Tongda Group | 698.HK

Rating Buy Maintain Recovery on the right track Target Price HKD 0.73 From HK$0.50 Current price HKD 0.61 Upside:19.7% % Company Update 2H20 recovery better than expected; GM to rebound on better product mix 12 January 2021

We recently met Tongda’s management and gave us an operational update and discussed business outlook. Tongda’s 2H20 recovery was better than expected Hayman Chiu mainly driven by handset segment as Chinese OEMs increased their order to [email protected] grab market share from , and the launch of Apple iPhone 12 series also (852) 2235 7677 helped. Meanwhile, economy restarted in Europe and US in 3Q20 which drove pend-up orders for home appliance and household products, as well as auto. Trading data Though GM pressure was seen across the board in 1H20 and blended GM 52-Week Range (HK$) 1.08/0.39 slipped 5.9ppts Yoy to 15.2%, with better product mix in 2H20 ( i.e increased 3D, 3 Mth Avg Daily Vol (m) 18.1 unibody glastics, and component upgrade for US client’s latest smartphone No. of Shares (m) 6,479.5 flagship), we expect 2H20 GM would improve HoH. Market Cap (HK$m) 4,017.3 Major Shareholders (%) Wang Ya Nan & Asso FY20E handset casing shipment largely in-line, thanks to and (35.7%) Samsung with increasing 3D and unibody glastics contribution; Auditors EY

Result Due FY20E: Mar 2021 Tongda management shared with us that FY20E handset casing shipment arrived at ~160mn pieces (+mid -teens Yoy) and it was largely in-line with our forecast thanks to better than expected orders from Xiaomi and Samsung. Company description Tongda’s latest guidance on FY21E shipment guidance (flattish Yoy) still looks Tongda Group (Tongda) is a one-stop service provider conservative to us, which possesses upward revision potential as Chinese OEMs of consumer electronics casings products. The Group (XOV) have increased their pace in obtaining various components including 5G has established a solid presence in handset, electrical chipsets and panels, as well as shorten the rollout time of new smartphones appliance and notebook computer casings and related through our recent channel checks as they target to grab Huawei’s market share products. Current clients include Samsung, Huawei, FY21E. As mentioned in our last update, Huawei contributed low-single digit of Tongda’s casing revenue in FY19, and Tongda only supplied to its mid-range Xiaomi, Vivo, , , Gree, Media, Toshiba, HP, smartphones (i.e. lower IC/chips requirement) which are less susceptible to the DELL, Asus, and Fujitsu. latest ban. All in all, we believe the potential negative impact on Tongda would be minor vs. other players in the supply chain. Price chart HK$ In terms of casing mix, glastics would take up >80% of total shipment (with 2.5 Samsung and Xiaomi continue to contribute majority of the shipment, while the 2.0 remaining will be shared among Vivo, oppo). The higher margin 3D and unibody 1.5 glastics would account for >70% of glastics shipment which would drove GM. For 1.0 glass and metal casings, we expect each would account for mid-single digit of the total casing shipment. 0.5 0.0

New iPhone launch drove GM improvement in tri-proof and high

8/4/2018 8/1/2019 8/7/2019 8/1/2020 8/7/2020 8/1/2018 8/7/2018 8/4/2019 8/4/2020

8/10/2019 8/10/2020 precision components in 2H20E 8/10/2018 Sources: Bloomberg, CIRL iPhone 12 was well-received by the market after having launched. We expect segment GM would recover in 2H20E and FY21E, as Tongda continues to provide various high precision components including Metal Injection Molding (MIM) parts, rubber molding and precise injection parts etc. for the new flagship models with better margins. Tongda currently received ~40% of Apple’s tri-proof and high precision components order, we expect this allocation would remain stable in FY21E. Apple is still Tongda’s top 3 customer, and given the well-established relationship, we continue to believe Tongda would be capable of gaining further market share ahead, in which they would be involved in Apple’s new product pipeline which include wearables, AR products etc.).

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Undemanding valuation, product mix enhancement to drive earnings; Maintain BUY with TP HK$0.73

We revised up Tongda’s FY20E-22E EPS by 4.5%/9.3%/8.3% respectively on higher sales forecasts during the period mainly driven by handset casing business, accompanied by gradual GM recovery on better product mix (Upgrade of 2.5D glastics to higher margin 3D/unibody glastics, higher dollar content for tri-proof and high precision components). We expect Tongda’s net profit would grow at 33.0% CAGR in FY20E-22E.

