china galaxy a -share research key ideas (excerpt) · 2017-09-13 · china galaxy a september 13,...

September 13, 2017

Please refer to the important disclosures and disclaimers at the end of the English summary and at the back of this report.

China Galaxy A-Share Research Key Ideas (Excerpt)

Today’s Highlights: (Please click here for full version)

(1) Strategy: Weekly Update – Investment Strategy in an Environment with Declining

Earnings and Rising Inflation

The A-share market trended up gradually in the first three quarters, with obvious

sector rotation. Quality large caps outperformed in the first half of the year, the

financial plays from late April to August, the yclicals since June this year and the

ChiNext since August this year...…… (Click for details)

(2) SME: Weekly Update – Paper Industry to Offer Opportunities

We recommend industry leaders with attractive valuations and growth potentials.

Segments with high growth visibility such as the new energy vehicle (NEV), artificial

intelligence (AI) and smart manufacturing deserve more attention. As for traditional

industries, investors may consider the paper industry which should benefit from the

waste paper import ban, rising raw material prices...…… (Click for details)

(3) TMT: Weekly Update – Remain Bullish about Sector Opportunities

The TMT sector rose 1.2% last week (vs. CSI300 Index: -0.12%; ChiNext Index: +1.1%).

Our top call of the Artificial Intelligence (AI) sector continued to outperform. We

believe the sector corrections last Thursday and Friday have effectively reduced the

risks involved and a rebound is expected. Investors may consider investment

opportunities from the AI, consumer finance, automated driving and Internet of

Vehicles.…… (Click for details)

(4) Brokerage: Monthly Update – August Net Profits Up 2.65% MoM

According to the financial data announced by the 29 listed brokers, total operating

revenue dropped 0.5% MoM to RMB16.1bn in Aug 2017 while net profit rose 0.7%

MoM to RMB6.5bn. Net assets as of end-Aug increased 0.6% MoM to RMB1,190.8bn.

Performance was mixed across the industry.…… (Click for details)

(5) Pharmaceuticals: Weekly Update – Investment Portfolios Outperforming

Benchmark Index

The pharmaceutical industry climbed 1.43% last week, outperforming the

benchmark index. Our investment portfolios also outgrew the industry index. The

Aggressive and Prudent Portfolios gained 3.5% and 3.12% WoW, respectively. The

technology plays within the sector were particularly strong. We do not recommend

chasing the technology theme without careful considerations.….… (Click for details)

(6) Changchun High & New Technology (000661.CH): Investing in Rani to Tap the Oral

Biotherapeutics Technologies

Changchun High & New Technology (CHNT) announced that it would subscribe for

889,680 preferential shares of the Rani Therapeutics (RT) at US$16.86 per share for

US$15m, representing 1.27% of the total equity of RT. Upon completion, CHNT will

obtain the assessment report and preferential purchase right of RT’s oral growth

hormones, several patents owned or controlled by RT, and RT’s proprietary

technologies for oral growth hormones.....….… (Click for details)

银河证券重点报告：

策略：盈利下滑与通胀回升的组

合–姚玭 (报告)

中小市值：新能源汽车长效支持政

策正在研究–王绪丽 (报告)

计算机：风险得到释放，继续看好

计算机板块–钱劲宇 (报告)

军工：短期催化因素不明确，中

长期继续推荐绩优成长军工股–

鞠厚林 (报告)

证券：业绩小幅回升，券商 8 月净

利环比增长 2.65%–武平平 (报告)

煤炭：动力煤价淡季不淡，建议

关注优质焦煤焦炭标 – 潘玮 (报

告)

医药：两个组合均明显跑赢板块 –

李平祝 (报告)

长春高新 (000661.CH) ：参股美

国 Rani 公司，卡位生长激素口服

给药技术– 李平祝 (报告)

CGIS Research

Johnson Cheung, 张富绅

(852) 3698 6275

[email protected]

Amy Tam, 谭韵芳

(852) 3698 6852

[email protected]

Patrick Leung, 梁秉仁

(852) 3698 6395

[email protected]

mailto:[email protected]



http://download.chinastock.com.hk/report/2017Sept/Galaxy_170913_A-Ideas.pdf



September 13, 2017

CGS A-Share Research Key Ideas:

Strategy: Weekly Update – Investment Strategy in an Environment with Declining Earnings and Rising Inflation

- Q1-Q3 Market Review. The A-share market trended up gradually in the first three quarters, with obvious sector

rotation. Quality large caps outperformed in the first half of the year, the financial plays from late April to August, the

yclicals since June this year and the ChiNext since August this year. So which sector will shine in Q4?

