HONG KONG 700 HK Outperform Expanding content eco-system Price (at 08:09, 17 Aug 2016 GMT) HK$193.00

Valuation HK$ 241.00 Event - Sum of Parts 12-month target HK$ 241.00 . 2Q16 revenue and net profit were 7-12% ahead of consensus on strong Upside/Downside % +24.9 mobile games, social networking and payment/cloud services. Ad revenue 12-month TSR % +25.3 YoY growth decelerated but was still robust at 60% YoY. Reiterate OP on Volatility Index Low/Medium Tencent’s dominant mobile usage share, high margins and earnings visibility. GICS sector Software & FY16-18E profit largely unchanged and keep SOTP-based TP at HK$241. Services Market cap HK$bn 1,827 Impact Market cap US$m 235,538 . 2Q16 results beat expectation. Total revenue grew 12% QoQ and 52% YoY Free float % 58 to RMB35.7bn, ahead of MQ estimate and consensus by 4% to 7%, on the 30-day avg turnover US$m 307.1 back of 114% YoY mobile game revenue growth and 57% social networking Number shares on issue m 9,466 revenue growth. GPM declined from 58.1% in 1Q16 to 57.3% in 2Q16 as Investment fundamentals online payment and cloud of lower margin accounted for a higher proportion Year end 31 Dec 2015A 2016E 2017E 2018E of revenue i.e. 10% in 2Q16 vs 7% in 1Q16. Non-GAAP net profit grew 13% Revenue bn 102.9 147.8 186.8 228.4 QoQ and 42% YoY to RMb11bn, 4% and 12% ahead of MQ and consensus. EBIT bn 40.6 57.0 69.7 85.8 EBIT growth % 33.0 40.2 22.4 23.1 . Solid mobile games partly offset by soft PC games. Mobile game revenue Reported profit bn 28.8 41.6 52.4 67.2 Adjusted profit bn 32.4 44.8 57.1 74.0 grew 17% QoQ and 114% YoY to RMB9.6bn as and Cross EPS rep Rmb 3.05 4.39 5.50 7.03 Fire Mobile picked up well along with new launches JX Mobile and ZhengTu EPS rep growth % 20.0 43.7 25.3 27.9 EPS adj Rmb 3.44 4.72 5.99 7.74 Mobile. PC games with weaker seasonality saw high single-digit YoY revenue EPS adj growth % 31.7 37.5 26.9 29.2 growth in 2Q16. Management noted impact from Overwatch on LoL is limited. PER rep x 54.1 37.6 30.0 23.5 PER adj x 48.1 35.0 27.6 21.3 Korea accounts for low single digit % of LoL’s total revenue. Its strong mobile Total DPS Rmb 0.47 0.63 0.80 1.04 game pipeline includes Fantasy Zhuxian, Legacy TLBB, and Pocket JX. Total div yield % 0.3 0.4 0.5 0.6 ROA % 17.0 15.1 15.0 16.2 . Content competition persists for video ad. Ad revenue rose 60% YoY to ROE % 31.7 31.7 30.9 30.9 EV/EBITDA x 30.1 21.4 17.9 14.9 RMB6.5bn in 2Q16 vs up 73% YoY in 1Q16. Performance-based ad revenue Net debt/equity % -52.7 -97.4 -81.0 -91.1 continued strong growth of 80% YoY driven by Weixin Moments, mobile news P/BV x 12.9 9.8 7.6 5.9 app, and Weixin Official Accounts. Brand display ad revenue grew 41% YoY 700 HK rel HSI performance, & rec primarily from Tencent News and . Management also noted history that content competition is more intense than last year with segment GPM declining to 45% in 2Q16 from 52% a year ago. Its digital content strategy is making headways. It grows its business through integrating QQ Music with CMC, and owns ’s top three music platforms. It continues to develop online literature as the largest digital publisher. . Payment revenue continued strong growth. Others revenue grew 324% YoY to RMB3.5bn of which payment and cloud contributed to majority of the growth. GPM of the segment improved from 7% in 1Q16 to 11% in 2Q16 as

Note: Recommendation timeline - if not a continuous line, then there was no newly imposed cash withdrawal fees help cover the cost. The number of Macquarie coverage at the time or there was an embargo period. Weixin/QQ mobile payment accounts bound to bank cards rose from 200mn Source: FactSet, Macquarie Research, August 2016 (all figures in Rmb unless noted, TP in HKD) in Sep 2015 to 300mn in Jun 2016.

Analyst(s) Earnings and target price revision Wendy Huang, CFA +852 3922 3378 [email protected] . Maintain earnings estimates largely unchanged and keep TP at HK$241. Hillman Chan, CFA +852 3922 3716 [email protected] Price catalyst Joe Yu +852 3922 1160 [email protected] . 12-month price target: HK$241.00 based on a Sum of Parts methodology. Maggie Jiang +852 3922 3328 [email protected] . Catalyst: Game launches, Weixin Moments ad, O2O takeoff, margin recovery

18 August 2016 Action and recommendation Macquarie Capital Limited . Reiterate Outperform. We view Tencent as a relative safe haven in a volatile market.

Please refer to page 11 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures.

Macquarie Research Tencent

Fig 1 2Q16 results review (RMB mn) 2Q15A 1Q16A 2Q16A MQ QoQ YoY vs MQ Consensus vs estimates consensus

Revenue 23,429 31,995 35,691 34,431 12% 52% 4% 33,346 7% Social networking 5,458 7,879 8,556 8,034 9% 57% 7% Online games 12,970 17,085 17,124 16,918 0% 32% 1% Online ads 4,073 4,701 6,532 7,033 39% 60% -7% e-Commerce 107 Others 821 2,330 3,479 2,447 49% 324% 42%

Cost of sales -8,991 -13,406 -15,235 -13,918 14% 69% 9% Gross profit 14,438 18,589 20,456 20,513 10% 42% 0%

Operating expenses -5,612 -6,400 -7,664 -7,334 20% 37% 5% S&M -1,601 -2,032 -2,365 -2,341 16% 48% 1% G&A -1,939 -2,035 -2,553 -2,582 25% 32% -1% R&D -2,072 -2,333 -2,746 -2,410 18% 33% 14%

Operating profit 10,036 13,398 14,329 14,379 7% 43% 0% 13,183 9% Net income 7,314 9,183 10,737 10,015 17% 47% 7% 9,517 13% Non-GAAP net income 7,975 10,032 11,319 10,900 13% 42% 4% 10,142 12% Diluted EPS (RMB) 0.78 0.97 1.13 1.06 17% 45% 7% 0.99 14% Non-GAAP diluted EPS 0.85 1.06 1.19 1.15 13% 41% 4% 1.10 9% (RMB)

