China / Hong Kong Company Guide Resources Land Version 7 | Bloomberg: 1109 HK EQUITY | Reuters: 1109.HK Refer to important disclosures at the end of this report

DBS Group Research . Equity 21 Mar 2018

Growth to remain decent BUY Last Traded Price ( 20 Mar 2018):HK$28.55 (HSI : 31,550) BUY on potential upside from sales growth and earnings upgrade. CR Price Target 12-mth: HK$31.90 (12% upside) (Prev HK$28.79) Land’s (CRL) FY17 results beat street estimates on almost all fronts.

A nalyst With higher margin expectations and a targeted 23% y-o-y growth in Carol WU +852 2863 8841 [email protected] completion, we bump up our FY18 earnings estimate by 12% to Danielle Wang CFA, +852 2820 4915 [email protected] HK$24.3bn, and we also expect earnings upgrade from the street. Ken HE CFA, +86 21 6888 3375 [email protected] After this earnings upgrade, the stock is trading at 8.0x FY18F PE, Jason LAM +852 29711773 [email protected] below pure-residential peers’ average of 8.7x, which is not justified What’s New given its premium investment property portfolio (IP). We also expect the company to beat its 2018 sales target (20% growth) and deliver  2018 presales growth likely to be >30%, over- >30% y-o-y growth in presales, supported by 39% y -o-y growth in achieving its target saleable resources and improving sell-through rates. Rental income is  Multiple acquisition channel to ensure higher– also expected to see 15% growth in each of 2018/2019. than-peer margins  Rental growth will stay at double digits with A sset turn becomes key focus; multiple acquisition channels to potential upside from efficiency improvement facilitate mid-term growth. Total saleable resources will grow 39% y-o- y to Rmb310bn in 2018. Its sell-through rate rose to 68% in FY17 from  Maintain BUY and bump up our EPS and TP to 50+% previously . While CRL has only guided for 60% sell through rate reflect better-than-expected margins for 2018, we believe it will beat guidance and achieve a similar rate in

2018, as (i) newly adopted pre-acquisition design/planning and more Price Relative standardisation could shorten the period between presales and HK$ Relative Index acquisitions (12-13 months now); and (ii) more new saleable resources 215 31.9 195 in 2018 (77% vs. 52% of total saleable resources in 2017). Its mid- 175 26.9 155 term sales growth and above-average margin of >30% could also be 21.9 135 115 supported by its multiple acquisition channels, including urban renewal 16.9 95

11.9 75 projects, synergy with parentco, cooperation with other SOEs and other Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 opportunities leveraged on its new businesses. Land (LHS) Relative HSI (RHS)

Forecasts and Valuation FY Dec (HK$ m) 2016A 2017A 2018F 2019F Robust rental business also supports margin recovery and earnings Turnover 109,328 118,588 151,917 186,885 grow th. We also expect >15% rental growth in 2018/2019. Same store EBITDA 39,025 48,066 55,437 66,717 sales growth in its retail malls was 26% and we expect decent retail Pre-tax Profit 38,387 46,095 53,954 65,224 sales growth in its mall to continue and translate into rental growth. In Net Profit 19,501 23,017 24,668 29,186 addition, tenants’ occupancy cost fell 2ppts in 2017 to 13.4%, lower Core Profit 16,270 19,160 24,296 28,801 Core Profit Gth (%) 14.5 17.8 26.8 18.5 than the normal level of 15-20%, implying further rental upside ahead. EPS (HK$) 2.81 3.32 3.56 4.21 The newly set-up commercial property units should help improve EPS (HK$) 2.81 3.32 3.56 4.21 overall rental operations and support rental growth. EPS Gth (%) 7.5 18.0 7.2 18.3 PE (X) 10.1 8.6 8.0 6.8 Valuation: P/Cash Flow (X) nm nm 11.0 6.1 We raise our TP to HK$34.50/share, based on 9x average FY18F and EV/EBITDA (X) 6.5 6.0 5.3 4.2 FY19F EPS. CR Land’s current valuation is 8.0x FY18F PE, vs. large-cap DPS (HK$) 0.70 0.97 1.23 1.45 peers’ average of 8.7x. Div Yield (%) 2.5 3.4 4.3 5.1 Net Gearing (%) 23.8 35.9 32.3 21.5 Key Risks to Our View: Below-expected sales growth may drag its share price performance. ROE (%) 16.8 17.7 16.3 17.3 Book Value (HK$) 16.80 20.64 22.92 25.62 At A Glance P/Book Value (X) 1.7 1.4 1.2 1.1 Issued Capital (m shrs) 6,931 Earnings Rev (%): 11 Nil Mkt. Cap (HK$m/US$m) 197,878 / 25,234 Consensus EPS (HK$) 2.69 3.91 4.76 Other Broker Recs: B: 29 S: 0 H: 3 Major Shareholders Source of all data on this page: Company, DBSV, Thomson Reuters, HKEX China Resources (Holdings) (%) 61.3 Free Float (%) 38.7 3m Avg. Daily Val. (US$m) 58.1 I CB Industry : Financials /

