Equity Research

December 30, 2016

Guoxuan High-Tech
Lithium battery leader charges ahead
Initial Coverage Initiate with Conviction BUY
Investment positives
Ticker 002074.SZ
We initiate coverage of Guoxuan High-Tech Company CICC investment rating * Conviction BUY
with Conviction BUY and a target price of Rmb45.00, or Last close Rmb 30.86
28x 2017e P/E. CICC target Rmb 45.00

Why Conviction BUY? 52wk price range Rmb 44.28~22.58

Market cap (bn) Rmb27
► Both capacity and sales to rise >3.5x in 2016~20 Daily value (mn) Rmb 269.11

with market share up from 7% to 18% (among the Shares outstanding (mn) 876
Free float (%) 53
top three in China). Over the same period, China’s demand Daily volume (mn sh) 8.26
for automotive batteries will likely have a CAGR of 25% Business sector Chemicals
while Guoxuan’s sales & output CAGR hits 50% and its
lithium battery shipments will likely reach 12GWh in 2020. 002074.SZ CSI 300
128

► Guoxuan is one of the few manufacturers that meet 114

Relative Value (%)

high sector standards; automakers’ batteries are mostly 100

purchased from leading players. 86

► Full value-chain deployment and channel 72

penetration to drive continued market share gains. 58

Dec-2015 Mar-2016 Jun-2016 Sep-2016 Dec-2016
We expect its automaker clients to take >55%/45% of the
alternative-fuel bus/PV markets in 2020.
(Rmb mn) 2014A 2015A 2016E 2017E

Revenue 1,014 2,745 5,647 8,043

How do we differ from the market? As China’s only
(+/-) N.M. 170.7% 105.7% 42.4%
listed battery manufacturer that meets 2017 Automotive Battery Net profit 251 585 1,042 1,425
Standards, Guoxuan’s scarcity will be revaluated by the market. (+/-) N.M. 133.3% 78.2% 36.7%
Potential catalysts: AFV sales beats expectations; capacity EPS 0.29 0.67 1.19 1.63
surplus resolved by higher entry barrier. BPS 1.26 3.44 4.79 6.15
DPS 0.00 0.15 0.27 0.37
CPS 0.24 0.59 1.29 2.33
Financials and valuation
P/E 107.9 46.3 26.0 19.0
We expect EPS to be Rmb1.19, Rmb1.63 and Rmb2.09 in P/B 24.5 9.0 6.4 5.0
2016~18, a CAGR of 32%. We initiate our coverage with EV/EBITDA 80.6 33.4 15.2 10.8
Conviction BUY. The stock is currently trading at 19x/15x Dividend yield 0.0% 0.5% 0.9% 1.2%
2017/18e P/E; we give a TP of Rmb45.00, or 28x/22x ROAA 19.0% 12.5% 12.4% 12.1%

2017/18e P/E, implying 46% upside room. ROAE 45.4% 28.4% 28.9% 29.7%

Risks
Sales volume of AFV and automotive batteries disappoint; safety
Source: Wind, Bloomberg, company data, CICC Research
issues; valuation adjustment of growth segments.

Xuan LI Yichen XU
Analyst Associate
xuan.li@cicc.com.cn yichen.xu@cicc.com.cn
SAC Reg. No.: S0080515080008 SAC Reg. No.: S0080116080054
SFC CE Ref: BGG514

Please read carefully the important disclosures at the end of this report
 CICC Research: December 30, 2016

Financial summary
Financial statement (Rmb mn) 2014A 2015A 2016E 2017E Financial ratios 2014A 2015A 2016E 2017E
Income statement Growth ability
Revenue 1,014 2,745 5,647 8,043 Revenue N.M. 170.7% 105.7% 42.4%
Operating costs 491 1,499 3,327 4,950 Operating profit N.M. 130.3% 100.3% 27.4%
Business tax and surcharges 10 26 53 75 EBITDA N.M. 129.3% 110.8% 33.4%
Selling expenses 60 210 433 616 Net profit N.M. 133.3% 78.2% 36.7%
Administrative expenses 93 272 560 797 Profitability
Finance costs 18 22 7 -20 Gross margin 51.6% 45.4% 41.1% 38.4%
Others 0 0 0 0 Operating margin 27.2% 23.2% 22.6% 20.2%
Operating profit 276 636 1,275 1,624 EBITDA margin 33.0% 27.9% 28.6% 26.8%
Non-operating income and expense 15 44 -68 26 Net margin 24.7% 21.3% 18.5% 17.7%
Profit before income tax 291 680 1,207 1,650 Liquidity
Income tax 41 93 165 225 Current ratio 1.47 1.66 1.65 1.60
Minority interest 0 3 0 0 Quick ratio 1.37 1.48 1.44 1.38
Net profit 251 585 1,042 1,425 Cash ratio 0.59 0.73 0.62 0.60
EBITDA 335 767 1,617 2,157 Liability / asset 57.8% 54.7% 58.2% 60.0%
Balance sheet Net debt / equity net cash net cash net cash net cash
Cash and bank balances 697 2,011 3,100 4,357 Return
Trade and bill receivables 897 1,900 3,831 5,345 RoA 19.0% 12.5% 12.4% 12.1%
Prepayments 6 64 143 212 RoE 45.4% 28.4% 28.9% 29.7%
Inventories 114 489 1,039 1,545 Per-share data
Other current assets 30 92 92 92 EPS (Rmb) 0.29 0.67 1.19 1.63
Total current assets 1,743 4,556 8,205 11,552 BPS (Rmb) 1.26 3.44 4.79 6.15
Fixed assets and CIP 476 1,358 1,487 1,494 DPS (Rmb) 0.00 0.15 0.27 0.37
Intangible assets 383 719 328 415 Cash flow per share (Rmb) 0.24 0.59 1.29 2.33
Total non-current assets 892 2,157 1,895 1,989 Valuation
Total assets 2,635 6,713 10,100 13,541 P/E 107.9 46.3 26.0 19.0
ST borrowings 403 409 394 444 P/B 24.5 9.0 6.4 5.0
Trade and bill payables 563 1,861 3,749 5,579 EV/EBITDA 80.6 33.4 15.2 10.8
Other current liabilities 219 475 835 1,206 Dividend yield 0.0% 0.5% 0.9% 1.2%
Total current liabilities 1,185 2,745 4,978 7,229
LT borrowings and bonds payable 215 148 148 148
Total non-current liabilities 315 898 898 898
Total liabilities 1,523 3,671 5,876 8,127
Shareholders' equity 1,104 3,016 4,198 5,388
Minority interest 8 26 26 26
Total liabilities & equity 2,635 6,713 10,100 13,541
Cash flow statement
Net income 251 585 1,042 1,425
Depreciation & amortization 24 68 403 527
Change in working capital -49 109 -311 110
Others -79 -324 5 -22
Cash flow from operations 213 520 1,133 2,039
Cash inflows from investing activities 0 0 0 0
Cash outflows from investing activities -164 -500 -161 -618
Cash flow from investing -164 -500 -161 -618
Equity financing 0 1,493 0 0
Bank borrowings 165 -61 -15 50
Others -35 -643 266 -429
Cash flow from financing 147 1,110 118 -164
Foreign exchange gain (loss) 0 0 0 0
Net changes in cash 195 1,132 1,090 1,256

Source: Company data, CICC Research

Company description
Guoxuan High-tech Co., Ltd is a leading lithium-ion battery producer. Its main products are lithium iron phosphate materials,
batteries, power batteries, BMS systems and energy storage battery packs. The company is headquartered in Hefei and back-door
listed in 2015.