Tongda’s share price has outperformed HK listed peers in the past 3 months (+40.2% vs. HK listed peers at ~10% which excl. Cowell), due to investors’ improved risk appetite for small caps and better exposure to Xiaomi (1810.HK). Tongda is trading at 9.1x FY21E PE (45% discount to casing peers). We maintain Tongda’s rating at BUY with new TP at HK$0.73 (based on FY21E EPS, hence implies 10.8x forward PE and unchanged 50% discount to peers).

Exhibit 1:We revised up Tongda’s EPS on higher sales forecasts Exhibit 1: FY20E(old) FY20E(new) Change(%) FY21E(old) FY21E(new) Change(%) FY22E(old) FY22E (new) Change(%) PorkRevenue 9,304 9,705 4.3% 9,959 10,338 3.8% 10,563 11,000 4.1%

productsGP 1,651 1,673 1.3% 1,885 1,890 0.3% 2,062 2,051 -0.6% sold in 17.7% 17.2% -50bps 18.9% 18.3% -60bps 19.5% 18.6% -90bps supermarkGM

etOP counters 526 549 4.4% 688 741 7.7% 793 850 7.2%

Net Profit 277 289 4.5% 399 436 9.3% 475 514 8.3%

Diluted EPS 0.043 0.045 4.5% 0.062 0.067 9.3% 0.073 0.079 8.3%

Source: CIRL estimates

Exhibit 2:Tongda’s revenue breakdown and growth assumption

ExhibitYear to Dec 1: (HK$ mn) FY17A *FY18A FY19A FY20E FY21E FY22E Segment Revene Pork Handset casings & others 5,911 6,621 7,120 7,922 8,585 9,203 products *Notebook casings 581 84 - - - -

sold in Electrical Appliances 578 849 627 625 562 549

supermark Total Casings/ handset related revenue 7,070 7,553 7,747 8,546 9,147 9,753 Ironware Parts/ Household and sports goods 470 607 648 519 534 560 et counters Autos 250 350 400 300 345 366 Communication Facilities 773 389 391 340 312 323 Group (ex notebook casing business) 8,563 8,899 9,186 9,705 10,338 11,000

Segment Revenue Growth Handset casings & others 10.1% 12.0% 7.5% 11.3% 8.4% 7.2% *Notebook casings 23.8% -85.6% - - - - Electrical Appliances -3.5% 46.7% -26.1% -0.4% -10.0% -2.3% Total Casings/ handset related revenue 9.8% 6.8% 2.6% 10.3% 7.0% 6.6%

Ironware Parts/ Household and sports goods -10.4% 29.2% 6.8% -20.0% 3.0% 4.8% Autos 150.0% 40.0% 14.3% -25.0% 15.0% 6.0% Communication Facilities 1.5% -49.7% 0.4% -12.9% -8.3% 3.4% Group (ex notebook casing business) 9.4% 3.9% 3.2% 5.7% 6.5% 6.4%

Source: Company data, CIRL estimates

*Tongda successfully spun off Tongda Hong Tai (2363.HK)and listed in HKEx on Mar 15 2018

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Exhibit 3: Xiaomi’s global smartphone market share increased in 3Q20 on the back of Huawei share loss

Exhibit30.0% 1: Pork

products25.0% sold in

supermark20.0% et counters

15.0%

10.0%

5.0%

0.0% 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20

Samsung Apple Huawei OPPO VIVO Xiaomi

Source: IDC, Canalys, Counterpoint Research, CIRL

Exhibit 4: Tongda’s capability to provide different smarthphone casing solutions to clients Exhibit

Tong 1:

Pork

products

sold in supermark

et counters

Source: Company data

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Exhibit 5: Tongda’s tri-proof (waterproof/shockproof/dustproof) components would penetrate further into US client Exhibit

Tong1:

Pork

products

sold in supermark

et counters

Source: Company data

Financial Statement

Exhibit 9: Financial summary IncomeExhibit statement 1: Cash flow Year to Dec (HKD mn) FY18A FY19A FY20E FY21E FY22E Year to Dec (HKD mn) FY18A FY19A FY20E FY21E FY22E RevenuePork 8,899 9,186 9,705 10,338 11,000 Pre-tax profit 675 485 354 532 628 Gross profit (reported) 1,793 1,677 1,673 1,890 2,051 Taxes paid 113 84 64 96 113 EBITDAproducts 1,239 1,159 988 1,222 1,354 Depreciation 390 468 440 483 507 Depreciation (390) (468) (440) (483) (507) Associates 0 0 0 0 0 EBITsold in 849 692 548 739 848 CFO bef. WC change 1,179 1,036 857 1,111 1,247 Net interest income (exp.) (174) (207) (194) (207) (220) Change in working cap 793 775 (86) (40) (155) Associatessupermark 0 0 0 0 0 Cashflow from operation 1,972 1,812 771 1,072 1,092 Exceptionals/others 0 0 0 0 0 CAPEX (1,256) (926) (850) (850) (850) Profitet counters before tax 675 485 354 532 628 Free cash flow 716 886 (79) 222 242 Tax expenses 113 84 64 96 113 Dividends (184) (68) (49) (74) (88) Minority interest 0 0 0 0 0 Balance sheet adj. (750) (89) 93 48 2 Net profit 542 400 289 436 514 Shares issued 0 0 0 0 0 Dividends (184) (68) (49) (74) (88) Others 0 0 0 0 0 Net cash flow (218) 729 (35) 196 157 Balance sheet Net cash (debt) start (2,888) (3,106) (2,377) (2,412) (2,216) Year to Dec (HKD mn) FY18A FY19A FY20E FY21E FY22E Net cash (debt) at year-end (3,106) (2,377) (2,412) (2,216) (2,059) Cash & equiv 1,276 1,488 1,049 1,009 883 Trade receivables 3,115 2,946 2,911 3,101 3,300 Ratios Other receivables 0 0 0 0 0 Year to Dec FY18A FY19A FY20E FY21E FY22E Inventories 2,529 2,245 2,630 2,646 2,803 Growth rate (%) Other current assets 800 785 785 785 785 Revenue 3.9 3.2 5.7 6.5 6.4 Fixed assets 4,918 5,089 5,281 5,429 5,554 EBITDA (28.0) (6.5) (14.8) 23.8 10.8 Intangible assets 0 0 0 0 0 EBIT (37.8) (18.5) (20.8) 34.9 14.7 Investment, associates etc 1,004 1,021 1,015 983 967 Net profit (46.1) (26.2) (27.7) 50.6 18.0 Total assets 13,642 13,573 13,671 13,954 14,292 Fully diluted EPS -46.1% -28.7% -27.7% 50.6% 18.0% Margins (%) Account payables 2,626 2,948 3,213 3,379 3,580 Gross margin (reported) 20.2 18.3 17.2 18.3 18.6 Other payables 459 514 514 514 514 EBITDA 13.9 12.6 10.2 11.8 12.3 Short-term debt 2,655 2,747 2,343 2,108 1,825 EBIT 9.5 7.5 5.6 7.1 7.7 Other current liabs 147 134 134 134 134 Net margin 6.1 4.4 3.0 4.2 4.7 Long-term debts 1,727 1,117 1,117 1,117 1,117 Other ratios Deferred tax and others 90 92 92 92 92 ROE (%) 9.1 6.7 4.7 6.6 7.4 Other long-term liabs 0 38 38 38 38 ROA (%) 4.0 2.9 2.1 3.1 3.6 Total liabilities 7,705 7,591 7,452 7,383 7,300 Net gearing (%) 52.3 39.7 38.8 33.7 29.4 Interest coverage (x) 4.9 3.3 2.8 3.6 3.9 Share capital 65 65 65 65 65 Receivables days 127.8 117.1 109.5 109.5 109.5 Reserves 5,898 5,881 6,122 6,483 6,910 Payables days 134.9 143.3 146.0 146.0 146.0 Shareholders' equity 5,963 5,946 6,186 6,548 6,975 Inventory days 129.9 109.1 119.5 114.3 114.3 Minorities (26) 36 34 24 17 Effective tax rate (%) (16.7) (17.3) (18.0) (18.0) (18.0) Total equity 5,937 5,982 6,220 6,572 6,992 Net cash (debt) (3,106) (2,377) (2,412) (2,216) (2,059)

Source: Company data, CIRL estimates

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Exhibit 10: Tongda’s 12 month Forward P/E Ratio

