1

Yum Cha 飲 茶 August 28, 2014

TALKING POINTS

CHART OF THE DAY—BACK TO PLAN A; BOOSTING INFRASTRUCTURE

Analyst: John Mulcahy, Managing Director

Source: Bloomberg

INDICES Closing DoD%

Hang Seng Index 24,918.8 (0.6)

HSCEI 11,074.3 (0.4)

Shanghai COMP 2,209.5 0.1

Shenzhen COMP 1,209.2 0.6

Gold 1,284.2 0.1

BDIY 1,063.0 (0.7)

Crude Oil, WTI(US$/BBL) 93.7 (0.1)

Crude Oil, BRENT(US$/BBL) 102.7 0.2

HIBOR, 3-M 0.4 (0.6)

SHIBOR, 3-M 4.7 (0.0)

RMB/USD 6.1 (0.2)

DAILY NOTES FOR THIS WEEK

Aug 28 Leading Index

Aug 31 Manufacturing PMI

Aug 31 HSBC Manufacturing PMI

ANTON OILFIELD SERVICES GROUP [3337.HK] - Anton’s 1H14 core net profit came in at

only RMB27m, plummeting by 82% year-on-year (YoY), 73% below our estimate. The operating

deleveraging is more severe than expected, with EBIT margin in 1H14 dropping 5.7ppt to 15.2%

from 20.9% in 1H13. We believe weak domestic demand will continue in the foreseeable future,

which will continue to put significant pressure on Anton. We have trimmed our 2014E/2015E

earnings forecasts by 33%. We cut our target price (TP) to HK$2.60 from HK$3.90 (unchanged

20x 2014E PER, average multiple since listing). Reiterate SELL.

MODERN BEAUTY SALON HOLDINGS [0919.HK; HK$0.59; Not Rated] - We recently visited

this micro-cap, a market leader in the Hong Kong beauty sector, offering high-quality facial and

body treatments with natural ingredients. The company operates 82 stores or a total of 214

service points including Hong Kong, China, Malaysia Singapore, and Taiwan, with 500,000

customers engaged in their beauty services, including 350,000 in Hong Kong. The company has

expansion ambitions, and aims to add 50 stores in China, mainly in Tier 2 & 3 cities, in the next

two years, from 10 now. It has also entered a joint venture agreement with the Australian

manufacturer and distributor of Advanced Natural®, a supplier to Modern, and which the parties

aim to list in due course. Modern has recovered from the crisis in Hong Kong’s beauty care

sector in 2012, and is restoring operating margins after a poor year in FY 2013.

China’s macro picture is beginning to look like the pattern of the previous government, which

repeatedly used public expenditure to boost growth when manufacturing or services slowed.

The monetary stimulus provided during Q2 has come to an end, with the People’s Bank of

China reluctant to build on the existing credit problem, and with the real estate sector sluggish

at best, the remaining avenue for maintaining the growth target (“about” 7.5% GDP expansion)

is infrastructure. Increased rail investment is the main impetus behind the current infrastructure

boost, and there have been various less direct measures including tax reductions for small

companies and incentives for banks to lend to small & medium enterprises (SMEs) and to rural

borrowers. As the chart shows, growth in manufacturing and real investment have slowed this

year, and after reducing the pace of infrastructure investment in 2013 the central government

has again been using this tool. Data due in the next few days is likely to show that manufactur-

ing is slowing again, and the property market has been weakening for some time.

Source: Bloomberg

2

Anton Oilfield Services Group [3337.HK]

Anton’s 1H14 core net profit came in at only RMB27m, plummeting by 82% year-on-year (YoY), 73% below our estimate. The operating deleveraging is more se-vere than expected, with EBIT margin in 1H14 dropping 5.7ppt to 15.2% from 20.9% in 1H13. Both net finance expenses (+317% YoY) and the effective tax rate (57%) are higher than our expectation. We believe weak domestic demand will continue in the foreseeable future, which will continue to put significant pres-sure on Anton. We have trimmed our 2014E/2015E earnings forecasts by 33%. We cut our target price (TP) to HK$2.60 from HK$3.90 (unchanged 20x 2014E PER, average multiple since listing). Reiterate SELL.