Please read carefully the important disclosures at the end of this report
2
 CICC Research: December 30, 2016

Contents
Domestic lithium battery bellwether .................................................................................. 5
Rapid capacity expansion; output/sales to grow >3.5x over 2016~20 .............................. 7
Solid sector leadership; continued market share gains ........................................................... 7
Strong downstream to bring opportunities to lithium battery business ...................................... 8
Smooth progress in capacity expansion; ternary battery deployment ....................................... 9
Beneficiary of higher entry barriers; leading products & technology to strengthen sector
leadership............................................................................................................. 11
Guoxuan is one of the few manufacturers to meet the automotive battery sector’s high entry barriers
..................................................................................................................11
Domestic bellwether in automotive battery product and R&D .................................................12
Cost controls and technical strengths to secure leading profitability ........................................14
Continued market share gains secured by value chain deployment and channel penetration
............................................................................................................................. 15
Market share secured by channel penetration and large client strategy ....................................15
Strengthened value chain deployment and cooperation with automakers .................................16
Large shareholder’s incremental shareholding and equity incentive demonstrates confidence .....20
We initiate coverage of Guoxuan with a Conviction BUY rating ........................................ 22
Risks……………… .................................................................................................................24

Please read carefully the important disclosures at the end of this report
3
 CICC Research: December 30, 2016

Figures
Figure 1: Historical development ............................................................................................ 5
Figure 2: Guoxuan High-Tech’s equity structure as of June 30, 2016 ............................................ 5
Figure 3: China’s AFV sales (2011~15) .................................................................................... 6
Figure 4: Guoxuan’s automotive battery output & sales .............................................................. 6
Figure 5: Guoxuan’s revenue from battery business (2011~15) .................................................. 6
Figure 6: Guoxuan’s blended gross profit (2011~15) ................................................................. 6
Figure 7: Guoxuan has the third highest capacity and sales volume in China ................................. 7
Figure 8: Continued share gains in the automotive battery market .............................................. 7
Figure 9: Forecasts for automotive battery output ..................................................................... 7
Figure 10: Forecasts for automotive battery sales ...................................................................... 7
Figure 11: AFV policy and outlook .......................................................................................... 8
Figure 12: AFV output/sales to top 1.6mn in 2020 ..................................................................... 9
Figure 13: Domestic demand for lithium batteries to grow at a CAGR of 25% over 2016~20 .......... 9
Figure 14: Plans for the proceeds from the private placement ...................................................10
Figure 15: Guoxuan’s continued expansion of lithium iron phosphate and ternary battery capacity .10
Figure 16: Capacity comparison .............................................................................................11
Figure 17: The 57 companies in the AFV Battery Catalogue’s (batch 1~4) ...................................11
Figure 18: Guoxuan is the third largest supplier in the fourth batch of the AFV Battery Catalogue ..12
Figure 19: Comparison of Chinese & Korean lithium battery manufacturers .................................12
Figure 20: Guoxuan’s technical R&D .......................................................................................13
Figure 21: R&D centers around the world ................................................................................13
Figure 22: Steady gross margin amid lithium battery price decline .............................................14
Figure 23: Market share of bus makers(2015~20e) ..................................................................15
Figure 24: Market share of PV makers (2015~20e)...................................................................15
Figure 25: Guoxuan’s key clients are leading enterprises in the industry ......................................16
Figure 26: Large contracts signed in early-2016 accounted for 75% of 2015 revenue ...................16
Figure 27: Value chain deployment .........................................................................................16
Figure 28: Guoxuan’s competitive deployment along the value chain ..........................................17
Figure 29: Guoxuan’s value chain-level cooperation with firms/agencies ....................................17
Figure 30: Senior’s highest share in global separator market .....................................................18
Figure 31: Senior’s highest share in China’s separator market ....................................................18
Figure 32: Guoxuan’s cooperation with China Energine ............................................................19
Figure 33: Guoxuan’s strategic cooperation with BAIC BJEV .......................................................19
Figure 34: Funds by equity investment partners .....................................................................20
Figure 35: The private placement ...........................................................................................21
Figure 36: The earnings requirements for unlocking..................................................................21
Figure 37: Earnings forecast breakdown ..................................................................................22
Figure 38: Guoxuan’s 2017e revenue breakdown .....................................................................23
Figure 39: Guoxuan’s 2017e net profit breakdown ....................................................................23
Figure 40: Financial statements .............................................................................................23
Figure 41: P/E & P/B bands ...................................................................................................24
Figure 42: Comparable valuations ..........................................................................................24

Please read carefully the important disclosures at the end of this report
4
 CICC Research: December 30, 2016

Domestic lithium battery bellwether

As well as being China’s only listed lithium battery name which meets the
2017 Automotive Battery Industry Standards (draft), Guoxuan High-Tech’s
shipments ranked among the top three in China in 2016 with an estimated market share of
~9%. We expect its advantages in product quality, value chain deployment and channel
penetration to further consolidate its sector leadership; 2016~18e revenue and net profit
will likely grow at CAGRs of 39% and 32%, respectively.

Founded in 2006, Guoxuan is one of China’s leading producers of lithium-ion batteries and
materials. In May 2015, it went public via a backdoor listing (Rmb3.35bn injection
into Dongyuan Electrical) and raised Rmb821mn to fund a 240mn Ah
automotive battery project. Post-injection, Zhuhai Guoxuan became its controlling
shareholder, while its Chairman Li Zhen was the actual controller with a 36.46% stake. It
also brought about its transformation from power distributor to automotive battery and
power distribution & transmission supplier.

Figure 1: Historical development

Source: Company data, CICC Research

Figure 2: Guoxuan High-Tech’s equity structure as of June 30, 2016

Persons acting in concert

Zhuhai FSL Yiyuan SUN

80.69% Zhen LI Chen LI (the Xiamen
Guoxuan Electrical Jinyongquan (former chairman
(actual son of Zhen Kingdom Others
(controlling and Investments of Dongyuan
controller) LI) Capital
shareholder) Lighting electrical)

24.78% 11.68% 2.50% 8.33% 4.72% 4.62% 2.80% 39.61%

Guoxuan High-Tech

100% 100%

Hefei Dongyuan
Guoxuan Electrical

100% 65% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Guo- Guang Ameri- Su- Nan- Lu- Shang- Su- intelli- New
Shang-
xuan -tong can zhou jing jiang hai Tai- zhou Hui- Asi- gent energy
hai
New New Guo- Guo- Guo- Guo- Guo- fu Tian- de tong equip- techno-
Xuanyi
Energy Energy xuan xuan xuan xuan xuan li ment logy

Shareholders Lithium power battery & new energy technology development AFV components

BMS & AFV control Equipment for power transmission and distribution

Source: Company announcement, CICC Research

Please read carefully the important disclosures at the end of this report
5
 CICC Research: December 30, 2016

Guoxuan’s sales volume of lithium automotive batteries quadrupled over

2012~15, and now contributes >90% of its revenue. Riding on the boom of the
lithium battery sector, Guoxuan’s automotive battery sales grew 4x from 0.19GWh in 2012
to 1.00GWh in 2015, ranking third in China with a market share of 7%. Over 2012~15, the
revenue from its battery business surged 192%/37%/33%/115% YoY to
Rmb548mn/749mn/994mn/2.135bn and its blended gross margin expanded to
44%/54%/52%/45%.

