Deutsche Bank Markets Research

Rating Company Date 9 June 2017 Buy Jinjiang Forecast Change Asia International Reuters Bloomberg Exchange Ticker Price at 8 Jun 2017 (HKD) 2.30 Consumer 2006.HK 2006 HK HSI 2006 Price target - 12mth (HKD) 3.80 / Leisure / ADR Ticker ISIN 52-week range (HKD) 3.00 - 2.03 Gaming SJJIY US81943G1040 HANG SENG INDEX 26,063

Chasing the laggard in a whole sector Tallan Zhou Karen Tang recovery - Buy Research Analyst Research Analyst (+852 ) 2203 6464 (+852 ) 2203 6141 Pursuing the lagged conglomerate on a whole sector recovery-BUY [email protected] [email protected] We increase our target price to HKD3.8 from HKD3.7 and reiterate our Buy rating on . This is mainly due to: 1) Plateno and Vienna’s full year consolidation to Jinjang – A in 2017, and 2) a better outlook, driven by Key changes Chinese economy hotels’ recovery. We believe the demand recovery of Price target 3.70 to 3.80 ↑ 2.7% economy hotels is structural in the long term, thanks to strong growth from Sales (FYE) 18,380 to 20,066 ↑ 9.2% domestic and consumer trade-up, leading to: 1) a higher occupancy rate Op prof 13.1 to 11.2 ↓ -14.7% and 2) higher demand from mid-high scale hotels. margin (FYE) Full-year contribution of newly-acquired brands to Jinjiang-A Net profit 732.1 to 919.0 ↑ 25.5% (FYE) We have factored in the full-year contribution of newly-acquired hotels Source: Deutsche Bank including Plateno and Vienna to Jinjiang-A. We mainly raise our Plateno EBITDA estimates, by c.40% to c.RMB1.1bn (doubled from RMB0.6bn in Price/price relative 2016), due to the full-year contribution and reduced cost and expenses. As a result, we lift our earnings forecast for Jinjiang-H in 2017/2018 by 10%/12%. 4.0 3.6 High-star rating hotels’ RevPAR growth may continue in 2017E 3.2 To recap, Jinjiang’s high star-rating full-service hotels in reported c. 2.8 8.3% RevPAR growth in 2016, 7% increase of ADR, thanks to the contribution 2.4 from Disney in Shanghai. On a national basis, we believe that the trend of 2.0 recovery will continue in 2017E with RevPAR growth of 7-8% yoy for 4-5 star 6/15 12/15 6/16 12/16 hotels. Jinjiang Internation HANG SENG INDEX (Rebased) Valuation and risks We use SOTP based on EV/EBITDA (12-month weighted average) as our Performance (%) 1m 3m 12m primary valuation. We separately calculate the EBIDTA of Jinjiang’s Chinese Absolute 5.0 7.0 -23.8 and overseas selected hotel business. We assign a 10x multiple (unchanged) to HANG SENG INDEX 6.0 9.6 22.4 Jinjiang Full service hotels, which is the average of its Asian peers. We assign Source: Deutsche Bank a 13x multiple to Jinjiang-A select service hotels (at a 7% discount to14x EV/EBITDA assigned for the original China lodging business). Risks: 1) lower demand; 2) stronger RMB, leading to more outbound travel; and 3) government policy changes.

Forecasts And Ratios Year End Dec 31 2015A 2016A 2017E 2018E Sales (CNYm) 12,197.2 17,013.1 20,065.7 20,734.4 EBITDA (CNYm) 1,599.3 2,749.5 3,598.4 3,700.8 Reported NPAT (CNYm) 865.5 758.4 919.0 982.5 Reported EPS FD(CNY) 0.16 0.14 0.17 0.18 PER (x) 41.7 37.3 22.3 19.8 EV/EBITDA (x) 15.6 13.2 9.4 9.2 Source: Deutsche Bank estimates, company data 1 DB EPS is fully diluted and excludes non-recurring items 2 Multiples and yields calculations use average historical prices for past years and spot prices for current and future years, except P/B which uses the year end close

______Deutsche Bank AG/Hong Kong Distributed on: 09/06/2017 04:46:19 GMT Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, 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. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 083/04/2017. 0bed7b6cf11c 9 June 2017