Exhibit16 1: 12 mths Forward P/E Ratio Pork avg. 14 products +1std. 12 sold in 10 supermark a 8 et -1std. - counters6

4

2

0 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20

Source: Bloomberg, CIRL

Exhibit 11: Peers comparison

bloomberg Mkt Cap Price Share Price Movement (%) PER (x) Yield (%) Exhibit 1: code (HKD mn) (HKD) 1M 3M YTD FY17 FY18 FY19 FY20E FY21E FY17 FY18 FY19 FY20E FY21E

HKPork Listed Peers GROUP 992 HK 91,035 7.56 31.7 47.7 3.3 17.3 17.3 17.3 18.6 13.3 3.5% 3.5% 3.7% 3.1% 3.6% AAC TECHNOLOGIES 2018 HK 54,141 44.80 4.6 (0.3) 3.2 8.9 12.1 21.5 31.5 18.2 4.4% 3.3% 1.0% 0.9% 1.6% FIHproducts MOBILE LTD 2038 HK 8,145 1.00 23.5 (16.0) 5.3 -1.9 -1.2 -85.1 -12.3 15.2 0.0% 0.0% 0.0% 0.0% 0.0% FIT HON TENG LTD 6088 HK 18,748 2.72 6.3 (14.7) 1.1 11.8 9.9 9.7 14.9 11.0 1.7% 2.6% 0.0% 2.0% 2.2% SKY LIGHT HOLDIN 3882 HK 231 0.24 (3.2) (6.9) 1.3 -0.4 -0.8 -2.8 - - 0.0% 0.0% 0.0% 0.0% 0.0% SUNNYsold OPTICAL in 2382 HK 199,298 181.70 22.7 44.7 7.1 59.0 67.2 43.9 38.1 29.5 0.4% 0.4% 0.5% 0.6% 0.7% TRULY INTL HLDGS 732 HK 3,059 0.93 (1.1) (2.1) (3.1) 43.7 39.4 5.4 - - 1.1% 0.0% 0.0% 0.0% 0.0% DISPLAY OP 334 HK 846 0.40 (8.0) (2.4) (4.8) 6.0 8.5 14.0 - - 4.8% 4.9% 0.0% 0.0% 0.0% COOLPADsupermark 2369 HK 1,666 0.26 9.9 37.1 2.0 -0.5 -3.1 11.5 - - 0.0% 0.0% 0.0% 0.0% 0.0% BYD ELECTRONIC 285 HK 89,227 39.60 7.0 (4.6) (2.5) 29.8 34.4 49.2 13.4 14.8 0.7% 0.6% 0.2% 0.9% 0.8% JUet TENG counters INTL HDG 3336 HK 2,652 2.21 (1.3) (5.2) (4.7) 31.6 15.7 13.9 6.7 7.6 3.6% 4.5% 4.5% 4.5% 4.5% Q TECHNOLOGY GRO 1478 HK 15,216 12.98 17.8 43.3 (1.2) 28.2 842.0 24.0 17.0 14.6 0.3% 0.7% 0.8% 1.1% 1.4% VITAL INNOVATION 6133 HK 383 0.45 8.4 101.8 (4.3) -3.0 19.0 -60.1 - - 0.0% 0.0% 22.7% 0.0% 0.0% SKY LIGHT HOLDIN 3882 HK 231 0.24 (3.2) (6.9) 1.3 -0.4 -0.8 -2.8 - - 0.0% 0.0% 0.0% 0.0% 0.0% COWELL 1415 HK 4,906 5.88 (2.8) 45.9 0.7 22.9 44.1 21.4 10.7 8.7 1.2% 14.9% 32.3% 11.3% 6.3% WAI CHI HOLD 1305 HK 100 0.46 17.9 15.0 15.0 4.6 2.2 2.7 - - 0.0% 0.0% 0.0% 0.0% 0.0% TK GROUP HOLDING 2283 HK 2,091 2.51 (1.2) (1.6) 0.4 7.0 6.0 7.0 9.7 6.6 6.8% 8.0% 5.6% 4.4% 6.8% KA SHUI INTL HLD 822 HK 554 0.62 (13.9) 30.5 (13.9) 16.3 4.9 6.3 - - 0.0% 0.0% 0.0% 0.0% 0.0% SAS DRAGON HLDG 1184 HK 1,890 3.02 7.9 23.3 0.7 6.2 6.0 8.0 - - 6.6% 6.6% 1.3% 0.0% 0.0% PANASIALUM HOLDI 2078 HK 408 0.34 13.3 9.7 21.4 -2.6 -1.7 -0.8 - - 0.0% 0.0% 0.0% 0.0% 0.0% VESON HOLDINGS L 1399 HK 270 0.25 (0.8) 2.9 (2.7) 11.1 2.4 4.5 - - 0.0% 0.0% 0.0% 0.0% 0.0% SIM TECH GROUP 2000 HK 803 0.34 (4.2) (11.7) (4.2) 7.8 3.6 -10.9 - - 4.7% 4.7% 2.9% 0.0% 0.0% WILLAS-ARRAY ELE 854 HK 196 2.30 2.2 20.4 0.0 5.1 1.7 -10.3 - - 12.3% 16.6% 8.7% 0.0% 0.0% Average 21,569 5.8 15.2 0.9 18.7 63.2 16.3 17.8 13.9 3.7% 5.5% 7.0% 3.2% 3.1%

