DAILY SPOTLIGHT Hong Kong Edition 23 October 2009 (Friday) The Raw and the Cooked
Index Performance* (%) 5D 1M YTD HSI 1 3 54 The Cooked HSCEI 1 4 64 HSCCI 0 1 26 Datang Power – SELL (Hª) HOLD (A) ...... 2 MSCI HK 2 4 58 (0991.HK/HK$4.08; TP: HK$3.65ª) Peter YAO, CFA MSCI China 1 4 57 (601991.SS/Rmb9.16; TP: Rmb8.90ª) MSCI Asia (0) (1) 27 Rating Change — Contrary to its peer Huaneng Power, Datang International FTSE-Xinhua A50 3 10 75 Power recently settled key coal contracts at much higher prices than its earlier * BOCI indices are available on Reuters page BOCI estimates, resulting in a 39% QoQ net profit decline in 3Q09. We see higher risks of unfavourable coal‐price terms for its 2010 contract negotiations and a Leaders (%) 5D 1M YTD low probability of de‐leveraging after Datang rolled over its debt structure to a Haier Electronics (1169.HK) 27 56 171 longer‐term bias. Owing to a bleak outlook and low earnings visibility for its Towngas China (1083.HK) 20 24 122 non‐power segments in 2010‐11, we lower Datang’s H‐share target price to Beijing Media (1000.HK) 20 23 82 HK$3.65 and downgrade the stock from HOLD to SELL. We also revise down Weichai Power (2338.HK) 18 36 263 our A‐share target price to Rmb8.90. China Foods (0506.HK) 16 15 115 China Shipping Development – HOLD (Hª&A) ...... 9 Laggards (%) 5D 1M YTD (1138.HK/HK$11.98; TP: HK$12.00ª) Jimmy Lam, CFA China Dongxiang (3818.HK) (8) (14) 138 (600026.SS/Rmb13.86; TP: Rmb13.70ª) Air China Ltd (0753.HK) (8) (8) 79 Rating Change — The 9M09 net profit of China Shipping Development (CSD) Parkson Group (3368.HK) (8) 5 40 plunged 80.8% YoY due to lower shipping rates. Turnover dropped 54.1% to Anhui Conch (0914.HK) (8) (11) 46 Rmb6.57bn. The decline in CSD’s profit was driven by: i) a 8.5% slide in total Wasion Meter (3393.HK) (8) (0) 308 shipment volume to 160.5bn tonne‐nautical miles (tnm); ii) a drop in average freight rates of 45.5%; iii) a 93.6% plunge in investment income as profit from US ADR Closings HK$ (%) associated companies was hampered by the poor market environment, and; iv) the 75.9% decline in non‐operating income due to lower disposal gains from Bank of East Asia (0023.HK) 27.82 (2) vessel sales. We downgrade CSD’s H shares from BUY to HOLD, with a new Cathay Pacific (0293.HK) 12.99 3 target price of HK$12.00. We reaffirm our HOLD rating for its A shares with Chalco (2600.HK) 9.17 1 our target price lowered to Rmb13.70. Cheung Kong (0001.HK) 107.03 1 China Life (2628.HK) 36.12 1 China Mobile (0941.HK) 76.68 0 China Southern (1055.HK) 2.45 0 China Telecom (0728.HK) 3.63 1 China Unicom (0762.HK) 10.73 1 CLP Holdings (0002.HK) 52.24 0 CNOOC Ltd (0883.HK) 12.37 1 Guangshen Railway (0525.HK) 3.19 1 Henderson Land (0012.HK) 57.97 1 HK & China Gas (0003.HK) 18.83 (2) HK Electric (0006.HK) 41.46 (0) HSBC (0005.HK) 89.93 1 Huaneng Power (0902.HK) 5.60 0 Hutchison (0013.HK) 57.74 0 Johnson Electric (0179.HK) 3.67 1 Lenovo (0992.HK) 4.57 0 PCCW (0008.HK) 1.98 (0) PetroChina (0857.HK) 10.23 1 SHK Properties (0016.HK) 125.40 2 Sinopec (0386.HK) 6.77 1 SMIC (0981.HK) 0.40 0 Swire Pacific (0019.HK) 95.56 (1) Techtronic (0669.HK) 6.56 1 Tsingtao Brewery (0168.HK) 31.54 (1) Yanzhou Coal (1171.HK) 12.35 2
BOCI research is available electronically on Bloomberg (BOCR
UTILITIES — Electricity Rating Change
23 October 2009
Datang Int’l Power Poor earnings visibility
Contrary to its peer Huaneng Power, Datang International SELL (ªHOLD) Power recently settled key coal contracts at much higher H prices than its earlier estimates, resulting in a 39% QoQ net 0991.HK – HK$4.08 profit decline in 3Q09. Due to the margin squeeze, its 9M09 profits only accounted for 49% of our full-year forecast. We Target Price: HK$3.65 (ª5.00) see higher risks of unfavourable coal-price terms for its 2010 contract negotiations and a low probability of de-leveraging after Datang rolled over its debt structure to a longer-term HOLD bias. Owing to a bleak outlook and low earnings visibility for its non-power segments in 2010-11, we lower Datang’s 601991.SS – Rmb9.16 H-share target price from HK$5.00 to HK$3.65 and downgrade A the stock from HOLD to SELL. We also revise down our Target Price: Rmb8.90 (ª9.70) A-share target price from Rmb9.70 to Rmb8.90 and reiterate our HOLD rating. Key Factors for Rating Some 44% of the 2009 coal supply to Datang was already settled by key contracts at higher terms.
Peter YAO, CFA We revise up our 2009 unit fuel cost projection by 2.4% to Rmb174.6/MWh. +852 29052105 [email protected] Its high financial leverage signifies potential fund‐raising.
Share Price vs Index – H shares Key Risks to Rating HK$ Turnover (HK$ m) Production schedule and sales terms of energy projects. 6.5 600 Contract coal negotiations for 2010. 5.5 500 400 4.5 Valuation 300 3.5 200 We cut our 2009‐11 EPS estimates by 19%, 18% and 14%, 2.5 100 respectively, based on our higher unit fuel cost estimates. 1.5 0 We lower our target prices for its H and A shares to HK$3.65 and Rmb8.90. Our new target price implies 16.2x forward P/E
22/10/08 22/11/08 22/12/08 22/01/09 22/02/09 22/03/09 22/04/09 22/05/09 22/06/09 22/07/09 22/08/09 22/09/09 22/10/09 and 1.2x forward P/B for its H shares. Datang Intl Power Gen Co-H HSMLCI Earnings visibility is questionable despite expected jumps in Sources: Bloomberg, BOCI Research 2010‐11.
Figure 1. Investment Summary – H shares Share Price Performance – H shares Year ended 31 Dec 2007 2008 2009E 2010E 2011E YTD 1M 3M 12M Revenue (Rmb m) 32,763 36,836 50,127 59,233 76,087 Absolute (%) (0) (7) (14) 23 Change (%) 32 12 36 18 28 Relative to HSMLCI (%) (54) (11) (26) (59) Net profit (Rmb m) 3,564 761 1,694 2,416 4,228 Sources: Bloomberg, BOCI Research Fully diluted EPS (Rmb) 0.307 0.065 0.142 0.196 0.343 Change (%) 14.6 (78.9) 119.4 37.9 75.0 Key Data – H shares Consensus EPS (Rmb) - - 0.213 0.273 0.345 Total issued shares (m) 11,749 Previous EPS (Rmb) - - 0.176 0.240 0.400 Free float (%) 100 Change (%) -- (19.3) (18.2) (14.2) Free float mkt. cap. (HK$ m) 47,936 Fully diluted P/E (x) 11.7 55.5 25.3 18.3 10.5 3M avg. daily turnover (HK$ m) 131 CFPS (Rmb) 0.91 0.76 1.44 1.46 1.92 Net debt/equity (%) (2009E) 304 P/CF (x) 3.9 4.7 2.5 2.5 1.9 Major shareholders (%) EV/EBITDA (x) 8.8 15.8 10.5 9.9 7.8 China Datang Corporation 36 DPS (Rmb) 0.121 0.110 0.078 0.079 0.137 Beijng Energy Investment 11 Yield (%) 3.4 3.1 2.2 2.2 3.8 Sources: Company data, Bloomberg, BOCI Research Sources: Company data, BOCI Research estimates BOCI research is available electronically on Bloomberg (BOCR
Share Price vs Index – A shares Disappointing 3Q09 Results Rmb Turnover (Rmb m) 14 1,000 900 Datang made a net profit of Rmb374m in 3Q09, down 39% QoQ. 12 800 700 9M09 profits under the Chinese accounting standards (CAS) 10 600 500 came in at Rmb1.03bn, representing merely 49% of our 2009 8 400 300 forecast and significantly below market consensus. Gross and 6 200 100 operating margins shrank 3.4ppts and 4ppts QoQ, respectively, 4 0 owing to higher fuel costs. The earnings disappointment was mainly attributed to the settlement of most key contract coal at 22/10/08 22/11/08 22/12/08 22/01/09 22/02/09 22/03/09 22/04/09 22/05/09 22/06/09 22/07/09 22/08/09 22/09/09 22/10/09 Datang Intl Power Gen Co-A FTSE-Xinhua A50 higher prices than Datang’s earlier estimate, in addition to better performance of its non‐wholly owned power plants since Sources: Bloomberg, BOCI Research minority interests comprised 46% of the after‐tax and
before‐minority‐interest profits in 3Q09. Share Price Performance – A shares Figure 2. 3Q09 and 9M09 Results under CAS YTD 1M 3M 12M Absolute (%) 42 (5) 5 49 (Rmb m) 2Q09 3Q09 9M08 9M09 QoQ % YoY % Relative to FTSE-Xinhua A50 (%) (33) (14) 14 (22) Revenue 12,141 15,020 27,449 35,704 23.7 30.1 Cost of operations (9,863) (12,702) (24,829) (29,813) 28.8 20.1 Sources: Bloomberg, BOCI Research Gross profit 2,279 2,318 2,620 5,891 1.7 124.8
Gross margin (%) 18.8 15.4 9.5 16.5 Key Data – A shares Selling, general and (251) (416) (886) (1,042) 65.8 17.6 administrative expenses Total issued shares (m) 11,780 Free float (%) 52 Financing cost (991) (1,045) (2,506) (3,033) 5.4 21.0 Free float mkt. cap. (Rmb m) 56,252 Investment income and 189 58 320 312 3M avg. daily turnover (Rmb m) 220 associates Net debt/equity (%)(2009E) 324 Operating profit 1,223 915 (451) 2,128 (25.2) n.m. Sources: Company data, Bloomberg, BOCI Research estimates Operating margin (%) 10.1 6.1 (1.6) 6.0 Non-operating income 7 25 48 92 257.1 91.7 Non-operating expenses (5) (22) (9) (27) 340.0 200.0 Investment Summary – A shares Pre-tax profit 1,225 919 (412) 2,193 (25.0) n.m. Year ended 31 Dec 2007 2008 2009E 2010E 2011E Tax (183) (226) 366 (444) 23.5 n.m. Revenue (Rmb m) 32,763 36,836 43,231 50,212 63,730 Minority interests 383 (318) 32 (722) n.m. n.m. Change (%) 32 12 17 16 27 Net profit 617 374 (14) 1,027 (39.4) n.m. Net profit (Rmb m) 3,633 823 2,138 2,979 4,960 EPS (Rmb) 0.05 0.03 (0.00) 0.09 (39.5) n.m. Fully diluted EPS (Rmb) 0.313 0.070 0.181 0.253 0.421 Sources: Company data, BOCI Research Change (%) 10.3 (77.6) 159.2 39.3 66.5 Consensus EPS (Rmb) - - 0.203 0.274 0.354 Fully diluted P/E (x) 29.3 130.8 50.5 36.2 21.8 CFPS (Rmb) 0.91 0.61 1.29 1.51 1.87 Locked-in Higher Coal Prices than P/CF (x) 10.1 15.0 7.1 6.1 4.9 EV/EBITDA (x) 13.7 22.8 14.4 12.9 10.2 Guidance DPS (Rmb) 0.121 0.110 0.098 0.100 0.168 Yield (%) 1.3 1.2 1.1 1.1 1.8 Unit fuel cost in 9M09 averaged Rmb174.5/MWh, higher than the Sources: Company data, BOCI Research estimates company’s earlier guidance of Rmb170/MWh for the whole year. By our retrospective analysis, we estimate that the standard coal price in 3Q09 rose 13% QoQ.
Datang signed on key contract coal of 28m tonnes out of the 64m tonnes coal demand for 2009. It anticipated a 4% increase in key contract prices earlier, while the prices of seaborne coal secured were 18% higher year‐on‐year, thus causing the up‐leg in unit fuel cost during 3Q09.
23 October 2009 Datang Int’l Power 3 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
We note that Datang has signed the majority of key contracts for this year and the unsigned ones are set at vendors’ ask prices, hence the key contract risk is removed. For 2010 negotiations, however, we are afraid that coal companies will command greater bargaining power as demand is picking up and independent power producers (IPPs) are financially much better off this time around. Aggravated by slightly higher spot prices for 4Q09, the coal‐price risk remains an overhang for IPPs. We raise our 2009 unit fuel cost assumptions from Rmb170.5/MWh to Rmb174.6/MWh or 10.7% lower year‐on‐year.
Figure 3. Coal Price Trend
(Rmb/tonne) (Rmb/MWh) 700 180 160 650 140 600 120
550 100 80 500 60 450 40 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 Standard coal prices ex-VAT (LHS) Spark spread (RHS)
Sources: Company data, BOCI Research
Figure 4. Key Operating Statistics 1Q08 2Q08 3Q08 4Q08 2008A 1Q09 2Q09 1H09 3Q09 9M09 Power generation (bn kWh) 29.3 33.2 33.88 30.32 126.7 27.8 33.5 61.3 40.5 101.8 YoY % 6.45 15.4 11.8 (4.37) 7.1 (5.1) 0.9 (1.5) 4.8 5.6 Standard coal prices ex-VAT (Rmb/tonne) 473.0 514.3 667.1 634.5 591.0 562.0 488.0 525.0 546.0 532.0 Unit fuel cost (Rmb/MWh) 156.5 175.8 248.7 197.0 187.0 183.5 159.7 171.6 180.4 174.5 On-grid tariff (net VAT) 289.9 291.6 297.8 317.2 301.6 317.2 316.3 316.8 316.0 316.5 Spark spread (Rmb/MWh) 133.4 115.8 49.1 120.2 114.6 133.7 156.6 145.2 135.5 142.0 Sources: Company data, BOCI Research
Rolled over to Long-term Debt Profile
DATANG has issued Rmb6bn worth of long‐term bonds this year and switched many of its short‐term debts to long‐term ones, which now account for 81% of the total borrowings versus 63% as of end‐2009. This move caters to Datang’s project development in coal mines, coal‐based energy projects and new energy power units whose initial capital outlay last longer for coal‐fired power plants. We believe this initiative helps Datang partially fend off the rate‐hike cycle over the next few years, despite the formation of a relatively higher interest‐rate structure. Given its high capex requirement in several years’ time, we do not expect Datang to de‐leverage any time soon and expect, on the contrary, continued need for fund‐raising.
23 October 2009 Datang Int’l Power 4 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
Figures 5. Borrowing Structure of Datang (Rmb m) Dec-08 Jun-09 Sep-09 Short-term borrowings 29,584 21,172 17,878 Non-current borrowings within one year 6,822 3,953 3,071 Short-term bonds 3,500 3,500 3,500 39,906 28,625 24,449
Long-term borrowings 68,130 84,034 96,945 Bonds payable - 3,000 6,019 68,130 87,034 102,964
Total loans and bonds 108,036 115,659 127,413 Long-term % of total 63.1 75.3 80.8 Source: Company data
Figures 6. Capital Need and Gearing Outlook
(%) (Rmb bn) 350 45 300 40 250 200 35 150 30 100 25 50 0 20 06/05 06/05 07/05 07/05 07/05 Net debt-to-equity (LHS) Depreciation and net financing costs as a % of revenue (LHS) Capital expenditur (RHS)
Sources: Company data, BOCI Research
Downgrade on Low Earnings Visibility
We revise down our 2009‐11 EPS estimates by 19%, 18% and 14%, respectively, after incorporating a lower rate of decline in unit fuel cost but higher power sales growth and utilisation rate after analysing Datang’s 9M09 generation data. As a result, we adjust down our DCF‐based target prices to HK$3.65 for its H shares and Rmb8.90 for the A shares. Our H‐share target price implies 16.2x forward P/E and 1.2x forward P/B. Datang should still register phenomenal earnings growth of 38% and 75% in 2010‐11, thanks to the launch of more coal‐production and coal‐based energy projects. Nevertheless, earnings visibility remains low as management did not shed much light on the financials.
Owing to increased downside risks facing the company ahead, including unfavourable contract coal negotiations, financing needs and coal‐based energy‐project returns, we downgrade the H shares from HOLD to SELL.
