1

Yum Cha 飲 茶 May 7, 2014

CHINA HIGH SPEED TRANSMISSION EQUIPMENT (CHSTE) [0658.HK, HK$5.37; BUY] - We initiate

coverage with a BUY rating, as we believe domestic and US demand will provide several drivers for a strong

revenue and earnings recovery this year. Projected new wind power installation in China is projected at 20GW

this year and 22GW in 2015, while a 40% increase in orders from General Electric (GE) reflects a resurgent

US windpower sector. Three key domestic factors are improving grid curtailment; increased grid-connected

windpower capacity in Q1 2014; and a surge in windpower turbine generator tenders so far this year. On

valuation, CHSTE is trading at a deep discount to other windpower generating equipment makers, and our

target price of HK$7.50 (+40% upside) infers a mid-point between the mid—cycle and peak valuation for the

company.

TALKING POINTS

CHART OF THE DAY— CITIES TAKE ACTION TO HEAD OFF PROPERTY CRASH

Analyst: John Mulcahy, Managing Director

Source: Bloomberg

DIARY NOTES FOR THIS WEEK

May 8 Export/import YoY (April)

May 9 PPI YoY (April)

May 9 CPI YoY (April)

Nanning in Guangxi Province launched the latest round of HPR relaxation, by allowing non-

residents (but only from neighbouring cities) to buy homes in the city. Since then, Ningbo in

Zhejiang Province and Tongling in Anhui Province have eased restrictions, reducing down-

payments to 20% from 30%, in defiance of central government guidelines. But the cities are

responding to a real problem, as property agent Centaline reported that sales of new homes

in 54 cities during the key May 1-3 holiday period were 47% lower than the equivalent 2013

period. The chart at the top of the page shows the slowdown in year-on-year (YoY) house

price increases for 100 cities monitored by the National Bureau of Statistics (NBR). The low-

er chart shows that the market has been discounting a weaker property market for some

time, and if anything the question now is where to find the new entry point. As with China’s

banks, the real estate sector has priced in a severe slump, and there may be a capitulation

point, but we expect some central government measures to avoid a crash that would have

much wider implications for the economy than volatile stock prices.

INDICES Closing DoD%

Hang Seng Index

21,976.3

(1.3)

HSCEI

9,743.3

(0.6)

Shanghai COMP

2,027.4

0.0

Shenzhen COMP

1,037.0

0.9

Gold

1,311.9

0.9

BDIY

1,017.0

2.4

Crude Oil, WTI(US$/BBL)

100.3

0.5

Crude Oil, BRENT(US$/BBL)

108.7

0.1

HIBOR, 3-M

0.4

0.8

SHIBOR, 3-M

5.5

(0.3)

RMB/USD

6.2

(0.2)

China’s property sector is once

again under the spotlight, as more

cities move to relax home pur-

chase restrictions (HPR), to prop

up a sector that has seen extreme

volatility, hitting a recent low in

2012, although prices and vol-

umes recovered throughout 2013.

The stock prices have remained

sluggish, and are typically trading

at low single-digit PERs, although

it is generally a warning sign

when analysts start quoting PERs

rather than net asset value (NAV)

as a measure for valuing property

developers. The risk is now not so

much the deviation from NAV, but

the ability to service debt at a time

of slowing cash flow from sales.

2

China High Speed Transmission Equipment [0658.HK]

We see more signs of accelerating wind power installation growth in China and the US this year, which we believe will translate into several earnings drivers for China High Speed Transmission Equipment (CHSTE), including sales volume growth, margin expansion and reduction of finance costs. Most importantly, we believe the market has yet to adjust to CHSTE’s strong recovery. Our earnings estimates for 2014E/2015E are 30%+ above consensus. CHSTE is trading at a large discount to other wind equipment makers. We set our target price at HK$7.50 based on 17.5x 2014E PER, mid-point between mid-cycle (13x) and peak valuation (22x), to reflect the on-track earnings recovery. Initiate with BUY.

China wind power installation addition projected at 20GW/22GW in 2014E/2015E from 16GW in 2013—five factors: (1) Grid curtailment contin-ues to improve; (2) grid-connected capacity in Q1 14 increased by 18% sug-gesting on-track installation growth; (3) China wind turbine generator (WTG) tenders jumped 80%+ YoY in Q1 14; (4) strong project pipeline released by NEA; (5) strong government determination to improve air quality.

