China / Hong Kong Industry Focus Property Sector

Refer to important disclosures at the end of this report 4 Oct 2018 DBS Group Research . Equity

Whose margins are more sustainable? HSI: 27,091  Listed developers’ margin compression less severe

than overall market due to well-controlled land cost A N ALYST  Logan, Future Land, and ’s land banking Danielle Wang CFA, +852 2820 4915 [email protected] during the past two-and-a-half years likely to Carol Wu +852 2863 8841 [email protected] support margins Ken HE CFA, +86 21 6888 3375 [email protected] Jason LAM +852 29711773 [email protected]  Pick names with strong YTD presales and higher margins to cushion softening selling prices: Vanke, CR Land and Evergrande Recommendation & valuation

T arget Mk t F Y19F Large developers see lower margin compression than overall Price Price Rec Cap PE mark et. We tracked the open market land cost as a percentage HK$ HK$ US$bn x of selling price of 30 key cities during the last five-and-a-half China Vanke 'H' years and found that the ratio had been trending up from 26% 24.75 35.40 BUY 38.6 5.7 (2202 HK) in 2013 to 50% in 2017. However, 20 key listed developers’ CR Land average AV-to-ASP ratio peaked at 50% in 2015 and trended 26.25 34.50 BUY 23.2 6.3 (1109 HK) down from 50% in 2015 to 28% in 1H18. We believe this is Evergrande because large developers acquired more projects via M&As at a 22.75 40.81 BUY 37.8 4.5 (3333 HK) lower cost while having higher pricing power in terms of ASP. Their entire land bank’s AV-to-ASP ratio increased from 18% in Source: Thomson Reuters, DBS HK, Bloomberg Finance L.P. 2013 to 28% as at 1H18. This indicates that these 20 key developers’ faced lower margin compression compared to the overall market. (See table 1 on page 2).

Logan (3380 HK), Future Land (1030 HK) and Vanke (2202 HK) continue to outperform peers in terms of margins, while (2007 HK) and Sino-Ocean (3377 HK)’s margins might continue to underperform the sector average. These are our findings from the review of land bank AV-to-ASP ratio changes during the past two-and-a-half years and FY17 gross margins. We believe the developers which generate higher-than-sector-average gross margins along with a lower increase in land bank AV-to-ASP ratio will be more likely to outperform peers in terms of margins in the coming years. CR Land and Agile’s current gross margins are higher than peers and they have more flexibility in pricing to move sales during market downturn if necessary. (See table 2 on page 2).

Prefer companies with strong YTD presales, higher margins to cushion selling price declines, and healthy balance sheets w hich indicate more sustainable earning growth. We are adding Vanke as one of our top picks along with CR Land and Evergrande. We expect more news flow about declining sales despite a large number of new launches being planned by developers and more promotions to push sales. However, given the sector’s attractive valuation of 4.2x FY19F PE, which is below FY15’s trough of 4.6x PE and has priced in a potential market slowdown, in our view.

ed-TH / sa-CS / AH

Industry Focus China Property Sector

Comparison of various AV/ASP parameters

60%

50%

40%

30%

20%

10%

0% 2013 2014 2015 2016 2017 YTD18

Key cities land sales AV/ASP (current year) Key developers' acquisition AV/ASP (current year) Key developers' land bank average AV vs current year ASP

Source: Companies, Wind, DBS HK

Land bank AV-to-ASP ratio change (1H18 over 2015) vs. FY17 gross margins

45% F Y17 gross margins Margins likey to outperform peers CR Land Agile 40%

Evergrande R&FYuzhou Logan 35% Longfor China SCE Future Land COLI Vanke Shimao -15% -10% -5% 0% 30%5% 10% 15% Times Landbank AV-to-ASP ratio AoyuanCIFI CG Sino-Ocean Central China 25%

Margins likely to underperform peers

20%

Source: Companies, Wind, DBS HK

Page 2

Industry Focus China Property Sector

FY16-18 total GFA acquired as % of total land bank as of 1H18

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Source: Companies, DBS HK

Page 3

Industry Focus China Property Sector

Revenue locked in

Revenue (HK$m) Gross margins (%) Core earnings (HK$m) 1H18 Growth 1H18 Growth 1H18A F Y18E F Y19E 1H18A F Y18E F Y19E 1H18A F Y18E F Y19E lock in in 2019 lock in in 2019

Company Name Code Large cap China Overseas* 688 HK 87,445 217,995 261,005 40% 20% 36.3 32.9 32.4 19,145 37,408 47,175 51% 26% CR Land* 1109 HK 49,872 151,917 186,885 33% 23% 48.1 41.2 37.7 7,597 24,668 29,025 31% 18% China Vanke 'H'* 2202 HK 119,455 323,201 385,983 37% 19% 33.7 31.3 30.4 10,681 39,113 48,409 27% 24% Country Garden* 2007 HK 150,253 396,560 621,508 38% 57% 26.5 25.5 24.7 14,893 42,483 67,980 35% 60% Evergrande* 3333 HK 342,156 557,401 664,403 61% 19% 36.2 35.2 35.3 37,707 55,060 65,818 68% 20% Longfor* 960 HK 30,896 116,667 153,807 26% 32% 37.1 31.6 30.7 3,629 13,791 17,669 26% 28% China 1918 HK 53,067 160,388 237,378 33% 48% 24.7 24.0 24.2 4,353 15,626 25,961 28% 66% Large-cap average 38% 31% 34.7 31.7 30.8 38% 34% Mid cap * 3383 HK 27,575 74,564 90,950 37% 22% 49.6 41.4 39.6 4,559 8,378 10,544 54% 26% Hldgs*817 HK 24,990 47,723 52,860 52% 11% 39.6 35.4 33.1 3,370 4,221 5,784 80% 37% CIFI Holdings 884 HK 20,985 48,384 64,198 43% 33% 23.6 26.5 26.6 2,813 6,571 8,523 43% 30% Future Land 1030 HK 18,268 76,904 113,737 24% 48% 36.7 32.4 31.4 1,855 5,832 7,998 32% 37% Greentown 3900 HK 38,201 60,949 65,719 63% 8% 18.1 20.5 21.2 1,494 3,015 3,156 50% 5% R&F 2777 HK 38,832 92,906 117,895 42% 27% 38.5 34.4 33.0 4,245 11,710 14,376 36% 23% KWG Property 1813 HK 3,946 18,607 25,803 21% 39% 31.1 34.5 34.0 1,276 5,382 6,874 24% 28% Logan Property* 3380 HK 17,263 52,282 65,168 33% 25% 37.0 35.1 35.2 3,379 8,198 10,767 41% 31% Shenzhen Inv 604 HK 11,304 18,365 21,774 62% 19% 34.3 37.1 38.1 1,254 2,832 3,436 44% 21% * 813 HK 48,497 98,784 119,852 49% 21% 31.0 31.4 31.3 4,083 10,482 13,420 39% 28% Sino-Ocean Land* 3377 HK 17,517 57,370 65,719 31% 15% 23.5 25.3 25.6 1,766 5,411 6,600 33% 22% Yanlord Land*^ YLLG SP 3,352 5,528 5,621 61% 2% 46.0 46.6 42.5 419 737 791 57% 7% * 123 HK 11,577 28,546 33,236 41% 16% 25.8 26.1 27.0 814 2,720 3,388 30% 25% Mid-cap average 43% 22% 33.5 32.8 32.2 43% 25% Small cap China Aoyuan 3883 HK 15,569 33,810 48,329 46% 43% 28.6 27.4 26.1 1,334 2,733 3,870 49% 42% Central China* 832 HK 5,435 14,411 26,040 38% 81% 36.0 26.2 23.0 207 860 860 24% 0% China SCE 1966 HK 10,725 24,370 30,756 44% 26% 32.3 32.9 33.4 1,377 3,133 3,978 44% 27% COGO* 81 HK 11,189 24,986 30,077 45% 20% 24.7 22.4 23.4 1,014 1,662 2,415 61% 45% Powerlong 1238 HK 10,576 24,323 27,170 43% 12% 37.8 36.0 35.3 1,411 4,923 6,205 29% 26% 272 HK 21,681 24,293 11,896 89% -51% 27.2 43.8 40.5 2,044 2,379 624 86% -74% Times Property 1233 HK 11,935 37,210 48,125 32% 29% 28.2 28.7 28.1 1,360 4,105 5,156 33% 26% Yuzhou Properties* 1628 HK 10,529 31,240 40,533 34% 30% 31.5 33.7 32.6 1,429 4,016 4,996 36% 24% Small-cap average 43% 43% 30.8 31.4 30.3 44% 28% A v erage 43% 25% 33.0 32.1 31.3 43% 24%

Source: Bloomberg, Companies, DBS HK

Page 4

Industry Focus China Property Sector

Sell-through rate

2H18 v s y-o-y change 2H18 1H18 1H18 1H17 (ppt) required required China Jinmao 86% 73% 13 21% (65) Yanlord 75% 70% 5 66% (9) Sunac 71% 62% 9 53% (18) Central China 70% 60% 10 44% (26) Country Garden 70% 71% (1) 55% (15) CIFI 70% 70% - 45% (25) Yuzhou 67% 75% (8) 54% (13) Agile 64% 66% (2) 59% (4) Shimao 62% 60% 2 36% (26) 62% 56% 6 68% 6 KWG 60% 66% (6) 54% (6) Longfor 60% 61% (1) 51% (9) Sino-Ocean 56% 60% (4) 42% (14) CR Land 55% 46% 9 36% (19) COLI 44% 70% (26) 28% (16) A v erage 65% 64% 0 47% (17) Source: Companies, DBS HK

Sales target revision

Rmb bn Original target New target % SZI 15 20 33% Logan 66 70 6% Source: Companies, DBS HK