Hotels / Leisure / Gaming Jinjiang International

Model updated:08 June 2017 Fiscal year end 31-Dec 2014 2015 2016 2017E 2018E

Running the numbers Financial Summary Asia DB EPS (CNY) -0.05 0.06 0.06 0.09 0.10 Reported EPS (CNY) 0.11 0.16 0.14 0.17 0.18 China DPS (CNY) 0.05 0.07 0.08 0.08 0.08 BVPS (CNY) 1.5 1.7 1.7 1.8 1.9 Hotels / Leisure / Gaming Weighted average shares (m) 5,566 5,566 5,566 5,566 5,566 Jinjiang International Hote Average market cap (CNYm) 10,592 12,933 12,693 11,154 11,154 Enterprise value (CNYm) 9,248 25,003 36,182 33,929 33,890 Reuters: 2006.HK Bloomberg: 2006 HK Valuation Metrics P/E (DB) (x) nm 41.7 37.3 22.3 19.8 Buy P/E (Reported) (x) 17.1 14.9 16.7 12.1 11.4 Price (8 Jun 17) HKD 2.30 P/BV (x) 1.27 1.59 1.04 1.13 1.08

Target Price HKD 3.80 FCF Yield (%) nm 12.9 1.0 0.5 4.3 Dividend Yield (%) 2.6 2.8 3.5 4.0 4.0 52 Week range HKD 2.03 - 3.00 EV/Sales (x) 1.0 2.0 2.1 1.7 1.6 Market Cap (m) HKDm 12,802 EV/EBITDA (x) 15.8 15.6 13.2 9.4 9.2 EV/EBIT (x) nm 55.5 36.6 15.1 14.5 USDm 1,642 Income Statement (CNYm) Company Profile Sales revenue 9,364 12,197 17,013 20,066 20,734 Jin Jiang Hotels is one of the leading hotels operators and Gross profit 2,619 3,788 5,521 7,511 7,744 managers in China. It engages in 2-5 star-rated hotel EBITDA 586 1,599 2,750 3,598 3,701 operation and management, budget hotel operation and Depreciation 862 1,050 1,535 1,127 1,134 franchising, and restaurant operation. Over the years, the Amortisation 75 99 227 230 230 group has invested in a diverse portfolio of hotel assets EBIT -352 450 987 2,242 2,336 comprising landmark hotels, 4-5 star luxury hotels, 2-3 star Net interest income(expense) -80 -256 -416 -596 -528 commercial hotels and Jin Jiang budget hotels. Associates/affiliates 141 236 186 186 186 Exceptionals/extraordinaries 0 0 0 0 0 Other pre-tax income/(expense) 1,841 1,462 1,031 525 525 Profit before tax 1,551 1,892 1,788 2,356 2,519 Price Performance Income tax expense 474 494 434 731 781 Minorities 455 532 596 707 756 4.0 Other post-tax income/(expense) 0 0 0 0 0 3.6 Net profit 621 866 758 919 982

3.2 DB adjustments (including dilution) -904 -556 -418 -418 -418 2.8 DB Net profit -283 310 340 501 564 2.4 Cash Flow (CNYm) 2.0 Jun 15Sep 15Dec 15Mar 16Jun 16Sep 16Dec 16Mar 17 Cash flow from operations -796 2,464 1,146 1,264 1,694 Net Capex -772 -801 -1,015 -1,211 -1,209 Jinjiang International Hote Free cash flow -1,568 1,663 130 53 485 HANG SENG INDEX (Rebased) Equity raised/(bought back) 0 0 2,245 0 0 Margin Trends Dividends paid -501 -605 -362 -445 -445 Net inc/(dec) in borrowings -278 6,335 8,557 -2,000 -2,000 20 Other investing/financing cash flows 3,749 -8,226 -9,150 1,106 0 16 Net cash flow 1,402 -833 1,421 -1,286 -1,961 12 Change in working capital 642 306 1,268 -163 126 8 4 Balance Sheet (CNYm) 0 Cash and other liquid assets 5,877 5,044 6,559 5,273 3,312 -4 Tangible fixed assets 7,154 11,216 12,804 12,796 12,861 14 15 16 17E 18E Goodwill/intangible assets 2,391 8,676 20,211 18,966 18,746 EBITDA Margin EBIT Margin Associates/investments 5,807 6,755 5,678 5,678 5,678