Impressive order growth of 40% YoY from General Electric [GE] in 2014E. We believe US wind power installation will recover strongly in 2014E after the extension of the production tax credit (PTC). We estimate substan-tial orders from GE will help drive CHSTE’s wind gear export volume to its historical high this year.

Earnings drivers for CHSTE: Volume growth + margin expansion + de-cline in finance expenses. We expect total wind gear sales volume to reach 9.5GW/10.8GW in 2014E/2015E, up from 7.3GW in 2013. With higher utiliza-tion rate, stabilized average selling price (ASP) and less impairment, we ex-pect margin to expand 2ppt+ to 27% in 2014E and we see further upside if the non-wind segments grow faster than our expectation. Besides, we expect the peak of the capex cycle to drive finance expenses down.

Major subsidiary of CHSTE reported 166% YoY revenue growth in Q1 14; Returning to profit (PRC GAAP). Nanjing High Speed Gear Manufac-turing Group is the major wind gear subsidiary of CHSTE. The strong growth reaffirmed our confidence on CHSTE’s recovery story.

Key risk factors: (1) Technology shift; (2) Policy risk; (3) Increase in raw

material costs; (4) New business risk.

(For details, please refer to the full report.)

Wayne Fung, CFA —Analyst

(852) 3698-6319

waynefung@chinastock.com.hk

John Mulcahy—Head of Research

(852) 3698-6889

johnmul@chinastock.com.hk

Wind Power Sector Re-rating on installation acceleration; three earnings drivers;

Initiate with BUY

BUY

Close: HK$5.37 (May 5, 2014)

Target Price: HK$7.50 (+40%)

Share Price Performance

Market Cap US$1,133m

Shares Outstanding 1,635m

Auditor Deloitte

Free Float 63%

52W range HK$3.15-6.75

3M average daily T/O US$2.8m

Major Shareholding Fortune Apex

(21.3%)

Ji Changqun

(15.7%)

May 7, 2014

Key financials (RMB m) 2011 2012 2013 2014E 2015E

Revenue 7,121 6,369 6,539 7,935 8,721

Change (YoY) -3.7% -10.6% 2.7% 21.4% 9.9%

EBIT 1,063 761 701 1,155 1,316

Change (YoY) -35.4% -28.4% -7.9% 64.8% 13.9%

Core net profit 807 256 478 553 717

Change (YoY) -42.2% -68.2% 86.3% 15.8% 29.6%

ROE 10.9% 3.4% 6.0% 6.3% 7.6%

Net debt/equity 55.0% 57.3% 53.6% 46.1% 36.0%

PER (core earnings) (x) 7.5 23.2 12.3 12.7 9.7

Dividend yield 0.0% 0.0% 0.0% 0.0% 0.0%

PBR (x) 0.8 0.8 0.8 0.8 0.7

EV/EBITDA (x) 10.0 12.2 12.2 8.9 8.0

Sources: Company, CGIHK Research estimates

3

We initiate coverage of CHSTE with a BUY rating. Our target price of HK$7.50 is based on 17.5x PER, mid-point between the peak level of 22x and average of 13x. We believe an above-average valuation is justified as CHSTE is entering a recovery stage with further strong earnings growth in 2015E.

Cross checking, we believe Xinjiang Goldwind [2208.HK; Not rated] is the best comparable to CHSTE in the Hong Kong market. While Goldwind and CHSTE represent different technologies and are not in the same value chain, earnings of both companies are driven by the same industry factor (i.e. acceler-ating installation). CHSTE is now trading at 49%/38% discount to Goldwind in terms 2014E PER/PBR. Even our target price of HK$7.50 implies 29%/15%

discount to the current valuation of Goldwind.

By comparison with major international wind equipment players, CHSTE is trad-ing at 41%/66% discount in terms of 2014E PER/PBR (figure 1).

Valuation

We believe CHSTE’s large dis-count to Goldwind and interna-tional wind equipment players is unjustified.

