China Evergrande Group Version 3 | Bloomberg: 3333 HK Equity | Reuters: 3333.HK Refer to Important Disclosures at the End of This Report

China / Hong Kong Company Guide

China Evergrande Group Version 3 | Bloomberg: 3333 HK Equity | Reuters: 3333.HK Refer to important disclosures at the end of this report

DBS Group Research . Equity 19 Jun 2017

HOLD Wait for better entry point

Last Traded Price ( 19 Jun 2017):HK$15.00 (HSI : 25,925) Wait for better entry point. We revised up our FY17/18 EPS to reflect Price Target 12-mth: HK$15.48 (3% upside) (Prev HK$6.43) perpetual redemption, delivery upside, strategic investors' sharing of profit Potential Catalyst: A-share listing and A-share share price rally and ytd sales. Based on 8x rolling 12-month PE, we reset our TP to HK$15.48, Where we differ: More confident in its revenue growth representing 9% discount to our updated estimate of its NAV of Analyst HK$17.1/share. The share is trading at 14.4x FY17 PE and 19% discount to Danielle WANG CFA, +852 2820 4915 [email protected] its implied A-share valuation, compared with the 35% overall valuation Carol WU +852 2863 8841 [email protected] discount of H-share to A-share. We believe Evergrande has strong incentive Andy YEE CFA, +852 2971 1773 [email protected] to stabilise its share price to facilitate its A-share listing and the company's Ken HE CFA, +86 21 6888 3375 [email protected] interim results may see a strong recovery from 1H16 due to faster-than- Trista QIN +852 2863 8820 [email protected] expected delivery. These might protect its downside. However, A-share listing What’s New might only be done in 4Q17 since it has not published asset restructuring • Our site visits to Chengdu and Chongqing unveiled proposal for 000029 CN and Evergrande won’t be able to pay interim dividend. Current short interest is at low level and southbound shareholding strong post-M&A execution is on a declining trend. • Profitability enhancement likely to result from group Projects acquired through M&A are driving growth in Chongqing and level financial restructuring rather than selling price hike Chengdu. We visited Evergrande’s projects in Chengdu and Chongqing last • Banks are giving priority to Evergrande due to its week. Contracted sales contribution from Chengdu and Sichuan companies large scale and good track record, despite limited overall was Rmb9bn in 2014 before Evergrande acquired assets from CC Land, Chinese Estates, Sino Land and New World in late 2014. Sales had picked up quota and increase in interest rate to Rmb29bn in 2016 and sales momentum has remained strong ytd. We see • Revise up earnings and TP to reflect potential upside fast integration, redesigning, and execution in acquired projects in both cities. in delivery and faster-than-promised pace of perpetual We believe Evergrande's strong execution in M&A will be its advantage in this

redemption; but suggest waiting for a better entry point fast consolidating market.

Price Relative Profitability enhancement will mainly rely on group level cost-saving efforts.

HK$ Relative Index Regional offices are ranked by profit contribution now as compared with

476 16.5 sales contribution before. However, due to strict price control by the 426 14.5 376 government, local teams' ability to lift selling prices is limited. Sell-through 12.5 326 10.5 rates remained at a high level, with selling prices at the ceiling of the range. 276 8.5 226 In 2017 and 2018, margin improvement will be mainly from debt 6.5 176 4.5 126 restructuring. We estimate Evergrande’ gross margin will stay at c. 30% with 2.5 76 core net profit margin improving from 4% in 2016 to 7.5% in 2018. Jun-13 Jun-14 Jun-15 Jun-16 Jun-17

China Evergrande Group (LHS) Relative HSI (RHS) Local banks have high tendency to support Evergrande due to its large scale Forecasts and Valuation and good track record. Banks are reported to have limited quota for FY Dec (RMB m) 2015A 2016A 2017F 2018F development loans at present and their own costs are increasing. Mortgages Turnover 133,130 211,444 303,939 388,316 are usually offered at benchmark rates while some provide a 5% discount. EBITDA 34,568 49,299 56,463 75,192 Pre-tax Profit 31,445 36,862 54,487 73,216 Development loans come with a 40% premium to PBOC rates for non-SOE Net Profit 10,460 5,091 11,867 25,475 developers and this may increase further. Banks have indicated that they Core Profit 1,985 1,596 18,672 25,475 would give priority to Evergrande's lending at PBOC*1.4x despite the Core Profit Gth (%) 46.0 (19.6) 1,070.3 36.4 company's high debt ratio due to its top ranking in the sector and clean EPS (RMB) 0.71 0.37 0.91 1.95 credit record. EPS (HK$) 0.82 0.43 1.04 2.23 EPS Gth (%) (16.5) (47.8) 143.7 114.7 Valuation: PE (X) 18.3 35.1 14.4 6.7 The stock is trading at 14.4x FY17F PE and 6.7x FY18 PE.

P/Cash Flow (X) nm nm nm 1.5 EV/EBITDA (X) 12.0 11.3 11.7 7.5 Key Risks to Our View: DPS (HK$) 0.41 0.00 0.74 1.12 Liquidity tightening in China and overall market slowdown. Div Yield (%) 2.7 0.0 5.0 7.4 Unsuccessful A-share listing or A-share listing progress is slower than expected Net Gearing (%) 93.5 119.8 139.2 134.3 At A Glance ROE (%) 20.5 10.7 25.8 47.2 Issued Capital (m shrs) 13,088 Book Value (HK$) 3.99 3.71 4.18 5.29 Mkt. Cap (HK$m/US$m) 196,324 / 25,169 P/Book Value (X) 3.8 4.0 3.6 2.8 Major Shareholders Earnings Rev (%): 105 41 Hui Ka Yan (%) 77.9 Consensus EPS (RMB) 0.85 1.22 Free Float (%) 22.1 Other Broker Recs: B: 9 S: 6 H: 6 3m Avg. Daily Val. (US$m) 125.8 Source of all data on this page: Company, DBSV, Thomson Reuters, HKEX ICB Industry : Financials / Real Estate (HK)

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Company Guide

China Evergrande Group

Pro-rata net debt ratio calculations

Rmb mn L/T debt S/T debt Cash S/H MI Total Total Perpetual Net debt Net debt ratio equity equity Equity debt to if treating Total perps as debt equity and base on (Perp as attributable equity ) equity

End-2016 332,164 202,906 304,329 44,240 148,292 192,532 535,070 112,944 119.8% 431.8% Additional debt increase 100,000 Proceed from strategic investors 70,000 70,000 Garaunted earning in 2017 17,010 7,290 Redemption of perpetual -112,944 -112,944 -112,944 Citic fund 12,000 12,000 Disposal of V anke's shares 29,200 -700 Pro-forma 432,164 202,906 302,585 60,550 124,638 192,532 635,070 0 172.7% 172.7%

Source: Company; DBS Vickers

Possible structure after A-share listing

3333.HK's public Cha ima n Hui flo a t

78% 22%

Shenzhen Special Economic 3333.HK Zone Real Estate & Properties Strategic investors exisitng shareholders

71% 4% 25%

000029 CN

Source: Company; DBS Vickers

ASIAN INSIGHTS VICKERS SECURITIES

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Company Guide China Evergrande Group

Southbound holding declined 34% from the peak level in mid-April

Millions Evergrande 600

500

400

300

200

100

0 -17 -17 -17 r-17 r-17 r-17 y y y p p p 2-Jun-17 9-Jun-17 7-A 5-Ma 21-Apr-17 28-A 14-A 17-Mar-17 24-Mar-17 31-Mar-17 12-Ma 19-Ma 26-May-17 Source: Company; DBS Vickers

Short interest picked up slightly in mid-June but still at low level

% of short sell HK$ 40% 18 35% 16 30% 14 25% 12 10 20% 8 15% 6 10% 4 5% 2 0% 0 Jan-17 Jun-17 Feb-17 Apr-17 Dec-16 Nov-16 Mar-17 May-17 Share price (RHS) 30 per. Mov. Avg. (% of short sell (LHS))

Source: Company; DBS Vickers

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Company Guide

China Evergrande Group

Share buyback has limited quota

HK$ 350 18 300 16 14 250 12 200 10 150 8 6 100 4 50 2 0 0 Jun-16 Jun-17 Sep-15 Sep-16 Dec-15 Dec-16 Mar-16 Mar-17 Trading vol. ex. Buyback (in mn shares) (LHS) Share price with buyback (RHS) Share price without buyback (RHS)

Source: Company; DBS Vickers

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Company Guide China Evergrande Group

Earnings Drivers: Contracted sales Revenue will be driven by pre-sales growth with stable gross % profit margin. Evergrande achieved 85% y-o-y presales growth Rmb bn 400,000 90 in 2016 and targets to grow sales by 21% to Rmb450bn in 350,000 80 2017. It had locked in 40% of its target in 5M17. Gross margin 300,000 70 60 was maintained at 28% in FY16 as contracted ASP increased by 250,000 50 200,000 9% y-o-y. Given the higher land costs from newly acquired land, 40 150,000 we expect gross margins in the property business to stay stable. 30 Evergrande’s targeted completion in 2017 was 39m sm. In 100,000 20 50,000 addition, it had Rmb80bn of completed but unsold units on its 10 0 0 balance sheet and Rmb220bn unbooked sales as at end-2016. FY11 FY12 FY13 FY14 FY15 FY16 We believe it will be able to deliver strong growth in revenue in Gross margins 2017 and 2018. 34% 33% Shifting focus to operating efficiency on top of scale expansion. 32% After the fast sales expansion in the past seven years (43% 31% CAGR since 2009), Evergrande’s presales reached Rmb373bn in 30% 2016, and it targets to grow sales to Rmb450bn in 2017. 29% 28% Management believes that with sales of over Rmb400bn, it will 27% be able to maintain its leading position in the property sector in 26% the next ten years. As such, management will now shift its 25% focus to operating efficiency rather than solely on scale. This FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E implies optimisation of profitability and capital structure in the SG&A as % of contracted sales medium term, including reducing perpetual securities and 12% foreign debt to lower financial risks. 10%