- Uncertainties Expected in Q4. It is confirmed that the 19th

Party Congress will be held in Beijing on October 18. Based

on previous experiences, the market should remain relatively stable ahead of the meeting and structural

opportunities should exist. There could be greater uncertainties after the meeting.

- Q4 Market Outlook. The capacity cuts and environmental inspections will further support the price hikes in upstream

industries. In addition, owing to slower demand growth, downstream industries have smaller bargaining power.

Therefore, the price hikes in upstream industries will narrow the profit margins of mid- and downstream industries.

Based on the economic and inflation data in August, we would probably see a slower growth in demand and higher

inflation in Q4, which is not a favourable scenario for the equity market and cyclical stocks.

- Implications. If the price increases in upstream industries are gradually transferred to the mid- and downstream

industries, the country will adjust its policies to cope with the rising inflation. First of all, it will tighten its monetary

policies and slow down capacity cuts. The price increases in upstream industries led solely by supply contraction

should be unsustainable.

- Recommendations. Based on the above logic, we believe cyclical stocks would probably be suppressed by slower

demand and rising inflation. We are also less convinced about the rebound of growth stocks due to their weakening

earnings and high valuation. In Q4, we are more positive about the potential of quality consumer stocks which have

higher safety margin and earnings visibility, especially staples leaders and financial stocks. Opportunities also exist in

some individual stocks on the ChiNext.

(…… click here for Chinese original)

Quantitative Analysis: Funds Reducing Equity Exposure

- Funds have decreased their equity weighting last week: Our survey of funds on Sept 11 shows that the average stock

exposure for the open-end funds has decreased to 79.4% from the previous week’s 80.6%. In particular, the stock

exposure of equity funds dropped by 133bps to 81.7%.

- There were 211 funds with stock exposure of more than 90%. This was 37% of the sample. The number of funds with

exposure below 70% was 174, or 30% of the sample. Compared with the previous week, the number with higher stock

exposure and that with lower stock exposure remained unchanged.

Quantitative Analysis: Market Timing Strategy – Mainboard Remains Bullish; ChiNext Rally Only a Rebound

- Our A-share team maintains their bullish view as stated since May 16. The team actively adjusts its index-based

overweight portfolio based on the technical signals and has reported decent gains this year. The investment returns of

its CSI500 Overweight and CSI300 Overweight Portfolios have reached 20%.

- The team believes that the current ChiNext rally is a rebound after overselling rather than a reversal, and investors

should trade selectively in the fluctuating market.

A-Share Key Ideas - 2



September 13, 2017

SME: Weekly Update – Paper Industry to Offer Opportunities

- We recommend industry leaders with attractive valuations and growth potentials. Segments with high growth

visibility such as the new energy vehicle (NEV), artificial intelligence (AI) and smart manufacturing deserve more

attention. As for traditional industries, investors may consider the paper industry which should benefit from the waste

paper import ban, rising raw material prices and stricter environmental policies.

- Manufacturing upgrade: invest along the industrial line of progressive automation. Given the (i) robust demand of

industries which have high requirements on precision such as 3C, lithium-ion battery equipment and robotics; (ii)

huge development potential of smart storage and logistic industries; and (iii) promising development of industrial

software and system solutions, we recommend investors to closely monitor core parts suppliers and comprehensive

solution providers with advanced technologies. Our top picks include Noblelift Equipment JSC (603611.CH), Yizumi

Precision Machinery (300415.CH), Zhengye Technology (300410.CH) and Megmeet Electrical (002851.CH).

- New Energy Vehicle: We recommend investing in selected upstream raw material segments with better competitive

landscapes, such as NMC materials, copper foils for lithium-ion battery and aluminum plastic film segments. We also

like domestic producers of lithium-ion battery equipment and lithium-ion battery recycle companies. Our key

recommendations include Zhengye Technology (300410.CH), Yizumi Precision Machinery (300415.CH), Ningbo

Shanshan (600884.CH) and Eve Energy (300014.CH).