ed-CK/ sa- CS / TW

Company Guide

China Resources Land

S aleable resources for 2018 - saleable resource grew 39% y-o-y in 2018 - targeted sell-through of 59% looks convertible

(R mb bn) 2 0 17 actual 2 0 18 target Saleable resources 223.3 310.2 - old 107.0 71.2 - new 116.3 239.0 Contracted sales 152.1 Target sales 183.0

Actual/target sell-through 68.1% 59.0%

Source: Company, DBS

GFA new starts and completion for development business - 23% y-o-y growth in completion - may also beat GFA new starts target in 2018, like what it did in 2017

(m sm) 2 0 17 target 2 0 17 actual 2 0 18 target % o f target GFA completion 9.08 9.57 11.77 23% GFA new starts 13.20 17.10 20.78 22%

Source: Company, DBS

C ap rate used for investment properties’ book value

PU D or completed A sset type C ap rate FY1 6 FY1 7 Completed Retail mall 6.0-7.8% 5.5-7.5% Office 6.0-7.5% 5.3-7.3% PUD Mall/office 6.3-7.5% 5.8-7.5%

Source: Company, DBS

IP gross margin (incl. hotel) IP gross margin (excl. hotel)

64% 75%

62% 70% 60%

58% 65%

56% 60% 54% 55% 52%

50% 50% FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17

Source: Company, DBS Vickers Source: Company, DBS Vickers

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Company Guide China Resources Land

Critical Factors Contracted sales

F aster asset turnover. GFA new starts in 2017 was 30% above Rmb mn % its original target, thanks to (i) faster-than-expected land 160,000 50 acquisitions, and (ii) shorter period between land acquisitions 140,000 40 and construction commencement due to pre-acquisition 120,000 design/planning and more adoption of standardisation. 2018 100,000 30 80,000 new starts target is set at 22% above 2017 actual number, and 60,000 20 we believe it could beat target again given its improved asset 40,000 10 turnover. 20,000 0 0 Improving sell-through. The sell-through rate jumped to 68% in FY12 FY13 FY14 FY15 FY16 FY17 Gross margin trend 2017, from 50+% in the past, primarily due to faster asset turnover. expects further room to shorten the 45% period between land acquisitions and presales from the 12-13 40% 35% months currently. Therefore, we expect sell-through to stay at a 30% high level moving ahead. In addition, new saleable resources 25% made up 77% of total saleable resources, compared to 52% in 20% 2017, which might point to better sell-through moving ahead. 15% 10% Nearly 40% growth in saleable resources in 2018. Saleable 5% 0% resources to grow 39% y-o-y to Rmb310bn in 2018. Its 2018 FY12 FY13 FY14 FY15 FY16 FY17 FY18E FY19E sales target of Rmb183bn, which is based on a 59% sell- SG&A as % of contracted sales through, looks conservative. We expect CRL to beat the target 10% and deliver 30% growth in 2018. 8% Multiple acquisition channels to support sustainable growth and 6% above-peers’ margin. (i) CRL has already secured urban renewal projects with potential GFA of c.20m sm in . (ii) CRL is 4% also strengthening cooperation with parentco on potential land conversion (form industrial land to residential or commercial 2% land) opportunities ahead. (iii) CRL will also seek cooperation 0% with other SOEs such as Land Group. (iv) Its new FY12 FY13 FY14 FY15 FY16 FY17 business such as senior housing and industrial town may also Average funding costs offer some land acquisition opportunities. 6%

High profitability to continue. In FY17, gross margin for its development business was 61.9%/32.8%/31.3% in tier 1/2/3 4% cities respectively, improved by 10.0ppts/3.9ppts/5.1ppts.

