano report: Solid performance amid challenging environment

China Hongqiao (1378.HK) as a beta play. Steel and aluminium prices have been stronger than forecast YTD. We see scope for continued recovery as global liquidity conditions should remain moderately loose this year. China’s expected increase in fiscal spending and policy support to draw down property inventory levels are also positive. Steel and aluminium stocks lagged in 2015 due to unfavorable ASP trends, but this can reverse in 2016. Our analyst has just upgraded China Hongqiao to BUY to due to better supply and demand dynamics. Here is the link to Addison Dai’s Hongqiao report: Favourable risk-reward

Nothing ground breaking yet in NPC. We have summarized key targets given over the weekend in China’s government work report. NDRC’s Xu Shaoshi also cited five reasons why he is not expecting large layoffs to occur (pg 4).

Adding Hongqiao to replace CTCM in top picks. We are adding Hongqiao into our top picks as we believe commodities have favorable risk-reward. Meanwhile, we are removing Chinese Traditional Chinese Medicine (570.HK) due to potential risk from sales team incentive changes. Our top picks can be found on page 13.

HSI: 20,177 ANALYST Alexander LEE CFA, +852 2971 1930

alexander_lee@hk.dbsvickers.com

Ian CHUI ian_chui@hk.dbsvickers.com Hashtags of the week - #warm4Q15 #cold1Q16

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05 06 07 08 09 10 11 12 13 14 15 16

Monthly temperature vs. normal(Celsius)

Source: Hong Kong Observatory, DBS Vickers Performance of key indices

A s ofIndices 3/4 1 week 1 month YT D 2015A siaHSI 20,177 4.2 3.8 (7.9) (7.2) HSCEI 8,558 6.5 6.2 (11.4) (19.4) HSCCI 3,678 5.5 6.1 (9.2) (6.8) Shanghai Comp. 2,874 3.9 4.5 (18.8) 9.4 Shenzhen Comp. 1,707 (1.7) (1.3) (26.1) 63.2 CSI300 3,094 4.9 4.5 (17.1) 5.6 NIKKEI 225 17,015 5.1 (4.1) (10.6) 9.1 KOSPI 1,956 1.8 2.6 (0.3) 2.4 Taiex 8,644 2.8 6.3 3.7 (10.4) STI 2,837 7.1 10.0 (1.6) (14.3) KLCI 1,692 1.7 2.4 (0.0) (3.9) SET 1,380 2.7 7.3 7.1 (14.0) JCI 4,851 2.5 5.7 5.6 (12.1) Sensex 24,646 6.4 0.4 (5.6) (5.0) OthersDow Jones 17,007 2.2 5.3 (2.4) (2.2) S&P 500 2,000 2.7 5.1 (2.2) (0.7) Nasdaq 4,717 2.8 4.4 (5.8) 5.7 FTSE 100 6,199 1.7 4.7 (0.7) (4.9) DAX 30 9,824 3.3 2.5 (8.6) 9.6

% change

Source: Thomson Reuters, DBS Vickers

Market Focus

Monday market blog

Page 2

Focus of the week

Giordano’s dividend yield and share price

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97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17

Share price Trailing 12 month dividend yield (RHS)(HK$) (yield)

Source: Thomson Reuters, DBS Vickers

Year on year interim revenue trends (red areas denote warm periods)

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30%

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05 06 07 08 09 10 11 12 13 14 15

Giordano Bossini I.T. Trinity(yoy)

Source: Bloomberg Finance L.P., DBS Vickers

Market Focus

Monday market blog

Share price performance since Dec 31, 2014

-50%

-40%

-30%

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-10%

0%

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Source: Thomson Reuters, DBS Vickers

LME aluminium spot

China aluminium supply and demand forecasts

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1,500

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3,500

08 09 10 11 12 13 14 15 16

(USD/MT)

(mt ) 2013 2014 2015 2016F 2017FAl output (mt) 25.0 27.7 30.6 32.1 33.8% y-o-y 13.0% 11.1% 10.5% 4.9% 5.3%Net imports (mt) 0.26 0.17 0.12 0.12 0.12Al apparentconsumption (mt)

25.2 27.9 30.8 32.3 34.0

% y-o-y 12.2% 10.7% 10.3% 4.9% 5.3%Inventory change (mt) 0.08 0.21 0.54 0.20 0.20Al consumption (mt) 25.1 27.7 30.2 32.1 33.8% y-o-y 14.2% 10.2% 9.2% 6.1% 5.3%Al output capacity (mt) 31.90 35.60 38.60 40.40 41.90Capacity utilisation (%) 78% 78% 79% 80% 81%

Sources: Bloomberg Finance L.P, DBS Vickers

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Market Focus

Monday market blog

Page 4

Key takeaways from NPC over the weekend

Key 2016 targets of the government work report:

- GDP target of 6.5-7.0%, compared to 2015’s 6.9%

- CPI goal of 3.0%, compared to 2015’s 1.4%

- 2016 deficit to expand to Rmb2.18tr. 2015 deficit was Rmb1.62tr. Deficit ratio to GDP to increase to 3% compared to 2.3% last year.

- Create more than 10m urban jobs, compared to 13.1m last year.

- Keep unemployment rate at below 4.5%. Unemployment rate ended 2015 at 4.05%.

- Lower rural poverty by more than 10m. Last year’s decrease was 14.4m.

- Railway construction of more than Rmb800bn, compared to Rmb824bn spent last year.

- Military budget increase of 7-8%, down from 10% growth in 2015.

Addressing concerns for massive layoffs:

- Xu Shaoshi, Minister of the National Development and Reform Commission, thinks a second wave of massive layoffs in China will not occur. The first wave of layoffs occurred in the late 1990s.

- Xu cited five reasons for his optimism:

Enterprises have taken measures including cutting working hours and salaries to avoid laying off their employees.

China's growth speed has slowed, but its economic aggregate is larger. One percentage point of growth in gross domestic product now translates to an addition of 1.6 million jobs.

The fast-growing service industry is a reliable source of job creation. In 2015, the service sector accounted for 50.5 percent of China's GDP, the first time it has exceeded the 50-percent level.

More people are starting their own businesses. In 2015, 4.4 million new enterprises were registered. This translates to 12,000 new ones every day.

The development of social mobility and information exchange makes it easier and faster for people to find jobs that match their ability and interest.

- The central government will also allocate 100 billion yuan over two years to help the laid-off workers find new jobs.

Market Focus

Monday market blog

Notable results announcements last week Company T icker Period Prof it V s. Notes

growth mkt

F inancialsHKEX 388 FY15 51% In line FY15 was helped by a buoyant 2Q. 4Q15 was only flat yoy.