Page 5

Industry Focus China Property Sector

GFA completion

Completions 000sm F Y18E 1H18A % F Y17A Grow th (%) Evergrande 3333 HK 56,000 38,200 68% 45,137 24% Country Garden 2007 HK 41,000 12,000 29% 24,000 71% Vanke 2202 HK 26,310 9,170 35% 23,010 14% COLI 688 HK 15,950 6,770 42% 13,700 16% Longfor 960 HK 10,000 3,023 30% 7,650 31% Shimao 813 HK 9,000 4,000 44% 7,650 18% R&F 2777 HK 6,500 2,386 37% 6,490 0% Agile 3383 HK 5,200 1,770 34% 3,070 69% Central China 832 HK 5,200 730 14% 3,520 48% Greentown China 3900 HK 4,849 1,830 38% 6,170 -21% Sino-Ocean 3377 HK 4,000 1,030 26% 3,088 30% COGO 81 HK 3,200 1,000 31% 2,307 39% Poly HK 119 HK 3,010 1,290 43% 3,072 -2% CIFI 884 HK 3,000 2,600 87% 2,900 3% China Jinmao 817 HK 2,520 1,300 52% 1,878 34% Yuexiu 123 HK 2,353 540 23% 2,460 -4% Yuzhou 1628 HK 1,340 590 44% 1,820 -26% A v erage 40% 20% Source: Companies, DBS HK

GFA new start

GFA new starts 000sm F Y18E 1H18A % F Y17A Grow th (%) Country Garden 2007 HK 120,000 56,000 47% 86,000 40% Evergrande 3333 HK 71,500 31,500 44% 96,310 -26% Vanke 2202 HK 35,450 23,210 65% 36,520 -3% COLI 688 HK 23,250 12,960 56% 19,540 19% Shimao 813 HK 19,000 8,000 42% 10,330 84% R&F 2777 HK 17,000 12,000 71% 11,740 45% CIFI 884 HK 13,000 5,200 40% 10,000 30% Agile 3383 HK 12,000 5,800 48% 6,250 92% Central China 832 HK 11,150 5,640 51% 5,870 90% Sino-Ocean 3377 HK 8,500 3,485 41% 5,000 70% Greentown China 3900 HK 8,120 3,240 40% 5,275 54% COGO 81 HK 6,000 3,300 55% 3,800 58% Yuexiu 123 HK 4,230 3,140 74% 3,730 13% Yuzhou 1628 HK 4,200 1,700 40% 1,900 121% Poly HK 119 HK 2,800 2,070 74% 2,370 18% Yanlord YLLG SP 2,000 1,000 50% 1,000 100% A v erage 52% 50% Source: Companies, DBS HK

Page 6

Industry Focus China Property Sector

1H18 borrowing costs

1H18 borrowing Change cost F Y17 1H18 (ppts) Evergrande 3333 HK 7.6% 8.0% 0.44 Times China 1233 HK 7.6% 7.6% - China Aoyuan 3883 HK 7.2% 7.3% 0.10 Central China 832 HK 6.8% 6.9% 0.10 Sunac 1918 HK 6.2% 6.7% 0.50 Yuzhou 1628 HK 6.0% 6.5% 0.50 China SCE 1966 HK 6.5% 6.4% (0.10) Agile 3383 HK 6.2% 6.3% 0.10 Logan 3380 HK 5.8% 6.0% 0.20 Country Garden 2007 HK 5.2% 5.8% 0.59 KWG 1813 HK 5.8% 5.8% - R&F 2777 HK 5.1% 5.6% 0.50 Shimao 813 HK 5.3% 5.6% 0.30 Future Land 1030 HK 5.3% 5.6% 0.30 Vanke 2202 HK 4.9% 5.5% 0.59 Yanlord YLLG SP 5.4% 5.5% 0.13 Shui On 272 HK 5.2% 5.4% 0.21 CIFI 884 HK 5.2% 5.3% 0.10 Greentown China 3900 HK 5.4% 5.3% (0.10) Sino-Ocean 3377 HK 5.2% 5.3% 0.07 Poly HK 119 HK 5.2% 5.0% (0.19) China Jinmao 817 HK 4.8% 5.0% 0.15 Yuexiu 123 HK 4.3% 4.8% 0.52 COGO 81 HK 4.0% 4.6% 0.53 Longfor 960 HK 4.5% 4.5% - CR Land 1109 HK 4.2% 4.4% 0.25 COLI 688 HK 4.3% 4.3% - A v erage 5.6% 5.8% 0.22

Source: Companies, DBS HK

Page 7

Industry Focus China Property Sector

Gross margins 1H18

Company Stock code 1H18 F Y17 1H17 Agile 3383 HK 50% 40% 37% CR Land 1109 HK 48% 40% 35% Yanlord YLLG SP 46% 47% 47% China Jinmao 817 HK 40% 32% 36% R&F 2777 HK 39% 35% 36% Longfor 960 HK 37% 34% 37% Logan 3380 HK 37% 34% 39% Future Land 1030 HK 37% 33% 33% Evergrande 3333 HK 36% 36% 36% Central China 832 HK 36% 24% 26% COLI 688 HK 36% 33% 30% SZI 604 HK 34% 35% 40% Vanke 2202 HK 34% 32% 30% China SCE 1966 HK 32% 34% 31% Yuzhou 1628 HK 32% 35% 33% KWG 1813 HK 31% 35% 36% Shimao 813 HK 31% 30% 30% China Aoyuan 3883 HK 29% 27% 27% Times China 1233 HK 28% 28% 26% Beijing Capital Land 2868 HK 28% 29% 31% Shui On 272 HK 27% 43% 43% Country Garden 2007 HK 27% 26% 22% Yuexiu 123 HK 26% 26% 25% Sunac 1918 HK 25% 21% 20% COGO 81 HK 25% 20% 21% CIFI 884 HK 24% 27% 32% Sino Ocean 3377 HK 24% 25% 22% Greentown 3900 HK 18% 19% 20% A v erage 33% 31% 31% Source: Companies, DBS HK

Page 8

Industry Focus China Property Sector

SG&A as % of contracted sales

Change (1H18 vs Company Stock Code 1H18 F Y17 1H17 FY17) (ppts) SZI 604 HK 9.3% 8.4% 4.1% (0.86) R&F 2777 HK 6.6% 6.5% 5.8% (0.11) Yanlord YLLG SP 6.2% 4.3% 3.7% (1.91) Evergrande 3333 HK 5.2% 5.9% 5.4% 0.64 Agile 3383 HK 4.5% 4.8% 3.9% 0.33 Shui On 272 HK 4.3% 5.3% 6.6% 0.98 Central China 832 HK 4.0% 5.9% 4.2% 1.86 Greentown 3900 HK 3.7% 3.1% 3.3% (0.69) Shimao 813 HK 3.3% 4.4% 5.0% 1.12 China Aoyuan 3883 HK 3.1% 3.8% 4.1% 0.68 Times China 1233 HK 3.1% 3.3% 4.1% 0.18 Longfor 960 HK 2.7% 3.2% 1.5% 0.52 China SCE 1966 HK 2.7% 4.5% 4.2% 1.80 CR Land 1109 HK 2.7% 5.3% 3.2% 2.68 Sunac 1918 HK 2.5% 2.5% 1.4% (0.07) Country Garden 2007 HK 2.5% 3.3% 2.6% 0.81 Vanke 2202 HK 2.5% 3.0% 1.8% 0.53 KWG 1813 HK 2.3% 4.8% 3.8% 2.44 COGO 81 HK 2.3% 3.5% 3.0% 1.16 Yuzhou 1628 HK 2.3% 2.5% 1.8% 0.17 CIFI 884 HK 2.2% 1.8% 1.8% (0.40) Yuexiu 123 HK 2.0% 3.9% 3.1% 1.84 Logan 3380 HK 2.0% 3.9% 3.0% 1.84 China Jinmao 817 HK 2.0% 5.0% 5.8% 2.96 Beijing Capital Land 2868 HK 2.0% 2.3% 2.2% 0.34 Future Land 1030 HK 2.0% 3.2% 3.3% 1.26 Sino Ocean 3377 HK 2.0% 2.9% 2.4% 0.92 COLI 688 HK 1.8% 2.5% 1.8% 0.65 A v erage 3.3% 4.1% 3.5% 0.77

Source: Companies, DBS HK

Page 9

Industry Focus China Property Sector

Revenue 1H18 vs 1H17

Rmb (mn)

350,000 300% 300,000 250% 250,000 200% 150% 200,000 100% 150,000 50% 100,000 0% 50,000 -50%

- -100%

SZI

CIFI

R&F

COLI

Agile

KWG

Logan

Logan

Vanke

Sunac

COGO

Shimao

Yuexiu

Yuzhou

Poly HK Poly

Shui On Shui

Yanlord

CR Land CR

Longfor

China SCE China

Sino Ocean Sino

Evergrande

Greentown

Future Land Future

Times China Times

China Jinmao China

Central China Central

China Aoyuan China

Country Garden Country Beijing Capital Land Capital Beijing

1H18 1H17 1H18 average 1H17 average y-o-y

Source: Companies, DBS HK

Core earnings 1H18 vs 1H17

Rmb (mn) 35,000 400% 30,000 300% 25,000 200% 20,000 15,000 100% 10,000 0% 5,000 -100% -