GPM 61.6% 58.1% 57.3% 59.6% (79 bps) (431 bps) (226 bps) 58.8% (145 bps) GAAP OPM 42.8% 41.9% 40.1% 41.8% (173 bps) (269 bps) (161 bps) 39.5% Non-GAAP OPM 45.7% 44.5% 41.8% 44.3% (275 bps) (388 bps) (255 bps)

Key assumptions QQ active user account 843 877 899 877 2% 7% (mn) QQ paying account (mn) 84.3 108.4 105.1 108.4 -3% 25% QQ ARPU (RMB/month, 13.6 13.2 13.9 13.2 5% 2% incl mobile QQ) Weixin/WeChat MAU (mn) 600.0 762.4 806.0 800.5 6% 34% Source: Bloomberg consensus, Macquarie Research, August 2016

Fig 2 Key assumptions 2013A 2014A 2015A 2016E 2017E 2018E

Revenue (RMB mn) 60,437 78,932 102,863 147,803 186,806 228,403 Social Networking 13,020 18,554 24,082 35,098 42,455 49,015 Online games 31,965 44,756 56,587 70,566 81,202 91,584 Online ads 5,034 8,308 17,468 28,293 45,692 68,750 e-Commerce 9,796 4,753 645 0 0 0 Others 622 2,561 4,081 13,845 17,457 19,054 % of total revenue Social Networking 22% 24% 23% 24% 23% 21% Online games 53% 57% 55% 48% 43% 40% Online ads 8% 11% 17% 19% 24% 30% e-Commerce 16% 6% 1% 0% 0% 0% YoY growth Net revenue 38% 31% 30% 44% 26% 22% Social Networking 10% 43% 30% 46% 21% 15% Online games 34% 40% 26% 25% 15% 13% Online ads 49% 65% 110% 62% 61% 50% e-Commerce 121% -51% -86% 0% 0% 0% Others 70% 312% 59% 239% 26% 9%

Key assumptions QQ active user account (m) 817 828 847 900 921 924 QQ paying account (m) 95 87 87 107 108 108 VAS ARPU (RMB/month) 40 61 77 83 95 109 Weixin/WeChat MAU (m) 280 451 624 826 957 1025 Source: Company data, Macquarie Research, August 2016

18 August 2016 2 Macquarie Research Tencent

Strong mobile games partly offset by soft PC games

. Mobile game revenue grew 17% QoQ and 114% YoY to RMB9.6bn in 2Q16 as Honor of Kings and Cross Fire Mobile picked up well along with new launches JX Mobile and ZhengTu Mobile. . Naruto, launched in Jan 2016, with strong Japanese manga IP held up among the top 10 grossing, whereas mobile B&S, launched in Mar 2016, based on the reputed PC game IP failed to gain traction. . Zheng Tu, launched in mid May 2016 and licensed from Giant and based on the popular PC game IP, maintained at about top 20 grossing. Mobile JX, launched in Jun 2016 and licensed from Kingsoft, has been a hit game with top 10 grossing. On the other hand, the other newly launched Dragon Ball Z failed to gain user traction and fell off. . Its strong mobile game pipeline includes Fantasy Zhuxian, Legacy TLBB, and Pocket JX.

Fig 3 Number of Tencent’s top grossing mobile games

6

5

4

3

2

1

0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2016

Ranking between 6-10 Ranking between 1-5

Source: AppAnnie, Macquarie Research, August 2016

Fig 4 China’s top grossing mobile games (5 from Tencent among top 10 grossing in Jun)

Grossing rank Grossing rank Jun-24 vs Jun 17 Chinese name English name Publisher IP IP type Jun-10 May-27 Apr-29 Mar-25 Feb-26 Jan-29 Dec-25 1 = 梦幻西游 Fantasy Westward Journey Netease Y Game, Chinese literature 2 1 1 1 1 1 1 2 ▲13 穿越火线 Cross Fire Tencent Y Game 9 9 10 8 7 4 10 3 ▼1 剑侠情缘 Mobile JX Tencent Y Game 4 ------4 ▲1 大话西游 Westward Journey Netease Y Game, Chinese literature 7 6 2 2 3 2 2 5 ▲9 倚天屠龙记 The Heaven Sword and DragonPerfect Sabe World, ShengliY Novel 13 20 - - - - - 6 ▼2 王者荣耀 Honour of Kings Tencent Y Game 3 4 5 5 4 5 11 7 ▲3 黑衣剑士 Sword Art Online Chuxun Y Novel 89 ------8 ▲8 全民坦克之战 We Tank iDreamsky 0 0 ------9 ▼2 圣斗士星矢：重生 Saint Seiya DeNA Y Japanese anime 6 40 - - - - - 10 ▼7 全民飞机大战 We Fly Tencent 0 0 1 28 26 35 12 19 4 11 ▼3 问道 Wen Dao Leiting Y Game 8 5 3 - - - - 12 ▼6 火影忍者 Naruto Tencent Y Japanese manga 12 2 15 3 8 6 - 13 New 六扇门 Six Doors Shanghai GreenshoreY TV drama ------14 ▼5 倩女幽魂 Ghost Netease Y Game 11 8 - - - - - 15 ▲84 鬼吹灯3D Gui Cui Deng Sendon Y Online literature ------Source: AppAnnie, Macquarie Research, August 2016

18 August 2016 3 Macquarie Research Tencent

Fig 5 Tencent’s game quarterly ARPU ARPU (RMB) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16

ACG 85-220 85-220 100-220 95-235 100-245 80-265 80-270 85-310 85-330 85-350 MMOG 220-300 240-320 270-390 295-395 295-395 310-375 145-455 265-410 310-450 310-450 Smartphone 80-90 100-110 100-110 155-165 155-165 165-175 170-180 185-195 155-165 155-165 games Source: Company data, Macquarie Research, August 2016

Fig 6 Tencent’s average concurrent users ACU (mn) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16

- ACG 6.9 7.1 7.7 7.3 8.2 8.2 8.7 7.8 7.9 7.4 - MMOG 2.3 2.0 1.7 1.6 1.5 1.5 1.7 1.7 1.5 1.5 Source: Company data, Macquarie Research, August 2016

PC games: LoL facing headwinds

. PC games with weaker seasonality saw high single-digit YoY revenue growth in 2Q16. Management noted impact from Overwatch on LoL is limited. Korea accounts for low single digit% of LoL’s total revenue. . With the launch of Overwatch in late May 2016, Tencent’s top game LoL is facing headwinds. LoL’s popularity as gauged by Baidu Index declined 30% YoY in 2Q16. Its number of monthly active users was down by 14% YoY in 2Q16, according to iResearch. Also, Overwatch narrowed fast the gap with LoL and climbed fast to top 3 by gamer popularity according to China’s top PC game portal 17173.