Other assets 2,934 10,609 11,520 12,895 13,793 Growth & Profitability Total assets 24,163 42,298 56,771 55,608 54,390 Interest bearing debt 3,583 16,385 24,942 22,942 20,942 50 12 Other liabilities 5,205 9,134 11,689 12,052 12,297 40 10 Total liabilities 8,787 25,520 36,631 34,994 33,239 8 30 Shareholders' equity 8,619 9,296 9,357 9,831 10,368 6 Minorities 6,757 7,482 10,783 10,783 10,783 20 4 Total shareholders' equity 15,376 16,778 20,140 20,614 21,151 10 2 Net debt -2,294 11,342 18,383 17,670 17,630 0 0 14 15 16 17E 18E Key Company Metrics Sales growth (%) nm 30.3 39.5 17.9 3.3 Sales growth (LHS) ROE (RHS)

DB EPS growth (%) na na 9.7 47.2 12.7 Solvency EBITDA Margin (%) 6.3 13.1 16.2 17.9 17.8 EBIT Margin (%) -3.8 3.7 5.8 11.2 11.3 100 5 Payout ratio (%) 44.8 41.8 58.7 48.5 45.3 80 4 ROE (%) 7.7 9.7 8.1 9.6 9.7 60 Capex/sales (%) 9.1 7.1 6.5 6.0 5.8 40 3 Capex/depreciation (x) 0.9 0.8 0.6 0.9 0.9 20 2 0 Net debt/equity (%) -14.9 67.6 91.3 85.7 83.4 -20 1 Net interest cover (x) nm 1.8 2.4 3.8 4.4 -40 0 Source: Company data, Deutsche Bank estimates 14 15 16 17E 18E

Net debt/equity (LHS) Net interest cover (RHS)

Tallan Zhou +852 2203 6464 [email protected]

Page 2 Deutsche Bank AG/Hong Kong

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Hotels / Leisure / Gaming Jinjiang International

Where have we overlooked things?

There is no concern on Jinjiang Int’ls core profit growth

Don’t be puzzled by the “reported” profit We understand that Jinjiang Int’ls reporting profit is relatively more complicated than its peers’, and its growth was negative in 2016. However, this is where the market seems to have a misperception on the fundamentals of Jinjiang. We have tried to breakdown the earnings of Jinjiang Int’l to strip out the non-recurring items:

 Full service hotel, which is the only segment/assets owned by Jinjiang Int (its other segments are consolidated from three separate A share listcos), net profit growth was 33% in 2016.

 The high net profit growth of Jinjiang can also be reflected by c. 8.3% RevPAR growth for its full service hotels in Shanghai, thanks to the high hotel demand in Shanghai.

 Non-recurring gains dropped by 34%, which is the primary factor dragging down the total reported profit.

 Headquarter overheads also increased by 53%.

Figure 1: Jinjiang International (2006 HK) earnings breakdown RMB million 2016 2015 yoy Jinjiang A (600574) 350 320 9% Jinjiang Investment (600650) 90 87 3% Jinjiang Travel (900934) 30 29 3% Full service hotel 200 150 33% Others (headquarter overhead) -130 -85 53% Non-recurring gains 230 350 -34% Total 770 851 -10% Source: Deutsche Bank

Where is the upside coming from?

Full-service hotel – 70%+ of self-owned luxury/star hotels are in Shanghai For full-service hotels, Jinjiang Hotels-H owns and manages 109 hotels, of which 20 are owned/co-owned by Jinjiang Hotels-H, as shown in the figure below. More than 70% of these self-owned hotels are located in Shanghai.

Management guided that Shanghai’s demand for 2017 will remain strong with growing tourists (aiming to visit Disney, for example) and business travelers (more business exhibitions in Shanghai).

Those self-owned hotels are mostly luxury/high star hotels with high occupancy rate and ADR. In addition, their profit is fully consolidated to the P/L of Jinjiang Intl based on the stake they own.

