25 January 2017

CFSG Daily Comment

Today ’s Forecast Market Outlook HSI trading range 22,900-23,200 points HSI might challenge 23,000 points today. Market focus Jiangxi Copper (00358) The Hang Seng Index opened higher by 66 points yesterday, and then its gains once Railway (00390) narrowed to 9 points. However, the market gained support at its 10-day MA at Tencent (00700) approximately 22,915 points and its 100-day MA at approximately 22,910 points. The index further extended its gains and increased 70 points in the morning. During HK and Regional Markets the afternoon session, the HK stocks increased 87 points at most to reach its Close (last trading day) Up(down) intra-day high of 22,986 points, but met resistance at 23,000 point level. The HSI Hang Seng Index 22,949.86 0.22% finally closed at 22,949.86 points, up 51.34 points or 0.22%. Market turnover was HSCEI 9,759.26 0.33% HKD60.501 billion. The ADR proportional HSI index closed overnight at 23,096 CCI 3,722.76 0.08% points with 145 points higher than yesterday’s closing price. U.S equities rose. HSI is DJIA 19,912.71 0.57% Nasdaq 5,600.96 0.86% expected to challenge 23,000 points today. UK FTSE 7,150.34 (0.01%) France CAC 4,830.03 0.18% Sector and Company News Germany DAX 11,594.94 0.43% Shanghai A 3,290.62 0.18% ¢ Yanzhou Coal (01171) announced that Yancoal Australia, a subsidiary of the Shanghai B 337.97 0.20% company, has agreed to acquire all of the issued share capital of C&A from Rio Tinto, at the purchase price of USD2.45 billion (approximately HKD19.01 billion). Shanghai -HK stock connect C&A owns majority interests in three coal mine operations and related assets in Daily Quota Bal. % Hunter Valley region, New South Wales, Australia. Northbound 12.265 billion 94.35% Southbound 7.240 billion 68.95% ¢ China Railway (00390) announced the major operating information for 2016Q4. The value of newly – signed contracts amounted to RMB 508.77 billion. Aggregate Shenzhen -HK stock connect amount for 2016 amounted to RMB 1235 billion, recording 29% YoY increase. Daily Quota Bal. % ¢ Jiangxi Copper (00358) issued positive profit alert. The realized net profit for the Northbound 12.293 billion 94.56% year of 2016 is expected to be increased by 40% to 60% as compared with the Southbound 10.199 billion 97.13% corresponding period of the preceding year. The prices of products such as gold and silver increased as compared with the corresponding period of the preceding Hang Seng Composite Industry Ind ice s year, thereby improving the results of the Company. Close (last trading day) Up(down) ¢ Yuexiu (00123) announced the company acquired a parcel of land with a total Energy 8,279.84 1.40% GFA of approximately 90,611 sq.m. at Guobo Avenue, Hanyang , Materials 6,145.84 4.07% City, for a consideration of RMB240,600,000 by way of open tender through its Consumer Goods 4,047.17 (0.15%) indirect non-wholly-owned subsidiary. Services 3,243.32 0.35% Telecommunications 1,785.39 0.97% ¢ Sunac (01918) announced that during the period from 11 November 2016 to 24 Financials 3,345.71 0.00% January 2017, the group further acquired an aggregate of 329,862,211 Jinke Properties & Shares (000656.SZ) at the open market. After the acquisition, the company will Construction 3,035.19 1.02% indirectly hold a total of 1,236,891,689 Jinke Shares, representing approximately Conglomerates 2,519.06 0.71% 23.15% of the total issued shares of Jinke property.

HSI Futures (Day Trading Session) Today’s A -share Snapshot Jan-17 Feb-17

Open (last trading day) 22,970 22,918 MACROLINK (000620.SZ) Market Cap: 14.57 billion Close (last trading day) 22,930 22,884 Up (down) 33 26 Valuation Financial Highlight (FY 201 5) Day High 22,998 22,954 P/E P/B Turnover (“RMB billion ”) Net Profit ( “RMB billion ”) Day Low 22,912 22,871 72.00 2.48 4.65 +32.72% 0.31 -27.22% Settled volume 137,310 90,231 Change in OI (44,638) 43,140 Company’s Profile:

¢ The Company is mainly engaged in real estate industry. Foreign Exchange Latest Price Brief Comments: USD/JPY 113.7000 EUR/USD 1.0733 - Business catalysts GBP/USD 1.2537 ¢ The Company proposed to acquire 51.74% equity interests of Sanya Youju with AUD/USD 0.7568 the investment of RMB517.4 million, via share acquisition and capital increase. USD/CAD 1.3139 This is expected to expand the Company’s cultural tourism project, which might USD/SWF 1.0009 further develop its related business and enhance its profitability.