- Flexible Electronics: Display devices, sensors, circuit boards and batteries are the four major areas of flexible

electronics. According to the latest research, the market size of the global printed and flexible electronics could reach

US$330bn by 2027, of which flexible display devices will be a key subsegment. By 2024, shipments of flexible displays

will achieve a CAGR of 43.7%. Investors may follow the development of flexible electronics in flexible display and

printing. Our key recommendations include Shengyi Technology (600183.CH) and Holitech Technology (002217.CH).

- Investment Portfolio. Our short-term investment portfolio features Ningbo Shanshan (600884.CH), Eve Energy

(300014.CH), Nuode Investment (600110.CH) and Anhui Zotye Automobile (000980.CH). For long-term investment

portfolio, we include Zhengye Technology (300410.CH), Noblelift Equipment JSC (603611.CH), Megmeet Electrical

(002851.CH), Yizumi Precision Machinery (300415.CH) and Guangdong Ellington Electronics Technology (603328.CH).

Our short-term and long-term investment portfolios reported returns of 0.75% and 0.35% last week, outperforming

the CSI 300’s decline of 0.02%.





September 13, 2017

TMT: Weekly Update – Remain Bullish about Sector Opportunities

- The TMT sector rose 1.2% last week (vs. CSI300 Index: -0.12%; ChiNext Index: +1.1%). Our top call of the Artificial

Intelligence (AI) sector continued to outperform. We believe the sector corrections last Thursday and Friday have

effectively reduced the risks involved and a rebound is expected. Investors may consider investment opportunities

from the AI, consumer finance, automated driving and Internet of Vehicles.

- We maintain our investment recommendations for the sector this week.

Company Stock Code Rationale

Aggressive Portfolio

NavInfo Co 002405.CH The only commercial map leader listed on the A-share market; deeply-rooted in the

automated driving and AI businesses; faster earnings growth expected

Hanwang Technology 002362.CH Face recognition technology; closely connected to the AI industry; rapid earnings growth

Hangzhou Century 300078.CH Leader in “AI+Healthcare”; huge growth potential

Yonyou Network

Technology 600588.CH

Rapid development in cloud business; earnings of conventional business grow steadily;

faster earnings growth expected

Suzhou Keda Technology 603660.CH Penetrating into video surveillance business; booming smart defence industry to boost

earnings growth

Prudent Portfolio

Shanghai 2345 Network 002195.CH Leader in consumer finance; benefit from the robust industry climate; rapid growth in

earnings; cheap valuation

Fujian Newland Computer 000997.CH Smooth development in consumer finance; interim results beat; low valuation

Hithink RoyalFlush

Information Network 300033.CH Leader in Internet finance; application for “AI+Finance”; reasonable valuation

Glodon Co 002410.CH Leader in construction software; innovative monetization model should boost cash flow

Beijing SuperMap Software 300036.CH Outstanding competitive advantage in GIS platform; application expanding into more

industries





September 13, 2017

Military & Defence: Weekly Update – Catalysts to Support Share Prices in the Short Term; Recommend Growth Stocks

with Strong Earnings for Medium to Long-term Investments

- Over the past two weeks, our Aggressive and Prudent Portfolio reported losses of 1.96% and 2.04%, respectively,

compared to the 0.97% gain of the CSI Military Industry Index. The CSI Military Industry Index rose 0.64% last week,

and the civil-military plays were particularly strong. Despite the decent performance of the three civil-military stocks,

our Aggressive Portfolio was dragged by Lingyun Industrial which was down 4.15% las week. Nonetheless, we

maintain the counter in our portfolio given its attractive valuation. Traditional white-horse stocks had fair

performance last week but long-term outlook remains promising.

- AVIC Electromechanical Systems issued convertible bonds to raise RMB2.1bn. We are concerned about the potential

share dilution effect. We remove AVIC Electromechanical Systems (002013.CH) from our Prudent Portfolio this week

and replace it with AECC Aviation Power (600893.CH), given (i) the higher subscription price of AECC Aviation Power’s

private placement; and (ii) potential growth in aircraft engines.

- In the absence of strong catalysts, we expect the military stocks to remain range bound for some time. From a

longer-term prospective, the civil-military integration and research institute reform should boost the valuation of

military stocks. In addition, with increasing orders and faster implementation of reforms, it is expected that earnings

of military companies would improve going forward.