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Figure 2: Full service hotels owned by Jinjiang Hotels-H, 2016 Full service hotels 5-star luxury hotels Stake No. of rooms Shanghai Jin Jiang Hotel 上海锦江饭店 100.0% 442 Shanghai 上海和平饭店 100.0% 270 Shanghai Jin Jiang Tower 上海新锦江大酒店 100.0% 582 Shanghai Jin Jiang Tomson Hotel 上海锦江汤臣洲际大酒店 50.0% 398 Shanghai Yangtze Hotel 上海扬子江万丽大酒店 40.0% 540 Beijing Kunlun Hotel 北京昆仑饭店 47.5% 646 Wuhan Jin Jiang International Hotel 武汉锦江大酒店 100.0% 407

4-star luxury hotels Shanghai Park Hotel 上海国际饭店 100.0% 261 Shanghai Jian Guo Hotel 上海建国宾馆 65.0% 455 Shanghai Rainbow Hotel 上海虹桥宾馆 100.0% 640 Shanghai Cypress Hotel 上海龙柏饭店 100.0% 149 Shanghai Hotel 上海宾馆 100.0% 527 Shanghai Jing An Hotel 上海静安宾馆 100.0% 228 Shanghai Hotel 上海海仑宾馆 66.7% 401 Downtown Shanghai 上海广场长城假日大酒店 100.0% 531 Wuxi Jin Jiang Grand Hotel 无锡锦江大酒店 25.0% 353 Kunming Jin Jiang Hotel 昆明锦江大酒店 100.0% 320 West Capital International Hotel 西安西京国际饭店 100.0% 216 Jiangsu Nanjing Hotel 江苏南京饭店 40.0% 309

Commercial hotels Shanghai Pacific Hotel 锦江金门大酒店 100.0% 189 Source: Deutsche Bank, Company data

Economy hotel – Plateno profit could double in 2017 If we break down the profit of Jinjiang-A (600754 CH), which is the platform of the economy hotels, we can see that the profit from Plateno (its well-known economy brand is 7 Days) should almost triple in 2017E, due to its full-year contribution and lowered cost and expenses after acquisition.

Figure 3: Jinjiang A earnings breakdown (RMBm) 600754 Jinjiang A earnings breakdown 2016 2017E yoy 7 Days 105 311 195% Vienna 77 253 229% Baisui Villiage 5 5 9% Jinjiang brand 200 279 40% GDL 237 296 25% Sell of financial asset gain 300 - NA Food and dining including profit from KFC 107 192 79% Others (headquarter overhead) (336) (202) -40% Total 695 1134 63% Source: Deutsche Bank, Company data

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Hotels / Leisure / Gaming Jinjiang International

Bank, Company data

If we do a comparison, we can see that there is a considerable profit difference between Plateno (RMB105m) and the other two economy hotel brands, China Lodging and HomeInn whose profit in 2016 is c. RMB7-800m.

Figure 4: China Economy Hotel brands comparison Net profit 2016 Number of hotels Number of rooms Comments China Lodging 804 million 3,269 331,347 Plateno 130 million 3,039 255,994 According to Jinjiang's disclosure, Jinjiang holds 81% stake in Plateno from March to December HomeInn 700 million 3,167 337,462 April to December profit to be RMB 557 million according to Beijing Tourism Group Source: Deutsche Bank, Company data

We understand that Plateno was acquired by Jinjiang Int’l in 2015 and 2016 is the first year after consolidation. Therefore, Plateno incurred a lot of marketing and promotion expense in 2016, which we believe will not be the case in 2017.

If a similar size economy hotel (the same number of hotels and rooms) on average generates profit between RMB700-800m, we believe RMB130m is not a normal profit for Plateno in 2016.

We are estimating net profit of RMB 311m contributed by Plateno in 2017, which accounts for c.27% of the profit from Jinjiang-A and c. 33% of the profit of Jinjiang Int’l in 2017.

Deutsche Bank AG/Hong Kong Page 5

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Hotels / Leisure / Gaming Jinjiang International

Valuation

EV/EBITDA based valuation

We value Jinjiang Hotels-H using SOTP based on 2017E EV/EBITDA and arrive at a target price of HKD3.8. The stock is currently trading at 9.4x our 2017E EBITDA compared to an industry average of 12x, which we believe is attractive.