¢ The Company released a positive profit alert, expecting that the net profit attributed to the shareholders of listed company would be in the range of RMB500 million to RMB550 million, up 63% to 79.3% YoY, thanks to the significant increase of the income from real estate business. - Risk factors ¢ Chinese government’s adjustment for the policies related to real estate industry might increase uncertainties to the Company ’s c ore business operation.

The above information is provided and distributed by Celestial Securities Limited ( “CSL ”). CSL is a corporation licensed under the Securities and Futures Ordinance. The document i s for reference only. Neither the information nor opinion expressed shall be construed, expressly or impliedly, as an advice, offer, invitation, advertisement, inducement, recommendation or representation of any kind or form whatsoever. While the information contained herein has been obtained from sources believed to be reliable, CSL or its affiliates (“CASH”) do not represent t hat it is accurate or complete and it should be relied upon. CASH hereby expressly disclaims all liabilities arising out of or inc idental to the accuracy and completeness of the contents and information herein contained. The contents and information in this document is subject to change without prior notice to you. Trade in securities covered by this report may be made only in those jurisdictions where the securities are qualified for trading. This document may not in whole or in part be reproduced or furnished to any person other than the addressee without written consent from CASH and CASH shall not be liable to any such third parties for loss arising from any unauthorized distribution. - 1 - 2014 年 10 月 3 日 (星期五) >> 每日通訊 25 January 2017

CFSG Daily Comment

Shenzhen Express (00548)’s Profile Stock Pick Stock Category A/H share(Code: 600548.SH) #* Shenzhen Express (00548)’ average daily mixed traffic volume of Sector Railway & Tollroad Operation Business Investment, construction and all expressways in December 2016 recorded year-on-year operation management of toll growth. highways and roads in the PRC. Sub stantial Xin Tong Chan Development ¢ shareholders (Shenzhen) Company Limited Shenzhen Express recently announced its operating data for December 2016. （30.03% ） The average daily mixed traffic volume of the expressways in Shenzhen region recorded year-on-year growth while its year-on-year growth of the average daily Financial Highlight toll revenue was ranging from 10% to 25.6%. The average daily mixed traffic As at Jun 16 As at Dec 15 volume of the expressways in other region of Guangdong province and the PRC (in billion RMB ) 6M2016 % FY2015 % recorded year-on-year growth. In particular, the average daily mixed traffic volume Revenue 2.063 +37.6 3.421 -5.5 Net Profit 0.615 +14.1 1.553 -29.0 of Changsha Ring Road grew 33.8% YoY, showing the best performance.

Valuation ¢ Moreover, the average daily toll revenue of the expressways, except of Nanjing P/E 9.05x Third Bridge recording a decrease of 9.6%, showed year-on-year growth for the P/B 1.14x average daily toll revenue, with the highest growth of 35.8% from Changsha Ring Yield 5.27% Road.

Technical Analysis Direction Upward ¢ Overall, the operating performance of Shenzhen Express was decent. Its average 14-day RSI 63.28 daily mixed traffic volume of all expressways recorded year-on-year growth for Support HKD 6.83 continuously eight months. The average daily toll revenue recorded year-on-year Resistance HKD 7.53 growth in October and November 2016, but Nanjing Third Bridge recorded a