Slowing down expansion into new businesses. The company 8% sold its water, dairy, grain and oil businesses with disposal gains 6% recorded in FY16. After diversifying into new businesses over 4% the past few years, management believes it has optimised its business segmentation mix with real estate as the core business, 2% supported by three other segments – financials, cultural tourism, 0% and healthcare. Thus, it will slow down expansion into new FY11 FY12 FY13 FY14 FY15 FY16 businesses in the medium term. Average funding costs 12%

A-share listing on track to complete in 2017. In January 2017, 10% Evergrande obtained in-principle approval for the proposed 8% spin-off from the HKEx. The company has introduced strategic investors, with investments of Rmb70bn. According to the 6% current plan, the reorganisation will be completed in 2017. 4%

2% High dividend payout will be maintained after it completes share structure reorganisation. The company did not declare a 0% FY11 FY12 FY13 FY14 FY15 FY16 final dividend in FY16 as it is in the process of reorganising its shareholding structure by spinning off its real estate business on Effective tax rate the A-share platform. Assuming it keeps dividend payout ratio 60% at 50% when announcing FY17 results and paying out dividend 50% for two years, the dividend yield will be at c. 5%. 40%

30% 20% 10%

FY11 FY12 FY13 FY14 FY15 FY16 FY17E Source: Company, DBS Vickers

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Company Guide

China Evergrande Group

Leverage & Asset Turnover (x) Balance Sheet: 0.3 Net debt ratio is expected to improve by December 2017. As of 2.50 0.3 December 2016, net debt-to-total equity (perpetual securities 2.00 treated as debt) had gone up to 432%. Evergrande has redeemed a 0.3 majority of its perpetual securities and is likely to redeem all by end- 1.50 0.2 2017. With equity contribution of Rmb70bn from strategic 1.00 investors and Rmb12bn from Citic property fund, its comparable 0.50 0.2 net debt ratio is likely to be reduced to below 200% by year-end. 0.00 0.2 Evergrande has bought c. 40m sm of land ytd at a cost of 2014A 2015A 2016A 2017F 2018F Rmb107bn. The company plans to slow down on land auctions but Gross Debt to Equity (LHS) Asset Turnover (RHS) only focus on M&A in 2H17. Capital Expenditure RMB 0.0 Financial costs likely to remain stable. Despite the tight control on -2,000.0 bond issuance, Evergrande was able to obtain permission to issue -4,000.0 -6,000.0 an exchange offer to restructure and extend its USD debt. Coupon -8,000.0 rate will be reduced. Meanwhile, onshore lending cost is increasing -10,000.0 in general. In 2017, Evergrande’s total interest expenses are under -12,000.0 -14,000.0 upward pressure due to spinoff agency fees and bond exchange -16,000.0 expenses. Average funding cost may decline in 2018 if onshore -18,000.0 2014A 2015A 2016A 2017F 2018F borrowing cost can remain stable. Capital Expenditure (-) ROE Share Price Drivers: 45.0% Southbound investment. Evergrande's southbound shareholding 40.0% has been on a declining trend since mid-April. 35.0% 30.0% Short squeeze and buyback. Short interest picked up slightly in mid- 25.0% 20.0% June but still at a low level. Evergrande has bought back 723m 15.0% shares ytd. It has limited quota for further buybacks. 10.0% 5.0% Debt restructuring. Evergrande’s financial cost saving from 0.0% 2014A 2015A 2016A 2017F 2018F perpetual will boost earnings in 2018 and onwards. Forward PE Band

x Key Risks: 20 Financial risk: The heavy debt position adds financial risk to the 15 company if sales and liquidity in the market tighten. 10 +1SD: 7.7x Avg: 5.3x Macroeconomic risks: Tightening in credit especially in the domestic 5 market may put pressure on the company’s balance sheet. -1SD: 2.9x 0

Company Background Jun-11 Feb-13 Sep-14 Dec-17 Nov-09 Evergrande is among the top 3 developers in China in terms of May-16 property sales, with a large land bank of 229m sm. It aims to be a PB Band conglomerate with exposure in the real estate, financial, cultural x 4.0 tourism and healthcare sectors. 3.5 3.0 2.5 2.0 +1SD: 1.7x 1.5 Avg: 1.2x 1.0 0.5 0.0 -1SD: 0.8x

Jun-11 Feb-13 Sep-14 Dec-17 Nov-09 May-16 Source: Company, DBS Vickers

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Company Guide China Evergrande Group

Key Assumptions FY Dec 2016A 2017F 2018F

Property price growth 0.0% 0.0% 0.0% Rental for office 0.0% 0.0% 0.0%

Rental for retail 0.0% 0.0% 0.0% ADR growth for hotel 0.0% 0.0% 0.0%

Source: Company, DBS Vickers

Segmental Breakdown (RMB m)

FY Dec 2014A 2015A 2016A 2017F 2018F Revenues (RMB m) Sales of properties 107,450 126,449 203,890 300,890 384,728 Rental income of investment 144 241 647 712 783 Propertyi management services and 1,259 1,318 1,948 2,338 2,805 others Others 2,545 5,122 4,959 0 0 Total 111,398 133,130 211,444 303,939 388,316 Source: Company, DBS Vickers

Income Statement (RMB m) FY Dec 2014A 2015A 2016A 2017F 2018F Turnover 111,398 133,130 211,444 303,939 388,316 Cost of Goods Sold (79,615) (95,717) (152,022) (212,450) (279,536) Gross Profit 31,784 37,413 59,422 91,488 108,780 Other Opg (Exp)/Inc 256 501 9,260 (9,468) (2,663) Operating Profit 18,848 18,450 43,101 55,327 74,056 Associates Inc (104) (392) (203) 0 0 Net Interest (Exp)/Inc (703) (1,987) (11,301) (840) (840) Exceptional Gain/(Loss) 13,151 15,374 5,265 0 0 Pre-tax Profit 31,191 31,445 36,862 54,487 73,216 Tax (13,175) (14,105) (19,245) (30,339) (37,336) Minority Interest (5,412) (6,880) (12,526) (12,281) (10,405) Net Profit 12,604 10,460 5,091 11,867 25,475 Core Profit 1,359 1,985 1,596 18,672 25,475

Sales Gth (%) 18.9 19.5 58.8 43.7 27.8 Net Profit Gth (%) (0.1) (17.0) (51.3) 133.1 114.7 Core Profit Gth (%) (85.9) 46.0 (19.6) 1,070.3 36.4 Gross Mgn (%) 28.5 28.1 28.1 30.1 28.0 Core Profit Margin (%) 1.2 1.5 0.8 6.1 6.6 Tax Rate 42.2 44.9 52.2 55.7 51.0

Source: Company, DBS Vickers

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Company Guide

China Evergrande Group

Balance Sheet (RMB m) FY Dec 2014A 2015A 2016A 2017F 2018F

Fixed Assets 81,104 117,739 158,279 158,279 158,279 Invts in Assocs & JVs 0 0 0 0 0 Other LT Assets 9,708 26,952 78,954 42,149 42,149 Cash & ST Invts 59,498 164,022 304,329 221,196 275,683 Other Current Assets 324,152 448,322 809,306 1,067,284 1,091,196 Total Assets 474,462 757,035 1,350,868 1,488,908 1,567,305

ST Debt 79,663 158,744 202,906 202,906 202,906 Creditors 123,673 191,309 299,905 299,905 299,905 Other Current Liab 64,901 106,628 230,583 335,620 446,431 LT Debt 76,401 138,162 332,164 332,164 332,164 Other LT Liabilities 17,446 20,050 92,778 92,778 92,778 Minority Interests 61,258 91,136 148,292 177,906 132,756 Shareholder’s Equity 51,120 51,006 44,240 47,628 60,365 Total Capital 474,462 757,035 1,350,868 1,488,908 1,567,305

Share Capital (m) 14,762 14,667 13,683 13,088 13,088 Net Cash/(Debt) (96,566) (132,884) (230,741) (313,874) (259,388) Working Capital 135,578 150,385 278,818 431,759 344,860 Net Gearing (%) 85.9 93.5 119.8 139.2 134.3

Source: Company, DBS Vickers

Cash Flow Statement (RMB m) FY Dec 2014A 2015A 2016A 2017F 2018F

Profit Before Tax 31,191 31,445 36,862 54,487 73,216 Assoc. & JV Inc/(loss) 0 0 0 0 0 Tax Paid (7,306) (6,065) (13,106) (30,339) (37,336) Depr/Amort 1,136 1,136 1,136 1,136 1,136 Chg in Wkg.Cap. (38,954) (9,723) (15,851) (159,943) 76,494 Other Non-Cash (30,513) (40,017) (60,137) (1,136) (1,136) Operating CF (45,485) (23,749) (58,610) (135,795) 112,373 Net chg in inv. (3,235) (4,142) (44,448) 36,805 0 Assoc, MI, Invsmt (9,155) (8,411) (75,111) 0 0 Investing CF (12,391) (12,553) (119,559) 36,805 0 Net Chg in Debt 47,247 84,470 186,619 0 0 New Capital (3,983) (7,558) (632) 0 0 Dividend (6,338) (6,952) (5,481) (13,757) (12,737) Other Financing CF 10,672 39,486 92,573 29,614 (45,150) Financing CF 47,598 109,446 273,079 15,857 (57,887) Chg in Cash (10,272) 73,243 95,330 (83,133) 54,486 Chg in Net Cash (41,403) (36,318) (97,857) (83,133) 54,486

Source: Company, DBS Vickers

ASIAN INSIGHTS VICKERS SECURITIES

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Company Guide China Evergrande Group