1H14 Results highlights. Total revenue increased by 5% YoY to

RMB1,112m. Revenue from China (72% of total) dropped 4% YoY as a re-sult of the general weakness in the domestic market. Overseas revenue jumped 42% YoY, helped by 41% YoY growth in the Middle East revenue. EBIT margin in 1H14 dropped 5.7ppt YoY to 15.2%. While pre-tax profit de-clined by 64% YoY, income tax increased by 15% YoY (effective tax rate therefore reached 57%). This resulted in an 82% YoY decline in core net profit. As of end-June, trade receivables increased by 19% to RMB1.55bn from RMB1.30bn as of Dec 2013. Anton reported RMB434m operating cash outflow in 1H14, which is quite significant in our view. As of end-June, net debt/equity ratio reached 57% (up from 24% as of end-2013).

Weakness in Sichuan and Ordos Basin; Steady growth in Tarim Basin.

Revenue from Tarim Basin increased by 15% YoY to RMB360m (45% of China total) as Anton introduced new products lines there. However, revenue from Sichuan dropped 62% YoY to only RMB45m, due to the change in Chi-na major oil companies’ operating plans. In Ordos Basin, revenue increased by only 7.5% YoY (significant slowdown from 37% YoY growth in 2H13) as a result of reduced demand for fracking services.

Upside risks: (1) Strong order flow; (2) faster-than-expected shale gas de-

velopment; (3) potential increase in shareholding by Schlumberger.

Wayne Fung, CFA —Analyst

(852) 3698-6319

waynefung@chinastock.com.hk

John Mulcahy—Head of Research

(852) 3698-6889

johnmul@chinastock.com.hk

Oilfield Services Sector

Operating deleverage; Tough time likely to last; Reiterate SELL

SELL (Unchanged)

Close: HK$3.98 (Aug 27, 2014)

Target Price: HK$2.60 (-35%)

Share Price Performance

Market Cap US$1,136m

Shares Outstanding 2,192m

Auditor PWC

Free Float 49.4%

52W range HK$3.91-6.20

3M average daily T/O US$4.3m

Major Shareholding LUO Lin (30.9%)

(Chairman and CEO)

Schlumberger

(19.7%)

August 28, 2014

Results review

1H13 1H14 Chg (YoY)

Revenue 1,057 1,112 5.2%

Other gains 12 3 -76.4%

Operating expenses (835) (946) 13.3%

EBIT 234 169 -27.8%

EBITDA 294 261 -11.4%

Interest income 1 11 1412.1%

Finance expenses (22) (100) 355.3%

Share of profit/(loss) of JCE (6) (5) -11.2%

Impairment loss of LT investment in JCE 0 0 n/a

Pretax profit 207 75 -63.8%

Income tax exp (37) (43) 15.3%

After tax profit 170 32 -81.2%

NI (5) (5) -14.7%

Net profit 164 27 -83.4%

Recurring net profit 151 27 -81.9%

Sources: Company, CGIHK Research

3

Figure 1: Revenue Breakdown by Region (1H14)

Sources: Company, CGIHK Research

North China29%

Northwest China32%

Northeast China and

others7%

Southwest China

4%

The Middle East21%

Central Asia3%

Africa1%

America3%

0

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Dec-07

Mar-08

Jun-08

Oct-08

Jan-09

Apr-09

Jul-09

Nov-09

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Mar-11

Jun-11

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Oct-12

Feb-13

May-13

Aug-13

Nov-13

Mar-14

Jun-14

HKD

37x

29x

21x

13x

5x

Figure 2: PER Band

Sources: Bloomberg, CGIHK Research estimates

4

Figure 3: Segment Forecasts

Sources: Company, CGIHK Research estimates

(RMB m) 2008 2009 2010 2011 2012 2013 2014E 2015E

Down-hole operation

Revenue 112 100 344 570 857 1,082 1,162 1,292

Operating cost (47) (62) (205) (312) (386) (494) (535) (594)

EBITDA 64 38 139 259 471 588 628 698

EBITDA margin 57.7% 37.8% 40.4% 45.4% 55.0% 54.4% 54.0% 54.0%

Well completion

Revenue 241 214 325 320 458 548 671 738

Operating cost (87) (122) (185) (210) (312) (350) (470) (517)