23 October 2009 Datang Int’l Power 5 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
Figure 7. Key Assumptions 2008 2009E 2010E Power sales (bn kWh) 119.1 131.5 147.4 Change (%) 7.0 10.4 12.1 Attributable capacity (MW) 18,692.1 22,145.9 24,410.5 Change (%) 17.6 18.5 10.2 Same-plant utilisation hours 5,386 5,282 5,149 Ex-tax on-grid tariff (Rmb/MWh) 301.6 315.2 312.6 Change (%) 3.5 4.5 (0.8) Standard coal cost (Rmb/tonne) 589.9 531.8 522.6 Unit fuel cost (Rmb/MWh) 195.5 174.6 169.2 Change (%) 41.2 (10.7) (3.1) Net borrowing (Rmb m) 103,201.9 116,711.9 132,993.0 Net gearing (%) 336.8 304.1 330.3
EPS % change to: 1% standard coal cost 5.5 4.9 1% utilisation rate 5.1 5.0 1% on-grid tariff 6.0 9.2 50bp interest rate 8.7 8.1 Sources: Company data, BOCI Research
23 October 2009 Datang Int’l Power 6 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
Income Statement – H shares (Rmb m) Cash-flow Statement – H shares (Rmb m) Year ended 31 Dec 2007 2008 2009E 2010E 2011E Year ended 31 Dec 2007 2008 2009E 2010E 2011E Revenue 32,763 36,836 50,127 59,233 76,087 Pre-tax profit 5,837 613 3,817 4,528 8,098 Cost of sales (15,258) (22,499) (26,144) (28,339) (33,149) Depreciation & amortisation 5,043 6,342 8,560 10,373 12,358 Operating expenses (exclude Net interest expenses 2,161 3,582 3,528 3,913 4,723 (4,556) (5,065) (8,605) (12,747)(18,659) Depreciation & amortisation) Change in working capital (983) 174 1,504 1,075 1,888 Operating profit (EBIT) 7,923 2,930 6,818 7,774 11,922 Tax paid (1,293) (72) (840) (770) (1,417) Depreciation & amortisation (5,026) (6,342) (8,560) (10,373)(12,358) Other operating cash flows 5,084 4,666 9,211 9,259 10,345 EBITDA 12,949 9,272 15,378 18,148 24,280 Cash flow from operations 10,618 8,963 17,220 18,006 23,638 Net purchase of fixed assets (25,968) (42,001) (29,482) (28,071) (26,059) Net interest inc./(expenses) (1,995) (3,582) (3,528) (3,913) (4,723) Decrease/(increase) in 184 2,194 (866) (912) (985) Other gains/(losses) 136 1,265 521 662 894 invest. Pre-tax profit 6,064 613 3,811 4,523 8,093 Other investing cash flows (119) 5,000 0 0 0 Tax on profit (1,498) (72) (840) (770) (1,417) Cash flow from investing (25,903) (34,807) (30,349) (28,982) (27,044) Minority interests (1,002) 220 (1,278) (1,337) (2,448) Net increase in equity 0 0 4,950 0 0 Net profit 3,564 761 1,694 2,416 4,228 Net increase in debt 18,987 35,168 13,544 16,964 9,140 Core net profit 3,564 761 1,694 2,416 4,228 Dividends paid (2,124) (1,408) (1,296) (935) (968) EPS (Rmb) 0.307 0.065 0.142 0.196 0.343 Other financing cash flows (2,376) (6,582) (4,032) (4,367) (5,132) Core EPS (Rmb) 0.307 0.065 0.142 0.196 0.343 Cash flow from financing 14,487 27,178 13,166 11,663 3,040 DPS (Rmb) 0.121 0.110 0.078 0.079 0.137 Change in cash (799) 1,334 38 687 (366) Cash at beginning of year 4,451 3,649 4,978 5,012 5,695 Revenue growth (%) 32 12 36 18 28 Free cash flow to firm (15,218) (25,761) (13,079) (10,926) (3,349) EBIT growth (%) 32 (63) 133 14 53 Free cash flow to equity 249 5,742 (3,112) 2,075 1,011 EBITDA growth (%) 27 (28) 66 18 34 EPS growth (%) 15 (79) 119 38 75 Sources: Company data, BOCI Research estimates Core EPS growth (%) 15 (79) 119 38 75 Sources: Company data, BOCI Research estimates Key Ratios – H shares Year ended 31 Dec 2007 2008 2009E 2010E 2011E Profitability (%) Balance Sheet – H shares (Rmb m) EBITDA margin 39.5 25.2 30.7 30.6 31.9 As at 31 Dec 2007 2008 2009E 2010E 2011E EBIT margin 24.2 8.0 13.6 13.1 15.7 Cash & cash equivalents 3,446 4,978 5,012 5,695 5,325 Pre-tax margin 18.5 1.7 7.6 7.6 10.6 Receivables 5,681 4,302 5,854 6,918 8,886 Net profit margin 10.9 2.1 3.4 4.1 5.6 Inventories 993 2,143 2,490 2,699 3,157 Liquidity (x) Other current assets 1,071 3,817 5,194 6,138 7,884 Current ratio 0.3 0.3 0.4 0.4 0.4 Total current assets 11,191 15,240 18,551 21,450 25,253 Interest coverage 3.8 0.8 1.9 2.0 2.5 Fixed assets 102,585 136,444 151,929 168,554 181,255 Net debt to equity (%) 203.3 336.8 304.1 330.3 321.9 Quick ratio 0.3 0.2 0.3 0.3 0.3 Intangible assets 261 2,031 4,381 4,996 5,550 Valuation (x) Other long-term assets 5,891 4,210 8,621 10,172 11,906 P/E 11.7 55.5 25.3 18.3 10.5 Total long-term assets 108,598 142,152 164,399 183,189 198,178 Core P/E 11.7 55.5 25.3 18.3 10.5 Total assets 119,789 157,392 182,949 204,639 223,431 Core P/E @ target price 10.5 49.7 22.6 16.4 9.4 Creditors 9,848 13,145 17,888 21,137 27,152 P/B 1.4 1.6 1.4 1.4 1.2 Short-term debt 29,222 39,436 27,641 35,439 39,318 P/CF 3.9 4.7 2.5 2.5 1.9 Other current liabilities 987 381 419 461 507 EV/EBITDA 8.8 15.8 10.5 9.9 7.8 Total current liabilities 40,057 52,962 45,948 57,038 66,977 Activity ratios Long-term borrowings 43,790 68,744 94,083 103,249 108,510 Inventory days 21.5 25.4 32.3 33.4 32.2 Other long-term liabilities 1,587 5,041 4,537 4,083 3,675 Accounts receivables days 63.3 49.5 37.0 39.4 37.9 Share capital 11,612 11,780 12,330 12,330 12,330 Accounts payables days 109.7 113.9 113.0 120.2 115.8 Returns (%) Reserves 18,004 14,210 19,013 20,500 23,765 Dividend payout ratio 39.5 170.3 55.2 40.1 40.1 Shareholders' equity 29,616 25,990 31,343 32,830 36,095 Return on equity 12.0 2.7 5.9 7.5 12.3 Minority interests 4,599 4,655 7,038 7,440 8,174 Return on assets 5.0 1.9 3.1 3.3 4.6 Total liabilities & equity 119,649 157,392 182,949 204,639 223,431 Return on capital employed 7.5 2.4 4.6 4.6 6.5 Book value per share (Rmb) 2.55 2.21 2.63 2.66 2.93 Sources: Company data, BOCI Research estimates Tangible assets per share(Rmb 2.53 2.04 2.26 2.26 2.48 Net debt/(cash)per share (Rmb) 5.99 8.78 9.79 10.79 11.56 Sources: Company data, BOCI Research estimates
23 October 2009 Datang Int’l Power 7 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
Income Statement – A shares (Rmb m) Cash-flow Statement – A shares (Rmb m) Year ended 31 Dec 2007 2008 2009E 2010E 2011E Year ended 31 Dec 2007 2008 2009E 2010E 2011E Revenue 32,763 36,836 43,231 50,212 63,730 Pre-tax profit 5,837 613 3,927 5,743 10,383 Cost of sales (15,258) (22,499) (21,751) (24,140) (29,814) Depreciation & amortisation 5,043 6,342 8,828 10,204 11,340 Operating expenses (exclude Net interest expenses 2,161 3,582 3,731 3,747 4,105 (4,514) (5,064) (5,779) (7,307) (9,315) Depreciation & amortisation) Change in working capital (983) 174 982 767 1,350 Operating profit (EBIT) 7,948 2,931 6,873 8,561 13,259 Tax paid (1,293) (72) (785) (1,149) (2,596) Depreciation & amortisation (5,043) (6,342) (8,828) (10,204)(11,340) Other operating cash flows 4,991 2,867 7,306 8,698 8,770 EBITDA 12,991 9,273 15,701 18,765 24,600 Cash flow from operations 10,524 7,164 15,161 17,807 22,012 Net purchase of fixed assets (25,968) (35,545) (29,482) (28,071) (26,059) Net interest inc./(expenses) (1,995) (3,582) (3,731) (3,747) (4,105) Decrease/(increase) in 184 2,194 (866) (912) (985) Other gains/(losses) 178 1,329 809 939 1,244 invest. Pre-tax profit 6,131 678 3,951 5,753 10,399 Other investing cash flows (117) 5,000 0 0 0 Tax on profit (1,483) (61) (775) (1,139) (2,586) Cash flow from investing (25,667) (33,796) (30,349) (28,982) (27,044) Minority interests (1,015) 206 (1,037) (1,635) (2,853) Net increase in equity 0 0 4,950 0 0 Net profit 3,633 823 2,138 2,979 4,960 Net increase in debt 18,987 35,168 19,461 8,813 9,709 Core net profit 3,633 823 2,138 2,979 4,960 Dividends paid (2,124) (1,408) (1,296) (1,157) (1,184) EPS (Rmb) 0.313 0.070 0.181 0.253 0.421 Other financing cash flows (2,718) (5,434) (3,479) (3,483) (3,827) Core EPS (Rmb) 0.313 0.070 0.181 0.253 0.421 Cash flow from financing 14,145 28,326 19,636 4,173 4,698 DPS (Rmb) 0.121 0.110 0.098 0.100 0.168 Change in cash (998) 1,694 4,449 (7,002) (334) Cash at beginning of year 4,451 3,649 4,978 9,423 2,417 Revenue growth (%) 32 12 17 16 27 Free cash flow to firm (15,075) (26,549) (15,138) (11,081) (5,007) EBIT growth (%) 29 (63) 135 25 55 Free cash flow to equity 391 4,954 543 (6,110) 572 EBITDA growth (%) 26 (29) 69 20 31 EPS growth (%) 10 (78) 159 39 66 Sources: Company data, BOCI Research estimates Core EPS growth (%) 10 (78) 159 39 66 Sources: Company data, BOCI Research estimates Key Ratios – A shares Year ended 31 Dec 2007 2008 2009E 2010E 2011E Profitability (%) Balance Sheet – A shares (Rmb m) EBITDA margin 39.7 25.2 36.3 37.4 38.6 As at 31 Dec 2007 2008 2009E 2010E 2011E EBIT margin 24.3 8.0 15.9 17.0 20.8 Cash & cash equivalents 3,471 5,645 9,423 2,417 2,079 Pre-tax margin 18.7 1.8 9.1 11.5 16.3 Receivables 5,681 4,302 5,049 5,864 7,443 Net profit margin 11.1 2.2 4.9 5.9 7.8 Inventories 993 2,143 2,072 2,299 2,840 Liquidity (x) Other current assets 1,040 3,149 4,480 5,203 6,604 Current ratio 0.3 0.3 0.4 0.3 0.3 Total current assets 11,185 15,239 21,023 15,783 18,965 Interest coverage 3.6 0.8 1.8 2.2 3.1 Fixed assets 100,881 135,197 153,492 170,732 184,894 Net debt to equity (%) 203.4 335.6 323.8 345.6 332.1 Quick ratio 0.3 0.2 0.4 0.2 0.2 Intangible assets 261 2,031 4,381 4,996 5,550 Valuation (x) Other long-term assets 7,415 5,380 6,922 8,199 9,761 P/E 29.3 130.8 50.5 36.2 21.8 Total long-term assets 108,418 142,075 164,261 183,394 199,672 Core P/E 29.3 130.8 50.5 36.2 21.8 Total assets 119,603 157,314 185,284 199,177 218,638 Core P/E @ target price 31.0 138.5 53.4 38.4 23.0 Creditors 9,848 13,145 15,427 17,918 22,742 P/B 3.6 4.2 3.4 3.2 2.9 Short-term debt 29,222 39,436 37,173 41,430 46,289 P/CF 10.1 15.0 7.1 6.1 4.9 Other current liabilities 987 381 419 461 507 EV/EBITDA 13.7 22.8 14.4 12.9 10.2 Total current liabilities 40,057 52,962 53,019 59,809 69,538 Activity ratios Long-term borrowings 43,790 68,744 90,468 95,024 99,874 Inventory days 21.5 25.4 35.4 33.0 31.5 Other long-term liabilities 1,571 5,058 5,293 5,558 5,836 Accounts receivables days 63.3 49.5 39.5 39.7 38.1 Share capital 11,734 11,780 12,330 12,330 12,330 Accounts payables days 109.7 113.9 120.6 121.2 116.4 Returns (%) Reserves 17,852 14,115 19,208 21,000 24,747 Dividend payout ratio 38.8 157.5 54.1 39.7 39.8 Shareholders' equity 29,586 25,895 31,538 33,330 37,077 Return on equity 12.3 3.0 7.4 9.2 14.1 Minority interests 4,599 4,655 4,966 5,457 6,313 Return on assets 5.0 1.9 3.2 3.6 4.8 Total liabilities & equity 119,603 157,314 185,284 199,177 218,638 Return on capital employed 7.6 2.4 4.7 5.2 7.4 Book value per share (Rmb) 2.55 2.20 2.68 2.83 3.15 Sources: Company data, BOCI Research estimates Tangible assets per 2.53 2.03 2.31 2.41 2.68 share(Rmb) Net debt/(cash)per share 5.99 8.70 10.04 11.38 12.23 (Rmb) Sources: Company data, BOCI Research estimates
23 October 2009 Datang Int’l Power 8 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
TRANSPORT — Shipping Rating Change
23 October 2009
China Shipping Dev 3Q09 results review
The 9M09 net profit of China Shipping Development (CSD) HOLD (ªBUY) plunged 80.8% YoY due to lower shipping rates. We downgrade CSD’s H shares from BUY to HOLD, with a new H 1138.HK – HK$11.98 target price of HK$12.00. We reaffirm our HOLD rating for its A Target Price: HK$12.00 (ª12.20) shares with our target price lowered to Rmb13.70. Key Factors for Rating HOLD The 9M09 results were affected by lower year‐on‐year 600026.SS – Rmb13.86 shipping rates for coal and bulk transportation and those for A international oil shipping. Target Price: Rmb13.70 (ª13.90) Gradual improvement in domestic coal shipping volume was evident as the price gap between imported and domestic coal narrowed. This allows China IPPs shift away from imported coal, which is positive to CSD in terms of higher shipment volume and better rates. Cost of sales fell 38.2% as fuel costs, charter‐in cost and other operating costs dropped substantially.
Jimmy LAM, CFA Key Risks to Rating +852 2905 2111 [email protected] Slower‐than‐expected economic recovery in major economies of the world. Share Price vs Index - H shares Significant decline in dry bulk and oil shipping rates. HK$ Turnover (HK$ m) 13 600 Lower‐than‐expected domestic coal shipping volume. 11 500 400 9 Valuation 300 7 200 Based on CSD’s 9M09 operating figures, we cut our 2009 and 5 100 2010 profit forecasts by 13.5% and 7%, respectively. We downgrade CSD’s H shares from BUY to HOLD, with a new 3 0 target price of HK$12.00. We reaffirm our HOLD rating CSD’s A shares, with target price lowered to Rmb13.70. 22/10/08 22/11/08 22/12/08 22/01/09 22/02/09 22/03/09 22/04/09 22/05/09 22/06/09 22/07/09 22/08/09 22/09/09 22/10/09 China Shipping Development-H HSMLCI Figure 1. Investment Summary Sources: Bloomberg, BOCI Research Year ended 31 Dec 2007 2008 2009E 2010E 2011E
Revenue (Rmb m) 12,395 17,214 8,976 11,768 13,552 Share Price Performance - H shares Change (%) 35 39 (48) 31 15 YTD 1M 3M 12M Net profit (Rmb m) 4,546 5,373 1,333 2,504 3,160 Absolute (%) 56 16 7 114 Fully diluted EPS (Rmb) 1.367 1.578 0.392 0.735 0.928 Relative to HSMLCI (%) 2 12 (4) 32 Change (%) 64.8 15.5 (75.2) 87.8 26.2 Sources: Bloomberg, BOCI Research Consensus EPS (Rmb) -- 0.478 0.661 0.873
Key Data - H shares Previous EPS (Rmb) - - 0.453 0.791 0.984 Change (%) - - (13.5) (7.0) (5.7) Total issued shares (m) 3,405 Fully diluted P/E (x) 7.7 6.7 27.0 14.4 11.4 Free float (%) 38 CFPS (Rmb) 1.69 1.84 0.89 1.21 1.43 Free float mkt. cap. (HK$ m) 15,526 3M avg. daily turnover (HK$ m) 129 P/CF (x) 6.3 5.7 11.9 8.7 7.4 Net debt/equity (%) (2009E) 45 EV/EBITDA (x) 6.9 6.0 16.7 11.0 9.5 Major shareholder (%) DPS (Rmb) 0.512 0.300 0.074 0.140 0.176 China Shipping (Group) Company 46 Yield (%) 4.8 2.8 0.7 1.3 1.7 Sources: Company data, Bloomberg, BOCI Research Sources: Company data, BOCI Research estimates
BOCI research is available electronically on Bloomberg (BOCR
Share Price vs Index - A shares 3Q09 Operating Highlights Rmb Turnover (Rmb m) 20 1,400 1,200 CSD’s 9M09 net profit plunged 80.8% YoY to Rmb905.7m as 1,000 15 turnover dropped 54.1% to Rmb6.57bn. The decline in CSD’s 800 profit was driven by: i) a 8.5% slide in total shipment volume to 600 10 400 160.5bn tonne‐nautical miles (tnm); ii) a drop in average freight 200 rates of 45.5%; iii) a 93.6% plunge in investment income as profit 5 0 from associated companies was hampered by the poor market environment, and; iv) the 75.9% decline in non‐operating income 22/10/08 22/11/08 22/12/08 22/01/09 22/02/09 22/03/09 22/04/09 22/05/09 22/06/09 22/07/09 22/08/09 22/09/09 22/10/09 China Shipping Development-A FTSE-Xinhua A50 due to lower disposal gains from vessel sales. Operating costs dropped 38.2% during the period as major cost items such as fuel Sources: Bloomberg, BOCI Research and vessel charter‐in declined significantly during the period.
CSD’s 9M09 net profit also included Rmb32.5m in subsidiary Share Price Performance - A shares income. YTD 1M 3M 12M Absolute (%) 70 12 (16) 79 Total shipment volume dropped 8.5% to 160.5bn tnm. Shipment Relative to FTSE-Xinhua A50 (%) (4) 3 (7) 8 volume for oil increased 15.1% to 88.8bn tnm, while, that for coal Sources: Bloomberg, BOCI Research and other bulk cargoes dropped 29.4 to 42.4bn tnm and 23.1% to 29.3bn tnm
Key Data - A shares Domestic Shipments down 26.4% Total issued shares (m) 3,405 Free float (%) 16 Domestic shipment volume decreased 26.4% to 56.2bn tnm. Coal Free float mkt. cap. (Rmb m) 7,347 3M avg. daily turnover (Rmb m) 246 and other dry bulk cargoes shipment volumes dropped 34.8% Net debt/equity (%) (2009E) 48 and 17.3%, respectively, while that for oil increased 5.2%. Unit Sources: Company data, Bloomberg, BOCI Research estimates revenues for domestic coal and other dry bulk cargoes respectively dropped 50.0% and 52.2% while that for oil transportation increased 5.7%. Investment Summary - A shares Year ended 31 Dec 2007 2008 2009E 2010E 2011E Revenue (Rmb m) 12,687 17,562 9,193 12,053 13,882 International Shipments up 5.4% Change (%) 34 38 (48) 31 15 Net profit (Rmb m) 4,596 5,373 1,353 2,527 3,187 International shipment volume grew 5.4% to 104.3bn tnm. Fully diluted EPS (Rmb) 1.382 1.578 0.397 0.742 0.936 Shipment volume for coal and oil increased 72.5% and 17.1%, Change (%) 65.8 14.2 (74.8) 86.7 26.1 respectively, while other dry bulk cargo shipment volume Consensus EPS - - 0.511 0.723 0.901 dropped 24.2%. Rates for transportation of coal, other dry bulk Previous EPS (Rmb) - - 0.459 0.798 0.992 cargoes and oil dropped 44.4%, 48.2% and 63.4%, respectively. Change (%) - - (13.4) (6.9) (5.6) Fully diluted P/E (x) 10.0 8.8 34.9 18.7 14.8 CFPS (Rmb) 1.68 1.80 0.82 1.35 1.60 Downgrade H-share Rating to HOLD P/CF (x) 8.2 7.7 17.0 10.3 8.7 EV/EBITDA (x) 8.4 7.7 19.2 12.8 11.0 Taking into consideration CSD’s 9M09 operating figures and the DPS (Rmb) 0.512 0.300 0.074 0.140 0.176 adjustments in our assumptions for shipment volume and rates, Yield (%) 3.7 2.2 0.5 1.0 1.3 we cut our 2009 profit forecast by 13.5% to Rmb1.3bn for 2009 Sources: Company data, BOCI Research estimates and that for 2010 by 7% to Rmb2.5bn. This is based on cuts in 2009 and 2010 freight rate assumptions by 2% and 1% and decreases in our shipment volume assumptions of 1% and 1%. We downgrade our rating on its H‐shares from BUY to HOLD with our target price lowered from HK$12.20 to HK$12.00. We reaffirm our HOLD rating on CSD’s A‐shares with a new target price of Rmb13.70, down from Rmb13.90.