Valuation comparison

3-mth daily Net Disc/ 19-Jun Mkt trading 12-m EPS gth PE PE Yield Yield ROE ROE Gearing P/Bk NAV (Prem) Price Cap value Recom target 17F 18F 17F 18F 17F 18F 17F 18F 16A 16A to NAV Company Name Code HK$ US$bn US$m HK$ % % x x % % % % % x HK$ % Large cap China Overseas* 688 HK 22.95 32.2 70.8 BUY 26.15 (17) 8 7.7 7.1 3.9 4.2 14.0 13.8 7.3 1.1 26.0 11.8 Country Garden* 2007 HK 8.91 24.4 46.4 HOLD 6.75 16 32 12.2 9.1 2.6 3.4 19.0 21.8 48.7 2.4 9.3 4.6 CR Land* 1109 HK 22.1 19.6 39.8 BUY 24.98 (2) 15 8.1 7.0 3.4 3.9 15.4 15.9 23.8 1.3 28.0 21.2 China V anke 'H'* 2202 HK 21.35 33.6 24.8 BUY 25.00 17 17 8.3 7.1 5.3 6.1 20.3 20.9 25.9 1.8 22.7 6.0 Evergrande* 3333 HK 15 25.2 121.7 HOLD 15.48 144 115 14.4 6.7 5.0 7.4 25.8 47.2 119.8 4.0 7.1 (112.6) Longfor* 960 HK 15.54 11.7 12.3 BUY 20.10 8 28 7.9 6.3 4.4 5.7 15.4 17.7 53.9 1.3 22.7 31.4 Shimao Property* 813 HK 13.56 5.9 11.1 HOLD 11.20 (11) 10 7.5 6.9 7.1 7.8 10.0 10.5 50.7 0.8 28.5 52.5 A v erage 22 32 8.6 7.2 4.5 5.5 17.1 21.1 47.2 1.8 21.2 Mid cap Agile Property* 3383 HK 6.94 3.5 19.1 HOLD 6.28 64 22 6.3 5.2 8.4 8.7 8.9 10.4 49.1 0.6 16.3 57.5 China South City*^^ 1668 HK 1.47 1.5 4.2 FV 1.30 38 n.a. 10.7 n.a. 5.2 0.0 4.1 0.0 92.7 0.4 2.6 42.9 COGO* 81 HK 4.24 1.2 4.7 BUY 3.47 36 32 7.0 5.3 0.0 0.0 10.8 12.6 97.8 0.8 7.2 41.0 Greentown 3900 HK 8.18 2.3 6.6 NR n.a. 22 9 8.4 7.7 2.3 2.2 7.3 6.6 58.1 0.6 19.9 58.8 Guangzhou R&F 2777 HK 12.12 5.0 16.5 NR n.a. 10 12 4.6 4.1 9.0 9.7 16.0 16.6 159.9 0.8 19.0 36.2 Hopson Dev 754 HK 7.13 2.0 0.7 NR n.a. (80) 10 20.7 18.8 1.5 1.6 n.a. n.a. 68.1 0.3 n.a. n.a. KWG Property 1813 HK 5.35 2.1 12.3 NR n.a. (0) 13 4.1 3.6 8.9 9.9 15.1 15.0 66.8 0.6 10.8 50.4 Logan Property 3380 HK 4.84 3.4 6.3 NR n.a. (12) 27 5.8 4.6 6.3 7.9 19.2 20.9 76.2 1.2 4.5 (6.9) Poly (Hong Kong) 119 HK 3.22 1.5 4.1 NR n.a. 468 41 25.8 18.3 0.4 1.1 1.7 2.9 108.4 0.5 7.1 54.9 Sino-Ocean Land* 3377 HK 3.71 3.6 5.5 BUY 4.45 11 10 5.9 5.4 5.8 6.4 9.0 9.2 43.5 0.6 7.7 51.8 Soho China* 410 HK 3.71 2.5 6.7 HOLD 4.16 (67) 21 56.2 46.4 0.0 0.0 0.9 1.1 31.7 0.5 6.9 46.4 Sunac China 1918 HK 14.22 7.1 35.5 NR n.a. 6 76 16.3 9.3 2.0 3.0 10.2 15.5 121.5 2.1 16.9 16.0 Yanlord Land*^ YLLG SP 1.815 2.5 4.3 BUY 2.25 (4) 16 6.7 5.7 2.6 2.8 11.7 12.3 16.3 0.8 3.2 42.4 Yuexiu Property* 123 HK 1.31 2.1 5.8 HOLD 1.23 (14) 20 10.7 9.0 3.7 4.5 4.2 4.9 53.1 0.5 2.7 52.1 Average# 39 23 8.8 7.0 4.5 4.7 9.9 10.8 72.7 0.8 41.7 Small cap BJ Cap Land 'H' 2868 HK 3.61 2.3 2.6 NR n.a. (20) 34 5.8 4.4 6.6 8.8 19.3 22.8 132.3 0.6 n.a. n.a. BJ North Star 'H' 588 HK 3.15 1.4 1.5 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 92.3 0.5 n.a. n.a. C C Land* 1224 HK 1.87 0.9 0.5 Hold 2.06 6 (79) 4.3 20.6 4.7 1.0 7.4 1.5 (56.1) 0.3 2.8 32.5 Central China* 832 HK 1.78 0.6 0.7 HOLD 1.80 106 13 4.6 4.0 6.6 7.4 12.4 12.8 45.4 0.6 5.0 64.2 China SCE 1966 HK 3.01 1.3 3.9 NR n.a. (22) 32 5.6 4.2 5.5 7.2 17.7 20.0 96.7 1.1 n.a. n.a. CIFI Holdings 884 HK 3.04 2.7 5.7 NR n.a. 28 20 4.9 4.1 7.2 8.5 22.2 22.6 50.4 1.2 n.a. n.a. First Sponsor*^ FSG SP 1.325 0.6 0.0 NR 1.57 13 n.a. 12.8 n.a. 1.3 0.0 6.4 0.0 7.4 0.8 4.1 67.6 Glorious Property 845 HK 0.86 0.9 0.5 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 310.6 0.4 5.9 85.3 Hydoo Int'l 1396 HK 0.91 0.5 0.3 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 65.6 0.7 n.a. n.a. Kaisa Group 1638 HK 2.54 1.7 10.1 NR n.a. n.a. n.a. n.a. 14.6 n.a. 0.0 n.a. n.a. 332.6 0.9 n.a. n.a. Lai Fung* 1125 HK 0.218 0.5 0.1 NR n.a. (73) n.a. 12.7 n.a. 1.5 0.0 2.0 0.0 25.2 0.3 0.5 56.0 Minmetals Land 230 HK 0.89 0.4 0.3 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 69.5 0.5 n.a. n.a. Modern Land (China) 1107 HK 1.22 0.4 0.3 NR n.a. 17 17 3.0 2.5 8.6 10.7 18.6 20.0 114.9 0.6 n.a. n.a. Powerlong 1238 HK 3.37 1.7 2.6 NR n.a. (14) 17 5.5 4.7 5.3 6.2 13.6 13.9 76.6 0.5 n.a. n.a. Renhe Commercial 1387 HK 0.191 1.1 0.2 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. (21.0) 1.1 2.7 93.0 Greenland* 337 HK 2.71 1.0 2.3 BUY 4.97 70 n.a. 2.3 n.a. 0.0 0.0 13.8 0.0 120.6 0.8 5.7 52.7 SRE Group 1207 HK 0.185 0.5 0.2 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 74.5 0.5 n.a. n.a. Sunshine 100 China 2608 HK 3.14 1.0 0.0 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 290.1 1.1 n.a. n.a. Times Property 1233 HK 4.88 1.1 2.8 NR n.a. 7 38 3.5 2.5 9.2 12.4 22.6 24.8 73.4 0.8 n.a. n.a. Wuzhou Int'l 1369 HK 0.75 0.2 0.1 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 209.2 0.9 n.a. n.a. Ying Li^ YINGLI SP 0.136 0.3 0.4 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 81.6 0.4 0.9 85.2 Yuzhou Properties 1628 HK 4.18 2.1 4.6 NR n.a. 40 22 5.6 4.6 6.4 7.7 21.3 22.0 71.7 1.3 5.0 16.4 Zhong An 672 HK 1.1 0.4 0.5 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 62.8 0.3 n.a. n.a. Average** 17 13 4.7 5.7 6.7 7.8 17.2 17.8 85.0 0.7 57.3 Average (Overall)@ 28.7 22 7.5 6.7 5.3 5.8 13.6 14.4 71.5 0.8 35.9~

^ Denominated in SGD for price ~ Simple average discount to NAV; Market cap weighted average NAV = 22% (exclude Evergrande) # Exclude Soho China ** Exclude Greenland, First Sponsor & Lai Fung @ Exclude Soho China, Greenland, First Sponsor & Lai Fung ^^ FY15: 16F; FY16: FY17F; FY17: FY18F Source: Thomson Reuters, *DBS Vickers

ASIAN INSIGHTS VICKERS SECURITIES

Page 9

Company Guide

China Evergrande Group

PE valuations, 2008 to 2016 trough (based on earnings forecasts)