Figure 1: Peer comparison

Sources: Bloomberg, Company, CGIHK Research estimates for covered stocks

Ticker Company Rating Price Market cap PB (x) EV/EBITDA (x)

(local currency) (US$ m) 2013A 2014E 2015E 2013A 2014E 2015E 2013A 2014E 2015E

Wind gearbox manufacturers

658 HK Equity CHSTE BUY 5.37 1,133 12.3 12.7 9.7 0.8 0.8 0.7 12.2 8.9 8.0

Chinese WTG manufacturers

2727 HK Equity SHANGHAI ELECTRIC - 3.07 7,030 13.3 12.3 11.7 1.0 0.9 0.9 7.9 7.1 6.8

1072 HK Equity DONGFANG ELECTRIC - 11.90 3,682 8.2 9.2 8.9 1.1 1.0 0.9 5.7 5.7 5.5

2208 HK Equity XINJIANG GOLDWIND - 8.41 3,744 42.7 24.9 17.6 1.4 1.3 1.2 48.8 22.1 16.0

Average 21.4 15.5 12.7 1.1 1.1 1.0 20.8 11.7 9.5

Chinese wind farm operators

916 HK Equity China Longyuan BUY 8.02 8,314 21.3 16.3 14.0 1.7 1.5 1.4 10.9 8.9 7.8

958 HK Equity Huaneng Renewables HOLD 2.47 2,877 17.4 20.2 13.0 1.3 1.2 1.1 9.9 8.0 5.9

1798 HK Equity Datang Renewable HOLD 1.08 1,013 34.8 20.2 13.7 0.7 0.7 0.6 9.7 9.3 8.2

956 H Equity China Suntien BUY 2.59 1,241 13.9 13.2 11.3 1.1 1.0 0.9 8.4 6.9 6.0

735 HK Equity China Power New Energy - 0.42 622 14.9 9.4 5.4 0.5 0.5 0.5 7.7 4.6 2.8

182 HK Equity China Windpower - 0.55 635 27.1 9.6 7.2 0.9 0.9 0.8 n/a 5.5 3.4

Average 21.6 14.8 10.8 1.0 1.0 0.9 9.3 7.2 5.7

Overseas WTG manufacturers

GE US Equity GENERAL ELECTRIC - 26.68 267,467 16.1 15.7 14.6 2.0 2.0 1.8 22.0 23.1 21.4

SIE GR Equity SIEMENS AG-REG - 92.78 113,429 18.2 13.7 12.2 2.6 2.6 2.3 10.9 8.9 8.1

VWS DC Equity VESTAS - 244.50 10,186 n/a 30.3 24.2 4.3 3.3 2.9 11.8 9.1 8.4

SUEL IN Equity SUZLON ENERGY - 14.15 585 n/a n/a n/a 2.8 n/a n/a n/a 149.0 10.2

GAM SM Equity GAMESA - 7.42 1,357 39.1 20.3 14.6 1.8 1.6 1.4 7.8 7.4 6.3

NDX1 GR equity NORDEX AG - 12.02 1,349 85.8 27.9 20.3 2.6 2.4 2.2 8.7 7.4 6.1

Average 39.8 21.6 17.2 2.7 2.4 2.1 12.3 34.1 10.1

PE (x)

4

Figure 2: PER band

Sources: Bloomberg, Company, CGIHK Research estimates

Note: The calculation of EPS excludes the exceptional items

0

2

4

6

8

10

12

14

16

18

20Oct-09

Feb-10

May-10

Aug-10

Nov-10

Mar-11

Jun-11

Sep-11

Dec-11

Apr-12

Jul-12

Oct-12

Jan-13

May-13

Aug-13

Nov-13

Mar-14

HKD

22x

18x

14x

10x

6x

Figure 3: PBR band

Sources: Bloomberg, Company, CGIHK Research estimates

0

2

4

6

8

10

12

14

16

18

20

Oct-09

Feb-10

May-10

Aug-10

Nov-10

Mar-11

Jun-11

Sep-11

Dec-11

Apr-12

Jul-12

Oct-12

Jan-13

May-13

Aug-13

Nov-13

Mar-14

HKD

2.70x

2.10x

1.50x

0.90x

0.30x

5

Earnings Projection

Income Statement (Year end 31 Dec)

(RMB m, except for per share data) 2008A 2009A 2010A 2011A 2012A 2013A 2014E 2015E

Revenue 3,439 5,647 7,393 7,121 6,369 6,539 7,935 8,721

COGS (2,447) (3,786) (5,180) (5,302) (4,815) (4,908) (5,782) (6,289)