23 October 2009 China Shipping Dev 10 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
Figure 2. 9M09 Results Summary (A shares) (Rmb m) 9M08 9M09 Change (%) Turnover 14,319.4 6,572.3 (54.1) Cost of sales (8,419.1) (5,204.6) (38.2) Business tax (270.2) (144.2) (46.6) Profit from principal operations 5,630.1 1,223.5 (78.3) Fair value gains 8.2 0.0 (100.0) Income from investment (165.6) 0.0 n.m. Selling & distribution costs (29.8) (26.6) (10.9) Admin. expenses (163.0) (145.6) (10.7) Finance expenses (68.5) (24.9) (63.6) Operating profit 5,211.3 1,026.5 (80.3) Income from investment 445.1 28.7 (93.6) Non-operating income 405.1 97.7 (75.9) Non-operating expenses (10.8) (2.3) (78.8) Income tax (1,324.5) (244.1) (81.6) Minority interests 0.0 (0.8) n.m. Net profit 4,726.3 905.7 (80.8)
Key ratios (%) Gross profit margin 39.3 18.6 Operating margin 36.4 15.6 Effective tax rate 21.9 21.2 Net profit margin 33.0 13.8 Source: Company data
23 October 2009 China Shipping Dev 11 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
Income Statement – H shares (Rmb m) Cash-flow Statement – H shares (Rmb m) Year ended 31 Dec 2007 2008 2009E 2010E 2011E Year ended 31 Dec 2007 2008 2009E 2010E 2011E Revenue 12,395 17,214 8,976 11,768 13,552 Pre-tax profit 5,328 6,433 1,629 3,055 3,855 Cost of sales (7,329) (11,111) (7,178) (8,298) (9,191) Depreciation & amortisation 909 1,017 1,097 1,173 1,244 Operating expenses (exclude Net interest expenses 139 58 118 488 570 636 437 853 854 876 Depreciation & amortisation) Change in working capital 373 (277) 436 (94) (153) Operating profit (EBIT) 4,792 5,524 1,554 3,150 3,993 Tax paid (829) (1,057) (292) (548) (691) Depreciation & amortisation (909) (1,017) (1,097) (1,173) (1,244) Other operating cash flows 655 1,044 1,140 1,219 1,292 EBITDA 5,701 6,541 2,651 4,323 5,237 Cash flow from operations 5,609 6,199 3,029 4,117 4,870 Net purchase of fixed assets (7,668) (6,888) (6,818) (6,500) (6,081) Net interest inc./(expenses) (139) (58) (118) (488) (570) Decrease/(increase) in invest. 701 578 470 451 426 Other gains/(losses) 674 967 193 393 432 Other investing cash flows 2 2 2 2 2 Pre-tax profit 5,328 6,433 1,629 3,055 3,855 Cash flow from investing (6,966) (6,308) (6,346) (6,047) (5,653) Tax on profit (782) (1,057) (292) (548) (691) Net increase in equity 0 0 0 0 0 Minority interests 0 (3) (3) (4) (4) Net increase in debt 3,205 2,798 3,834 2,732 1,912 Net profit 4,546 5,373 1,333 2,504 3,160 Dividends paid (1,079) (1,702) (1,021) (253) (476) Core net profit 4,546 5,373 1,333 2,504 3,160 Other financing cash flows (135) (176) (145) (512) (616) EPS (Rmb) 1.367 1.578 0.392 0.735 0.928 Cash flow from financing 1,991 920 2,667 1,966 821 Core EPS (Rmb) 1.367 1.578 0.392 0.735 0.928 Change in cash 634 810 (650) 36 37 DPS (Rmb) 0.512 0.300 0.074 0.140 0.176 Cash at beginning of year 475 1,080 1,858 1,208 1,244 Revenue growth (%) 35 39 (48) 31 15 Free cash flow to firm (1,322) (84) (3,301) (1,913) (766) Free cash flow to equity 1,645 2,417 398 314 559 EBIT growth (%) 58 15 (72) 103 27 EBITDA growth (%) 46 15 (59) 63 21 Sources: Company data, BOCI Research estimates EPS growth (%) 65 15 (75) 88 26 Core EPS growth (%) 65 15 (75) 88 26 Key Ratios – H shares Sources: Company data, BOCI Research estimates Year ended 31 Dec 2007 2008 2009E 2010E 2011E Profitability (%) Balance Sheet – H shares (Rmb m) EBITDA margin 46.0 38.0 29.5 36.7 38.6 EBIT margin 38.7 32.1 17.3 26.8 29.5 As at 31 Dec 2007 2008 2009E 2010E 2011E Pre-tax margin 43.0 37.4 18.1 26.0 28.4 Cash & cash equivalents 1,080 1,858 1,208 1,244 1,282 Net profit margin 36.7 31.2 14.9 21.3 23.3 Receivables 559 785 409 595 753 Liquidity (x) Inventories 286 272 147 206 256 Current ratio 1.4 1.7 1.2 1.4 1.6 Other current assets 495 226 118 213 313 Interest coverage 27.7 65.7 11.5 6.2 6.8 Total current assets 2,420 3,141 1,882 2,259 2,604 Net debt to equity (%) 31.3 23.4 45.1 55.2 58.4 Fixed assets 20,002 25,100 30,821 36,148 40,985 Quick ratio 1.2 1.6 1.1 1.3 1.4 Intangible assets 0 0 0 0 0 Valuation (x) P/E 7.7 6.7 27.0 14.4 11.4 Other long-term assets 1,185 1,687 1,853 2,035 2,236 Core P/E 7.7 6.7 27.0 14.4 11.4 Total long-term assets 21,187 26,787 32,674 38,183 43,220 Core P/E @ target price 7.7 6.7 27.0 14.4 11.4 Total assets 23,607 29,928 34,556 40,442 45,825 P/B 2.2 1.7 1.7 1.5 1.4 Creditors 462 529 276 362 416 P/CF 6.3 5.7 11.9 8.7 7.4 Short-term debt 722 921 821 610 501 EV/EBITDA 6.9 6.0 16.7 11.0 9.5 Other current liabilities 528 384 464 624 725 Activity ratios Total current liabilities 1,712 1,834 1,561 1,596 1,642 Inventory days 11.9 9.2 10.7 7.8 9.2 Long-term borrowings 5,426 5,971 10,249 13,949 16,424 Accounts receivables days 14.1 14.2 24.3 15.6 18.2 Other long-term liabilities 299 575 885 786 964 Accounts payables days 10.0 10.5 16.4 9.9 10.5 Share capital 3,326 3,405 3,405 3,405 3,405 Returns (%) Reserves 12,746 17,949 18,261 20,512 23,196 Dividend payout ratio 37.4 19.0 19.0 19.0 19.0 Return on equity 31.7 28.7 6.2 11.0 12.5 Shareholders' equity 16,072 21,354 21,666 23,916 26,600 Return on assets 20.1 17.2 4.0 6.9 7.6 Minority interests 98 194 194 194 194 Return on capital employed 25.4 21.9 5.1 8.8 9.7 Total liabilities & equity 23,607 29,928 34,556 40,442 45,825 Book value per share (Rmb) 4.83 6.27 6.36 7.02 7.81 Sources: Company data, BOCI Research estimates Tangible assets per share(Rmb) 4.83 6.27 6.36 7.02 7.81 Net debt/(cash)per share (Rmb) 1.52 1.48 2.90 3.91 4.59 Sources: Company data, BOCI Research estimates
23 October 2009 China Shipping Dev 12 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
Income Statement – A shares (Rmb m) Cash-flow Statement – A shares (Rmb m) Year ended 31 Dec 2007 2008 2009E 2010E 2011E Year ended 31 Dec 2007 2008 2009E 2010E 2011E Revenue 12,687 17,562 9,193 12,053 13,882 Pre-tax profit 5,378 6,433 1,648 3,078 3,882 Cost of sales (7,587) (11,447) (7,367) (8,548) (9,479) Depreciation & amortisation 997 1,039 1,147 1,225 1,300 Operating expenses (exclude Net interest expenses 139 60 133 503 584 884 461 1,082 1,094 1,137 Depreciation & amortisation) Change in working capital 303 237 77 (87) (190) Operating profit (EBIT) 4,987 5,537 1,761 3,374 4,240 Tax paid (829) (1,331) (292) (548) (691) Depreciation & amortisation (997) (1,039) (1,147) (1,225) (1,300) Other operating cash flows 668 651 1,218 1,650 1,869 EBITDA 5,984 6,576 2,907 4,600 5,540 Cash flow from operations 5,602 6,049 2,782 4,594 5,451 Net purchase of fixed assets (7,668) (6,888) (6,818) (6,500) (6,081) Net interest inc./(expenses) (139) (60) (133) (503) (584) Decrease/(increase) in invest. 710 755 513 512 479 Other gains/(losses) 529 956 20 206 226 Other investing cash flows (8) 0 247 (493) (586) Pre-tax profit 5,378 6,433 1,648 3,078 3,882 Cash flow from investing (6,967) (6,133) (6,058) (6,480) (6,188) Tax on profit (782) (1,057) (292) (548) (691) Net increase in equity 0 0 0 0 0 Minority interests 0 (3) (3) (4) (4) Net increase in debt 3,210 2,343 3,834 2,732 1,912 Net profit 4,596 5,373 1,353 2,527 3,187 Dividends paid (1,079) (1,702) (1,021) (253) (476) Core net profit 4,596 5,373 1,353 2,527 3,187 Other financing cash flows (132) 254 (162) (529) (633) EPS (Rmb) 1.382 1.578 0.397 0.742 0.936 Cash flow from financing 1,999 894 2,650 1,949 803 Core EPS (Rmb) 1.382 1.578 0.397 0.742 0.936 Change in cash 634 810 (625) 63 65 DPS (Rmb) 0.512 0.300 0.074 0.140 0.176 Cash at beginning of year 475 1,080 1,858 1,208 1,244 Revenue growth (%) 34 38 (48) 31 15 Free cash flow to firm (1,331) (58) (3,259) (1,869) (720) Free cash flow to equity 1,650 1,962 423 340 587 EBIT growth (%) 56 11 (68) 92 26 EBITDA growth (%) 46 10 (56) 58 20 Sources: Company data, BOCI Research estimates EPS growth (%) 66 14 (75) 87 26 Core EPS growth (%) 66 14 (75) 87 26 Key Ratios – A shares Sources: Company data, BOCI Research estimates Year ended 31 Dec 2007 2008 2009E 2010E 2011E Profitability (%) Balance Sheet – A shares (Rmb m) EBITDA margin 47.2 37.4 31.6 38.2 39.9 EBIT margin 39.3 31.5 19.2 28.0 30.5 As at 31 Dec 2007 2008 2009E 2010E 2011E Pre-tax margin 42.4 36.6 17.9 25.5 28.0 Cash & cash equivalents 1,080 1,858 1,208 1,244 1,282 Net profit margin 36.2 30.6 14.7 21.0 23.0 Receivables 559 785 409 595 753 Liquidity (x) Inventories 286 272 147 206 256 Current ratio 1.4 1.7 1.2 1.3 1.4 Other current assets 495 226 118 213 313 Interest coverage 28.7 64.5 11.8 6.5 7.0 Total current assets 2,420 3,141 1,882 2,259 2,604 Net debt to equity (%) 31.3 21.3 48.3 58.9 62.1 Fixed assets 19,970 25,167 30,821 36,148 40,985 Quick ratio 1.2 1.6 1.1 1.1 1.2 Intangible assets 5 14 5 14 5 Valuation (x) P/E 10.0 8.8 34.9 18.7 14.8 Other long-term assets 1,212 1,714 1,819 1,998 2,195 Core P/E 10.0 8.8 34.9 18.7 14.8 Total long-term assets 21,187 26,896 32,645 38,160 43,185 Core P/E @ target price 9.9 8.7 34.5 18.5 14.6 Total assets 23,607 30,037 34,527 40,418 45,789 P/B 2.9 2.2 2.3 2.1 1.8 Creditors 462 529 277 363 418 P/CF 8.2 7.7 17.0 10.3 8.7 Short-term debt 722 921 821 610 501 EV/EBITDA 8.4 7.7 19.2 12.8 11.0 Other current liabilities 528 384 533 826 981 Activity ratios Total current liabilities 1,712 1,834 1,632 1,799 1,900 Inventory days 11.5 8.9 10.4 7.5 8.9 Long-term borrowings 5,426 5,529 10,593 14,293 16,768 Accounts receivables days 13.8 14.0 23.7 15.2 17.7 Other long-term liabilities 299 1,017 1,150 1,146 1,383 Accounts payables days 9.8 10.3 16.0 9.7 10.3 Share capital 3,326 3,405 3,405 3,405 3,405 Returns (%) Reserves 12,746 17,949 17,553 19,580 22,140 Dividend payout ratio 37.0 19.0 18.7 18.8 18.8 Return on equity 32.1 28.7 6.4 11.5 13.1 Shareholders' equity 16,072 21,354 20,957 22,985 25,544 Return on assets 21.0 17.3 4.5 7.4 8.1 Minority interests 98 194 194 194 194 Return on capital employed 26.4 22.1 5.9 9.6 10.5 Total liabilities & equity 23,607 29,928 34,527 40,418 45,789 Book value per share (Rmb) 4.83 6.27 6.16 6.75 7.50 Sources: Company data, BOCI Research estimates Tangible assets per share(Rmb) 4.83 6.27 6.15 6.75 7.50 Net debt/(cash)per share (Rmb) 1.52 1.35 3.00 4.01 4.70 Sources: Company data, BOCI Research estimates
23 October 2009 China Shipping Dev 13 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
CHINA — HK Y/E Price 5D 1M YTD 3M avg. Free float EPS EPS P/E P/E EPS Gr. EPS Gr. Yield Yield Target Ticker Company chg. chg. chg. daily T/O mkt. cap.^ 09E 10E 09E 10E 09E 10E 09E 10E Analyst Rec. Price (HK$) (%) (%) (%) (HK$ m) (HK$ m) (x) (x) (%) (%) (%) (%) Automotive 2357 AviChina Dec 2.65 5 0 152 31 4,800 0.04 0.13 70.7 20.1 252 0.0 0.0 XU Minle BUY 3.30 1114 Brilliance Auto Dec 1.03 2 18 154 30 2,306 0.05 0.06 22.7 18.1 33 25 0.0 0.0 WANG Yusheng SELL 0.76 0203 Denway Motors Dec 3.71 0 9 54 116 17,293 0.34 0.36 10.9 10.3 8 6 2.3 2.4 Eric HU HOLD 3.96 0489 Dongfeng Motor Dec 9.33 (2) 15 273 186 26,528 0.65 0.75 14.4 12.5 21 16 0.7 0.8 Eric HU BUY 9.75 0300 Kunming Machine (A/H) Dec 6.35 3 (5) 108 6 715 0.72 0.73 8.9 8.7 (3) 2 1.6 1.8 SHI Qi BUY 7.16 1122 Qingling Motors Dec 1.57 1 8 104 8 1,169 0.10 0.12 15.7 13.6 24 16 4.6 5.3 Eric HU BUY 2.56 2338 Weichai Power (A/H) Dec 52.95 16 36 263 67 10,586 3.24 3.79 16.4 14.0 23 17 0.3 0.4 Eric HU BUY 45.30 Average 3 12 158 63 9,057 0.73 0.85 22.8 13.9 18 48 1.4 1.5
Chemicals 0338 Shanghai Petrochem (A/H) Dec 3.21 (4) (6) 61 93 7,396 0.22 0.16 14.4 19.9 (28) 0.0 1.8 Lawrence LAU SELL 3.30 0297 Sinofert HK Hldg Dec 3.95 5 13 5 79 32,520 (0.05) 0.20 n.m. 19.9 0.0 0.4 NI Xiaoman HOLD4.25 Average 1 3 33 86 19,958 0.09 0.18 14.4 19.9 - (28) 0.0 1.1
Conglomerates 0291 China Resources Enterprise Dec 25.55 (1) 10 89 124 28,557 0.95 1.06 27.0 24.1 (4) 12 1.5 1.7 Ashley CHEUNG BUY 21.60 Average (1) 10 89 124 28,557 0.95 1.06 27.0 24.1 (4) 12 1.5 1.7
Consumer Products 2020 Anta Sports Products Dec 10.22 4 4 194 74 7,125 0.51 0.59 20.2 17.4 24 16 2.2 2.6 Sarah XING HOLD 11.15 0606 China Agri-Industries (R) Dec 8.13 8 20 111 65 12,368 0.54 0.69 15.2 11.8 (27) 29 1.2 1.7 Jenny CHAN BUY 8.00 3818 China Dongxiang (P) Dec 4.40 (7) (14) 138 120 12,739 0.29 0.35 15.0 12.7 8 18 2.7 3.1 Sarah XING BUY 6.20 0506 China Foods (R) Dec 6.20 8 15 115 17 12,978 0.27 0.31 23.0 20.0 59 15 1.5 1.6 Jenny CHAN BUY 5.55 0904 China Green Apr 6.46 (4) (2) 5 18 2,639 0.50 0.62 12.9 10.5 3 23 1.1 2.5 Jenny CHAN BUY 9.20 0359 China Haisheng Juice (P) Dec 0.72 (1) 11 48 1 289 0.36 0.40 2.0 1.8 5 10 9.5 11.0 Jenny CHAN BUY 2.50 3398 China Ting Group (P) Dec 1.18 (4) 0 130 1 716 0.15 0.19 8.1 6.3 (20) 28 7.4 9.5 Sarah XING BUY 1.55 1044 Hengan International Dec 50.20 2 10 102 108 23,669 1.73 1.97 29.0 25.5 50 14 2.2 2.6 Sarah XING BUY 46.00 0336 Huabao International Mar 7.33 (2) (8) 45 61 9,950 0.36 0.41 20.5 17.9 29 15 1.9 2.0 Jenny CHAN BUY 9.70 2331 Li Ning Dec 21.55 (2) (11) 78 98 15,435 0.97 1.16 22.1 18.5 25 20 2.3 2.7 Sarah XING BUY 25.00 2319 Mengniu Dairy Dec 20.75 2 7 106 182 21,998 0.90 1.11 22.9 18.7 22 0.9 1.1 Jenny CHAN HOLD 22.00 0157 Natural Beauty (P) Dec 1.29 (5) (7) 7 2 888 0.11 0.12 11.5 10.6 (6) 9 6.0 6.6 Sarah XING BUY 1.60 0886 Silver Base Group Dec 2.19 (1) (20) - 17 657 0.39 0.45 5.6 4.9 4 14 n.a. 5.1 Jenny CHAN BUY 4.00 0322 Tingyi Holding Dec 17.50 1 16 95 58 29,332 0.50 0.64 35.3 27.5 36 28 1.4 1.8 Jenny CHAN BUY 16.00 0168 Tsingtao Brewery (A/H) Dec 31.70 1 9 96 40 20,761 0.96 1.21 32.9 26.1 57 26 1.5 1.9 ZHAO Zongjun BUY 31.50 3331 Vinda International Dec 5.30 3 9 152 29 2,396 0.40 0.45 13.4 11.9 128 12 1.9 2.1 Sarah XING BUY 6.60 0151 Want Want China Dec 4.48 (0) (1) 40 71 28,219 0.16 0.23 28.9 19.3 0 50 1.7 3.5 Jenny CHAN BUY 4.00 2088 Xiwang Sugar (P) Dec 1.94 0 1 62 14 520 0.09 0.21 20.6 9.1 14 127 1.7 3.3 Jenny CHAN SELL 1.22 8259 Yantai North Andre Juice (H) Dec 0.34 0 (1) 13 2 270 0.12 0.14 2.8 2.5 40 12 10.7 12.0 Jenny CHAN BUY 1.05 Average 0 2 85 51 10,681 0.49 0.59 18.0 14.4 24 26 3.2 4.0