Figure 3: China’s AFV sales (2011~15) Figure 4: Guoxuan’s automotive battery output &
sales
400,000 (unit) 350 (mn Ah)

350,000
300

300,000
250
250,000
200
200,000
150
150,000
100
100,000

50
50,000

- 0
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

Alternative fuel commercial vehicles Alternative fuel passenger vehicles Output Sales

Source: CAAM, CICC Research Source: Company announcement, CICC Research

Accumulative shipments exceeded 2GWh as of end-2015; supplies for ~30,000

AFVs (>16,000 PV & >11,000 buses). The battery module product has been widely
applied to pure electric and hybrid electric buses/PVs/urban logistics & sanitation vehicles;
its key clients include Ankai Automobile, Nanjing King Long, Suzhou King Long, JAC, Hefei
Bus and Zhongtong Bus. It also established strategic cooperation with BAIC in
strengthening deployment in the alternative-fueled PV market.

Figure 5: Guoxuan’s revenue from battery Figure 6: Guoxuan’s blended gross profit
business (2011~15) (2011~15)
2,500 (Rmb mn) 250% 1,400 (Rmb mn) 160%

1,200 140%
2,000 200%
120%
1,000

1,500 150% 100%

800
80%
600
1,000 100%
60%
400
40%
500 50%
200 20%

0 0% 0 0%
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

Revenue YoY Gross profit YoY

Source: Company announcement, CICC Research Source: Company announcement, CICC Research

Core competitiveness (product quality, value chain deployment and channel

penetration) to further consolidate its sector leadership. As a leading player in the
automotive battery segment, Guoxuan enjoys solid product quality and strong cost
controls. Moreover, Guoxuan deployed in cathode materials & separators, EV chargers and
operation & energy storage through cooperation with other players, and penetrated into
the value chain up/downstream.

Please read carefully the important disclosures at the end of this report
6
 CICC Research: December 30, 2016

Rapid capacity expansion; output/sales to

grow >3.5x over 2016~20

Solid sector leadership; continued market share gains

Guoxuan is a leading lithium-ion automotive battery name with the third

highest capacity and sales in China. In 2015, Guoxuan’s shipments of automotive
batteries totaled 1.04GWh, ranking third in China with a market share of ~7%. We expect
the segment’s sales/net profit to grow at CAGRs of 49%/27% over 2016~20.

Output/sales to grow >3.5x over 2016~20. Driven by its capacity expansion and
the strong downstream demand, Guoxuan’s automotive output/sales volume will likely rise
4.2x/3.9x over 2016~20 to 13.1GWh/12.2GWh, respectively.

Market share to grow from 9% to 18%. Backed by its Rmb2.1bn worth of contracts
with Nanjing King Long and Zhongtong Bus secured in early-2016, Guoxuan’s battery
revenue will likely exceed Rmb4.6bn in 2016, a YoY increase of ~120%. As its continued
capacity expansion drives its battery business to outgrow the sector average, its market
share is expected to expand from 9% in 2016 to 18% in 2020.

Figure 7: Guoxuan has the third highest capacity Figure 8: Continued share gains in the automotive
and sales volume in China battery market
4 (Gwh) 25% 20%

18%
20%
3 16%

15% 14%

2 12%
10%
10%

1 8%
5%
6%
0 0% 4%

2%

0%
2015A 2016E 2017E 2018E 2019E 2020E

Batteary shipments in 2015 Market share in 2015 (RHS) Guoxuan's market share

Source: gg-lb.com, CICC Research Source: Company announcement, CICC Research

Figure 9: Forecasts for automotive battery output Figure 10: Forecasts for automotive battery sales
14 (GWh) 80% 14 (GWh) 160%

12 70% 140%
12
60% 120%
10 10
50% 100%
8 8
40% 80%
6 6
30% 60%
4 4
20% 40%

2 10% 2 20%

0 0% 0 0%
2015A 2016E 2017E 2018E 2019E 2020E 2015A 2016E 2017E 2018E 2019E 2020E

Ternary battery production volumes Ternary battery sale volumes

LFP battery production volumes LFP battery sale volumes

Growth rate of total power battery production volumes Growth rate of total power battery sale volumes

Source: Company announcement, CICC Research Source: Company announcement, CICC Research

Please read carefully the important disclosures at the end of this report
7
 CICC Research: December 30, 2016

Strong downstream to bring opportunities to lithium battery business

The government’s shift to market-oriented reform should drive the sound

development of the AFV value chain. Over 2013~16, AFV sales surged >20x; related
policies include:

► Subsidy & reward: the key driver; government subsidies were as high as Rmb50bn
in 2015, while triggering a market boom, this also caused negative issues such as
subsidy fraud.

► Sector standard & catalogue: the entry barriers (Model Catalogue and Battery
Catalogue) and quality standards guided the market and product R&D.

► Long-term planning: Technology Roadmap and Fuel Consumption Points aimed to

take the place of subsidies in leading the transformation towards energy conservation
and AFV.

Figure 11: AFV policy and outlook

2013.09
2015.04 2016.04~?
Notices of the 4Q16 (Expected)
Notices of the Financial Notices on Verification of
Continuation of AFV Subsidy Adjustment for
Subsidies Support Policy for AFV AFV Promotion and
Promotion and AFVs
Promotion in 2016-2020 Application
Application

2012.09 2012.02 4Q16 (Expected)

Notices of the Li Keqiang proposed that the central Guiding Opinions on
Organization to Carry Out government should support Promoting the Development
Short- AFV Technical Innovation enterprises by substituting subsidies of Automobile Battery
Projects with rewards Industry
term Awards
policies
Energy conservation and AFV models
2009 recommended for promotion 2016.08~09 4Q16
Market Access Guidelines Market Access Guidelines for AFV Fourth Batch of AFV Models
for AFV Producers and Producers and Products (Revised Recommended for
Products The first to third batches of AFV models Draft for Comments) Promotion
recommended for promotion
Contents
and The first to third
The Fourth Batch of Batteries
standards 2015.03 batches of batteries 2016.04 2017 (Expected)
Gauge Conditions for Auto Supplementary Industrial Standards for Auto
Battery Industry Notices of Gauge Batteries (Fifth Batch)
Conditions

2016.10
2016.09
The Technology
2012.07 AFV Carbon Quota Management Rules 2019 (Expected)
Roadmap for Fuel-
Plans Development Plan of Energy Saving (Draft)
efficient and
Development Plan for AFV
and AFV Industry (2012-2020) Policies of Fuel Consumption Points- Industry (2020-2025)
Alternative-fueled
based System for AFV
Long- Vehicles
term
policies
2014.07 2016.06 2016.10 4Q16 (Expected)
Design Specifications for Electric Safety Technology Size of Battery Product for Standards for Electric
Standards Vehicle Charging Stations Conditions for Electric Electric Vehicles Vehicles Battery
Buses (Draft) Auto Battery Code Management System

Source: CCID, CICC Research

AFV output/sales to exceed 1.6mn units in 2020. Driven by policy support and
stronger demand, AFV output/sales will likely exceed 500,000 units in 2016, and rise by a
further 40% to 700,000 in 2017 and hit 1.6mn in 2020, implying a CAGR of 35%.