PropertyYanlord YLLG SP FY15 7% 6% Revenue beat estimates but offset by margins.Hong Kong Land HKL SP FY15 -3% Slight + Underly ing profit. Lower provision write backs for SG projects.Prosperity REIT 808 FY15 10% In line Rental reversion of 16%. Cash finance cost increased 24%.Great Eagle 41 FY15 -7% Slight + Special div surprise. Overseas hotel portfolio to grow.

Indust rialsChina Everbright Int'l 257 FY15 22% In line Positive surprise in DPS.Beijing Originwater Tech 300070 FY15 44% In line Unaudited. Targets to grow earnings at 30-50% CAGR in 3 yrs.L&M Paper 2314 FY15 22% In line Margin improved due to fuel and raw material prices.

TelecomHutchison Telecom 215 FY15 10% In line Cost control & handset sales offset post-paid sub weakness

Consumer and autosLifesty le 1212 FY15 -5% In line Core profit. CWB store FY15 SSS of -4.5% vs. 1H15 -1.4%Sun Art 6808 FY15 -16% In line Attributable profit. Decline is less at 8.5% if excl. e-commerce.Giordano 709 FY15 4% -8% Warm weather in greater China. Close to 100% payout.JD.com JD US FY15 nm nm 79% gross merchandise value gain vs. Tmall's 37%.Dah Chong Hong 1828 FY15 -21% -15% Weak China contribution. HK was stable.

Source: DBS Vickers

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Market Focus

Monday market blog

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Upcoming results and macro data releases

MON TUE WED THUR FRI

7 -Ma r 8-Ma r 9-Ma r 10-Ma r 11-Ma r

Company Hysan Dev 14 [F ] Cathay Pac 293 [F ] Swire Pac 19 [F ] China Vanke 2202 [F ]results Car Inc. 699 [F ] Wharf 4 [F ] Value Partners 806 [F ] MTR 66 [F ]

361 Degrees 1361 [F ] Prudential 2378 [F ] Wheelock 20 [F ] Sands China 1928 [F ]Haitong Int'l 665 [F ] Hongqiao 1378 [F ]

Macro China NPC (Mar 5) China trade figures US wholesale inv. China CPIdata China foreign reserves China money supply

14-Ma r 15-Ma r 16-Ma r 17-Ma r 18-Ma r

Company Yestar 2393 [F ] Ping An 2318 [F ] Samsonite 1910 [F ] Tencent 700 [F ] COLI 688 [F ]results CGN Power 1816 [F ] Techtronic 669 [F ] Springland 1700 [F ] Singamas 716 [F ] U-Presid China 220 [F ]

Want Want 151 [F ] Shui On Land 272 [F ] Fountain Set 420 [F ]

TK Group 2283 [F ]

Macro China FAI, retail sales US retail sales US CPI, housing start US FOMC decision China prop. Pricedata ind. Prod. (Mar 12) HK unemployment

21-Ma r 22-Ma r 23-Ma r 24-Ma r 25-Ma r

Company Sino Ocean 3377 [F ] Geely 175 [F ] Ch Everbright Ltd 165[F]results Shenzhou Int'l 2313 [F ] Ch State Const 3311[F] Stella 1836 [F ]

Intime 1833 [F ] Tingy i 322 [F ] PetroChina 857 [F ]Weigao 1066 [F ]

Macro HK CPI US manu PMI US GDPdata US initial jobless claim

Key : F: Final Results I: Interim Results Q: Quarterly Results Source: Bloomberg Finance L.P., HKEX, DBS Vickers

Market Focus

Monday market blog

ETF and stock connect flows

Global listed HK and H-share ETF flows and HSI

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HK and H-share ETF flows HSI (RHS)(HK$ m)

Offshore A-share ETF flows and SHCOMP index

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A-share ETF flows SHCOMP (RHS)(Rmb m)

Northbound stock connect daily quota usage

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(% of daily quota of Rmb 10.5bn)

Sources: Bloomberg Finance L.P., DBS Vickers

*Daily quota usage = (Daily quota – daily quota balance)/(daily quota)

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Market Focus

Monday market blog

Page 8

Market valuations and technical indicators

HSI 1 year forward PE bands – 5yr mean and standard deviations

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HSI 5 yr mean of 1 yr forward P/E +1 std -1 std +2 std -2 std

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HSCEI 1 year forward PE bands – 5yr mean and standard deviations

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HSCEI 5 yr mean of 1 yr forward P/E +1 std -1 std +2 std -2 std

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CSI 300 1 year forward PE bands – 5yr mean and standard deviations

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CSI300 5 yr mean of 1 yr forward P/E +1 std -1 std +2 std -2 std

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Source: Bloomberg Finance L.P., DBS Vickers

Market Focus

Monday market blog

Short selling turnover and HSI

Moving average and RSI for HSI

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HSI 50d avg 100d avg 250d avg

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Moving average and RSI for CSI 300

Moving average and RSI for HSCEI

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CSI 50d avg 100d avg 250d avg

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Sources: Bloomberg Finance L.P, DBS Vickers

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Market Focus

Monday market blog

Page 10

Currencies

CNY

CNH

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DXY Index

HKD

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Jan/13 Jul/13 Jan/14 Jul/14 Jan/15 Jul/15 Jan/16

7.747.757.767.777.787.797.807.817.827.837.84

Jan/13 Jul/13 Jan/14 Jul/14 Jan/15 Jul/15 Jan/16

EURO

YEN

1.00 1.05 1.10 1.15 1.20 1.25 1.30 1.35 1.40 1.45 1.50

Jan/13 Jul/13 Jan/14 Jul/14 Jan/15 Jul/15 Jan/16

80859095

100105110115120125130

Jan/13 Jul/13 Jan/14 Jul/14 Jan/15 Jul/15 Jan/16 Sources: Bloomberg Finance L.P, DBS Vickers

Market Focus

Monday market blog

Page 11

Other charts and tables

Notable research from the team Date Company (with report links) Ticker Report

     4-Mar-16 China Hongqiao Group

1378.HK We upgrade China Hongqiao from HOLD to BUY. YTD aluminium prices have beat expectations. Ex-China AI market to remain in supply deficit, while Chinese dumping should be at its tail end.

2-Mar-16 Lee and Man Paper

2314.HK We upgrade LMP from HOLD to BUY due to better profit margin outlook. Supply and demand dynamic for containerboard is improving. Tissue paper is also a bright spot going forward.

