Deutsche Bank Markets Research

Rating Company Date 30 March 2017 Buy Jinjiang Results Asia International Alert Reuters Bloomberg Exchange Ticker Price at 29 Mar 2017 (HKD) 2.15 Consumer 2006.HK 2006 HK HSI 2006 Price target - 12mth (HKD) 3.70 / Leisure / ADR Ticker ISIN 52-week range (HKD) 3.35 - 2.03 Gaming SJJIY US81943G1040 HANG SENG INDEX 24,346

A year of demand recovery and Tallan Zhou Karen Tang consolidation -reiterate BUY Research Analyst Research Analyst (+852 ) 2203 6464 (+852 ) 2203 6141 Recurring earnings up by 10% yoy [email protected] [email protected] reported total profit of RMB758 million, yoy decrease by 12.4% yoy. However, this is mainly a result of the decrease of non-recurring Stock data items such as disposal of assets and disposal of investment security. If we exclude the one-off items gains, recurring profit was c. RMB340 million (up Market cap (HKDm) 11,967 10% yoy from last year’s RMB 310 million). Market cap (USDm) 1,541 A fruitful year of acquisitions—top-line growth by 40% yoy Shares outstanding (m) 5,566.0 Jinjiang consolidated 81% of Plateno Group (its economy brand name is 7 Major shareholders – Days ), 80% of Vienna Hotel Group and 100% of Group de Lourvre (GDL). Free float (%) 22 As a result, total revenue surged by 40% yoy to RMB17 billion from last year’s Avg daily value traded 1.6 RMB12 billion. (USDm) 2016 RevPAR led by high-star rating hotels, thanks to Disney Source: Deutsche Bank

Management mentioned that Jinjiang’s high star-rating full service hotels in reported c. 8.3% RevPAR growth in 2016, 7% increase of ADR, Key data thanks to contribution from Disney in Shanghai. On a national basis, we can FYE 12/31 2015A 2016E 2017E also observe a recovery of RevPAR for both full service and Jinjiang brand Sales (CNYm) 12,160 16,505 18,380 economy hotel, which is consistent with China Lodging (HTHT)’s result. Net Profit 842.4 521.0 732.1 (CNYm) Dividend payout rise to 58.6% from 42% last year. Dividend yield 4.1%. DB EPS (CNY) 0.06 0.04 0.08 Figure 1: Jinjiang 2016 earnings result at a glance PER (x) 37.3 48.0 24.5 Yield (net) (%) 2.8 2.6 2.6 2015 2016 Consensus yoy% diff. Source: Deutsche Bank Revenue 12,197 17,013 15,445 39% 10% Gross profit 2,639 2,759 na 5% na EBIT 2,010 2,170 1,595 8% 36% EBITDA 3,390 4,160 2,954 23% 41% Pre-tax profit 1,892 1,788 1,400 -5% 28% Net profit 866 758 521 -12% 46% Core net profit 310 340 na 10% na Asset diposal 356 230 na -35% na Investment Gain 200 180 na -10% na Operation (RevPAR) 2015 2016 Full Service Hotels 5-stars Luxury Hotels 603 609 na 1.0% na 4-stars Luxury Hotels 363 369 na 1.7% na Slect Service Hotels Jinjiang brand 141 142 na 0.7% na

Source: Deutsche Bank, company data, Bloomberg Finance LP

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For internal use only Deutsche Bank AG/Hong Kong Distributed on: 29/03/2017 18:12:32 GMT The views expressed above accurately reflect the personal views of the authors about the subject companies and its(their) securities. The authors have not and will not receive any compensation for providing a specific recommendation or view. Deutsche Bank does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Prices are current as of the end of the previous trading session unless otherwise indicated and are sourced from local exchanges via Reuters, Bloomberg and other vendors. FOR OTHER IMPORTANT DISCLOSURES PLEASE VISIT http://gm.db.com/ger/disclosure/Disclosure.eqsr?ricCode=2006.HK MCI (P) 057/04/2016. 0bed7b6cf11c