TONGDA GROUP HLD 698 HK 3,952 0.61 29.8 40.2 7.0 3.8 7.1 9.6 13.7 9.1 8.9% 4.9% 1.8% 1.3% 2.0%

Casing peers

FOXCONN TECH 2354 TT 21,790 15.40 (1.2) 8.2 4.1 8.5 9.2 12.1 10.6 9.8 6.0% 5.4% 4.1% 4.7% 5.3% CATCHER TECH 2474 TT 44,313 58.18 7.1 17.0 1.9 8.0 6.2 15.7 10.0 11.1 5.3% 5.4% 4.4% 5.2% 5.0% CASETEK HOLDINGS 5264 TT 10,146 24.13 (0.1) 0.8 (0.2) 19.3 -22.5 -63.4 57.2 24.0 2.7% 1.1% 1.1% 1.1% 1.1% COXON PRECISE 3607 TT 507 4.17 5.6 22.9 (1.0) -5.0 -2.3 -3.5 - - 4.9% 3.1% 0.0% 0.0% 0.0% COMPAL ELEC 2324 TT 25,642 5.82 4.5 11.1 1.4 17.2 10.9 14.3 12.4 11.2 5.3% 5.4% 4.4% 5.8% 6.0% QUANTA COMPUTER 2382 TT 89,788 23.25 3.1 13.1 3.7 24.3 22.8 22.1 13.5 13.1 3.7% 4.0% 4.0% 6.2% 6.5% WISTRON CORP 3231 TT 24,017 8.45 (3.3) 3.9 (1.6) 22.9 18.5 13.9 9.7 9.3 3.5% 4.6% 6.0% 7.2% 7.8% PEGATRON 4938 TT 49,284 18.51 (2.9) 5.4 (0.7) 12.8 16.7 9.9 8.3 9.6 5.5% 4.9% 6.2% 7.5% 7.3% INVENTEC 2356 TT 23,606 6.58 (1.0) 8.0 (1.0) 13.7 14.0 16.8 10.8 13.2 6.4% 5.9% 5.0% 6.8% 6.6% EVERW-A 300115 CH 38,028 38.00 21.9 32.9 28.6 52.2 757.5 360.1 54.5 36.1 0.3% 0.3% 0.3% 0.3% 0.4% CREA-A 300083 CH 19,098 13.37 17.6 19.5 (5.3) 36.2 -5.6 1,178.4 - - 0.0% 0.0% 0.0% 0.0% 0.0% LUXSHARE PRECI-A 002475 CH 490,752 70.14 10.9 2.4 4.2 183.7 130.0 91.3 56.4 39.8 0.0% 0.1% 0.1% 0.2% 0.4% BYD ELECTRONIC 285 HK 89,227 39.60 7.0 (4.6) (2.5) 29.8 34.4 49.2 13.4 14.8 0.7% 0.6% 0.2% 0.9% 0.8% JU TENG INTL HDG 3336 HK 2,652 2.21 (1.3) (5.2) (4.7) 31.6 15.7 13.9 6.7 7.6 3.6% 4.5% 4.5% 4.5% 4.5% Average 69,774 5.3 9.8 1.7 35.4 94.2 149.8 22.0 16.6 3.5% 3.3% 3.3% 4.2% 4.2%

