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Fri, 25 Oct 2013
Equi ty Research TCL COMM (2618 HK) TMT/ China
3Q13 results beat
3Q13 results beat with net profit soared by 474% qoq to HK$226mn, fueled
by accelerating smartphone penetration from 27% in 2Q13 to 34% in 3Q13
We raise our FY13/14E earnings estimate by 67%/4% to
HK$232mn/HK$872mn to reflect faster than expected increase in
smartphone penetration, higher margin expansion and economies of
scale.
Reiterate BUY with TP raise to HK$7.20 from HK$6.30, representing 10x
FY14E PE or 25% discount to peers.
3Q13 results beat. TCLC released its 3Q13 results with sales increased by 79% yoy
and 38% qoq to HK$5.45bn and net profit soared by 474% qoq from previous mere
breakeven to HK$226mn. GPM was improved by 3ppt yoy and 1.2ppt qoq to 19.6%,
fueled by accelerating smartphone penetration from 27% in 2Q13 to 34% in 3Q13.
TCLC shipped 15.4mn units of handset in 3Q13, of which smartphone shipments
jumped 162% yoy and 60% qoq to 5.2mn units. Handset ASP was improved by 22%
yoy and 8.6% qoq to US$45.4, and we expect the ASP uptrend is likely sustainable
given mid-to-high-end smartphone sales contribution continuously increasing.
We revise up our FY13/14E earnings by 67%/4% to HK$232mn/HK$872mn. TCLC
showed better than expected smartphone penetration and higher than expected
margin expansion, and have successfully improved its brand recognition for its
smartphone especially in overseas markets. Its flagship high-end model one touch
Idol X enjoys 22% gross margin. Given TCLC’s better operating leverage driven by
economies of scale of smartphone business, we revised up our FY13/14E EPS by
67%/4% to HK$0.19/HK$0.72.
Reiterate BUY with TP raise to HK$7.20 from HK$6.30, representing revised target
PE from 9x to 10x FY14E PE or 25% discount to peers given (1) successful
transformed from a featured phone player to a flourishing smartphones player with
“step-up” strategy in introducing more advanced smartphone models, (2) continuous
ASP and margin improvement thanks to increasing smartphone penetration and (3)
peak 4Q shipments ahead.
Risk: (1) Price pressure due to intensified market competition may be higher than
expected, (2) smartphone penetration may be lower than expected and (3) opex may
be higher than expect.
Yuji Fung / Cindy Li
Analyst / Analyst
+852 2135 0236 / +852 2135 0212
Company Update
BUY UNCHANGED
Close price: HK$6.06
Target Price: HK$7.20 (+19%)
Prior TP: HK$6.30
Key Data
HKEx code 2618
12 Months High (HK$) 6.36
12 Month Low (HK$) 2.12
3M Avg Dail Vol. (mn) 4.48
Issue Share (mn) 1,144.40
Market Cap (HK$mn) 6,935.03
Fiscal Year 12/2012
Major shareholder (s) TCL Ind (51.68%)
Source: Company data, Bloomberg, OP Research
Closing price are as of 24/10/2013
Price Chart
1mth 3mth 6mth
Absolute % 23.9 78.2 120.4
Rel. MSCI CHINA % 25.9 71.9 119.2
PE
Company Profi le TCLC is a handset maker with the brand
“TCL” for China market and “Alcatel” for
overseas market.
Exhibit 1: Forecast and Valuation Year to Dec (HK$ mn) FY11A FY12A FY13E FY14E FY15E
Revenue 10,653.0 12,031.2 16,708.9 26,857.6 33,167.3
Growth (%) 22.4 12.9 38.9 60.7 23.5
Net Profit 799.9 (207.8) 231.7 871.7 1,171.2
Growth (%) 14.0 (126.0) (211.5) 276.2 34.4
Diluted EPS (HK$) 0.704 (0.176) 0.191 0.720 0.967
EPS growth (%) 11.8 (124.9) (209.0) 276.2 34.4
Change to previous EPS (%)
66.6 3.6 15.6
Consensus EPS (HK$)
0.071 0.413 0.605
ROE (%) 32.7 (8.3) 9.5 29.2 29.2
P/E (x) 8.6 (34.5) 31.7 8.4 6.3
P/B (x) 2.5 2.9 2.7 2.0 1.5
Yield (%) 4.8 0.5 0.0 0.0 0.0
DPS (HK$) 0.288 0.030 0.000 0.000 0.000
Source: Bloomberg, OP Research
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Oct/12 Jan/13 Apr/13 Jul/13 Oct/13
HK$2618 HK MSCI CHINA
0
20
40
60
80
100
120
140
Dec/07Dec/08Dec/09Dec/10Dec/11Dec/12
Forward P/E Ratio
+1std.
avg.