19-J un Mkt 17F 18F PE (x) Price Cap PE PE Trough Trough Trough Trough Trough Trough Trough Trough Trough Company Name Code HK$ US$bn x x 2008 2009 2010 2011 2012 2013 2014 2015 2016 China Overseas* 688 HK 22.95 32.2 7.7 7.1 9.7 11.1 12.8 6.5 7.1 7.8 6.1 6.7 5.8 Country Garden* 2007 HK 8.91 24.4 12.2 9.1 3.6 5.2 10.7 5.2 5.8 6.5 4.0 4.2 4.9 CR Land* 1109 HK 22.10 19.6 8.1 7.0 15.9 13.1 14.4 7.2 10.1 11.9 7.1 8.2 7.0 China Vanke 'H'* 2202 HK 21.35 33.6 8.3 7.1 n.a. n.a. n.a. n.a. n.a. n.a. 6.3 6.8 6.5 Evergrande* 3333 HK 15.00 25.2 14.4 6.7 n.a. n.a. 3.8 2.9 3.3 4.2 3.4 4.3 6.4 Longfor* 960 HK 15.54 11.7 7.9 6.3 n.a. 17.8 13.8 6.3 5.6 7.4 5.3 5.4 5.5 Shimao Property* 813 HK 13.56 5.9 7.5 6.9 3.7 4.2 8.5 3.6 3.9 6.4 4.3 3.3 3.1 Average 8.6 7.2 8.2 10.3 10.7 5.3 6.0 7.4 5.2 5.5 5.6 Agile Property* 3383 HK 6.94 3.5 6.3 5.2 1.5 4.2 7.6 2.5 3.4 3.6 2.2 2.7 3.0 China South City*^^ 1668 HK 1.47 1.5 10.7 n.a. n.a. 17.7 6.9 4.3 5.9 4.3 5.1 5.7 5.8 COGO* 81 HK 4.24 1.2 7.0 5.3 n.a. n.a. n.a. 3.6 5.0 6.3 3.1 3.1 2.7 Greentown 3900 HK 8.18 2.3 8.4 7.7 1.9 2.3 6.3 2.0 1.5 3.3 2.3 3.1 3.4 Guangzhou R&F 2777 HK 12.12 5.0 4.6 4.1 2.4 4.8 6.8 3.2 3.2 4.7 3.8 3.1 3.5 Hopson Dev 754 HK 7.13 2.0 20.7 18.8 1.0 2.2 4.9 2.8 2.8 5.6 3.9 10.7 12.1 KWG Property 1813 HK 5.35 2.1 4.1 3.6 2.1 2.8 7.8 3.0 2.8 3.6 2.8 3.1 3.0 Logan Property 3380 HK 4.84 3.4 5.8 4.6 n.a. n.a. n.a. n.a. n.a. n.a. 3.5 3.6 3.8 Poly (Hong Kong) 119 HK 3.22 1.5 25.8 18.3 10.0 3.8 14.9 4.2 4.9 5.2 3.9 5.4 13.0 Sino-Ocean Land* 3377 HK 3.71 3.6 5.9 5.4 4.7 9.0 11.3 4.1 5.4 6.7 6.0 5.9 5.1 Soho China* 410 HK 3.71 2.5 56.2 46.4 4.5 3.1 3.6 7.0 3.5 4.9 6.9 12.3 14.0 Sunac China 1918 HK 14.22 7.1 16.3 9.3 n.a. n.a. 4.5 1.4 1.4 3.1 2.2 2.7 3.1 Yanlord Land*^ YLLG SP 1.82 2.5 6.7 5.7 4.1 6.6 9.3 5.0 6.7 9.3 7.5 7.1 7.0 Yuexiu Property* 123 HK 1.31 2.1 10.7 9.0 1.9 2.9 8.9 4.5 4.5 5.8 5.9 6.3 5.3 Average# 8.8 7.0 3.4 5.6 8.5 3.6 4.1 5.4 4.2 4.9 5.5 BJ Cap Land 'H' 2868 HK 3.61 2.3 5.8 4.4 1.6 3.1 5.1 1.9 2.0 3.3 2.6 3.1 3.5 BJ North Star 'H' 588 HK 3.15 1.4 n.a. n.a. 3.5 5.0 7.5 3.6 6.5 4.0 3.8 5.0 5.6 C C Land* 1224 HK 1.87 0.9 4.3 20.6 18.4 n.a. n.a. 5.1 3.9 6.7 3.4 5.2 7.6 Central China* 832 HK 1.78 0.6 4.6 4.0 1.3 1.5 3.9 2.8 2.8 3.5 2.6 2.5 2.3 China SCE 1966 HK 3.01 1.3 5.6 4.2 n.a. n.a. 4.7 3.7 2.9 2.4 5.6 4.5 3.7 CIFI Holdings 884 HK 3.04 2.7 4.9 4.1 n.a. n.a. n.a. n.a. n.a. 3.8 3.2 2.7 2.8 First Sponsor*^ FSG SP 1.33 0.6 12.8 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 29.9 13.4 13.6 Glorious Property 845 HK 0.86 0.9 n.a. n.a. n.a. 12.9 6.4 2.8 2.8 4.8 4.4 3.6 17.3 Hydoo Int'l 1396 HK 0.91 0.5 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 3.6 2.3 2.3 7.0 Kaisa Group 1638 HK 2.54 1.7 n.a. 14.6 n.a. n.a. 3.5 3.7 2.9 2.8 1.9 1.7 1.9 Lai Fung* 1125 HK 0.22 0.5 12.7 n.a. 0.8 3.2 6.7 3.1 2.6 4.0 4.0 4.0 4.0 Minmetals Land 230 HK 0.89 0.4 n.a. n.a. 0.8 2.2 6.9 3.8 2.3 4.2 3.6 4.5 7.5 Modern Land (China) 1107 HK 1.22 0.4 3.0 2.5 n.a. n.a. n.a. n.a. n.a. n.a. 2.4 2.4 2.0 Powerlong 1238 HK 3.37 1.7 5.5 4.7 n.a. 4.7 5.3 1.5 1.6 3.6 2.8 3.2 2.7 Renhe Commercial 1387 HK 0.19 1.1 n.a. n.a. 10.5 5.7 5.4 3.2 2.7 4.7 7.7 7.7 7.7 Greenland* 337 HK 2.71 1.0 2.3 n.a. 0.7 1.1 3.6 1.2 1.0 0.6 11.7 8.0 4.8 SRE Group 1207 HK 0.19 0.5 n.a. n.a. 1.0 1.5 2.0 2.3 0.9 1.1 1.1 1.1 1.1 Sunshine 100 China 2608 HK 3.14 1.0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5.7 5.8 5.3 Times Property 1233 HK 4.88 1.1 3.5 2.5 n.a. n.a. n.a. n.a. n.a. n.a. 2.5 2.2 1.9 Wuzhou Int'l 1369 HK 0.75 0.2 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 7.3 5.2 22.3 Ying Li^ YINGLI SP 0.14 0.3 n.a. n.a. n.a. 64.8 22.4 6.9 4.7 7.8 4.1 5.1 9.5 Yuzhou Properties 1628 HK 4.18 2.1 5.6 4.6 n.a. 9.6 5.5 2.7 3.6 3.6 2.4 2.1 3.3 Zhong An 672 HK 1.10 0.4 n.a. n.a. 1.7 2.9 7.8 3.0 9.9 5.3 8.3 8.3 8.3 Average** 4.7 5.7 4.4 9.9 6.5 3.3 3.5 4.2 4.0 4.0 6.2 Average (Overall)@ 7.5 6.7 5.1 5.7 12.2 4.2 4.4 5.7 5.4 5.8 6.1

^ Denominated in SGD for price # Exclude Soho China for 16F & 17F PE ** Exclude Greenland, First Sponsor & Lai Fung for 16F & 17F PE @ Exclude Soho China, Greenland, First Sponsor & Lai Fung for 16F & 17F PE ^^ FY15: 16F; FY16: FY17F; FY17: FY18F Source: Thomson Reuters, *DBS Vickers

ASIAN INSIGHTS VICKERS SECURITIES

Page 10

Company Guide China Evergrande Group

PE valuations, 2008 to 2016 peak (based on earnings forecasts)