EBITDA 154 92 140 110 146 198 201 222

EBITDA margin 63.9% 42.8% 43.1% 34.3% 31.8% 36.1% 30.0% 30.0%

Drilling technology

Revenue 70 88 97 198 433 589 771 893

Operating cost (43) (66) (63) (152) (325) (453) (593) (687)

EBITDA 28 22 34 45 108 136 177 205

EBITDA margin 39.3% 25.4% 35.3% 23.0% 24.9% 23.1% 23.0% 23.0%

Tubular services

Revenue 341 288 184 171 257 315 313 359

Operating cost (249) (237) (125) (131) (151) (165) (163) (187)

EBITDA 92 51 59 40 105 150 150 172

EBITDA margin 26.9% 17.8% 32.3% 23.5% 41.0% 47.5% 48.0% 48.0%

5

Earnings Projection

Sources: Company, CGIHK Research estimates

(RMB m) 2012 2013 2014E 2015E (RMB m) 2012 2013 2014E 2015E

Income statement (Y/E Dec) Cash flow statement (Y/E Dec)

Revenue 2,005 2,534 2,918 3,282 Pretax profit 367 490 300 343

Other gains 11 20 10 11 Depreciation 73 122 173 197

Operating expenses (1,617) (1,981) (2,458) (2,772) Amortization 21 16 16 16

EBIT 398 572 469 521 Share of results of JCE 0 10 0 (4)

D&A (93) (138) (189) (214) Net exchange loss 2 3 0 0

EBITDA 491 710 658 735 Change in working capital (133) (191) (76) (198)

Interest income 2 1 19 5 Income tax paid (49) (71) (66) (62)

Finance expenses (33) (74) (188) (187) Others 69 (0) 0 (0)

Share of profit/(loss) of JCE 0 (10) 0 4 Operating cash flow 350 379 348 293

Impairment loss of LT investment in JCE 0 0 0 0

Pretax profit 367 490 300 343 Purchase/(disposal) of PP&E (230) (813) (750) (350)

Income tax exp (50) (87) (66) (62) Purchase of land use right (21) 0 0 0

After tax profit 318 403 234 282 Purchase of intangible assets (22) (23) 0 0

NI (15) (21) (11) (11) Acquisition of subsidiaries 3 0 0 0

Net profit 303 383 224 270 Investment in JCE 0 (22) (30) (30)

Recurring net profit 303 369 224 270 Dividend received from JCE 0 0 0 0

Reported EPS (RMB) 0.14 0.18 0.10 0.13 Others (3) 49 0 0

Recurring EPS (RMB) 0.14 0.17 0.10 0.13 Investing cash flow (273) (809) (780) (380)

DPS (RMB) 0.05 0.06 0.03 0.04

Proceed from/(repayment of) borrowings 23 1,807 80 0

Proceed from equity/(share repurchase) 0 (18) 0 0

(RMB m) 2012 2013 2014E 2015E Dividend paid (47) (113) (120) (67)

Balance sheet (as of end-Dec) Others 13 18 0 0

Non current assets Financing cash flow (11) 1,695 (40) (67)

Property, plant and equipment 955 1,602 2,179 2,331

Land use rights 29 22 22 22 Net change in cash 65 1,265 (472) (154)