# Eligible Stock for Shanghai-HK stock connect scheme year-on-year drop of 10% in December 2016. The average daily toll revenue of * Eligible Stock for Shenzhen-HK stock connect scheme Wuhuang Expressway and Nanjing Third Bridge in December 2016 dropped 1.1% MoM and 18.86% MoM while the rest expressways recorded month-on-month growth. SZ Expressway and Pingan Innovation entered into the Transfer Agreement, pursuant to which SZ Expressway agreed to acquire 100% interest in Company from Pingan Innovation at a cash consideration of RMB1,270 million. The major asset of Yichang Company is the operation rights of Yichang Expressway. Yichang Expressway has a total length of approximately 73.1 km for its main lane. It is a main component of the skeleton of the Hunan Expressway Plan “five vertical and seven horizontal”. Its average daily toll revenue in 2015 and 2016 was RMB930,100 and RMB1,069,600, respectively. The Company believed that Yichang Expressway is situated in a superior location with good investment value. The obtaining of interest in Yichang Expressway through acquisition of Yichang Company at a reasonable price helps to expand the asset scale and profit base and increase the stable cash flow of SZ Expressway. Thus, we hold a cautiously optimistic view towards the Company’s business prospect in FY2017.

¢ Shenzhen Express’ share price climbed 2.82% and closed at HKD7.29 yesterday. Technically, the Company’s share price broke through all the MAs except its 100-day MA. Coupled with the 14-day RSI increasing to 63.2, these showed the bullish momentum. Therefore, the share price is expected to further challenge its 100-day MA at approximately HKD7.53 and the investors are advised to overweight Shenzhen Express’ shares at current price level for medium investment.

The above information is provided and distributed by Celestial Securities Limited ( “CSL ”). CSL is a corporation licensed under the Securities and Futures Ordinance. The document is for reference only. Neither the information nor opinion expressed shall be construed, expressly or impliedly, as an advice, offer, invitation, advertisement, inducement, recommendation or representation of any kind or form whatsoever. While the information contained herein has been obtained from sources believed to be reliable, CSL or its affiliates (“CASH”) do not represent that it is accurate or complete and it should be relied upon. CASH hereby expressly disclaims all liabilities arising out of or incid ental to the accuracy and completeness of the contents and information herein contained. The contents and information in this document is subject to change without prior notice to you. Trade in securities covered by this report may be made only in those jurisdictions where the securities are qualified for trading. This document may not in whole or in part be reproduced or furni shed to any person other than the addressee without written consent from CASH and CASH shall not be liable to any such third parties for loss arising from any unauthorized distribution. - 2 - 25 January 2017 >> CFSG Daily Comment

ADR HK Stock Prices Stock ADR Closing Price Adjusted Price Change from (HKEx Ticker) (US$) (HK$) HK Closing Price (%) HSBC Holdings (00005.HK) 42.1 65.525 0.525 China Life (02628.HK) 13.82 21.51 0.729 Petrochina (00857.HK) 79.32 6.173 0.749 CNOOC (00883.HK) 125.37 9.756 (0.484) Sinopec Corp (00386.HK) 80.01 6.226 1.561 China Mobile (00941.HK) 56.3 87.626 0.554 China Unicom (00762.HK) 11.51 8.957 1.142 China Telecom (00728.HK) 47.43 3.691 0.254 Huaneng Power (00902.HK) 26.16 5.089 (0.191)

A – H Comparison A-Share HKD H-Share Stock Closing Price Adjusted Price Closing Price H/A (%)* (HKEx Ticker) (RMB) (HK$) (HK$) ICBC (01398.HK) 4.55 5.16 4.73 92% China Merchants Bank (03968.HK) 18.87 21.42 19.22 90% Bank of China (03988.HK) 3.54 4.02 3.53 88% Sino Corp (00386.HK) 6.06 6.88 6.2 90% Maanshan Iron (00323.HK) 3.15 3.58 2.8 78% Angang New Steel (00347.HK) 5.97 6.78 5.78 85% Jiangxi Copper (00358.HK) 18.4 20.89 12.84 61% ZTE (00763.HK) 15.08 17.12 12.3 72% Huaneng Power (00902.HK) 7.27 8.25 5.05 61% Huadian Power (01071.HK) 5.06 5.74 3.33 58% Datang Power (00991.HK) 3.84 4.36 2.05 47% China Life (02628.HK) 25.99 29.50 21.5 73% China CITIC Bank (00998.HK) 6.93 7.87 5.15 65% BOCOMM (03328.HK) 5.98 6.79 5.72 84% * > 100% ： H-Share is at a premium on its A-Share ； < 100% ： H-Share is at a discount on its A-Share