19-J un Mkt 17F 18F PE (x) Price Cap PE PE Peak Peak Peak Peak Peak Peak Peak Peak Peak Company Name Code HK$ US$bn x x 2008 2009 2010 2011 2012 2013 2014 2015 2016 China Overseas* 688 HK 22.95 32.2 7.7 7.1 22.7 25.0 17.0 12.1 12.4 11.2 8.5 9.9 8.7 Country Garden* 2007 HK 8.91 24.4 12.2 9.1 19.8 20.3 16.7 11.6 9.2 10.0 6.4 7.3 8.8 CR Land* 1109 HK 22.10 19.6 8.1 7.0 28.6 30.4 21.1 15.2 17.6 16.2 10.7 12.8 9.7 China Vanke 'H'* 2202 HK 21.35 33.6 8.3 7.1 n.a. n.a. n.a. n.a. n.a. n.a. 9.0 11.8 11.3 Evergrande* 3333 HK 15.00 25.2 14.4 6.7 n.a. n.a. 9.1 8.9 6.1 6.4 4.6 14.2 13.2 Longfor* 960 HK 15.54 11.7 7.9 6.3 n.a. 24.4 21.7 14.2 11.9 10.4 6.9 8.7 8.2 Shimao Property* 813 HK 13.56 5.9 7.5 6.9 14.8 18.3 13.2 9.6 9.5 8.8 6.0 6.1 5.6 Average 8.6 7.2 21.5 23.7 16.5 11.9 11.1 10.5 7.4 10.1 9.4 Agile Property* 3383 HK 6.94 3.5 6.3 5.2 14.5 19.0 12.4 10.0 6.4 6.9 3.9 5.1 5.6 China South City*^^ 1668 HK 1.47 1.5 10.7 n.a. n.a. 19.6 20.4 12.3 6.6 6.9 11.8 9.5 10.8 COGO* 81 HK 4.24 1.2 7.0 5.3 n.a. n.a. n.a. 9.8 9.8 10.0 5.1 6.1 6.3 Greentown 3900 HK 8.18 2.3 8.4 7.7 9.7 18.3 10.2 6.1 6.3 6.6 4.5 6.1 7.8 Guangzhou R&F 2777 HK 12.12 5.0 4.6 4.1 16.6 17.8 10.5 8.0 7.4 8.1 4.8 4.8 6.0 Hopson Dev 754 HK 7.13 2.0 20.7 18.8 9.6 10.3 7.5 6.4 16.0 13.7 16.1 24.6 22.4 KWG Property 1813 HK 5.35 2.1 4.1 3.6 12.1 21.6 13.9 9.6 6.4 6.4 5.0 6.0 4.5 Logan Property 3380 HK 4.84 3.4 5.8 4.6 n.a. n.a. n.a. n.a. n.a. n.a. 3.8 6.6 6.0 Poly (Hong Kong) 119 HK 3.22 1.5 25.8 18.3 30.0 51.0 25.2 16.1 9.8 9.9 6.4 27.9 Sino-Ocean Land* 3377 HK 3.71 3.6 5.9 5.4 13.2 24.8 15.7 10.3 12.1 11.4 7.8 9.9 8.0 Soho China* 410 HK 3.71 2.5 56.2 46.4 11.4 8.5 6.1 13.7 4.8 6.0 9.1 18.9 46.7 Sunac China 1918 HK 14.22 7.1 16.3 9.3 n.a. n.a. 5.8 3.5 5.5 4.9 5.1 6.3 12.4 Yanlord Land*^ YLLG SP 1.82 2.5 6.7 5.7 14.5 19.8 14.5 10.5 15.0 14.4 9.8 12.7 9.4 Yuexiu Property* 123 HK 1.31 2.1 10.7 9.0 11.0 25.5 15.7 11.0 9.1 9.5 7.9 11.1 10.6 Average# 8.8 7.0 14.9 22.1 13.9 9.9 9.2 9.3 7.1 10.4 9.1 BJ Cap Land 'H' 2868 HK 3.61 2.3 5.8 4.4 9.5 15.9 9.6 5.9 4.7 5.3 3.3 6.3 5.9 BJ North Star 'H' 588 HK 3.15 1.4 n.a. n.a. 20.6 18.0 12.7 10.5 8.9 7.0 8.2 13.0 10.9 C C Land* 1224 HK 1.87 0.9 4.3 20.6 n.a. n.a. n.a. 17.5 12.7 10.8 6.4 8.6 7.6 Central China* 832 HK 1.78 0.6 4.6 4.0 10.8 9.4 6.6 5.6 6.3 5.2 3.8 4.4 3.9 China SCE 1966 HK 3.01 1.3 5.6 4.2 n.a. n.a. 6.9 5.5 3.5 6.6 5.6 5.6 7.6 CIFI Holdings 884 HK 3.04 2.7 4.9 4.1 n.a. n.a. n.a. n.a. n.a. 5.9 4.3 5.1 5.4 First Sponsor*^ FSG SP 1.33 0.6 12.8 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 31.3 13.9 13.6 Glorious Property 845 HK 0.86 0.9 n.a. n.a. n.a. 17.7 10.8 7.3 6.3 11.0 9.1 41.0 19.0 Hydoo Int'l 1396 HK 0.91 0.5 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5.5 5.9 7.8 7.0 Kaisa Group 1638 HK 2.54 1.7 n.a. 14.6 n.a. n.a. 8.4 10.0 6.9 5.9 3.9 2.3 8.9 Lai Fung* 1125 HK 0.22 0.5 12.7 n.a. 7.8 11.1 17.4 19.0 4.9 4.0 4.0 4.0 4.0 Minmetals Land 230 HK 0.89 0.4 n.a. n.a. 3.4 13.2 20.1 n.a. 7.1 6.6 5.9 7.6 7.5 Modern Land (China) 1107 HK 1.22 0.4 3.0 2.5 n.a. n.a. n.a. n.a. n.a. n.a. 2.9 5.8 5.8 Powerlong 1238 HK 3.37 1.7 5.5 4.7 n.a. 7.0 8.2 6.5 5.6 6.7 3.8 4.6 5.3 Renhe Commercial 1387 HK 0.19 1.1 n.a. n.a. 12.5 10.7 7.2 7.0 9.4 23.9 7.7 7.7 7.7 Greenland* 337 HK 2.71 1.0 2.3 n.a. 9.3 11.9 6.7 3.2 7.6 44.8 28.2 21.6 8.6 SRE Group 1207 HK 0.19 0.5 n.a. n.a. 4.2 4.6 3.7 2.9 1.4 1.1 1.1 1.1 1.1 Sunshine 100 China 2608 HK 3.14 1.0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 6.7 7.4 8.0 Times Property 1233 HK 4.88 1.1 3.5 2.5 n.a. n.a. n.a. n.a. n.a. n.a. 3.5 3.2 3.6 Wuzhou Int'l 1369 HK 0.75 0.2 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 12.4 29.6 22.3 Ying Li^ YINGLI SP 0.14 0.3 n.a. n.a. n.a. 196.2 331.2 42.9 13.0 16.1 14.7 16.4 15.3 Yuzhou Properties 1628 HK 4.18 2.1 5.6 4.6 n.a. 11.7 9.9 5.8 6.5 6.5 3.3 5.2 5.2 Zhong An 672 HK 1.10 0.4 n.a. n.a. 8.8 22.3 13.8 12.3 14.9 10.3 8.3 8.3 8.3 Average** 4.7 5.7 10.0 27.8 32.6 10.5 7.6 8.3 6.1 9.4 8.2 Average (Overall)@ 7.5 6.7 15.5 33.8 23.0 11.2 8.4 8.0 6.8 9.4 8.1

ASIAN INSIGHTS VICKERS SECURITIES

Page 11

Company Guide

China Evergrande Group

PE valuations, 2008 to 2016 trough (based on reported earnings)

3-mth daily 19-J un Mkt trading F Y17F F Y18F Price Cap value PE PE Avg Trough Trough Trough Trough Trough Trough Trough Trough Trough Company Name Code HK$ US$bn US$m x x PE (x) 2008 2009 2010 2011 2012 2013 2014 2015 2016 China Overseas* 688 HK 22.95 32.2 70.8 7.7 7.1 9.7 9.9 10.0 8.9 5.3 5.3 6.4 5.1 6.1 5.6 Country Garden* 2007 HK 8.91 24.4 46.4 12.2 9.1 13.9 11.3 9.2 6.3 4.3 5.2 5.8 4.4 4.9 4.5 CR Land* 1109 HK 22.1 19.6 39.8 8.1 7.0 11.4 13.1 8.5 10.6 4.9 6.4 7.3 5.3 6.8 6.0 China Vanke 'H'* 2202 HK 21.35 33.6 24.8 8.3 7.1 8.8 n.a. n.a. n.a. n.a. n.a. 6.5 6.3 8.6 6.7 Evergrande* 3333 HK 15 25.2 121.7 14.4 6.7 5.6 n.a. 42.7 3.0 2.4 3.6 2.7 2.7 3.9 11.0 Longfor* 960 HK 15.54 11.7 12.3 7.9 6.3 6.5 n.a. 11.8 7.2 4.5 5.1 5.8 4.7 4.9 5.0 Shimao Property* 813 HK 13.56 5.9 11.1 7.5 6.9 9.3 11.4 3.1 6.6 2.7 3.0 4.9 4.8 4.9 4.6 Average 8.6 7.2 9.3 11.4 14.2 7.1 4.0 4.8 5.6 4.7 5.7 6.2 Agile Property* 3383 HK 6.94 3.5 19.1 6.3 5.2 6.8 1.2 4.2 3.6 2.9 3.5 4.2 2.6 8.6 5.1 China South City*^^ 1668 HK 1.47 1.5 4.2 10.7 n.a. 6.1 n.a. n.a. n.a. 3.6 2.9 3.1 4.3 3.6 13.8 COGO* 81 HK 4.24 1.2 4.7 7.0 5.3 7.8 32.9 (3.5) 2.9 2.9 4.0 5.3 6.8 5.9 5.0 Greentown 3900 HK 8.18 2.3 6.6 8.4 7.7 10.0 4.2 2.8 6.6 1.7 0.9 3.9 6.7 18.8 6.3 Guangzhou R&F 2777 HK 12.12 5.0 16.5 4.6 4.1 6.9 3.3 6.3 6.6 3.7 2.7 3.4 4.0 3.3 3.2 Hopson Dev 754 HK 7.13 2.0 0.7 20.7 18.8 6.0 1.1 0.8 2.3 4.6 2.1 3.9 5.1 7.0 3.7 KWG Property 1813 HK 5.35 2.1 12.3 4.1 3.6 6.7 5.8 3.5 6.0 2.2 2.0 2.6 2.2 3.2 3.1 Logan Property 3380 HK 4.84 3.4 6.3 5.8 4.6 3.7 n.a. n.a. n.a. n.a. n.a. 3.6 3.6 3.6 2.2 Poly (Hong Kong) 119 HK 3.22 1.5 4.1 25.8 18.3 12.1 11.4 5.0 11.5 2.9 4.2 5.2 11.1 (2.5) 85.5 Sino-Ocean Land* 3377 HK 3.71 3.6 5.5 5.9 5.4 10.0 4.5 8.3 9.5 5.2 4.1 5.1 5.4 11.6 5.3 Soho China* 410 HK 3.71 2.5 6.7 56.2 46.4 16.0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 25.3 15.1 Sunac China 1918 HK 14.22 7.1 35.5 16.3 9.3 4.6 n.a. n.a. n.a. 1.3 1.5 3.8 3.1 3.6 5.4 Yanlord Land*^ YLLG SP 1.815 2.5 4.3 6.7 5.7 9.3 4.1 4.2 7.9 4.7 4.9 7.3 6.8 5.8 3.4 Yuexiu Property* 123 HK 1.31 2.1 5.8 10.7 9.0 8.0 3.4 (4.6) 8.0 1.1 2.5 4.2 4.9 12.6 6.5 Average# 8.8 7.0 8.2 6.5 3.5 6.7 3.1 3.2 4.4 5.0 7.9 11.0 BJ Cap Land 'H' 2868 HK 3.61 2.3 2.6 5.8 4.4 7.0 2.3 2.4 3.6 2.3 2.0 2.8 2.5 2.7 3.3 BJ North Star 'H' 588 HK 3.15 1.4 1.5 n.a. n.a. 7.9 1.6 1.9 4.6 2.3 3.1 5.4 5.8 7.8 7.3 C C Land* 1224 HK 1.87 0.9 0.5 4.3 20.6 24.7 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 3.2 4.7 Central China* 832 HK 1.78 0.6 0.7 4.6 4.0 5.2 1.1 2.4 5.1 3.7 3.3 3.8 3.9 3.7 6.6 China SCE 1966 HK 3.01 1.3 3.9 5.6 4.2 4.8 n.a. n.a. 4.0 4.1 5.1 4.4 4.5 4.6 2.2 CIFI Holdings 884 HK 3.04 2.7 5.7 4.9 4.1 3.7 n.a. n.a. n.a. n.a. 2.4 2.9 3.6 3.7 2.9 First Sponsor*^ FSG SP 1.325 0.6 0.0 12.8 n.a. 2.4 n.a. n.a. n.a. n.a. n.a. n.a. 13.8 8.8 13.0 Glorious Property 845 HK 0.86 0.9 0.5 n.a. n.a. 4.5 n.a. 6.7 3.7 2.9 5.7 23.6 (2.2) (1.4) (1.1) Hydoo Int'l 1396 HK 0.91 0.5 0.3 n.a. n.a. 11.9 n.a. n.a. n.a. n.a. n.a. n.a. 10.1 5.1 5.0 Kaisa Group 1638 HK 2.54 1.7 10.1 n.a. 14.6 3.4 n.a. 16.2 1.6 2.8 2.5 2.2 n.a. n.a. (11.4) Lai Fung* 1125 HK 0.218 0.5 0.1 12.7 n.a. 7.7 2.1 1.6 5.6 2.4 1.5 3.2 10.6 1.8 1.8 Minmetals Land 230 HK 0.89 0.4 0.3 n.a. n.a. 8.8 2.2 6.1 6.3 3.8 9.0 7.1 6.5 8.4 4.6 Modern Land (China) 1107 HK 1.22 0.4 0.3 3.0 2.5 3.5 n.a. n.a. n.a. n.a. n.a. 2.5 2.9 3.1 2.5 Powerlong 1238 HK 3.37 1.7 2.6 5.5 4.7 2.6 n.a. 2.6 2.8 1.1 1.8 3.2 2.4 1.8 1.8 Renhe Commercial 1387 HK 0.191 1.1 0.2 n.a. n.a. n.a. 7.8 4.8 6.0 2.5 5.2 (3.6) (3.2) (2.3) (0.5) Greenland* 337 HK 2.71 1.0 2.3 2.3 n.a. 9.6 2.4 1.0 2.9 1.2 (1.1) 71.8 22.8 13.0 2.7 SRE Group 1207 HK 0.185 0.5 0.2 n.a. n.a. 7.0 3.2 1.5 3.6 2.7 3.8 6.7 (10.6) (0.6) (12.9) Sunshine 100 China 2608 HK 3.14 1.0 0.0 n.a. n.a. 12.9 n.a. n.a. n.a. n.a. n.a. n.a. 5.7 8.3 30.8 Times Property 1233 HK 4.88 1.1 2.8 3.5 2.5 2.9 n.a. n.a. n.a. n.a. n.a. 3.6 3.2 2.5 2.0 Wuzhou Int'l 1369 HK 0.75 0.2 0.1 n.a. n.a. 10.3 n.a. n.a. n.a. n.a. n.a. 3.7 18.4 (5.7) 32.1 Ying Li^ YINGLI SP 0.136 0.3 0.4 n.a. n.a. n.a. 1.8 32.6 18.6 7.8 6.8 18.4 9.5 12.1 18.2 Yuzhou Properties 1628 HK 4.18 2.1 4.6 5.6 4.6 4.0 n.a. 2.6 3.6 2.6 4.2 2.8 3.4 3.0 3.0 Zhong An 672 HK 1.1 0.4 0.5 n.a. n.a. 10.8 4.2 3.4 8.6 5.5 4.2 5.1 5.2 3.6 10.2 Average** 4.7 5.7 7.4 2.8 5.9 5.5 3.2 3.7 8.7 5.6 4.1 5.5 Average (Overall)@ 7.5 6.7 8.1 5.7 6.4 6.2 3.3 3.7 6.6 5.3 5.7 7.6 HSI Index HSI 9.1 9.0 10.3 7.8 8.8 9.4 9.3 10.4 8.9