-1std.
Fri, 25 Oct 2013
TCL COMM (2618 HK)
Page 2 of 7
Exhibit 2: Revisions in Key Assumptions and Forecasts
FY13E FY14E FY15E
New Old % Chg New Old % Chg New Old % Chg
Shipments (mn)
Mobile handsets and others 49.0 49.0 0.0 51.4 51.4 0.0 54.0 54.0 0.0
ASP (US$)
Mobile handsets and others 43.7 47.9 (8.7) 66.9 66.9 (0.0) 78.7 78.7 (0.0)
(HK$ mn)
Revenue 16,709 18,305 (8.7) 26,858 26,858 (0.0) 33,167 33,167 (0.0)
Gross profit 3,265 3,519 (7.2) 5,451 5,300 2.8 6,768 6,434 5.2
Gross margin 19.5% 19.2% 0.3 20.3% 19.7% 0.6 20.4% 19.4% 1.0
Opex (3,357) (3,692) (9.1) (4,780) (4,647) 2.9 (5,786) (5,622) 2.9
EBIT 232 150 54.3 1,026 1,008 1.8 1,371 1,200 14.2
Net Profit 232 139 66.6 872 841 3.6 1,171 1,013 15.6
Diluted EPS (HK$) 0.191 0.115 66.6 0.720 0.695 3.6 0.967 0.837 15.6
Source: Company, OP Research
Exhibit 3: TCLC 3Q13 result summary
(HK$ mn) 3Q12 3Q13 YoY% 9M12 9M13 YoY% OP Comment
Revenue 3,053 5,454 79% 8,146 11,861 46% ASP improved from US$37.1 in 1Q12 to US$45.4 in 3Q13 thanks to
high-end smartphones
COGS (2,543) (4,383) 72% (6,654) (9,661) 45%
Gross profit 510 1,071 110% 1,492 2,199 47%
Margin 16.7% 19.6% 18.3% 18.5% GPM improved by 3ppt yoy in 3Q13, better than we expected
Other income & gains 139 96 -31% 408 343 -16%
Selling exp (302) (399) 32% (429) (697) 63%
as % of revenue 9.9% 7.3% 5.3% 5.9%
Admin exp (173) (219) 26% (791) (1,054) 33%
as % of revenue 5.7% 4.0% 9.7% 8.9% Operating leverage
R&D (182) (265) 46% (442) (643) 46%
as % of revenue 5.9% 4.9% 5.4% 5.4%
Other opex (27) (42) 56% (78) (73) -6%
Tax (10) 3 -132% (22) 22 -199%
Net profit (87) 226 -359% 18 19 5% Making remarkable profit since it breakeven in 2Q13, promising outlook
Net margin -2.9% 4.1% 0.2% 0.2%
Source: Company, OP Research
Fri, 25 Oct 2013
TCL COMM (2618 HK)
Page 3 of 7
Exhibit 4: TCLC shipments (mn units)
TCL Handset and accessories unit sales (mn)
of which:
Smartphone (mn)
Smartphone
contribution (%)
2008 2009 2010 2011 2012 2013 yoy
2011 2012 2013 yoy mom
2011 2012 2013
Jan 1.20 0.74 2.08 3.13 2.00 3.63 81%
0.01 0.14 0.59 322% -7%
0.2% 7.0% 16.3%
Feb 0.67 0.59 1.45 2.37 2.39 1.91 -20%
0.01 0.27 0.35 30% -40%
0.3% 11.4% 18.6%
Mar 1.50 0.95 2.27 3.21 3.45 2.94 -15%
0.01 0.33 0.51 52% 43%
0.3% 9.7% 17.2%
Apr 1.20 1.01 2.75 3.38 2.92 3.89 33%
0.02 0.37 0.82 123% 62%
0.6% 12.6% 21.1%
May 0.98 0.75 2.77 3.58 3.52 4.20 19%
0.03 0.51 1.11 119% 35%
0.7% 14.4% 26.4%
Jun 1.16 1.02 2.93 3.78 4.33 4.06 -6%
0.10 0.58 1.32 126% 19%
2.6% 13.5% 32.5%
Jul 1.23 1.53 2.91 3.61 2.95 5.01 70%
0.14 0.57 1.41 147% 7%
4.0% 19.3% 28.1%
Aug 1.11 1.38 3.01 3.60 3.63 4.93 36%
0.14 0.64 1.77 145% 26%
4.0% 17.7% 35.9%
Sep 1.21 1.32 3.59 3.79 3.97 5.46 38%
0.20 0.77 2.01 162% 14%
5.2% 19.3% 36.9%
Oct 1.39 2.03 3.85 4.05 4.30
0.20 0.76
5.0% 17.8%
Nov 1.16 2.18 4.38 4.64 5.02
0.24 0.93
5.2% 18.6%
Dec 0.88 2.61 4.25 4.47 4.13
0.27 0.64
6.1% 15.5%
Full Year 13.70 16.12 36.22 43.62 42.61 36.03
1.37 6.52 9.89
3.1% 15.3% 27.5%
OP Target
49.00
17.15
% of OP Target
73.5%
57.7%
Source: Company, OP Research