- Considering the stage of the development and features of the military & defence sector, as well as the valuation and

growth potential, we expect the military stocks to oscillate higher in the near term. We recommend Lingyun Industrial

(600480.CH), Zhonghang Heibao (600760.CH), Uroica Precision (300099.CH), Anhui Sun-Create Electronics

(600990.CH), AECC Aviation Power (600893.CH) and Guizhou Space Appliance (002025.CH).

Aggressive Portfolio: Zhonghang Heibao (600760.CH), Lingyun Industrial (600480.CH), Quanxin Cable Technology

(300447.CH), Uroica Precision Information Engineering (300099.CH) and Beijing Highlander Digital Technology

(300065.CH).

Prudent Portfolio: Guizhou Space Appliance (002025.CH), AVIC Jonhon OptronicTechnology (002179.CH), AVIC

Helicopter (600038.CH), Anhui Sun-Create Electronics (600990.CH) and AECC Aviation Power (600893.CH).


Brokerage: Monthly Update – August Net Profits Up 2.65% MoM

- According to the financial data announced by the 29 listed brokers, total operating revenue dropped 0.5% MoM to

RMB16.1bn in Aug 2017 while net profit rose 0.7% MoM to RMB6.5bn. Net assets as of end-Aug increased 0.6% MoM

to RMB1,190.8bn. Performance was mixed across the industry. Pacific Securities (601099.CH) returned to the black

with net profit up 199% MoM. Net profits of Dongxing Securities (601198.CH), Everbright Securities (601788.CH),

Guoyuan Securities (000728.CH), Shanxi Securities (002500.CH) and Orient Securities (600958.CH) surged 102%,

77.3%, 62.9%, 55.6% and 53.1% MoM, respectively. Net profits of Northeast Securities (000686.CH) and Southwest

Securities (600369.CH) fell 69.7% and 78.1% MoM, respectively.

- The total turnover of the Shanghai and Shenzhen stock markets increased 20.7% MoM to RMB11.7trn in August. Daily

average turnover rose 10.2% MoM to RMB510.1bn. In terms of investment banking business, the market size of

equity financing increased 10.2% MoM to RMB111.7bn, while that of bond financing decreased 9.1% MoM to

RMB233.2bn.

- The sector’s valuation of o 1.9x PBR (with large brokers at 1.6x PBR) is not expensive, given the rebound in the

markets and increasing turnover. In addition, since the strict financial regulations are likely to extend, we remain

positive about the investment opportunities of large-sized brokers with low valuations. We recommend CITIC

Securities (600030.CH), GF Securities (000776.CH) and Huatai Securities (601688.CH).

- Risks: Market fluctuations; slower-than-expected industry transformation.





September 13, 2017

Coal: Weekly Update – Recommend Quality Coking Coal Stocks

- Last week, thermal coal prices climbed slightly WoW, with prices rising to RMB417 per tonne at Wuhai, Inner

Mongolia. International thermal coal prices had mixed performance last week. Domestic coking coal and PCI coal

prices increased last week, with coking coal price at Liulin, Shanxi rising to around RMB950/t. The freight rates for

shipping coal increased while inventory levels at different transit points had mixed performance last week.

- The thermal coal prices at ports have been substantially lower than the production areas. Coal traders have less

incentive to sell their coal and are waiting for better market prices. Certain power plants in Southern China did not

replenish their inventory on a large scale due to maintenance and the low season. Since factors that suppress coal

supply such as stricter policies on safety production and environment protection, as well as measures such as coal

production quotas are unlikely to be eliminated in the near term, the thermal coal market should maintain a relatively

tight supply and downside for thermal coal prices is limited. Stepping into September, the tight supply may be eased

with more capacities from new constructions. The expected rainfalls in late September should also reduce the

country's reliance on coal-fired power plants and downstream demand would also decline. We expect the coal

inventory at ports to rebound with higher supply and imports. The thermal coal prices may see an inverted V-shape

pattern this month. Investors may consider Shaanxi Coal (601225.CH), Lu'an Environmental Energy Development

(601699.CH), Yanzhou Coal Mining (600188.CH) and China Shenhua (601088.CH).