Commodities Price

Price Change Change (%)

WTI Crude Oil Futures (USD/bbl.) 53 (0.18) (0.34%) Brent Crude Oil Futures (USD/bbl.) 55.44 0.21 0.38% Gold 100 OZ Futures (USD/t oz.) 1,209.25 0.31 0.03% COMEX Silver Futures (USD/t oz.) 17.10 (0.09) (0.52%) COMEX Copper Futures (USD/lb.) 271.75 0.90 0.33% Platinum Spot (USD/t oz.) 993.28 (2.72) (0.27%)

The above information is provided and distributed by Celestial Securities Limited ( “CSL ”). CSL is a corporation licensed under the Securities and Futures Ordinance. The document is for reference only. Neither the information nor opinion expressed shall be construed, expressly or impliedly, as an advice, offer, invitation, advertisement, inducement, recommendation or representation of any kind or form whatsoever. While the information contained herein has been obtained from sources believed to be reliable, CSL or its affiliates (“CASH”) do not represent that it is accurate or complete and it should be relied upon. CASH hereby expressly disclaims all liabilities arising out of or incid ental to the accuracy and completeness of the contents and information herein contained. The contents and information in this document is subject to change without prior notice to you. Trade in securities covered by this report may be made only in those jurisdictions where the securities are qualified for trading. This document may not in whole or in part be reproduced or furni shed to any person other than the addressee without written consent from CASH and CASH shall not be liable to any such third parties for loss arising from any unauthorized distribution. - 3 - 25 January 2017 >> CFSG Daily Comment

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

(%) (%) (%) (%) 12/28/16 1.445 1.653 2.082 2.168 12/29/16 1.372 1.592 1.990 2.090 12/30/16 1.366 1.599 1.920 2.018 01/03/17 1.366 1.569 1.920 1.986 01/04/17 1.316 1.495 1.883 1.953 01/05/17 1.179 1.301 1.689 1.760 01/06/17 1.180 1.293 1.670 1.735 01/09/17 1.230 1.374 1.749 1.821 01/10/17 1.166 1.309 1.670 1.730 01/11/17 1.180 1.317 1.694 1.763 01/12/17 1.136 1.268 1.642 1.711 01/13/17 1.187 1.328 1.701 1.779 01/16/17 1.184 1.334 1.715 1.796 01/17/17 1.167 1.318 1.707 1.781 01/18/17 1.167 1.328 1.722 1.804 01/19/17 1.225 1.424 1.773 1.866 01/20/17 1.232 1.426 1.795 1.887 01/23/17 1.198 1.390 1.756 1.854 01/24/17 1.147 1.331 1.711 1.810

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

(%) (%) (%) (%) (%) (%) 12/27/16 0.500 0.660 0.890 2.070 2.570 3.140 12/28/16 0.480 0.620 0.900 2.020 2.510 3.090 12/29/16 0.390 0.620 0.850 1.960 2.490 3.080 12/30/16 0.440 0.620 0.850 1.930 2.450 3.060 01/03/17 0.520 0.650 0.890 1.940 2.450 3.040 01/04/17 0.490 0.630 0.870 1.940 2.460 3.050 01/05/17 0.510 0.620 0.830 1.860 2.370 2.960 01/06/17 0.500 0.610 0.850 1.920 2.420 3.000 01/09/17 0.500 0.600 0.820 1.890 2.380 2.970 01/10/17 0.510 0.600 0.820 1.890 2.380 2.970 01/11/17 0.510 0.600 0.820 1.890 2.380 2.960 01/12/17 0.520 0.590 0.810 1.870 2.360 3.010 01/13/17 0.520 0.610 0.820 1.900 2.400 2.990 01/17/17 0.520 0.620 0.800 1.840 2.330 2.930 01/18/17 0.480 0.630 0.820 1.930 2.420 3.000 01/19/17 0.470 0.620 0.830 1.970 2.470 3.040 01/20/17 0.460 0.620 0.820 1.950 2.480 3.050 01/23/17 0.460 0.590 0.790 1.880 2.410 2.990 01/24/17 0.500 0.620 0.810 1.940 2.470 3.050

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