(5,000) -200%

SZI

CIFI

R&F

COLI

Agile

KWG

Logan Logan

Vanke

Sunac

COGO

Shimao

Yuexiu

Poly HK Poly Yuzhou

Shui On Shui

Yanlord

CR Land CR

Longfor

China SCE China

Sino Ocean Sino

Evergrande

Greentown

Future Land Future China Times

China Jinmao China

Central China Central

China Aoyuan China

Country Garden Country Beijing Capital Land Capital Beijing

1H18 1H17 1H18 average 1H17 average y-o-y

Source: Companies, DBS HK

Page 10

Industry Focus China Property Sector

Core net margins 1H18 vs 1H17

30% 25% 20% 15% 10% 5% 0% -5%

-10%

SZI

CIFI

R&F

COLI

Agile

KWG

Logan

Vanke

Sunac

COGO

Shimao

Yuexiu

Yuzhou

Shui On Shui

Yanlord

CR Land CR

Longfor

China SCE China

Sino Ocean Sino

Evergrande

Greentown

Times China Times

Future Land Future

China Jinmao China

Central China Central

China Aoyuan China

Country Garden Country Beijing Capital Land Capital Beijing

1H18 1H17 y-o-y 1H18 average 1H17 average 1H17 average

Source: Companies, DBS HK

Page 11

Industry Focus China Property Sector

Core EPS

Companies (Rmb) Stock Code 1H18 1H17 y -o-y Evergrande 3333 HK 3.86 2.03 90% COLI^ 688 HK 1.52 1.34 13% R&F 2777 HK 1.28 0.50 156% Yanlord YLLG SP 1.08 0.66 65% Shimao 813 HK 1.05 0.94 12% CR Land 1109 HK 1.05 0.42 152% Agile 3383 HK 1.02 0.49 108% Sunac 1918 HK 0.87 (0.28) n.a. Vanke 2202 HK 0.84 0.65 29% Times China 1233 HK 0.65 0.37 75% Country Garden 2007 HK 0.60 0.34 79% Greentown 3900 HK 0.60 (0.30) n.a. Longfor 960 HK 0.54 0.43 26% Logan 3380 HK 0.53 0.46 15% China Aoyuan 3883 HK 0.43 0.28 56% CIFI 884 HK 0.32 0.23 41% China SCE 1966 HK 0.31 0.27 14% Yuzhou 1628 HK 0.28 0.24 15% China Jinmao 817 HK 0.28 0.21 33% COGO^ 81 HK 0.27 0.27 1% Future Land 1030 HK 0.27 0.06 340% Shui On 272 HK 0.22 0.09 150% Sino Ocean 3377 HK 0.20 0.22 -9% SZI^ 604 HK 0.14 0.07 81% Poly HK^ 119 HK 0.10 0.10 5% KWG 1813 HK 0.07 0.41 -82% Central China 832 HK 0.07 0.11 -33% Yuexiu 123 HK 0.06 0.08 -30% Beijing Capital Land 2868 HK (0.05) 0.26 n.a. A v erage 54% ^ converted into Rmb at 1.15 conversion rate.

Source: Companies, DBS HK

Page 12 Industry Focus China Property Sector

Interim Dividend

Companies (HK$) Stock Code 1H18 1H17 y -o-y Agile 3383 HK 0.50 0.22 1.27 Beijing Capital Land 2868 HK - - Flat Central China 832 HK 0.07 - n.a. China Aoyuan 3883 HK - - Flat China Jinmao 817 HK 0.12 0.08 0.47 China SCE 1966 HK 0.07 0.06 0.17 CIFI 884 HK 0.07 0.05 0.40 COGO 81 HK 0.03 0.01 2.00 COLI 688 HK 0.40 0.35 0.14 Country Garden 2007 HK 0.19 0.15 0.23 CR Land 1109 HK 0.13 0.10 0.30 Evergrande 3333 HK - - Flat Future Land 1030 HK 0.07 - n.a. Greentown 3900 HK - - Flat KWG 1813 HK 0.29 0.12 1.50 Logan 3380 HK 0.32 0.25 0.27 Longfor 960 HK 0.35 0.23 0.50 Poly HK 119 HK - - Flat R&F 2777 HK 0.46 0.39 0.18 Shimao 813 HK 0.50 0.40 0.25 Shui On 272 HK 0.04 0.03 0.20 Sino Ocean 3377 HK 0.14 0.16 (0.13) Sunac 1918 HK - - Flat SZI 604 HK 0.07 0.07 Flat Times China 1233 HK - - Flat Vanke 2202 HK - - Flat Yanlord YLLG SP - - Flat Yuexiu 123 HK 0.04 0.04 0.05 Yuzhou 1628 HK 0.11 0.09 0.29

Source: Companies, DBS HK

Page 13

Industry Focus China Property Sector

Net gearing ratio

80%

70% 71% 70% 60% 63% 64% 60% 60% 60% 50% 55%

40% 45%

30% 32% 20%

10%

0% FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1H18

Source: Companies, DBS HK

Page 14

Industry Focus China Property Sector

1H18A cashflow

Operating Rmb bn Cash Construction Land Other 1H18A CF in-flow capex expenses CF O positiv e?

1233 HK Times China18.3 (5.2)(7.5)(5.2)0.4yes 1109 HK CR Land 66.3 (18.7)(46.0)(25.4)(23.8) no 884 HK CIFI 30.0 (7.0)(37.0)(7.8)(21.8) no 3301 HK Ronshine 31.6 (6.8)(14.6)(6.5)3.7yes 3377 HK Sino-Ocean33.2 (16.0)(18.4)(7.2)(8.4) no 3383 HK Agile 38.5 (8.3)(26.3)(14.1)(10.2) no 3333 HK Evergrande289.3 (96.2)(53.2)(117.8)22.1yes 832 HK Central China15.2 (5.5)(9.0)(3.5)(2.8) no 1030 HK Future Land58.2 (20.0)(33.5)(13.0)(8.3) no 3380 HK Logan 28.6 (6.0)(18.0)(5.7)(1.1) no 2868 HK BCL 8.9 (4.3)(11.2)(8.3)(14.9) no 3883 HK China Aoyuan31.2 (13.5)(12.6)(18.3)(13.2) no 119 HK Poly HK 15.0 (4.7)(8.0)(3.9)(1.6) no 1628 HK Yuzhou 17.5 (4.5)(10.6)(4.4)(2.0) no 1966 HK China SCE13.3 (2.9)(7.3)(3.7)(0.6) no 1638 HK Kaisa 22.7 (9.0)(6.4)(10.7)(3.4) no 960 HK Longfor 67.0 (20.0)(40.0)(19.0)(12.0) no Source: Companies, DBS HK

Page 15

Industry Focus China Property Sector

FY18E cashflow projection

T otal Rmb bn Cash Construction Land other F Y18E FY18E 1H18 in-flow capex expenses CF O Net debt Net debt ratio ratio 1233 HK Times China 44.0 (9.0) (25.0) (10.0) 0.0 51% 67% 1109 HK CR Land* 162.1 (33.0) (66.0) (43.3) 19.8 23% 47% 884 HK CIFI 80.5 (15.0) (50.0) (15.5) 0.0 44% 72% 3301 HK Ronshine 65.0 (15.0) (19.5) (13.5) 17.0 95% 151% 3377 HK Sino Ocean 76.9 (27.0) (39.0) (16.5) (5.6) 66% 76% 3383 HK Agile 82.0 (20.0) (50.0) (34.1) (22.1) 103% 88% 3333 HK Evergrande 570.2 (156.2) (103.2) (235.7) 75.1 129% 127% 832 HK Central China 35.8 (14.2) (14.0) (8.0) (0.4) 28% 47% 2007 HK Country Garden 700.0 (300.0) (300.0) (79.0) 21.0 30% 59% 1030 HK Future Land 119.5 (42.0) (60.0) (25.5) (8.0) 106% 148% 3380 HK Logan 60.0 (12.6) (33.0) (13.0) 1.4 50% 66% 2777 HK R&F* 110.0 (49.0) (32.0) (29.0) 0.0 146% 187% 123 HK Yuexiu 39.4 (14.0) (15.7) (8.8) 0.9 66% 64% 2868 HK Beijing Cap Land 30.1 (11.1) (22.1) (16.7) (19.7) 184% 154% 3883 HK China Aoyuan 58.4 (23.0) (28.0) (33.1) (25.7) 134% 68% 119 HK Poly (HK) 28.0 (11.0) (10.0) (7.0) 0.0 76% 85% 1628 HK Yuzhou 37.3 (9.0) (21.3) (10.2) (3.2) 63% 63% 1966 HK China SCE 30.2 (6.0) (20.0) (8.0) (3.8) 78% 69% 1638 HK Kaisa* 55.0 (18.0) (24.0) (22.1) (9.1) 272% 291% 960 HK Longfor 154.0 (45.0) (90.0) (39.0) (20.0) 59% 55%

