a share 200 250% 200% 150% 100% 50% 0% -50% -100% 12/31/07 12/31/08 12/31/09 12/31/10 12/30/11 12/31/12 12/31/13 12/31/14 12/31/15 12/30/16 10/31/17 New Econ 300% 250% 200% 150% 100% 50% 0% -50% -100% 12/31/07 12/31/08 12/31/09 12/31/10 12/30/11 12/31/12 12/31/13 12/31/14 12/31/15 12/30/16 10/31/17 200 new econ china+hk japan Fact Sheet MarketGrader MarketGrader China A+HK Connect 80 Index RESEARCH & INDEXES The MarketGrader China A-Shares + Hong Kong Connect Index measures the performance of the most fundamentally sound companies available to Mainland Chinese investors in the A-Shares market and through the HK-Connect program. As the HK Connect program expands, so will the pool of companies from which the index is constructed, ensuring only the best are select- ed. MarketGrader’s goal is to identify the best creators of shareholder value across these two equity markets, regardless of listing venue, as the best prospects of long-term capital appreciation. Index Rules Performance Underlying Universe Cumulativea+HK Total Return, Jan. 2008 - Dec. 2018* All data as of Dec 31, 2018 Companies rated by MarketGrader listed 150% in Shanghai and Shenzhen (A-Shares) and Hong Kong-listed stocks available through the ‘Connect’ program. 100% Objective Designed to serve as the basis of investment 50% funds providing access to investors to some of the most promising stocks in China. 0% Weighting The index is equally weighted. -50% Rebalance Frequency The index is rebalanced semi-annually, on -100% the third Friday of March and September. 12/31/07 12/31/08 12/31/09 12/31/10 12/30/11 12/31/12 12/31/13 12/31/14 12/31/15 12/30/16 12/29/17 12/31/18 MarketGrader China A+HKConnect 80 Hang Seng Index Selection Criteria Calendar Year Returns Annualized Returns All index components must have scored MG CN A HSI CSI MG CN A HSI CSI HSI japan HSI HK Conn. Shang-HK above the median MarketGrader funda- HK Conn. Shang-HK Japan 3-Years 0.80% 5.70% 4.40% mental rating in 12 of the last 20 semi-annu- 2018 -22.29% -13.61% -10.92% 150% al rebalance periods and in four of the last 5 -Years 8.00% 2.10% - Since 12/31/07 4.40% -0.70% - six. This ensures consistency in fundamental 2017 35.55% 35.99% 19.17% quality, based on MarketGrader’s GARP 100% Cumulative Returns methodology. The top 80 grades among this 2016 -2.84% 0.39% 7.07% MG CN A HSI CSI HSI pool is selected semi-annually to the index. HK Conn. Shang-HK 50% At least half of all constituents must be listed 3-Years 2.30% 17.90% 13.70% 2015 27.80% -7.16% -10.95% on the Hong Kong Stock Exchange. 5 -Years 46.80% 10.90% - 0% 2014 12.26% 1.28% - Since 12/31/07 60.70% -7.10% - Market Cap Requirements All selections must have a minimum total Standard Deviation 2013-50% 14.89% 2.87% - market cap of $100 million. MG CN A HSI CSI HSI HK Conn. Shang-HK 2012 14.09% 22.91% - 3-Years 18.54% 15.15% 18.51% Liquidity Requirements -100% A 3-month average daily traded volume of 12/31/07 12/31/08 12/31/09 12/31/10 12/30/11 12/31/125 -Years 12/31/13 12/31/1419.33% 12/31/1516.61% 12/30/16 - 10/31/17 2011 -24.22% -19.97% - USD $2 million and at least USD $50 million in Since 12/31/07 25.44% 21.24% - aggregate 12-month trading volume. 400% 2010 14.83% 5.32% - Sharpe Ratio MG CN A HSI CSI Diversification 350% HSI HK Conn. Shang-HK No more than 25% of the index (20 compa- 2009300% 130.54% 52.02% - 3-Years 0.04 0.38 0.24 nies) may belong to the same economic 250% 5 -Years 0.41 0.13 - sector. 