14 October 2016

CFSG Daily Comment

Today ’s Forecast Market Outlook HSI trading range 22,900-23,300 points HSI might bound trade at 23,000 points today. Market focus CHN security stocks The Hang Seng Index opened lower by 106 points yesterday, and then once Hisense Kelon (00921) narrowed its losses to 59 points. After that, the market further extended its losses AIA (01299) and fell below its 50-day MA at approximately 23,194 points. The index dropped over 250 points in the morning session. During the afternoon session, HK stocks remained sluggish and decreased 400 points at most to touch its intra-day low of HK and Regional Markets 23,006 points at the last trading hour. The HSI finally closed at 23,031.30 points, Close (last trading day) Up(down) down 375.75 points or 1.61%. Market turnover amounted to HKD74.516 billion. The Hang Seng Index 23,031.30 (1.61%) ADR proportional HSI index closed overnight at 23,027 points with 4 points lower HSCEI 9,496.85 (1.82%) CCI 3,831.68 (1.35%) than Thursday’s closing price. US stocks slipped on weak China data and financial DJIA 18,098.94 (0.25%) shares. Hong Kong stocks are expected to consolidate with HSI bound trading at Nasdaq 5,213.33 (0.49%) 23,000 points today. UK FTSE 6,977.74 (0.66%) France CAC 4,405.17 (1.06%) Sector and Company News Germany DAX 10,414.07 (1.04%) Shanghai A 3,204.53 0.09% ¢ Zoomlion (01157) issued profit warning, expecting to record loss for the nine Shanghai B 358.80 0.43% months ended September between RMB787 million and RMB812 million, compared to loss of RMB518 million over a year-ago period. However, the Shanghai -HK stock connect Company forecast to have profit of RMB25 million to RMB 50 million for the third Daily Quota Bal. % quarter ended September. Northbound 13.465 billion 103.57% ¢ NE Electric (00042) issued profit warning, expecting to suffer from a net loss of Southbound 9.859 billion 93.89% RMB22.66 million to RMB24.16 million and loss per share of RMB0.0259 to RMB0.0277 in the past three quarters of 2016, compared to loss RMB911,000 Hang Seng Composite Industry Ind ice s over a year-ago period. Close (last trading day) Up(down) ¢ Hisense Kelon (00921) announced that in the PRC accounting standards, the Energy 7,913.72 (2.29%) Company expected an increase comparing to the same period last year for the Materials 5,024.56 (1.02%) first nine months of 2016. During the period, the net profit attributable to the Consumer Goods 4,124.44 (1.09%) shareholders of the listed company increased by 50%-100% YoY to RMB690-920 Services 3,166.01 (1.49%) million, and the basic EPS amounted to RMB0.51-0.67. Telecommunications 1,920.65 (1.32%) ¢ China Taiping (00966) announced that the premium income of its PRC Financials 3,243.78 (1.94%) Properties & subsidiaries, namely Taiping Life Insurance Company Limited, Taiping General Construction 3,047.25 (0.36%) Insurance Company Limited and Taiping Pension Company Limited, was Conglomerates 2,563.14 (0.90%) RMB76.492 billion, RMB13.452 billion and RMB3.127 billion respectively, up 20.68%, 14.75% and 24.42% respectively YoY. Total premium income equaled HSI Futures (Day Trading Session) RMB93.07 billion, up 19.91% YoY. ¢ Longfor Ppt (00960) announced that for the first nine months of 2016, the Group Oct-16 Nov-16 Open (last trading day) 23,418 23,400 achieved aggregated contracted sales of RMB65.1 billion, representing YoY Close (last trading day) 22,941 22,936 growth of 83.4%, contracted sales in terms of GFA amounted to 4.3 million sq.m. Up (down) (475) (479) In September 2016, the Group recorded contracted sales of RMB9.03 billion, with Day High 23,418 23,400 contracted sales in terms of GFA amounting to 599,000 sq.m. Day Low 22,940 22,950 Settled volume 134,673 2,879 Today’s A -share Snapshot Change in OI (3,445) 2,010 Anhui Sun-Create (600990.SH) Market Cap: 10.01 billion Foreign Exchange Valuation Financial Highlight (FY 201 5) Latest Price P/E P/B Turnover (“RMB billion ”) Net Profit ( “RMB billion ”) USD/JPY 103.8300 89.61 9.82 0.89 +60.40 % 0.01 -26.39% EUR/USD 1.1046 GBP/USD 1.2224 Company’s Profile: AUD/USD 0.7575 ¢ The Company is a company primarily engaged in the electronic industry. USD/CAD 1.3207 USD/SWF 0.9868 Brief Comments: - Business catalysts ¢ According to its 20161H’s report, the Company’s R&D expenses was RMB172 million, up 17.25% YoY. In terms of radar and related products, the radar signal processing and data signal processing analysis system passed through evaluation, which might bring positive effects on the Company’s results. ¢ According to the Company’s report for 1H2016, the Company’s revenue rose 60.40% YoY to RMB890 million. Additionally, its public security business’s revenue was amounted to RMB 301 million, up by 105.54% YoY, which might improve the Company’s results. - Risk factors ¢ According to its 20161H’s report ，the Company's selling expense was RMB45.88 million, up by 45.62% YoY. Due to the increase of after-sales service fees and related labor costs, the Company’s results might be adversely affected.