Pharmaceuticals: Weekly Update – Investment Portfolios Outperforming Benchmark Index

- The pharmaceutical industry climbed 1.43% last week, outperforming the benchmark index. Our investment

portfolios also outgrew the industry index. The Aggressive and Prudent Portfolios gained 3.5% and 3.12% WoW,

respectively. The technology plays within the sector were particularly strong. However, we do not recommend chasing

the technology concept and theme without careful considerations. We reiterate our view that industry leaders should

benefit from future industry investments and remain bullish about their investment opportunities. We recommend

Lepu Medical Technology (300003.CH), Changchun High & New Technology (000661.CH), Hengrui Medicine

(600276.CH), Aier Eye Hospital (300015.CH), Walvax Biotechnology (300142.CH), Jointown Pharmaceutical

(600998.CH), Huadong Medicine (000963.CH), Fosun Pharmaceutical (600196.CH), Salubris Pharmaceuticals

(002294.CH), Livzon Pharmaceutical (000513.CH), Shanghai Pharmaceuticals, and Hualan Biological Engineering

(002007.CH).

- Based on interim results, we adjust our investment portfolios. For the Aggressive Portfolio, we added Nanjing

King-Friend Biochemical Pharmaceutical (603707.CH) considering its strong earnings growth, the export of its drug

preparations and the blueprint of its drug preparation in China. We added Changchun High & New Technology to our

Prudent Portfolio given the rapid growth of its growth hormone products and the competitive advantage of its

products.





September 13, 2017

Changchun High & New Technology (000661.CH): Investing in Rani to Tap the Oral Biotherapeutics Technologies

- Changchun High & New Technology (CHNT) announced that it would subscribe for 889,680 preferential shares of the

US Rani Therapeutics (RT) at US$16.86 per share for US$15m, representing 1.27% of the total equity of RT. According

to the agreement, the Company will obtain 10% of the warrants linked to RT’s ordinary shares if it completes the

remittance by October 24, 2017 (inclusive). A 1:1 conversion suggests that the Company will have 978,678 preference

shares, or a 1.4% stake of the RT. Upon completion, CHNT will obtain the assessment report and preferential purchase

right of RT’s oral growth hormones, several patents owned or controlled by RT, and RT’s proprietary technologies for

oral growth hormones. CHNT can also conduct systematic research based on the formulas of oral growth hormones.

In addition, CHNT will be the preferred sole distributor of RT’s oral growth hormone products in China when all other

things being equal.

- RT mainly engages in the research and production of oral biotherapeutics. Its financing projects have been supported

by big names such as Google Venture, Novartis and AstraZeneca, which owned 2.15%, 1.14% and 1.01% of its shares

respectively as of end-2016. Since most of the macromolecular biological drugs would be easily dissolved by gastric

acid, enzymes and hepatic circulation, such drugs are usually prepared in the form of injections, which could have the

treatment compliance. Therefore, the industry has been developing oral biotherapeutics technologies. RT, a

subsidiary of InCube Labs, is an innovative medical technology company engaged in the R&D and commercialization

of robotic pills. It is currently developing a capsule encompassing biological drug injections, of which the drug content

could be injected directly into the patient after the capsule is dissolved in the digestive system. The technology could

be applied on all macro-molecular biological drugs including protein, peptides and monoclonal antibodies, and should

have a promising market outlook as it could be used to treat chronic diseases such as diabetes, rheumatoid arthritis

and traumas. Clinical research proves that the bioavailability of RT’s oral therapeutics technologies exceeds 50%.

- CHNT’s investment in RT will provide the former with the opportunities to develop oral growth hormone projects. If

successful, CHNT will have the sole distribution right of RT’s oral growth hormone products in China. We believe oral

drugs will substantially improve the treatment compliance of non-fatal disease and help with product penetration,

thus reinforcing CHNT’s leading position in China’s growth hormone market. We expect the Company’s growth

hormone products to maintain strong growth based on the following factors: (i) huge market potential: Growth

hormone is the only drug for primordial dwarfism. There are currently over 7m cases of primordial dwarfism in China,

but the treatment rate is less than 2%, suggesting a tremendous market potential; (ii) most of the growth hormones

are prescribed outside the public hospital system and will not affect the drug sales percentage; (iii) the market share

of its injection products remains solid; (iv) its long-term dosages to complete phase IV clinical trial as scheduled,

further reinforcing its market leading position. The Company’s long-term dosages could achieve revenue of around

RMB150m in 2017. Upon the completion of the phase IV clinical trial, the long-term dosage products will be ready for

academic promotion and sales in the UK and US markets, which will help to boost the Company’s earnings; (v)

building a sales team and establishing a complete consultation system for children’s physical growth to expand market

coverage.

