Source: The Company, Guotai Junan International.

Shares in issue (m) 3 month average vol. 3 (HK$Market cap. m) 52 Weekshigh/low 52 (HK$) 2014F 2013F 2015F 2011A 2012A 12/31 年结 Year End z z z z z z z z

See the last page for disclaimer

13 In-line 1-3Q13Results, 公司报告：高鑫零售 Sun Art Re Report: Company

财年首三季度业绩符合预期，维持“收集”。

FY14 EPS, 26.2x FY15 EPS, 4.6x of FY14 or 4.1x of FY15 BPS. FY154.1xof FY14 FY15FY14 BPS. of BPSor EPS,4.6x EPS,26.2x margin guidanceandmerchandisesituation. res 0.358and0.399 previous 0.307, from 0.383 0.335and EPStoRMB0.291, forecast FY13-15 change our HK$ 12.88. price to raise target rating “Accumulate” Maintain decently in3Q13. performed margins therefore thatduetolowersuppliers’incomecontribution in3Q12, was The reason in 3Q12. washigher thanthat 3Q13 both gross marginandnetfor issues. structural to due decent performance margin 3Q13 regionisindeedintensive. fact thatcompetitioninEasternChina coincided with regions, with other the when compared heavier slowdown provincerecorded Zhejiang and indicatedthatShanghai Management was mainlyattributabl Art in3Q13 3Q13. sluggish Rather launchlargescalepromotioncampaign. didnot 1H13 astheCompany estimate, in-line.SSSgrowth slowed period rose 26.4% toRMB2,179million,representingour 74.4% FY13 of shareholders’profitforthesame FY13 estimate; 72.4% ofourfull-year results. 1-3Q13 In-line 年半的40放至 1%。 4.0%放缓至约 财年上半年的 13 财年第三季度同店销售增长由 财年预测的 74.4%，符合预期。由于公司没有进行大规模促销，13 13 百万元，约为我们 2,179 26.4%至人民币 72.4%；同期股东净利同比增长 13 净利率均高于 竞争激烈的事实。 于数个结构性原因导致。管理层介绍上海以及浙江区域放缓幅度较大，印证了华东地区 13 导致 13 维持“收集”评级，升目标价至 人民币 30.0 财年第三季度利润率由于结构性因素表现出色。 财年第三季度表型疲弱。 财年首三季度业绩符合预期。 倍 13 0.307 14 财年第三季度利润率表现较好。 (RMBm) Turnover 年市盈率， 0,9 ,9 .3 4927. 101,292 3,196 0.335 14.9 1,8 ,5 .8 4424. 116,986 3,655 0.383 14.4 8082700211. 31. 37. 46. 88,048 2,780 0.291 15.4 77,851 2,409 0.253 23.2 68,084 1,600 9.3 0.205 、 总股数 12 市值 收入 0.358 个月平均成交股数 财年第三季度，主要由于

(HK$ m)

(m) (06808 (06808 HK) 及 周高 26.2 0.399 / Net Profit Profit Net 低 倍 (RMB m) 股东净利 The slowdown in turnover and SSS growth for Sun forSun andSSSgrowth inturnover The slowdown 销售额以及同店销售增长于 1-3Q13 turnover of the Company accounting for for accounting Company ofthe turnover 1-3Q13

15 元调整至人民币 12.88

司1 年三度售约我 3财年预测的 13 财年首三季度销售额约为我们 13 公司 年市盈率， (‘000)

港元。

12 每股净利 (RMB) e to numerous structural reasons. reasons. structural e tonumerous to approx. 1% in 3Q13 from 4.0% in 4.0%in 1% in3Q13from to approx. 4.6 pectively to better reflect updated pectively updated to better reflect 我们将 财年第三季度由供应商处收入较低，从而 EPS 0.291 倍 14 公司 New TPtranslatesto 30.0x of

13 tail GroupLtd.(06808HK) 、 13.080 /10.040 每股净利变动 年市净率及 0.335 至 13 13 Maintain “Accumulate”. 15 ( 财年第三季度的毛利率以及 财年第三季度的放缓主要由 113,569.2 △ 及 财年预测基本每股盈利从 EPS 9,539.7 6,771.1 %) 0.383 4.1 倍 元。目标价对应 15

市盈率 年市净率。 Sun Art’s Art’s Sun PER Major shareholder FY14 Netgearing (%) FY14 Free float (%) FY12-15 PEG (x) (x) 6 1.959 4.7 0.117 0.8 15.7 0.117 0.8 15.1 0.097 0.7 16.4 0.081 0.6 4.7 5.4 4.9 1.959 1.764 1.939 6 6 7 5 2.177 4.2 0.134 0.9 16.2 0.134 0.9 4.2 2.177 5 0 2.426 3.8 0.153 1.0 16.6 0.153 1.0 3.8 2.426 0 We 每股净资产 (RMB) BPS 自由流通比率

-10% 10% 15% 20% 25%

Source: Bloomberg, Guotai Junan International. Guotai Junan Bloomberg, Source: -5% 大股东 Stock performance performance Stock 股价表现 0% 5% 平均股价（港元） Avg. share price(HK$) 相对恒指变动 index %toHS Rel. 绝对变动 Abs. % 股价变动 Change in Share Price

Share price Revised from 6-18m TP 评级： Rating:

o-2Fb1 a-3Ag1 Nov-13 Aug-13 May-13 Feb-13 Nov-12

% of return % of 市净率 %

(%) 净负债 PBR (x)