Exhibit 5: TCLC monthly shipments (mn units)
Source: Company, OP Research
-40%
-20%
0%
20%
40%
60%
80%
100%
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2011 2012 2013 yoy 2013 Smartphone Penetration %)
(mn units)
Fri, 25 Oct 2013
TCL COMM (2618 HK)
Page 4 of 7
Financial Summary Year to Dec FY11A FY12A FY13E FY14E FY15E
Year to Dec FY11A FY12A FY13E FY14E FY15E
Income Statement (HK$ mn)
Ratios
Mobile handsets and others 10,653 12,031 16,709 26,858 33,167
Gross margin (%) 21.9 17.4 19.5 20.3 20.4
Operating margin (%) 6.8 (1.9) 1.4 3.8 4.1
Turnover 10,653 12,031 16,709 26,858 33,167
Net margin (%) 7.5 (1.7) 1.4 3.2 3.5
YoY% 22 13 39 61 23
Selling & dist'n exp/Sales (%) 8.1 9.6 8.8 8.0 8.0
COGS (8,325) (9,935) (13,444) (21,407) (26,399)
Admin exp/Sales (%) 5.2 5.5 5.1 4.1 3.7
Gross profit 2,328 2,097 3,265 5,451 6,768
Payout ratio (%) 40.9 (17.1) 0.0 0.0 0.0
Gross margin 21.9% 17.4% 19.5% 20.3% 20.4%
Effective tax (%) (2.2) (16.9) 8.5 16.5 16.5
Other income 508 543 496 523 571
Total debt/equity (%) 276.8 264.9 240.9 179.6 133.8
Selling & distribution (866) (1,154) (1,470) (2,149) (2,653)
Net debt/equity (%) 4.1 41.3 49.5 34.1 10.1
Admin (558) (658) (851) (1,100) (1,242)
Current ratio (x) 1.1 1.1 1.1 1.1 1.2
R&D (459) (740) (919) (1,343) (1,658)
Quick ratio (x) 1.0 0.9 0.9 1.0 1.0
Other opex (28) (109) (117) (188) (232)
Inventory T/O (days) 43 46 46 46 46
Total opex (1,912) (2,660) (3,357) (4,780) (5,786)
AR T/O (days) 101 101 101 101 101
Operating profit (EBIT) 925 (21) 404 1,195 1,553
AP T/O (days) 86 105 105 105 105
Operating margin 8.7% -0.2% 2.4% 4.4% 4.7%
Cash conversion cycle (days) 58 42 42 42 42
Provisions 0 0 0 0 0
Asset turnover (x) 0.8 0.9 1.2 1.5 1.5
Finance costs (140) (166) (151) (151) (151)
Financial leverage (x) 5.4 5.5 5.9 5.9 5.4
Profit after financing costs 785 (187) 253 1,044 1,403
EBIT margin (%) 6.8 (1.9) 1.4 3.8 4.1
Associated companies & JVs (1) (2) 0 0 0
Interest burden (x) 1.1 0.8 1.1 1.0 1.0
Pre-tax profit 783 (188) 253 1,044 1,403
Tax burden (x) 1.0 1.1 0.9 0.8 0.8
Tax 17 (32) (22) (172) (231)
Return on equity (%) 32.7 (8.3) 9.5 29.2 29.2
Minority interests (1) 12 0 0 0
ROIC (%) 36.4 (7.8) 5.6 19.7 23.1
Net profit 800 (208) 232 872 1,171
YoY% 14 (126) (211) 276 34
Year to Dec FY11A FY12A FY13E FY14E FY15E
Net margin 7.5% -1.7% 1.4% 3.2% 3.5%
Balance Sheet (HK$ mn)
EBITDA 997 554 755 1,567 1,914
Fixed assets 497 597 963 1,063 1,199
EBITDA margin 9.4% 4.6% 4.5% 5.8% 5.8%
Intangible assets & goodwill 956 1,174 786 414 66
EPS (HK$) 0.704 (0.176) 0.191 0.720 0.967
Associated companies & JVs 2 4 4 4 4
YoY% 12 (125) (209) 276 34
Long-term investments 0 26 26 26 26
DPS (HK$) 0.288 0.030 0.000 0.000 0.000
Other non-current assets 317 307 307 307 307
Non-current assets 1,773 2,109 2,087 1,814 1,602
Year to Dec FY11A FY12A FY13E FY14E FY15E
Cash Flow (HK$ mn)
Inventories 981 1,263 1,709 2,722 3,356
EBITDA 997 554 755 1,567 1,914
AR 2,948 3,314 4,603 7,398 9,136
Chg in working cap (722) (102) (579) (1,199) (739)