29-Feb-16 China Healthcare Sector

Demand for medical services in urban areas will surge faster than rural areas in next five years. Lower-tier medical institutes and private hospitals are emerging to satisfy the demand. Prefer private hospitals such as Wenzhou Kangning (2120 HK) and device providers Yestar (2393 HK)

22-Feb-16 China Software Sector

ERP revenue growth should resume in 2H15, while cloud business maintains its high growth momentum. Cloud should contribute 30% of Kingdee and 15% of Yonyou's revenue by FY17. Prefer Kingdee over Yonyou.

19-Feb-16 Qingdao Haier Co

600690.CH We downgrade QD Haier from BUY to HOLD in part due to weak YTD trends. The GE deal may add Rmb1.63/share in value, but approval and integration will take time.

18-Feb-16 China Banking Sector Regulator may lower NPL coverage ratio requirement. Right time to fine-tune countercyclical measures; Positive to earnings growth and capital position. Time for accumulating H-share China banks. Top picks: CCB-H and Citic-H.

16-Feb-16 Water Sector

Expect 12-60% earnings growth in FY15. FY16 earnings growth still decent. Trading at around -1SD from 5-year historical average. Top picks: China Everbright International (257 HK), CT Environment (1363 HK) and China Everbright Water (CEWL SP)

5-Feb-16 China Telecom Sector Accounting policy to carry forward unused mobile data will defer revenue recognition by 1 month; one-off negative impact on 4Q15 earnings. Stock preference in this order: China Mobile > China Unicom > China Telecom

3-Feb-16 China Modern Dairy 1117.HK Downgrade Modern Dairy to HOLD due to uncertainties associated with raw milk price weakness and a lack of clear near term catalysts

1-Feb-16 Great Wall Motor 2333.HK Downgrade GWM to HOLD. Intense competition in SUV market lead to larger than expected GP margin erosion.

Source: DBS Vickers

Market Focus

Monday market blog

Page 12

Recent strategy reports Date Report (please click link)

2-Mar-16 Monthly market pulse: RRR cut to kick off March

29-Feb-16 Monday market blog: Focus on Mark Six and NPC

22-Feb-16 Monday market blog: Potential for some YTD laggards

1-Feb-16 Monthly market pulse: Rainy and gloomy start to 2016

1-Feb-16 Strategist's Blog: Turning bullish after marketing trip

7-Jan-16 2016 Strategy Outlook : Four themes to navigate 2016 drivers

18-Dec-16 Strategist's Blog: Opportunities from divergent rate policies

3-Dec-16 Strategist's Blog : Strongest El Nino since ‘98 is coming

Source: DBS Vickers

Corporate access and analyst marketing Date Company Ticker Event Location

1, 9 Mar-16 China Healthcare sector Analyst Marketing HK 9-Mar-16 Texhong 2678.HK Non-deal road show HK 10, 11 Mar-16 Yuexiu REIT 405.HK Non-deal road show SG 11-Mar-16 SOHO China 410.HK Non-deal road show SG 16-Mar-16 TK Group 2283.HK Corporate Access - Luncheon HK 17-Mar-16 TK Group 2283.HK Non-deal road show HK 17, 18 Mar-16 Prosperity REIT 808.HK Non-deal road show SG 24-Mar-16 Best Pacific 2111.HK Non-deal road show HK 24-Mar-16 Canvest 1381.HK Non-deal road show HK 30-Mar-16 Samson Holding 531.HK Non-deal road show HK 4-8, Apr-16 China Everbright Water CEWL.SP Non-deal road show Europe

Market Focus

Monday market blog

Page 13

DBSV top picks

EPS

Closing DBSV Tgt CA GRT ick er price rat ing Price F Y15F F Y16F 14-16 F Y15F F Y16F F Y15F F Y16F F Y15F F Y16F

Top pick s (HK$) (HK$) (X ) (X ) (%) (%) (%) (X ) (X ) (%) (%)China Everbright Intl 257.HK 8.67 BUY 9.80 18.6 15.6 21.0 12.5 13.7 2.3 2.0 2.1 2.6

China Everbright Ltd 165.HK 15.32 BUY 23.84 5.9 3.7 65.6 12.6 20.6 0.8 0.8 6.7 31.7

China Railway Construction 1186.HK 7.97 BUY 11.60 7.0 7.0 2.1 11.9 11.0 0.8 0.7 2.1 2.1

China CITIC Bank 998.HK 4.63 BUY 6.71 4.6 4.5 (2.9) 14.1 13.0 0.6 0.6 6.6 7.0

China Hongqiao Group 1378.HK 4.95 BUY 6.50 6.9 6.2 (13.4) 11.1 12.3 0.7 0.7 3.7 4.1

CK Property 1113.HK 45.60 BUY 57.00 12.1 9.2 (40.0) 5.9 6.9 0.7 0.6 3.0 3.3

CR Land 1109.HK 20.20 BUY 26.01 10.5 9.2 (6.8) 11.6 11.3 1.1 1.0 2.6 2.9Dah Sing F in. Hldgs 440.HK 45.05 NR n.a. 8.4 8.2 1.8 8.8 8.4 0.7 0.7 2.9 3.0

Haitong Securities 6837.HK 12.38 NR n.a. 8.0 8.4 24.1 16.5 13.9 1.2 1.1 3.7 3.4

Tencent 700.HK 147.20 BUY 175.00 38.2 29.3 27.2 31.7 31.0 10.7 8.1 0.2 0.3

Simple av erage 12.0 10.1 7.9 13.7 14.2 1.9 1.6 3.4 6.0

PER ROE Div y ieldPBV

* consensus estimates

Source: Thomson Reuters, DBS Vickers

Our top picks list:

China Citic Bank (998.HK)

- Capital and dividend overhang can be lifted with expected private placement in 1Q16; dividend payment can resume after capital issue.

- Forward P/B of around 0.6x is the lowest in the sector, despite encouraging NPL formation trends compared to peers.

- Cooperation with internet companies, employee stock ownership plan, and spin-off of subsidiaries are potential catalysts.

China Everbright International (257.HK)

- Further increase in capex in FY16 with current order backlog amounting to >Rmb19bn

- Operating data continues to be robust in FY16: 27% growth in WTE operational capacity, >25% growth in treated waste water volume, doubling in operational capacity for hazardous solid waste..

- More attractive valuation with <16x FY16 PE

China Everbright Ltd (165.HK)

- A-share IPO resumption to help private equity business exit projects.

- Parent’s consolidation of China Everbright Securities and Everbright Bank stakes held by CEL can resume as regulators unwind A-share supportive measures which prohibited large stake changes. Restructuring should narrow CEL’s discount to NAV.

- A-share market recovery to enhance CEL’s NAV from stakes in Everbright Securities and Everbright Bank.