Fig 7 Popularity of Tencent’s core PC titles

150% ACG MMOG

100%

50%

0%

-50%

-100% LoL CF Assault Fire DNF B&S

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16

Source: Baidu Index, Macquarie Research, August 2016

18 August 2016 4 Macquarie Research Tencent

Fig 8 MAU growth of LoL

40%

30%

20%

10%

0%

-10%

-20%

MAU YoY growth

Source: iResearch, Macquarie Research, August 2016

QQ music strategic merger with China Music Corp . Combined to form the largest music company in China. Tencent QQ announced a strategic merger with China Music Corporation (CMC) on July. 15th. CMC became a subsidiary of Tencent and Tencent’s interest in CMC was about 61.6%. . CMC owns two of China’s top 3 music screaming companies Kuwo Music and Kugou Music. According to Analysys International, QQ Music has the highest user penetration rate on mobile platforms in 1Q16 with 56.8% penetration rate, followed by Kugou Music at 51.8% and Kuwo Music at 31.8%. The new company will own the top three music platform in China.

Fig 9 Mobile Music platform penetration rate (1Q16)

QQ Music 57%

Kugou Music 52%

Kuwo Music 32%

Ali Music 11%

Baidu Music 7%

Netease Cloud Music 5%

0% 10% 20% 30% 40% 50% 60%

Source: Analysys, Macquarie Research, August 2016

Estimates revision and valuation

. Lift revenue by 4-6% in FY16-18 to factor in stronger social networking, mobile games and payment/cloud . Keep our earnings estimates largely unchanged to reflect higher content cost for online video ads . Maintain SOTP-based TP at HK$241

18 August 2016 5 Macquarie Research Tencent

Fig 10 Estimates revision New estimates

(RMB mn) 3Q16E 2016E 2017E 2018E Revenue 38,589 147,803 186,806 228,403 Social networking 9,068 35,098 42,455 49,015 Online games 17,827 70,566 81,202 91,584 Online advertising 7,868 28,293 45,692 68,750 Others 3,827 13,845 17,457 19,054 Operating profit 14,528 56,955 69,689 85,764 Net profit 10,558 41,633 52,380 67,238 Non-GAAP net profit 11,378 44,794 57,067 74,046 Non-GAAP EPS (RMB) 1.20 4.72 5.99 7.74

Old estimates (RMB mn) 3Q16E 2016E 2017E 2018E Revenue 36,601 142,408 176,488 216,579 Social networking 8,440 33,301 39,525 45,534 Online games 17,469 69,604 78,737 88,266 Online advertising 8,123 29,331 46,507 69,989 Others 2,569 10,171 11,718 12,790 Operating profit 14,540 56,883 68,355 84,874 Net profit 10,298 40,678 52,119 67,336 Non-GAAP net profit 11,257 44,409 57,207 74,316 Non-GAAP EPS (RMB) 1.19 4.68 6.01 7.77

Estimate revision (RMB mn) 3Q16E 2016E 2017E 2018E Revenue 5% 4% 6% 5% Social networking 7% 5% 7% 8% Online games 2% 1% 3% 4% Online advertising -3% -4% -2% -2% Others 49% 36% 49% 49% Operating profit 0% 0% 2% 1% Net profit 3% 2% 1% 0% Non-GAAP net profit 1% 1% 0% 0% Non-GAAP EPS 1% 1% 0% 0% Source: Macquarie Research, August 2016

Fig 11 SOTP valuation (RMB mn) 2017E revenue 2017E non-GAAP Target Est. fair value Fair value (US$ Fair value/ share earnings 2017E PE (RMB bn) bn) (HK$)

Social networking (QQ + Wexin VAS) 42,455 15,960 30x 479 72 59 Online game (PC + Mobile game) 81,202 30,526 17x 519 78 64 Online ads (Portal + Video + Social 45,692 12,794 35x 448 67 56 ads) Payment + O2O 316 48 39 Total EV 169,349 59,280 30x 1,761 265 218 2016E cash per share (HK$) 27 22 Target price (HK$) 241 Source: Macquarie Research, August 2016

Fig 12 SOTP valuation (previous) (RMB mn) 2017E revenue 2017E non-GAAP Target Est. fair value Fair value (US$ Fair value/ share earnings 2017E PE (RMB bn) bn) (HK$)

Social networking (QQ + Wexin VAS) 39,525 15,561 30x 467 70 59 Online game (PC + Mobile game) 78,737 30,998 17x 527 79 67 Online ads (Portal + Video + Social 46,507 13,159 35x 461 69 59 ads) Payment + O2O 305 47 39 Total EV 164,770 59,718 29x 1,760 266 224 2016E cash per share (HK$) 20 17 Target price (HK$) 241 Source: Macquarie Research, August 2016

18 August 2016 6 Macquarie Research Tencent

Fig 13 Ratio summary YE 31 December 2013 2014 2015 2016E 2017E 2018E 15-16E 16-17E 17-20E