A v erage 90% 99% Source: Companies, DBS HK

Page 16

Industry Focus China Property Sector

Valuation comparison

3-mth daily Net Disc/ 3-Oct Mk t trading 12-m EPS gth PE PE Yield Yield ROE ROE Gearing P/Bk NAV (Prem) Price Cap v alue Recom target 18F 19F 18F 19F 18F 19F 18F 19F F Y17A 18F to NA V Company Name Code HK$ US$bn US$m HK$ % % x x % % % % % x HK$ % Large cap China Overseas* 688 HK 23.9 33.4 53.9 BUY 34.50 (8) 26 7.0 5.6 4.0 5.0 13.4 15.2 27.1 0.9 34.7 31.1 CR Land* 1109 HK 26.3 23.2 43.3 BUY 34.50 7 18 7.4 6.3 4.7 5.5 16.3 17.3 35.9 1.1 34.2 23.3 China Vanke 'H'* 2202 HK 24.8 38.6 28.3 BUY 35.40 22 24 7.1 5.7 5.0 6.3 23.7 24.7 8.8 1.5 33.8 26.7 Country Garden* 2007 HK 9.7 26.8 85.3 BUY 18.93 37 60 5.0 3.1 6.7 10.7 35.1 43.1 56.9 1.6 20.6 52.7 Evergrande* 3333 HK 22.8 37.8 113.3 BUY 40.81 102 20 5.4 4.5 15.0 11.1 40.4 41.7 183.7 2.1 40.2 43.3 Longfor* 960 HK 19.9 15.0 14.8 BUY 25.63 (7) 28 8.4 6.6 4.8 6.1 16.3 18.8 47.7 1.3 28.7 30.8 Sunac China 1918 HK 23.7 13.3 80.4 NR n.a. 17 63 6.4 3.9 3.1 5.1 29.7 29.7 256.7 1.5 n.a. n.a. A v erage 24 34 6.7 5.1 6.2 7.1 25.0 27.2 88.1 1.4 34.6 Mid cap Agile Property* 3383 HK 11.1 5.5 14.6 BUY 17.74 22 26 5.1 4.1 8.8 11.0 16.3 18.1 96.0 0.8 19.0 41.7 BJ Cap Land 'H' 2868 HK 2.8 0.4 1.4 NR n.a. 36 26 2.6 2.0 10.9 13.7 n.a. n.a. 173.1 n.a. n.a. n.a. China Jinmao Hldgs* 817 HK 3.5 5.2 12.7 HOLD 3.20 15 37 8.9 6.5 4.5 6.1 11.1 13.7 73.3 1.0 4.6 24.0 CIFI Holdings 884 HK 3.5 3.5 11.9 NR n.a. 10 30 4.1 3.1 8.6 11.1 24.9 26.7 70.0 0.9 n.a. n.a. Future Land 1030 HK 4.9 3.7 16.6 NR n.a. 27 38 5.0 3.6 8.0 10.2 33.9 35.1 100.4 1.4 n.a. n.a. Greentown 3900 HK 7.2 2.0 6.6 NR n.a. 54 4 5.3 5.1 3.3 3.7 7.8 7.2 75.3 0.4 n.a. n.a. Guangzhou R&F 2777 HK 14.1 1.8 13.3 NR n.a. (52) 22 3.9 3.2 10.3 12.4 18.2 19.8 179.9 0.6 n.a. n.a. Kaisa Group 1638 HK 2.6 2.0 3.4 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 300.0 n.a. n.a. n.a. KWG Property 1813 HK 6.9 2.8 9.0 NR n.a. 29 27 4.0 3.1 9.0 11.4 17.8 20.4 67.9 0.6 n.a. n.a. Logan Property* 3380 HK 8.6 6.0 8.0 BUY 12.13 10 31 5.8 4.4 6.7 8.9 31.2 33.8 83.9 1.7 15.2 43.2 Shenzhen Inv 604 HK 2.5 2.6 2.9 NR n.a. (46) 17 7.2 6.2 6.2 6.9 7.2 7.4 22.0 0.5 n.a. n.a. Shimao Property* 813 HK 18.4 7.8 17.9 BUY 29.76 17 28 5.9 4.6 6.0 7.7 15.2 17.5 63.4 0.9 30.9 40.3 Sino-Ocean Land* 3377 HK 3.4 3.3 4.4 BUY 6.68 (7) 22 4.7 3.9 8.8 10.6 9.4 10.7 61.8 0.4 8.9 61.7 Yanlord Land*^ YLLG SP 1.5 2.1 2.3 BUY 2.17 15 7 3.8 3.5 5.3 5.7 15.2 14.5 50.8 0.5 3.6 60.2 Yuexiu Property* 123 HK 1.4 2.2 3.4 BUY 2.08 6 25 6.3 5.0 6.4 7.9 7.2 8.5 72.8 0.4 3.5 60.2 A v erage# 10 24 5.2 4.2 7.3 9.1 16.6 17.9 99.4 0.8 47.3 Small cap China Aoyuan 3883 HK 5.2 1.8 7.0 NR n.a. 45 42 5.1 3.6 7.4 10.4 25.3 27.1 51.0 1.0 n.a. n.a. Central China* 832 HK 3.0 1.1 0.5 BUY 3.87 (7) 93 8.6 4.5 3.5 6.7 9.5 16.7 25.7 0.8 5.1 41.1 China Merchants Land 978 HK 1.1 0.7 0.3 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. 7.2 8.5 46.4 n.a. n.a. n.a. China SCE 1966 HK 3.0 1.4 4.6 NR n.a. (10) 29 3.6 2.8 8.4 11.0 21.0 22.8 79.3 0.7 n.a. n.a. China South City*^^ 1668 HK 1.3 1.3 1.9 BUY 2.77 15 69 7.6 4.5 6.9 11.7 4.5 7.3 85.6 0.3 n.a. n.a. COGO* 81 HK 2.5 1.1 1.9 BUY 3.60 (10) 41 4.9 3.5 3.0 4.3 9.9 11.5 25.4 0.4 11.7 78.8 Gemdale Props 535 HK 0.7 1.4 1.0 NR n.a. 81 32 3.3 2.5 n.a. n.a. 25.2 25.9 22.9 0.8 n.a. n.a. Greenland 337 HK 2.3 0.8 0.5 NR n.a. 25 34 3.5 2.6 8.4 11.3 15.4 16.2 97.4 0.8 n.a. n.a. Hopson Dev 754 HK 6.5 1.8 0.6 NR n.a. (66) 4 7.2 7.0 4.2 4.3 n.a. n.a. 71.5 0.3 n.a. n.a. LVGEM 95 HK 2.4 1.5 0.4 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 126.2 0.1 n.a. n.a. Modern Land (China) 1107 HK 1.1 0.4 0.1 NR n.a. (31) 44 5.7 3.9 5.1 4.4 12.3 12.4 83.1 0.3 n.a. n.a. Poly (Hong Kong) 119 HK 2.7 1.3 2.6 NR n.a. 5 4 3.8 3.7 7.7 7.5 8.8 9.3 83.0 0.3 n.a. n.a. Powerlong 1238 HK 3.2 1.6 1.2 NR n.a. 13 27 2.9 2.3 8.7 10.8 14.4 13.9 98.4 0.5 n.a. n.a. Road King 1098 HK 13.3 1.3 0.8 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 95.8 n.a. n.a. n.a. Shui On Land* 272 HK 1.8 1.8 1.7 HOLD 2.05 (49) n.a. 16.8 n.a. 3.6 0.0 2.0 0.0 69.3 0.3 5.1 64.8 SRE Group 1207 HK 0.2 0.4 0.0 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 91.5 n.a. n.a. n.a. Sunshine 100 China 2608 HK 3.0 1.0 0.4 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 231.6 n.a. n.a. n.a. Times Property 1233 HK 8.0 1.9 3.3 NR n.a. 27 27 3.6 2.9 7.9 10.2 22.4 24.7 57.5 0.7 n.a. n.a. Wuzhou Int'l 1369 HK 0.0 0.0 0.3 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 247.5 n.a. n.a. n.a. Yuzhou Properties* 1628 HK 3.2 1.9 5.2 BUY 4.82 15 15 3.4 2.9 10.7 12.3 21.3 22.0 77.1 0.6 9.3 66.2 Zhong An 672 HK 0.3 0.2 0.1 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 12.4 n.a. n.a. n.a. A v erage# 10 41 5.1 3.4 6.7 8.5 14.6 16.1 71.9 0.5 62.7 Average (Overall)# 11 31 5.5 4.2 6.7 8.3 17.7 19.4 81.1 0.8 47.0~

^ Denominated in SGD for price ~ Simple average discount to NAV; Market cap weighted average NAV = 36% # Exclude outliners ~~Gross Gearing ^^ FY16: 17F; FY17: FY18F; FY18: FY19F Source: Thomson Reuters, *DBS HK

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Industry Focus China Property Sector

PE valuations, 2009 to 2017 trough (based on earnings forecasts)