%

目标价 原目标价 股价： /

股东资金 每股股息 (RMB) :

06808 HK DPS :

(%)

A-RT Retail Holdings Ltd. 51.0% 1

个月 1 M (1.4) 5.0 (5.9) 12.3 11.5 11.1 11.1 11.5 12.3 . 03 5.4 0.0 10.3

[email protected] Accumulate 股息率 19 November 2013 2013 19 November Yield 3 Frank Xu (%) +86 75523976725

个月 3 M HSI Index HSI

HK$12.88 净资产收益率 HK$11.800 收集 Maintained HK$12.16 Net cash Page 1of 7

许智程 1 1 Y ( 年 ROE 维持 (%) 20.7

2.5

)

Company Report Sun Art Retail Group 高鑫零售 (06808 HK) GTJA Research 国泰君安研究

E-commerce platform w in FY12. with situations when compared unchanged will largely remain FY13 bothgr basis, theCompanyexpects in performeddecently 3Q12, margins in contribution income with suppliers’ 4Q12, lower from 3Q12to suppliers, SunArtdelayed certai and retailers between relationship the yearover Commerce last by of Ministry regulations out oftightened carry due tothe to 3Q13,reason in improvement made has Company the indicate Itactually doesn’t respectively). 1.8% and 19.7% thatin3Q12(being than higher both respectively, was 2.8% for3Q13 and netmargin 21.6% Art’s grossmarginand decent performance 3Q13 margin Eastern China in competition with that fact the coincided with otherregions, compared Z Shanghai and that indicated themanagement YoY.Inaddition, 10% by dropped sales liquor (4)salesfromChinese 20% YoY;and approximately o salesofedible from contribution 3)Weaker Festival; theMid-Autumn by11% YoYduring were down card Sales ofcommercialprepaid YoY;2) by 10-20% sales dropped TV forexample, appliances, home in sales sluggish caused 2013 inJun subsidies energy of termination 1)The reasons: tonumerous attributable mainly was 3Q13 SunArtin growth for SSS and inturnover slowdown to decelerated also in 3Q13 Rather sluggish 3Q13. campaign. promotion scale large notlaunch did astheCompany in 1H13 4.0% from 3Q13 1% in approximately to slowed SSSgrowth in-line. estimate, ofourFY13 74.4% representing million, to RMB2,179 profit shareholders’ estimate; FY13 accoun million, 65,691 RMB 11.7% to 1-3Q13results. In-line See the last page for Page disclaimer 2 contributio earning make apparent burden significant to create unlikely thatitis one isaratherconservative platform fore-commerce plan investment,Sun Art’s with heavy strategy and aggressive normally Incontrasttothele nationwide. to thecoverage toexpand plans themanagement yet in Shanghai tocustomers only services delivery doeshome platform the on-line onl itse-commerceplan launched hejiang province recorded Similar to SSS growth, turnover of Sun Art of SunArt SimilartoSSSgrowth, turnover ill take alongtime tobearfruit. 1-3Q13 turnover of the Company rose rose of theCompany 1-3Q13 turnover region is indeed intensive. intensive. isindeed region ading e-commerce operators which which operators e-commerce ading 9.2% from 12.9% in 1H13. The 9.2% from 12.9%in1H13. The n negotiation tasks with suppliers with suppliers negotiation tasks n n in the next few years. years. few n inthenext explain the phenomenon isthat phenomenon the explain s slackened, for example, sales sales forexample, s slackened, y in September, at the moment atthemoment y inSeptember, for the same period rose 26.4% 26.4% rose period forthesame il, that their prices dropped by by dropped il, thattheirprices due to structural issues. issues. tostructural due oss margin and net margin for for netmargin oss marginand to the Company, neither will it neither to theCompany, 3Q13. However, on a full year year onafull 3Q13.However, ting for 72.4% of our full-year of ourfull-year 72.4% for ting heavierslowdownwhen Sun Art Sun Figure:Art’s Sun 1H net profitand NPM Figure:Art’s Sun gross profitand GPM Source: the Company, Guotai Junan International. Source: the Company, Guotai Junan International. Source: the Company, Guotai Junan International. Figure:Art’s Sun operating profit and OPM Source: the Company, Guotai Junan International. Figure:Art’s Sun turnoverand growth 10,000 15,000 20,000 25,000 30,000 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 1,000 2,000 3,000 4,000 5,000 6,000 5,000 500 100,000 120,000 140,000 0 0 20,000 40,000 60,000 80,000 0 0 1,985 2,814 Y1F1 Y3 Y4 FY15F FY14F FY13F FY12 FY11 Y1F1 Y3 Y4 FY15F FY14F FY13F FY12 FY11 4.1% 2.9% 13,857 20.4% Y1F1 Y3 Y4 FY15F FY14F FY13F FY12 FY11 68,084 21.2% Y1F1 Y3 Y4 FY15F FY14F FY13F FY12 FY11 Operating (RMB mn,leftaxis) Profit, Gross (RMB mn,leftaxis) Profit, Net Profit, (RMB mn, left axis) Net (RMB mn,left Profit, Turnover, mn, leftaxis) (RMB 3,248 2,533 4.2% 3.2% 16,150 20.7% 77,851 14.3% 3,715 2,946 4.2% 3.3% 18,265 20.7% 88,048 13.1% 4,304 3,386 4.2% 21,109 3.3% 20.8% 101,292 15.0% NPM (rightaxis) GPM (right axis) OPM (right axis) YoY (right axis) 5,135 3,873 24,544 4.4% 3.3% 21.0% 116,986 15.5%