Consumer Services 0538 Ajisen (China) Dec 6.80 (3) 0 90 10 3,486 0.27 0.35 24.8 19.7 31 26 1.2 1.5 Sarah XING BUY 6.35 1880 Belle International Dec 8.17 (4) 9 140 110 23,447 0.31 0.35 26.2 23.2 16 13 1.0 1.2 Ashley CHEUNGSELL 6.60 3308 Golden Eagle Dec 14.38 6 26 164 42 7,300 0.35 0.64 40.9 22.3 (9) 83 2.4 0.7 LIU Du BUY 12.48 0493 Gome Electrical Dec 2.47 3 17 145 398 17,239 0.09 0.14 26.5 18.1 (38) 46 0.8 1.2 Ashley CHEUNGBUY 2.50 0980 Lianhua Supermarket Dec 16.88 2 3 75 6 4,704 0.81 1.08 20.9 15.7 14 34 1.9 2.6 Ashley CHEUNG BUY 19.40 0825 New World Department Store Dec 6.97 4 18 64 15 3,290 0.33 0.33 21.4 21.3 15 1 2.2 1.4 Ashley CHEUNG BUY 6.80 3368 Parkson Group Dec 12.36 (6) 5 40 60 15,857 0.40 0.48 31.3 25.7 15 22 1.6 1.9 ZHENG Yuan HOLD 12.00 1832 Time Ltd Dec 5.30 14 21 159 3 1,158 0.26 0.32 20.0 16.3 31 23 2.1 n.a. Ashley CHEUNG BUY 4.10 8277 Wumart Store Dec 12.28 (1) 3 113 22 8,270 0.41 0.49 30.1 25.0 11 20 1.7 2.0 Ashley CHEUNG BUY 12.90 3389 Xinyu Hengdeli (P) Dec 2.67 0 25 234 23 3,307 0.19 0.22 14.3 12.4 3 16 2.1 2.4 Sarah XING HOLD 3.35 Average 2 11 110 74 9,417 0.36 0.46 26.9 20.8 10 30 1.7 1.6
Energy 1898 China Coal (A/H) Dec 10.76 1 2 74 309 44,227 0.73 0.82 14.7 13.2 19 12 2.0 2.2 Lawrence LAU BUY 13.26 2883 China Oilfield Services (A/H) Dec 8.82 6 16 41 146 13,519 0.74 1.00 11.8 8.9 (5) 34 1.8 2.2 Lawrence LAU BUY 7.49 0883 CNOOC Limited Dec 12.24 3 13 69 1,048 158,397 0.75 1.07 16.3 11.4 (33) 43 2.9 3.1 Lawrence LAU BUY 12.32 0639 Fushan Energy Dec 5.99 12 10 209 183 15,842 0.35 0.37 17.4 16.1 104 8 2.3 2.5 Lawrence LAU BUY 5.80 0857 PetroChina (A/H) Dec 10.12 1 8 49 1,058 222,261 0.69 0.88 14.7 11.5 (3) 27 3.1 3.9 Lawrence LAU BUY 10.90 1088 Shenhua Energy (A/H) Dec 35.40 2 2 116 632 120,402 1.80 2.00 19.6 17.7 19 11 1.7 1.9 Lawrence LAU BUY 36.28 0386 Sinopec (A/H) Dec 6.71 (5) (2) 43 1,071 112,863 0.89 1.09 7.5 6.1 129 23 3.4 4.2 Lawrence LAU BUY 8.51 1171 Yanzhou Coal (A/H) Dec 12.10 2 4 113 206 23,803 0.86 0.96 14.0 12.6 (42) 11 1.9 2.2 Lawrence LAU BUY 15.59 Average 3 6 89 582 88,914 0.85 1.02 14.5 12.2 23 21 2.4 2.8
Financials 3988 Bank of China (A/H) Dec 4.58 4 7 116 1,315 348,193 0.35 0.37 13.0 12.2 24 6 4.0 4.2 YUAN Lin BUY 4.16 3328 Bank of Communication (A/H) Dec 10.12 (2) 2 81 436 233,035 0.62 0.61 16.4 16.7 (7) (1) 2.3 2.3 YIN Jinhua HOLD 9.24 0998 China Citic Bank (A/H) Dec 5.88 7 12 122 249 201,972 0.35 0.35 17.0 16.7 (11) 2 1.6 1.6 YUAN Lin SELL 4.88 0939 China Construction Bank (A/H) Dec 6.93 3 8 63 1,986 409,887 0.48 0.48 14.5 14.5 5 0 3.4 3.4 YUAN Lin HOLD 6.23 0165 China Everbright Dec 19.84 6 6 108 154 14,345 0.64 0.63 31.0 31.5 0 (2) 0.3 0.3 Dickie WONG BUY 22.00 0966 China Insurance Dec 26.10 7 17 119 81 14,544 0.74 0.97 35.3 26.9 31 0.3 0.3 Dickie WONG HOLD 19.00 2628 China Life (A/H) Dec 35.70 (0) 0 52 1,694 262,356 1.06 1.32 33.8 27.1 21 25 1.1 1.4 YUAN Lin HOLD 31.20 3968 China Merchants Bank (A/H) Dec 19.44 4 8 76 505 51,456 1.02 1.13 19.0 17.2 (18) 10 1.1 1.1 YUAN Lin BUY 17.84 1398 ICBC (A/H) Dec 6.33 3 4 55 2,011 105,717 0.41 0.42 15.5 15.1 9 3 3.2 3.2 YUAN Lin BUY 5.94 2328 PICC Dec 5.54 1 (3) 33 161 19,135 0.10 0.27 55.4 20.5 170 0.0 0.0 YUAN Lin HOLD 4.81 2318 Ping An Insurance (A/H) Dec 68.35 2 6 82 581 174,908 0.05 1.79 1,505.4 38.1 (98) 3,850 0.2 0.5 YUAN Lin HOLD 65.00 Average 3 6 82 834 166,868 0.53 0.76 159.7 21.5 (8) 372 1.6 1.7
Industrials 0914 Anhui Conch (A/H) Dec 52.00 (5) (11) 46 179 22,958 2.31 3.56 22.5 14.6 38 54 0.9 1.3 Grace TANG BUY 56.40 1800 China Comm Construction (H) Dec 8.64 (2) (3) (10) 244 34,584 0.59 0.79 14.7 11.0 31 34 1.6 2.2 Jimmy LAM BUY 12.00 3323 China National Building Material Dec 17.34 (3) (11) 86 207 15,698 1.04 1.41 16.7 12.3 34 35 0.4 0.5 Grace TANG BUY 22.01 0390 China Railway (A/H) Dec 6.53 0 (6) 22 199 23,923 0.36 0.45 18.2 14.4 402 26 1.4 1.7 Patrick LI BUY 8.20 1186 China Railway Construction (A/H) Dec 10.38 (4) (8) (10) 214 18,186 0.55 0.78 18.8 13.3 65 41 1.3 1.9 Patrick LI BUY 12.27 1766 China South Locomotive (A/H) Dec 4.53 1 4 8 93 9,118 0.17 0.22 26.6 21.0 25 27 1.0 1.3 SHI Qi BUY 4.75 3898 CSR Times Electric (H) Dec 13.78 (1) 6 120 29 6,274 0.54 0.69 25.3 19.9 26 27 1.8 2.3 SHI Qi BUY 8.14 1072 Dongfang Electric (A/H) Dec 43.55 4 (5) 124 74 21,126 2.32 2.80 18.8 15.6 275 21 0.0 0.1 HAN Ling BUY 50.00 3800 GCL-Poly Energy Dec 2.01 2 (16) 230 121 1,627 0.09 0.25 22.1 8.0 700 175 1.7 4.0 HAN Ling BUY 3.00 0317 Guangzhou Shipyard Int'l (A/H) Dec 15.10 5 (1) 112 36 2,378 1.69 1.47 8.9 10.3 (10) (13) 2.9 2.6 XU Minle BUY 17.96 3339 Lonking Holdings Dec 4.76 10 14 140 47 2,292 0.40 0.46 11.9 10.3 13 16 2.1 2.5 Eric HU BUY 6.05 2689 Nine Dragons Paper (P) Jun 11.90 10 17 438 160 14,444 0.43 0.40 27.4 29.5 (11) (7) 0.3 0.7 Sarah XING HOLD10.40 1893 Sinoma Dec 6.53 3 (8) 40 85 7,695 0.27 0.35 24.3 18.5 50 31 1.2 1.6 Lawrence LAU BUY 7.11 0505 Xingye Copper (P) Dec 1.16 (1) (2) 55 3 271 0.03 0.07 34.1 17.0 100 0.0 0.0 Sarah XING SELL 0.40 Average 1 (2) 100 121 12,898 0.77 0.98 20.7 15.4 126 41 1.2 1.6
23 October 2009 (Friday) The Raw and the Cooked 14 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
CHINA — HK Y/E Price 5D 1M YTD 3M avg. Free float EPS EPS P/E P/E EPS gr. EPS gr. Yield Yield Target Ticker Company chg. chg. chg. daily T/O mkt. cap.^ 09E 10E 09E 10E 09E 10E 09E 10E Analyst Rec. Price (HK$) (%) (%) (%) (HK$ m) (HK$ m) (x) (x) (%) (%) (%) (%) Media 1000 Beijing Media Dec 4.67 11 23 82 0 335 0.27 17.4 2 4.9 n.a. Allan NG SELL 9.00 2008 Phoenix Satellite TV Dec 1.77 3 8 149 6 2,192 0.05 0.07 34.7 26.4 (12) 31 1.0 1.2 Allan NG BUY1.70 0811 Xinhua Winshare Dec 2.98 3 2 83 7 1,319 0.36 0.40 8.2 7.5 8 9 3.8 4.2 Allan NG BUY 4.00 Average 6 11 105 5 1,282 0.23 0.23 20.1 17.0 (1) 20 3.2 2.7
Metals & Mining 0347 Angang New Steel (A/H) Dec 16.18 2 4 87 337 17,559 0.21 0.74 76.6 22.0 (55) 249 0.7 2.3 Belle CHAN SELL 12.50 2600 CHALCO (A/H) Dec 9.06 0 0 122 426 36,760 (0.26) 0.28 n.m. 32.1 0.0 0.0 Belle CHAN HOLD9.11 3993 China Molybdenum (H) Dec 6.80 5 2 93 97 7,527 0.16 0.29 42.2 23.3 (58) 81 0.8 1.4 Belle CHAN BUY 11.47 1053 Chongqing Iron & Steel (A/H) Dec 3.07 (0) 1 56 19 1,690 0.13 0.36 23.9 8.5 (67) 182 1.5 4.1 Belle CHAN HOLD 4.00 2626 Hunan Non-Ferrous Metal Dec 2.490 10 7 126 40 3,653 (0.06) 0.02 n.m. 109.7 0.0 0.0 Belle CHAN SELL 1.97 0358 Jiangxi Copper (A/H) Dec 18.80 1 3 231 556 22,733 1.45 1.75 13.0 10.8 69 21 2.3 2.8 Belle CHAN BUY 26.29 3330 Lingbao Gold Dec 2.98 1 (4) 51 10 826 0.22 0.23 13.5 13.2 39 2 2.6 2.7 Belle CHAN SELL 2.26 0067 Lumena Resources Corp Dec 2.89 (8) (7) - 103 3,169 0.33 0.53 8.7 5.5 31 60 0.0 4.6 Belle CHAN BUY 4.92 0323 Maanshan Iron & Steel (A/H) Dec 5.13 2 3 86 183 10,667 0.08 0.37 66.5 13.7 (35) 384 0.5 2.2 Belle CHAN BUY 6.00 0697 Shougang Concord Int'l Dec 1.43 8 1 66 100 2,873 (0.03) 0.20 n.m. 7.0 0.0 7.2 Belle CHAN BUY 1.69 1862 Sino Gold (P) Dec 48.50 (4) 1 97 2 9,347 1.52 2.20 31.9 22.1 - 44 0.0 0.0 Belle CHAN HOLD 39.00 3833 Xinjing Xinxin Mining (H) Dec 4.40 7 3 120 19 3,034 0.11 0.19 38.8 23.4 (26) 66 0.6 1.1 Belle CHAN BUY 5.13 2899 Zijin Mining (A/H) Dec 8.09 (0) 0 72 259 35,291 0.30 0.37 27.4 21.9 23 25 1.7 2.2 Belle CHAN HOLD 6.80 Average 2 1 101 166 11,933 0.32 0.58 34.2 24.1 (9) 111 0.8 2.4
Pharmaceuticals 0874 Guangzhou Pharmaceutical (A/H) Dec 3.80 0 (4) 45 10 836 0.61 0.73 6.2 5.2 6 19 8.1 11.4 HE Changming BUY 6.14 Average 0 (4) 45 10 836 0.61 0.73 6.2 5.2 6 19 8.1 11.4
Property 3383 Agile Property Dec 11.20 18 14 177 190 16,724 0.43 0.66 26.2 17.0 (74) 55 0.8 1.0 Vivien ZHANG BUY 12.40 2868 Beijing Capital Land Dec 3.68 11 23 197 30 4,030 0.35 0.41 10.5 9.0 82 16 3.1 3.4 Vivien ZHANG BUY 3.50 0688 China Overseas (R) Dec 18.20 7 9 69 482 69,417 0.74 0.91 24.8 19.9 14 24 0.9 1.3 Manfred HO BUY 20.50 1109 China Resources Land (R) Dec 20.10 12 15 112 286 35,118 0.82 1.06 24.5 19.0 74 29 0.5 0.7 Manfred HO BUY 22.20 2007 Country Garden Dec 3.25 9 9 71 100 21,800 0.16 0.31 20.7 10.6 64 95 1.7 3.4 Vivien ZHANG HOLD 3.60 3900 Greentown China Dec 12.64 13 15 297 55 7,258 1.05 1.37 12.0 9.2 76 30 1.7 3.1 Vivien ZHANG HOLD 12.30 0119 Poly (Hong Kong) Investments Dec 9.70 3 (0) 430 200 14,183 0.24 0.60 40.4 16.2 100 150 0.2 0.5 Vivien ZHANG BUY 10.50 1387 Renhe Commercial Dec 1.56 3 (7) 32 148 14,758 0.18 0.29 8.8 5.5 64 61 5.7 9.2 Vivien ZHANG BUY 2.40 0604 Shenzhen Investment (R) Dec 3.50 13 10 154 106 5,764 0.29 0.41 12.1 8.5 7 43 3.3 4.7 Vivien ZHANG HOLD 4.30 0272 Shui On Land Dec 5.02 9 7 125 204 9,454 0.22 0.40 22.7 12.7 (64) 78 0.6 0.9 Vivien ZHANG BUY 6.00 1168 Sinolink Worldwide Holdings Dec 1.69 9 (11) 168 204 2,888 0.31 0.24 5.4 7.1 86 (23) 1.3 1.3 Manfred HO BUY 2.26 3377 Sino-ocean Land (R) Dec 8.26 14 12 N/A 204 23,292 0.32 0.91 25.8 9.1 (9) 184 1.1 3.2 Vivien ZHANG BUY 10.00 Average 10 8 167 184 18,724 0.42 0.63 19.5 12.0 35 62 1.7 2.7
Technology 1688 Alibaba.com Dec 18.46 (2) 1 234 309 20,517 0.22 0.30 83.4 62.3 (18) 34 1.1 0.0 Frank HE BUY 23.70 1211 BYD Company Dec 83.60 6 17 558 461 20,566 1.22 1.49 68.7 56.0 115 23 0.5 0.6 Frank HE HOLD 40.00 0861 Digital China Mar 8.20 3 17 266 22 4,027 0.67 0.82 12.3 10.0 60 23 1.8 2.5 Frank HE BUY 8.70 0596 Inspur International Mar 1.18 2 7 48 46 1,656 0.08 0.11 14.2 10.7 22 33 2.0 2.7 Frank HE BUY 1.90 0992 Lenovo Group (R) Mar 4.56 2 33 116 187 19,375 (0.20) 0.08 n.m. 58.8 0.7 0.7 Frank HE BUY 4.70 0700 Tencent Holdings Dec 147.40 7 14 195 486 127,141 3.05 4.13 48.3 35.7 78 35 0.4 0.6 Frank HE BUY 143.90 0763 ZTE Corporation (A/H) Dec 47.80 3 21 206 78 14,188 1.44 1.68 33.1 28.4 37 16 0.6 0.7 Frank HE BUY 42.00 Average 3 16 232 227 29,639 0.93 1.23 43.3 37.4 49 27 1.0 1.1
Telecoms 0941 China Mobile Dec 76.30 (3) (6) (2) 2,607 397,851 6.37 6.41 12.0 11.9 (0) 1 3.6 3.7 Allan NG BUY 102.00 0728 China Telecom Dec 3.61 (5) (5) 25 395 49,960 0.18 0.23 19.6 15.7 25 2.2 2.2 Allan NG HOLD 4.20 0762 China Unicom (A/R) Dec 10.60 (3) (6) 14 401 73,549 0.49 0.39 21.7 27.2 (77) (20) 1.1 1.1 Allan NG SELL 9.80 Average (4) (5) 12 1,134 173,787 2.35 2.34 17.8 18.3 (39) 2 2.3 2.3
Transport 0753 Air China (A/H) Dec 4.30 (3) (8) 79 69 18,944 0.48 0.18 8.9 24.4 (64) 2.2 0.8 DU Jianping BUY 7.25 0995 Anhui Expressway (A/H) Dec 4.88 4 6 74 10 2,428 0.51 0.55 9.7 8.9 26 9 5.2 5.8 LIU Huiming HOLD 5.00 0670 China Eastern Airlines (H) Dec 2.27 (2) (14) 94 29 3,535 0.06 0.13 40.8 17.7 131 0.0 0.0 DU Jianping HOLD 2.57 0144 China Merchants Holdings (R) Dec 26.95 2 (0) 80 189 28,732 1.03 1.08 26.2 25.0 (28) 5 2.0 1.8 Jimmy LAM BUY 30.90 1138 China Shipping (A/H) Dec 11.98 3 16 56 129 15,501 0.51 0.90 23.3 13.3 (71) 75 0.8 1.4 Jimmy LAM BUY 12.20 1055 China Southern Airlines (A/H) Dec 2.44 2 (5) 89 64 4,322 0.11 0.06 22.2 39.1 (43) 0.0 0.0 DU Jianping HOLD 2.20 1199 COSCO Pacific (R) Dec 11.96 (2) (5) 51 99 13,162 0.95 0.88 12.5 13.5 5 (7) 3.2 3.0 Jimmy LAM BUY 15.00 2866 CSCL (H) Dec 3.11 3 0 166 305 9,810 (0.26) (0.08) n.m. n.m. 0.0 0.0 Jimmy LAM SELL1.50 0525 GS Railway (A/H) Dec 3.17 1 (4) 11 19 4,536 0.20 0.23 16.0 13.9 1 15 2.4 2.8 Patrick LI BUY 4.10 0357 Hainan Meilan Airport Dec 6.15 11 12 108 1 1,396 0.48 0.51 12.8 12.0 8 6 2.3 2.5 DU Jianping BUY 5.77 0177 Jiangsu Expressway (A/H) Dec 6.73 5 4 18 46 8,137 0.47 0.54 14.4 12.5 31 15 5.9 6.8 LIU Huiming BUY 7.90 0548 Shenzhen Expressway (A/H) Dec 3.86 2 (0) 42 9 2,862 0.33 0.39 11.6 9.8 30 18 3.5 4.1 LIU Huiming HOLD 4.60 0716 Singamas (P) Dec 1.63 15 14 348 41 963 (0.24) 0.12 n.m. 14.0 0.0 2.4 Jimmy LAM BUY 1.70 0368 Sinotrans Shipping (R) Dec 3.90 3 12 98 34 4,982 0.23 0.15 16.8 26.5 (61) (37) 1.8 1.2 Jimmy LAM BUY 4.25 Average 3 2 94 74 8,522 0.35 0.40 17.9 17.7 (7) 10 2 2
Utilities 0392 Beijing Enterprises Dec 45.35 (1) 9 44 76 21,197 2.13 2.42 21.3 18.8 12 14 1.6 1.8 Peter YAO BUY 47.50 0257 China Everbright Int'l Dec 3.68 10 15 157 51 5,084 0.14 0.17 27.3 21.5 27 27 0.7 1.0 Peter YAO BUY 4.15 2380 China Power Int'l Dec 2.32 6 3 45 29 2,732 0.19 0.21 12.0 10.9 10 1.4 2.6 Peter YAO BUY 2.70 0836 China Resources Power Dec 17.90 2 (1) 22 156 26,394 1.14 1.50 15.6 11.9 187 31 1.6 2.1 Peter YAO BUY 24.00 0182 China WindPower Group Dec 0.78 1 1 277 62 2,293 0.02 0.03 45.9 26.9 (6) 71 0.0 0.0 Peter YAO BUY 1.26 0991 Datang International Power (A/H) Dec 4.08 3 (6) (0) 131 47,936 0.20 0.27 20.4 15.0 171 36 2.7 2.7 Peter YAO HOLD 5.00 0270 Guangdong Investment (R) Dec 4.15 2 8 33 42 9,973 0.35 0.40 11.7 10.3 18 14 3.0 3.4 Peter YAO BUY 4.50 1071 Huadian Power (A/H) Dec 2.49 0 (3) 35 46 7,346 0.26 0.37 9.7 6.7 44 2.6 3.7 Peter YAO BUY 3.60 0902 Huaneng Power (A/H) Dec 5.58 9 2 (0) 208 67,267 0.56 0.50 10.0 11.2 (11) 5.0 4.5 Peter YAO HOLD 6.00 1193 China Resources Gas Dec 7.30 1 6 162 8 2,581 0.25 0.29 29.6 25.0 (50) 18 0.8 1.3 Peter YAO BUY 9.65 1083 Towngas China Dec 3.40 17 24 122 4 1,796 0.12 0.15 27.6 23.1 19 20 0.4 0.4 Peter YAO SELL 2.26 Average 5 5 81 74 17,691 0.49 0.57 21.0 16.5 47 25 1.8 2.1