Prepayments & deposits 870 1,246 1,731 2,782 3,436
Others 14 2 0 0 0
Other current assets 6,267 4,419 4,419 4,419 4,419
Operating cash 289 454 176 368 1,175
Cash 1,187 970 666 762 1,465
Interests paid (131) (177) (151) (151) (151)
Current assets 12,254 11,212 13,127 18,082 21,812
Tax (36) (52) (1) (22) (172)
Net cash from operations 122 224 25 196 852
AP 1,952 2,861 3,872 6,165 7,602
Tax 26 1 22 172 231
Capex (232) (246) (501) (269) (332)
Accruals & other payables 1,431 1,620 2,250 3,617 4,467
Investments (1,049) (1,044) 0 0 0
Bank loans & leases 7,222 5,726 5,726 5,726 5,726
Dividends received 0 0 0 0 0
CB & othe debts 165 113 113 113 113
Sales of assets 51 30 0 0 0
Other current liabilities 519 284 284 284 284
Interests received 141 206 172 169 183
Current liabilities 11,315 10,606 12,267 16,078 18,424
Others 122 3 0 0 0
Investing cash (966) (1,052) (329) (100) (149)
Bank loans & leases 0 194 194 194 194
FCF (844) (827) (304) 96 703
CB & othe debts 0 116 116 116 116
Issue of shares 44 36 0 0 0
Deferred tax & others 39 83 83 83 83
Buy-back (68) 0 0 0 0
MI 4 2 2 2 2
Minority interests 0 0 0 0 0
Non-current liabilities 43 394 394 394 394
Dividends paid (336) (202) 0 0 0
Net change in bank loans 998 807 0 0 0
Total net assets 2,669 2,321 2,553 3,424 4,596
Others (1) 0 0 0 0
Financing cash 637 640 0 0 0
Shareholder's equity 2,669 2,321 2,553 3,424 4,596
Share capital 1,114 1,128 1,128 1,128 1,128
Net change in cash (207) (187) (304) 96 703
Reserves 1,554 1,193 1,425 2,296 3,467
Exchange rate or other Adj 49 (30) 0 0 0
Opening cash 1,345 1,187 970 666 762
BVPS (HK$) 2.40 2.06 2.23 2.99 4.02
Closing cash 1,187 970 666 762 1,465
Total debts 7,387 6,149 6,149 6,149 6,149
CFPS (HK$) 0.107 0.189 0.020 0.162 0.704
Net cash/(debts) (108) (958) (1,262) (1,166) (463)
Source: Company, OP Research
Fri, 25 Oct 2013
TCL COMM (2618 HK)
Page 5 of 7
Exhibit 6: Peer Group Comparison
Company Ticker Price
Mkt cap
(US$m)
3-mth
avg t/o
(US$m)
PER Hist
(x) PER FY1 (x)
PER
FY2
(x)
EPS
FY1
YoY%
EPS
FY2
YoY%
3-Yr EPS
Cagr (%) PEG (x)
Div
yld
Hist
(%)
Div
yld
FY1
(%)
P/B
Hist
(x)
P/B
FY1
(x)
EV/
Ebitda
Hist
EV/
Ebitda
Cur Yr
Net
gearing
Hist
(%)
Gross
margin
Hist
(%)
Net
margin
Hist
(%)
ROE
Hist
(%)
ROE
FY1 (%)
Sh px
1-mth
%
Sh px
3-mth
%
Tcl Comm Tech Hl 2618 HK 6.06 894 2.7 (34.5) 31.7 8.4 (209.0) 276.2 (276.6) -0.11 0.5 0.0 2.95 2.72 14.1 10.9 41.3 17.4 (1.7) 9.5 29.2 21.0 73.6
HSI 22,835.82 10.6 10.9 10.1 (2.7) 7.7 4.8 2.27 3.4 3.6 1.44 1.36 13.6 12.5 (1.5) 3.9
HSCEI 10,322.12 8.1 7.6 7.0 6.7 8.9 8.6 0.89 4.0 4.2 1.24 1.14 15.2 14.9 (2.6) 5.6
CSI300 2,400.51 11.6 10.4 8.9 10.6 17.5 14.7 0.71 2.4 2.5 1.64 1.49 14.2 14.3 (1.8) 6.7
Adjusted sector avg* 13.7 16.6 13.6 16.8 25.9 (55.0) 2.54 1.9 1.7 2.73 2.84 7.9 10.6 0.0 16.7 1.7 23.0 20.2 1.3 17.1
China Wireless T 2369 HK 2.89 786 8.5 18.8 13.1 10.1 43.6 29.4 33.2 0.39 1.7 1.6 2.34 2.18 13.4 11.0 0.0 12.0 2.3 15.9 17.6 (9.4) 10.3
Lenovo Group Ltd 992 HK 8.13 10,899 34.3 17.0 14.4 12.5 18.5 15.1 14.7 0.98 2.3 2.5 3.91 3.44 7.3 6.8 0.0 12.0 1.9 25.5 26.0 (1.1) 15.5