Key ratios EPS (Non-GAAP diluted) (HK$) 2.32 3.33 4.13 5.56 7.05 9.11 35% 27% 24% EPS (diluted) (HK$) 2.11 3.24 3.67 5.16 6.47 8.27 41% 25% 23% DPS (HK$) 0.24 0.36 0.47 0.63 0.80 1.04 35% 27% 24% BVPS (HK$) 7.96 11.19 15.55 19.92 25.76 33.22 28% 29% 27% Cash per share (HK$) 5.49 4.60 9.90 22.39 23.20 33.73 126% 4% 36% Diluted share - year end (mn) 9,340 9,357 9,430 9,484 9,523 9,561 1% 0% 0% Per Share EPS (non-GAAP diluted) (RMB) 1.82 2.61 3.44 4.72 5.99 7.74 37% 27% 24% EPS (diluted) (RMB) 1.66 2.54 3.05 4.39 5.50 7.03 44% 25% 23% DPS (RMB) 0.19 0.28 0.39 0.54 0.68 0.88 37% 27% 24% BVPS (RMB) 6.26 8.78 12.95 16.94 21.90 28.24 31% 29% 27% Cash per share (RMB) 4.32 3.61 8.24 19.04 19.73 28.67 131% 4% 36% Value EV/Revenue X 22.9x 17.5 x 14.3 x 10.1 x 8.0 x 6.6 x ------EV/EBITDA X 60.8x 39.1x 31.1 x 22.7 x 18.9 x 15.6 x ------EV/FCF X 122.4x nm 31.7 x 13.4 x 47.0 x 15.6 x ------P/E (non-GAAP) X 83.3x 58.0x 46.7 x 34.7 x 27.4 x 21.2 x ------P/E (non-GAAP), ex cash X 81.0x 56.7 x 44.4 x 30.7 x 24.1 x 17.5 x ------Price/ Sales X 23.5x 17.9 x 14.6 x 10.4 x 8.2 x 6.7 x ------Price/ Book X 24.2x 17.3x 12.4 x 9.7 x 7.5 x 5.8 x ------Key forecasts Revenue (RMB mn) 60,437 78,932 102,863 147,803 186,806 228,403 44% 26% 18% EBITDA (RMB mn) 22,784 35,339 47,256 66,084 79,418 96,093 40% 20% 18% Operating Profit (RMB mn) 19,194 30,542 40,627 56,955 69,689 85,764 40% 22% 20% Net Income (RMB mn) 15,501 23,810 28,806 41,633 52,380 67,238 45% 26% 23% Profitability EBITDA Margin % 38% 45% 46% 45% 43% 42% (123 bps) (220 bps) (48 bps) Operating Margin % 32% 39% 39% 39% 37% 38% (96 bps) (123 bps) 102 bps Net Margin % 26% 30% 28% 28% 28% 29% 16 bps (13 bps) 369 bps Cash Flow Operating Cash Flow (RMB mn) 27,193 40,635 92,732 132,291 42,837 111,527 43% -68% 48% Free Cash Flow : (RMB mn) 11,324 4,473 46,286 111,891 31,871 96,141 142% -72% 53% +EBIT*(1-t) (RMB mn) 15,492 25,147 32,653 45,982 56,672 69,756 41% 23% 20% +D&A (RMB mn) 3,590 4,797 6,629 9,129 9,729 10,329 38% 7% 6% +Capex & Investments (RMB mn) -15,944 -38,681 -51,912 -27,117 -17,832 -20,299 -48% -34% 13% +Change in NWC (RMB mn) 8,186 13,210 58,915 83,898 -16,697 36,354 42% -120% -222% Yield Dividend Yield % 0.12% 0.19% 0.24% 0.33% 0.42% 0.54% 8 bps 9 bps 37 bps FCF Yield % 0.8% 0.3% 3.1% 7.2% 2.0% 6.1% 414 bps (515 bps) 514 bps Earnings Yield % 0.9% 1.3% 1.6% 2.3% 2.9% 3.6% 69 bps 58 bps 247 bps Balance Sheet Net debt (cash) (RMB mn) -40,349 -33,766 -77,731 -180,559 -187,839 -274,135 132% 4% 36% Net debt/ equity (RMB mn) cash cash cash cash cash cash ------Shareholders Equity (RMB mn) 58,463 82,124 122,100 160,652 208,571 269,983 32% 30% 28% Efficiency ROE (average) % 31% 34% 28% 29% 28% 28% 124 bps (108 bps) (303 bps) ROA (average) % 17% 17% 12% 11% 11% 13% (105 bps) 25 bps 212 bps ROIC (average) % 30% 31% 27% 27% 27% 28% 29 bps (34 bps) 5 bps Source: Company data, Macquarie Research, August 2016

18 August 2016 7 Macquarie Research Tencent

Fig 14 Financial statements YE 31 December 2013 2014 2015 2016E 2017E 2018E 15-16E 16E-17E 17E-20E

Consolidated Income Statement (RMB mn) Revenue 60,437 78,932 102,863 147,803 186,806 228,403 44% 26% 18% Social Network 13,020 18,554 24,082 35,098 42,455 49,015 46% 21% 13% Online Game 31,965 44,756 56,587 70,566 81,202 91,584 25% 15% 11% Online Ads 5,034 8,308 17,468 28,293 45,692 68,750 62% 61% 37% e-commerce 9,796 4,753 645 0 0 0 ------Others 622 2,561 4,081 13,845 17,457 19,054 239% 26% 6% Gross Profit 32,658 48,059 61,232 84,879 107,018 131,791 39% 26% 19% GPM 54% 61% 60% 57% 57% 58% (210 bps) (14 bps) 56 bps SG&A 15,684 21,952 24,818 32,670 40,529 49,227 32% 24% 17% Operating Profit 19,194 30,542 40,627 56,955 69,689 85,764 40% 22% 20% OPM 32% 39% 39% 39% 37% 38% (96 bps) (123 bps) 102 bps PBT 19,280 29,013 36,216 52,205 65,115 83,370 44% 25% 23% Income Taxes (Credit) 3,718 5,125 7,108 10,058 12,163 15,561 42% 21% 23% Net Income 15,501 23,810 28,806 41,633 52,380 67,238 45% 26% 23% Non-GAAP net income 17,005 24,411 32,410 44,794 57,067 74,046 38% 27% 24% NPM 26% 30% 28% 28% 28% 29% 16 bps (13 bps) 369 bps Non-GAAP NPM 28% 31% 32% 30% 31% 32% (120 bps) 24 bps 451 bps EBITDA 22,784 35,339 47,256 66,084 79,418 96,093 40% 20% 18% EBITDA Margin 37.7% 44.8% 45.9% 44.7% 42.5% 42.1% (123 bps) (220 bps) (48 bps) Consolidated Balance Sheet (RMB mn) Current Assets 53,686 75,321 155,378 278,420 299,722 384,152 79% 8% 24% Cash + 43,982 62,685 135,500 254,419 271,659 351,710 88% 7% 25% Receivables 2,955 4,588 7,061 10,146 12,823 15,679 44% 26% 18% Inventories 1,384 244 222 0 0 0 ------Other 5,365 7,804 12,595 13,855 15,240 16,764 10% 10% 10% Non-current Assets 53,549 95,845 151,440 171,428 181,032 192,501 13% 6% 7% PP&E 10,734 12,016 14,513 19,728 22,113 25,454 36% 12% 16% Intangibles 4,974 10,055 15,732 12,256 8,180 4,004 -22% -33% -- Available-for-sale financial assets 12,515 13,277 44,339 54,827 57,568 60,447 24% 5% 5% Deferred Taxes 431 322 757 908 1,090 1,308 20% 20% 20% Term deposits 11,420 4,831 3,674 4,041 4,446 4,890 10% 10% 10% Others (incl investment) 13,475 55,344 72,425 79,668 87,634 96,398 10% 10% 10% Total Assets 107,235 171,166 306,818 449,848 480,754 576,653 47% 7% 18% Current Liabilities 33,267 50,035 124,406 211,283 197,620 237,428 70% -6% 16% Deferred revenue 11,841 16,153 21,122 30,350 38,359 46,901 44% 26% 18% Payables 6,680 8,683 15,700 20,667 25,639 31,141 32% 24% 17% ST debt 2,589 3,215 11,429 10,286 9,257 8,332 -10% -10% -10% Others 12,157 21,984 76,155 149,980 124,365 151,054 97% -17% 17% LT Liabilities 15,505 39,007 60,312 77,913 74,563 69,243 29% -4% -9% Total Liabilities 48,772 89,042 184,718 289,196 272,183 306,671 57% -6% 10% Shareholders Equity 58,463 82,124 122,100 160,652 208,571 269,983 32% 30% 28% Common Stock 0.2 0.2 0.2 0.2 0.2 0.2 0% 0% 0% Surplus 2,846 5,131 12,167 12,775 13,414 14,085 5% 5% 5% Retained Earnings 53,292 75,340 101,503 139,447 186,727 247,468 37% 34% 30% Others 2,325 1,653 8,430 8,430 8,430 8,430 0% 0% 0% Total Sh. Equity + Liabilities 107,235 171,166 306,818 449,848 480,754 576,653 47% 7% 18% Consolidated Cash Flow (RMB mn) Net Income 15,501 23,810 28,806 41,633 52,380 67,238 45% 26% 23% + Depreciation and amortization 3,590 4,797 6,629 9,129 9,729 10,329 38% 7% 6% + Interest (Income)/Expense -84 -1,182 -1,618 -2,369 -2,574 -2,394 46% 9% -11% +/- Change in NWC 8,186 13,210 58,915 83,898 -16,697 36,354 42% -- -- Operating Cash Flow 27,193 40,635 92,732 132,291 42,837 111,527 43% -68% 48% Capex -3,378 -2,748 -4,491 -8,868 -6,538 -7,994 97% -26% 18% Intangibles -2,421 -1,970 -3,218 -2,000 -1,500 -1,500 -38% -25% 0% Other investment -12,566 -35,933 -47,421 -18,249 -11,294 -12,304 -62% -38% 9% Investing Cash Flow -18,365 -40,651 -55,130 -29,117 -19,332 -21,799 -47% -34% 12% Shares issued (redeemed) 1,937 1,613 13,813 608 639 671 -96% 5% 5% Cash Dividends -1,123 -1,762 -2,643 -3,690 -5,100 -6,497 40% 38% 26% Debt increase (decrease) 4,574 24,128 29,519 16,458 -4,379 -6,246 -44% -- -44% Interest Income/(Expense) 84 1,182 1,618 2,369 2,574 2,394 46% 9% -11% Others -27 -6,442 -7,094 0 0 0 ------Financing Cash Flow 5,445 18,719 35,213 15,746 -6,265 -9,678 -55% -- 11% Net Change in Cash 14,273 18,703 72,815 118,919 17,240 80,050 63% -86% 81% Cash at beginning of period 29,709 43,982 62,685 135,500 254,419 271,659 116% 88% 19% Cash at end of period 43,982 62,685 135,500 254,419 271,659 351,710 88% 7% 25% Source: Macquarie Research, August 2016