China Hongqiao (1378.HK)

- YTD aluminium prices beat expectations and we believe recovery can be sustained by supportive liquidity conditions.

- Global ex-China AI market to remain in supply deficit by 1.5mt, and the global supply shock of Chinese export dumping should be at its tail end.

- The company’s rights issue in Feb 2016 strengthened Hongqiao’s balance sheet.

Market Focus

Monday market blog

Page 14

China Railway Construction (1186.HK)

- Chinese policy makers are helping infrastructure funding by lowering borrowing costs and project capital requirements, and this will help domestic demand.

- Decline in borrowing costs to help high gearing companies like CRCC.

- Company can win overseas contracts as part of China’s “one belt one road” strategy.

China Resources Land (1109.HK)

- 2015 presales should beat target thanks to strong 9M15 sales; 2016 outlook remains decent due to strong tier I city product pipeline.

- Beneficiary of PBOC rate cuts as cuts stimulate demand and lower funding costs.

- Current PE valuation is undemanding, and is midway between trough PE of 7.1x and historcial average of 12.1x.

Cheung Kong Property (1113.HK)

- The stock’s >50% discount to NAV should have priced in residential and retail market risk; more clarity on NAV change can help re-rate to smaller discount to NAV.

- Balance sheet is strong with only a small net debt position; well positioned for new acquisitions.

- Large hotel portfolio is a risk, but office segment should be strong given limited new supply in Central.

Dah Sing Financial (440.HK)

- Group ROE has been dragged historically by the insurance unit; a potential disposal of the insurance business can help narrow P/B gap against listed banking subsidiary Dah Sing Banking Group (2356.HK).

- Banking arm can see interest margin improve in coming years in a higher interest rate environment.

- Trading at 0.7 FY15 P/BV and 8.2x FY16F PE.

Haitong Securities (6837.HK)

- Order is returning to the A-share market as supportive measures are unwinding.

- Lower interest rates and wealth management product yields to usher savings towards equity markets. Shenzhen-HK connect and potential MSCI inclusion can be a catalyst.

- Haitong Sec should be more resilient than smaller brokers against gradual entrance of Chinese banks into the retail brokerage space.

Tencent (700.HK)

- New advertising offerings help drive revenue growth; Tencent only has 5% market share in online ads.

- We foresee Tencent can better monetize its >800m users through new ad offerings and new apps.

- Mobile gaming revenues are counter-cyclical; new gaming strategy focusing on games with intellectual properties and mobile games should drive gaming revenue growth in 2016.

Market Focus

Monday market blog

DBSV universe comparison table

St oc kcode St ock name

M k tCap

(US$m)

SharePric e

(HK $ )

T argetPric e

(HK $)upside

(% ) RemdPE (x )

15FPE (x )

16FPB (x )

15FY ld (% )

15FRO E (% )

15FA ut o manuf ac t u rers & dealers

1114 Brilliance China 4,624 7.13 9.95 40 B 8.1 7.1 1.5 1.8 19.91728 China ZhengTong 834 2.93 4.30 47 B 6.8 5.5 0.6 2.9 9.31828 Dah Chong Hong 731 3.10 3.70 19 B 10.0 8.3 0.6 4.0 6.2

489 Dongfeng Motor Group 10,770 9.71 13.50 39 B 5.3 4.9 0.8 2.5 16.4175 Geely Automobile 3,830 3.38 3.30 -2 H 11.0 8.8 1.3 1.4 12.4

2333 Great Wall Motor 7,484 6.37 5.60 -12 H 6.1 5.8 1.3 5.7 22.2601633 Great Wall Motor-A @@@ 10,363 8.82 7.70 -13 H 10.0 9.4 2.1 4.1 22.2

2238 Guangzhou Automobile 5,973 7.21 7.50 4 B 9.5 8.7 1.0 3.2 11.2601238 Guangzhou Automobile-A @@@ 15,673 18.92 15.80 -16 FV 29.5 27.0 3.2 1.0 11.2

425 Minth Group 2,209 15.50 15.80 2 B 11.4 9.9 1.6 3.5 14.41316 Nexteer Automotiv e Group 2,509 7.80 9.60 23 B 11.9 9.7 2.9 1.7 27.21148 Xinchen China Power Hldgs 216 1.31 1.35 3 B 6.7 5.8 0.5 0.0 8.3

881 ZhongSheng 1,138 4.12 4.50 9 B 9.9 8.0 0.6 2.0 6.4Bank ing and F inance (Ch ina- A ) @ @ @

601288 Agricultural Bank of China-A 144,032 3.20 3.47 8 H 5.8 5.8 0.9 5.3 17.1601988 Bank of China-A 153,207 3.40 4.14 22 H 5.8 5.8 0.8 6.0 15.0601328 Bank of Comm-A 62,860 5.53 6.76 22 H 6.2 6.2 0.8 3.7 13.3601998 China CITIC Bank-A 58,121 5.95 6.10 3 S 7.1 6.8 0.9 3.4 14.1601939 China Construction Bank-A 185,219 4.84 6.50 34 H 5.3 5.3 0.9 4.2 17.3600036 China Merchants Bank-A 61,649 15.97 21.51 35 B 6.8 6.4 1.1 4.4 17.4600016 China Minsheng Bank-A 52,105 9.33 8.87 -5 H 6.9 6.7 1.1 2.1 17.5601398 ICBC-A 235,127 4.31 5.55 29 B 5.5 5.5 0.9 5.5 17.3

Bank ing and F inance (Ch ina)1288 Agricultural Bank of China 114,561 2.74 3.82 39 B 4.1 4.2 0.7 7.5 17.13988 Bank of China 117,479 3.10 4.56 47 B 4.4 4.5 0.6 6.9 15.03328 Bank of Communications 45,887 4.80 7.44 55 B 4.5 4.6 0.6 6.9 13.3

998 China CITIC Bank 38,036 4.63 6.71 45 B 4.6 4.5 0.6 6.6 14.1939 China Construction Bank 154,161 4.79 7.15 49 B 4.3 4.5 0.7 6.9 17.3605 China F inancial Serv ices 272 0.55 0.92 67 B 5.6 4.9 0.7 4.5 12.5

3968 China Merchants Bank 53,308 16.42 23.68 44 B 5.8 5.6 0.9 5.2 17.41988 China Minsheng Bank 32,877 7.00 9.76 39 B 4.3 4.3 0.7 3.3 17.53618 Chongqing Rural Bank 4,693 3.92 6.28 60 B 4.2 4.2 0.6 6.5 16.31398 ICBC 187,649 4.09 6.11 49 B 4.3 4.5 0.7 7.0 17.3