Gross profit 992 1,861 2,213 1,819 1,553 1,631 2,153 2,432

Other income/(expenses) 26 56 143 108 127 104 145 123

Distribution and selling exp (107) (139) (200) (254) (279) (281) (349) (384)

Administrative exp (284) (318) (460) (527) (502) (613) (635) (680)

Research and development cost (55) (70) (50) (83) (138) (139) (159) (174)

EBIT 572 1,390 1,645 1,063 761 701 1,155 1,316

D&A 161 216 369 555 574 631 675 701

EBITDA 732 1,606 2,014 1,618 1,335 1,332 1,831 2,018

Other non recurring gain/(loss) 212 (140) 111 (70) (2) 13 0 0

Shares of results of Associates/JCE 10 16 41 26 (27) (62) 13 13

Finance costs (29) (100) (147) (323) (524) (564) (550) (480)

Pretax profit 764 1,166 1,651 695 208 88 619 849

Taxation (72) (200) (257) (147) (79) (57) (62) (127)

After tax profit 693 966 1,394 548 128 31 557 722

Minority interests (0) 1 (10) 9 10 33 (4) (5)

Net profit 692 966 1,384 557 138 65 553 717

EPS (RMB/shr) 0.556 0.776 1.080 0.407 0.102 0.047 0.338 0.438

Recurring net profit 450 1,134 1,309 807 256 478 553 717

Recurring EPS (RMB) 0.362 0.911 1.021 0.590 0.188 0.348 0.338 0.438

Dividend 274 329 382 0 0 0 0 0

DPS (RMB) 0.220 0.264 0.298 0.000 0.000 0.000 0.000 0.000

Growth rates 2008A 2009A 2010A 2011A 2012A 2013A 2014E 2015E

Revenue 80.6% 64.2% 30.9% -3.7% -10.6% 2.7% 21.4% 9.9%

Gross profit 79.4% 87.6% 18.9% -17.8% -14.6% 5.0% 32.0% 12.9%

EBITDA 121.5% 119.3% 25.4% -19.7% -17.5% -0.2% 37.5% 10.2%

EBIT 140.8% 143.2% 18.3% -35.4% -28.4% -7.9% 64.8% 13.9%

Net profit 125.8% 39.6% 43.3% -59.8% -75.1% -53.4% 756.4% 29.6%

Recurring net profit 43.2% 152.0% 15.4% -38.3% -68.2% 86.3% 15.8% 29.6%

EPS 93.3% 39.6% 39.2% -62.3% -75.1% -53.7% 618.8% 29.6%

Recurring EPS 22.6% 152.0% 12.1% -42.2% -68.1% 85.0% -2.8% 29.6%

M argins 2008A 2009A 2010A 2011A 2012A 2013A 2014E 2015E

Gross margin 28.8% 33.0% 29.9% 25.5% 24.4% 24.9% 27.1% 27.9%

EBITDA margin 21.3% 28.4% 27.2% 22.7% 21.0% 20.4% 23.1% 23.1%

EBIT margin 16.6% 24.6% 22.2% 14.9% 12.0% 10.7% 14.6% 15.1%

Net margin 20.1% 17.1% 18.7% 7.8% 2.2% 1.0% 7.0% 8.2%

Recurring net margin 13.1% 20.1% 17.7% 11.3% 4.0% 7.3% 7.0% 8.2%

Sources: Company, CGIHK Research estimates

6

Sources: Company, CGIHK Research estimates

Balance Sheet (As of Dec)

(RMB m, except for per share data) 2008A 2009A 2010A 2011A 2012A 2013A 2014E 2015E