18 August 2016 8 Macquarie Research Tencent Macquarie Quant View

The quant model currently holds a strong positive view on Tencent. The Attractive Displays where the strongest style exposure is Growth, indicating this stock has good historic company’s ranked based on

and/or forecast growth. Growth metrics focus on both top and bottom line s l the fundamental consensus

a items. The weakest style exposure is Valuations, indicating this stock is t

n Price Target and over-priced in the market relative to its peers. e Macquarie’s Quantitative

m

a Alpha model. 3/758 d

n

u Two rankings: Local market Global rank in F (Hong Kong) and Global Software & Services sector (Software & Services) Quant % of BUY recommendations 97% (38/39) Local market rank Global sector rank Number of Price Target downgrades 0 Number of Price Target upgrades 11

Macquarie Alpha Model ranking Factors driving the Alpha Model A list of comparable companies and their Macquarie Alpha model score For the comparable firms this chart shows the key underlying styles and their (higher is better). contribution to the current overall Alpha score.

Tencent 2.8 Tencent

Facebook 2.3 Facebook

Alphabet 1.9 Alphabet

Alibaba Group Holding 0.9 Alibaba Group Holding

Baidu -1.1 Baidu

-100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 Valuations Growth Profitability Earnings Price Quality Momentum Momentum

Macquarie Earnings Sentiment Indicator Drivers of Stock Return The Macquarie Sentiment Indicator is an enhanced earnings revisions Breakdown of 1 year total return (local currency) into returns from dividends, changes signal that favours analysts who have more timely and higher conviction in forward earnings estimates and the resulting change in earnings multiple. revisions. Current score shown below.

Tencent Tencent 0.9 Facebook Facebook 1.2 Alphabet Alphabet -0.6

Alibaba Group Holding Alibaba Group Holding 0.1

Baidu -0.4 Baidu

-3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 -90% -40% 10% 60% Dividend Return Multiple Return Earnings Outlook 1Yr Total Return

What drove this Company in the last 5 years How it looks on the Alpha model Which factor score has had the greatest correlation with the company’s A more granular view of the underlying style scores that drive the alpha (higher is returns over the last 5 years. better) and the percentile rank relative to the sector and market. ⇐ Negatives Positives ⇒ Normalized Percentile relative Percentile relative Sales to EV FY0 36% Score to sector(/758) to market(/717) Alpha Model Score 2.75 Sales to EV NTM 33% Valuation -0.64 Price to Sales NTM 32% Growth 1.06 Price to Sales FY0 31% Profitability 0.91 Earnings Momentum 0.79 Asset Growth -18% Price Momentum 0.80 DPS Revisions 3 Month -18% Quality 0.44 Capital & Funding 0.04 EBITDA Revisions 3 Month -18% Liquidity 1.61 Working Capital Inc. -21% Risk 0.48 Technicals & Trading 0.29 -40% -20% 0% 20% 40% 0 50 100 0 50 100 0 0 1 1

Source (all charts): FactSet, Thomson Reuters, and Macquarie Research. For more details on the Macquarie Alpha model or for more customised analysis and screens, please contact the Macquarie Global Quantitative/Custom Products Group ([email protected])

18 August 2016 9 Macquarie Research Tencent

Tencent (700 HK, Outperform, Target Price: HK$241.00) Quarterly Results 2Q/16A 3Q/16E 4Q/16E 1Q/17E Profit & Loss 2015A 2016E 2017E 2018E

Revenue m 35,691 38,589 41,527 41,651 Revenue m 102,863 147,803 186,806 228,403 Gross Profit m 20,456 22,084 23,750 23,950 Gross Profit m 61,232 84,879 107,018 131,791 Cost of Goods Sold m 15,235 16,505 17,777 17,701 Cost of Goods Sold m 41,631 62,924 79,788 96,612 EBITDA m 16,611 16,810 16,983 18,622 EBITDA m 47,256 66,084 79,418 95,493 Depreciation m 2,282 2,282 2,282 2,432 Depreciation m 6,629 9,129 9,729 9,729 Amortisation of Goodwill m 0 0 0 0 Amortisation of Goodwill m 0 0 0 0 Other Amortisation m 0 0 0 0 Other Amortisation m 0 0 0 0 EBIT m 14,329 14,528 14,700 16,190 EBIT m 40,627 56,955 69,689 85,764 Net Interest Income m -669 -1,092 -1,409 -1,144 Net Interest Income m -4,411 -4,750 -4,574 -2,394 Associates m 0 0 0 0 Associates m 0 0 0 0 Exceptionals m -582 -820 -910 -1,006 Exceptionals m -3,604 -3,161 -4,686 -6,808 Forex Gains / Losses m 0 0 0 0 Forex Gains / Losses m 0 0 0 0 Other Pre-Tax Income m 582 820 910 1,006 Other Pre-Tax Income m 3,604 3,161 4,686 6,808 Pre-Tax Profit m 13,660 13,436 13,292 15,046 Pre-Tax Profit m 36,216 52,205 65,115 83,370 Tax Expense m -2,923 -2,877 -2,137 -3,152 Tax Expense m -7,410 -10,572 -12,735 -16,133 Net Profit m 10,737 10,558 11,155 11,894 Net Profit m 28,806 41,633 52,380 67,238 Minority Interests m 0 0 0 0 Minority Interests m 0 0 0 0