Demand for lithium batteries to have CAGR of 25% over 2016~20. Automotive
batteries have been in short supply due to robust sector growth and strong AFV
output/sales since 2H14. We expect demand for lithium automotive batteries to surge 145%
from 29GWh in 2016 to 71GWh in 2020, implying a CAGR of >25%, thus driving strong
earnings growth.

Please read carefully the important disclosures at the end of this report
8
 CICC Research: December 30, 2016

Figure 12: AFV output/sales to top 1.6mn in 2020

1,800 (1,000 units) 400%

1,600 350%

1,400
300%
1,200
250%
1,000
200%
800
150%
600
100%
400

200 50%

0 0%
2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E

Production and sale volumes of AFVs YoY (RHS)

Source: MITT, CAAM, CICC Research

Figure 13: Domestic demand for lithium batteries to see CAGR of 25% over 2016~20
Global lithium battery & raw materials demand 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E
Global lithium battery demand (Gwh) 17.6 20.4 30.9 37.9 51.4 66.4 87.7 114.5 138.8 162.5 186.1 210.0
Global demand YOY (%) 10.0% 15.5% 51.8% 22.5% 35.7% 29.2% 32.0% 30.7% 21.2% 17.1% 14.5% 12.8%
Consumer electronics batteries (Gwh) 17.3 19.8 29.1 33.9 43.2 50.7 55.8 64.1 71.8 79.0 86.9 93.9
Power batteries (Gwh) 0.3 0.4 1.4 3.0 6.1 11.5 26.4 43.3 57.8 72.4 85.9 100.4
Energy storage (Gwh) 0.1 0.2 0.4 1.0 2.1 4.2 5.5 7.1 9.2 11.1 13.3 15.7

China lithium battery & raw materials demand 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E
China lithium battery output (Gwh) 7.7 10.0 11.0 15.0 19.7 25.9 40.2 56.1 69.7 84.0 96.9 113.0
China output YOY (%) 25.0% 29.9% 10.4% 35.9% 31.0% 31.9% 55.2% 39.4% 24.3% 20.6% 15.3% 16.7%
Consumer electronics batteries (Gwh) 7.4 9.6 10.4 13.7 17.3 21.0 23.1 25.9 29.0 31.9 35.1 38.6
Power batteries (Gwh) 0.2 0.3 0.4 1.0 1.8 4.2 16.2 29.0 39.2 50.1 59.1 71.0
Energy storage (Gwh) 0.1 0.1 0.2 0.3 0.6 0.7 0.9 1.2 1.6 2.1 2.7 3.5

Source: Company data, CICC Research

Smooth progress in capacity expansion; ternary battery deployment

Continued capacity expansion funded by private placement to remove the

bottleneck of ternary battery capacity. With total capacity of 750mn Ah (2.4GWh) at
end-2015, Guoxuan announced it would raise no more than Rmb3.6bn via private
placement in November to fund a 1.2bn Ah automotive battery project, 10,000t nickelic
ternary cathode material, 5,000t silicon-based anode material, 210,000 units(sets)/year
AFV charging facility & key parts project, 200,000 sets/year EV automotive powertrain
control system project and the construction of the engineering research institute; it should
help further expand capacity and deploy along the value chain up/downstream.

Lithium battery capacity to expand 3.5x to 25GWh over 2016~20 (ternary

battery to rise 5.5x to 16GWh). Over the long term, Guoxuan aims to expand its
capacity to 7.2bn Ah by 2020 (25GWh) with ternary battery capacity up to 4.25bn Ah
(16GWh). It will also expand its value chain capacity by deploying in cathode materials,
anode materials, separators, AFV charging facilities & key parts, and EV automotive
powertrain systems.

Please read carefully the important disclosures at the end of this report
9
 CICC Research: December 30, 2016

Figure 14: Plans for the proceeds from the private placement
Proposed fund-
No. Investment projects Total investment (Rmb mn)
raising (Rmb mn)
1 Industrializationization of the new generation of
lithium automotive battery with high energy
1.1 Hefei Guoxuan 600mn Ah/year high-energy LIB
1,158 950
industrializationization project
1.2 Qingdao Guoxuan 300mn Ah/year high-energy LIB
611 500
industrializationization project
1.3 Nanjing Guoxuan 300mn Ah/year high-energy LIB
604 500
industrializationization project
2 Industrialization project producing 10,000 t/year
high-nickel cathode materials and 5,000 t/year 654 500
silicon anode materials
3 210,000 units (sets)/year AFV charging facility &
389 300
key parts project
4 200,000 sets/year EV automotive powertrain control
362 250
system project
5 Engineering research institute construction project 1,066 600
Source: Company announcement, CICC Research

Figure 15: Guoxuan’s continued expansion of lithium iron phosphate and

ternary battery capacity
Battery
Battery type 2013 2014 2015 2016E 2017E 2018E 2019E 2020E
capacity (Gwh)
Hefei Old LFP
0.32 0.32 0.32 0.32 0.32 0.32 0.32 0.32
Factory
Hefei No.1 LFP 0.16 0.16 0.16 0.64 0.64 0.64 0.64
Hefei No.2 LFP 0.64 0.64 0.64 0.64 0.64 0.64
Hefei No.3 LFP 0.80 1.12 1.12 1.12 1.12
Ternary 1.30 1.67 1.67 1.67 1.67
Suzhou No.1 LFP 0.32 0.32 0.32 0.32 0.32 0.32
Nanjing No.1 LFP 0.96 0.96 0.96 0.96 0.96 0.96
Tangshan New type 0.96 1.92 3.20 3.20
Laixi, Qingdao Ternary 1.11 2.22 3.70 3.70 3.70
To construct LFP 0.48 0.48 0.96 2.24
Ternary 0.74 1.11 7.40 10.36
Total 0.32 0.48 2.40 5.61 10.07 12.88 20.93 25.17
Ternary 0.00 0.00 0.00 2.41 4.63 6.48 12.77 15.73

Source: Company announcement, CICC Research

Please read carefully the important disclosures at the end of this report
10
 CICC Research: December 30, 2016

Beneficiary of higher entry barriers, leading products

& technology

Guoxuan is one of the few manufacturers to meet the automotive

battery sector’s high entry barriers

As the Automotive Battery Sector Standards and Automotive Storage Battery Recycling
Management take effect in 2017, we expect only five domestic players will be up to the
grade. Such policies should accelerate the capacity elimination and the crowding-out of
unqualified medium-/small-size firms, thus benefiting battery/material/equipment leaders.
According to their own plans, the companies which plan to expand capacity by >8GWh in
2017~18 are CATL (24GWh), BYD (16GWh), Guoxuan (13GWh), and, OptimumNano
(10.5GWh).