Bank ing and F inance (HK )2388 Bank of China HK 28,922 21.25 26.40 24 B 8.4 6.9 1.2 4.7 14.6

23 Bank of East Asia 9,043 26.60 33.50 26 H 9.1 8.4 0.8 4.5 9.6165 China Ev erbright Ltd 3,324 15.32 23.84 56 B 5.9 3.7 0.8 6.7 12.6

2356 Dah Sing Banking Group 2,469 13.68 14.90 9 B 9.0 8.9 0.9 2.8 10.43360 Far East Horizon 3,102 6.10 7.24 19 B 7.1 6.7 0.9 2.9 13.6

11 Hang Seng Bank (1) 33,939 137.90 143.80 4 B 13.2 13.0 1.7 4.3 16.65 HSBC Holdings 127,345 50.25 93.70 86 B 6.9 6.7 0.7 8.3 9.4

Cement 914 Anhui Conch Cement 13,152 19.28 24.00 24 B 10.4 11.7 1.2 3.0 11.7

600585 Anhui Conch Cement-A @@@ 10,956 16.06 19.26 20 B 10.4 11.7 1.2 3.6 11.73323 China Nat'l Bldg Mat 2,711 3.90 2.70 -31 FV 4.9 7.6 0.4 3.1 7.51313 China Resources Cement 2,044 2.43 3.30 36 H 9.1 8.9 0.5 2.3 6.0

Chemic als2283 T K Group 197 1.85 3.30 78 B 8.4 6.9 2.3 4.8 30.9

Source: DBS Vickers

@@@ denominated in RMB

Page 15

Market Focus

Monday market blog

Page 16

DBSV universe comparison table (con’t)

St oc kc ode St oc k name

M k tCap

(US$m)

SharePric e

(HK $)

T argetPric e

(HK $)upside

(% ) RemdPE (x )

15FPE ( x )

16FPB (x )

15FY ld (% )

15FRO E (% )

15FCong lomerat es- HK

4 Wharf Holdings # 16,817 43.10 39.90 -7 H 10.6 10.7 0.5 4.5 4.020 Wheelock # 8,723 33.35 32.70 -2 B 6.2 6.4 0.8 3.5 5.5

F ood and Bev erages600597 Bright Dairy & F ood@@@ 2,065 10.96 14.50 32 H 35.4 26.4 3.5 1.7 9.0

506 China F oods 1,116 3.10 2.80 -10 H 100.3 12.6 1.5 0.0 1.52319 China Mengniu 5,542 10.98 13.25 21 B 15.4 14.1 1.6 1.5 10.61117 China Modern Dairy 1,161 1.70 1.60 -6 H 8.8 8.8 0.5 0.0 7.5

322 Tingy i Holding 5,474 7.59 8.40 11 H 22.4 19.0 1.8 2.2 8.0168 Tsingtao Brewery 5,235 30.10 30.80 2 FV 21.4 21.5 2.0 1.4 9.8

600600 Tsingtao Brewery -A @@@ 4,793 27.56 25.50 -7 FV 23.9 24.0 2.3 1.3 9.8220 Uni-President China 2,919 5.25 6.00 14 H 22.3 20.1 1.6 1.3 7.6345 V itasoy 1,817 13.52 14.10 4 H 37.7 28.7 7.3 1.8 20.3151 Want Want China 9,117 5.56 5.30 -5 H 17.5 16.1 3.9 0.9 24.2

Hardw are & Equ ipment552 China Comm Serv ices 2,996 3.36 4.50 34 B 8.5 7.7 0.8 3.5 9.4

2342 Comba 351 1.34 1.40 4 H 8.8 7.6 0.7 2.8 8.2600498 F iberHome Telecom 3,060 22.71 20.00 -12 FV 33.7 27.9 3.2 1.1 9.8

2618 TCL Communication 903 5.53 5.30 -4 H 6.1 6.3 1.5 5.7 25.51300 Trigiant Group 298 1.48 2.30 55 B 5.8 5.1 0.8 9.5 14.6

856 V ST Holdings 311 1.66 3.00 81 B 4.2 3.8 0.6 7.1 13.8763 ZTE 7,519 14.16 24.00 69 B 14.1 12.4 1.7 1.8 13.1

000063 ZTE -A @@@ 7,997 15.06 24.00 59 B 18.1 15.9 2.2 1.4 13.1Househo ld /Personal (Ch ina/HK )

1880 Belle Int'l 5,841 5.38 8.70 62 B 7.9 8.0 1.5 13.2 18.92111 Best Pacific Int'l Hldgs 487 3.70 4.40 19 B 11.8 10.6 2.0 2.5 18.16388 Coach @ ^^^ 1,019 28.50 24.47 -14 H 26.7 24.1 4.3 3.5 16.4

210 Daphne International 221 1.04 1.00 -4 H nm nm 0.4 0.0 -6.01169 Haier Electronics 4,406 12.26 18.41 50 B 8.8 7.9 1.7 1.1 21.51044 Hengan 9,679 61.90 72.00 16 H 18.7 17.6 3.9 3.5 22.0

600612 Lao Feng Xiang@@@ 1,987 40.94 42.21 3 H 20.0 17.5 4.8 2.5 25.4494 Li & F ung 5,092 4.70 11.30 140 B 8.3 7.2 1.9 8.5 24.5

2331 Li Ning 864 3.56 4.80 35 B 196.1 16.8 1.7 0.0 1.0311 Luen Thai 160 1.20 1.80 50 B 7.9 4.8 0.4 3.8 5.2

000333 Midea Group Co Ltd@@@ 19,131 29.30 38.02 30 B 10.1 8.0 2.6 4.0 28.41382 Pacific Textile 2,015 10.82 13.00 20 B 14.6 13.1 4.5 7.4 28.91913 Prada 7,889 23.95 25.80 8 H 15.7 20.1 2.4 4.0 15.8

600690 Qingdao Haier@@@ 8,130 8.70 8.55 -2 H 11.7 10.7 2.1 2.6 19.5531 Samson Holding 372 0.95 1.24 31 B 15.1 14.0 0.8 12.6 5.1

1910 Samsonite Int'l ^^ 4,356 24.00 26.62 11 B 21.9 19.5 3.1 2.2 14.91023 Sitoy Group 358 2.78 3.20 15 H 6.8 7.0 1.3 8.3 20.11836 Stella International 2,012 19.68 19.20 -2 H 16.3 14.4 2.0 4.4 12.72678 Texhong Textile Group 592 5.20 6.40 23 B 7.4 5.7 1.0 4.0 14.2