23 October 2009 (Friday) The Raw and the Cooked 15 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
HK — HK Y/E Price 5D 1M YTD 3M avg. Free float EPS EPS P/E P/E EPS gr. EPS gr. Yield Yield Target Ticker Company chg. chg. chg. daily T/O mkt. cap.^ 09E 10E 09E 10E 09E 10E 09E 10E Analyst Rec. Price (HK$) (%) (%) (%) (HK$ m) (HK$ m) (x) (x) (%) (%) (%) (%) Consumer Products 0330 Esprit Holdings Jun 53.55 (4) (2) 22 378 56,533 3.82 3.78 14.0 14.2 (26) (1) 5.3 4.2 Ashley CHEUNG SELL 45.70 0709 Giordano Int'l Dec 2.03 0 4 4 6 2,968 0.11 0.18 17.8 11.2 (39) 59 3.3 4.5 Ashley CHEUNGSELL 2.00 0494 Li & Fung Dec 34.40 3 12 159 264 41,083 0.97 1.31 35.4 26.3 43 35 2.3 3.0 Ashley CHEUNG BUY 32.70 0589 Ports Design Dec 21.00 (5) 12 123 28 7,174 0.95 1.14 22.1 18.4 10 20 4.1 3.3 Sarah XING BUY 21.60 178 Sa Sa International Dec 3.84 (1) 13 109 7 1,856 0.23 0.27 16.8 14.3 10 17 6.0 6.3 Ashley CHEUNG BUY 4.18 0210 Daphne International Dec 6.03 0 12 379 21 5,205 0.32 0.41 18.9 14.6 6 30 1.1 1.5 Ashley CHEUNG BUY 5.80 Average (1) 9 133 117 19,136 1.07 1.18 20.8 16.5 1 27 3.7 3.8
Consumer Services 0341 Café de Coral Mar 17.62 (2) 5 12 10 4,749 0.95 1.08 18.5 16.3 15 13 3.8 4.3 Ashley CHEUNG BUY 17.30 0052 Fairwood Mar 6.51 (1) 2 19 2 463 0.62 0.61 10.5 10.6 (12) (1) 5.8 5.7 Ashley CHEUNGSELL 6.30 0027 Galaxy Entertainment Dec 3.57 5 (5) 237 49 3,533 0.26 13.7 1,200 0.8 n.a. Ashley CHEUNG BUY 10.00 1212 Lifestyle Int'l Dec 12.52 (4) 10 59 16 11,095 0.53 0.58 23.8 21.5 5 10 1.8 2.0 Ashley CHEUNGSELL 9.50 0200 Melco Int'l Dec 4.56 3 (22) 77 65 3,024 1.40 3.3 66 6.1 n.a. Ashley CHEUNG SELL 13.00 3813 Pou Sheng International Sep 1.27 (2) 2 53 9 2,402 0.03 0.10 41.0 12.6 (79) 225 0.0 0.0 Ashley CHEUNGBUY 1.63 1836 Stella International Dec 14.86 4 16 136 8 3,540 1.13 1.21 13.1 12.3 (8) 7 5.8 6.5 Ashley CHEUNG BUY 17.45 Average 0 1 85 23 4,115 0.70 0.72 17.7 14.7 170 51 3.5 3.7
Financials 0662 Asia Financial Holdings Dec 2.65 0 4 26 1 1,181 0.23 0.16 11.5 16.6 (30) 2.6 1.9 Dickie WONG BUY 2.80 0023 Bank of East Asia Dec 28.30 (3) (0) 92 147 35,518 0.78 1.12 36.3 25.3 3,800 44 1.2 1.7 Dickie WONG HOLD 25.00 2388 BOC Hong Kong Dec 17.98 4 5 105 428 65,014 1.26 1.33 14.3 13.5 294 6 3.2 3.4 Dickie WONG BUY 17.50 1111 Chong Hing Bank Dec 14.90 0 (1) 61 1 1,556 0.54 0.51 27.6 29.2 286 (6) 2.1 2.1 Dickie WONG SELL 11.50 2356 Dah Sing Banking Dec 11.12 (0) 5 100 13 3,182 0.43 0.67 25.9 16.6 115 56 1.5 2.4 Dickie WONG HOLD 8.50 0440 Dah Sing Financial Dec 43.60 (4) (3) 119 14 4,472 3.27 3.96 13.3 11.0 698 21 2.9 3.5 Dickie WONG HOLD 34.00 0636 Fubon Bank Dec 3.61 3 6 44 10 1,058 0.18 0.30 20.1 12.0 100 67 3.0 4.9 Dickie WONG SELL 2.80 0011 Hang Seng Bank Dec 110.20 (1) (1) 8 319 79,848 6.48 7.18 17.0 15.3 (12) 11 5.7 6.0 Dickie WONG BUY 144.00 0388 HK Exchanges & Clearing Dec 145.00 3 (2) 97 956 145,899 3.77 4.05 38.5 35.8 (21) 7 2.3 2.5 Dickie WONG SELL 115.00 0005 HSBC Dec 88.90 (1) (2) 30 2,215 1,076,223 4.08 3.80 21.8 23.4 (3) (7) 4.1 3.4 Dickie WONG HOLD 74.30 0349 ICBC (Asia) Dec 18.50 (0) 3 123 24 6,848 1.04 1.02 17.8 18.1 39 (2) 3.4 3.3 Dickie WONG BUY 16.00 1389 Ming An (Holdings) Dec 2.45 2 12 214 18 1,972 0.04 0.07 61.3 35.0 75 0.4 0.4 Dickie WONG BUY 0.95 2888 Standard Chartered Dec 201.20 1 6 118 153 309,807 13.30 13.42 15.1 15.0 (1) 1 2.8 2.8 Dickie WONG HOLD 170.40 0302 Wing Hang Bank Dec 76.40 2 (1) 71 28 10,274 3.96 4.25 19.3 18.0 1 7 1.6 1.7 Dickie WONG SELL 58.00 Average 0 2 86 309 124,489 2.81 2.99 24.3 20.3 441 18 2.6 2.9
Industrials 2314 Lee & Man Paper Mar 15.30 10 10 302 55 6,437 0.26 1.00 58.0 15.4 (79) 277 0.3 1.3 Sarah XING HOLD 8.50 0303 V-Tech Holdings Mar 65.60 (3) (3) 100 26 9,683 4.53 5.31 14.5 12.4 (34) 17 6.3 6.5 Ashley CHEUNGBUY 53.00 0551 Yue Yuen Industrial Sep 21.55 (2) 5 41 39 13,626 1.93 2.04 11.2 10.6 5 6 3.6 3.3 Ashley CHEUNG BUY 25.00 Average 2 4 147 40 9,915 2.24 2.78 27.9 12.8 (36) 100 3.4 3.7
Media 0100 Clear Media Dec 3.72 7 22 272 2 975 0.21 0.34 17.8 11.0 (37) 62 0.0 0.0 Allan NG BUY 4.50 1097 i-Cable Communications Dec 0.96 1 (1) 66 1 639 0.01 0.06 120.0 16.8 613 0.0 1.0 Allan NG SELL 0.88 0685 Media Chinese International Mar 1.11 (3) (8) (4) 0 121 0.18 6.3 57 8.1 n.a. Allan NG BUY 1.88 0282 Next Media Mar 1.02 2 4 13 2 640 0.11 0.12 9.5 8.8 (50) 8 0.0 0.0 Allan NG SELL 1.25 0018 Oriental Press Mar 0.94 0 2 29 2 949 n.a. n.a. Allan NG SELL 1.14 0583 SCMP Group Dec 1.35 4 6 (48) 0 527 0.02 0.06 64.3 24.5 (81) 162 4.4 5.2 Allan NG SELL 1.14 0511 Television Broadcasting Dec 35.60 4 8 41 18 10,603 2.04 2.67 17.5 13.3 (15) 31 4.1 5.1 Allan NG BUY 36.00 Average 2 5 53 4 2,065 0.43 0.65 39.2 14.9 (25) 175 2.8 2.3
Property 2778 Champion REIT Dec 3.37 2 8 62 27 7,473 0.14 0.11 23.7 29.6 27 (20) 7.5 6.6 Alfred LAU HOLD 3.25 0001 Cheung Kong Dec 106.30 7 6 45 480 147,725 8.26 7.88 12.9 13.5 15 (5) 2.3 2.4 Manfred HO HOLD 104.50 0041 Great Eagle Dec 21.40 2 14 149 14 6,396 1.80 1.83 11.9 11.7 (5) 2 2.4 2.6 Alfred LAU BUY 22.40 0405 GZI REIT Dec 2.93 3 1 64 4 2,342 0.26 0.31 11.3 9.5 117 19 8.9 9.6 Vivien ZHANG HOLD 3.00 0010 Hang Lung Group Jun 41.25 9 10 76 44 34,641 1.08 1.75 38.3 23.6 (43) 63 1.7 1.9 Manfred HO HOLD 43.80 0101 Hang Lung Properties Jun 31.15 8 14 85 201 63,267 0.57 0.96 54.6 32.3 (53) 69 2.1 2.6 Manfred HO HOLD 30.70 0012 Henderson Land Jun 57.30 7 10 100 165 57,329 2.58 2.43 22.2 23.6 (66) (6) 1.0 1.9 Manfred HO HOLD 51.40 0014 Hysan Development Dec 23.65 8 20 89 40 14,526 1.11 1.11 21.3 21.4 8 (0) 3.0 3.1 Alfred LAU HOLD 21.10 0683 Kerry Properties Dec 45.50 2 13 120 114 30,387 2.46 2.20 18.5 20.7 19 (11) 1.8 2.0 Manfred HO HOLD 38.70 0066 MTR Corporation Dec 27.85 0 5 55 115 36,473 1.08 1.23 25.9 22.6 (25) 14 1.7 1.7 Manfred HO HOLD 30.70 0017 New World Development Jun 18.50 11 11 135 190 45,070 0.55 1.48 33.8 12.5 (79) 171 1.6 2.7 Manfred HO HOLD 17.60 0808 Prosperity REIT Dec 1.35 2 2 50 3 1,400 0.06 0.06 22.5 22.5 0 8.1 8.1 Vivien ZHANG HOLD 1.23 0016 SHK Properties Jun 123.30 4 7 91 636 183,362 4.81 5.27 25.6 23.4 9 10 2.0 2.4 Manfred HO BUY 134.20 0083 Sino Land Jun 16.38 8 15 104 149 36,461 0.77 0.93 21.3 17.6 (52) 21 2.5 2.4 Manfred HO HOLD 14.54 0823 The Link REIT Mar 17.76 (3) 8 39 138 34,237 0.85 0.92 20.9 19.4 13 8 4.7 5.2 Alfred LAU BUY 21.50 Average 5 10 84 155 46,739 1.76 1.90 24.3 20.2 (8) 22 3.4 3.7
Technology 0522 ASM Pacific Dec 56.65 (4) 4 125 36 10,400 0.60 1.89 94.1 30.0 (76) 214 2.1 2.7 Frank HE HOLD 49.80 2342 Comba Telecom Dec 8.65 12 7 593 47 3,173 0.42 0.49 20.7 17.7 56 18 1.3 1.5 Frank HE BUY 7.30 2038 Foxconn International Dec 7.35 21 39 186 96 14,527 0.12 0.20 59.3 36.5 (6) 63 0.0 0.0 Frank HE HOLD 4.60 0903 TPV Technology Dec 5.19 2 13 108 21 4,894 0.37 0.42 14.0 12.4 17 13 2.4 2.8 Frank HE BUY 5.30 Average 8 16 253 50 8,249 0.38 0.75 47.0 24.1 (2) 77 1.5 1.8
Telecoms 2332 Hutchison Telecom Int'l Dec 1.58 (1) (2) 35 22 3,119 0.87 (0.46) 1.8 n.m. 110 0.0 0.0 Allan NG SELL 2.20 0008 PCCW Dec 1.99 1 (1) (16) 27 6,987 0.27 0.22 7.3 9.1 13 (20) 2.5 3.0 Allan NG SELL 2.40 0315 Smartone Jun 6.01 0 (6) 5 1 1,617 0.08 0.11 77.1 53.2 (84) 45 1.3 1.7 Allan NG SELL 6.60 Average 0 (3) 8 17 3,907 0.41 (0.04) 28.7 31.1 13 13 1.3 1.6
Transport 0293 Cathay Pacific Dec 12.58 (6) (4) 44 71 49,565 0.63 0.84 20.0 15.0 33 2.1 2.6 DU Jianping HOLD 9.17 0316 OOIL Dec 41.15 1 (2) 139 58 8,240 (4.91) (0.11) n.m. n.m. 0.0 0.0 Jimmy LAM BUY50.00 2343 Pacific Basin Dec 6.17 10 14 75 95 8,688 0.49 0.16 12.6 39.8 (73) (68) 3.9 1.3 Jimmy LAM SELL 5.75 Average 2 2 86 75 22,165 (1.27) 0.30 16.3 27.4 (73) (17) 2.0 1.3
Utilities 0002 CLP Dec 52.05 (1) (1) (1) 184 90,251 3.20 3.50 16.3 14.9 (26) 9 4.2 4.5 Peter YAO HOLD 55.00 0003 HK & China Gas Dec 19.18 (3) (1) 64 110 69,041 0.75 0.82 25.6 23.5 16 9 2.4 2.5 Peter YAO HOLD 18.00 0006 HK Electric Dec 41.55 (2) (3) (4) 150 48,773 3.12 3.14 13.3 13.2 (17) 1 4.9 4.9 Peter YAO SELL 41.00 Average (2) (2) 19 148 69,355 2.35 2.48 18.4 17.2 (9) 6 3.8 4.0
23 October 2009 (Friday) The Raw and the Cooked 16 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
CHINA — A Price 5D 1M YTD 3M avg. Free float EPS EPS P/E P/E EPS gr.EPS gr. Yield Yield Target Ticker Company chg. chg. chg. daily T/O mkt. cap.^ 09E 10E 09E 10E 09E 10E 09E 10E Analyst Rec. Price (Rmb) (%) (%) (%) (¥ m) (¥ m) (x) (x) (%) (%) (%) (%) Agriculture 600195 China Animal Husbandry Industry 22.00 13 7 87 154 4,462 0.75 0.86 29.3 25.6 79 15 2.0 2.3 ZHAO Zongjun BUY 23.00 Average 13 7 87 154 4,462 0.75 0.86 29.3 25.6 79 15 2.0 2.3
Automotive 600166 Beiqi Foton Motor 17.49 2 10 264 245 9,985 1.08 1.15 16.2 15.2 186 7 0.1 0.6 WANG Yusheng BUY 23.00 000625 Changan Automobile (A/B) 11.68 4 12 218 279 14,721 0.60 0.77 19.6 15.3 5,860 28 0.2 1.0 WANG Yusheng BUY 14.54 000951 Zoomlion Heavy Industry 26.96 6 7 112 89 4,067 1.10 1.56 24.4 17.3 (2) 41 0.0 1.2 WANG Yusheng HOLD 25.00 000800 FAW Car 18.91 6 3 163 235 14,469 0.81 0.97 23.4 19.6 21 20 1.9 1.7 WANG Yusheng BUY 19.36 000927 FAW Xiali 7.92 2 6 108 65 2,527 0.19 0.29 42.8 27.3 194 57 0.4 1.1 WANG Yusheng SELL 6.38 600660 Fuyao Group Glass Industries 11.22 2 5 188 199 10,360 0.43 0.64 25.9 17.6 252 48 0.0 1.9 WANG Yusheng BUY 12.80 600478 Hunan Corun New Energy 16.90 1 3 113 218 3,335 0.16 0.67 103.0 25.3 31 307 0.0 0.3 WANG Yusheng BUY 20.01 000550 Jiangling Motors (A/B) 20.45 7 9 143 54 5,118 1.04 1.13 19.7 18.2 14 8 1.5 1.9 WANG Yusheng BUY 22.50 002048 Huaxiang Electronic 9.40 1 2 161 113 3,457 0.53 0.50 17.8 18.7 81 (5) 0.7 1.2 WANG Yusheng HOLD 11.07 600104 Shanghai Auto 21.00 (0) 3 292 398 30,266 0.92 1.25 22.8 16.8 822 36 0.6 1.5 WANG Yusheng BUY 25.08 000338 Weichai Power (A/H) 57.60 2 14 220 214 16,313 2.85 3.34 20.2 17.3 23 17 0.3 0.3 Eric HU BUY 60.00 000581 Weifu High Tech 14.13 7 21 183 151 4,775 0.59 0.65 24.1 21.8 72 10 1.1 1.2 WANG Yusheng HOLD 12.94 600686 Xiamen King Long Motor Co 8.75 15 17 88 82 3,527 0.47 0.55 18.5 16.0 7 15 0.6 0.7 Eric HU HOLD 8.50 600066 Zhengzhou Yutong Bus 16.10 (0) 4 79 114 5,609 0.79 0.96 20.4 16.7 (23) 22 2.9 3.5 Eric HU BUY 17.30 Average 4 8 167 175 9,181 0.83 1.03 28.5 18.8 538 44 0.7 1.3
Chemicals 600299 Blue Star New Chemical 13.01 7 7 77 178 2,030 0.36 0.49 35.7 26.4 7 35 0.8 0.8 NI Xiaoman HOLD 14.50 600230 Changzhou Dahua 18.29 7 1 133 164 2,037 0.47 1.33 38.6 13.8 (26) 180 0.3 0.8 NI Xiaoman BUY 26.60 000839 CITIC Guoan 15.32 4 1 157 763 23,182 0.34 0.40 45.2 38.1 49 19 0.7 0.8 NI Xiaoman HOLD 18.00 000589 Guizhou Tyre 16.78 0 18 276 299 2,856 0.62 0.65 27.1 25.9 208 5 1.1 1.2 CHEN Tian HOLD 12.80 600426 Hualu Hengsheng 18.50 5 5 74 96 3,395 0.88 1.34 20.9 13.8 16 52 0.6 0.6 NI Xiaoman BUY 24.00 000707 Shuanghuan Sci & Tech 7.73 3 5 46 109 2,678 0.72 0.84 10.7 9.2 26 17 3.9 3.9 CHEN Tian HOLD 10.10 002037 Jiu Lian Development 16.81 6 28 117 49 1,431 0.60 0.69 28.1 24.3 91 16 1.1 1.2 CHEN Tian BUY 15.00 600423 Liuzhou Chemical 9.94 5 3 27 81 1,613 0.29 0.45 34.0 22.0 (15) 54 0.0 0.5 NI Xiaoman HOLD 11.60 000792 Qinghai Salt Lake Potash 53.10 6 6 (7) 420 20,757 2.54 3.45 20.9 15.4 43 36 3.1 4.7 NI Xiaoman BUY 69.10 600409 Sanyou Chemical Industries 6.79 3 7 106 180 3,698 0.16 0.24 43.2 28.9 (28) 50 0.3 0.3 CHEN Tian HOLD 7.90 000677 Shandong Helon 8.50 1 5 214 258 4,260 0.24 0.52 35.6 16.3 118 0.3 0.3 CHEN Tian BUY 11.10 600315 Shanghai Jahwa United 26.95 2 (3) 44 58 3,539 0.75 1.03 35.8 26.2 (12) 37 0.7 0.7 NI Xiaoman BUY 29.00 600688 Shanghai Petrochem (A/H) 10.99 (4) (0) 99 180 7,913 (0.13) 0.02 n.m. 499.5 0.0 0.0 Lawrence LAU SELL 2.80 000731 Sichuan Meifeng 8.98 2 4 41 146 3,232 0.47 0.58 19.0 15.5 17 23 2.2 2.8 NI Xiaoman HOLD 11.60 600500 Sinochem Int'l 11.28 2 5 45 216 9,246 0.44 0.54 25.7 20.7 (11) 24 1.3 1.6 NI Xiaoman HOLD 11.88 600141 Xingfa Group 16.26 2 5 101 120 2,605 0.56 0.99 29.0 16.5 (43) 76 1.1 1.9 NI Xiaoman BUY 22.00 600486 Yangnong Chemical 35.26 4 (0) 41 35 2,611 1.73 2.14 20.4 16.5 10 24 0.5 0.5 CHEN Tian BUY 42.80 600309 Yantai Wanhua 18.64 (2) 4 86 374 12,089 0.74 0.99 25.1 18.8 (18) 33 2.7 1.9 NI Xiaoman BUY 23.50 600096 Yuntianhua 23.59 3 3 34 312 5,456 (0.10) 0.98 n.m. 24.1 1.3 1.5 NI Xiaoman HOLD 27.40 600352 Zhejiang Longsheng 9.15 1 6 190 290 6,030 0.72 0.80 12.6 11.5 1 10 0.3 0.3 CHEN Tian BUY 11.00 Average 3 6 95 216 6,033 0.62 0.92 28.2 44.2 19 45 1.1 1.3
Consumer Products 000848 Hebei Chengde Lolo 17.99 3 11 13 62 3,420 0.60 0.72 29.8 25.0 4 19 2.3 2.8 ZHAO Zongjun BUY 17.00 600519 Kweichow Moutai 159.86 (0) (3) 47 445 72,420 5.20 6.42 30.7 24.9 29 23 1.5 1.9 ZHAO Zongjun BUY 190.00 600559 Laobaigan Liquor 22.10 4 (0) 176 78 1,640 0.32 0.44 69.1 50.2 39 38 0.6 0.9 ZHAO Zongjun BUY 30.00 000568 Luzhou Laojiao 29.09 1 (5) 60 408 20,806 1.14 1.30 25.5 22.4 25 14 2.8 3.2 ZHAO Zongjun BUY 35.00 600962 SDIC Zhonglu Fruit Juice 11.59 5 (0) 54 66 1,413 0.72 0.80 16.1 14.5 11 11 2.5 2.8 ZHAO Zongjun HOLD 17.93 600779 Sichuan Swellfun 16.58 4 2 48 164 4,872 0.55 0.66 30.0 25.0 (14) 20 2.7 3.2 ZHAO Zongjun HOLD 17.00 600809 Shanxi Xinghuacun Fen Wine 33.15 7 4 206 101 14,354 1.02 1.30 32.5 25.5 79 27 1.8 2.4 ZHAO Zongjun BUY 36.00 600600 Tsingtao Brewery (A/H) 29.14 3 (4) 46 143 19,058 0.85 1.07 34.3 27.2 57 26 1.5 1.8 ZHAO Zongjun BUY 33.00 000729 Yanjing Brewery 15.18 2 2 15 132 7,347 0.58 0.71 26.2 21.4 53 22 1.5 1.8 ZHAO Zongjun BUY 18.00 000869 Yantai Changyu (A/B) 61.40 (0) 8 27 54 6,799 2.08 2.59 29.5 23.7 22 25 2.4 3.0 ZHAO Zongjun BUY 70.00 000858 Wuliangye Yibin 23.67 11 10 77 1,150 89,851 0.80 1.00 29.6 23.7 67 25 0.2 0.5 ZHAO Zongjun BUY 25.00 600887 Yili Industrial Group 21.58 6 12 170 186 8,012 1.14 18.9 19 1.9 n.a. ZHAO Zongjun SELL 24.00 Average 4 3 78 249 20,833 1.25 1.55 31.0 25.8 33 23 1.8 2.2