Figure 16: Capacity comparison

Capacity requirements Old version New version
Lithium-ion battery producers ≥200 mn Wh ≥8 bn Wh
Nickel–metal hydride battery producers ≥10 mn Wh ≥100 mn Wh
Super capacitor battery producers ≥5 mn Wh ≥10 mn Wh
Battery system producers ≥10,000 units or 200 mn Wh ≥80,000 units or 4 bn Wh
The annual capacity of battery monomer producers and battery system producers should meet the above
requirements.

Source: MITT, CICC Research

Guoxuan is one of the three companies included in the Ministry of Science &
Technology’s (MoST) list and was granted an Rmb100mn subsidy.

Guoxuan was also included in the second batch of the AFV Battery Catalog.
Some foreign and JV brands have yet to join the catalogue.

Figure 17: The 57 companies in the AFV Battery Catalogue (batches 1~4)
Related Listed Fourth Related Listed
First Batch Company Location Company Location
Company Batch Company
1 CATL Ningde, Fujian 26 China Aviation Lithium Battery Luoyang, Henan Chengfei Integration
Technology
2 Optimum Nano Shenzhen, Guangdong J&B Firefighting 27 Henan Lithium Power Source Xinxiang, Henan
3 Zhuhai Yinlong Zhuhai, Guangdong Gree Electric 28 Microvast Huzhou, Zhejiang
Appliances
4 Zibo Guoli New Power Source Zibo, Shandong 29 Narada Battery Hangzhou, Zhejiang Narada Power
Source
5 Sinopoly Battery. Tianjin FDG Electric 30 Skyrich Power Huzhou, Zhejiang
Vehicles
6 Coslight Power Harbin, Heilongjiang 31 Chaowei Chuangyuan Huzhou, Zhejiang
7 Tianjin Lishen Joint-Stock Co. Tianjin 32 Ningbo CRRC New Energy Ningbo, Zhejiang
8 Lishen Power Battery System Tianjin 33 Zhejiang GBS Energy Yuyao, Zhejiang
9 Hunan Copower EV Battery Changsha, Hunan 34 Chunlan Clean Energy Research Institute Taizhou, Jiangsu
10 Cenat New Energy Shanghai 35 Suzhou Youlion Battery Changshou, Jiangsu
36 Zhihang New Energy Taizhou, Jiangsu
Second Related Listed 37 ZTT Energy Storage Technology Nantong
Company Location
Batch Company
11 Wanxiang A123 Hangzhou, Zhejiang Wanxiang A123 38 Jiangsu Tenpower Zhangjiagang, Jiangsu Aucksun
12 Huizhou BYD Battery Huizhou, Guangdong BYD 39 Jiangsu Jisheng Xintai Jiangsu Changzhou
13 Guoxuan High-Tech Power Hefei, Anhui Guoxuan High- 40 Huizhou EVE Battery Huizhou, Guangdong EVE Energy
Energy Tech
14 Citic Guoan MGL Beijing Citic Guoan 41 Cham Battery Technology Dongguan, Guangdong
15 Do-Fluoride (Jiaozuo) New Energy Jiaozuo, Henan Do-Fluoride 42 Guangzhou Great Power Guangzhou, Guangdong Great Power
16 Huanyu New Energy Xinxiang, Henan 43 Zhuhai Great Power Zhuhai, Guangdong
17 High Star Power Qidong, Jiangsu 44 Sinowatt Dongguan, Guangdong Zhenhua Science&
Technology
45 Teamgiant New Energy Shenzhen, Guangdong
Third Related Listed 46 ETC Battery Wuhu, Anhui
Company Location
Batch Company
18 Tianjin Jiewei Battery Tianjin 47 CNSG Anhui Hong Sifang Hefei, Anhui
19 Shenzhen Bak Battery Shenzhen, Guangdong Token Science 48 Melsen Power Changsha, Hunan
20 Zhongdao Energy Jincheng, Shanxi 49 Zhuoneng New Energy Qinzhou, Guangxi
21 Henan Xintaihang Power Xinxiang, Henan 50 Delangneng Power Battery Shanghai
22 Tianneng Energy Technology Huzhou, Zhejiang Tianneng Power 51 National Battery Beijing Clou Electronics
23 Mcnair Technology Dongguan, Guangdong 52 Farasis Ganzhou Ganzhou, Jiangxi
24 Phylion Battery Suzhou, Jiangsu 53 First New Energy Yichun, Jiangxi Far East Smarter
Energy
25 Wina Battery Weifang, Shandong 54 Camel Group New Energy Battery Xiangyang, Hubei Camel Group
55 Hengyu Technology Dongying, Shandong
56 Shandong Forever New Energy Zoucheng, Shandong
57 Jiexin Power Battery Shanghai

Source: MITT, CICC Research

Please read carefully the important disclosures at the end of this report
11
 CICC Research: December 30, 2016

Now that it is part of the catalogue’s key supply chain, Guoxuan supplies
batteries for 40 vehicle models, the third most in the sector. In the fourth batch
of the AFV Models Recommended for Promotion unveiled by the Ministry of Industry &
Information Technology (MIIT) in December 2016, Guoxuan supplies 40 vehicle models,
only fewer than CATL and Tianjin Lishen.

Figure 18: Guoxuan is the third largest supplier in the fourth batch of the AFV
Battery Catalogue
80 (Unit)
70
60
50
40
30
20
10
0

Chaowei…
National Battery
Optimum Nano

Xintaihang
Sound
Chunlan
Guoxuan

CALB
CATL

EVE

Phylion
Wina

Bak

Pride
BYD

Zhuhai Yinlong
Microvast

First

McNair

Highstar
Lishen

MGL

ZTT

Coslight
Units of vehicle models supplied

Source: MITT, CICC Research

Higher entry barrier, AFV Battery Catalogue and entry into key supply chain to
further reinforce leadership. In the short term, we expect domestic manufacturers
included in the catalogue to see less competition from the outside while their capacity
surplus pressure eases. Over the medium/long term, the sustainability of capacity
expansion still depends on whether firms can meet auto makers’ demand.

Domestic bellwether in automotive battery product and R&D

Core AFV parts with higher technical requirements. Battery technology is what
keeps EVs from taking center stage. Among the core technologies, the motor has matured,
the electronic control is progressing along with Moore’s Law and the chassis is also no
longer a problem.

China still lags more developed countries in its research on battery materials and systems.
Despite its one-decade of development, the AFV industry is still taking shape, and its
weaknesses are common to all subsectors.