Overall gross margin in FY17 came in at 40%, above expected. 2% Unbooked sales amounted to Rmb126bn as of end-FY17, with Rmb78.7bn to be booked in FY18. For the unbooked sales, management expects a 45% gross margin. Therefore, we 0% FY12 FY13 FY14 FY15 FY16 FY17 revised up our gross margin expectations to 42%/41% in Effective tax rate FY18/FY19. 60% Decent growth in rental income. Same store sales growth 50% (SSSG) of its retail malls was 26% in FY17, higher than rental 40% growth. As such, tenants’ occupancy costs came down to 13.4%, vs. the normal level of 15-20%, implying further rental 30% revision ahead. This, coupled with contribution from new malls, 20% will continue to drive >15% rental growth moving ahead. 10%

0% FY12 FY13 FY14 FY15 FY16 FY17 FY18E FY19E Source: Company, DBS Vickers

Page 3

Company Guide

China Resources Land

FY17 results summary

FY Dec (HKD mn) F Y16 F Y17 y -o-y FY17 Comments % Sales 109,328 118,588 8% Development properties 98,727 104,559 6% Booked GFA down 2% y-o-y, while ASP up 8% Property investment & management 6,267 7,403 18% Others 4,333 5,245 21% Cost of goods sold (72,439) (70,851) -2% Gross profit 36,889 47,737 29% Gross margin improved significantly to 40% SG&A (6,328) (8,117) 28% SG&A as % of contracted sales improved to 5.3% in FY17 Other income 2,589 1,764 -32% Operating profit 33,149 41,384 25% Fair value gain on investment properties 4,831 6,002 24% Finance costs (193) (1,527) 690% Exchange gain was HK$1,259m in FY16, vs HK$263m in FY17 Share of Associates' or JV Income 601 236 -61% Pretax profit 38,387 46,094 20% - LAT (6,631) (10,214) 54% Mainly due to higher gross margin - Income Tax (9,257) (10,471) 13% T axation (15,888) (20,686) 30% Minority interests (2,998) (2,392) -20% Reported profit 19,501 23,017 18% Core earnings 16,270 19,160 18% Gross profit margin (%) 34% 40% ↑ 7 ppts Core profit margin (%) 15% 16% ↑ 1 ppts Reported profit margin (%) 18% 19% ↑ 2 ppts SG&A as % of top line 6% 7% ↑ 1 ppts SG&A as % of contracted sales 6% 5% ↓ 1 ppts Effective Tax Rate (%) 41% 45% ↑ 3 ppts Mainly due to higher LAT EPS (HK$) 2.81 3.32 18% Core EPS (HK$) 2.35 2.76 18% DPS (HK$) 0.70 0.97 37% Payout ratio 30% 35% ↑ 5 ppts Above expected Net debt ratio 24% 36% ↑ 12 ppts Cash (HK$ m) 46,674 64,323 38% Contracted sales (RMB mn) 108,040 152,159 41% GFA Sold ('000 sm) 7,760 9,573 23% ASP (Rmb/sm) 13,923 15,894 14% Recognized Sales (HK$ m) 98,727 104,559 6% Recognized GFA ('000 sm) 7,330 7,210 -2% 14,502 8% Recognized ASP (HK$/ sm) 13,469 Source: Company, DBS

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Company Guide China Resources Land

Balance Sheet: Healthy balance sheet. CR Land’s net debt ratio went down to Leverage & Asset Turnover (x) 0.4 36% at end-FY17 from 41% at end-1H17. There is still more 0.80 0.4 room for the company to gear up for growth, yet management 0.70 0.4 will closely monitor its key financial matrix to maintain its 0.60 0.3 investment grade. 0.50 0.3 0.3 0.40 0.3 0.30 Improving debt structure. Non-Rmb net debt exposure further 0.3 0.20 declined to 23% as at end-FY17, from 26%/45% as at end- 0.2 0.10 FY16/FY15. Meanwhile, average funding cost edged down to 0.2 0.00 0.2 4.16% in FY17. 2015A 2016A 2017F 2018F 2019F Gross Debt to Equity (LHS) Asset Turnover (RHS) Capital Expenditure Div idend payout lifted to 35%. The company increased payout HK$m ratio from previously 30% to 35%. Management has indicated 0.0 that such payout is sustainable. -5,000.0