The above information is provided and distributed by Celestial Securities Limited ( “CSL ”). CSL is a corporation licensed under the Securities and Futures Ordinance. The document i s for reference only. Neither the information nor opinion expressed shall be construed, expressly or impliedly, as an advice, offer, invitation, advertisement, inducement, recommendation or representation of any kind or form whatsoever. While the information contained herein has been obtained from sources believed to be reliable, CSL or its affiliates (“CASH”) do not represent t hat it is accurate or complete and it should be relied upon. CASH hereby expressly disclaims all liabilities arising out of or inc idental to the accuracy and completeness of the contents and information herein contained. The contents and information in this document is subject to change without prior notice to you. Trade in securities covered by this report may be made only in those jurisdictions where the securities are qualified for trading. This document may not in whole or in part be reproduced or furnished to any person other than the addressee without written consent from CASH and CASH shall not be liable to any such third parties for loss arising from any unauthorized distribution. - 1 - 2014 年 10 月 3 日 (星期五) >> 每日通訊 14 October 2016

CFSG Daily Comment

China Res Power(00836)’s Profile Stock Pick Stock Category HK Share # Sector Electricity China Res Power (00836)'s net generation in September Business Construction and operations of 2016 increased 25.8% YoY. power stations and coal mining.

Substantial CRH (Power) Limited (62.97%) ¢ China Res Power recently announced its performance of the total electricity shareholders sold in September 2016. During the period, its total net generation in Financial Highlight September 2016 increased by 25.8% YoY to 13.5006 million MWh. Total net As at Jun 16 As at Dec 15 generation for the first nine months of 2016 increased by 3.9% YoY to 112 (in billion HKD) 6M2016 % FY2015 % million MWh. Revenue 30.971 -16.2 71.436 +1.1 Net Profit 5.336 -21.7 10.025 +8.8 ¢ On a same plant basis, total net generation of subsidiary coal-fired power Valuation plants in the first nine months of 2016 decreased by 2.7% YoY. Power P/E 6.47x P/B 0.92x plants located in Henan and Hubei recorded 2.6% and 1.5% increases YoY, Yield 6.30% respectively. Power plants located in Guangdong, Hebei, Jiangsu and Other provinces recorded 6.4%, 2.2%, 1.6% and 7.2% decreases YoY, Technical Analysis Direction Downward respectively. 14-day RSI 45.93 Support HKD 12.65 ¢ Overall, the operating data of China Res Power in September 2016 was Resistance HKD 13.83 decent. The Company’s total net generation in September 2016 increased # Eligible Stock for Shanghai-HK stock connect scheme by 25.8% YoY, showing the best performance in over 6 months, but it dropped 6.24% MoM, being the first month-on-month decrease in recent several months. Its total net generation for the first nine months of 2016 increased by 3.9% YoY, being the highest level in over 6 months. The NDRC agreed yesterday about a reform program in Zhejiang which will introduce competition to the electricity selling side and gradually open the electricity sales market to social capital, also will cultivate a diverse electricity sales market in multi-way. The attributable operational generation capacity in Zhejiang represented 5.02% among the Company’s total capacities, expecting small effects. A significant growth in power consumption is not expected in 2H2016 as demand for power is expected to be weak, while the supply of power is expected to be abundant. One of the primary focuses for the Group will be to strive for higher utilization hours. Therefore, we hold the cautiously optimistic view towards the Company’s business prospect in FY2016.