Zte Corp-H 763 HK 16.56 8,602 20.3 N/A 25.6 17.2 N/A 49.0 (203.0) N/A N/A 1.0 2.06 1.91 195.1 18.3 38.6 22.2 (3.4) (12.0) 7.6 5.9 23.4
Htc Corp 2498 TT 145.50 4,219 72.6 7.2 N/A 16.2 N/A N/A (122.2) N/A 1.4 1.0 1.50 N/A 4.8 N/A 0.0 20.6 6.2 18.5 N/A 3.9 (14.7)
Apple Inc AAPL US 524.37 476,389 6,341.2 11.7 13.3 12.1 (11.8) 10.0 2.1 6.26 2.2 2.2 3.86 3.82 5.9 6.3 0.0 43.9 26.7 32.1 29.6 7.2 19.0
* Outliners and "N/A" entries are excl. from the calculation of averages
Source: Bloomberg, OP Research
Fri, 25 Oct 2013
TCL COMM (2618 HK)
Page 6 of 7
Our recent reports Date Company / Sector Stock Code Title Rating Analyst
24/10/2013 Century Sunshine 509 The three musketeers BUY Min Li/ Jose Xu
22/10/2013 Sunny Optical 2382 Still not the right time HOLD Yuji Fung
21/10/2013 HC International 8292 Upgrade on easing concern on share overhang BUY Yuji Fung
21/10/2013 Fufeng Group 546 Still tasty BUY Tracy Sun
21/10/2013 CHINA FIBER OPTIC
NETWORK
3777 The truth is rarely pure, and never simple BUY Yuji Fung
18/10/2013 Xingda 1899 Raise earnings on robust 3Q demand BUY Vivien Chan
17/10/2013 Antonoil 3337 Maintain positive on 4Q13/14 result BUY Min Li
15/10/2013 Geely Auto 175 Truth behind Sept. sales figures BUY Vivien Chan
15/10/2013 TCL Multimedia 1070 Weak Sept shipment, 3Q13 loss warning HOLD Yuji Fung
11/10/2013 TCL COMM 2618 Unprecedented shipment, 3Q13 positive alert BUY Yuji Fung
10/10/2013 Gold Poly 686 Synergy under China Merchants NR Min Li
07/10/2013 SCUD Group 1399 Company visit note NR Vivien Chan
04/10/2013 GCL-Poly Energy 3800 Margin to further rebound in 2H13 BUY Min Li
26/09/2013 China Animal Healthcare 940 Benefit from sector consolidation BUY Min Li
24/09/2013 China Modern Dairy 1117 Positive JV arrangement for cash flow BUY Tracy Sun
18/09/2013 Biostime 1112 Begin a New Journey BUY Tracy Sun
12/09/2013 Great Wall Motor 2333 Monthly performance in-line HOLD Vivien Chan
11/09/2013 Comtec Solar 712 Mono wafer leading supplier BUY Min Li
09/09/2013 China Singyes Solar 750 Transition won't be easy HOLD Min Li
09/09/2013 Geely Auto 175 Domestic sales bounce back BUY Vivien Chan
09/09/2013 TCL Multimedia 1070 Aug shipment on track HOLD Yuji Fung
09/09/2013 TCL COMM 2618 Smartphone shipment reached record high in Aug BUY Yuji Fung
05/09/2013 Jiangnan Group 1366 Recovery expected in 2H13 BUY Min Li
04/09/2013 China Modern Dairy 1117 Raw milk price, continue to upswing BUY Tracy Sun
04/09/2013 Xiangyu Dredging 871 Expect a strong turn around in 2014-15 BUY Min Li
03/09/2013 Shengli Pipe 1080 Downward trend is unlikely to be reversed in the near
term
SELL Min Li
Historical recommendations and target price: TCL COMM (2618 HK) (as of 24/10/2013)
1 19-Oct-10 BUY, Target price HK$7.47 9 11-Oct-12 HOLD-> SELL , Target price unchanged HK$2.15
2 8-Jul-11 BUY, Target price change HK$9.9 10 29-Oct-12 SELL, Target price change HK$1.80
3 9-Aug-11 BUY, Target price change HK$9.6 11 4-Mar-13 SELL-> HOLD, Target price change HK$2.10