3-Oct Mk t 18F 19F Price Cap PE PE T rough T rough T rough T rough T rough T rough T rough T rough T rough Company Name Code HK$ US$bn x x 2009 2010 2011 2012 2013 2014 2015 2016 2017 China Overseas* 688 HK 23.90 33.4 7.0 5.6 11.1 12.8 6.5 7.2 7.8 6.1 6.7 5.8 5.8 CR Land* 1109 HK 26.25 23.2 7.4 6.3 13.1 14.3 7.2 10.1 11.9 7.1 8.2 7.1 6.2 China Vanke 'H'* 2202 HK 24.75 38.6 7.1 5.7 n.a. n.a. n.a. n.a. n.a. 6.3 6.8 6.5 7.3 Country Garden* 2007 HK 9.72 26.8 5.0 3.1 4.9 10.1 5.0 5.5 6.2 3.8 4.0 4.7 6.3 Evergrande* 3333 HK 22.75 37.8 5.4 4.5 n.a. 3.8 2.9 3.3 4.2 3.4 4.3 6.4 7.7 Longfor* 960 HK 19.90 15.0 8.4 6.6 17.8 13.8 6.3 5.6 7.4 5.3 5.4 5.5 5.7 Sunac China 1918 HK 23.70 13.3 6.4 3.9 n.a. 4.5 1.4 1.5 3.1 2.2 2.7 3.1 7.8 A v erage 6.7 5.1 11.7 9.9 4.9 5.5 6.8 4.9 5.4 5.6 6.7 Agile Property* 3383 HK 11.08 5.5 5.1 4.1 3.2 8.5 2.7 3.8 4.0 2.4 3.0 3.3 4.6 BJ Cap Land 'H' 2868 HK 2.80 0.4 2.6 2.0 3.1 5.1 1.9 2.0 3.3 2.6 3.1 3.5 4.1 China Jinmao Hldgs* 817 HK 3.53 5.2 8.9 6.5 7.0 14.8 6.0 5.9 7.3 4.8 5.1 5.1 5.7 CIFI Holdings 884 HK 3.51 3.5 4.1 3.1 n.a. n.a. n.a. n.a. 3.8 3.2 2.7 2.8 3.6 Future Land 1030 HK 4.85 3.7 5.0 3.6 n.a. n.a. n.a. n.a. 2.7 2.1 2.1 3.5 5.4 Greentown 3900 HK 7.21 2.0 5.3 5.1 2.3 6.3 2.0 1.5 3.3 2.3 3.1 3.4 5.5 Guangzhou R&F 2777 HK 14.14 1.8 3.9 3.2 4.8 6.8 3.2 3.2 4.7 3.8 3.1 3.5 3.7 Kaisa Group 1638 HK 2.63 2.0 n.a. n.a. n.a. 3.5 3.7 3.0 2.8 1.9 1.7 1.9 2.0 KWG Property 1813 HK 6.91 2.8 4.0 3.1 2.9 8.0 3.1 2.8 3.7 2.9 3.2 3.1 3.4 Logan Property* 3380 HK 8.60 6.0 5.8 4.4 n.a. n.a. n.a. n.a. n.a. 3.5 3.6 3.8 3.8 Shenzhen Inv 604 HK 2.48 2.6 7.2 6.2 4.2 6.5 3.8 4.4 6.2 5.3 5.4 6.2 6.5 Shimao Property* 813 HK 18.42 7.8 5.9 4.6 4.2 8.6 3.6 3.9 6.4 4.3 3.3 3.2 4.6 Sino-Ocean Land* 3377 HK 3.41 3.3 4.7 3.9 9.0 11.3 4.1 5.4 6.7 6.0 5.9 5.1 5.6 Yanlord Land*^ YLLG SP 1.45 2.1 3.8 3.5 6.6 9.3 5.0 7.1 9.3 7.5 7.1 7.0 4.8 Yuexiu Property* 123 HK 1.38 2.2 6.3 5.0 3.0 9.0 4.6 4.5 5.8 5.9 6.3 5.3 7.8 A v erage# 5.2 4.2 4.6 8.1 3.7 4.0 5.0 3.9 3.9 4.0 4.7 China Aoyuan 3883 HK 5.21 1.8 5.1 3.6 12.7 10.2 5.1 5.1 5.1 2.2 3.2 2.8 3.6 Central China* 832 HK 3.03 1.1 8.6 4.5 1.5 3.9 2.8 2.8 3.5 2.6 2.5 2.3 2.7 China Merchants Land 978 HK 1.11 0.7 n.a. n.a. n.a. n.a. n.a. n.a. 12.0 4.4 5.4 3.9 5.6 China SCE 1966 HK 2.95 1.4 3.6 2.8 n.a. 4.7 3.7 2.9 2.4 5.6 4.5 3.7 4.7 China South City*^^ 1668 HK 1.26 1.3 7.6 4.5 17.7 6.9 4.3 4.5 4.3 5.1 5.7 5.8 6.9 COGO* 81 HK 2.47 1.1 4.9 3.5 n.a. n.a. 3.7 5.0 6.3 3.1 3.1 2.7 4.2 Gemdale Props 535 HK 0.71 1.4 3.3 2.5 n.a. n.a. n.a. n.a. 10.9 14.1 3.8 5.5 4.2 Greenland 337 HK 2.33 0.8 3.5 2.6 1.2 4.2 1.4 1.2 0.8 11.7 8.0 4.8 4.0 Hopson Dev 754 HK 6.48 1.8 7.2 7.0 2.2 4.9 2.8 2.8 5.6 3.9 10.7 12.1 11.0 LVGEM 95 HK 2.42 1.5 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 0.0 7.5 10.3 Modern Land (China) 1107 HK 1.14 0.4 5.7 3.9 n.a. n.a. n.a. n.a. n.a. 2.3 2.4 2.0 2.5 Poly (Hong Kong) 119 HK 2.70 1.3 3.8 3.7 3.8 14.9 4.2 4.9 5.2 3.9 5.7 13.0 17.6 Powerlong 1238 HK 3.17 1.6 2.9 2.3 4.7 5.2 1.5 1.6 3.6 2.8 3.2 2.7 3.1 Road King 1098 HK 13.32 1.3 n.a. n.a. 1.6 5.4 2.2 2.4 6.5 6.8 6.8 6.8 6.8 Shui On Land* 272 HK 1.80 1.8 16.8 n.a. 3.3 9.4 5.6 6.5 9.1 10.6 5.8 6.4 5.6 SRE Group 1207 HK 0.16 0.4 n.a. n.a. 1.6 2.0 2.3 0.9 1.1 1.1 1.1 1.1 1.1 Sunshine 100 China 2608 HK 3.04 1.0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5.7 5.8 5.3 7.8 Times Property 1233 HK 8.04 1.9 3.6 2.9 n.a. n.a. n.a. n.a. n.a. 2.5 2.2 1.9 2.6 Wuzhou Int'l 1369 HK 0.04 0.0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 7.3 5.2 22.3 22.3 Yuzhou Properties* 1628 HK 3.15 1.9 3.4 2.9 9.6 5.5 2.7 3.6 3.6 2.4 2.1 3.3 3.6 Zhong An 672 HK 0.31 0.2 n.a. n.a. 3.6 7.7 4.1 9.9 5.3 8.3 8.3 8.3 8.3 A v erage# 5.1 3.4 5.0 6.5 3.3 3.8 5.3 5.2 4.5 6.0 6.6 Average (Overall)# 5.5 4.2 5.8 7.8 3.7 4.2 5.4 4.7 4.5 5.3 6.0 ^ Denominated in SGD for price # Exclude outliners ^^ FY16: 17F; FY17: FY18F; FY18: FY19F Source: Thomson Reuters, *DBS HK

Page 18

Industry Focus China Property Sector

PE valuations, 2009 to 2017 peak (based on earnings forecasts)

3-Oct Mk t 18F 19F Price Cap PE PE Peak Peak Peak Peak Peak Peak Peak Peak Peak Company Name Code HK$ US$bn x x 2009 2010 2011 2012 2013 2014 2015 2016 2017 China Overseas* 688 HK 23.90 33.4 7.0 5.6 25.1 20.4 12.1 12.4 12.0 9.0 9.9 8.7 8.9 CR Land* 1109 HK 26.25 23.2 7.4 6.3 30.4 26.3 15.2 17.6 17.0 12.3 12.8 10.9 9.9 China Vanke 'H'* 2202 HK 24.75 38.6 7.1 5.7 n.a. n.a. n.a. n.a. n.a. 9.0 11.8 11.8 10.5 Country Garden* 2007 HK 9.72 26.8 5.0 3.1 19.3 15.9 11.0 8.7 9.5 7.7 6.9 8.4 15.2 Evergrande* 3333 HK 22.75 37.8 5.4 4.5 n.a. 74.1 8.9 6.1 6.4 4.6 14.2 13.2 16.5 Longfor* 960 HK 19.90 15.0 8.4 6.6 24.4 21.7 14.2 11.9 11.5 7.5 8.7 8.2 11.3 Sunac China 1918 HK 23.70 13.3 6.4 3.9 n.a. 5.8 3.5 5.5 5.5 5.1 6.3 12.4 46.7 A v erage 6.7 5.1 24.8 18.0 10.8 10.4 10.3 7.9 10.1 10.5 12.1 Agile Property* 3383 HK 11.08 5.5 5.1 4.1 21.0 17.8 11.1 7.1 7.6 4.8 5.7 5.8 9.4 BJ Cap Land 'H' 2868 HK 2.80 0.4 2.6 2.0 15.9 11.9 5.9 4.7 5.3 3.6 6.3 5.9 7.4 China Jinmao Hldgs* 817 HK 3.53 5.2 8.9 6.5 22.1 21.4 16.6 10.2 10.1 8.4 8.4 8.2 11.5 CIFI Holdings 884 HK 3.51 3.5 4.1 3.1 n.a. n.a. n.a. n.a. 5.9 4.4 5.1 5.4 8.4 Future Land 1030 HK 4.85 3.7 5.0 3.6 n.a. n.a. n.a. n.a. 4.8 4.4 6.5 8.8 11.5 Greentown 3900 HK 7.21 2.0 5.3 5.1 18.3 15.1 6.1 6.3 6.6 4.5 6.1 7.8 10.8 Guangzhou R&F 2777 HK 14.14 1.8 3.9 3.2 17.8 13.7 8.0 7.4 8.1 5.2 4.8 6.0 7.2 Kaisa Group 1638 HK 2.63 2.0 n.a. n.a. n.a. 8.4 10.0 6.9 6.3 4.4 2.3 8.9 37.4 KWG Property 1813 HK 6.91 2.8 4.0 3.1 22.1 19.3 9.9 6.6 6.6 5.2 6.2 4.7 7.2 Logan Property* 3380 HK 8.60 6.0 5.8 4.4 n.a. n.a. n.a. n.a. n.a. 3.8 6.6 6.0 11.1 Shenzhen Inv 604 HK 2.48 2.6 7.2 6.2 14.9 10.6 9.0 8.6 11.8 8.0 10.3 10.1 9.1 Shimao Property* 813 HK 18.42 7.8 5.9 4.6 18.4 15.4 9.7 9.5 9.0 7.5 6.2 5.6 7.7 Sino-Ocean Land* 3377 HK 3.41 3.3 4.7 3.9 24.8 19.8 10.3 12.1 11.9 9.2 9.9 8.2 9.3 Yanlord Land*^ YLLG SP 1.45 2.1 3.8 3.5 19.8 14.6 10.5 15.0 14.7 11.2 12.7 9.8 7.9 Yuexiu Property* 123 HK 1.38 2.2 6.3 5.0 25.8 22.0 11.1 9.3 9.5 8.1 11.1 10.6 10.5 A v erage# 5.2 4.2 19.5 15.3 9.7 8.6 8.4 6.0 6.9 7.2 9.1 China Aoyuan 3883 HK 5.21 1.8 5.1 3.6 45.4 22.5 10.0 5.1 5.1 5.1 4.6 4.3 8.0 Central China* 832 HK 3.03 1.1 8.6 4.5 9.4 7.8 5.6 6.3 6.3 4.1 4.4 3.9 8.5 China Merchants Land 978 HK 1.11 0.7 n.a. n.a. n.a. n.a. n.a. n.a. 13.5 13.5 15.6 11.6 5.6 China SCE 1966 HK 2.95 1.4 3.6 2.8 n.a. 6.9 5.5 3.8 6.6 5.6 5.6 7.6 7.4 China South City*^^ 1668 HK 1.26 1.3 7.6 4.5 19.6 20.4 12.3 6.6 6.9 11.8 9.5 10.8 17.2 COGO* 81 HK 2.47 1.1 4.9 3.5 n.a. n.a. 9.8 9.8 10.0 6.4 6.1 6.3 8.8 Gemdale Props 535 HK 0.71 1.4 3.3 2.5 n.a. n.a. n.a. n.a. 21.9 57.7 50.0 10.6 10.0 Greenland 337 HK 2.33 0.8 3.5 2.6 14.0 10.7 3.8 8.9 52.6 28.2 21.6 12.2 7.1 Hopson Dev 754 HK 6.48 1.8 7.2 7.0 10.3 7.5 6.4 16.0 15.7 16.1 24.6 22.4 29.8 LVGEM 95 HK 2.42 1.5 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 0.0 11.5 26.6 Modern Land (China) 1107 HK 1.14 0.4 5.7 3.9 n.a. n.a. n.a. n.a. n.a. 2.8 5.8 5.8 3.8 Poly (Hong Kong) 119 HK 2.70 1.3 3.8 3.7 51.0 41.2 16.1 9.8 9.9 6.4 27.9 670.0 637.5 Powerlong 1238 HK 3.17 1.6 2.9 2.3 7.0 8.2 6.5 5.6 6.7 4.9 4.6 5.3 6.5 Road King 1098 HK 13.32 1.3 n.a. n.a. 7.2 7.3 7.0 7.6 7.6 6.8 6.8 6.8 6.8 Shui On Land* 272 HK 1.80 1.8 16.8 n.a. 21.3 16.6 17.6 12.6 17.6 17.4 87.1 11.7 8.6 SRE Group 1207 HK 0.16 0.4 n.a. n.a. 4.6 3.7 2.9 2.4 1.1 1.1 1.1 1.1 1.1 Sunshine 100 China 2608 HK 3.04 1.0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 6.7 7.4 8.0 7.8 Times Property 1233 HK 8.04 1.9 3.6 2.9 n.a. n.a. n.a. n.a. n.a. 3.5 3.2 3.6 5.7 Wuzhou Int'l 1369 HK 0.04 0.0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 12.4 29.6 22.3 22.3 Yuzhou Properties* 1628 HK 3.15 1.9 3.4 2.9 11.7 9.9 5.8 6.5 6.5 4.6 5.2 5.2 6.3 Zhong An 672 HK 0.31 0.2 n.a. n.a. 26.8 19.8 12.3 14.9 10.3 8.3 8.3 8.3 8.3 A v erage# 5.1 3.4 13.2 12.4 8.7 8.2 9.5 8.6 10.1 8.9 10.2 Average (Overall)# 5.5 4.2 20.1 14.7 9.5 8.8 9.2 7.6 9.1 8.7 10.1 ^ Denominated in SGD for price # Exclude outliners ^^ FY16: 17F; FY17: FY18F; FY18: FY19F Source: Thomson Reuters, *DBS HK