Please read carefully the important disclosures at the end of this report
12
 CICC Research: December 30, 2016

Figure 19: Comparison of Chinese & Korean lithium battery manufacturers

Chinese enterprises
Current cell energy density in
outstanding enterprises can reach
Technology capacity
180Wh/kg. Further improvement is
likely.
Current yield rate is 70% for A-
Manufacturing product, or 90% for B-product at
capacity some leading enterprises. That of
battery modules is a bit lower.
Currently, the price of a battery cell is
around Rmb1.44/Wh, but ensuring 5
Product price years/100,000 miles is difficult.
Korean enterprises
Current cell energy density can reach
200Wh/kg. Further improvement is
likely.
Defective rates of battery modules
and cells have reached a level of
1ppm.
Cell price is around Rmb1.5~1.6/Wh,
and will be a bit lower after domestic
production. Module endurance can be
ensured for 5 years/100,000 miles.

Chinese enterprises are chosen only More popular among car enterprises,
when Korean enterprises' batteries and demand will exceed supply
are not available in the market for
electric passenger cars.
Willingness of vehicle
In the past 1~2 years, phosphoric
enterprises
acid iron batteries from Chinese
enterprises are still the first choice for
the electric bus market, though the
future is tough to predict.
Source: RealLi Research, CICC Research

Leading technology and commercialization. Guoxuan’s lithium iron phosphate

technology allows it to closely respond to the demands of China’s AFV market. It is also
seeking earnings growth by investing more in technical reserves and accelerating the R&D
and commercialization of compound ternary materials, high-voltage/energy density Ni-Mn
materials and lithium-rich materials.

Guoxuan has several core technologies with proprietary intellectual property

rights and 351 patents granted as of end-June 2016 (93 for inventions). Guoxuan’s key
R&D institutes comprise of branches in technical management, materials, batteries, PACK,
BMS, FMEA, electric drives and techniques.

Figure 20: Guoxuan’s technical R&D

Source: Company data, CICC Research

R&D centers established in key countries to accelerate the building of a global

lithium battery ecosystem. Guoxuan invested a total of >Rmb250mn in R&D over
2012~15, equivalent to almost 5% of its revenue each year. It also set up R&D centers
both abroad (in the US, Germany and Japan) and at home (Hefei and Shanghai).

Please read carefully the important disclosures at the end of this report
13
 CICC Research: December 30, 2016

Figure 21: R&D centers around the world

Bochum (Germany)

Silicon Valley (California, US) Hefei Osaka (Japan)

Shanghai

Engineering Research Institute

Hefei Shanghai USA Germany Japan

Whole industry Product BMS Motor and Batteries
chain research design development electric control

Source: Company data, CICC Research

Cost controls and technical strengths to secure leading profitability

Cost reductions to continue along with the capacity expansion. With key
manufacturing technologies in hand, Guoxuan is able to improve its production efficiency
and reduce its unit cost, thus creating visible cost advantages for itself. As the large-scale
production proceeds further, improved techniques will continue to cut unit costs; batteries’
higher energy density should spare more material for the same mileage. As a result, the
decline in material price can better offset the battery price cut.

Steady profitability despite YoY price decline. As disclosed by Guoxuan, the gross
margin of its automotive batteries stayed ~50% over 2013~15, while product price and
costs both dropped by ~10% on average per year. The fact that both saw the same level
of decline proved the latter to be just a natural course after capacity expansion.

Figure 22: Steady gross margin amid lithium battery price decline
7 (RMB/Wh) 55%

6 50%

5 45%

4 40%

3 35%

2 30%

1 25%

0 20%
2005 2010 2013 2014 2015 2016E 2017E 2018E 2019E 2020E 2025E

Lithium-ion battery price Guoxuan's battery business gross profit margin (RHS)

Source: State Information Center, Company announcement, CICC Research

Please read carefully the important disclosures at the end of this report
14
 CICC Research: December 30, 2016

Continued market share gains from value chain

deployment and channel penetration

Market share secured by channel penetration and large client strategy

Guoxuan has built close ties with, and strong channel advantages among, downstream
automakers. We expect its key clients to take >55% of the alternative-fuel bus market
and 45% of the alternative-fuel PV in 2020.

Key clients took >45% of the alternative-fuel bus market in 2015~16; we

expect this share to expand to >55% by 2020. So far, its key clients include King
Long Motor, Nanjing King Long, Ankai Automobile, Zhongtong Bus and Dongfeng.

In 2015, China’s pure electric CV output & sales reached 102,461 & 100,763 units,
respectively, of which 35,839 were produced by Guoxuan’s key clients (namely King Long
Motor, Nanjing King Long, Zhongtong, Joylong, Ankai and Nanjing Automobile), implying
demand for 3.76GWh in LFP batteries. In 2015, China’s hybrid electric CV output & sales
amounted to 23,230 & 22,947 respectively; of which, 11,364 were produced by Guoxuan’s
key clients (King Long, Zhongtong, Ankai, Nanjing King Long, AsiaStar and SunWin),
implying demand for 0.23GWh of LFP batteries. Assuming 30% of this large client
demand is met by Guoxuan, its total shipments would be 1.2GWh.

Guoxuan’s key clients took 25% of the alternative-fuel PV market in 2015~16

and this share will likely exceed 45% by 2020. With its cooperation with Chery
progressing well in 2016, as well as its ternary automotive battery production lines in Hefei
and Qingdao going into operation, 2017 will be the year Guoxuan expands its presence in
the PV automotive battery market. We expect its ties with famous carmakers to
significantly drive up its shipments of ternary batteries.

Continued deployment in PV market to boost the ramp-up of ternary batteries.

Guoxuan will invest more in PV batteries to further expand its clients; carmakers such as
SAIC are target partners.

Figure 23: Market share of bus makers(2015~20e) Figure 24: Market share of PV makers (2015~20e)
Market share Market share
Bus enterprises Battery enterprises
in 2015~16 in 2020 Market share Market share
PV enterprises Battery enterprises
Yutong 18% 20% CATL, Lishen, CALB, MGL in 2015~16 in 2020
Guoxuan, CATL, Llishen, BYD 31% 23% BYD
King Long Motor 14% 15% OptimumNano, CALB,
Wanxiang Lishen, Sinopoly, Wanxiang,
Geely 18% 13%
Guoxuan, Lishen, CALB, Do-Fluoride
ZTO 13% 15%
Wanxiang, Microvast, MGL BESK, Coslight, Guoxuan,
BAIC 10% 12%
Guoxuan, CATL, Lishen, Pride
Nangjing KIng Long 5% 10% OptimumNano, CALB, Zotye 9% 10% Guoxuan, Lishen, Bak, Foster
Wanxiang
SAIC 7% 8% Wanxiang
Lishen, OptimumNano,
Foton 4% 8% Guoxuan, Sumsung SDI,
Microvast, Wanxiang JAC 7% 8%
Guoxuan, Lishen, Wanxiang, Sinoev Technologies
Ankai 4% 5%
Microvast, LGC Wanxiang, Jeiwei,
Chery 6% 7%
Guoxuan, OptimumNano, OptimumNano
Jiangsu Joylong 4% 5%
Coslight, National Battery JMC 3% 3% Sinopoly, Funeng
Guoxuan, Lishen, Changan 2% 2% Pride, Changan New Energy
Dongfeng Motor 3% 5%
OptimumNano, CALB
BYD 3% 5% BYD Other alliance CATL, Korean battery
1% 10%
Zhuhai Yinlong, OptimumNano, enterprises enterprises, etc.
Zhuhai Guangtong 3% 3%
CALB
Source: CAAM, chinaev.org, CICC Research Source: CAAM, chinaev.org, CICC Research