2008 -58.39% -48.27% - 200% Since 12/31/07 0.17 -0.03 - All values in RMB. *YTD values as of 12/31/2018 Frequency: Monthly. Licensing opportunities Sources:150% FactSet, Bloomberg, MarketGrader Sources: FactSet, Bloomberg, MarketGrader [email protected] 100% * The MarketGrader China A+HK Connect 80 Index was first published on April 1, 2016. Backtested performance information is +1 (305) 529-1767 purely50% hypothetical and is solely for informational purposes. Backtested performance does not represent actual performance, www.marketgrader.com and should not be interpreted as an indication of actual performance. Past performance is not indicative of future results. CSI is a registered0% trademark of China Securities Index Co. The Hang Seng Index® are proprietary to Hang Seng Data Services Limited MarketGrader.com © 2019. -50% -100% 12/31/07 12/31/08 12/31/09 12/31/10 12/30/11 12/31/12 12/31/13 12/31/14 12/31/15 12/30/16 10/31/17 a share 200 250% 200% 150% 100% 50% 0% -50% -100% 12/31/07 12/31/08 12/31/09 12/31/10 12/30/11 12/31/12 12/31/13 12/31/14 12/31/15 12/30/16 10/31/17 New Econ 300% 250% 200% 150% 100% 50% 0% -50% -100% 12/31/07 12/31/08 12/31/09 12/31/10 12/30/11 12/31/12 12/31/13 12/31/14 12/31/15 12/30/16 10/31/17 200 new econ china+hk japan a share 200 a share 200 250% 250% 200% 200% 150% 150% 100% 100% 50% 50% 0% 0% -50% -50% -100% -100% Fact Sheet 12/31/07 12/31/08 12/31/09 12/31/10 12/30/11 12/31/12 12/31/13 12/31/14 12/31/15 12/30/16 10/31/17 a+HK 12/31/07 12/31/08 12/31/09 12/31/10 12/30/11 12/31/12 12/31/13 12/31/14 12/31/15 12/30/16 10/31/17 MarketGrader MarketGrader China A+HK Connect 80 Index RESEARCH & INDEXES 150% Index composition data as of Jan 9, 2019 New Econ New Econ 300% Index Bio Top 20 Stocks by Fundamentals 300% 100% Average Market Cap RMB 174,687.04 Ticker Name Grade 250% Median Market Cap RMB 32,802.80 250% 914.HK Anhui Conch Cement Company 87.28 Average 3 Mo. RMB Volume RMB 473,294,383.46 000789.CN Jiangxi Wannianqing Cement Co., 86.80 200% 50% 200% Average 3 Mo. Trading Volume 16,628,946.00 000651.CN Gree Electric Appliances, Inc. of 86.34 Last Rebalance Date 9/24/18 150% 002626.CN Xiamen Kingdomway Group Co. 86.23 150% Companies Replaced 47 600801.CN Huaxin Cement Co., Ltd. Class A 84.67 0% 100% Biggest Sector Increase Materials 175.HK Geely Automobile Holdings Limited 84.05 100% Biggest Sector Decrease Industrials 002001.CN Zhejiang NHU Co. Ltd. Class A 83.28 50% 50% 600426.CN Shandong Hualu-Hengsheng 82.65 Fundamental Attributes Median -50% 002233.CN Guangdong Tapai Group Co., Ltd 81.48 0% Trailing P/E Ratio 10.5 0% 002258.CN Lier Chemical Co., Ltd. Class A 81.26 Forward P/E Ratio 10.7 002146.CN RiseSun Real Estate Development 80.91 -50% Earnings Yield 9.1% -100% -50% 2314.HK Lee & Man Paper Manufacturing 80.65 Price/Tangible Book Ratio 2.7 12/31/07 12/31/08 12/31/09 12/31/10 -100%12/30/11 12/31/12 12/31/13 12/31/14 12/31/15 12/30/16 12/29/17 12/31/18 960.HK Longfor Group Holdings Ltd. 79.54 -100% Revenue Change - 3 Years 85.7% 12/31/07 12/31/08 12/31/09 12/31/10 12/30/11 12/31/12 12/31/13 12/31/14 12/31/15 12/30/16 10/31/17 000537.CN Tianjin Guangyu Development 78.90 12/31/07 12/31/08 12/31/09 12/31/10 12/30/11 12/31/12 12/31/13 12/31/14Operating12/31/15 Income Change12/30/16 - 3 Years10/31/17 178.1% 000596.CN Anhui Gujing Distillery Co., Ltd. 78.89 Earnings per Share (EPS) 3-Year Growth 34.1% 002572.CN Suofeiya Home Collection Co. Ltd 78.68 Operatingjapan Margin 25.5% 1313.HK China Resources Cement Holdings 78.64 Total Debt to Capital 25.3% Japan 600763.CN Topchoice Medical Investment 77.95 Return on Equity 24.9% 150% 600622.CN Everbright Jiabao Co., Ltd. Class A 77.30 Dividend Yield 2.79% 600233.CN YTO Express Group Co.,Ltd. Class A 76.92 200 new econ china+hk japan new econ Sector Breakdownchina+hk (based on constituent count)japan 100% 200 1.3% Consumer Discretionary 8.8% Most Selections Since Inception 10.0% Consumer Staples 8.8% Energy Ticker Name Times 50% 20.0% Financials 700.HK Tencent Holdings Ltd. 23 3.8% Health Care Industrials 2020.HK ANTA Sports Products Ltd. 17 Materials 883.HK CNOOC Limited 16 0% 25.0% Technology 600519.CN Kweichow Moutai Co., Ltd. 15 13.8% Telecommunication Utilities 3968.HK China Merchants Bank Co., 14 8.8% 1177.HK Sino Biopharmaceutical 13 -50% Market Cap Breakdown (based on constituent count) 1109.HK China Resources Land Limited 12 3.8% 1.3% 1088.HK China Shenhua Energy Co.