4 11-Oct-11 BUY, Target price change HK$6.58 12 9-May-13 HOLD, Target price change HK$3.20
5 28-Feb-12 BUY-> HOLD, Target price change HK$4.5 13 10-Jul-13 HOLD-> BUY , Target price change HK$4.50
6 10-Apr-12 HOLD-> BUY , Target price unchanged HK$4.5 14 9-Sep-13 BUY, Target price change HK$5.50
7 11-Jun-12 BUY, Target price change HK$3.8 15 11-Oct-13 BUY, Target price change HK$6.30
8 10-Aug-12 BUY-> HOLD, Target price change HK$2.15
0
2
4
6
8
10
Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13 Oct-13
1
2 3
(HK$)
4
5
67
8
910
1112
13
14
15
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Oriental Patron, its directors, officers and employees, including persons involved in the preparation or issuance of this report, may, to the extent permitted by law, from time to time participate or invest in financing transactions with the issuer(s) of the securities mentioned in this report, perform services for or solicit business from such issuers, and/or have a position or holding, or other material interest, or effect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. Oriental Patron may, to the extent permitted by law, act upon or use the information presented herein, or the research or analysis on which they are based, before the material is published. One or more directors, officers and/or employees of Oriental Patron may be a director of the issuers of the securities mentioned in this report. Oriental Patron may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment or investment banking service to the issuers of the securities mentioned in this report.
Regulatory Disclosures as required by the Hong Kong Securities and Futures Commission
Oriental Patron (inclusive of OPSL) which are carrying on a business in Hong Kong in investment banking, proprietary trading or market making or agency broking are not a market maker in the securities of the subject companies mentioned in this report. Unless otherwise specified, Oriental Patron does not have any investment banking relationship with the companies mentioned in this report within the last 12 months. As at the date of this report, Oriental Patron do not have any interests in the subject company(ies) aggregating to an amount equal to or more than 1% of the subject company(ies) market capitalization.
Analyst Certification:
The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research analyst’s compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.
Rating and Related Definitions
Buy (B) We expect this stock outperform the relevant benchmark greater than 15% over the next 12 months. Hold (H) We expect this stock to perform in line with the relevant benchmark over the next 12 months. Sell (S) We expect this stock to underperform the relevant benchmark greater than 15% over the next 12 month. Relevant Benchmark Represents the stock closing price as at the date quoted in this report.
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