3.5% 4.0% 4.5% 2.6% 2.7% 2.8% 2.9% 3.0% 3.1% 3.2% 3.3% 3.4% of7 20% 21% 22%

0% 5% 10% 15% 20% 25%

Company Report Sun Art Retail Group Ltd. 高鑫零售 (06808 HK) 19 November 2013

Figure: Sun Art’s turnover segment detail Maintain “Accumulate” rating and raise target price to Rental income HK$ 12.88. We slightly change our FY13-15 forecast EPS to RMB 3,012 120,000 Sales of goods 0.291, 0.335 and 0.383 from previous 0.307, 0.358 and 0.399 2,613 100,000 2,241 respectively mainly to better reflect updated margin guidance and 1,915 80,000 1,544 113,974 merchandise situation. Though the Company’s valuation is higher 60,000 98,679 than peer companies, as the biggest operator in China (even under 85,808 40,000 19 November 2013 the scenario that CRE takes over in near term), we believe 75,936 20,000 66,540 Sun Art is able to enjoy a valuation premium for its nationwide ‐ network, larger operating scale, good management skill, relatively FY11 FY12 FY13F FY14F FY15F high self-owned properties, high earning visibility and dual Source: the Company, Guotai Junan International. ownership that can create synergies and its unique all-hypermarket format. The Company maintained its FY13 expansion target of 50 Figure: Sun Art’s turnover segment trend retail points, given the market size in the lower tier cities in China 97.8% 2.70% and Sun Art’s financial resources, we believe the company will 2.58% 2.57% 97.7% 2.54% 2.60% 97.73% expand at a fast pace for another few years and the potential room 2.46% 97.6% 2.50% for modern hypermarket in China is still huge. Maintain “Accumulate” rating, raise target price to HK$ 12.88 from HK$ 12.16 97.5% 2.40% 2.27% 97.54% as sector valuation showed signs of recovery, new TP translates to 97.4% 97.46% 2.30% 97.42% 97.43% 30.0x of FY14 EPS, 26.2x FY15 EPS, 4.6x of FY14 BPS or 4.1x of 97.3% Sales of goods (right axis) 2.20% FY15 BPS. Rental income (Left axis) 97.2% 2.10% FY11 FY12 FY13F FY14F FY15F Source: the Company, Guotai Junan International.

Table: Stores of Sun Art Location 1H12 FY12 1H13 3Q13 (06808 HK) (06808 Auchan RT-Mart Total Auchan RT-Mart Total Auchan RT-Mart Total Auchan RTR -Mart Total Eastern China 35 83 118 39 87 126 39 90 129 39 92 131 高鑫零售 Northern China 4 27 31 6 28 34 6 31 37 6 32 38 North-Eastern China 0 21 21 1 24 25 1 25 26 1 26 27 Southern China 0 33 33 1 41 42 1 42 43 1 44 45 Central China 3 23 26 4 30 34 4 32 36 4 35 39 Western China 3 8 11 3 9 12 3 10 13 3 10 13

Total 45 195 240 54 219 273 54 230 284 54 239 293 Art Retail Group Ltd. Sun

Source: The Company, Guotai Junan International.

Appendix: Peers Comparison

PE PB ROE(%) D/Y(%) Market Cap Company

Stock Code Currency Last price 12A 13F 14F 15F 12A 13F 14F 15F 13F 13F HKD mil

Sun Art Retail Group Ltd 6808 HK HKD 11.80 38.4 31.5 26.9 23.7 5.4 4.7 4.2 3.7 15.7 1.2 112,569

Lianhua Hldgs -H 980 HK HKD 4.87 13.2 13.5 12.1 8.7 1.3 1.2 1.1 1.1 8.8 3.0 5,452

Wumart Stores Inc-H 1025 HK HKD 12.60 21.8 20.0 17.9 14.6 3.7 3.2 2.7 2.6 17.0 2.2 16,144

Beijing Jingkelong Co Ltd-H 814 HK HKD 2.54 8.3 8.2 6.3 8.0 0.5 0.5 0.5 0.4 4.9 4.2 1,047

Simple Average 7.95 20.4 18.3 15.8 13.7 2.7 2.4 2.1 2.0 11.6 2.6 33,803

Weighted Average 11.54 35.2 29.2 25.1 21.9 5.0 4.3 3.9 3.5 15.5 1.4 95,873

Intime Retail Group Co Ltd 1833 HK HKD 8.99 14.9 13.6 12.1 10.8 2.0 1.7 1.5 1.5 13.1 2.9 18,035

Parkson Retail Group Ltd 3368 HK HKD 2.74 7.4 9.3 8.8 8.0 1.1 1.0 0.9 0.9 11.2 4.7 7,691

Golden Eagle Retail Group 3308 HK HKD 11.62 15.0 14.1 12.8 11.4 3.4 2.8 2.4 2.1 21.4 2.1 21,538

Maoye International Hldgs 848 HK HKD 1.61 8.8 8.6 7.6 6.7 1.2 1.0 0.9 0.8 12.9 3.2 8,409