Intangible assets 371 375 359 343

Investment in JCE 4 17 47 81

Others 20 85 85 85 2012 2013 2014E 2015E

Total non current assets 1,379 2,101 2,692 2,863 Valuation

PER (recurring earnings) (x) 23 19 31 25

Current assets Dividend yield 1.4% 1.8% 1.0% 1.2%

Inventories 487 541 519 643 PBR (x) 3.5 3.0 2.9 2.6

Trade receivables 919 1,307 1,219 1,622 EV/EBITDA (x) 19 13 14 13

Note receivables 29 25 25 25 Growth rate

Prepayments and other receivables 240 191 334 257 Revenue 59% 26% 15% 12%

Restricted bank deposits 16 32 32 32 EBIT 128% 44% -18% 11%

Term deposits 0 0 0 0 EBITDA 110% 44% -7% 12%

Cash 523 1,770 1,298 1,144 Recurring net profit 177% 22% -39% 21%

Others 0 0 0 0 Recurring EPS 175% 20% -40% 21%

Total current assets 2,214 3,867 3,428 3,724 Operating ratios

EBIT margin 20% 23% 16% 16%

Total assets 3,593 5,968 6,120 6,586 EBITDA margin 25% 28% 23% 22%

Recurring net margin 15% 15% 8% 8%

Asset turnover (x) 1.7 1.5 1.2 1.2

Non current liabilities Adjusted ROE 17% 17% 10% 11%

Long term bonds 299 1,983 1,983 1,983 Adjusted ROA 10% 8% 4% 4%

Other long term payables 3 0 0 0 Interest coverage (x) 16.0 9.8 3.9 4.0

Deferred income tax liabilities 1 2 2 2 Net debt/equity Net cash 24% 45% 48%

Total non current liabilities 303 1,984 1,984 1,984 Current ratio (x) 1.8 2.4 2.1 2.0

Quick ratio (x) 1.4 1.3 1.3 1.4

Current liabilities Days inventories 160 194 170 170

Short term borrowings 223 399 479 479 Days receivables 143 160 158 158

Trade payables 693 578 918 722 Days payables 192 240 240 240

Notes payables 37 125 125 125

Accruals and other payables 218 449 67 515

Current income tax liabilties 37 56 56 56

Others 0 0 0 0

Total current liabilities 1,209 1,608 1,646 1,898

Equity

Share capital 201 203 203 203

Reserves 1,771 2,080 2,183 2,387

1,972 2,283 2,386 2,590

MI 109 93 103 114

Total equity 2,081 2,375 2,490 2,704

Total equity and liabilities 3,593 5,968 6,120 6,586

BVPS (RMB) 0.92 1.06 1.11 1.20

6

FINGER ON THE PULSE—VISIT NOTE

Analyst: Samuel Chan, CFA

Modern Beauty Salon Holdings [0919.HK; HK$0.59; Not Rated] - Financial Health Back On Track, New Expansion Plan In Sight

Market Cap: US$67m; Free Float: 25.9%

The Company. Listed in 2006, Modern Beauty is a market leader

in the Hong Kong beauty sector, offering high-quality facial and

body treatments with natural ingredients. Within Asia, the company

operates 82 stores or a total of 214 service points including Hong

Kong, China, Malaysia Singapore, and Taiwan, with 500,000

customers engaged in their beauty services, including 350,000 in

Hong Kong. The company also carries several self-owned brands

including Advanced Natural®, be®, p.e.n® and FERRECARE®.

Emphasis on Recurring Revenue. Modern Beauty has a long

tradition promoting loyalty and repeat customers who generate

consistent recurring revenue, as evidenced by the fact that 73% of

its revenue is from beauty and facial treatment, as opposed to one-

off treatments. During the year to 31 March 2014 sales of new

prepaid beauty packages increased 1% year-on-year (YoY) to

HK$772.2m, showing signs of stability after the “DR Beauty Centre

incident” in late 2012, in which a patient/client died under

treatment. The tragedy caused major disruption to the Hong Kong

beauty care market.

Acquiring Upstream Brand. In July Modern Beauty acquired a

49% stake in the manufacturing and distribution rights of Advanced

Natural®, an Australian beauty care brand which has been

supplying facial products to Modern Beauty for years. Advanced

Natural® has a broad distribution network including Australia,

Europe, Middle East, Southeast Asia and China, and Modern

Beauty aims to leverage its brand reputation and to increase the

product’s penetration in Hong Kong and China. The acquisition

was structured in favourable terms for Modern Beauty: Modern

Beauty will own 49% of the newly formed joint venture (JV) but the

acquisition price will not be paid until three years from now when

certain after-tax profit targets are fulfilled. The intention is to list the

JV separately, according to the announcement.

China Expansion. To capture the beauty care opportunity in

China’s fast-growing middle class, Modern Beauty plans to

aggressively expand its network on the mainland. From

discussions with the company’s senior management we have

learned that the company intends modifying its China strategy,

from opening individual greenfield stores to identifying local

partners and thus broadening their network in multiples. The

company plans to focus on 2nd to 3rd tier cities with a target to

reach at least 50 stores (from 10 stores currently) in two years.