Consumer Services 600258 Beijing Capital Tourism 17.75 4 (3) 92 151 1,842 0.72 0.44 24.5 40.2 (3) (39) 2.4 1.5 LIU Du HOLD 15.14 002251 Better Life Commercial Chain Share 25.99 2 1 23 74 2,561 0.64 0.83 40.6 31.2 (46) 30 0.5 0.6 ZHENG Yuan HOLD 22.60 600828 Chengshang Group 24.50 6 1 152 25 1,642 0.64 0.58 38.3 42.2 28 (9) 0.0 0.2 LIU Du HOLD 13.40 600138 CYTS 12.62 6 3 65 257 4,190 0.45 0.48 27.8 26.5 45 5 1.3 1.6 LIU Du HOLD 11.96 600693 Fujian Dongbai Group 8.88 0 3 33 70 1,836 0.32 0.38 27.5 23.1 (17) 19 1.0 1.1 LIU Du BUY 8.58 002264 Fujian New HuaDu 28.70 0 3 58 26 768 0.69 0.92 41.7 31.4 10 33 1.7 1.1 ZHENG Yuan HOLD 32.00 000978 Guilin Tourism 9.90 1 1 55 49 925 0.24 0.33 40.6 30.2 86 34 0.0 1.8 LIU Du HOLD 9.26 600054 Huangshan Tourism (A/B) 14.95 2 1 12 89 1,762 0.40 0.53 37.1 28.2 1 32 1.2 1.5 LIU Du HOLD 13.41 600754 Jin Jiang Development (A/B) 19.90 3 3 118 95 4,338 0.46 0.53 42.9 37.8 2 14 1.5 1.8 LIU Du HOLD 20.65 002033 Lijiang Tourism 16.94 14 9 70 48 1,211 0.42 0.22 40.6 77.4 (10) (47) 1.2 0.6 LIU Du HOLD 14.94 600832 Oriental Pearl 10.15 3 4 49 273 17,786 0.15 0.14 70.0 70.5 4 (1) 0.0 0.0 LIU Du SELL 7.25 002024 Suning Appliance 16.32 (1) 0 37 772 34,169 0.60 0.75 27.1 21.7 23 25 0.7 1.5 LIU Du BUY 17.48 600859 Wangfujing Dept Store 31.75 (2) 0 67 103 6,301 1.06 1.25 30.0 25.4 20 18 0.7 0.7 LIU Du BUY 31.00 600327 Commerical Mansion Grand Orient 11.87 1 5 114 86 2,051 0.45 0.59 26.2 20.3 36 29 0.4 0.5 LIU Du BUY 12.30 000759 Wuhan Zhongbai Group 10.25 (1) 1 9 128 5,445 0.35 0.43 29.5 24.1 19 23 1.0 1.0 ZHENG Yuan BUY 10.90 Average 3 2 64 150 5,788 0.51 0.56 36.3 35.3 13 11 0.9 1.0
Energy 601898 China Coal (A/H) 13.19 2 13 104 817 20,986 0.51 0.58 25.7 22.7 16 13 1.4 1.6 Lawrence LAU BUY 18.11 601808 China Oilfield Services (A/H) 14.85 2 7 25 231 7,343 0.66 0.88 22.6 16.9 (7) 34 1.0 1.0 Lawrence LAU HOLD 14.37 600348 Guoyang New Energy 42.42 (1) 13 336 595 17,139 1.89 2.31 22.4 18.4 25 22 1.0 1.2 Grace TANG BUY 51.00 600123 Lanhua Sci-Tech 39.30 0 11 230 395 22,440 2.05 2.21 19.1 17.8 (16) 7 1.2 1.3 Grace TANG HOLD 41.30 601699 Lu'an Environmental Energy 45.46 (0) 16 264 504 17,267 2.34 2.93 19.4 15.5 (6) 25 2.1 2.6 Grace TANG BUY 51.80 600583 Offshore Oil Engineering 12.35 9 15 22 368 17,331 0.50 0.61 24.7 20.1 19 23 1.2 1.5 Lawrence LAU BUY 15.00 601857 PetroChina (A/H) 13.65 1 7 34 780 49,965 0.61 0.77 22.6 17.8 (3) 27 2.0 2.5 Lawrence LAU BUY 18.05 601666 Pingdingshan Tian'an Coal 32.07 4 17 234 559 14,135 1.36 1.80 23.6 17.8 (45) 33 1.9 2.5 Grace TANG BUY 25.60 601088 Shenhua Energy (A/H) 36.09 4 18 106 1,318 64,605 1.50 1.67 24.1 21.6 17 12 1.5 1.7 Lawrence LAU BUY 40.06 600028 Sinopec (A/H) 12.00 2 7 71 1,080 41,617 0.78 0.96 15.3 12.4 129 23 1.7 2.1 Lawrence LAU BUY 15.80 000983 Xishan Coal 37.87 5 20 225 1,145 43,145 1.05 1.73 36.2 21.8 (27) 66 0.8 1.3 Grace TANG BUY 38.00 600188 Yanzhou Coal (A/H) 19.12 2 12 132 390 6,582 0.71 0.79 27.0 24.4 (44) 11 1.0 1.2 Lawrence LAU BUY 19.41 900948 Yantai Coal B 44.02 7 15 162 13 14,499 3.86 4.94 11.4 8.9 (9) 28 1.9 1.9 Grace TANG BUY 46.29 Average 3 13 150 630 25,927 1.37 1.71 22.63 18.17 3.8 24.9 1.44 1.72 23 October 2009 (Friday) The Raw and the Cooked 17 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
China — A Price 5D 1M YTD 3M avg. Free float EPS EPS P/E P/E EPS gr.EPS gr. Yield Yield Target Ticker Company chg. chg. chg. daily T/O mkt. cap.^ 09E 10E 09E 10E 09E 10E 09E 10E Analyst Rec. Price (Rmb) (%) (%) (%) (¥ m) (¥ m) (x) (x) (%) (%) (%) (%) Financials 600816 Anxin Trust & Investment 15.99 3 6 26 155 7,114 0.97 1.31 16.5 12.2 33 35 0.9 1.3 ZHANG Jian BUY 29.04 601169 Bank of Beijing 18.54 1 14 108 555 73,310 0.90 1.00 20.7 18.5 3 12 1.0 1.0 YUAN Lin BUY 17.98 601988 Bank of China (A/H) 4.11 3 6 38 396 26,708 0.31 0.33 13.3 12.5 24 6 3.9 4.1 YUAN Lin BUY 4.54 601328 Bank of Communication (A/H) 8.85 0 6 87 734 138,751 0.55 0.54 16.2 16.4 (6) (1) 2.3 2.3 YIN Jinhua HOLD 8.84 601009 Bank of Nanjing 18.75 3 15 123 249 22,032 0.86 0.88 21.7 21.3 9 2 2.2 2.3 YUAN Lin HOLD 17.11 002142 Bank of Ningbo 13.73 2 15 102 224 8,444 0.49 0.28 28.0 49.0 (11) (43) 1.6 0.9 YUAN Lin SELL 10.82 601998 China Citic Bank (A/H) 6.26 7 17 62 237 21,991 0.29 0.30 21.3 20.9 (14) 2 1.3 1.3 YUAN Lin HOLD 5.54 000783 Changjiang Securities 20.21 8 15 130 354 17,264 0.61 0.58 33.2 34.8 45 (5) 0.6 0.6 ZHANG Jian HOLD 17.08 601939 China Construction Bank (A/H) 5.94 2 5 55 926 53,442 0.42 0.42 14.1 14.1 5 0 3.5 3.5 YUAN Lin HOLD 6.08 600036 China Merchants Bank (A/H) 17.12 7 17 83 1,733 206,435 0.90 0.99 19.0 17.2 (18) 10 1.1 1.1 YUAN Lin BUY 16.48 600030 CITIC Securities 28.58 6 12 59 3,777 189,500 1.13 1.10 25.3 26.1 3 (3) 0.6 0.5 ZHANG Jian BUY 38.42 000728 Guoyuan Securities 22.20 10 18 107 188 6,175 0.57 0.61 39.2 36.6 59 7 0.5 0.5 ZHANG Jian SELL 22.80 600837 Haitong Securities 14.94 8 14 84 1,621 3,688 0.42 0.42 36.0 35.6 7 1 0.6 0.6 ZHANG Jian HOLD 12.25 600015 Huaxia Bank 11.69 6 18 61 648 44,237 0.63 0.55 18.7 21.3 2 (12) (1.2) (0.8) SUN Peng BUY 10.96 000562 Hong Yuan Securities 21.92 9 18 87 376 11,755 0.69 0.71 32.0 31.1 85 3 0.6 0.6 ZHANG Jian HOLD 23.80 601398 ICBC (A/H) 5.13 4 4 45 1,182 102,126 0.36 0.36 14.3 14.3 6 0 3.5 3.5 YUAN Lin BUY 5.64 601166 Industrial Bank 38.80 5 20 166 1,029 155,200 2.33 2.27 16.6 17.1 3 (3) 0.9 0.9 YUAN Lin HOLD 35.70 600016 Minsheng Bank 7.80 7 22 92 1,444 139,478 0.65 0.64 11.9 12.3 56 (3) (1.2) (1.2) SUN Peng HOLD 8.60 000686 Northeast Securities 41.91 8 18 284 463 7,305 1.26 1.05 33.3 40.0 79 (17) 0.6 0.5 ZHANG Jian HOLD 37.20 601318 Ping An Insurance (A/H) 58.00 3 16 118 1,674 148,422 0.09 1.42 644.4 40.8 (96) 1,478 0.2 0.6 YUAN Lin BUY 59.00 600000 Pudong Bank 22.53 4 17 138 2,187 99,483 1.85 1.51 12.2 14.9 (16) (18) 1.4 1.1 YUAN Lin SELL 20.23 600109 Sinolink Securities 23.60 14 20 98 315 4,366 0.35 0.33 68.4 72.4 (77) (6) 0.3 0.3 ZHANG Jian SELL 8.25 000001 Shenzhen Development 22.44 5 15 137 865 62,729 1.20 1.12 18.7 20.0 486 (7) (0.5) (0.5) YUAN Lin HOLD 18.93 Average 5 14 100 928 67,389 0.8 0.8 51.1 26.1 28.9 62.6 1.1 1.1
Industry 600585 Anhui Conch (A/H) 44.00 2 (2) 70 229 51,285 2.04 3.14 21.6 14.0 31 54 0.9 1.4 Grace TANG BUY 49.00 600761 Anhui Heli 11.39 1 4 66 156 2,562 0.20 0.31 56.7 37.3 (62) 52 0.3 0.5 Eric HU HOLD 11.12 601390 China Railway (A/H) 6.07 1 3 12 670 28,444 0.32 0.39 19.2 15.4 508 25 1.3 1.6 Patrick LI BUY 7.90 601186 China Railway Construction (A/H) 8.93 1 0 (11) 669 21,925 0.49 0.68 18.4 13.1 64 40 1.4 1.9 Patrick LI BUY 12.32 600970 Sinoma International Engineering 37.50 2 11 134 105 2,331 1.74 2.09 21.5 18.0 87 20 2.6 3.1 Grace TANG BUY 38.32 601766 China South Locomotive (A/H) 4.78 2 4 11 525 14,149 0.15 0.19 31.9 25.2 25 27 0.8 1.0 SHI Qi BUY 5.10 600150 China State Shipbuilding 75.00 3 3 96 514 11,019 5.11 5.51 14.7 13.6 (19) 8 1.1 1.2 XU Minle BUY 110.00 000012 CSG Holding (A) 16.85 8 9 98 344 19,594 0.61 0.81 27.6 20.8 79 33 1.1 1.4 HAN Ling HOLD 17.10 002074 Dongyuan Electric 14.50 8 19 53 69 1,204 0.46 0.63 31.5 23.0 64 37 1.0 1.3 HAN Ling HOLD 11.40 600875 Dongfang Electric (A/H) 46.40 1 (6) 56 338 20,462 1.87 2.31 24.8 20.1 835 24 0.0 0.0 HAN Ling BUY 50.00 002164 Donly Transmission 16.34 6 2 78 33 735 0.73 0.94 22.4 17.4 49 29 0.7 0.9 SHI Qi BUY 9.49 002011 Dunan Equipment 13.58 1 (3) 89 62 1,224 0.52 0.69 26.1 19.7 13 33 0.6 0.7 SHI Qi BUY 17.25 002202 Goldwind Sci & Tech 27.76 2 (3) 54 674 31,868 0.96 1.09 28.9 25.5 48 14 0.5 0.5 HAN Ling HOLD 31.00 000528 Guangxi Liugong Machinery 17.72 (0) 7 125 207 7,026 1.06 1.13 16.7 15.7 77 7 0.8 0.9 Eric HU BUY 20.37 600685 Guangzhou Shipyard Int'l (A/H) 27.01 6 7 119 277 4,341 1.24 1.29 21.7 21.0 (25) 4 1.2 1.3 XU Minle BUY 29.78 600068 GZB Company Ltd. 12.73 3 4 44 248 9,962 0.76 1.00 16.8 12.7 56 32 1.6 2.1 Patrick LI BUY 15.30 002204 Huarui Heavy Industry 24.60 (0) 3 62 50 1,316 0.85 1.12 28.9 22.0 42 32 0.5 0.7 SHI Qi BUY 28.00 600801 Huaxin Cement (A) 20.94 2 5 41 50 1,861 1.25 1.96 16.7 10.7 10 57 0.8 1.2 Grace TANG BUY 31.25 600308 Huatai Paper 13.08 2 1 114 145 4,265 1.43 1.75 9.1 7.5 26 22 22.9 2.3 NI Xiaoman BUY 22.80 002097 Hunan Sunward Intelligent 16.52 2 6 38 109 2,625 0.85 1.11 19.4 14.9 77 31 2.1 2.7 SHI Qi HOLD 19.05 600495 Jinxi Axle 18.28 6 7 4 43 1,111 0.79 1.08 23.1 16.9 7 37 0.9 1.2 SHI Qi BUY 23.70 600586 Jinjing Group 15.86 6 7 230 219 5,738 0.24 0.54 66.1 29.4 26 125 0.4 1.0 HAN Ling HOLD 13.50 600499 Keda Industrial 15.91 3 14 196 156 4,160 0.37 0.60 43.0 26.5 6 62 0.4 0.6 SHI Qi BUY 18.06 600806 Kunming Machine (A/H) 12.04 0 4 81 81 1,591 0.63 0.64 19.1 18.8 (3) 2 0.7 0.8 SHI Qi BUY 13.86 002147 Maanshan Fangyuan Slewing Ring 10.51 3 2 15 36 1,067 1.02 1.41 10.3 7.5 79 38 3.9 5.3 SHI Qi HOLD 12.76 600449 Saima Industry 27.10 5 14 58 156 3,593 1.70 2.87 16.0 9.4 21 69 1.1 1.9 Grace TANG BUY 32.30 600312 Pinggao Electric 17.40 (2) (5) 52 252 8,244 0.39 0.64 45.2 27.1 (5) 66 0.4 0.7 HAN Ling HOLD 17.50 600425 QBMC 11.57 4 10 58 110 2,647 0.66 0.95 17.5 12.2 104 43 3.5 5.0 Grace TANG BUY 17.16 600031 Sany Heavy Industry 35.95 (0) 3 157 251 20,863 1.26 1.59 28.5 22.6 52 26 0.7 0.9 SHI Qi BUY 35.28 600170 Shanghai Construction Co.Ltd. 15.54 3 16 72 188 4,916 0.50 0.57 31.3 27.2 18 15 1.0 1.1 Patrick LI BUY 17.20 600284 Shanghai Pudong Road and Bridge 13.35 4 10 52 193 4,619 0.41 0.77 32.2 17.4 29 86 0.8 1.4 Patrick LI BUY 15.40 600820 Shanghai Tunnel Engineering 13.58 2 6 25 223 6,280 0.59 0.66 23.1 20.6 48 12 1.1 1.2 Patrick LI BUY 19.80 000680 Shantui Construction 11.79 2 9 56 194 7,069 0.69 0.75 17.1 15.7 5 9 1.2 1.3 SHI Qi BUY 15.18 000837 Qinchuan Machinery 7.79 7 17 72 69 1,985 0.26 0.32 30.0 24.1 21 24 0.8 1.0 Eric HU HOLD 8.07 000410 Shenyang Machine Tool 8.57 (3) 9 78 111 4,577 (0.01) 0.14 n.m. 62.6 (0.0) 0.4 Eric HU HOLD 8.40 002028 Siyuan Electric 23.49 0 (1) 34 149 7,023 0.82 1.02 28.8 23.1 3 25 0.5 0.7 HAN Ling BUY 28.00 002083 Sunvim Group 8.18 3 0 131 163 6,380 0.13 0.22 62.0 38.0 1 63 0.5 0.7 HAN Ling SELL 8.59 600169 Taiyuan Heavy Industry 15.53 1 1 75 135 5,441 0.85 0.98 18.3 15.8 12 15 1.8 2.1 SHI Qi BUY 17.50 000401 Tangshan Jidong Cement 14.60 1 9 47 146 9,563 0.69 0.97 21.0 15.0 74 40 0.9 1.0 Grace TANG BUY 18.30 600550 Tainwei Baobian 34.20 5 1 70 680 19,933 0.77 1.02 44.4 33.5 (5) 32 0.7 0.9 HAN Ling BUY 30.00 600590 Tellhow Sci & tech 12.66 (4) (4) 184 116 3,670 0.39 0.52 32.5 24.3 63 33 0.9 1.3 HAN Ling HOLD 13.07 600582 Tiandi Science & Technology 27.20 8 7 99 111 7,883 0.90 1.03 30.2 26.4 18 14 0.7 0.8 SHI Qi BUY 22.50 002122 Tianma Bearing 27.65 3 2 4 145 4,106 1.20 1.46 23.0 18.9 26 22 0.9 1.0 SHI Qi BUY 31.68 000877 Tianshan Cement 15.00 (1) 10 41 97 3,182 0.78 0.99 19.1 15.2 27 26 1.4 1.8 Grace TANG BUY 16.38 600458 Times New Material 15.25 1 10 56 56 1,649 0.49 0.60 31.1 25.4 81 22 0.7 0.8 SHI Qi BUY 9.80 002218 Topray Solar 25.39 5 2 131 148 2,586 0.14 0.35 181.4 72.5 (44) 150 0.2 0.4 HAN Ling SELL 18.00 600580 Wolong Electric 18.29 (3) 3 159 143 3,628 0.64 0.87 28.8 21.0 39 37 0.9 1.2 HAN Ling BUY 20.20 600089 TBEA 22.22 (2) (0) 40 1,051 35,138 0.86 1.03 25.8 21.6 59 20 1.8 2.1 HAN Ling BUY 22.60 600416 Xiangdian Electric 20.70 2 3 182 135 2,967 0.47 0.70 43.8 29.8 89 47 0.7 1.0 HAN Ling HOLD 20.14 000400 XJ Electric 23.63 (2) (0) 80 219 6,252 0.42 0.60 56.3 39.4 320 43 0.3 0.4 HAN Ling HOLD 16.50 000425 Xugong Science & Technology 35.62 (3) 6 129 143 10,095 1.68 1.91 21.2 18.6 740 14 0.5 0.5 SHI Qi BUY 38.80 000157 Zoomlion Heavy Industry 27.53 3 8 171 451 22,568 1.31 1.73 21.1 15.9 39 32 0.5 0.6 Eric HU BUY 34.60 Average 2 5 81 228 9,014 0.86 1.11 30.7 22.3 77 36 1.4 1.3
23 October 2009 (Friday) The Raw and the Cooked 18 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
CHINA — A Price 5D 1M YTD 3M avg. Free float EPS EPS P/E P/E EPS gr. EPS gr. Yield Yield Target Ticker Company chg. chg. chg. daily T/O mkt. cap.^ 09E 10E 09E 10E 09E 10E 09E 10E Analyst Rec. Price (Rmb) (%) (%) (%) (¥ m) (¥ m) (x) (x) (%) (%) (%) (%) Media 600037 Beijing Gehua CATV 12.06 2 6 27 277 6,699 0.22 0.22 55.1 54.1 (29) 2 1.2 1.2 Allan NG SELL 9.30 600880 B-ray Media 21.71 (0) 8 64 118 5,099 0.72 0.94 30.4 23.1 37 32 1.0 1.3 LIU Du BUY 25.46 600825 Xinhua Media 11.12 5 8 31 81 2,838 0.28 0.29 39.7 38.2 1 4 1.0 1.1 LIU Du SELL 8.73 Average 2 7 41 159 4,879 0.40 0.49 41.72 38.45 2.78 12.45 1.08 1.20