Company Report Report Company

See the last page for disclaimer Page 3 of 7 4.49 CNY 1.18 600361CH 4.45 HKD 16.52 Beijing Hualian Hypermarke-A 331HK 4.19 HKD HKD 0.36 825HK 1212HK HKD Weighted Average HKD Simple Average 1700HK 312HK Pcd Stores Group Ltd New WorldDept StoreChina Lifestyle Intl Hldgs Ltd Springland International Hol Shirble Department Stores ant GTR U 8,830.10 110.85 RUB MGNT RM 45.90 BRL 42.00 31,900.00 PCAR4 BZ TRY 193.00 See the last page 43.82 for Page disclaimer COP THB 4 TI BIMAS THB EXITOCB MXN CPALL TB 202.50 Cia Brasileira De Dis-Pref BIGC TB Magnit SORIANAB MM 334.00 TWD As Magazalar Birlesik Bim Organizacion Soriana S.A.B-B 979.00 JPY 2912TT Almacenes Exito Sa JPY 8263JP Supercenter Pcl Cp AllPcl 840.00 8251JP President Chain Store Corp 1,494.00 986.00 JPY JPY 778.00 JPY 1,056.00 8242JP Weighted Average 3099JP JPY Simple Average 8233JP JPY Daiei Inc 1,494.00 3086JP JP 8252 Parco Co Ltd JPY Isetan Mitsukoshi Holdings L 1,879.00 H2O Retailing Corp 3099JP JPY 1,574.00 Takashimaya Co Ltd 1,511.00 J FrontRetailing Co Ltd 1,345.00 JPY 9948JP Co LtdMarui Group 908.00 JPY JPY Isetan Mitsukoshi Holdings L 9946JP JPY 8276JP 4,475.00 8267JP JPY 8217JP Weighted Average 7,640.00 3,745.00 Simple Average 658.00 JPY 8028JP Arcs Co Ltd JPY Co Ltd 2651JP JPY Heiwado Co Ltd 3382JP Aeon Co Ltd 8270JP Okuwa Co Ltd Familymart Co Ltd Seven &IHoldings Co Ltd 11.35 Uny Group Holdings Co Ltd 18.01 Inc CNY 13.28 6.16 CNY 002277CH 20.75 CNY Weighted Average 600859CH 10.65 CNY Simple Average 000501CH CNY Hunan Friendship &Apollo -A 000417CH CNY Beijing Wangfujing Dept St-A 600729CH Wuhan Department Store Grp-A 002419CH Hefei Department Store Grp-A 18.90 Chongqing Department Store-A 13.75 Rainbow Department Store-A 9.32 CNY 12.54 CNY 002447CH 7.06 CNY Weighted Average 601933CH CNY Simple Average 002336CH CNY Dalian Yi Qiao Marine Seed-A 002251CH Yonghui Superstores Co Ltd-A 002264CH Renrenle Commercial Group-A Better LifeCommercial Cha-A New Huadu Supercenter Co L-A

1,157.47 3,667.78 2,637.22 995.13 13.95 13.37 12.59 11.01 9.18 5.74

146.3 56.1 13.5 13.9 25.9 12.4 13.4 13.1 13.9 13.9 33.0 34.3 27.6 33.3 42.1 22.2 30.0 25.9 34.1 31.0 29.1 41.7 18.7 10.0 29.9 21.9 55.0 10.0 23.5 18.8 14.7 18.2 15.4 17.2 25.6 25.5 15.6 30.7 16.9 12.4 16.8 11.7 11.1 14.6 31.5 42.3 18.1 23.5 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 73.4 6.3

14.7 11.4 14.6 10.9 13.0 32.0 38.2 22.3 29.1 17.4 31.1 56.1 11.8 11.8 12.2 13.2 11.2 23.9 25.0 33.6 21.2 31.6 24.4 33.4 25.6 25.4 25.1 16.8 26.5 26.6 24.1 31.5 23.9 26.5 20.4 17.8 12.1 18.6 17.8 15.6 29.0 17.5 22.9 22.6 12.3 12.4 n.a. n.a. n.a. 9.4 4.4

12.2 10.2 12.2 11.2 25.8 31.5 15.8 22.8 67.1 13.7 25.9 43.6 10.8 10.6 10.6 12.4 10.1 19.4 20.5 29.0 18.6 31.2 21.0 26.9 23.3 20.0 19.0 15.5 25.8 16.9 18.4 13.3 17.5 25.8 18.5 25.6 15.3 27.6 10.1 14.7 92.2 18.3 18.9 12.5 20.8 10.5 10.5 9.5 7.9

10.7 10.0 17.9 18.8 11.6 18.8 24.5 12.0 20.9 24.9 11.4 16.3 16.6 25.2 16.6 27.3 18.2 20.6 20.8 19.6 18.5 14.2 24.0 14.3 18.2 18.6 16.4 24.0 16.7 16.9 12.1 24.6 10.7 13.6 25.4 16.6 17.5 12.1 19.2 8.8 9.9 8.6 6.7 9.7 9.6 9.5 9.1 9.1 9.1

17.1 14.1 2.8 1.4 2.8 1.8 2.4 2.1 3.9 3.1 5.4 4.8 1.1 3.2 2.9 1.0 2.3 1.8 1.6 1.3 2.9 1.9 0.5 3.4 8.4 2.0 1.9 5.0 9.2 1.2 1.0 0.5 1.0 1.3 1.0 1.1 1.2 1.0 1.3 1.9 1.4 1.0 0.8 0.8 1.1 0.5 1.9 1.9 0.5 3.6 2.2 2.2