Please read carefully the important disclosures at the end of this report
15
 CICC Research: December 30, 2016

In 2015, China’s pure electric PV output & sales reached 152,172 & 146,719 units
respectively, of which 30,177 (20%) were produced by Guoxuan’s key clients (namely
King Long Motor, Nanjing King Long, Zhongtong, Joylong, Ankai and Nanjing Automobile),
implying demand for 0.66GWh of ternary batteries. In 2015, China’s hybrid electric PV
output & sales amounted to 62,608 & 60,663, respectively, of which 1,221 were produced
by Guoxuan’s key clients (such as Brilliance Auto), implying demand for 0.02GWh of
ternary batteries. Assuming 30% of large client demand is met by Guoxuan, its total
shipments would be 0.2GWh.

Guoxuan signed Rmb2bn of contracts in early 2016, further reinforcing

downstream CV clients. In early 2016, Guoxuan signed contracts worth
Rmb1,037.366mn with Zhongtong Bus and Rmb1,058.17mn with Nanjing King Long (a
total of Rmb2.095bn), amounting to 75% of its revenue in 2015. These deals should help
secure future earnings growth.

Figure 25: Guoxuan’s key clients are leading Figure 26: Large contracts signed in early 2016
enterprises in the industry amounted to 75% of 2015 revenue

(unit) Outputs of the 10 largest pure electric CV enterprises in 2015 3,000 (Rmb mn)
16,000
14,000 13,436 2,500
75% of
12,000 Guoxuan's
10,000 revenue in
8,796 8,191 2,000 2015
8,000 6,670
5,605
Contract with Nangjing King Long,
6,000 5,191 Rmb 1.058bn
1,500 Guoxuan's revenue in 2015,
4,000 3,189 3,027 2,579 2,526 Rmb 2.745bn
2,000
1,000
0
Contract with Zhong Tong Bus,
500 Rmb 1.037bn

0
Output of pure electric CVs in 2015 Contract amount Revenue in 2015

Source: MITT, CICC Research Source: Company announcement, CICC Research

Strengthened value chain deployment and cooperation with

automakers

Continued deployment along lithium battery and AFV value chains. With its
technical strengths in lithium-ion automotive battery and solid market foundation,
Guoxuan consolidated its resources to strengthen its sector leadership and competitive
advantages.

Figure 27: Value chain deployment

◇ Building and
to build cathode
materials project
Cathode
material Coating
Cathode Power Mid-stream Downstream Back-end
flakes Put in battery application application services
Aluminum
Aluminumfoil
oil battery ◇ EVSE: cooperate
◇ Plan to ◇ Passenger
◇ Coope- Roll Rolled shells Pack into ◇ Build a with Tgood and plan
built AFV vehicles: to suppy
rate with Separator cathode cells and battery factory to construct EVSE
◇ To build powertrain for Brilliance Jinbei,
Senior and anode test for and an R & D and key components
anode Anode control system Chang'an, JAC, etc.
formation center with project
materials material Coating project ◇ Commercial
project Anode Electrolyte BAIC BJEV vehicles: Zhong ◇Finance: buying
flakes Put in ◇ Cooperate Tong, Nanjing AFV sub-fund;
Copper foil battery with CASC Golden Dragon, ◇ Others: finance
shells etc. lease, telematics,
etc.

Source: Company announcement, CICC Research

Please read carefully the important disclosures at the end of this report
16
 CICC Research: December 30, 2016

Figure 28: Guoxuan’s competitive deployment along the value chain

Guoxuan's BYD Guoxuan CATL Wanxiang Others
Deployment

Upstream
Metal resources
Li/NCM, etc.

Constructing 50,000 t/year cathode Cathode

material project materials

Midstream
materials
Plans to build 10,000t/year cathode Anode
material and 5,000t/year anode materials
material project
Separators
Cooperation with Senior Electrolytes

Deployment

Deployment

Deployment

Deployment
Deployment
Plans to construct EVSE and key
manufacturing

components project and AFV Battery

Midstream

powertrain control system project equipment

Cooperation with BAIC BJEV BMS+MCU
EVSE
Cooperation with CASC

Passenger vehicles: to suppy for

manufacturing

3C consumer
Downstream

Brilliance Jinbei, Chang'an, JAC,

etc. electronics
AFV

Deployment
Commercial vehicles: Zhong
Tong, Nanjing Golden Dragon, Energy storage
etc.

Plans to construct EVSE and

Deployment

key components project

after-market
Vehicle and

EV chargers
Cooperation with Tgood Finance
Others
Buying AFV sub-fund

Financial leasing, telematics, etc.

Source: Company announcement, CICC Research

Rapid growth of battery materials amid AFV boom. The quality of materials directly
affects a battery’s energy density, recycling performance and safety. Guoxuan keeps close
ties with its material suppliers (anode, separator and electrolyte) and has established
value chain cooperation with leading players and famous universities.

Figure 29: Guoxuan’s value chain-level cooperation with firms/agencies

Cathode Anode material Electrolyte Separator Interface Thermal runaway Development of Integration
material technics precaution cell core application

Tech administration Technology

Material branch Batteray branch Testing lab BMS branch Product branch FMEA branch
department branch

Intellectual Material Battery design Test and analysis Technology BMS System design Failure analysis
property rights development and verification development development and verification
of project and matching
management

Source: Company data, CICC Research

Please read carefully the important disclosures at the end of this report
17
 CICC Research: December 30, 2016

Upstream deployment: cathode/anode material and separator

Guoxuan plans to expand its existing 8,000t capacity of LFP cathode material to
50,000t over the next five years and to build 10,000t nickelic ternary cathode material and
5,000t silicon-based anode material projects with the proceeds of its private placement.
Thanks to the core technologies, it now could produce and sell its own cathode materials.

Fully-owned subsidiary, Hefei Guoxuan, to jointly build lithium battery separator

project with upstream giant, Shenzhen Senior (Rmb35mn/35% stake by Guoxuan;
Rmb51mn/51% stake by Senior; Rmb14mn/14% stake by others).

Figure 30: Senior’s highest share in global Figure 31: Senior’s highest share in China’s
separator market separator market

Others Senior
19%
Asahi Zhongke
Jinhui 24% 13%
Science &
1%
Zhongke Technology
Science & Others 12%
Technology 40%
4%
Senior Celgard Jinhui
4% UBE 12% 9%
4%
South Tonen
South Korea Korea Chemical
Henan Yiteng
W-Scope SK 15% Suzhou Jieli Cangzhou 8%
6% 11% 3% Newmi-Tech Donghang Mingzhu
4% 5% 6%

Source: cnii.com.cn, CICC Research Source: cnii.com.cn, CICC Research

Midstream deployment: EV powertrain control systems & automotive batteries

Planned building of EV powertrain control system project to strengthen value

chain deployment. In November 2016, Guoxuan announced plans to build an EV
powertrain control system project (annual capacity of 200,000 units) including BMS and
MCU. The project will likely contribute Rmb1.131bn annual revenue and Rmb146mn
annual net profit after reaching full capacity.