Metals & Mining 000898 Angang New Steel (A/H) 13.43 4 11 93 476 15,449 0.19 0.65 72.6 20.7 (55) 250 0.7 2.4 Belle CHAN HOLD 14.70 600019 Baosteel 7.08 3 8 53 1,011 33,476 0.15 0.32 48.8 21.9 (61) 123 0.8 1.8 Belle CHAN BUY 12.00 601600 CHALCO (A/H) 14.39 6 10 134 1,018 58,387 (0.23) 0.25 n.m. 57.8 0.0 0.0 Belle CHAN BUY 26.94 600497 Chihong Xizhe 29.60 5 13 199 650 15,007 0.30 0.45 100.3 65.2 51 54 0.7 1.1 LE Yukun HOLD 30.00 600357 Chengde Xinxin Vanadium 7.30 4 4 60 198 4,152 0.75 0.84 9.8 8.7 28 13 5.5 5.5 XU Minle BUY 8.95 601005 Chongqing Iron & Steel (A/H) 5.65 (1) 5 64 121 3,105 0.11 0.32 50.0 17.7 (67) 182 0.7 2.0 Belle CHAN HOLD 6.40 000831 Shanxi Guanlu 9.53 4 6 139 254 4,107 0.01 0.10 953.0 95.3 0 900 0.0 0.1 LE Yukun HOLD 3.40 600362 Jiangxi Copper (A/H) 40.81 6 12 309 909 49,347 1.28 1.54 32.0 26.5 69 21 0.9 1.1 Belle CHAN BUY 54.69 601958 Jinduicheng Molybdenum 22.48 7 11 168 792 12,090 0.22 0.41 101.7 55.2 (76) 84 0.3 0.6 LE Yukun BUY 23.70 600808 Maanshan Iron & Steel (A/H) 4.65 2 5 44 428 5,694 0.07 0.33 68.4 14.2 (35) 382 0.5 2.2 Belle CHAN BUY 7.00 600282 Nanjing Steel 5.53 2 1 90 128 4,473 0.16 0.32 34.6 17.1 119 103 1.3 2.6 LE Yukun BUY 7.90 600219 Nanshan Aluminium 10.92 4 9 77 446 5,473 0.20 0.22 54.6 49.6 (57) 10 0.3 0.4 LE Yukun HOLD 4.40 000629 Panzhihua Steel 8.14 3 3 (11) 136 15,726 0.05 0.04 166.1 193.8 (14) 0.0 0.0 XU Minle HOLD 9.30 600547 Shandong Gold 69.00 1 7 184 1,682 12,036 1.26 1.52 54.7 45.3 41 21 0.9 1.0 LE Yukun BUY 61.00 000825 Taigang Stainless Steel 8.20 5 8 127 478 18,683 0.04 0.65 186.4 12.7 (80) 1,373 0.1 1.7 LE Yukun BUY 11.00 000709 Tangshan Iron & Steel 6.94 5 5 88 437 12,331 0.18 0.32 38.1 21.4 (59) 78 1.7 3.0 LE Yukun BUY 12.30 000630 Tongling Nonferrous Matel 18.99 7 12 186 531 12,041 0.44 0.47 43.6 40.1 (10) 8 0.7 0.7 LE Yukun HOLD 17.00 000612 Wanfang Aluminium 22.06 6 15 198 420 6,353 0.41 0.64 54.2 34.3 (41) 58 0.5 0.8 LE Yukun BUY 31.00 600005 Wuhan Steel 7.79 3 3 63 942 24,423 0.47 0.72 16.6 10.8 (29) 53 2.8 4.3 LE Yukun BUY 10.00 600888 Xinjiang Joinworld 14.21 5 9 81 76 2,351 0.51 0.61 28.1 23.4 76 20 0.6 0.8 LE Yukun HOLD 18.20 000807 Yunnan Aluminium 13.21 5 12 194 406 6,822 0.01 0.13 1,016.2 104.0 (80) 877 0.1 0.8 LE Yukun BUY 17.30 000960 Yunnan Tin 29.26 10 14 210 473 9,524 0.29 0.68 102.3 43.3 633 136 0.3 0.7 LE Yukun BUY 49.00 601899 Zijin Mining (A/H) 9.76 4 7 103 1,988 42,576 0.26 0.33 37.5 30.0 23 25 1.3 1.6 Belle CHAN HOLD 11.20 Average 4 8 124 609 16,245 0.31 0.52 148.62 43.88 18.43 216.23 0.90 1.53
Pharmaceuticals 600085 Beijing Tongrentang 17.98 1 2 46 146 4,207 0.58 0.68 31.2 26.6 16 17 1.0 1.5 HE Changming HOLD 20.32 000423 Dong-E E-Jiao 20.76 1 4 54 283 8,376 0.54 0.62 38.8 33.3 (2) 17 1.0 1.5 HE Changming HOLD 18.74 600252 Guangxi Wuzhou Zhongheng Group 20.43 0 23 310 112 3,414 0.47 0.71 43.8 28.8 117 52 0.7 1.4 HE Changming BUY 17.24 600332 Guangzhou Pharmaceutical (A/H) 7.87 3 2 34 55 1,594 0.54 0.64 14.6 12.3 6 19 3.4 4.8 HE Changming HOLD 9.72 600276 Hengrui Medicine 41.19 0 (8) 28 119 14,836 1.08 1.31 38.1 31.6 59 21 0.4 0.5 ZHANG Yin BUY 43.00 000963 Huadong Medicine 15.74 (3) 5 46 61 2,938 0.66 0.75 23.9 21.0 70 14 0.8 1.0 ZHANG Yin BUY 19.50 002007 Hualan Biological 51.66 2 3 115 503 9,531 0.79 1.07 65.4 48.3 52 35 0.5 0.6 ZHANG Yin BUY 42.90 600557 Kanion Pharmaceutical 15.31 (2) 1 8 91 3,014 0.51 0.63 30.0 24.4 (4) 23 1.0 1.6 HE Changming BUY 17.55 002252 Shanghai RAAS 27.49 2 4 9 48 1,100 0.83 1.04 33.2 26.3 26 26 0.8 0.9 ZHANG Yin HOLD 29.00 600535 Tianjin Tasly Pharmaceuticals 19.25 5 3 56 101 4,697 0.66 0.80 29.1 24.0 26 21 2.1 2.5 HE Changming BUY 24.05 600161 Tiantan Biological 27.50 7 6 89 452 5,908 0.35 0.44 78.6 62.5 30 26 0.2 0.3 ZHANG Yin BUY 19.40 600529 Shandong Pharmceutical Glass 12.89 4 6 35 87 2,683 0.60 0.70 21.5 18.5 9 16 0.8 1.0 ZHANG Yin BUY 14.50 002223 Yuyue Medical 27.78 5 4 74 44 1,085 0.66 0.89 42.4 31.2 64 36 0.8 1.1 ZHANG Yin BUY 31.20 600351 Yabao Pharmaceuticals 13.26 (2) (0) 113 175 3,478 0.42 0.57 31.6 23.3 56 35 1.3 2.1 HE Changming BUY 17.00 Average 2 4 73 163 4,776 0.62 0.77 37.3 29.4 37 26 1.0 1.5
Property 000043 CATIC Real Estate 17.41 (0) 3 256 77 2,415 0.29 0.54 60.7 32.1 122 89 0.7 1.2 ZHOU Lu HOLD 15.19 600675 China Enterprise 17.53 5 25 211 498 13,160 0.60 0.95 29.0 18.5 41 57 0.3 0.4 TIAN Shixin BUY 21.90 000024 China Merchants Property (A/B) 31.33 15 34 139 505 20,442 1.05 1.25 29.8 25.1 48 19 0.3 0.3 TIAN Shixin HOLD 32.50 000002 China Vanke (A/B) 12.47 8 18 93 2,207 117,913 0.52 0.74 24.0 16.9 45 42 0.3 0.5 TIAN Shixin BUY 16.20 600007 China World Trade Centre 10.87 6 14 53 64 8,650 0.25 0.28 44.2 39.2 (30) 13 1.1 1.3 ZHOU Lu HOLD 10.82 600067 Citychamp Dartong 15.70 11 34 292 194 7,890 0.43 0.82 36.7 19.2 52 91 0.1 0.1 TIAN Shixin HOLD 15.60 000402 Financial Street 13.61 11 22 79 679 32,753 0.56 0.62 24.3 21.9 33 11 1.6 1.8 ZHOU Lu BUY 15.80 600383 Gemdale 16.43 10 29 228 1,399 27,018 0.52 0.72 31.8 22.7 64 40 0.2 0.4 TIAN Shixin BUY 18.70 600325 Huafa Industrial Share 20.36 9 18 119 254 12,525 1.10 1.31 18.5 15.5 38 19 0.5 0.6 TIAN Shixin BUY 26.38 600048 Poly Real Estate Group 27.66 4 23 150 945 29,164 1.20 1.45 23.0 19.1 32 20 0.3 0.4 TIAN Shixin BUY 35.29 600639 Jinqiao Export Processing Zone (A/B) 14.36 6 17 87 141 12,120 0.30 0.53 47.5 27.0 (8) 76 0.8 1.5 ZHOU Lu HOLD 14.93 000069 Shenzhen Overseas Chinese Town 21.67 6 17 165 450 27,831 0.47 0.81 45.7 26.6 (2) 72 0.2 0.3 TIAN Shixin BUY 24.40 000006 Shenzhen Zhenye Group 12.30 12 21 149 130 1,310 0.68 0.85 18.0 14.5 54 24 0.8 1.0 TIAN Shixin HOLD 14.88 600683 Silvertie Holding 12.15 9 22 159 52 2,718 0.29 0.70 41.5 17.4 142 139 0.0 0.0 TIAN Shixin HOLD 11.69 600895 Zhangjiang Hi-tech 14.64 6 12 47 238 22,673 0.44 0.58 33.3 25.3 29 32 0.9 1.2 ZHOU Lu BUY 15.32 Average 8 21 148 522 22,572 0.58 0.81 33.9 22.7 44 50 0.5 0.7
Technology 000063 ZTE Corporation (A/H) 38.20 0 2 83 310 40,018 1.27 1.48 30.0 25.8 37 16 0.7 0.8 Frank HE BUY 44.50 Average 0 2 83 310 40,018 1.27 1.48 30.0 25.8 37 16 0.7 0.8
Telecoms 600050 China Unicom (A/R) 6.53 1 (5) 30 1,519 53,982 0.15 0.11 44.4 57.3 (82) (22) 0.5 0.5 Allan NG SELL 5.20 Average 1 (5) 30 1,519 53,982 0.15 0.11 44.4 57.3 (82) (22) 0.5 0.5
23 October 2009 (Friday) The Raw and the Cooked 19 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
CHINA — A Price 5D 1M YTD 3M avg. Free float EPS EPS P/E P/E EPS gr. EPS gr. Yield Yield Target Ticker Company chg. chg. chg. daily T/O mkt. cap.^ 09E 10E 09E 10E 09E 10E 09E 10E Analyst Rec. Price (Rmb) (%) (%) (%) (¥ m) (¥ m) (x) (x) (%) (%) (%) (%) Transport 601111 Air China (A/H) 8.10 5 5 98 437 13,278 0.42 0.16 19.5 50.9 (62) 1.0 0.0 DU Jianping BUY 12.44 600012 Anhui Expressway (A/H) 5.36 2 5 42 45 3,379 0.44 0.50 12.1 10.8 6 12 4.1 4.6 Liu Huiming HOLD 5.30 600115 China Eastern Airlines (A) 5.65 1 3 37 60 2,200 0.06 0.12 88.3 45.6 94 0.0 0.0 DU Jianping HOLD 6.34 600125 China Railway Tielong 7.58 3 3 36 122 5,306 0.35 0.40 21.5 19.0 20 14 0.9 1.1 Patrick LI HOLD 7.55 600026 China Shipping (A/H) 13.84 7 14 70 246 7,540 0.46 0.80 30.2 17.3 (71) 74 0.6 1.1 Jimmy LAM HOLD 13.90 600029 China Southern Airlines (A/H) 5.44 5 5 71 373 8,209 0.10 0.06 53.3 93.8 (43) 0.0 0.0 DU Jianping SELL 4.06 000039 CIMC (A/B) 10.86 5 5 75 255 8,384 0.46 0.33 23.7 33.2 (13) (29) 1.2 0.9 Jimmy LAM SELL 9.30 601866 CSCL (A) 4.64 2 1 75 477 10,842 (0.23) (0.06) n.m. n.m. 0.0 0.0 Jimmy LAM SELL 3.05 601006 Daqin Railway 9.90 (1) 3 23 729 25,759 0.45 0.57 22.0 17.4 (13) 27 2.6 3.3 Patrick LI BUY 13.10 601333 GS Railway (A/H) 4.42 1 3 19 277 12,211 0.17 0.20 25.7 22.2 1 16 1.5 1.8 Patrick LI HOLD 4.96 600004 Guangzhou Baiyun Airport 9.33 1 4 32 119 9,442 0.45 0.54 20.6 17.4 8 18 2.5 2.9 DU Jianping BUY 12.32 600035 Chutian Expressway 5.00 2 4 32 55 2,469 0.36 0.40 13.9 12.6 11 10 2.9 3.2 Liu Huiming HOLD 5.03 600221 Hainan Airlines 4.89 3 1 57 182 8,631 0.10 0.12 51.5 42.5 21 0.0 0.0 LI Yan HOLD 5.34 600377 Jiangsu Expressway (A/H) 6.11 3 3 12 69 2,463 0.41 0.47 14.9 12.9 32 16 5.7 6.6 Liu Huiming BUY 7.10 600269 Jiangxi Ganyue Expressway 7.33 3 (2) 88 568 4,966 1.03 1.20 7.1 6.1 9 16 3.4 3.9 Liu Huiming BUY 8.20 600350 Shandong Expressway 4.98 2 1 3 115 3,351 0.28 0.32 17.6 15.8 (23) 12 2.6 2.9 Liu Huiming HOLD 4.76 600591 Shanghai Airlines 6.18 0 2 41 63 5,550 0.10 0.21 60.6 28.9 110 0.0 0.0 DU Jianping HOLD 6.86 600009 Shanghai Airport 14.33 1 2 27 289 14,635 0.34 0.47 42.4 30.5 (24) 39 0.4 0.5 DU Jianping HOLD 13.73 000089 Shenzhen Airport 7.18 3 4 35 113 4,732 0.37 0.39 19.5 18.6 160 5 2.8 3.0 DU Jianping HOLD 7.40 600548 Shenzhen Expressway(A/H) 5.70 1 2 29 47 1,243 0.30 0.35 19.1 16.2 29 18 2.1 2.5 Liu Huiming BUY 7.00 600897 Xiamen Airport 16.39 1 3 37 44 1,563 0.81 0.93 20.2 17.7 24 14 0.4 0.5 Patrick LI BUY 17.41 000900 Xiandai Investment 20.26 6 8 72 153 5,701 1.71 1.89 11.9 10.7 19 11 4.5 5.0 Liu Huiming BUY 25.59 600320 Zhenhua Heavy (A/B) 10.45 1 1 66 319 17,427 0.54 0.68 19.5 15.4 (32) 27 1.3 1.6 Jimmy LAM BUY 14.60 Average 3 4 47 224 7,795 0.41 0.48 28.0 25.3 8 19 1.8 2.0
Utilities 000690 Baolihua New Energy 9.26 (0) 10 48 239 7,516 0.50 0.49 18.5 18.8 56 (2) 1.1 1.1 YU Nian BUY 10.80 600900 China Yangtze Power Corp 13.64 1 1 (7) 1,011 67,015 0.38 0.71 35.9 19.3 (9) 86 1.5 2.8 YU Nian BUY 16.64 601991 Datang International Power (A/H) 9.15 0 (0) 42 220 56,049 0.18 0.25 50.6 36.2 159 40 1.1 1.1 Peter YAO HOLD 9.70 600795 GD Power 7.19 0 5 29 377 29,769 0.21 0.26 34.7 27.7 (24) 26 0.6 0.7 YU Nian BUY 7.35 600323 Nanhai Development 9.23 4 5 16 52 1,801 0.34 0.30 27.5 30.6 (5) (10) 1.0 0.9 YU Nian HOLD 9.42 000027 Shenzhen Energy 12.29 (0) 4 51 196 7,307 0.85 0.70 14.5 17.7 81 (18) 1.4 1.1 YU Nian BUY 12.30 600027 Huadian Power (A/H) 5.41 1 8 42 157 16,287 0.23 0.35 23.7 15.3 55 1.0 1.5 Peter YAO HOLD 6.30 600011 Huaneng Power (A/H) 7.79 3 8 13 195 30,051 0.53 0.45 14.8 17.2 (14) 3.1 2.8 Peter YAO HOLD 8.50 600886 SDIC Huajing Power 9.70 (1) 2 6 143 10,230 0.27 0.37 36.1 26.3 (62) 37 0.6 0.8 YU Nian BUY 10.52 Average 1 5 27 288 25,114 0.39 0.43 28.5 23.2 28 22 1.3 1.4
23 October 2009 (Friday) The Raw and the Cooked 20 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
GERMANY Price 5D 1M YTD 3M avg. Free float EPS EPS P/E P/E EPS gr.EPS gr. Yield Yield Target Ticker Company chg. chg. chg. daily T/O mkt. cap.^ 09E 10E 09E 10E 09E 10E 09E 10E Analyst Rec. Price (Euro) (%) (%) (%) (€ m) (€ m) (x) (x) (%) (%) (%) (%) Agriculture 5AB Asian Bamboo AG 20.55 6 9 234 1 115 1.96 2.22 10.5 9.3 59 13 1.0 1.1 Jenny CHAN BUY 14.48 Average 6 9 234 1 115 1.96 2.22 10.5 9.3 59 13 1.0 1.1
Industrial ZEF Zhong De Waste Technology 12.27 (2) (4) (11) 0 81 1.09 1.55 11.3 7.9 (37) 42 0.0 0.0 Frank LAI BUY 16.90 Average (2) (4) (11) 0 81 1.09 1.55 11.3 7.9 (37) 42 0.0 0.0
SINGAPORE Price 5D 1M YTD 3M avg. Free float EPS EPS P/E P/E EPS gr.EPS gr. Yield Yield Target Ticker Company chg. chg. chg. daily T/O mkt. cap.^ 09E 10E 09E 10E 09E 10E 09E 10E Analyst Rec. Price (S$) (%) (%) (%) (S$m) (S$ m) (x) (x) (%) (%) (%) (%) Consumer Product CZAI China Zaino International 0.26 (5) (10) 44 3 101 0.07 0.07 4.0 3.5 (30) 11 5.1 5.7 Frank LAI BUY 0.32 Average (5) (10) 44 3 101 0.07 0.07 4.0 3.5 (30) 11 5.1 5.7
Consumer Services CHHS China Hongxing Sports 0.21 (5) (11) 11 8 385 0.02 0.02 12.5 10.0 (53) 25 2.0 3.0 Frank LAI BUY 0.28 Average (5) (11) 11 8 385 0.02 0.02 12.5 10.0 (53) 25 2.0 3.0
Industrial Midas Midas Holdings 0.85 (3) (7) 74 15 464 0.04 0.05 21.7 16.6 0 31 1.8 2.4 Frank LAI BUY 1.17 Average (3) (7) 74 15 464 0.04 0.05 21.7 16.6 0 31 1.8 2.4
Property Yanlord Yanlord Land 2.44 5 (1) 173 29 1,658 0.14 0.18 17.4 13.8 20 26 0.6 0.8 Frank LAI BUY 3.42 Average 5 (1) 173 29 1,658 0.14 0.18 17.4 13.8 20 26 0.6 0.8 NB: BUY =≥+10% compared with the relevant benchmark index over a 6‐month period; SELL=≤ ‐10% compared with the relevant benchmark index over a 6‐month period; HOLD = ≤+10% and ≥‐10% compared with the relevant benchmark index over a 6‐month period; Not Rated (NR) ^: Represents total figures, while others are average Sources: Reuters, BOCI Research estimates
23 October 2009 (Friday) The Raw and the Cooked 21 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