Page 19

Industry Focus China Property Sector

Share price performance

Price Performance 2007 1-w k 2-w k 1-mth 2-mth 3-mth 5-mth 6-mth YTD 1-y r 2012 2013 2014 2015 2016 2017 high % % % % % % % % % % % % % % % % Tier 1 players China Overseas 688 HK (5.0) (4.6) (3.0) 1.5 (6.1) (9.8) (12.6) (5.0) (8.3) 78.0 (5.6) 5.7 21.5 (24.4) 22.4 27.3 CR Land 1109 HK (7.9) (7.6) (1.9) (2.8) 2.9 (8.4) (7.9) 14.1 7.6 69.1 (8.9) 6.4 14.2 (22.8) 31.9 26.8 China Vanke 'H' 2202 HK (7.0) (8.3) (5.0) 9.5 (5.2) (18.2) (29.8) (20.7) (6.4) 62.8 (3.2) 43.0 32.4 (22.7) 76.3 61.4 Country Garden 2007 HK (8.5) (12.4) (14.7) (10.7) (28.0) (35.6) (35.7) (31.4) (18.3) 46.4 15.3 (32.8) 2.6 36.5 243.3 (20.9) Evergrande 3333 HK (11.5) (11.8) (17.3) 9.4 9.6 (10.3) (7.1) (15.6) (23.3) 32.0 (30.4) 6.1 117.2 (29.2) 458.0 n.a. Longfor Properties 960 HK (6.6) (10.8) (8.3) (3.6) (5.0) (13.7) (15.3) 1.6 (3.4) 72.9 (28.6) (7.8) 15.7 (14.9) 99.0 n.a. Sunac China 1918 HK (8.3) (8.5) (8.7) 5.8 (11.9) (30.0) (17.1) (26.7) (36.6) 272.7 (22.5) 69.7 (24.0) 7.5 401.6 n.a. A v erage (7.8) (9.1) (8.4) 1.3 (6.2) (18.0) (17.9) (11.9) (12.7) 90.5 (12.0) 12.9 25.7 (10.0) 190.3 23.7 Tier 2 players Agile Property 3383 HK (3.1) (3.3) (7.8) (0.4) (12.2) (28.2) (28.9) (6.6) (2.8) 56.6 (23.8) (46.9) (2.0) (8.6) 200.3 (43.7) BJ Cap. Land 2868 HK (4.1) (3.8) (8.8) (11.1) (14.4) (32.9) (39.4) (31.0) (37.2) 110.5 (18.0) 11.4 20.7 (18.0) 39.5 (62.5) China Jinmao Hldgs 817 HK (6.6) (6.1) (0.3) 5.4 (8.1) (19.8) (19.8) 2.6 (13.9) 85.9 (3.2) (17.4) 19.4 (21.1) 64.6 (43.5) CIFI Holdings 884 HK (6.4) (14.0) (18.0) (17.6) (25.5) (42.5) (46.4) (25.5) (19.1) n.a. 17.1 (6.1) 12.3 20.8 125.4 n.a. Future Land 1030 HK (9.3) (14.5) (15.8) (14.9) (29.1) (24.1) (25.5) (1.0) 26.6 n.a. (38.3) (21.7) 86.1 18.7 208.2 n.a. Greentown 3900 HK (5.8) (8.3) (6.6) (15.3) (28.9) (33.9) (35.0) (28.3) (23.7) 321.4 (16.6) (35.0) 0.0 (18.4) 60.2 (63.1) GZ R&F 2777 HK (2.9) (5.0) (9.1) 4.7 (6.1) (24.0) (26.0) (19.8) (24.1) 110.1 (12.1) (16.3) 0.6 (1.8) 87.8 (67.4) Kaisa Group 1638 HK 1.2 (3.3) (7.1) (10.8) (19.1) (36.8) (39.0) (40.4) (55.2) 79.1 4.2 (36.4) (1.9) 0.0 182.7 n.a. KWG 1813 HK (7.9) (11.4) (15.1) (13.7) (26.0) (35.3) (35.3) (24.3) (17.8) 122.2 (26.1) 33.5 13.1 (17.8) 107.5 (45.5) Logan Property 3380 HK (6.0) (7.2) (8.9) 3.6 (16.3) (24.7) (26.9) 6.4 3.6 n.a. n.a. 10.0 9.1 11.4 175.8 n.a. Shenzhen Inv 604 HK 1.6 4.2 (1.2) (9.5) (10.8) (22.3) (25.1) (23.5) (30.3) 125.9 (7.0) (23.6) 62.8 (14.3) 4.2 (68.0) Shimao Property 813 HK (9.3) (13.7) (15.3) (9.5) (9.5) (13.3) (14.5) 8.4 5.1 120.5 21.9 (2.7) (20.5) (26.4) 67.7 (36.6) Sino-Ocean 3377 HK (4.7) (7.1) (13.2) (18.8) (22.1) (37.9) (40.2) (36.7) (35.2) 60.8 (12.1) (13.4) 12.7 (30.2) 55.3 (77.3) Yanlord Land YLLG SP (1.4) 0.0 (4.0) (0.7) (5.2) (13.2) (12.1) (10.5) (22.7) 59.2 (19.4) (15.1) (3.4) 31.3 22.7 (65.6) Yuexiu Property 123 HK (2.1) (2.1) (1.4) (2.1) (4.2) (20.7) (25.4) (5.5) (14.8) 118.8 (22.0) (16.8) (10.1) (20.9) 37.7 (52.1) A v erage (4.5) (6.4) (8.8) (7.4) (15.8) (27.3) (29.3) (15.7) (17.4) 114.2 (11.1) (13.1) 13.3 (6.4) 96.0 (56.8) Tier 3 players China Aoyuan 3883 HK (4.1) (5.4) (8.6) 2.2 (7.1) (19.2) (27.1) 21.4 13.3 67.8 11.6 (24.5) 32.5 9.2 141.0 (29.8) Central China 832 HK (2.3) (3.2) (9.0) (11.4) (18.1) (15.4) (12.4) (17.2) (12.4) 76.8 (12.8) (26.8) (7.4) 4.3 116.6 n.a. China Merchants Land 978 HK (5.9) (5.1) (6.7) (14.0) (16.5) (32.7) (32.7) (22.9) (29.7) 105.1 18.8 (40.0) 36.8 (28.2) 28.6 (75.1) China SCE Property 1966 HK (3.0) (5.1) (14.0) (7.8) (17.8) (24.9) (26.3) (12.5) (23.4) 20.2 16.2 (12.4) 8.0 33.1 44.6 n.a. China South City 1668 HK (2.3) (4.5) (7.4) (11.3) (15.4) (26.3) (28.0) (38.5) (46.8) 17.0 88.0 60.9 (50.6) (7.4) 26.5 n.a. COGO 81 HK (3.9) (5.7) (7.5) (3.5) (8.5) (30.6) (32.0) (40.7) (49.3) 105.6 (20.7) (46.7) (16.7) (22.9) 69.2 (44.2) Gemdale Props 535 HK (5.3) (4.1) (2.7) (6.6) (13.4) (19.3) (21.1) (12.3) (21.1) 163.6 60.9 (28.6) 4.0 (8.7) 70.5 61.4 Greenland 337 HK (3.7) (7.2) (11.1) (14.7) (20.5) (37.5) (39.3) (25.1) (23.4) 53.5 90.4 (18.3) (1.9) (36.1) 61.1 (68.8) Hopson Dev 754 HK (6.1) (8.5) (11.2) 1.7 (5.0) (21.8) (25.1) (15.4) (28.8) 207.2 (24.6) (24.0) 8.7 (10.5) 10.9 (79.3) LVGEM 95 HK 1.3 1.3 (5.1) (13.9) (14.8) (23.7) (22.9) (18.8) 3.9 30.4 236.7 119.8 9.0 (1.2) 24.7 212.7 Modern Land (China) 1107 HK 1.8 (2.6) (0.9) (9.5) (14.3) (21.9) (26.0) (32.1) (30.9) n.a. n.a. 1.6 98.4 (53.2) 79.5 n.a. Poly HK 119 HK (3.9) (4.6) (9.1) (10.0) (14.6) (26.4) (28.6) (33.7) (32.3) 79.8 (31.7) (22.9) (20.7) 1.6 58.4 (76.4) Powerlong 1238 HK (8.9) (11.5) (17.7) (22.5) (24.0) (23.2) (22.3) (16.4) (21.1) 58.7 0.6 (34.3) 50.5 39.0 66.2 n.a. Road King 1098 HK 0.9 1.4 0.5 (6.2) 0.0 (11.8) (14.1) (1.2) 0.9 52.1 9.6 (11.7) 3.1 (4.6) 109.3 (22.1) Shui On Land 272 HK (2.7) 1.7 (1.6) 2.3 (5.3) (14.3) (13.5) (16.7) (13.0) 58.9 (31.1) (23.1) 16.4 (21.6) 29.3 (81.8) SRE Group 1207 HK (0.6) 0.6 (9.7) (3.6) (8.6) (13.1) (17.2) (20.1) (21.7) 24.2 (32.9) (20.8) 73.8 (45.5) 0.0 (95.3) Sunshine 100 China 2608 HK (9.0) (20.0) (22.1) (16.0) 7.4 1.3 (7.3) (13.4) (23.0) n.a. n.a. n.a. 21.7 4.8 (5.1) n.a. Times Property 1233 HK (3.2) (5.5) (9.3) (14.5) (29.3) (28.1) (32.1) 4.6 (0.9) n.a. n.a. (5.7) (18.2) 40.4 102.9 n.a. Wuzhou Int'l 1369 HK 0.0 0.0 0.0 (23.1) (36.5) (93.4) (94.8) (95.4) (95.6) n.a. n.a. 14.0 (44.9) (3.7) 11.5 n.a. Yuzhou Properties 1628 HK (9.0) (10.0) (17.5) (18.8) (28.6) (47.1) (40.6) (24.5) (26.4) 37.1 2.9 1.0 7.7 28.6 54.4 n.a. Zhong An 672 HK (6.1) (4.6) (3.1) (24.4) (20.5) (40.4) (45.6) (66.3) (72.8) 7.5 26.3 (20.8) (28.9) (21.0) 187.5 (89.3) A v erage (3.6) (4.9) (8.1) (10.1) (14.1) (26.5) (28.1) (22.6) (24.8) 68.7 21.6 (8.4) 8.3 (4.6) 60.4 (34.8)