Non current assets

PP&E 2,362 3,845 4,870 5,589 6,238 6,633 6,533 6,206

Interest in associates/JV 588 604 681 838 796 645 658 671

Others 667 749 1,239 1,721 2,035 2,059 1,984 1,909

3,617 5,198 6,789 8,148 9,069 9,337 9,175 8,787

Current assets

Inventories 1,336 1,313 1,258 1,799 1,781 2,390 2,521 2,821

Trade and other receivables 1,294 2,613 3,811 4,938 4,668 6,238 6,372 7,248

Pledged disposal & restricted cash 1,484 603 914 1,253 1,898 2,515 2,515 2,515

Cash 682 471 2,124 2,175 2,405 2,235 1,138 1,019

Others 65 37 36 89 63 256 256 256

4,861 5,037 8,142 10,253 10,813 13,633 12,801 13,858

Total assets 8,478 10,235 14,932 18,401 19,882 22,971 21,976 22,645

Current liabilities

Trade and other payables 2,049 1,566 2,613 2,826 2,945 3,986 3,934 4,681

Bank borrow ings 1,292 1,556 1,209 4,991 7,449 7,109 5,659 4,909

Others 54 166 1,405 181 250 414 414 414

3,395 3,288 5,226 7,998 10,645 11,509 10,007 10,004

Non current liabilities

Bank borrow ings 68 1,012 2,043 2,627 1,288 2,338 2,288 2,238

CB 932 1,369 0 0 0 0 0 0

Deferred income 32 67 62 91 180 74 74 74

Others 317 49 86 63 25 288 288 288

1,348 2,496 2,191 2,781 1,493 2,700 2,650 2,600

Equity

Share capital 95 95 103 103 103 119 119 119

Reserves 3,636 4,326 7,289 7,370 7,437 8,395 8,948 9,665

3,731 4,421 7,393 7,473 7,539 8,514 9,067 9,784

Minority interests 4 29 122 149 205 248 252 257

3,735 4,450 7,514 7,622 7,745 8,762 9,319 10,041

Total equity and liabilities 8,478 10,235 14,932 18,401 19,882 22,971 21,976 22,645

BVPS (RMB/shr) 2.72 3.22 5.39 5.45 5.53 5.21 5.54 5.98

7

Sources: Company, CGIHK Research estimates

Cash Flow Statement (Year end 31 Dec)

(RMB m, except for per share data) 2008A 2009A 2010A 2011A 2012A 2013A 2014E 2015E

Pretax profit 764 1,166 1,651 695 208 88 619 849

D&A 161 216 369 555 574 631 675 701

Tax (20) (107) (200) (287) (153) (91) (62) (127)

Interest expenses/(income) (15) 74 116 278 462 479 505 457

Shares of results of JV/associates (10) (16) (41) (26) 27 62 (13) (13)

Change in w orking capital (556) (1,784) (185) (1,588) 319 (1,509) (317) (429)

Other non cash item (176) 169 (76) 254 105 333 0 0

Operating cash flow 149 (282) 1,634 (118) 1,542 (7) 1,408 1,438

PP&E (944) (1,499) (1,082) (1,002) (1,037) (883) (500) (300)

Investment/(disposal) in JV/Associate (561) 0 (44) (157) (9) 3 0 0

Interest received 44 26 31 45 62 85 45 23

Others (1,708) 698 (937) (1,086) (963) (840) 0 0

Investing cash flow (3,169) (775) (2,031) (2,174) (1,923) (1,602) (455) (277)

Issue/(repurchase) of CB 1,469 0 0 (1,254) 0 0 0 0

Issue/(repurchase) of shares 0 0 1,916 0 0 856 0 0

Net borrow ing 867 1,206 605 4,342 1,119 710 (1,500) (800)

Dividend paid (88) (274) (327) (375) 0 0 0 0

Interest paid (29) (100) (147) (389) (568) (611) (550) (480)

Others (35) 15 4 19 60 486 0 0

Financing cash flow 2,185 847 2,050 2,343 612 1,439 (2,050) (1,280)

Net change in cash (835) (210) 1,653 51 230 (169) (1,097) (119)