¢ China Res Power’s share price grew 1.81% and closed at HKD13.5 yesterday. Technically, the share price fell below several main MAs. Coupled with the 14-day RSI of 45.94, it suggested an uncertain momentum. Thus, the share price is expected to test its 100-day MA at approximately HKD12.65 and investors are advised to overweight its shares once it stayed above the mentioned level for medium investment.

The above information is provided and distributed by Celestial Securities Limited ( “CSL ”). CSL is a corporation licensed under the Securities and Futures Ordinance. The document is for reference only. Neither the information nor opinion expressed shall be construed, expressly or impliedly, as an advice, offer, invitation, advertisement, inducement, recommendation or representation of any kind or form whatsoever. While the information contained herein has been obtained from sources believed to be reliable, CSL or its affiliates (“CASH”) do not represent that it is accurate or complete and it should be relied upon. CASH hereby expressly disclaims all liabilities arising out of or incid ental to the accuracy and completeness of the contents and information herein contained. The contents and information in this document is subject to change without prior notice to you. Trade in securities covered by this report may be made only in those jurisdictions where the securities are qualified for trading. This document may not in whole or in part be reproduced or fur nished to any person other than the addressee without written consent from CASH and CASH shall not be liable to any such third parties for loss arising from any unauthorized distribution. - 2 - 14 October 2016 >> CFSG Daily Comment

ADR HK Stock Prices Stock ADR Closing Price Adjusted Price Change from (HKEx Ticker) (US$) (HK$) HK Closing Price (%) HSBC Holdings (00005.HK) 37.39 58.195 (0.770) China Life (02628.HK) 13.13 20.436 (1.500) Petrochina (00857.HK) 69.35 5.397 (1.323) CNOOC (00883.HK) 132.28 10.294 (0.840) Sinopec Corp (00386.HK) 73.83 5.746 (1.835) China Mobile (00941.HK) 60.76 94.568 (1.267) China Unicom (00762.HK) 12.32 9.588 (1.519) China Telecom (00728.HK) 51.14 3.98 (0.891) Huaneng Power (00902.HK) 24.9 4.844 (0.519)

A – H Comparison A-Share HKD H-Share Stock Closing Price Adjusted Price Closing Price H/A (%)* (HKEx Ticker) (RMB) (HK$) (HK$) ICBC (01398.HK) 4.42 5.10 4.69 92% China Merchants Bank (03968.HK) 18.09 20.85 18.98 91% Bank of China (03988.HK) 3.38 3.90 3.41 88% Sino Corp (00386.HK) 4.9 5.65 5.66 100% Maanshan Iron (00323.HK) 2.81 3.24 1.76 54% Angang New Steel (00347.HK) 4.47 5.15 3.75 73% Jiangxi Copper (00358.HK) 14.1 16.25 8.88 55% ZTE (00763.HK) 14.94 17.22 10.7 62% Huaneng Power (00902.HK) 7.09 8.17 4.83 59% Huadian Power (01071.HK) 5.01 5.78 3.4 59% Datang Power (00991.HK) 3.91 4.51 2.07 46% China Life (02628.HK) 21.67 24.98 20.4 82% China CITIC Bank (00998.HK) 5.97 6.88 5.05 73% BOCOMM (03328.HK) 5.53 6.37 5.69 89% * > 100% ： H-Share is at a premium on its A-Share ； < 100% ： H-Share is at a discount on its A-Share

Commodities Price

Price Change Change (%)

WTI Crude Oil Futures (USD/bbl.) 50.48 0.04 0.08% Brent Crude Oil Futures (USD/bbl.) 51.86 (0.17) (0.33%) Gold 100 OZ Futures (USD/t oz.) 1,255.96 (2.13) (0.17%) COMEX Silver Futures (USD/t oz.) 17.43 (0.03) (0.16%) COMEX Copper Futures (USD/lb.) 212.40 0.20 0.09% Platinum Spot (USD/t oz.) 932.60 (4.69) (0.50%)