 We assign 10x 2017E EV/EBITDA to the full service hotel business, which is at a 20% discount to the industry average of 12x.

 We value Jinjiang Hotels-A (600754.SS) using our derived fair valuation of HKD47bn based on 13x 2017E EV/EBITDA.

 We value Jinjiang Industrial Investment (600650.SS), which provides passenger transportation and logistics services, at 7x 2017E EV/EBITDA, compared to the 9x of CAR Inc (0699.HK; NR; CP HK$6.84) based on Bloomberg consensus.

 We assign 7x 2017E EV/EBITDA to Jinjiang International Travel (900929.SS), at a 40% discount to CITS’s 12x (601888.SS, Buy, CP RMB65).

Figure 5: EV/EBITDA valuation table 2017 EBITDA Multiple Valuation (Rmb m) (Rmb m) Full service hotels 677 x 10 = 6,769 Select service hotels 3,323 x 13 = 42,534 Jinjiang Int'l Industrial (600650.CH) - car rental & logistics 404 x 7 = 2,831 Jinjiang Travel (900929.CH) - travel agency 96 x 7 = 670 Food and restaurants and others book value 250 Enterprise value 4,500 x 12 = 53,055

Less net debt End-2017 17,670 Less minorities End-2017 10,783 Equity value 24,602 Target price (HK$/shr) 3.8 Source: Deutsche Bank estimates

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Hotels / Leisure / Gaming Jinjiang International

Figure 6: Earnings forecast changes, 2017E and 2018E RMB mn Old New Diff 2017E 2018E 2017E 2018E 2017E 2018E Revenue 18,380 19,067 20,066 20,734 9% 9% Net revenue 17,728 18,391 19,633 20,287 11% 10% Gross profit 5,389 5,634 6,155 6,380 14% 13% SG&A (3,169) (3,287) (3,913) (4,043) 23% 23% Adj. EBITDA (*) 3,429 3,567 4,918 4,688 43% 31% EBIT 2,220 2,347 2,242 2,336 1% 0% Adj. EBIT (*) 2,220 2,347 2,242 2,336 1% 0% Pre-tax profit 2,164 2,288 2,356 2,519 9% 10% Net profit 833 880 919 982 10% 12% Core net profit (*) 423 470 501 564 18% 20% EPS (RMB) 0.08 0.08 0.09 0.10 18% 20% Source: Deutsche Bank