13.9 12.8 n.a. n.a. n.a.n.a. n.a. n.a.n.a. n.a. n.a. n.a. n.a.n.a. n.a. n.a.n.a. n.a. n.a.n.a. n.a. n.a.n.a. n.a. 2.4 1.3 2.3 1.6 1.9 1.9 2.5 2.4 4.4 2.5 1.1 2.5 2.7 1.0 1.9 1.7 1.2 2.6 1.7 3.1 6.3 1.8 1.8 4.4 8.2 1.1 1.1 1.0 1.2 1.0 1.0 1.1 1.0 1.2 1.7 1.6 1.0 1.0 1.8 1.7 0.5 3.4 1.9 1.9

11.6 10.6 2.1 1.2 1.9 1.4 1.6 1.7 2.3 2.1 3.6 2.3 1.1 2.2 2.5 1.0 1.7 1.5 1.1 2.3 1.5 2.7 5.1 1.6 1.8 3.8 7.9 1.0 1.0 0.9 1.1 0.8 0.9 1.1 0.9 1.1 1.6 1.5 0.9 1.0 1.7 1.6 0.5 3.1 1.6 1.6

10.1 n.a. n.a. 1.8 1.0 1.6 1.2 1.3 1.4 1.9 2.0 2.8 2.0 1.0 2.0 2.2 1.5 1.4 1.0 2.0 1.4 2.4 4.1 1.5 1.7 3.3 8.3 1.0 1.0 0.9 1.1 0.8 0.9 1.0 0.9 1.1 1.5 1.4 0.9 1.0 1.6 1.5 0.5 2.9 1.4 1.4

(4.8) 16.7 11.4 16.0 14.9 20.0 14.5 11.8 18.5 12.6 14.8 15.8 15.0 10.0 20.5 15.6 12.6 28.0 44.9 19.0 40.5 34.4 10.2 10.1 12.2 15.7 15.5 15.6 n.a. n.a. n.a. n.a. n.a. 9.8 1.4 9.9 1.7 8.9 5.7 4.1 3.3 5.3 4.9 3.7 4.3 3.7 4.1 4.9 8.8 8.5 6.7 8.0

n.a. n.a. n.a. 0.0 1.5 1.1 0.0 1.6 1.0 3.0 1.1 0.9 2.9 3.0 3.4 3.6 3.1 4.5 0.9 0.9 2.1 1.2 2.1 2.6 2.4 2.2 3.6 2.7 1.4 1.4 1.2 0.0 0.8 1.6 0.3 1.4 0.9 1.0 1.8 0.7 1.5 1.0 1.1 1.3 0.7 1.9 2.1 1.8 1.7 2.9 1.7 2.9

of7 100,379 198,693 257,683 167,309 17,345 17,354 11,862 52,416 53,487 47,428 57,799 39,078 92,597 55,376 45,786 13,480 25,320 32,383 26,120 45,786 86,942 33,931 11,957 59,481 10,605 10,844 28,470 27,243 10,475 33,657 25,466 9,306 9,009 9,642 7,142 7,710 8,108 3,589 6,867 3,188 8,069 8,571 6,113 9,851 6,445 4,744 9,528 4,865 3,804 4,968 7,503 898

Company Report Sun Art Retail Group Ltd. 高鑫零售 (06808 HK) 19 November 2013 18.38 BRL 5,079.60 389,000.00 KRW AMAR3 BZ CLP 023530KS FALABCI 2,099.70 414.98 18,027.00 Marisa Lojas Sa CLP RUB Lotte Shopping Co ZAr S.A.C.I. Falabella CENCOSUD CI DIXY RM SHP SJ Weighted Average Simple Average Cencosud Sa Shoprite Holdings Ltd Dixy Group See the last page for Page disclaimer 5 400.75 98.75 GBp 2.83 3.00 GBp MTC LN AUD DEB LN AUD MYR AU 503.50 50.47 Source: The Company, DJS AU Bloomberg, Guotai Junan International. 8.71 Weighted Average 11.47 GBp 8.19 Simple Average 62.48 USD Mothercare Plc USD EUR MKSLN 90.16 53.69 MUS EUR Debenhams Plc USD JCP US STCBV FH Myer Holdings Ltd USD USD MACIN NA US JWN David Jones Ltd Marks &Spencer Group Plc DDS US KSSUS Stockmann Oyj Abp-B Share Macintosh Retail Group Nv J.C. Penney Co Inc 33.98 Macy'S Inc 43.50 Inc Nordstrom 33.17 42.44 AUD Dillards Inc-Cl A AUD Corp Kohls AU WOW EUR 27.74 EUR Kering KER WESAU MEOGR 83.91 DELB BB EUR 411.50 358.00 Weighted Average CA FP 60.90 EUR GBp Simple Average GBp 33.04 268.90 Woolworths Ltd CO FP CAD SBRY LN Wesfarmers Ltd TSCO LN 66.45 8.71 GBp USD 41.37 MRU CN FP Metro Ag MRW LN SWYUS USD Casino Guichard Perrachon USD USD Carrefour Sa 79.22 TGTUS JCP US KR US Sainsbury (J)Plc Wm Morrison USD Tesco Plc EUR Metro Inc WMTUS IncSafeway J.C. Penney Co Inc Target Corp 1,150.00 3.71 Co 57.00 IDR Wal-Mart Stores Inc162.40 MYR 29.30 248,000.00 RALS IJ THB 65.48 PKSMK KRW Weighted Average TWD 160,500.00 ROBINS TB Simple Average 004170KS BRL KRW 2903TT Ramayana Lestari Sentosa Pt 069960KS Robinson Department StorePu LREN3 BZ Holdings BhdParkson Far EasternDepartment Store Shinsegae Co Ltd Hyundai Dept StoreCo Lojas Renner S.A.