Ratios

Valuation

PER (recurring earnings) 13.3 5.2 4.6 7.5 23.2 12.3 12.7 9.7

Dividend yield 4.6% 5.6% 6.4% 0.0% 0.0% 0.0% 0.0% 0.0%

PBR 1.8 1.5 0.9 0.8 0.8 0.8 0.8 0.7

EV/EBITDA 22.2 10.1 8.1 10.0 12.2 12.2 8.9 8.0

Operational

Recurring net margin 13.1% 20.1% 17.7% 11.3% 4.0% 7.3% 7.0% 8.2%

Asset Turnover 0.52 0.60 0.59 0.43 0.33 0.31 0.35 0.39

Asset / Equity 1.9 2.3 2.1 2.2 2.6 2.7 2.6 2.4

Adjusted ROAE 13.2% 27.8% 22.2% 10.9% 3.4% 6.0% 6.3% 7.6%

Adjusted ROAA 6.8% 12.1% 10.4% 4.8% 1.3% 2.2% 2.5% 3.2%

Adjusted ROIC 9.4% 15.8% 13.8% 6.3% 1.6% 2.8% 3.2% 4.2%

Interest coverage 19.9 13.9 11.2 3.3 1.5 1.2 2.1 2.7

Net debt / Equity 3.4% 64.3% 2.9% 55.0% 57.3% 53.6% 46.1% 36.0%

Current ratio 1.4 1.5 1.6 1.3 1.0 1.2 1.3 1.4

Quick ratio 1.2 1.4 1.2 1.0 0.8 1.0 1.2 1.3

Days receivables 103 126 159 224 275 304 290 285

Days payables 239 174 147 187 219 258 250 250

Days inventories 148 128 91 105 136 155 155 155

Sources: Company, CGIHK Research estimates

8

Disclaimer

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 China Galaxy International Securities (Hong Kong) Co., Limited and its group companies to any registration or licensing requirement within such jurisdiction.

This report (including any information attached) is issued by China Galaxy International Securities (Hong Kong) Co., Limited, one of the subsidiaries of the China Galaxy International Financial Holdings Limited, to the professional or institutional clients from the sources believed to be reliable, but no representation or warranty (expressly or implied) is made as to their accuracy, correctness and/or completeness.

This report shall not be construed as an offer, invitation or solicitation to buy or sell any securities of the company(ies) referred to herein. Past perfor-mance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regard-ing future performance. The recipient of this report should understand and comprehend the investment objectives and its related risks, and where necessary consult their own financial advisers prior to any investment decision.

Where any part of the information, opinions or estimates contained herein reflects the personal views and opinions of the analyst who prepared this report, such views and opinions may not correspond to the published views or investment decisions of China Galaxy International Financial Holdings Limited and any of its subsidiaries (“China Galaxy International”), directors, officers, agents and employees (“the Relevant Parties”).

All opinions and estimates reflect the judgment of the analyst on the date of this report and are subject to change without notice. China Galaxy Interna-tional and/or the Relevant Parties hereby disclaim any of their liabilities arising from the inaccuracy, incorrectness and incompleteness of this report and its attachment/s and/or any action or omission made in reliance thereof. Accordingly, this report must be read in conjunction with this disclaimer.

Disclosure of Interests

China Galaxy International may have financial interests in relation to the subjected company(ies) the securities in respect of which are reviewed in this report, and such interests aggregate to an amount may equal to or more than 1 % of the subjected company(ies)’ market capitalization.

One or more directors, officers and/or employees of China Galaxy International may be a director of the securities of the company(ies) mentioned in this report.

China Galaxy International and the Relevant Parties may, to the extent permitted by law, from time to time participate or invest in financing transac-tions with the securities of the company(ies) mentioned in this report, perform services for or solicit business from such company(ies), 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.

China Galaxy International may have 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 last 12 months, significant advice or invest-ment services in relation to the investment concerned or a related investment or investment banking services to the company(ies) mentioned in this report.

Furthermore, China Galaxy International may have received compensation for investment banking services from the company(ies) mentioned in this report within the preceding 12 months.

Analyst Certification

The analyst who is primarily responsible for the content of this report, in whole or in part, certifies that with respect to the securities or issuer covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject, securities or issuer; and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by the analyst in this report.

Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the securities covered in this research report within 30 calendar days prior to the date of issue of this report; (2) will deal in or trade in the securities covered in this research report three business days after the date of issue of this report; (3) serve as an officer of any of the Hong Kong-listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies cov-ered in this report.

Explanation on Equity Ratings

Copyright Reserved

No part of this material may be reproduced or redistributed without the prior written consent of China Galaxy International Securities (Hong Kong) Co., Limited.

China Galaxy International Securities (Hong Kong) Co. Limited, CE No.AXM459

Room 3501-3507, 35/F, Cosco Tower, Grand Millennium Plaza, 183 Queen’s Road Central, Sheung Wan, Hong Kong. General line: 3698-6888.

BUY share price will increase by >20% within 12 months in absolute terms :

SELL share price will decrease by >20% within 12 months in absolute terms :

HOLD no clear catalyst, and downgraded from BUY pending clearer signal to reinstate BUY or further downgrade to outright SELL :