321 Texwinca 1,357 7.63 8.55 12 B 13.6 12.5 1.7 7.3 12.8

Source: DBS Vickers

# P/NAV ; '@ denominated in USD ; @@@ denominated in RMB; ^^^ Valuation based on US-listed share; ^^ Core profit and EPS

Market Focus

Monday market blog

DBSV universe comparison table (con’t)

St ockcode St oc k name

M k tCap

(US$m)

SharePric e

(HK $)

T argetPric e

(HK $)ups ide

(% ) RemdPE (x )

15FPE ( x )

16FPB ( x )

15FY ld (% )

15FRO E (% )

15FIndust rials

1 CK Hutchison # 49,114 98.85 123.50 25 B 12.0 11.4 0.7 2.9 8.2517 Cosco International 774 3.92 5.20 33 B 17.2 15.9 0.8 2.9 4.4

1366 J iangnan Group 683 1.30 2.00 54 B 5.6 5.0 0.9 3.7 17.62314 Lee and Man Paper 2,981 5.08 5.90 16 B 10.1 8.9 1.4 3.5 13.42689 Nine Dragons 3,550 5.91 6.50 10 B 16.4 17.3 1.0 1.4 5.73393 Wasion Group 500 3.78 4.40 16 H 7.7 7.0 0.8 4.8 11.2

In f rast ruc t u re152 Shenzhen International 3,012 12.32 14.36 17 B 11.6 10.9 1.2 2.6 11.0

Inv est ment Serv ic es (Ch ina / HK )806 V alue Partners Group 1,832 7.70 7.55 -2 B 56.3 34.3 3.9 1.2 6.8

M ed ia 752 Pico F ar East 313 1.99 2.56 29 B 8.8 8.0 1.4 7.0 16.7511 TV B 1,708 30.30 28.01 -8 FV 7.9 13.9 1.4 5.8 19.0

Pharmac eut ic al & Healt h Care2877 China Shineway 1,006 9.45 9.50 1 H 9.0 8.8 1.2 4.4 14.1

570 China Traditional Chinese Med 2,488 4.31 7.60 76 B 21.6 14.0 1.5 0.0 9.01681 Consun Pharmaceutical 515 4.05 5.20 28 B 13.6 11.8 2.1 0.8 16.4

000999 CR Sanjiu Medical & Pharm@@ 3,136 20.93 36.20 73 B 17.1 15.3 2.7 2.0 16.7853 Microport Scientific 599 3.26 1.95 -40 FV n.a. 73.8 1.8 0.0 -2.1

1498 PuraPharm Corporation 107 3.70 5.20 41 B 20.8 12.5 1.8 0.0 13.31066 Shandong Weigao 2,939 5.10 5.10 0 H 17.0 15.1 1.8 1.8 10.81099 Sinopharm Group 10,971 30.80 29.00 -6 H 19.3 17.1 2.3 1.4 12.8

600535 Tasly Pharmaceutical Group 5,757 34.81 32.00 -8 H 21.4 19.1 5.9 1.6 30.7300026 Tianjin Chase Sun Pharm@@@ 1,983 12.89 21.40 66 H 21.2 17.1 2.5 0.6 15.2

2393 Yestar International 846 3.02 4.00 32 B 33.5 23.8 4.8 1.4 20.72120 Wenzhou Kangning Hospital 376 40.00 50.00 25 B 46.4 30.0 2.8 0.4 9.3

002603 Yiling Pharmaceutical 2,216 12.85 14.20 11 H 32.5 26.6 2.9 0.6 9.4Propert ies (Ch ina) (2 )

3383 Agile Property # 2,002 3.97 3.66 -8 H 3.7 4.2 0.2 6.7 8.8832 Central China # 437 1.39 1.89 36 B 3.8 3.5 0.2 7.9 11.1

1224 CC Land # 830 2.49 2.06 -17 H 5.7 27.4 0.9 3.5 7.481 China Ov erseas Grand Oceans 808 2.75 3.50 27 B 4.9 3.2 0.3 1.8 10.0

688 China Ov erseas # 31,607 24.90 30.30 22 B 8.0 7.3 0.9 2.6 17.21109 China Resources Land # 18,023 20.20 26.01 29 B 10.5 9.2 0.7 2.6 11.62202 China V anke 26,318 18.52 19.60 6 H 10.0 8.6 0.8 3.5 18.2

000002 China V anke-A @@@ 34,717 24.43 19.31 -21 B 15.8 13.6 1.3 2.2 18.22007 Country Garden # 9,053 3.14 3.66 17 B 6.0 5.5 0.7 5.5 15.43333 Ev ergrande Real Estate # 10,280 5.84 6.45 10 H 10.1 8.5 0.6 5.0 12.7

fsg sp F irst Sponsor Group @@ 1 1.22 1.57 29 B 13.2 11.7 0.6 1.4 5.9817 China J inmao Holdings # 2,995 2.18 2.83 30 B 8.3 6.4 0.5 3.3 6.8813 Shimao Property # 5,177 11.58 16.53 43 B 4.5 4.2 0.4 7.7 15.2272 Shui On Land # 2,129 2.06 2.07 0 H 6.6 n.a. 0.4 3.5 5.4

3377 Sino-Ocean Land # 3,782 3.91 4.40 13 H 8.1 7.0 0.5 4.2 7.2410 Soho China # 2,530 3.78 3.60 -5 H 59.4 35.7 0.4 0.9 0.7337 Greenland (Hong Kong) % # 842 2.34 4.97 112 B 13.5 6.6 0.4 0.0 6.4

Yllg sp Yanlord Land # @@ 1,620 1.16 1.35 17 B 7.2 8.1 0.6 1.3 7.4123 Yuexiu Property # 1,852 1.16 1.00 -14 H 9.6 8.4 0.4 4.2 4.3

Source: DBS Vickers

@@ denominated in SGD; # P/NAV; @@@ denominated in RMB

Page 17

Market Focus

Monday market blog

Page 18

DBSV universe comparison table (con’t)

St oc kc ode St ock name

M k tCap

(US$m)

SharePric e

(HK $)

T argetPric e

(HK $)upside

(% ) RemdPE (x )

15FPE (x )

16FPB (x )

15FY ld (% )

15FRO E (% )

15FPropert ies (HK ) #

1113 CK Property 22,657 45.60 57.00 25 B 12.1 9.2 0.5 3.0 5.941 Great Eagle 2,114 24.70 24.50 -1 H 9.2 9.9 0.4 11.1 3.4

101 Hang Lung Properties 8,580 14.82 15.45 4 H 15.2 14.9 0.4 5.1 3.412 Henderson Land 19,283 45.30 44.30 -2 H 15.8 15.4 0.6 2.5 3.9