ASIAN INSIGHTS VICKERS SECURITIES

Page 12

Company Guide China Evergrande Group

PE valuations, 2008 to 2016 peak (based on reported earnings)

3-mth daily 19-Jun Mkt trading F Y17F F Y18F Price Cap v alue PE PE Av g Peak Peak Peak Peak Peak Peak Peak Peak Peak Company Name Code HK$ US$bn US$m x x PE (x) 2008 2009 2010 2011 2012 2013 2014 2015 2016 China Overseas* 688 HK 22.95 32.2 70.8 7.7 7.1 9.7 25.2 20.6 11.6 9.4 10.1 8.7 6.9 9.3 7.6 Country Garden* 2007 HK 8.91 24.4 46.4 12.2 9.1 13.9 86.8 25.3 10.6 9.0 8.2 9.5 7.2 8.6 7.1 CR Land* 1109 HK 22.1 19.6 39.8 8.1 7.0 11.4 35.6 21.6 14.5 10.2 11.5 9.3 7.8 10.9 8.4 China V anke 'H'* 2202 HK 21.35 33.6 24.8 8.3 7.1 8.8 n.a. n.a. n.a. n.a. n.a. 9.9 10.5 12.5 10.9 Evergrande* 3333 HK 15 25.2 121.7 14.4 6.7 5.6 n.a. 52.1 7.0 6.6 6.3 4.5 3.9 9.9 16.0 Longfor* 960 HK 15.54 11.7 12.3 7.9 6.3 6.5 n.a. 14.8 11.7 9.2 10.2 8.7 6.3 8.3 7.1 Shimao Property* 813 HK 13.56 5.9 11.1 7.5 6.9 9.3 63.7 14.2 9.6 6.7 7.4 7.6 6.8 10.1 6.8 Average 8.6 7.2 9.3 52.8 24.8 10.8 8.5 9.0 8.3 7.1 9.9 9.1 Agile Property* 3383 HK 6.94 3.5 19.1 6.3 5.2 6.8 7.9 20.9 6.1 9.6 5.9 7.2 5.7 17.3 7.3 China South City*^^ 1668 HK 1.47 1.5 4.2 10.7 n.a. 6.1 n.a. n.a. n.a. 5.8 4.3 7.0 9.7 8.6 18.8 COGO* 81 HK 4.24 1.2 4.7 7.0 5.3 7.8 188.9 n.a. 4.9 8.0 8.9 9.2 13.3 14.1 7.3 Greentown 3900 HK 8.18 2.3 6.6 8.4 7.7 10.0 30.5 18.9 10.7 5.2 4.3 6.2 12.7 42.0 9.6 Guangzhou R&F 2777 HK 12.12 5.0 16.5 4.6 4.1 6.9 28.6 20.6 10.2 8.3 6.0 5.2 6.0 5.3 5.8 Hopson Dev 754 HK 7.13 2.0 0.7 20.7 18.8 6.0 16.2 4.1 3.9 11.7 7.3 8.2 7.1 14.0 5.0 KWG Property 1813 HK 5.35 2.1 12.3 4.1 3.6 6.7 n.a. 18.2 11.0 6.4 4.5 4.5 4.3 5.8 4.2 Logan Property 3380 HK 4.84 3.4 6.3 5.8 4.6 5.7 n.a. n.a. n.a. n.a. n.a. 3.7 4.5 5.5 3.8 Poly (Hong Kong) 119 HK 3.22 1.5 4.1 25.8 18.3 12.1 59.7 40.1 18.6 10.8 8.3 9.1 16.4 (6.8) 121.8 Sino-Ocean Land* 3377 HK 3.71 3.6 5.5 5.9 5.4 10.0 25.5 22.5 16.2 12.8 8.5 8.3 7.3 20.1 8.8 Soho China* 410 HK 3.71 2.5 6.7 56.2 46.4 16.0 n.a. 6.7 7.9 8.0 2.4 3.8 7.2 52.1 23.7 Sunac China 1918 HK 14.22 7.1 35.5 16.3 9.3 4.6 n.a. n.a. n.a. 3.2 5.4 6.0 6.9 9.8 8.3 Yanlord Land*^ YLLG SP 1.815 2.5 4.3 6.7 5.7 9.3 27.4 17.6 11.0 11.6 8.0 10.4 8.1 8.3 5.1 Yuexiu Property* 123 HK 1.31 2.1 5.8 10.7 9.0 8.0 20.2 n.a. 12.0 2.5 5.7 6.8 6.5 22.2 9.4 Average# 8.8 7.0 8.4 39.2 18.0 10.3 7.8 6.5 7.0 8.0 15.5 16.1 BJ Cap Land 'H' 2868 HK 3.61 2.3 2.6 5.8 4.4 7.0 21.7 13.2 6.3 5.4 4.7 4.0 3.3 7.1 4.6 BJ North Star 'H' 588 HK 3.15 1.4 1.5 n.a. n.a. 7.9 12.7 6.1 6.9 5.2 5.7 7.7 9.8 15.5 10.3 C C Land* 1224 HK 1.87 0.9 0.5 4.3 20.6 24.7 n.a. n.a. 36.3 26.6 13.5 15.9 4.7 5.8 6.0 Central China* 832 HK 1.78 0.6 0.7 4.6 4.0 5.2 6.7 11.0 7.4 6.6 6.3 6.1 5.9 7.1 9.9 China SCE 1966 HK 3.01 1.3 3.9 5.6 4.2 4.8 n.a. n.a. 5.9 6.1 6.3 5.8 5.9 6.2 3.8 CIFI Holdings 884 HK 3.04 2.7 5.7 4.9 4.1 3.7 n.a. n.a. n.a. n.a. 2.6 4.6 4.7 7.2 5.6 First Sponsor*^ FSG SP 1.325 0.6 0.0 12.8 n.a. 2.4 n.a. n.a. n.a. n.a. n.a. n.a. 16.6 9.7 14.7 Glorious Property 845 HK 0.86 0.9 0.5 n.a. n.a. 4.5 n.a. 8.8 6.3 8.5 10.1 39.2 (3.8) (2.3) (2.2) Hydoo Int'l 1396 HK 0.91 0.5 0.3 n.a. n.a. 11.9 n.a. n.a. n.a. n.a. n.a. n.a. 28.2 12.4 11.6 Kaisa Group 1638 HK 2.54 1.7 10.1 n.a. 14.6 3.4 n.a. 20.2 3.2 7.0 4.8 3.9 n.a. n.a. (11.4) Lai Fung* 1125 HK 0.218 0.5 0.1 12.7 n.a. 7.7 15.2 5.9 7.8 5.4 2.5 5.7 14.1 3.4 2.8 Minmetals Land 230 HK 0.89 0.4 0.3 n.a. n.a. 8.8 16.4 38.4 12.1 9.5 15.6 11.8 8.5 15.4 6.7 Modern Land (China) 1107 HK 1.22 0.4 0.3 3.0 2.5 3.5 n.a. n.a. n.a. n.a. n.a. 3.4 3.7 6.5 6.2 Powerlong 1238 HK 3.37 1.7 2.6 5.5 4.7 2.6 n.a. 3.0 3.7 3.2 3.1 5.4 4.0 3.5 3.7 Renhe Commercial 1387 HK 0.191 1.1 0.2 n.a. n.a. n.a. 9.3 9.1 9.4 5.7 17.4 (8.4) (5.5) (7.3) (0.9) Greenland* 337 HK 2.71 1.0 2.3 2.3 n.a. 9.6 39.3 7.2 4.9 4.2 (1.8) 364.4 48.0 36.7 4.9 SRE Group 1207 HK 0.185 0.5 0.2 n.a. n.a. 7.0 20.7 4.7 4.8 6.7 6.8 13.3 (13.9) (2.7) (24.3) Sunshine 100 China 2608 HK 3.14 1.0 0.0 n.a. n.a. 12.9 n.a. n.a. n.a. n.a. n.a. n.a. 7.9 13.0 38.5 Times Property 1233 HK 4.88 1.1 2.8 3.5 2.5 2.9 n.a. n.a. n.a. n.a. n.a. 3.7 3.9 3.8 3.1 Wuzhou Int'l 1369 HK 0.75 0.2 0.1 n.a. n.a. 10.3 n.a. n.a. n.a. n.a. n.a. 4.2 32.2 (15.0) 35.8 Ying Li^ YINGLI SP 0.136 0.3 0.4 n.a. n.a. n.a. 4.8 112.2 33.8 17.6 11.5 26.6 17.7 27.1 26.3 Yuzhou Properties 1628 HK 4.18 2.1 4.6 5.6 4.6 4.0 n.a. 3.2 4.7 4.6 7.1 4.1 4.5 5.0 5.6 Zhong An 672 HK 1.1 0.4 0.5 n.a. n.a. 10.8 29.4 15.4 12.4 10.4 7.2 9.1 16.6 6.1 13.3 Average** 4.7 5.7 7.4 17.5 17.7 10.3 8.2 7.2 25.6 9.7 7.5 7.4 Average (Overall)@ 7.5 6.7 8.1 32.4 19.1 10.4 8.1 7.2 15.9 8.7 10.7 10.8 HSI Index HSI 23.1 18.2 13.6 11.7 11.0 11.3 11.1 14.3 11.7