-10,000.0

Share Price Drivers: -15,000.0 Continued recovery in retail sales in shopping malls. Recovery -20,000.0 in retail sales in China may change investors’ view on mall -25,000.0 operators. CR Land will be the largest beneficiary. -30,000.0 2015A 2016A 2017F 2018F 2019F T he kick-off of C-REIT, if it materialises, could greatly improve Capital Expenditure (-) the liquidity of commercial properties and help value recovery ROE in that space. 16.0%

14.0%

Key Risks: 12.0%

Policy risk in Tier I/2 cities. Tightening policies in Tier I/2 cities, 10.0% such as Shenzhen, Shanghai and may affect CR Land’s 8.0% sales. 6.0% 4.0% Company Background 2.0% 0.0% CR Land is a PRC developer focusing on nationwide residential 2015A 2016A 2017F 2018F 2019F developments and shopping mall investments (MixC and Hi 5). Forward PE Band As a state-owned red-chip, the company has been enjoying (x) 14.0 strong support from its parent company through asset 13.0 injections over the past few years. 12.0

11.0 +2sd: 10.7x 10.0 +1sd: 9.5x 9.0

8.0 Avg: 8.2x

7.0 -1sd: 6.9x 6.0 -2sd: 5.7x 5.0 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18

PB Band (x) 1.9

1.7

1.5 +2sd: 1.48x

1.3 +1sd: 1.33x Avg: 1.19x 1.1 -1sd: 1.05x

0.9 -2sd: 0.91x

0.7 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18

Source: Company, DBS Vickers

Page 5

Company Guide

China Resources Land

Segmental Breakdown (HK$ m)

FY Dec 2015A 2016A 2017F 2018F 2019F R e venues (HK$ m) Sale of developed properties 94,019 98,727 104,559 135,927 169,908 Property investments and 5,716 6,267 7,403 9,033 9,672 management Hotel operations 969 985 1,381 1,450 1,522 Construction, decoration services 3,202 3,348 5,245 5,507 5,783 and Others others 0 0 0 0 0 T otal 103,906 109,328 118,588 151,917 186,885 Source: Company, DBS Vickers

I ncome Statement (HK$ m) FY Dec 2015A 2016A 2017F 2018F 2019F Turnover 103,906 109,328 118,588 151,917 186,885 Cost of Goods Sold (71,562) (72,439) (70,851) (87,961) (110,262) Gross Profit 32, 345 36, 889 47, 737 63, 955 76, 623 Other Opg (Exp)/Inc (6,398) (6,328) (8,117) (9,335) (10,735) O pe rating Profit 25, 946 30, 561 39, 620 54, 620 65, 888 Associates Inc 298 601 236 373 385 Net Interest (Exp)/Inc (930) (193) (1,527) (1,039) (1,049) Exceptional Gain/(Loss) 7,407 7,419 7,766 0 0 Pre -tax Profit 32, 722 38, 387 46, 095 53, 954 65, 224 Tax (13,160) (15,888) (20,686) (26,674) (32,808) Minority Interest (1,864) (2,998) (2,392) (2,612) (3,230) Ne t Profit 17, 698 19, 501 23, 017 24, 668 29, 186 Core Profit 14, 206 16, 270 19, 160 24, 296 28, 801

Sales Gth (%) 15.8 5.2 8.5 28.1 23.0 Net Profit Gth (%) 16.9 10.2 18.0 7.2 18.3 Core Profit Gth (%) 19.2 14.5 17.8 26.8 18.5 Gross Mgn (%) 31.1 33.7 40.3 42.1 41.0 Core Profit Margin (%) 13.7 14.9 16.2 16.0 15.4 Tax Rate 40.2 41.4 44.9 49.4 50.3

Source: Company, DBS Vickers

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Company Guide China Resources Land

Balance Sheet (HK$ m) FY Dec 2015A 2016A 2017F 2018F 2019F

Fixed Assets 99,139 106,430 131,251 137,167 139,472 Invts in Assocs & JVs 10,527 10,066 16,148 16,148 16,148 Other LT Assets 2,480 12,604 27,529 27,529 27,529 Cash & ST Invts 47,058 46,674 64,323 66,402 84,746 Other Current Assets 238,412 251,270 335,316 320,863 329,401 T otal Assets 397,616 427,045 574,566 568,109 597,296