HKL SP Hongkong Land @ 14,423 6.13 8.16 33 B 15.9 16.8 0.6 3.1 3.214 Hy san Dev elopment 4,507 33.40 35.70 7 B 15.3 15.0 0.5 3.8 3.4

173 K. Wah Intl 1,097 3.00 3.21 7 B 12.7 6.9 0.3 5.0 2.7683 Kerry Properties 3,660 19.70 24.20 23 B 8.0 8.0 0.3 4.1 4.4488 Lai Sun Dev elopment 435 0.11 0.12 6 B 7.7 13.5 0.2 2.2 9.3

66 MTR 27,416 36.35 37.70 4 H 20.1 26.3 0.8 2.9 6.317 New World Dev 8,518 7.14 7.80 9 B 9.3 9.3 0.4 5.9 11.316 SHK Properties 35,049 94.10 115.90 23 B 13.7 12.1 0.5 3.6 4.683 Sino Land 9,404 11.94 12.54 5 B 13.6 14.6 0.5 4.2 4.6

1972 Swire Properties 15,777 20.95 26.45 26 B 16.2 17.2 0.5 3.2 3.688 Tai Cheung 466 5.86 7.51 28 B 6.5 9.3 0.3 5.1 8.2

369 Wing Tai Properties 725 4.20 4.60 10 B 13.9 14.1 0.3 3.2 1.8Railw ay & Const ruc t ion

1800 China Comm Construction 15,783 7.58 7.10 -6 H 7.0 6.4 0.8 3.3 12.1601800 China Comm Construction-A @@@ 24,695 11.86 10.70 -10 H 12.9 12.0 1.5 2.1 12.1

1186 China Railway Construction 13,932 7.97 11.60 46 B 7.0 7.0 0.8 2.1 11.9601186 China Railway Construction-A @@@ 19,002 10.87 10.50 -3 H 11.4 11.3 1.2 1.6 11.9

390 China Railway Group 15,498 5.27 7.60 44 B 8.5 8.0 0.9 1.8 11.3601390 China Railway Group-A@@@ 23,379 7.95 7.90 -1 H 15.2 14.3 1.6 1.2 11.3

1766 CRRC Corp 26,382 7.51 9.25 23 B 14.3 12.7 1.5 2.1 11.9601766 CRRC Corp-A @@@ 35,761 10.18 11.15 10 H 22.9 20.5 2.4 1.6 11.9

3311 China State Construction 6,162 11.80 12.20 3 H 10.9 9.4 2.0 2.7 19.9Real Est at e Inv est ment T rust

2778 Champion REIT 2,883 3.88 4.59 18 B nmf nmf 0.5 5.1 7.0778 F ortune REIT 1,983 8.15 9.21 13 B nmf nmf 0.6 5.8 10.7

6139 J inmao Inv estment 1,146 4.45 5.49 23 B nmf nmf 1.0 10.1 4.0808 Prosperity REIT 534 2.88 3.12 8 B nmf nmf 0.6 6.1 10.0435 Sunlight REIT 820 3.89 4.35 12 B nmf nmf 0.5 5.7 15.5823 Link REIT 12,842 44.35 48.00 8 B nmf nmf 0.9 4.1 25.4

Rest aurant s341 Caf?de Coral 1,629 21.70 25.00 15 H 21.3 24.7 3.4 3.6 15.9

Ret ailers814 Beijing J ingkelong 85 1.60 1.50 -6 F V 16.8 13.8 0.3 7.6 2.0653 Bonjour Holdings 169 0.39 0.38 -1 H 2.8 12.9 1.1 2.7 53.5116 Chow Sang Sang 1,007 11.56 15.78 37 B 8.3 7.3 0.9 5.2 10.6330 Esprit Holdings 1,799 7.19 6.10 -15 F V nm nm 1.2 0.0 -25.7709 Giordano 699 3.46 3.45 0 H 12.8 12.1 1.9 7.8 14.9

3308 Golden Eagle % 1,971 9.07 8.54 -6 H 13.3 13.2 2.2 2.8 17.6493 Gome Elec Appliances % 2,467 1.13 1.26 12 H 11.6 10.6 0.9 3.4 7.8

1833 Intime Department Store 1,799 6.41 10.00 56 B 9.9 8.6 1.1 5.5 10.9J D US J D.com ^^@ 36,627 26.48 37.20 40 B nm 224.8 7.8 0.0 -27.6

980 Lianhua Supermarket 366 2.54 2.41 -5 H n.a. n.a. 0.8 0.0 -14.8

Source: DBS Vickers

^ EPS and Net Profit exclude fair value changes on investment properties; % - Fully Diluted EPS; # P/NAV; ^^Core profit and EPS; '@ denominated in USD ; @@@ denominated in RMB

Market Focus

Monday market blog

DBSV universe comparison table (con’t)

St oc kc ode St oc k name

M k tCap

(US$m)

SharePric e

(HK $)

T argetPric e

(HK $ )upside

(% ) RemdPE (x )

15FPE (x )

16FPB (x )

15FY ld (% )

15FRO E (% )

15FRet ailers ( con t 'd )

1212 Lifesty le 1,999 9.69 8.72 -10 H 8.4 8.9 1.4 6.5 17.2590 Luk F ook 1,327 17.56 17.78 1 B 6.4 10.7 1.2 6.3 20.0

1438 Nirvana Asia Ltd 782 2.25 3.05 36 B 15.3 13.3 2.2 3.3 15.3002336 Renrenle Commercial Group@@@ 565 10.97 8.57 -22 F V n.a. n.a. 1.9 0.0 -15.6

178 Sa Sa 901 2.42 2.71 12 H 8.2 16.7 2.8 9.7 35.01700 Springland Int'l 467 1.50 1.91 27 H 6.0 5.9 0.6 6.7 10.06808 Sun Art Retail Group 6,079 4.95 5.20 5 H 16.3 15.7 1.9 3.8 12.1

891 Trinity Ltd 218 0.97 1.00 3 H n.a. 23.0 0.5 n.a. -0.2Sof t w are & Comput er Serv ic es

1310 HKBN Ltd. 1,318 10.18 12.10 19 B 98.1 29.0 6.8 2.0 6.6268 Kingdee 1,035 2.75 4.20 53 B 32.9 33.5 1.9 0.5 7.4700 Tencent ^^ 178,201 147.20 175.00 19 B 38.2 29.3 10.7 0.2 31.7