ASIAN INSIGHTS VICKERS SECURITIES

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Company Guide

China Evergrande Group

Share price performance

Price Performance 2007 1-wk 2-wk 1-mth 2-mth 3-mth 4-mth 5-mth 6-mth YTD 1-yr 2012 2013 2014 2015 2016 high %%%%%%%%%% %%%%% % Tier 1 play ers China Overseas 688 HK (1.9) (2.1) 2.5 (0.2) (7.8) (2.8) 0.9 11.1 11.7 0.7 78.0 (5.6) 5.7 21.5 (24.4) 22.3 Country Garden 2007 HK (2.8) (9.3) 8.7 15.9 36.4 66.9 102.5 108.2 105.3 188.3 46.4 15.3 (32.8) 2.6 36.5 (31.0) CR Land 1109 HK (2.9) (4.1) 4.0 0.0 (2.0) 5.5 17.1 27.5 26.7 26.9 69.1 (8.9) 6.4 14.2 (22.8) 6.8 China Vanke 'H' 2202 HK (0.5) 6.8 9.7 1.9 (8.2) 10.2 8.2 14.0 20.6 21.9 n.a. n.a. n.a. 32.4 (22.7) n.a. Evergrande 3333 HK (7.9) (5.7) 58.2 69.9 130.1 156.8 183.0 202.4 210.6 184.1 32.0 (30.4) 6.1 117.2 (29.2) n.a. Longfor Properties 960 HK 5.3 (3.2) 13.9 14.9 17.2 29.5 42.0 58.1 57.9 58.1 72.9 (28.6) (7.8) 15.7 (14.9) n.a. Shimao Property 813 HK 0.0 0.7 11.9 4.1 5.3 23.3 31.1 33.2 33.7 44.3 120.5 21.9 (2.7) (20.5) (26.4) (53.3) Average (1.5) (2.4) 15.6 15.2 24.4 41.3 55.0 64.9 66.6 74.9 69.8 (6.1) (4.2) 26.2 (14.9) (13.8) Tier 2 play ers Agile Property 3383 HK (1.4) (3.3) 8.3 (3.5) 5.5 52.2 67.6 71.8 75.7 80.7 56.6 (23.8) (46.9) (2.0) (8.6) (64.8) China South City 1668 HK 2.1 (0.7) (1.3) (3.9) (12.0) (10.4) (14.0) (10.4) (9.3) 0.0 17.0 88.0 60.9 (50.6) (7.4) n.a. COGO 81 HK (2.1) 1.2 9.0 (0.9) 2.2 51.4 60.6 64.3 67.6 86.0 105.6 (20.7) (46.7) (16.8) (22.9) (6.6) Greentown 3900 HK (1.6) (0.4) 9.4 8.3 3.2 18.9 30.3 31.7 30.3 59.5 321.4 (16.6) (35.0) 0.0 (18.4) (58.2) GZ R&F 2777 HK (1.6) (4.0) (3.8) (10.5) (6.6) 15.4 24.3 29.5 29.2 19.3 110.1 (12.1) (16.3) 0.6 (1.8) (72.1) Hopson Dev 754 HK (1.8) (3.6) 0.0 (3.1) (4.4) 3.3 3.2 3.3 3.2 11.4 207.2 (24.6) (24.0) 8.7 (10.5) (77.2) KWG 1813 HK (0.9) (14.5) (4.5) (10.2) (0.6) 6.4 19.4 22.4 21.6 23.6 122.2 (26.1) 33.5 13.1 (17.8) (57.8) Logan Property 3380 HK (1.4) (0.6) 13.3 6.6 36.0 48.9 63.5 62.4 65.2 86.2 n.a. n.a. 10.0 9.1 11.4 n.a. Poly HK 119 HK (1.2) (4.2) 5.2 (0.9) (6.4) (3.0) 2.9 27.3 25.3 67.7 79.8 (31.7) (22.9) (20.7) 1.6 (71.9) Sino-Ocean 3377 HK 0.3 (4.4) (0.5) (4.9) (9.1) (0.3) 7.2 9.4 6.9 20.8 60.8 (12.1) (13.4) 12.7 (30.2) (75.3) SOHO China 410 HK (1.1) (3.4) (13.7) (12.9) (10.6) (7.3) (5.1) (3.9) (2.9) 4.2 20.3 7.4 (18.0) (31.4) 1.6 (68.9) Sunac China 1918 HK 3.9 2.2 28.1 25.0 60.3 88.8 116.8 118.1 120.5 213.2 272.7 (22.5) 69.7 (24.0) 7.5 n.a. Yanlord Land YLLG SP (2.7) (4.5) (1.9) (5.0) 1.4 22.6 30.6 32.0 37.5 60.6 59.2 (19.4) (15.1) (3.4) 31.3 (57.0) Yuexiu Property 123 HK (0.8) (4.4) 5.6 (2.2) (2.2) 5.6 17.0 19.1 23.6 39.4 118.8 (22.0) (16.8) (10.1) (20.9) (54.5) Average (0.5) (3.0) 4.1 (0.8) 3.0 18.6 27.1 31.0 31.8 48.0 113.9 (11.1) (8.5) (0.9) (8.4) (61.4) Tier 3 play ers BJ Cap. Land 2868 HK 0.6 (1.6) 5.9 (6.0) (4.2) 4.0 18.4 25.3 24.1 42.1 110.5 (18.0) 11.4 20.7 (18.0) (51.6) BJ North Star 588 HK (2.2) (4.0) (4.0) 4.0 4.7 15.4 30.7 33.5 32.4 37.0 82.6 (16.7) 41.1 3.6 (7.0) (60.1) C C Land 1224 HK (1.6) (3.6) (5.6) (7.9) (9.2) (17.5) (19.3) (11.3) (16.1) (7.5) 88.9 (28.3) (30.7) 79.2 (6.6) (88.7) Central China 832 HK 0.6 0.0 0.0 (11.4) (5.3) 2.3 9.2 7.2 5.3 28.1 76.8 (12.8) (26.8) (7.4) 4.3 n.a. China SCE Property 1966 HK (1.0) 0.3 7.1 1.7 1.3 7.1 24.4 22.9 29.2 80.2 20.2 16.2 (12.4) 8.0 33.1 n.a. CIFI Holdings 884 HK 2.7 (0.3) 8.2 2.4 (1.3) 23.1 40.7 42.7 45.5 59.2 n.a. 17.1 (6.1) 12.3 20.8 n.a. First Sponsor FSG SP (1.9) 0.0 (1.9) (0.4) (1.1) 0.0 (0.4) (1.1) (0.7) 11.3 n.a. n.a. n.a. 0.8 6.0 n.a. Glorious Property 845 HK (1.1) (1.1) 6.2 (6.5) (8.5) 7.5 19.4 11.7 13.2 22.9 7.4 14.4 (28.1) (25.0) (15.6) n.a. Hydoo Int'l 1396 HK 0.0 13.8 40.0 28.2 37.9 23.0 51.7 78.4 56.9 1.1 n.a. n.a. (13.5) (44.0) (46.3) n.a. Kaisa Group 1638 HK (2.3) (5.9) 14.9 1.2 62.8 62.8 62.8 62.8 62.8 62.8 79.1 4.2 (36.4) (1.9) 0.0 n.a. Lai Fung 1125 HK 0.5 0.5 (1.4) 2.3 (2.2) 9.5 19.1 32.1 35.4 84.7 25.5 (5.3) (19.9) (17.2) 23.8 (53.3) Minmetals Land 230 HK (1.1) (7.3) (4.3) (9.2) (15.2) (6.3) (4.3) (7.3) (4.3) 0.0 70.7 (19.5) (13.6) 1.1 3.3 (76.0) Modern Land (China) 1107 HK (1.6) (1.6) 1.7 (4.7) (12.9) 0.0 8.0 20.8 18.4 (10.9) n.a. n.a. 1.6 98.4 (53.2) n.a. Powerlong 1238 HK 4.0 0.3 0.3 3.4 7.7 30.1 46.5 45.3 47.8 124.7 58.7 0.6 (34.3) 50.5 39.0 n.a. Renhe Commercial 1387 HK 1.1 (2.1) (2.1) 0.5 (9.0) (6.4) (2.6) (2.6) (4.0) 3.2 (8.9) (38.9) (28.1) 5.9 (44.7) n.a. Greenland 337 HK (6.6) (5.9) (3.6) 5.9 23.2 45.7 53.1 45.7 40.4 2.3 53.5 90.4 (18.3) (1.9) (36.1) (63.7) SRE Group 1207 HK 0.5 (2.1) (3.1) (1.1) (9.8) (8.9) (0.5) (5.6) (7.0) (14.4) 24.2 (32.9) (20.8) 73.8 (45.5) (94.6) Sunshine 100 China 2608 HK (2.8) (4.8) 1.3 (4.6) (5.4) (4.6) 10.2 1.6 (15.1) (9.8) n.a. n.a. n.a. 21.7 4.8 n.a. Times Property 1233 HK 0.0 (3.9) 0.4 (10.5) (6.2) 14.3 22.0 23.2 28.8 54.4 n.a. n.a. (5.7) (18.2) 40.4 n.a. Wuzhou Int'l 1369 HK 0.0 1.4 (2.6) (5.1) (3.8) (3.8) (6.3) (3.8) (3.8) (6.3) n.a. n.a. 14.0 (44.9) (3.7) n.a. Ying Li YINGLI SP 2.3 (2.9) 3.8 (6.2) (16.0) (20.0) (20.5) (10.5) (8.7) (0.7) 45.1 6.8 (38.0) (32.2) (10.2) (88.7) Yuzhou Properties 1628 HK 1.5 2.0 17.4 17.1 31.0 56.0 57.7 60.8 54.8 99.0 37.1 2.9 1.0 7.7 28.6 n.a. Zhong An 672 HK (9.1) 44.7 61.8 69.2 64.2 69.2 83.3 77.4 71.9 59.4 7.5 26.3 (20.8) (28.9) (21.0) (81.0) Average (0.9) 0.5 5.4 2.1 5.6 14.2 23.3 25.4 23.6 33.1 48.9 0.9 (13.5) 6.9 (4.5) (69.8)