Average (Overall) (4.6) (6.1) (8.4) (7.3) (13.4) (25.4) (26.9) (18.5) (20.4) 87.6 3.8 (6.6) 12.8 (6.0) 93.2 (35.1)

Source: Thomson Reuters

Page 20

Industry Focus China Property Sector

PE charts

Sector average Agile Property (3383 HK)

x x 40 16 35 14 30 12 25 10 20 +2SD: 18.1x +1SD: 8.8x 15 +1SD: 13.4x 8 Avg: 6.5x 10 Mean: 8.7x 6 5 4 -1SD: 3.9x -1SD: 4.2x 0 2 -2SD: -0.8x (5)

0

Jan-05

Jun-10

Oct-07

Sep-18

Dec-15

Mar-13

Jul-17

Feb-16

Apr-10

Sep-11

Dec-05 Dec-18

Nov-08

Mar-13 Aug-14 May-07 Central China (832 HK) China Jinmao Holdings (817 HK)

x x 12 30

10 25

8 +1SD: 7.3x 20 Avg: 5.6x 6 15 +1SD: 13.3x

4 10 Avg: 9x -1SD: 4x 2 5 -1SD: 4.6x

0 0

Jun-08 Jun-15

Oct-11 Oct-12 Oct-13

Sep-13

Sep-09 Sep-10

Dec-11 Dec-18

Dec-17 Dec-18

Nov-14 Nov-15 Nov-16

Mar-10 Mar-17 Aug-08 Aug-07 China Overseas (688 HK) COGO (81 HK)

x x 190x (Dec-07) 35 40 30 35 30 25 25 20 20 +1SD: 18.3x 15 +1SD: 13.9x 15 10 Avg: 8x 10 Avg: 9.3x 5 -1SD: -2.3x 5 0 -1SD: 4.7x

0 J -5

Jul-07

Jan-99

Jun-10

Feb-16

Jan-05

Sep-04 Apr-13

Dec-18

Nov-01

Sep-09 Apr-14

Dec-11 Dec-18 Aug-16 May-07 Source: Thomson Reuters, DBS HK

Page 21

Industry Focus China Property Sector

PE charts (continued)

CR Land (1109 HK) China Vanke (2202 HK)

x x 50 13.0 45 12.0 40 11.0 35 10.0 +1SD: 9.2x 30 9.0 25 Avg: 8x 8.0 20 +1SD: 17.8x 7.0 15 Avg: 11x 6.0 -1SD: 6.8x 10 5.0 5 -1SD: 4.2x

J 4.0

0

Jun-14

Jun-15

Jun-16

Jun-17

Jun-18

Dec-14

Dec-15

Dec-16

Dec-17

Dec-18

Jan-05

Sep-09

Apr-14

Dec-11

Dec-18 Aug-16 May-07

Country Garden (2007 HK) China Evergrande (3333 HK) x 18 16 14 12 10 8 +1SD: 7.2x 6 Avg: 5x 4 2 -1SD: 2.8x

0

Jan-15

Jun-12

Feb-11

Oct-13

Sep-17

Dec-18 Nov-09 May-16

Longfor (960 HK) Shimao Property (813 HK) x x 12 70 11 10 60 9 50 8 +1SD: 7.9x 40 7 Avg: 6.6x 6 30 5 -1SD: 5.3x 20 +1SD: 17.1x 4 Avg: 8.6x 3 10 -1SD: 0.2x

2 0

Jul-06

Jan-10

Jun-15

Nov-09 Nov-12 Nov-15 Nov-18

Apr-08

Dec-18

May-11 May-14 May-17

Nov-11 Mar-17 Aug-13 Source: Thomson Reuters, DBS HK

Page 22

Industry Focus China Property Sector

PE charts (continued)

Shui On Land (272 HK) Sino-Ocean Land (3377 HK) x x 78 40 68 35 58 30 48 25 38 20 28 15 +1SD: 14.4x +1SD: 18.9x Avg: 9.4x 18 Avg: 11.1x 10 8 -1SD: 3.3x 5 -1SD: 4.5x

-2 0

Jul-08

Jun-14

Sep-07

Sep-16

Jun-15

Dec-09

Dec-18

Oct-06

Apr-10

Sep-13

Mar-12

Dec-11 Dec-18 Mar-17 SOHO China (410 HK) Yuexiu Property (123 HK)

x x 160 35 140 30 120 25 100 80 20 60 +1SD: 45.7x 15 +1SD: 12.3x 40 10 Avg: 7.6x Avg: 17.1x 20 5 -1SD: 2.9x 0 -1SD: -11.5x

-20 0

Jan-03

Oct-15

Jul-11

Dec-18

Mar-06

Aug-12

May-09

Oct-07

Feb-17

Apr-15

Dec-18 Aug-09 May-13 Yanlord (YLLG SP)

x 35 30 25 20 15 +1SD: 14.3x 10 Avg: 8.8x 5 -1SD: 3.4x

0

Jan-10

Jun-06

Apr-08

Dec-18

Nov-11

Mar-17 Aug-13 May-15 Source: Thomson Reuters, DBS HK

Page 23

Industry Focus China Property Sector

PB charts

Sector average Agile Property (3383 HK)

x x 4.0 6.0 3.5 5.0 3.0 2.5 4.0 +2SD 1.9x 2.0 1.5 +1SD 1.4x 3.0 Mean 1.0x 1.0 +1SD: 2.1x 2.0 0.5 Avg: 1.2x -1SD 0.5x 0.0 1.0 -2SD 0.00x -1SD: 0.4x (0.5)