Recently Published Research Date Title Sector Author(s) Tel. Email 16-Oct Shougang Concord International METALS & MINING - Belle CHAN (852) 2905 2103 [email protected] Iron and Steel 15-Oct Huaqiao In The Middle Kingdom Monthly Anthony C.H. LOK (852) 2905 2108 [email protected] - Oct 09 CHENG Manjiang (8610) 9922 9128 [email protected] 8-Sep Huaqiao In The Middle Kingdom Monthly Anthony C.H. LOK (852) 2905 2108 [email protected] - Sep 09 CHENG Manjiang (8610) 9922 9128 [email protected] 13-Aug China Banks FINANCIALS - Banking YUAN Lin (8610) 6622 9070 [email protected] 5-Aug Huaqiao In The Middle Kingdom Monthly Anthony C.H. LOK (852) 2905 2108 [email protected] - Aug 09 CHENG Manjiang (8610) 9922 9128 [email protected] 23-Jul Lumena Resources METALS & MINING - Belle CHAN (852) 2905 2103 [email protected] Miscellaneous 15-Jul China IPPs UTILITIES - Electricity Peter YAO (852) 2905 2105 [email protected] 14-Jul Inspur International TECHNOLOGY - Frank HE (852) 2905 2112 [email protected] Software & IT Service 8-Jul Huaqiao In The Middle Kingdom Monthly Anthony C.H. LOK (852) 2905 2108 [email protected] - Jul 09 CHENG Manjiang (8610) 9922 9128 [email protected] 6-Jul Poly (Hong Kong) PROPERTY - Developer Manfred HO (852) 2905 221107 [email protected] Vivien ZHANG (852) 2905 2167 [email protected] 9-Jun Huaqiao In The Middle Kingdom Monthly Anthony C.H. LOK (852) 2905 2108 [email protected] - Jun 09 CHENG Manjiang (8610) 9922 9128 [email protected] 27-May Hainan Meilan Airport TRANSPORT - Airport DU Jianping (8610) 6622 9079 [email protected] 26-May New World Department Store CONSUMER Ashley CHEUNG (852) 2905 2102 [email protected] SERVICES - Retail 12-May Blood Products Industry PHARMACEUTICALS - ZHANG Yin (8621) 6860 4866 ext 8929 [email protected] Biological Drugs 12-May Shenzhen Energy UTILITIES - Electricity YU Nian (8610) 6622 9124 [email protected] 11-May Huaqiao In The Middle Kingdom Monthly Anthony C.H. LOK (852) 2905 2108 [email protected] - May 09 CHENG Manjiang (8610) 9922 9128 [email protected] 11-May China Metals & Mining Monthly METALS & MINING Belle CHAN (852) 2905 2103 [email protected] 7-May China Power Sector UTILITIES Peter YAO (852) 2905 2105 [email protected] 5-May China Economy Update MACRO & STRATEGY CHENG Manjiang (8610) 9922 9128 [email protected] YE Bingnan (8610) 6622 9081 [email protected] LI Tao (8610) 6622 9064 [email protected] 24-Apr Jiulian Development CHEMICALS - CHEN Tian (8621) 6860 4866 ext 8503 [email protected] Miscellaneous NI Xiaoman (8621) 6860 4866 ext 8319 [email protected] 21-Apr China Banking Sector FINANCIALS - Banking YUAN Lin (8610) 6622 9070 [email protected] 7-Apr Huaqiao In The Middle Kingdom Monthly Anthony C.H. LOK (852) 2905 2108 [email protected] - Apr 09 CHENG Manjiang (8610) 9922 9128 [email protected] 30-Mar Parkson Retail Group CONSUMER LIU Du (8621) 6860 4866 ext 8511 [email protected] SERVICES - Retail ZHENG Yuan (8621) 6860 4866 ext 8517 [email protected] 26-Mar Alibaba.com TECHNOLOGY - Frank HE (852) 2905 2112 [email protected] Internet 23-Mar Renhe Commercial PROPERTY - Developer Vivien ZHANG (852) 2905 2167 [email protected] 17-Mar China Resources Gas UTILITIES - Gas Peter YAO (852) 2905 2105 [email protected] 17-Mar Saima Industry Co. Ltd. INDUSTRIALS — Basic Grace TANG (8610) 9922 9077 [email protected] Materials 10-Mar Huaqiao In The Middle Kingdom Monthly Anthony C.H. LOK (852) 2905 2108 [email protected] - Mar 09 CHENG Manjiang (8610) 9922 9128 [email protected] 9-Mar Wuhan Zhongbai Group CONSUMER ZHENG Yuan (8621) 6860 4866 ext 8517 [email protected] SERVICES - Retail LIU Du (8621) 6860 4866 ext 8511 [email protected]
23 October 2009 (Friday) The Raw and the Cooked 22 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
DISCLOSURE
The views expressed in this report accurately reflect the personal views of the analysts. Each analyst declares that neither he/she nor his/her associate serves as an officer of nor has any financial interests in relation to the listed corporation reviewed by the analyst. None of the listed corporations reviewed or any third party has provided or agreed to provide any compensation or other benefits in connection with this report to any of the analysts, BOCI Research Limited and BOCI Group. Member companies of BOCI Group confirm that they, whether individually or as a group (i) do not own 1% or more financial interests in any of the listed corporations reviewed; (ii) are not involved in any market making activities for any of the listed corporation reviewed; (iii) do not have any individual employed by or associated with any member companies of BOCI Group serving as an officer of any of the listed corporation reviewed; and (iv) have not had any investment banking relationship with any of the listed corporation reviewed within the preceding 12 months.
This disclosure statement is made pursuant to paragraph 16 of the “Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission” and is updated as of 21 October 2009. Waiver has been obtained by BOC International Holdings Limited from the Securities and Futures Commission of Hong Kong to disclose any interest the Bank of China Group may have in this research report.
23 October 2009 (Friday) The Raw and the Cooked 23 THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC.
BOCI’s daily product is christened “The Raw and the Cooked” with inspiration from the legendary Professor Claude Lévi-Strauss, whose groundbreaking research into “Mythology” 40 years ago showed that even apparently trivial 20/F, Bank of China Tower and unintelligible myths form a vast and intricate system of parallels and 1 Garden Road oppositions — a system whose complexity far transcends that of any one Hong Kong particular myth. Tel: (852) 2867 6333 In that sense, Myths are no different from Stock Markets, in which investors Fax: (852) 2147 9513 and analysts claim to see logics but nonetheless become mesmerised by irrational exuberance from time to time. After all, both myths and stock Toll free numbers to Hong Kong: markets are but manifestations of the human mind. China North: 10800 8521065 For the practical purposes of humble stockbroking research, “The Raw and China South: 10800 1521065 the Cooked” offers both “raw materials” (eg, visit notes, key statistics) to Singapore: 800 852 3392 disillusioned clients who no longer have faith in stockbrokers' recommendations and forecasts as well as “delicious” end-product “cuisines” for generalists who cannot afford to cover a full spectrum of stocks in detail.
DISCLAIMER BOCI Securities Limited 20/F, Bank of China Tower This report was originally prepared and issued by BOCI Research Limited for distribution to their professional, accredited and institutional investor customers. It is not directed to, or intended for distribution to or use by, any person 1 Garden Road or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such Hong Kong distribution, publication, availability or use would be contrary to law or regulation or which would subject BOCI Research Limited, BOC International Holdings Limited and its subsidiaries and affiliates (collectively “BOCI Group”) to Tel: (852) 2867 6333 any registration or licensing requirement within such jurisdictions. None of the material, nor its contents, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written Fax: (852) 2147 9513 permission of BOCI Group. All trademarks, service marks and logos used in this report are trademarks or service marks or registered trademarks or service marks of BOCI Group. The information, tools and material presented in this report are provided to you for information purposes only and shall BOC International (UK) Limited not be used or considered as an offer or the solicitation of an offer to sell or to buy or subscribe for securities or other financial instruments. BOCI Group may not have taken any steps to ensure that the securities referred to in this report 90 Cannon Street are suitable for any particular investor. The contents of this report do not constitute investment advice to any person London EC4N 6HA and such person shall not be treated as a customer of BOCI Group by virtue of receiving this report. United Kingdom Information and opinions presented in this report have been obtained or derived from sources believed by BOCI Group to be reliable, but BOCI Group makes no representation as to their accuracy or completeness and BOCI Group Tel: (4420) 7022 8888 accepts no liability for loss arising from the use of the material presented in this report unless such liability arises under Fax: (4420) 7022 8877 specific statutes or regulations. This report is not to be relied upon in substitution for the exercise of independent judgment. BOCI Group may have issued other reports that are inconsistent with, and reach different conclusions from, the information presented in this report. The reports reflect the different assumptions, views and analytical methods of the analysts who prepared them. For the avoidance of doubt, views expressed in this report do not necessarily BOC International (USA) Inc. represent those of BOCI Group. Room 202, 1270 Avenue of the Americas This report may provide the addresses of, or contain hyperlinks to, various websites. To the extent that this report refers to material outside BOCI Group’s own website, BOCI Group has not reviewed the linked sites and takes no New York, NY, 10020, USA responsibility for the content contained therein. Such address or hyperlink (including addresses or hyperlinks to BOCI Group’s own website material) is provided solely for your convenience and information and the content of the linked Tel: (1) 212 259 0888 sites does not in any way form part of this report. Accessing such websites shall be at your own risk. Fax: (1) 212 259 0889 BOCI Group may, to the extent permitted by law, participate or invest in financing transactions with the issuer(s) of the securities referred to in this report, perform services for or solicit business from such issuers, and/or have a position or effect transactions in the securities or other financial instruments thereon. BOCI Group may, to the extent permitted by BOC International (Singapore) Pte. Ltd. law, act upon or use the information or opinions presented herein, or the research or analysis on which they are based, before the material is published. BOCI Group and the analysts preparing this report (each an “analyst” and collectively Reg. No. 199303046Z the “analysts”) may have relationships with, financial interests in or business relationships with any or all of the companies mentioned in this report (each a “listed corporation” and collectively the “listed corporations”). See 4 Battery Road “Disclosure”. 4/F Bank of China Building Information, opinions and estimates are provided on an “as in” basis without warranty of any kind and may be changed at any time without prior notice. Nothing in this report constitutes investment, legal, accounting or tax advice nor a Singapore 049908 representation that any investment or strategy is suitable or appropriate to your individual circumstances. Nothing in Tel: (65) 6412 8856 / 6412 8630 this report constitutes a personal recommendation to you. Fax: (65) 6534 3996 / 6532 3371 This report has been prepared and issued by BOCI Research Limited. This information is confidential and is intended solely for the use of its recipient. This report is distributed in Hong Kong by BOCI Research Limited and BOCI Securities Limited; in Singapore by BOC International (Singapore) Pte. Ltd.; and in the United Kingdom by Bank of China International (UK) Limited. This information may only be issued or passed on to any person in the United BOC International (China) Limited Kingdom if that person is of a kind described in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2001 or otherwise pursuant to exemptions to section 21 of the Financial Services and Markets Act 39/F Bank of China Tower 2000. In addition, no person who is an Authorised Person may issue or pass on this information, or otherwise promote BOCI Group, to any person in the United Kingdom other than under the rules of the Financial Services Authority (FSA) 200 Yincheng Zhong Road applicable to such Authorised Persons. This report and any information, material and contents herein are intended for Shanghai Pudong District general circulation only and do not take into account the specific investment objectives, financial situation or particular needs or any particular person. The investment(s) mentioned in this report may not be suitable for all investors and a 200121 China person receiving or reading this report should seek advice from a financial adviser regarding the suitability of such Tel: (8621) 6860 4866 investment(s), taking into account the specific investment objectives, financial situation or particular needs of that person, before making a commitment to purchase any of such investment(s). The suitability of any particular Fax: (8621) 5888 3554 investment or strategy whether opined on, described in or referred to in this report or otherwise will depend on a person’s individual circumstances and objectives and should be confirmed by such person with his advisers independently before adoption or implementation thereof (either as is or is varied). BOC International Holdings Limited Without prejudice to any of the foregoing disclaimers, to the extent that the reader is an accredited or expert investor as defined in Regulation 2 of the Financial Advisers Regulations (“FAR”) of the Financial Advisers Act (Cap. 110) of Beijing Representative Office Singapore (“FAA”), BOC International (Singapore) Pte Ltd is in any event exempted (i) by Regulation 34 of the FAR from the requirement to have a reasonable basis for making any recommendation as mandated under Section 27 of 15/F, Tower 2, the FAA, and (ii) by Regulation 35 of the FAR from the requirements in Section 36 of the FAA mandating disclosure of Yingtai Business Center No.28, any interests in securities mentioned in this report, or in their acquisition or disposal, that it or its associated or connected persons may have. The recipient of the analysis or report should contact BOCI in Singapore if they have Finance Street, Xicheng District, any queries as to the report/analysis. Beijing 100032, China Copyright 2009 BOCI Research Limited, BOC International Holdings Limited and its subsidiaries and affiliates. All rights reserved. Tel: (8610) 6622 9000 Fax: (8610) 6657 8950