ST Debt 14,190 11,988 30,694 32,694 34,694 Creditors 52,193 58,645 76,595 80,425 84,447 Other Current Liab 122,540 133,475 179,545 148,284 150,709 LT Debt 62,855 67,763 95,583 95,583 95,583 Other LT Liabilities 13,352 16,015 19,726 19,726 19,726 Minority Interests 16,914 22,721 29,335 32,518 34,538 Shareholder’s Equity 115,574 116,438 143,087 158,880 177,600 T otal Capital 397,616 427,045 574,566 568,109 597,296

Share Capital (m) 6,764 6,931 6,931 6,931 6,931 Net Cash/(Debt) (29,987) (33,077) (61,954) (61,875) (45,531) Working Capital 63,680 59,150 79,175 92,154 94,246 Net Gearing (%) 22.6 23.8 35.9 32.3 21.5

Source: Company, DBS Vickers

Cash Flow Statement (HK$ m) FY Dec 2015A 2016A 2017F 2018F 2019F

Profit Before Tax 32,722 38,387 46,095 53,582 64,839 Assoc. & JV Inc/(loss) (298) (601) (236) (373) (385) Tax Paid (11,070) (13,822) (20,910) (23,731) (31,634) Depr/Amort 428 444 444 444 444 Chg in Wkg.Cap. 25,119 (20,009) (28,559) (12,979) (2,092) Other Non-Cash (4,911) (3,467) (4,475) 1,039 1,049 O perating CF 4 1 ,989 (4 ,243) (1 1,170) 1 7 ,982 3 2 ,222 Net chg in inv. 25 0 0 0 0 Assoc, MI, Invsmt (27,954) (814) (10,574) (6,361) (2,749) I nvesting CF (2 7,929) (8 14) (1 0,574) (6 ,361) (2 ,749) Net Chg in Debt (1,023) 2,707 47,622 0 0 New Capital 0 0 0 0 0 Dividend (3,760) (4,879) (6,702) (8,504) (10,080) Other Financing CF (4,293) (193) (1,527) (1,039) (1,049) Fi nancing CF (9 ,077) (2 ,365) 3 9 ,392 (9 ,542) (1 1,129) Chg in Cash 4,068 (384) 17,649 2,080 18,344 Chg in Net Cash 14,057 (3,090) (28,877) 80 16,344

Source: Company, DBS Vickers

Page 7

Company Guide

China Resources Land

Target Price & Ratings History

HK$ S.No. Date Closing 12-mth Rating 33.0 Price T arget 3 4 Price 31.0 1 2 1: 23-Mar-17 HK$22.05 HK$24.98 Buy 29.0 2: 7-Apr-17 HK$21.95 HK$24.98 Buy 3: 31-Jul-17 HK$24.35 HK$24.98 Buy 27.0 4: 24-Aug-17 HK$23.65 HK$28.79 Buy 25.0

23.0

21.0

19.0

Jul-17

Jan-18

Jun-17

Oct-17

Feb-18

Apr-17

Sep-17

Dec-17

Nov-17

Mar-17

Aug-17 May-17

Source: DBS Vickers

Analyst: Carol WU

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Company Guide China Resources Land

DBSVHK recommendations are based an Absolute Total Return* Rating system, defined as follows: S TRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) B U Y (>15% total return over the next 12 months for small caps, >10% for large caps) H O LD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FU LLY VALUED (negative total return i.e. > -10% over the next 12 months) S ELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)

Share price appreciation + dividends

Completed Date: 21 Mar 2018 08:52:26 (HKT) Dissemination Date: 21 Mar 2018 09:38:05 (HKT)

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

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

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

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Company Guide

China Resources Land

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

C O MPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBS Bank Ltd, DBS HK, DBSVS, DBSV HK or their subsidiaries and/or other affiliates have a proprietary position in China Resou rces Land Limited (1109 HK) recommended in this report as of 16 Mar 2018.

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

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

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

1 An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step -child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst. 2 Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at arm's length, or i nvestments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.

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Company Guide China Resources Land

R ESTRICTIONS ON DISTRIBUTION Ge neral This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. A ustralia This report is being distributed in Australia by DBS Bank Ltd. (“DBS”) or DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”). DBS holds Australian Financial Services Licence no. 475946. DBSVS is exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. Both DBS and DBSVS are regulated by the Monetary Authority of Singapore under the laws of Singapore, and DBSVHK is regulated by the Securities and Futures Commission of Hong Kong under the laws of Hong Kong, which differ from Australian laws. Distribution of this report is intended only for “wholesale investors” within the meaning of the CA.