0.0

Jan-05

Jun-10

Oct-07

Sep-18

Dec-15

Mar-13

Jul-17

Feb-16

Apr-10

Sep-11

Dec-05

Dec-18

Nov-08

Mar-13 Aug-14 May-07 Central China (832 HK) China Jinmao Holdings (817 HK)

x x 1.6 30 1.4 25 1.2 20 1.0 +1SD: 0.9x 0.8 Avg: 0.7x 15 +1SD: 13.3x 0.6 10 Avg: 9x 0.4 -1SD: 0.5x 5 0.2 -1SD: 4.6x

0.0 0

Jun-08

Jun-15

Sep-13

Oct-11

Oct-12

Oct-13

Dec-11

Dec-18

Sep-09

Sep-10

Dec-17

Dec-18

Mar-10

Mar-17

Nov-14

Nov-15

Nov-16 Aug-07 Aug-08 w China Overseas (688 HK) COGO (81 HK)

x x 5.0 3.0 4.5 4.0 2.5 3.5 2.0 3.0 2.5 +1SD: 2.4x 1.5 +1SD: 1.3x 2.0 Avg: 1.6x 1.0 1.5 Avg: 0.7x 1.0 0.5 -1SD: 0.2x 0.5 -1SD: 0.9x

0.0 0.0

Jul-07

Jan-99

Jun-10

Feb-16

Sep-04 Apr-13

Dec-18

Nov-01

Jan-05

Sep-09 Apr-14

Dec-18 Dec-11 Aug-16 May-07 Source: Thomson Reuters, DBS HK

Page 24

Industry Focus China Property Sector

PB charts (continued)

CR Land (1109 HK) China Vanke (2202 HK)

x x 3.5 2.8 2.6 3.0 2.4 2.5 2.2 2.0 2.0 +1SD: 1.7x +1SD: 1.8x 1.8 1.5 Avg: 1.3x Avg: 1.6x 1.6 1.0 1.4 -1SD: 0.8x -1SD: 1.4x 0.5 1.2 1.0

0.0

Jun-14

Jun-15

Jun-16

Jun-17

Jun-18

Dec-14

Dec-15

Dec-16 Dec-17

Dec-18

Jan-05

Sep-09

Apr-14

Dec-11

Dec-18 Aug-16 May-07 Country Garden (2007 HK) China Evergrande (3333 HK)

x x 10.0 3.5 3.0 8.0 2.5

6.0 2.0 +1SD: 1.8x 1.5 4.0 +1SD: 3.3x Avg: 1.3x 1.0 2.0 Avg: 1.8x 0.5 -1SD: 0.7x -1SD: 0.2x

0.0 0.0

Jan-15

Jun-12

Feb-11 Oct-13

Sep-17

Dec-18

Jan-17

Nov-09

Feb-13 Feb-15

Apr-07

May-16

Dec-18 Mar-11 Mar-09 Longfor (960 HK) Shimao Property (813 HK)

x x 4.5 3.0 4.0 2.5 3.5

2.0 3.0 +1SD: 1.8x 2.5 1.5 Avg: 1.3x 2.0 +1SD: 1.7x 1.0 1.5 Avg: 1.1x 1.0 0.5 -1SD: 0.9x 0.5 -1SD: 0.5x

0.0 0.0

Jul-06

Jan-10

Jun-15

Apr-08

Dec-18

Nov-11

Mar-17

Nov-09 Nov-12 Nov-15 Nov-18

Aug-13

May-14 May-17 May-11 Source: Thomson Reuters, DBS HK

Page 25

Industry Focus China Property Sector

PB charts (continued)

Shui On Land (272 HK) Sino-Ocean Land (3377 HK)

x x 2.5 3.7 3.2 2.0 2.7 1.5 2.2 +1SD: 1x 1.7 1.0 Avg: 0.6x 1.2 +1SD: 1.1x Avg: 0.8x 0.5 0.7 -1SD: 0.2x -1SD: 0.4x 0.2

0.0

Jun-14

Sep-07

Sep-16

Dec-09

Dec-18

Mar-12

Jul-08

Jun-15

Oct-06

Apr-10

Sep-13

Dec-11 Dec-18 Mar-17 SOHO China (410 HK) Yuexiu Property (123 HK)

x x 3.5 1.6 3.0 1.4 1.2 2.5 1.0 2.0 0.8 +1SD: 0.8x 1.5 Avg: 0.6x +1SD: 1x 0.6 1.0 Avg: 0.7x 0.4 0.5 0.2 -1SD: 0.4x -1SD: 0.4x

0.0 0.0

Jul-11

Jan-03

Oct-15

Oct-07

Feb-17

Dec-18

Apr-15

Dec-18

Mar-06

Aug-12

May-09 Aug-09 May-13 Yanlord (YLLG SP) x 5.0 4.5 4.0 3.5 3.0 2.5 2.0 +1SD: 1.8x 1.5 Avg: 1.1x 1.0 0.5 -1SD: 0.3x

0.0

Jan-10

Jun-06

Apr-08

Dec-18

Nov-11

Mar-17 Aug-13 May-15 Source: Thomson Reuters, DBS HK

Page 26

Industry Focus China Property Sector

DBS HK 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: 4 Oct 2018 13:29:38 (HKT) Dissemination Date: 4 Oct 2018 18:34:59 (HKT)

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

GEN ERAL DISCLOSURE/DISCLAIMER

Th is report is prepared by DBS Bank (Hong Kong) Limited (“DBS HK”). This report is solely intended for the clients of DBS Bank Ltd., DBS HK, DBS Vickers (Hong Kong) Limited (“DBSV HK”), and DBS Vickers 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 DBS 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 as 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 pe rform broking, investment banking and other banking services for these companies.

Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed, it may not contain all material information concerning the company (or companies) referred to in this report and the DBS Group is under no obligation to update the information in this report.

This publication has not been reviewed or authorized by any regulatory authority in Singapore, Hong Kong or elsewhere. There is no planned schedule or frequency for updating research publication relating to any issuer.

The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that: (a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or the ir underlying assumptions will be achieved, and (b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein.

Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets. Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report.

DBS Vickers Securities (USA) Inc (“DBSVUSA”), a US-registered broker-dealer, does not have its own investment banking or research department, has not 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 and does not engage in market-making.

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Industry Focus China Property Sector

A N ALYST CERTIFICATION The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that th e 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 in whole, certifies that he or his associate 1 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 in 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 or their subsidiaries and/or other affiliates have proprietary positions in China Overseas Land & Investment Limited (688 HK), Limited (1109 HK), China Vanke Company Limited 'H' (2202 HK), Country Garde n Holdings Company Limited (2007 HK), China (3333 HK), Sunac China Holdings Limited (1918 HK), China Jinmao Holdings (817 HK), Shimao Property Holdings Limited (813 HK) and Sino-Ocean Group Holding Limited (3377 HK) recommended in this report as of 02 Oct 2018.

DBS Bank Ltd, DBS HK, DBSVS or their subsidiaries and/or other affiliates have a proprietary position in Yanlord Land Group Limited (YLLG SP) recommended in this report as of 31 Aug 2018.

2. Neither DBS Bank Ltd nor DBS 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: DBS Bank Ltd, DBS HK, DBSVS, their subsidiaries and/or other affiliates of DBSVUSA have received compen sation, within the past 12 months for investment banking services from China Overseas Land & Investment Limited (688 HK), Logan Property Holdings Compan y Limited (3380 HK), Sino-Ocean Group Holding Limited (3377 HK), Yanlord Land Group Limited (YLLG SP), Yuexiu Property Company Limited (123 HK), China South City Holdings Limited (1668 HK), Group Company Limited (119 HK) and Road King Infrastructure Limited (1098 HK) as of 31 Aug 2018.

4. DBS Bank Ltd, DBS HK, DBSVS, their subsidiaries and/or other affiliates of DBSVUSA have managed or co-managed a public offering of securities for China Overseas Land & Investment Limited (688 HK), Logan Property Holdings Company Limited (3380 HK), Yanlo rd Land Group Limited (YLLG SP), Yuexiu Property Company Limited (123 HK), China South City Holdings Limited (1668 HK) and Poly Property Group Company Limited (119 HK) in the past 12 months, as of 31 Aug 2018.

DBSVUSA does not have its own investment banking or research department, nor has it participated in a ny 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 wishing 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.

5. D isclosure of previous investment recommendation produced: DBS Bank Ltd, DBSVS, DBS HK, 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, DBS HK, DBSVS, 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 i n respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing app licant and the firm or analysis. This term does not include commercial lending conducted at arm's length, or investments 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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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, DBSVS or DBSV HK. DBS Bank Ltd holds Australian Financial Services Licence no. 475946. DBSVS and DBSV HK are 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 Bank Ltd and DBSVS are regulated by the Monetary Authority of Singapore under the laws of Singapore, and DBSV HK is regulated by the Hong Kong Securities and Futures Commission under the laws of Hong Kong, which differ from Australian laws. Distribution of this report is intended only for “wholesale investors” within the m eaning 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 Futures 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 Financial Advisers Regulations. Where the report is distributed in Singapore to a pe rson 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 DBS HK which is regulated by the Hong Kong Monetary Authority

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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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 DBS HK. 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 restrictions 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 shou ld 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 Bank (Hong Kong) Limited 18th Floor Man Yee building, 68 Des Voeux Road Central, Central, Hong Kong Tel: (852) 2820-4888, Fax: (852) 2521-1812

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D BS Regional Research Offices

H O NG KONG MA LAYSIA S INGAPORE D BS Bank (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 2521 1812 Tel.: 603 2604 3333 Fax: 65 65353 418 e-mail: [email protected] Fax: 603 2604 3921 e-mail: [email protected] 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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