Figure 7: Valuation comps

Market cap 2017E 2018E DB Ticker English name Chinese name Current price (USD m) ROE (%) P/B 2017E PER 2018E PER EV/EBITDA EV/EBITDA Recomm. HK/China luxury hotel companies HTHT US Equity CHINA LODGIN-ADS 華住酒店集團有限公司 81.57 2,646.22 18.2 4.5x 21.0x 35.0x 8.4x 13.6x Buy 45 HK Equity HK&S HOTELS 大酒店 9.45 1,909.23 1.9 0.4x 22.6x 20.7x 14.5x 13.2x NR HTHT US Equity China Lodging 華住酒店集團有限公司 81.57 5,675.76 17.3 7.4x 38.4x 29.5x 18.2x 14.6x Hold 69 HK Equity SHANGRI-LA ASIA 香格里拉(亞洲) 13.00 3,822 1.7 0.6x 25.5x 33.2x 11.9x 14.0x Buy 2006 HK Equity SHANGHAI JIN J-H 錦江酒店 2.27 1,642.47 9.6 1.1x 22.3x 19.8x 9.4x 9.2x Buy 600754 CH Equity SHANGHAI JINJI-A 錦江股份 25.87 4,767.13 8.6 1.9x 23.1x 21.3x 8.0x 8.2x Buy 600258 CH Equity BTG HOTELS GRO-A 首旅酒店 21.28 2,661.99 6.0 2.7x NA NA 12.0x 10.5x NR 1.5x 29.4x 25.2x 11.8x 11.9x Asia hotel companies CENTEL TB Equity CENTRAL PLAZA HT 中央廣場飯店大眾有限公司 36.00 1,520 18.8 5.2x 29.0x 25.0x 14.1x 12.5x Buy EIH IN Equity EIH LTD EIH有限公司 132.15 1,190.03 4.7 2.9x 58.3x 39.4x 23.4x 16.8x NR IH IN Equity INDIAN HOTELS CO Indian Hotels Co Ltd/The 137.45 2,090.45 (1.6) 5.3x 84.6x 53.0x 20.9x 17.9x NR MINT TB Equity MINOR INTERNATIO PCL 37.00 4,674 18.8 4.2x 37.6x 31.9x 18.9x 16.6x Buy Asia hotels average 4.2x 49.0x 34.9x 19.3x 15.9x Global major hotel companies AC FP Equity SA 法國雅高國際酒店集團 41.82 10,248 5.6 1.6x 20.3x 23.5x 10.1x 11.0x Buy BEL US Equity BELMOND LTD-A Belmond有限公司 13.35 1,081 3.7 2.0x 42.5x 91.0x 11.9x 14.3x Hold HLT US Equity 希爾頓全球控股公司 65.76 15,071 27.2 11.7x 31.4x 35.8x 11.7x 14.3x Buy H US Equity HOTELS-A 凱悅酒店集團 56.49 6,505 8.8 1.9x 29.7x 39.4x 9.6x 10.6x Hold MAR US Equity MARRIOTT INTL-A 萬豪國際集團 104.99 54,163 147.3 24.0x 19.0x 25.7x 20.7x 27.4x Hold MLC LN Equity MILLENNIUM & COP 美麗年和科波托公司 447.50 1,857.16 3.0 0.5x 14.6x 14.1x 11.1x 10.8x NR NHH SM Equity NH HOTEL GROUP S NH Hotel Group SA 5.28 1,519 3.7 1.2x 73.4x 35.4x 11.0x 10.9x Hold Global major hotels average 4.7x 36.7x 30.3x 12.3x 14.2x Global major economy hotel companies CHH US Equity CHOICE HOTELS 精品國際酒店集團 64.95 2,720 NM NM 19.7x 22.9x 13.4x 14.4x Hold STAY US Equity EXTENDED STAY AM 美國長住飯店 18.25 2,937 11.6 2.2x 14.8x 17.9x 9.0x 9.7x Buy WTB LN Equity WHITBREAD PLC Whitbread PLC 4,042.00 13,171 17.9 2.9x 20.2x 15.6x 13.9x 10.8x Buy WYN US Equity WYNDHAM WORLDWID 溫翰全球公司 99.67 10,413.47 87.7 15.7x 16.2x 14.3x 9.7x 9.2x NR Global major economy hotels average 7.1x 18.0x 16.7x 11.5x 11.0x Source: Deutsche Bank estimates, Bloomberg Financial LP consensus estimates

The authors of this report wish to acknowledge the contribution made by Mengyi (Matt) Zhang, an employee of CRISIL Global Research & Analytics, a division of CRISIL Limited, a third-party provider of offshore research support services to Deutsche Bank.

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Hotels / Leisure / Gaming Jinjiang International

Appendix 1

Important Disclosures

*Other information available upon request

Disclosure checklist Company Ticker Recent price* Disclosure Jinjiang International Hotels-H 2006.HK 2.31 (HKD) 8 Jun 17 NA 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 . Other information is sourced from Deutsche Bank, subject companies, and other sources. For disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this research, please see the most recently published company report or visit our global disclosure look-up page on our website at http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr. Aside from within this report, important conflict disclosures can also be found at https://gm.db.com/equities under the "Disclosures Lookup" and "Legal" tabs. Investors are strongly encouraged to review this information before investing.

For disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this research, please see the most recently published company report or visit our global disclosure look-up page on our website at http://gm.db.com/ger/disclosure/Disclosure.eqsr?ricCode=2006.HK

Analyst Certification The views expressed in this report accurately reflect the personal views of the undersigned lead analyst(s) about the subject issuer and the securities of the issuer. In addition, the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendation or view in this report. Tallan Zhou

Historical recommendations and target price: Jinjiang International Hotels-H (2006.HK) (as of 6/8/2017)

4.00 Previous Recommendations

Strong Buy 3.50 Buy Market Perform 1 3.00 Underperform Not Rated 2.50 Suspended Rating Current Recommendations 2.00 Buy Hold