112,026.47 80,390.35 6,364.28 5,628.17 112.03 146.68 106.19 99.82

3,316.5 103.2 272.1 14.7 14.8 11.1 33.1 30.3 31.3 18.3 30.6 49.2 16.1 10.1 11.8 15.4 15.5 15.5 17.1 19.5 10.4 12.4 19.5 22.9 40.4 15.3 12.9 10.1 10.2 12.5 13.7 15.4 41.0 17.4 24.0 20.1 19.3 30.6 10.6 24.3 17.7 16.6 22.8 n.a. 62.8 n.a. 54.6 n.a. n.a. n.a. n.a. n.a. 22.1 n.a. n.a. n.a. n.a. 8.8

13.9 16.7 16.1 19.3 18.7 17.0 29.4 14.1 19.4 15.5 20.6 14.0 12.5 25.5 26.7 26.5 24.8 26.5 21.9 15.3 22.4 10.2 12.7 16.3 15.5 20.8 14.8 17.8 14.3 13.0 15.9 17.3 18.9 17.9 10.6 49.9 16.0 20.4 13.8 10.1 12.0 12.3 32.3 n.a. 9.3

14.2 14.6 15.3 16.8 15.4 15.9 23.6 13.9 18.0 13.4 17.5 11.2 10.9 20.9 22.3 22.2 17.4 23.4 13.4 13.9 15.4 26.7 10.0 14.2 18.3 15.3 15.5 14.9 13.0 16.9 12.3 12.9 14.3 15.3 14.6 17.2 20.1 15.8 14.5 17.2 12.7 10.9 11.3 11.7 19.6 9.5

13.3 13.0 14.0 13.6 13.9 13.7 19.3 12.4 16.0 12.2 15.1 17.4 18.6 18.6 13.8 20.1 12.3 12.6 13.8 13.0 16.3 13.5 11.6 12.0 11.6 15.2 11.2 11.8 12.5 13.9 13.2 16.2 17.8 13.6 13.1 14.9 11.9 10.4 10.8 10.7 15.8 n.a. 9.3 9.3 9.4 9.2 8.8

n.a. 2.0 0.5 2.8 5.8 3.8 3.2 2.9 2.7 6.3 1.5 1.5 1.2 1.6 6.2 3.3 0.8 4.3 7.2 6.6 1.6 7.6 2.1 2.9 2.5 4.9 1.9 1.9 2.0 2.9 0.9 0.9 0.5 3.5 6.6 2.2 2.0 1.8 3.0 2.4 5.1 0.8 1.8 1.3 2.6 1.4 1.3 1.6 2.3 2.7

n.a. n.a. n.a.n.a. n.a. 0.5 2.6 5.7 3.4 2.7 2.8 2.5 5.5 1.4 1.5 1.1 5.7 2.8 0.8 3.7 6.1 5.7 1.6 6.6 1.9 2.9 2.5 4.6 1.7 1.9 2.0 3.3 0.9 0.9 0.5 3.4 6.7 2.1 2.1 1.7 3.0 2.3 5.0 0.8 1.9 1.2 2.3 1.3 1.2 1.5 2.1 2.2

0.9 2.6 4.4 3.2 2.5 2.5 2.3 4.8 1.4 1.3 1.0 5.2 2.4 0.7 3.4 5.1 4.9 1.3 5.6 1.7 2.7 2.5 6.2 1.5 1.8 2.0 3.0 0.9 0.9 0.9 3.3 5.9 2.1 2.0 1.6 2.8 2.1 4.4 1.9 0.8 1.7 1.2 2.2 1.3 1.1 1.6 1.8 1.6

1.6 2.6 4.1 2.9 2.2 2.3 2.2 4.3 1.3 1.3 0.9 4.7 2.0 0.7 2.9 3.9 3.9 1.6 4.9 1.4 2.5 2.3 4.5 1.4 1.8 2.0 2.7 0.9 0.9 1.6 3.1 5.2 2.1 1.9 1.5 2.6 2.0 4.0 1.9 0.7 1.6 1.1 2.0 1.3 1.1 1.5 1.7 2.2

(10.3) (10.3) 17.8 33.1 21.9 13.3 14.4 15.1 19.9 10.4 12.7 28.8 21.5 14.5 23.2 21.4 26.4 17.3 13.1 17.2 14.9 12.7 19.8 23.4 36.9 15.5 10.7 18.4 12.7 28.0 11.9 12.7 14.3 17.5 10.6 n.a. 7.0 7.3 6.4 6.4 8.5 6.8 5.7 3.8 8.9 7.1 0.2 7.3 9.9