TONGDA GROUP HLD 698 HK 3,952 0.61 29.8 40.2 7.0 3.8 7.1 9.6 13.7 9.1 8.9% 4.9% 1.8% 1.3% 2.0%

3D glass plays

CORNING INC GLW US 218,572 286.09 (1.8) 5.2 2.5 -55.6 30.7 32.9 27.2 19.6 1.7% 2.0% 2.2% 2.4% 2.6% BYD ELECTRONIC 285 HK 89,227 39.60 7.0 (4.6) (2.5) 29.8 34.4 49.2 13.4 14.8 0.7% 0.6% 0.2% 0.9% 0.8% CPT TECHNOLOGY-A 000536 CH 10,712 3.87 31.8 59.9 10.6 45.3 -1.8 -3.6 - - 3.0% 0.0% 0.0% 0.0% 0.0% LENS TECHNOLOG-A 300433 CH 184,910 42.18 5.1 9.5 14.9 70.1 175.4 60.0 35.1 28.1 0.4% 0.1% 0.7% 0.6% 0.8% ZHEJIANG FIRST-A 300256 CH 6,501 6.79 (19.4) (21.2) (8.1) 88.2 -3.3 33.2 - - 0.6% 0.0% 0.0% 0.0% 0.0% TRIUMPH SCIEN-A 600552 CH 6,054 7.93 (1.0) 6.1 (3.9) 54.4 118.5 55.3 40.4 34.3 0.0% 0.0% 1.4% 0.0% 0.0% SUZHOU VICTORY-A 002426 CH 8,253 2.40 (3.8) 11.1 (6.1) 15.4 -8.6 -2.4 - - 1.4% 0.0% 0.0% 0.0% 0.0% HOLITECH TECHN-A 002217 CH 14,311 4.59 (16.4) (23.7) (6.6) 10.5 9.0 11.6 - - 1.0% 1.1% 0.9% 0.0% 0.0% Average 44,005 (7.1) (3.6) (2.0) 44.8 73.6 40.4 29.0 24.2 1.1% 0.5% 0.7% 0.5% 0.5%

TONGDA GROUP HLD 698 HK 3,952 0.61 29.8 40.2 7.0 3.8 7.1 9.6 13.7 9.1 8.9% 4.9% 1.8% 1.3% 2.0%

Source: Bloomberg, CIRL (Tongda’s valuation as of Jan 8 market close)

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Risk Factors

Downside risks include: 1) Upstream supply shock; 2) Escalating China-US trade tension; 3) Slower than expected recovery in PRC customers’ smartphone shipment; 4) Slower than expected adoption and intensified competition in glastics; 5) Weaker than expected sales for US client and 6) Delay in dipole antenna

mass production

Rating Policy

Rating Definition Buy Outperform HSI by 15% Stock Rating Neutral Between -15% ~ 15% of the HSI Sell Underperform HSI by -15% Accumulate Outperform HSI by 10% Sector Rating Neutral Between -10% ~ 10% of the HSI

Reduce Underperform HSI by -10%

Analysts List

Hayman Chiu Research Director (852) 2235 7677 [email protected]

Lewis Pang Associate Director (852) 2235 7847 [email protected] Farica Li Research Analyst (852) 2235 7617 [email protected] Edith Li Research Analyst (852)2235 7515 [email protected]

Analyst Certification

I, Hayman Chiu, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was / were, is / are or will be directly or indirectly, related to the specific recommendations or views expressed in this report / note.

Disclaimer

This report has been prepared by the Cinda International Research Limited. Although the information and opinions contained in this report have been compiled or arrived at from sources believed to be reliable, Cinda International cannot and does not warrant the accuracy or completeness of any such information and analysis. The report should not be regarded by recipients as a substitute for the exercise of their own judgment. Recipients should understand and comprehend the investment objectives and its related risks, and where necessary consult their own financial advisers prior to any investment decision. The report may contain some forward-looking estimates and forecasts derived from the assumptions of the future political and economic conditions with inherently unpredictable and mutable situation, so uncertainty may contain. Any opinions expressed in this report are subject to change without notice. The report is published solely for information purposes, it does not constitute any advertisement and should not be construed as an offer to buy or sell securities. Cinda International will not accept any liability whatsoever for any direct or consequential loss arising from any use of the materials contained in this report. This document is for the use of intended recipients only, the whole or a part of this report should not be reproduced to others.

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