Financial Analysis. Earnings for FY13/3 were affected by the “DR

Beauty Centre incident” causing revenue and gross margin to

suffer. Earnings for FY14 rebounded strongly on margin recovery,

and we particularly like the management’s cost awareness and

August 28, 2014

Source: Bloomberg Consensus Estimates

[Modern Beauty Salon Holdings Limited]

commitment to dividend payout. At a trailing PER of 9.4x,

the valuation does not appear to be expensive compared

to its closest peer, Perfect Shape [1830.HK; Not Rated],

which is on a trailing / forward PER of 20.7x / 19.1x. Near-

term catalysts include 1) A more concrete China

expansion plan; 2) Execution on Advanced Natural®

Key Risks: 1) Regulatory change in Hong Kong’s beauty

care market; 2) Outbreak of medical incident similar to DR

scandal; 3) Weaker-than-expected domestic economy and

retail sector.

0

5

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15

20

25

0.3

0.4

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0.6

0.7

0.8

Aug13

Sep13

Oct13

Nov13

Dec13

Jan14

Feb14

Mar14

Apr14

May14

Jun14

Jul14

(HK$ million)(HK$)

Turnover (RHS) Price (LHS)

Key Financials

(in HKD m)FY2012/3 FY2012/3 FY2013/3 FY2014/4

Revenue 718.2 756.6 708.1 868.8

Gross Profit 355.3 371.8 281.6 428.1

Gross Margin % 49.5 49.1 39.8 49.3

Net Profit 89.2 82.2 (53.4) 54.8

Net Margin % 12.4 10.9 (7.5) 6.3

EPS (Basic) $0.123 $0.112 -$0.061 $0.063

ROE (%) 33.0 29.7 (25.6) 37.7

Dividend Yield (%) 7.25 12.93 5.08 7.63

PER (x) 4.79 5.27 (9.66) 9.39

PBR (x) 1.52 1.90 3.55 3.55

Capex (m) (22.4) (42.3) (88.6) (60.1)

Free cash flow (m) 170.9 119.1 (53.5) 22.5

7

Figure 1: Revenue Breakdown by Market

Source: Annual Report

Figure 3: Summary Acquisition Terms

Source: HKEX

Beauty & Facial73%

Slimming16%

Spa and Massage

6%

Skincare Products

5%

Figure 2: Products Offering

Source: Annual Report, www.advancednatural.com

Initial consideration: AUD 1.00

Conditional payment: AUD 5,110,200.00 subject to an aggregate after-tax net profit of AUD

3,661,100 for three years ending 30 June 2017

Call Option on premise: AUD 900,000

Conditional payment will be satisfied in cash within 30 days AFTER the listing of the joint venture.

Figure 4: Peers Comparison

Source: Bloobmerg estimates. Yr 0 represents last fiscal year, where Yr+1E and Yr+2E represent forward year 1 and year 2. For Modern Beauty and Perfect Shape, Yr 0

represents FY14/Mar; For Natural Beauty and Bloomage, Yr 0 represents FY13/Dec..

PBR (x)

Company Ticker Price

Market

cap

(US$m)

Yr 0 Yr+1E Yr+2E Yr 0 Yr 0 Yr+1E Yr+2E Yr 0 Yr+1E Yr+2E

MODERN BEAUTY 919 HK equity 0.59 67 9.4 n.a. n.a. 3.6 37.7 n.a. n.a. n.a. n.a. n.a. 1.7

PERFECT SHAPE PR 1830 HK equity 1.74 254 21.0 19.3 13.4 7.3 34.6 29.2 28.5 6.4 8.4 44.4 42.6

NATURAL BEAUTY 157 HK equity 0.54 139 20.7 n.a. n.a. 1.4 7.6 n.a. n.a. (51.7) n.a. n.a. 22.7

BLOOMAGE BIOTE 963 HK equity 15.66 671 39.3 25.6 18.5 7.3 20.1 18.4 21.7 2.8 65.0 38.1 (9.0)

Average 22.6 22.5 16.0 4.9 25.0 23.8 25.1 (14.2) 36.7 41.3 14.5

ROE (%)PER (x)

YTD

Perf (%)

EPS Growth (%yoy)

8

Key Financials

Source: Capital IQ

Income Statement (HKDm) FY2012/3 FY2013/3 FY2014/3 Cash Flow Statement (HKDm) FY2012/3 FY2013/3 FY2014/3