3.4 3.4 2.0 1.3 2.0 1.3 1.9 2.9 1.7 3.5 0.4 3.3 2.5 1.2 1.4 1.3 1.9 2.6 3.3 3.3 6.5 5.5 3.4 1.6 1.6 2.4 2.6 2.6 2.9 3.9 2.2 4.4 4.1 1.6 2.2 2.8 0.4 0.4 1.2 0.0 0.0 4.5 2.0 4.1 3.1 0.5 3.8 4.1 5.6

of7 1,992,353 1,061,773 101,639 147,211 214,689 309,869 363,661 113,274 210,307 361,497 325,126 166,908 183,069 110,271 103,512 128,782 285,851 39,982 74,914 58,080 15,119 12,050 11,695 20,565 94,398 32,025 90,400 45,534 99,230 97,729 78,407 41,494 61,807 20,565 15,537 10,874 17,923 27,572 28,031 11,681 89,923 88,265 78,632 12,319 4,442 8,713 2,088 5,492 9,713

Company Report Sun Art Retail Group Ltd. 高鑫零售 (06808 HK) 19 November 2013 revenue Other profit Gross Cost ofsales Turnover Yr end31Dec(RMB m) Appendix: Financial Statements See the last page for Page disclaimer 6 Source: The Company, Guotai Junan International. Cash balanceyearend Cash balanceyearbeginning FX effect Net increaseincash flow cash Financing Others Dividend paid Interest paid bankloans Net cashflow Investing Others PP&EPurchase of flow cash Operating Others change capital Working cost Finance Interest income andamortisation Depreciation before tax Profit Yr end31Dec(RMB m) EPS (RMB) interest Minority profit Shareholder's Income tax before taxation Profit income(costs) Finance Net fromoperations Profit costs Operating expenses Administrative

Cash Flow Statement Flow Cash Income Statement Statement Income

(54,227) (54,227) (1,837) (1,837) (2,157) (5,285) (5,358) (9,516) (1,849) 68,084 68,084 13,857 13,857 2011A 2011A 2011A 2011A

7,517 7,517 3,281 4,231 3,730 7,814 5,786 2,183 1,530 2,816 0.205 1,600 2,816 2,814 (741) (385) (831)

(90) (92) 322 73 90

2 5

(11,400) (61,701) (1,760) (6,865) (1,734) (5,131) (1,796) 77,851 16,150 16,150 2012A 2012A

5,586 5,586 1,294 1,952 3,506 0.253 2,409 3,506 3,248 5,757 5,757 7,517 (481) (782) (908) (270) (124) (973)

(12) 109 204 258 294 12

0

(12,794) (12,794) (69,783) (4,434) (4,434) (6,735) (1,101) (2,052) 88,048 88,048 18,265 18,265 2013F 2013F 2013F 2013F

4,946 4,946 5,757 2,301 4,546 2,033 4,047 0.291 2,780 4,047 3,715 (811) (923) (926) (712) (490) (348) (166)

(17) 331 296 20 17

0 0

(14,758) (14,758) (80,183) 101,292 101,292 (1,109) (1,109) (1,112) (7,847) (8,199) (1,265) (2,384) 21,109 21,109 2014F 2014F 2014F 2014F

5,184 5,184 4,946 9,193 3,274 2,500 4,651 0.335 3,196 4,651 4,304 (884) (365) (191)

(18) 238 352 347 337 21 18

0 0

(17,013) (92,442) 116,986 (1,447) (2,781) (2,299) (1,275) (1,278) (9,466) (9,654) (1,047) 24,544 24,544 2015F 2015F

0.383 3,655 5,320 5,135 2,885 2,885 5,184 8,442 1,334 3,019 5,320 (218) (203)

(19) 184 385 189 22 19

0 0

Total liabilities liabilities Total Non-current liabilities Current liabilities Others Bank loansandoverdrafts payables &other Trade assets Current saleitems Available foe Cash balance Bank deposits &other receivables Trade Inventories assets Non-current Others Land useright assets Fixed Yr end31Dec(RMB m) Payout ratio(%) (x) ratio Current Cash cycle payabledays Account receivabledays Account ROA (%) ROE (%) Net profit margin (%) margin(%)Operating (%) Gross margin growth (%) profit Net (%) growth Turnover Yr end31Dec Book valuepershare(RMB) interest Minority Shareholders' equities

Key Financial Ratios Balance Sheet Sheet Balance

(8,307) 25,829 25,829 25,699 25,162 21,592 10,259 19,754 24,675 15,139 15,139 2011A 2011A 7,517 7,517 3,749 3,386 118.9 1.939

16.4 20.4 55.2 21.2

(31) 130 338 199 378 0.8 1.0 4.5 2.9 4.1 67 91

0

(11,183) (11,183) 27,227 27,227 27,078 26,307 21,496 10,141 23,089 29,712 16,830 16,830 2012A 2012A 2012A 2012A

1,965 1,965 5,757 3,528 4,560 1.764 1.764 38.4 38.4 15.1 20.7 50.6 14.3

(26) 149 369 402 105 528 0.8 0.8 1.3 5.6 3.2 4.2 87

(14,444) (14,444) 29,922 29,922 29,752 28,897 21,700 12,703 27,600 36,122 18,684 18,684 2013F 2013F 2013F 2013F

4,946 4,946 3,936 5,921 1.959 1.959 40.0 40.0 15.7 20.7 15.4 13.1

(20) 170 433 422 116 694 0.7 0.7 1.3 5.9 3.3 4.2 81

0

(18,408) 34,383 34,383 34,188 33,256 22,986 13,286 33,050 43,995 20,768 20,768 2014F 2014F

5,184 5,184 4,389 7,462 2.177 40.0 16.2 20.8 14.9 15.0

(21) 195 488 443 127 884 0.7 1.3 6.1 3.3 4.2 81

0

(23,058) of7 23,144 23,144 39,474 39,250 38,221 24,280 16,379 39,441 53,325 2015F 2015F