Reported Earnings m 10,737 10,558 11,155 11,894 Reported Earnings m 28,806 41,633 52,380 67,238 Adjusted Earnings m 11,319 11,378 12,065 12,901 Adjusted Earnings m 32,410 44,794 57,067 74,046

EPS (rep) 1.13 1.11 1.17 1.25 EPS (rep) 3.05 4.39 5.50 7.03 EPS (adj) 1.19 1.20 1.27 1.36 EPS (adj) 3.44 4.72 5.99 7.74 EPS Growth yoy (adj) % 40.7 36.1 35.4 28.1 EPS Growth (adj) % 31.7 37.5 26.9 29.2 PE (rep) x 54.1 37.6 30.0 23.5 PE (adj) x 48.1 35.0 27.6 21.3

EBITDA Margin % 46.5 43.6 40.9 44.7 Total DPS 0.47 0.63 0.80 1.04 EBIT Margin % 40.1 37.6 35.4 38.9 Total Div Yield % 0.3 0.4 0.5 0.6 Earnings Split % 25.3 25.4 26.9 22.6 Basic Shares Outstanding m 9,543 9,499 9,537 9,575 Revenue Growth % 52.3 45.1 36.4 30.2 Diluted Shares Outstanding m 9,430 9,484 9,523 9,561 EBIT Growth % 42.8 40.6 35.0 20.8

Profit and Loss Ratios 2015A 2016E 2017E 2018E Cashflow Analysis 2015A 2016E 2017E 2018E

Revenue Growth % 30.3 43.7 26.4 22.3 EBITDA m 47,256 66,084 79,418 95,493 EBITDA Growth % 33.7 39.8 20.2 20.2 Tax Paid m 0 0 0 0 EBIT Growth % 33.0 40.2 22.4 23.1 Chgs in Working Cap m -58,915 -83,898 16,697 -36,354 Gross Profit Margin % 59.5 57.4 57.3 57.7 Net Interest Paid m 0 0 0 0 EBITDA Margin % 45.9 44.7 42.5 41.8 Other m 104,391 150,104 -53,278 52,388 EBIT Margin % 39.5 38.5 37.3 37.5 Operating Cashflow m 92,732 132,291 42,837 111,527 Net Profit Margin % 31.5 30.3 30.5 32.4 Acquisitions m 0 0 0 0 Payout Ratio % 13.7 13.4 13.4 13.4 Capex m -4,491 -8,868 -6,538 -7,994 EV/EBITDA x 30.1 21.4 17.9 14.9 Asset Sales m 0 0 0 0 EV/EBIT x 35.0 24.8 20.4 16.6 Other m -50,639 -20,249 -12,794 -13,804 Investing Cashflow m -55,130 -29,117 -19,332 -21,799 Balance Sheet Ratios Dividend (Ordinary) m 0 0 0 0 ROE % 31.7 31.7 30.9 30.9 Equity Raised m 13,813 608 639 671 ROA % 17.0 15.1 15.0 16.2 Debt Movements m 29,519 16,458 -4,379 -6,246 ROIC % 48.9 78.7 1,335.5 174.9 Other m -8,119 -1,321 -2,525 -4,103 Net Debt/Equity % -52.7 -97.4 -81.0 -91.1 Financing Cashflow m 35,213 15,746 -6,265 -9,678 Interest Cover x 9.2 12.0 15.2 35.8 Price/Book x 12.9 9.8 7.6 5.9 Net Chg in Cash/Debt m 72,815 118,919 17,240 80,050 Book Value per Share 12.8 16.9 21.9 28.2 Free Cashflow m 88,241 123,423 36,299 103,533

Balance Sheet 2015A 2016E 2017E 2018E

Cash m 135,500 254,419 271,659 351,710 Receivables m 7,061 10,146 12,823 15,679 Inventories m 222 0 0 0 Investments m 0 0 0 0 Fixed Assets m 14,513 19,728 22,113 25,454 Intangibles m 16,489 13,164 9,270 5,312 Other Assets m 133,033 152,390 164,888 178,498 Total Assets m 306,818 449,848 480,754 576,653 Payables m 15,700 20,667 25,639 31,141 Short Term Debt m 21,122 30,350 38,359 46,901 Long Term Debt m 50,014 67,615 64,265 58,945 Provisions m 11,429 10,286 9,257 8,332 Other Liabilities m 86,453 160,278 134,663 161,352 Total Liabilities m 184,718 289,196 272,183 306,671 Shareholders' Funds m 122,100 160,652 208,571 269,983 Minority Interests m 0 0 0 0 Other m 0 0 0 0 Total S/H Equity m 122,100 160,652 208,571 269,983 Total Liab & S/H Funds m 306,818 449,848 480,754 576,653

All figures in Rmb unless noted. Source: Company data, Macquarie Research, August 2016