Revenue 758 708 869 Net Income 82 (53) 55

Growth yoy% 5.5% (6.6%) 22.7% Depreciation & Amort. 31 31 44

Gross Profit 372 282 428 Change in Working Capital 48 59 (14)

Growth yoy% 4.6% (24.3%) 52.0% Cash from Ops. 161 36 84

Selling General & Admin Exp. (141) (188) (190) Capital Expenditure (42) (89) (60)

Depreciation & Amortization (31) (31) (44) Sale of Property, Plant, and Equipment 0 0 0

Others Operating Expenses (63) (73) (77) Change in Investing Acitivities (6) 128 (5)

Operating Income 137 (10) 118 Cash from Investing (48) 40 (65)

Growth yoy% 12.3% n.a. n.a. Debt/ Issuance / Repayment 0 0 0

Interest Expense 0.7 1.3 1.6 Equity Issuance / Repurchase 0 0 0 Other Non-Operating Inc. (Exp.) (37) (36) (37) Total Dividends Paid (45) (73) (57)Gain (Loss) On Sale Of Assets - 0 - Others Financing Activities (41) (1) (2) Asset Writedow n 1 (14) - Cash from Financing (86) (74) (59)

Income Tax Expense (19) 5 (27) Foreign Exchange Rate Adj. 2 1 (1)

Minority Int. in Earnings - - - Net Change in Cash 29 3 (40)

Net Income 82 (53) 55

Growth yoy% (7.9%) n.a. n.a.

Balance Sheet (HKDm) FY2012/3 FY2013/3 FY2014/3 Ratios FY2012/3 FY2013/3 FY2014/3

ASSETS Profitability

Cash And Equivalents 484 481 441 Return on Assets % 8.8% (0.6%) 7.5%

Receivables 186 213 207 Return on Capital % 30.4% (2.8%) 48.4%

Inventory 13 19 23 Return on Equity % 29.7% (25.6%) 37.7%

Other Current Assets 46 97 100

Total Current Assets 730 811 771 Margin Analysis

Net Property, Plant & Equipment 76 134 149 Gross Margin % 49.1% 39.8% 49.3%

Deferred Tax Assets, LT 14 24 14 SG&A Margin % 18.7% 26.5% 21.8% Other Long-Term Assets 199 22 20 R&D Margin % 18.0% (1.4%) 13.5%

Total Long Term Assets 289 180 184 Net Income Margin % 10.8% (7.5%) 6.3%

Total Assets 1,019 991 955

Asset Turnover

LIABILITIES & EQUITY Total Asset Turnover 0.8x 0.7x 0.9x

Accounts Payable 1 1 2 Fixed Asset Turnover 11.1x 6.8x 6.1x

Accrued Exp. 0 0 0 Accounts Receivable Turnover 4.8x 3.8x 4.5x

Curr. Port. of LT Debt 3 4 4 Inventory Turnover 31.7x 26.3x 20.6x

Curr. Port. of Cap. Leases 0 0 -

Curr. Income Taxes Payable 18 7 21 Liquidity

Unearned Revenue, Current 649 748 688 Current Ratio 1.0x 1.0x 1.0x

Other Current Liabilities 71 83 89 Quick Ratio 0.9x 0.8x 0.8x

Total Current Liabilities 742 843 805 Avg. Days Sales Out. 75.71 96.15 80.99

Long-Term Debt 5 3 2 Avg. Days Inventory Out. 11.56 13.89 17.68

Capital Leases 0 - - Avg. Days Payable Out. 0.90 0.92 1.39

Def. Tax Liability, Non-Curr. - - 2 Avg. Cash Conversion Cycle 86.37 109.11 97.28

Other Non-Current Liabilities - - - Net Debt to Equity* Net Cash Net Cash Net Cash

Total Liabilities 747 846 810

Common Stock 87 87 87 Growth Over Prior Year

Additional Paid In Capital 290 290 290 Total Revenue 5.5% (6.6%) 22.7%

Retained Earnings 150 54 52 Net Income (7.9%) n.a. n.a.

Comprehensive Inc. and Other (256) (286) (284) Payout Ratio % 55.1% n.a. 39.8%

Minority Interest 0 0 0

Total Equity 272 145 145

Total Liabilities And Equity 1,019 991 955

9

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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

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

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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 :