H o ng Kong This report is being distributed in Hong Kong by DBS Bank Ltd, DBS Bank (Hong Kong) Limited and DBS Vickers (Hong Kong) Limited, all of which are registered with or licensed by the Hong Kong Securities and Futu res Commission to carry out the regulated activity of advising on securities. I ndonesia This report is being distributed in Indonesia by PT DBS Vickers Sekuritas Indonesia. Malaysia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies.

Wong Ming Tek, Executive Director, ADBSR S ingapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No. 198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Fi nancial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from, or in connection with the report. Th ailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd. U nited This report is produced by DBSVHK which is regulated by the Hong Kong Securities and Futures Commission Ki ngdom This report is disseminated in the United Kingdom by DBS Vickers Securities (UK) Ltd (“DBSVUK”). DBSVUK is authorised and regulated by the Financial Conduct Authority in the United Kingdom.

In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVUK. This communication is directed at persons having professional experience in matters relating to investments. Any investment activity following from this communication will only be engaged in with such persons. Persons who do not have professional experience in matters relating to investments should not rely on this communication. D u bai This research report is being distributed by DBS Bank Ltd., (DIFC Branch) having its office at PO Box 506538, 3 rd Floor, I n ternational Building 3, East Wing, Gate Precinct, Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates. DBS Bank Fi nancial Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This research report is intended only for C entre professional clients (as defined in the DFSA rulebook) and no other person may act upon it.

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Company Guide

China Resources Land

U nited Arab This report is provided by DBS Bank Ltd (Company Regn. No. 196800306E) which is an Exempt Financial Adviser as defined Em irates in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. This report is for information purposes only and should not be relied upon or acted on by the recipient or considered as a solicitation or inducement to buy or sell any financial product. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situation, or needs of individual clients. You should contact your relationship manager or investment adviser if you need advice on the merits of buying, selling or holding a particular investment. You should note that the information in this report may be out of date and it is not represented or warranted to be accurate, timely or complete. This report or any portion thereof may not be reprinted, sold or redistributed without our written consent. U nited States This report was prepared by DBSVHK. DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restricti ons on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate. O ther In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, j urisdictions professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions. D BS Vickers (Hong Kong) Limited 18th Floor Man Yee building, 68 Des Voeux Road Central, Central, Hong Kong Tel: (852) 2820-4888, Fax: (852) 2868-1523 Company Regn. No. 31758

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Company Guide China Resources Land

D BS Regional Research Offices

H O NG KONG MA LAYSIA S INGAPORE D BS Vickers (Hong Kong) Ltd A llianceDBS Research Sdn Bhd D BS Bank Ltd C o ntact: Carol Wu C o ntact: Wong Ming Tek (128540 U) C o ntact: Janice Chua 18th Floor Man Yee Building 19th Floor, Menara Multi-Purpose, 12 Marina Boulevard, 68 Des Voeux Road Central Capital Square, Marina Bay Financial Centre Tower 3 Central, Hong Kong 8 Jalan Munshi Abdullah 50100 Singapore 018982 Tel: 852 2820 4888 Kuala Lumpur, Malaysia. Tel: 65 6878 8888 Fax: 852 2863 1523 Tel.: 603 2604 3333 Fax: 65 65353 418 e-mail: [email protected] Fax: 603 2604 3921 e-mail: [email protected] Participant of the Stock Exchange of Hong Kong Ltd e-mail: [email protected] Company Regn. No. 196800306E

I N DONESIA TH AILAND PT DBS Vickers Sekuritas (Indonesia) D BS Vickers Securities (Thailand) Co Ltd C o ntact: Maynard Priajaya Arif C o ntact: Chanpen Sirithanarattanakul DBS Bank Tower 989 Siam Piwat Tower Building, Ciputra World 1, 32/F 9th, 14th-15th Floor Jl. Prof. Dr. Satrio Kav. 3-5 Rama 1 Road, Pathumwan, Jakarta 12940, Indonesia Bangkok Thailand 10330 Tel: 62 21 3003 4900 Tel. 66 2 857 7831 Fax: 6221 3003 4943 Fax: 66 2 658 1269 e-mail: [email protected] e-mail: [email protected] Company Regn. No 0105539127012 Securities and Exchange Commission, Thailand

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