18 August 2016 10 Macquarie Research Tencent Important disclosures: Recommendation definitions Volatility index definition* Financial definitions Macquarie - Australia/New Zealand This is calculated from the volatility of historical All "Adjusted" data items have had the following Outperform – return >3% in excess of benchmark return price movements. adjustments made: Neutral – return within 3% of benchmark return Added back: goodwill amortisation, provision for Underperform – return >3% below benchmark return Very high–highest risk – Stock should be catastrophe reserves, IFRS derivatives & hedging, expected to move up or down 60–100% in a year IFRS impairments & IFRS interest expense Benchmark return is determined by long term nominal – investors should be aware this stock is highly Excluded: non recurring items, asset revals, property GDP growth plus 12 month forward market dividend speculative. revals, appraisal value uplift, preference dividends & yield minority interests Macquarie – Asia/Europe High – stock should be expected to move up or Outperform – expected return >+10% down at least 40–60% in a year – investors should EPS = adjusted net profit / efpowa* Neutral – expected return from -10% to +10% be aware this stock could be speculative. ROA = adjusted ebit / average total assets Underperform – expected return <-10% ROA Banks/Insurance = adjusted net profit /average Medium – stock should be expected to move up total assets Macquarie – South Africa or down at least 30–40% in a year. ROE = adjusted net profit / average shareholders funds Outperform – expected return >+10% Gross cashflow = adjusted net profit + depreciation Neutral – expected return from -10% to +10% Low–medium – stock should be expected to *equivalent fully paid ordinary weighted average Underperform – expected return <-10% move up or down at least 25–30% in a year. number of shares Macquarie - Canada Outperform – return >5% in excess of benchmark return Low – stock should be expected to move up or All Reported numbers for Australian/NZ listed stocks Neutral – return within 5% of benchmark return down at least 15–25% in a year. are modelled under IFRS (International Financial Underperform – return >5% below benchmark return * Applicable to Asia/Australian/NZ/Canada stocks Reporting Standards). only Macquarie - USA Outperform (Buy) – return >5% in excess of Russell Recommendations – 12 months 3000 index return Note: Quant recommendations may differ from Neutral (Hold) – return within 5% of Russell 3000 index Fundamental Analyst recommendations return Underperform (Sell)– return >5% below Russell 3000 index return

Recommendation proportions – For quarter ending 30 June 2016 AU/NZ Asia RSA USA CA EUR Outperform 45.17% 56.00% 36.36% 43.16% 63.39% 45.91% (for global coverage by Macquarie, 6.27% of stocks followed are investment banking clients) Neutral 36.21% 28.59% 40.26% 50.38% 29.46% 36.96% (for global coverage by Macquarie, 6.33% of stocks followed are investment banking clients) Underperform 18.62% 15.41% 23.38% 6.46% 7.14% 17.12% (for global coverage by Macquarie, 5.38% of stocks followed are investment banking clients)

700 HK vs HSI, & rec history

(all figures in HKD currency unless noted)

Note: Recommendation timeline – if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period. Source: FactSet, Macquarie Research, August 2016

12-month target price methodology 700 HK: HK$241.00 based on a Sum of Parts methodology

Company-specific disclosures: 700 HK: Macquarie Capital Limited makes a market in the securities of Tencent Holdings Ltd. Important disclosure information regarding the subject companies covered in this report is available at www.macquarie.com/research/disclosures.

Date Stock Code (BBG code) Recommendation Target Price 19-May-2016 700 HK Outperform HK$204.00 18-Mar-2016 700 HK Outperform HK$196.00 11-Nov-2015 700 HK Outperform HK$198.00 13-Aug-2015 700 HK Outperform HK$197.00 14-May-2015 700 HK Outperform HK$204.00 23-Mar-2015 700 HK Outperform HK$189.00 26-Aug-2014 700 HK Neutral HK$138.00 19-May-2014 700 HK Neutral HK$112.00 07-Apr-2014 700 HK Neutral HK$112.00 15-Nov-2013 700 HK Underperform HK$60.00 15-Aug-2013 700 HK Underperform HK$52.00

Target price risk disclosures: 700 HK: Any inability to compete successfully in their markets may harm the business. This could be a result of many factors which may include geographic mix and introduction of improved products or service offerings by competitors. The results of operations may be materially affected by global economic conditions generally, including conditions in financial markets. The company is exposed to market risks, such as changes in interest rates, foreign exchange rates and input prices. From time to time, the company will enter into transactions, including transactions in derivative instruments, to manage certain of these exposures.

Analyst certification: We hereby certify that all of the views expressed in this report accurately reflect our personal views about the subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. The Analysts responsible for preparing this report receive compensation from Macquarie that is based upon various factors including Macquarie Group Ltd total revenues, a portion of which are generated by Macquarie Group’s Investment Banking activities. General disclaimers:

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Asia Research Head of Equity Research Industrials Telecoms Peter Redhead (Global – Head) (852) 3922 4836 Janet Lewis (Asia) (852) 3922 5417 Nathan Ramler (Asia, Japan) (813) 3512 7875 Jake Lynch (Asia – Head) (852) 3922 3583 Patrick Dai (China) (8621) 2412 9082 Danny Chu (Greater China) (852) 3922 4762 David Gibson (Japan – Head) (813) 3512 7880 Leo Lin (China) (852) 3922 1098 Soyun Shin (Korea) (822) 3705 8659 Conrad Werner (ASEAN – Head) (65) 6601 0182 Kenjin Hotta (Japan) (813) 3512 7871 Chirag Jain (India) (9122) 6720 4352 James Hong (Korea) (822) 3705 8661 Prem Jearajasingam (ASEAN) (603) 2059 8989 Automobiles/Auto Parts Inderjeetsingh Bhatia (India) (9122) 6720 4087 Kervin Sisayan (Philippines) (632) 857 0893 Lyall Taylor (Indonesia) (6221) 2598 8489 Janet Lewis (China) (852) 3922 5417 Transport & Infrastructure Zhixuan Lin (China) (8621) 2412 9006 Internet, Media and Software Leo Lin (China) (852) 3922 1098 Janet Lewis (Asia) (852) 3922 5417 Takuo Katayama (Japan) (813) 3512 7856 Wendy Huang (Asia, China) (852) 3922 3378 Corinne Jian (Taiwan) (8862) 2734 7522 James Hong (Korea) (822) 3705 8661 David Gibson (Asia, Japan) (813) 3512 7880 Azita Nazrene (ASEAN) (603) 2059 8980 Amit Mishra (India) (9122) 6720 4084 Hillman Chan (China, Hong Kong) (852) 3922 3716 Lyall Taylor (Indonesia) (6221) 2598 8489 Nathan Ramler (Japan) (813) 3512 7875 Utilities & Renewables Soyun Shin (Korea) (822) 3705 8659 Financials Alan Hon (Hong Kong) (852) 3922 3589 Abhishek Bhandari (India) (9122) 6720 4088 Inderjeetsingh Bhatia (India) (9122) 6720 4087 Scott Russell (Asia) (852) 3922 3567 Oil, Gas and Petrochemicals Prem Jearajasingam (Malaysia) (603) 2059 8989 Dexter Hsu (China, Taiwan) (8862) 2734 7530 Karisa Magpayo (Philippines) (632) 857 0899 Elaine Zhou (Hong Kong) (852) 3922 3278 Polina Diyachkina (Asia, Japan) (813) 3512 7886 Keisuke Moriyama (Japan) (813) 3512 7476 Aditya Suresh (Asia, China) (852) 3922 1265 Commodities Leo Nakada (Japan) (813) 3512 6050 Anna Park (Korea) (822) 3705 8669 Colin Hamilton (Global) (44 20) 3037 4061 Chan Hwang (Korea) (822) 3705 8643 Duke Suttikulpanich (ASEAN) (65) 6601 0148 Ian Roper (65) 6601 0698 Suresh Ganapathy (India) (9122) 6720 4078 Isaac Chow (Malaysia) (603) 2059 8982 Jim Lennon (44 20) 3037 4271 Thomas Stoegner (65) 6601 0854 Pharmaceuticals and Healthcare Lynn Zhao (8621) 2412 9035 (Malaysia, Singapore) Matthew Turner (44 20) 3037 4340 Lyall Taylor (Indonesia) (6221) 2598 8489 Abhishek Singhal (India) (9122) 6720 4086 Gilbert Lopez (Philippines) (632) 857 0892 Wei Li (China, Hong Kong) (852) 3922 5494 Economics Passakorn Linmaneechote (Thailand) (662) 694 7728 Property Peter Eadon-Clarke (Global) (813) 3512 7850 Conglomerates Larry Hu (China, Hong Kong) (852) 3922 3778 Tuck Yin Soong (Asia, Singapore) (65) 6601 0838 Tanvee Gupta Jain (India) (9122) 6720 4355 David Ng (China, Hong Kong) (852) 3922 1291 David Ng (China, Hong Kong) (852) 3922 1291 Conrad Werner (Singapore) (65) 6601 0182 Raymond Liu (China, Hong Kong) (852) 3922 3629 Quantitative / CPG Gilbert Lopez (Philippines) (632) 857 0892 Wilson Ho (China) (852) 3922 3248 Gurvinder Brar (Global) (44 20) 3037 4036 Consumer and Gaming William Montgomery (Japan) (813) 3512 7864 Woei Chan (Asia) (852) 3922 1421 Corinne Jian (Taiwan) (8862) 2734 7522 Danny Deng (Asia) (852) 3922 4646 Linda Huang (Asia, China, Hong Kong) (852) 3922 4068 Abhishek Bhandari (India) (9122) 6720 4088 Per Gullberg (Asia) (852) 3922 1478 Zibo Chen (China, Hong Kong) (852) 3922 1130 Aiman Mohamad (Malaysia) (603) 2059 8986 Terence Chang (China, Hong Kong) (852) 3922 3581 Kervin Sisayan (Philippines) (632) 857 0893 Strategy/Country Satsuki Kawasaki (Japan) (813) 3512 7870 Patti Tomaitrichitr (Thailand) (662) 694 7727 Viktor Shvets (Asia, Global) (852) 3922 3883 Kwang Cho (Korea) (822) 3705 4953 Chetan Seth (Asia) (852) 3922 4769 KJ Lee (Korea) (822) 3705 9935 Resources / Metals and Mining David Ng (China, Hong Kong) (852) 3922 1291 Stella Li (Taiwan) (8862) 2734 7514 Polina Diyachkina (Asia, Japan) (813) 3512 7886 Erwin Sanft (China, Hong Kong) (852) 3922 1516 Amit Sinha (India) (9122) 6720 4085 Coria Chow (China) (852) 3922 1181 Peter Eadon-Clarke (Japan) (813) 3512 7850 Fransisca Widjaja (65) 6601 0847 Anna Park (Korea) (822) 3705 8669 Chan Hwang (Korea) (822) 3705 8643 (Indonesia, Singapore) Stanley Liong (Indonesia) (6221) 2598 8381 Jeffrey Ohlweiler (Taiwan) (8862) 2734 7512 Hendy Soegiarto (Indonesia) (6221) 2598 8369 Inderjeetsingh Bhatia (India) (9122) 6720 4087 Karisa Magpayo (Philippines) (632) 857 0899 Technology Lyall Taylor (Indonesia) (6221) 2598 8489 Chalinee Congmuang (Thailand) (662) 694 7993 Damian Thong (Asia, Japan) (813) 3512 7877 Anand Pathmakanthan (Malaysia) (603) 2059 8833 Emerging Leaders George Chang (Japan) (813) 3512 7854 Gilbert Lopez (Philippines) (632) 857 0892 Daniel Kim (Korea) (822) 3705 8641 Conrad Werner (Singapore) (65) 6601 0182 Jake Lynch (Asia) (852) 3922 3583 Allen Chang (Greater China) (852) 3922 1136 Alastair Macdonald (Thailand) (662) 694 7753 Aditya Suresh (Asia) (852) 3922 1265 Jeffrey Ohlweiler (Greater China) (8862) 2734 7512 Timothy Lam (China, Hong Kong) (852) 3922 1086 Patrick Liao (Greater China) (8862) 2734 7515 Find our research at Mike Allen (Japan) (813) 3512 7859 Louis Cheng (Greater China) (8862) 2734 7526 Kwang Cho (Korea) (822) 3705 4953 Kaylin Tsai (Greater China) (8862) 2734 7523 Macquarie: www.macquarie.com.au/research Thomson: www.thomson.com/financial Corinne Jian (Taiwan) (8862) 2734 7522 Marcus Yang (Taiwan) (8862) 2734 7532 Reuters: www.knowledge.reuters.com Conrad Werner (ASEAN) (65) 6601 0182 Bloomberg: MAC GO Factset: http://www.factset.com/home.aspx CapitalIQ www.capitaliq.com Email [email protected] for access

Asia Sales Regional Heads of Sales Regional Heads of Sales cont’d Sales Trading cont’d Miki Edelman (Global) (1 212) 231 6121 Paul Colaco (San Francisco) (1 415) 762 5003 Suhaida Samsudin (Malaysia) (603) 2059 8888 Jeff Evans (Boston) (1 617) 598 2508 Amelia Mehta (Singapore) (65) 6601 0211 Michael Santos (Philippines) (632) 857 0813 Jeffrey Shiu (China, Hong Kong) (852) 3922 2061 Angus Kent (Thailand) (662) 694 7601 Chris Reale (New York) (1 212) 231 2555 Sandeep Bhatia (India) (9122) 6720 4101 Ben Musgrave (UK/Europe) (44 20) 3037 4882 Marc Rosa (New York) (1 212) 231 2555 Thomas Renz (Geneva) (41 22) 818 7712 Christina Lee (UK/Europe) (44 20) 3037 4873 Justin Morrison (Singapore) (65) 6601 0288 Daniel Clarke (Taiwan) (8862) 2734 7580 Riaz Hyder (Indonesia) (6221) 2598 8486 Sales Trading Nick Cant (Japan) (65) 6601 0210 Brendan Rake (Thailand) (662) 694 7707 John Jay Lee (Korea) (822) 3705 9988 Adam Zaki (Asia) (852) 3922 2002 Mike Keen (UK/Europe) (44 20) 3037 4905 Nik Hadi (Malaysia) (603) 2059 8888 Stanley Dunda (Indonesia) (6221) 515 1555 Eric Roles (New York) (1 212) 231 2559 Gino C Rojas (Philippines) (632) 857 0861

This publication was disseminated on 17 August 2016 at 17:55 UTC.