Se curity Price 1.50 Sell Not Rated 1.00 Suspended Rating

*New Recommendation Structure 0.50 as of September 9,2002

**Analyst is no longer at Deutsche 0.00 Bank

Jun 15 Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 Da te

1. 01/02/2016: Upgrade to Buy, Target Price Change HKD3.70 Tallan Zhou

Page 8 Deutsche Bank AG/Hong Kong

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Hotels / Leisure / Gaming Jinjiang International

Equity rating key Equity rating dispersion and banking relationships Buy: Based on a current 12- month view of total 500 share-holder return (TSR = percentage change in 450 52 % share price from current price to projected target price 400 350 37 % plus pro-jected dividend yield ) , we recommend that 300 investors buy the stock. 250 200 Sell: Based on a current 12-month view of total share- 150 18 % 11 % 100 17 % 18 % holder return, we recommend that investors sell the 50 stock 0 Buy Hold Sell Hold: We take a neutral view on the stock 12-months out and, based on this time horizon, do not Companies Covered Cos. w/ Banking Relationship recommend either a Buy or Sell. Asia-Pacific Universe Newly issued research recommendations and target

prices supersede previously published research.

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Hotels / Leisure / Gaming Jinjiang International

Additional Information

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Macroeconomic fluctuations often account for most of the risks associated with exposures to instruments that promise to pay fixed or variable interest rates. For an investor who is long fixed rate instruments (thus receiving these cash flows), increases in interest rates naturally lift the discount factors applied to the expected cash flows and thus cause a loss. The longer the maturity of a certain cash flow and the higher the move in the discount factor, the higher will be the loss. Upside surprises in inflation, fiscal funding needs, and FX depreciation rates are among the most common adverse macroeconomic shocks to receivers. But counterparty exposure, issuer creditworthiness, client segmentation, regulation (including changes in assets holding limits for different types of investors), changes in tax policies, currency convertibility (which may constrain currency conversion, repatriation of profits and/or the liquidation of positions), and settlement issues related to local clearing houses are also important risk factors to be considered. The sensitivity of fixed income instruments to macroeconomic shocks may be mitigated by indexing the contracted cash flows to inflation, to FX depreciation, or to specified interest rates – these are common in emerging markets. It is important to note that the index fixings may -- by construction -- lag or mis-measure the actual move in the underlying variables they are intended to track. The choice of the proper fixing (or metric) is particularly important in swaps markets, where floating coupon rates (i.e., coupons indexed to a typically short-dated interest rate reference index) are exchanged for fixed coupons. It is also important to acknowledge that funding in a currency that differs from the currency in which coupons are denominated carries FX risk. Naturally, options on swaps (swaptions) also bear the risks typical to options in addition to the risks related to rates movements.

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Hong Kong: Distributed by Deutsche Bank AG, Hong Kong Branch or Deutsche Securities Asia Limited.

India: Prepared by Deutsche Equities India Pvt Ltd, which is registered by the Securities and Exchange Board of India (SEBI) as a stock broker. Research Analyst SEBI Registration Number is INH000001741. DEIPL may have received administrative warnings from the SEBI for breaches of Indian regulations.

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United Arab Emirates: Deutsche Bank AG in the Dubai International Financial Centre (registered no. 00045) is regulated by the Dubai Financial Services Authority. Deutsche Bank AG - DIFC Branch may only undertake the financial services activities that fall within the scope of its existing DFSA license. Principal place of business in the DIFC: Dubai International Financial Centre, The Gate Village, Building 5, PO Box 504902, Dubai, U.A.E. This information has been distributed by Deutsche Bank AG. Related financial products or services are only available to Professional Clients, as defined by the Dubai Financial Services Authority.

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David Folkerts-Landau Group Chief Economist and Global Head of Research

Raj Hindocha Michael Spencer Steve Pollard Global Chief Operating Officer Head of APAC Research Head of Americas Research Research Global Head of Economics Global Head of Equity Research

Anthony Klarman Paul Reynolds Dave Clark Pam Finelli Global Head of Head of EMEA Head of APAC Global Head of Debt Research Equity Research Equity Research Equity Derivatives Research

Andreas Neubauer Stuart Kirk Head of Research - Germany Head of Thematic Research

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