600588 Yonyou Network Tech@@@ 3,867 17.25 14.00 -19 F V 73.7 49.2 4.4 0.8 6.8St eel, alumin ium & copper

347 Angang Steel 3,558 3.82 3.09 -19 H nm nm 0.5 0.0 -9.6000898 Angang Steel-A @@@ 3,893 4.18 2.56 -39 F V nm nm 0.7 0.0 -9.6600019 Baoshan Iron & Steel Co-A@@@ 13,586 5.39 7.14 32 B 32.2 40.0 0.8 1.6 2.4

1378 China Hongqiao Group 4,626 4.95 6.50 31 B 6.9 6.2 0.7 3.7 11.1323 Maanshan I & S 1,517 1.53 1.04 -32 F V nm nm 0.5 0.0 -23.1

600808 Maanshan I & S-A @@@ 2,627 2.65 1.35 -49 F V nm nm 1.1 0.0 -23.1486 United Co RUSAL PLC 5,594 2.86 4.06 42 B 6.5 13.0 1.7 0.0 30.9

T elecom Serv ic es (Ch ina)941 China Mobile 225,888 85.70 133.00 55 B 11.9 11.7 1.6 3.6 13.9762 China Unicom 28,053 9.10 11.80 30 B 13.0 14.1 0.8 2.6 6.1728 China Telecom 40,215 3.86 4.70 22 B 12.7 12.6 0.9 2.3 7.0

T elecom Serv ic es (HK )1883 CITIC Telecom 1,385 3.18 3.70 16 B 13.4 12.8 1.5 3.9 11.86823 HKT Trust 10,273 10.54 10.30 -2 H 20.2 20.9 2.1 5.1 10.5

215 Hutchison Telecom 1,700 2.74 2.70 -1 H 14.4 15.0 1.1 5.2 8.0315 SmarTone 1,725 12.62 12.40 -2 H 14.2 15.3 3.5 4.8 26.6

T ransport at ion - Po rt s & A irport s694 Beijing Capital Intl A irport 4,020 7.21 9.65 34 B 15.6 14.2 1.4 2.6 9.2144 China Merchants Hldgs 7,611 22.75 35.00 54 B 10.5 10.2 0.8 3.6 8.1

1199 COSCO Pacific 3,238 8.48 13.00 53 B 10.5 9.6 0.7 3.8 6.4Ut it il ies

1816 CGN Power 13,983 2.39 3.37 41 B 15.0 13.0 1.7 2.0 10.7Warehouse

925 Beijing Properties 453 0.52 0.67 29 B n.a. n.a. 0.8 0.0 -2.3600340 China F ortune Land Dev@@@ 11,606 25.66 31.60 23 B 14.2 11.4 5.0 2.1 40.9

1668 China South City 1,709 1.66 1.94 17 H 3.4 18.4 0.5 8.8 16.6200053 Shenzhen Chiwan Petroleum 740 16.43 20.39 24 B 30.2 35.1 1.8 0.3 6.0

Source: DBS Vickers

@@ denominated in SGD; @@@ denominated in RMB

% - Fully Diluted EPS; ^^Core profit and EPS

Page 19

Market Focus

Monday market blog

Page 20

DBSV universe comparison table (con’t)

St o c kc o de St oc k name

M k tCap

(US$ m)

SharePric e

(HK $ )

T argetPric e

(HK $ )ups ide

(% ) RemdPE ( x )

15 FPE (x )

1 6FPB ( x )

15 FY ld (% )

15FRO E (% )

15FW at er In f rast ruc t u re, En v iro nment al

371 Beijing Enterprises Water % 5,165 4.61 4.60 0 B 17.1 13.9 2.2 1.8 14.0300070 Beijing Originwater@@@ 6,647 34.48 53.40 55 B 28.8 19.4 2.9 0.3 14.1

1381 Canv est Env ironment Protection 857 3.33 4.00 20 B 28.8 17.8 2.6 0.0 9.5257 China Ev erbright Intl 5,004 8.67 9.80 13 B 18.6 15.6 2.3 2.1 12.5

CEWL SP China Ev erbright Water @@ 983 0.53 0.64 22 B 18.4 15.0 1.1 0.0 6.11363 CT Env ironmental Group 1,927 2.37 2.50 5 B 21.0 17.8 4.0 1.0 24.36136 Kangda International 447 1.68 1.50 -11 H 8.8 7.4 0.9 0.0 10.9

SIIC SP SIIC Env ironment @@ 1,121 0.69 0.69 0 H 18.8 15.7 1.3 0.0 7.91065 Tianjin Cap Env ironmental 944 5.14 4.20 -18 H 15.1 13.2 1.4 1.3 9.4

600874 Tianjin Cap Env ironmental-A @@@ 1,543 8.40 6.50 -23 S 29.5 25.9 2.7 0.7 9.4CEL SP CITIC Env irotech @@ 1,128 1.39 1.55 12 H 38.0 25.7 1.8 0.3 7.0

Source: DBS Vickers

@@ denominated in SGD; @@@ denominated in RMB

% - Fully Diluted EPS

Market Focus

Monday market blog

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DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows:

STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)

BUY (>15% total return over the next 12 months for small caps, >10% for large caps)

HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps)

FULLY VALUED (negative total return i.e. > -10% over the next 12 months)

SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)

Share price appreciation + dividends GENERAL DISCLOSURE/DISCLAIMER This report is prepared by DBS Vickers (Hong Kong) Limited (“DBSVHK”) This report is solely intended for the clients of DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd and DBSVHK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVHK. The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBSVHK, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the “DBS Group”)) do not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies. Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company (or companies) referred to in this report. The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that: (a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and (b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk

assessments stated therein. Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report. DBS Vickers Securities (USA) Inc ("DBSVUSA")"), a U.S.-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-making. ANALYST CERTIFICATION The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of 7 March 2016, the analyst(s) and his/her spouse and/or relatives who are financially dependent on the analyst(s), do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities). COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBSVHK and its subsidiaries do not have a proprietary position in the securities recommended in this report as of 02 Mar 2016.

2. DBS Bank Ltd., DBSVS, DBSVHK, DBSVUSA, their subsidiaries and/or other affiliates beneficially own a total of 1% of any class of common equity securities of Yuexiu Real Estate Investment Trust (405 HK) as of 02 Mar 2016.

3. Compensation for investment banking services: DBS Bank Ltd., DBSVS, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA have received compensation, within the past 12 months for investment banking services from Far East Horizon Limited (3360 HK) as of 31 Jan 2016. DBS Bank Ltd., DBSVS, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA have managed or co-managed a public offering of securities for Purapharm Corporation Limited (1498 HK) in the past 12 months, as of 31 Jan 2016.

Market Focus

Monday market blog

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DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.

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Wong Ming Tek, Executive Director, ADBSR

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