The above information is provided and distributed by Celestial Securities Limited ( “CSL ”). CSL is a corporation licensed under the Securities and Futures Ordinance. The document is for reference only. Neither the information nor opinion expressed shall be construed, expressly or impliedly, as an advice, offer, invitation, advertisement, inducement, recommendation or representation of any kind or form whatsoever. While the information contained herein has been obtained from sources believed to be reliable, CSL or its affiliates (“CASH”) do not represent that it is accurate or complete and it should be relied upon. CASH hereby expressly disclaims all liabilities arising out of or incid ental to the accuracy and completeness of the contents and information herein contained. The contents and information in this document is subject to change without prior notice to you. Trade in securities covered by this report may be made only in those jurisdictions where the securities are qualified for trading. This document may not in whole or in part be reproduced or fur nished to any person other than the addressee without written consent from CASH and CASH shall not be liable to any such third parties for loss arising from any unauthorized distribution. - 3 - 14 October 2016 >> CFSG Daily Comment

HK Treasury Yield Curve Rates 3-year 5-year 10-year 15-year Date Yield Yield Yield Yield

(%) (%) (%) (%) 09/15/16 0.576 0.717 1.086 1.269 09/19/16 0.583 0.727 1.099 1.280 09/20/16 0.582 0.734 1.101 1.284 09/21/16 0.581 0.724 1.094 1.277 09/22/16 0.538 0.670 1.038 1.203 09/23/16 0.494 0.633 1.001 1.156 09/26/16 0.472 0.610 0.975 1.141 09/27/16 0.463 0.617 1.002 1.178 09/28/16 0.486 0.627 0.965 1.155 09/29/16 0.498 0.639 0.974 1.163 09/30/16 0.490 0.616 0.949 1.136 10/03/16 0.514 0.653 0.995 1.184 10/04/16 0.517 0.661 0.995 1.177 10/05/16 0.666 0.678 1.033 1.195 10/06/16 0.672 0.688 1.033 1.185 10/07/16 0.677 0.680 1.028 1.170 10/11/16 0.682 0.719 1.073 1.223 10/12/16 0.676 0.729 1.087 1.230 10/13/16 0.630 0.672 1.026 1.179

US Treasury Yield Curve Rates 1-month 3-month 1-year 3-year 10-year 30-year Date Yield Yield Yield Yield Yield Yield

(%) (%) (%) (%) (%) (%) 09/16/16 0.200 0.500 0.610 1.210 1.700 2.440 09/19/16 0.160 0.480 0.600 1.220 1.700 2.450 09/20/16 0.170 0.490 0.610 1.200 1.690 2.430 09/21/16 0.120 0.440 0.610 1.200 1.660 2.390 09/22/16 0.100 0.390 0.600 1.180 1.630 2.340 09/23/16 0.090 0.400 0.600 1.160 1.620 2.340 09/26/16 0.120 0.420 0.580 1.130 1.590 2.320 09/27/16 0.160 0.420 0.580 1.120 1.560 2.280 09/28/16 0.140 0.440 0.600 1.130 1.570 2.290 09/29/16 0.120 0.430 0.590 1.120 1.560 2.280 09/30/16 0.200 0.450 0.590 1.140 1.600 2.320 10/03/16 0.250 0.480 0.630 1.180 1.630 2.340 10/04/16 0.280 0.480 0.640 1.220 1.690 2.400 10/05/16 0.260 0.480 0.650 1.260 1.720 2.440 10/06/16 0.260 0.460 0.650 1.280 1.750 2.460 10/07/16 0.260 0.460 0.660 1.260 1.730 2.460 10/11/16 0.270 0.480 0.690 1.300 1.770 2.500 10/12/16 0.260 0.490 0.680 1.310 1.790 2.510 10/13/16 0.260 0.450 0.660 1.270 1.750 2.480

The above information is provided and distributed by Celestial Securities Limited ( “CSL ”). CSL is a corporation licensed under the Securities and Futures Ordinance. The document is for reference only. Neither the information nor opinion expressed shall be construed, expressly or impliedly, as an advice, offer, invitation, advertisement, inducement, recommendation or representation of any kind or form whatsoever. While the information contained herein has been obtained from sources believed to be reliable, CSL or its affiliates (“CASH”) do not represent that it is accurate or complete and it should be relied upon. CASH hereby expressly disclaims all liabilities arising out of or incid ental to the accuracy and completeness of the contents and information herein contained. The contents and information in this document is subject to change without prior notice to you. Trade in securities covered by this report may be made only in those jurisdictions where the securities are qualified for trading. This document may not in whole or in part be reproduced or fur nished to any person other than the addressee without written consent from CASH and CASH shall not be liable to any such third parties for loss arising from any unauthorized distribution. - 4 -