Average (Overall) (0.9) (1.2) 6.4 3.0 7.4 19.7 29.3 33.1 32.8 44.5 78.8 (4.9) (10.4) 6.9 (7.4) (57.6)

Hang Seng Index 0.8 0.2 3.0 8.8 6.6 7.9 12.5 18.7 17.8 28.5 22.9 2.9 1.3 (7.2) 0.4 (18.1) MSCI China (1.1) (0.9) 1.8 8.3 7.1 10.1 16.3 23.7 22.5 33.5 18.7 0.4 4.7 (10.1) (1.4) (31.0)

Source: Thomson Reuters

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Company Guide China Evergrande Group

Target Price & Ratings History

S.No. Date Closing 12-mth Rating HK$ Price Target 4 16.0 Price 3 1: 31-Aug-16 HK$5.76 HK$5.30 Hold 14.0 2 2: 4-Oct-16 HK$5.24 HK$5.30 Hold 3: 29-Mar-17 HK$6.38 HK$6.43 Hold 12.0 4: 18-Apr-17 HK$8.62 HK$6.43 Hold 1 10.0 5:

8.0

6.0

4.0 Jul-16 Jan-17 Jun-17 Jun-16 Feb-17 Oct-16 Sep-16 Apr-17 Dec-16 Nov-16 Mar-17 Aug-16 May-17

Source: DBS Vickers Analyst: Danielle WANG CFA,

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Company Guide

China Evergrande Group

DBSVHK recommendations are based an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return i.e. > -10% over the next 12 months) SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)

Share price appreciation + dividends

Completed Date: 19 Jun 2017 16:47:49 (HKT) Dissemination Date: 19 Jun 2017 18:20:19 (HKT)

Sources for all charts and tables are DBS Vickers unless otherwise specified.

GENERAL DISCLOSURE/DISCLAIMER This report is prepared by DBS Vickers (Hong Kong) Limited (“DBSV HK”). This report is solely intended for the clients of DBS Bank Ltd., DBS Bank (Hong Kong) Limited (DBS HK), DBSV HK, and DBS Vickers Securities (Singapore) Ptd Ltd. (“DBSVS”), its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSV HK.

The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS Bank Ltd., DBS HK, DBSV HK, DBSVS, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the “DBS Group”) have not conducted due diligence on any of the companies, verified any information or sources or taken into account any other factors which we may consider to be relevant or appropriate in preparing the research. Accordingly, we do not make any representation or warranty as to the accuracy, completeness or correctness of the research set out in this report. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group, may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies.

Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed, it may not contain all material information concerning the company (or companies) referred to in this report and the DBS Group is under no obligation to update the information in this report.

This publication has not been reviewed or authorized by any regulatory authority in Singapore, Hong Kong or elsewhere. There is no planned schedule or frequency for updating research publication relating to any issuer.

The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that: (a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and (b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein.

Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets. Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report.

DBSVUSA, a US-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-making.

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Company Guide China Evergrande Group

ANALYST CERTIFICATION The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s) primarily responsible for the content of this research report, in part or in whole, certifies that he or his associate1 does not serve as an officer of the issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the management of the issuer or the new listing applicant) and the research analyst(s) primarily responsible for the content of this research report or his associate does not have financial interests2 in relation to an issuer or a new listing applicant that the analyst reviews. DBS Group has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately. There is no direct link of DBS Group's compensation to any specific investment banking function of the DBS Group.

COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBS Bank Ltd, DBS HK, DBSVS, DBSV HK or their subsidiaries and/or other affiliates have proprietary positions in China Overseas Land & Investment Limited (688 HK), China Resources Land Limited (1109 HK), China Vanke Company Limited 'H' (2202 HK) and Sino- Ocean Land Holdings Limited (3377 HK) recommended in this report as of 15 Jun 2017.

DBS Bank Ltd, DBS HK, DBSVS, DBSV HK or their subsidiaries and/or other affiliates have proprietary positions in Yanlord Land Group

Limited (YLLG SP) and Ying Li International Real Estate Limited (YINGLI SP) recommended in this report as of 31 May 2017.

2. Neither DBS Bank Ltd, DBS HK nor DBSV HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research Report.

3. Compensation for investment banking services: DBS Bank Ltd, DBS HK, DBSVS, DBSV HK, their subsidiaries and/or other affiliates of DBSVUSA have received compensation, within the past 12 months for investment banking services from China South City Holdings Limited (1668 HK), China Overseas Grand Oceans Group (81 HK), Yanlord Land Group Limited (YLLG SP), Yuexiu Property Company Limited (123 HK) and Central China Real Estate Limited (832 HK) as of 31 May 2017.

4. DBS Bank Ltd, DBS HK, DBSVS, DBSV HK, their subsidiaries and/or other affiliates of DBSVUSA have managed or co-managed a public offering of securities for China South City Holdings Limited (1668 HK), China Overseas Grand Oceans Group (81 HK), Yanlord Land Group Limited (YLLG SP) and Yuexiu Property Company Limited (123 HK) in the past 12 months, as of 31 May 2017.

DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.

5. Disclosure of previous investment recommendation produced: DBS Bank Ltd, DBSVS, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA may have published other investment recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12 months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by DBS Bank Ltd, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA in the preceding 12 months.

1 An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst.

2 Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at arm's length, or investments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.

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Company Guide

China Evergrande Group

RESTRICTIONS ON DISTRIBUTION General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be

contrary to law or regulation. Australia This report is being distributed in Australia by DBS Bank Ltd. (“DBS”) or DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”) or DBS Vickers (Hong Kong) Limited (“DBSVHK”), which are exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. Both DBS and DBSVS are regulated by the Monetary Authority of Singapore under the laws of Singapore, and DBSVHK is regulated by the Securities and Futures Commission of Hong Kong under the laws of Hong Kong, which differ from Australian laws. Distribution of this report is intended only for “wholesale investors” within the meaning of the CA. Hong Kong This report is being distributed in Hong Kong by DBS Bank Ltd., DBS Bank (Hong Kong) Limited and DBS Vickers (Hong Kong) Limited, which is registered with or licensed by the Hong Kong Securities and Futures Commission to carry out the regulated activity of advising on securities

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Wong Ming Tek, Executive Director, ADBSR Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No. 198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from,

or in connection with the report. Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd. Research reports distributed are only

intended for institutional clients only and no other person may act upon it. United This report is produced by DBSVHK which is regulated by the Hong Kong Securities and Futures Commission

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In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVUK. This communication is directed at persons having professional experience in matters relating to investments. Any investment activity following from this communication will only be engaged in with such persons. Persons who do not have professional experience in matters

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professional clients (as defined in the DFSA rulebook) and no other person may act upon it. United States This report was prepared by DBSVHK. DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should

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