- As a biological drug leader in China, CHNT should be able to maintain a rapid earnings growth for its genetic

engineering drugs business, considering (i) its new growth hormone products which could enhance its

competitiveness in the domestic market; (ii) its advantages in the distribution channel of its injection products; (ii) its

exclusive long‐term dosage products; (iii) faster growth in products sales following the completion of phase IV clinical

trial and distribution channel expansion. Its recombinant human FSH products could fill the current gap in the

domestic market and achieve import substitution. The vaccine business is about to enter new development stage,

with its varicella vaccine products expanding into the international markets and rabies vaccine products on track to an

earnings turnaround with technology and product upgrades. Its traditional Chinese Medicine (TCM) business could

probably achieve small growth despite adverse industry policies. Property business should maintain stable growth.

We estimate its 2017‐19E EPS at RMB3.76/ RMB4.92/ RMB6.35. The counter is currently trading at 2017E PER of 37x,

2018E PER of 28x and 2019E PER of 22x. Maintain RECOMMEND.

- Risks: Slower-than-expected or failure in the R&D of the injection capsule product; technology risk.





September 13, 2017

Reports Recently Distributed by CGS:

Military & Defence – Weekly Update: Catalysts to Boost Short-term Performance; Recommend Growth Stocks

with Strong Earnings for Medium to Long-term Investment (Ju Houlin)

Strategy – Tracking A-share Valuations: Sector Comparison and Allocation (Yao Pin)

Yifan Pharmaceutical (002019.CH) – Interim Results Beat; Q3 Growth to Accelerate (Li Pingzhu)

Lepu Medical Technology (300003.CH) – H1 Growth In-line; Remain Bullish on Stock Performance (Li

Pingzhu)

Coal – Weekly Update: Continue to Recommend Leading Coking Coal Players on Strong Prices (Pan Wei)

Small & Mid Caps – Investment Opportunities from Manufacturing Upgrade (Wang Xuli)

Small & Mid Caps – Weekly Update: Pick Smart Equipment Leaders in AI Industry (Wang Xuli)

Jointo Energy (000600.CH) – Q3 Earnings to See Substantial Improvement (Zhou Ran)

Fixed Income – Weekly Update: Banks Face Mounting Capital Pressure (Liu Dan)

Aier Eye Hospital (300015.CH) – Interim Results Review: Growth Accelerated as Various Businesses Began

Contribution (Li Pingzhu)

Anhui Sun-Create Electronics (600990.CH) – Bottoming-out in H1; Remain Positive about Full-year Growth (Ju

Houlin)

Fixed Income – Weekly Update: Monetary Policy to Remain Prudent and Neutral on Fair Inflation Expectations

(Liu Dan)

Macro – International Economy Weekly: US Non-Farm Payrolls Beat Expectations (Zhou Shiyi)

Macro – International Economy Weekly: US Home Sales Dropped while Prices Climbed (Zhou Shiyi)

Pharmaceuticals – Weekly Update: Recent Addition King-Friend Biochemical Pharmaceutical Continues to

Outperform (Li Pingzhu)

TMT – Weekly Update: Share Prices Dropped Slightly Last Week; Sector Rebound Expected (Zhou Ying)


Disclaimer and Risk Statement

This document (including any information attached) is issued by China Galaxy International Securities (Hong Kong) Co., Ltd. (“Galaxy International Securities”), one of the subsidiaries of the China Galaxy International Financial Holdings Limited (“China Galaxy International”), to the institutional clients and it does not aim at or intend to violate any laws and regulations of any regions, countries, cities or other jurisdiction.

Notwithstanding this document is based on information and/or reports obtained from the research team of China Galaxy Securities Co., Ltd. (6881.HK; 601881.CH), a direct and/or indirect holding company of the group of companies under China Galaxy International, being information sources believed to be reliable, no representation or warranty (expressly or implied) is made as to their accuracy, correctness and/or completeness. All information, opinions, estimates and/or ratings contained in this document are for the sole purpose of general reference and subject to change without notice and shall not be construed as an offer, invitation or solicitation to buy or sell any securities of the company(ies) referred to herein. The analysis herein does not take into account the particular investment objectives, financial situation or risk tolerance level of any particular clients and does not constitute a personal investment recommendation to anyone. The prices of securities may move up or down, and past performance should not be regarded as an indication of future performance. The recipient of this document should understand and comprehend the investment objectives and its related risks, and where necessary consult their own independent financial advisers prior to any investment decision.

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