2.426 1,102 2,885 4,876 9,174 40.0 16.6 21.0 14.4 15.5

(22) 224 564 465 140 0.6 1.3 6.1 3.3 4.4 81

0

Company Report Sun Art Retail Group Ltd. 高鑫零售 (06808 HK) 19 November 2013 18months Time Horizon:6to SengIndex Hong KongHang The Benchmark: Definition Rating Company See the last page for Page disclaimer 7 an This ResearchReportdoesnotconstitute ChenmingPaperHold ExceptforShandong The in theirassociates financial and do nothaveany Analysts (3) The theirassociates and do notserveasan Analysts (2) (1) 18months Time Horizon:6to SengIndex Hong KongHang The Benchmark: Definition Sector Rating Any opinions expressed in this report may differ or be contrary inthisreportmayAny to differor opinionsexpressed investproprietarily). or underwriter including investmentbanking,serv research reports, co itsgroup Junanand Guotai Junan"). Limited ("Guotai (Hong Kong) DISCLAIMER DISCLAIMER itsgroupcompanieshavenothadinvestmentbank GuotaiJunanand (4) estimates and forecasts derived from the assumptions ofthefutu estimates andforecastsderivedfromtheassumptions accuracy completenessoftheinformationand the and not guarantee ofthein the accuracy toensure made hasbeen best effort Though orinvestment decisionsmade bybe contrary toopinions the executiv persons, dealersandotherprofessional Website: www.gtja.com.hk Fax: (852)2509-7793 Tel.: (852)2509-9118 27/F., LowBlock,Grand Millennium Plaza, © 2013 Guotai JunanSecurities (Hong Kong) Limited. All Rights Reserved. compani subject GuotaiJunananditsgroup jurisdiction publication,avail in any where suchdistribution, fordistribut intended at,or isnot directed This ResearchReport where necessaryand ownfinancial consulttheir mutable situation,souncertaintymay contain.Investors Sell Relative Performance <-15%; <-15%; RelativePerformance is-5%to-15%; RelativePerformance is-5%to5%; RelativePerformance Sell >15%; RelativePerformance is5%to15%; RelativePerformance Reduce Neutral Accumulate Buy Rating Neutral Relative Performance is -5% to 5%; is-5%to5%; RelativePerformance <-5%; RelativePerformance >5%; RelativePerformance Underperform Neutral Outperform Rating Company Limited (08240), Guotai Junananditsgroupcompaniesdonot Guotai Limited (08240), Company Report within the preceding 12 months. preceding12months. within the Report the issuermentionedinthisResearchReport.

or the fundamental outlook of the company or sector is unfavorable. outlookofthecompany sectorisunfavorable. or or thefundamental outlookofthecompany sectorisunfavorable. or or thefundamental outlookofthecompany sectorisneutral. or or thefundamental outlookofthecompany sectorisfavorable. or or thefundamental outlookofthecompany sectorisfavorable. or or thefundamental Definition Definition or the fundamental outlookofthesectorisunfavorable. or thefundamental outlookofthesectorisneutral. or thefundamental outlookofthesectorisfavorable. or thefundamental Definition Definition 181Queen’s Road Central, HongKong. es to any registration or licensingr es toany or registration invitation or offer to acquire, purchase or invitationacquire, purchase orofferto advisers prior to any investmentdecision.advisers priortoany es of Guotai Junan group of companies. groupofcompanies. es ofGuotaiJunan ings Limited-H shares (01812) and China Ci andChina ings Limited-Hshares(01812) DISCLOSURE OF INTERESTS should understand objectivesandits andcomprehendtheinvestment rel officer of the issuer mentioned in this Research Report. officer thisResearchReport. oftheissuermentionedin ability or use would be contrary to applicable law regulation or toapplicable contrary would be use ability or se aaeetadivsmn akn ruso utiJnn investmentbankinggroupsofGuotaiJunan. asset managementand ion to or use by, any person or entity who isacitizenorre entityperson or any oruseby, ion to opinions orinvestment strategiesexpressedorally or inwriopinions ices and etc. (for example, t example, ices andetc.(for formation and data containedinthis data and formation re political andeconomicre conditions with unpredicta inherently terests in relation to the issuer mentionedinthisResearch terests inrelationtothe

data herein. This Research Report may contain someforward-l ResearchReport maydata herein.This contain mpanies may do business that relates to companiescoveredin businessthatrelatesto may do mpanies equirement within suchjurisdiction.equirement ing relationshipswith thei hold equal to or more than 1% of the market capitalization ofthemarket hold equaltoormorethan1% subscribe forsecuriti Any expressedinthisreportma opinions ty Railway Transportation Technology Holdi he placing agent, lead manager, spo placing agent,leadmanager, he Research Report, GuotaiJ ResearchReport, ssuer mentionedinthisResear es byGuotai Juna sident of or located or located sident of tten form by sales tten formby or which would which or Report. Report. n Securities unan does does unan ated risks, y differ or y or differ ble and ble and ooking of7 nsor, ngs ngs of ch

Company Report Sun Art Retail Group Ltd. 高鑫零售 (06808 HK) 19 November 2013