Alliance with BAIC BJEV to deepen cooperation in automotive batteries. In

November 2015, its fully-owned subsidiary Hefei Guoxuan entered into a strategic
cooperation with BJEV, a leading player in China’s AFV market. It should help deepen the
win-win cooperation and accelerate Guoxuan’s deployment in the PV market.

Cooperation with China Energine should expand its carmaker clients, such as
Brilliance Jinbei and Chang’an Automobile. In February 2016, Guoxuan announced
it would enter into a cooperative agreement with China Energine International and
Tangshan Government to building an automotive battery project in Tangshan. Guoxuan
and China Energine will jointly set up a JV (51% stake by Guoxuan), which plans to build
1.0bn Ah capacity for Rmb3bn. Moreover, they will also cooperate in the R&D and
application of automotive batteries, graphene, wind power storage and military products.

Please read carefully the important disclosures at the end of this report
18
 CICC Research: December 30, 2016

Figure 32: Guoxuan’s cooperation with China Energine

Aspects
Wind power and PV
generation and storage
Graphene material
Military and alternative-fuel
automotive batteries
AFV industry chains
Source: Company announcement, CICC Research
Details
To combine the advantages of CASC in wind power and the experience of
Guoxuan in automotive batteries; to apply high-quality products to Wind
power, PV and other fields to create market values.
To jointly develop graphene materials and application technology which have
great market potentials; to focus on graphene application on automotive
batteries and to build a development and innovation industry chain platform
to expand the AFV market for win-win.
To combine the advantages of CASC in military and the experience of
Guoxuan in alternative-fuel automotive batteries; To develop military storage
products with a focus on promoting the application of alternative-fuel
batteries on military vehicles and vessels.
To focus on promoting the cooperation with Brilliance Jinbei and Chang'an in
AFV platform and to cooperate in AFV product development, auxiliary
battery, market expansion, capital cooperation and other aspects.

Downstream deployment: shareholding in BAIC BJEV and national fund to

explore EV charger and battery leasing services

Transformation towards comprehensive service provider; strengthened

cooperation with downstream players. Guoxuan set up R&D centers in key countries
and strengthened its cooperation with downstream players, especially automakers and
operators.

Shareholding in BAIC BJEV to strengthen downstream cooperation. In March

2016, its fully-owned subsidiary Hefei Guoxuan acquired a 3.75% share of BAIC BJEV for
Rmb120mn.

Figure 33: Guoxuan’s strategic cooperation with BAIC BJEV

Aspects
To jointly establish an R&D center in
Silicon Valley, the United States
To jointly build Qingdao Laixi
Automotive Battery Factory
To set up a battery operation and
recycle joint venture
Source: gg-lb.com, CICC Research
Details
To establish an R&D center with other overseas investors to creat an
open innovation platform, undertake domestic product development
projects and seeking foreign strategic partnership and international
cooperation.
To jointly establish a 1bn Ah automotive battery factory in Laixi, Qingdao.
To set up a joint venture with other third parties to cover battery rental
and maintenance, EVSE construction, battery stagger utilization research
and application, quick repair and maintenance services, convenient
business operation, new energy publicity and display, etc.

Shareholding in AFV sub-fund to accelerate value chain deployment. In

November 2015, Guoxuan announced it would invest in an AFV sub-fund using
Rmb216.5mn of its own funds. It will mainly support the growth of AFV, key parts and
related service industry.

Proactive expansion to battery leasing and charging operations. In 2010,

Guoxuan launched a battery finance leasing business in China, allowing Hefei Bus to lease
automotive batteries. In 2016, it established a JV with BACI BJEV to provide battery
replacement services for electric taxis. Guoxuan is also working together with companies
such as TGood and China Energine to explore new segments, including charging
operations.

Please read carefully the important disclosures at the end of this report
19
 CICC Research: December 30, 2016

Figure 34: Funds by equity investment partners

Partner Character Capital contributions Proportion
(Rmb mn)
Hefei Guoxuan High-Tech Power Energy Co.,Ltd Limited partner 216.5 43.3%
National Fund for Technology Transfer and Limited partner 150 30%
Commercialization
Anhui Provincial Investment Group Holding Co.,Ltd Limited partner 50 10%
Hefei Innovative Technology and Venture Capitalist Limited partner 50 10%
Co.,Ltd
Hefei Gaoxin Development and Investment Group Limited partner 30 6%
Company
Hefei Guoke Xinneng Equity Investment Management General partner 3.5 0.7%
partnership (limited partnership)
Total 500 100%
Source: gg-lb.com, CICC Research

Alliance with TGood Electric to push forward EV charger construction. In

February 2015, Guoxuan jointly established a JV with Qingdao TGood, investing
Rmb200mn for a 35% stake; the two plan to invest Rmb1bn in building an EV charger
project in Yaohai. The charger construction helps Guoxuan to further expand downstream,
thus strengthening its overall competitiveness.

Planned construction of charging facilities and key parts project. In November

2016, Guoxuan announced its private placement plan would fund a charging facility and
key parts capacity. The project, after reaching full capacity of 210,000 units, will likely
generate revenue of Rmb969mn and net profit of Rmb116mn p.a.

Large shareholder’s incremental shareholding and equity incentive

demonstrates confidence

Large shareholder and actual controller, Li Zhen’s additional shareholding via

private placement demonstrates his confidence in future growth. Currently, Li
Zhen holds a 36.46% stake. According to the private placement plan announced in
November 2016, Li Zhen would acquire another 40.09mn shares (35% of total placement)
for Rmb1.25bn at Rmb31.18/sh with a 36-month restriction on trading, well
demonstrating his confidence in the future.

Figure 35: The private placement

Directional add-
No. Amounts (Rmb mn) Shares (Sh.)
issuance buyers
1 Zhen LI 1,250 40,089,801
2 SAIC Capital 350 11,225,144
3 Bosera Fund 400 12,828,736
4 Jishi Investment 400 12,828,736
5 Jinniu Investment 370 11,866,581
6 Sinvo Fund 330 10,583,708
7 Yida Investment 300 9,621,552
8 Southern Capital 200 6,414,368
Total 3,600 115,458,626
Source: Company announcement, CICC Research

Equity incentives to 165 senior managers and core employees. In September

2015, Guoxuan proposed to place 15.67mn restricted shares (1.82% of total share capital)
to 175 senior managers and core employees at Rmb15.15/sh. The Phase One Plan
(14.01mn shares) was completed in November 2015.

Please read carefully the important disclosures at the end of this report
20
 CICC Research: December 30, 2016

Interests aligned by equity incentive; business and earnings growth worth watching.
According to the requirements for unlocking, 2015/16/17/18e net profit should be above
Rmb348mn/465mn/515mn/569mn, implying growth of 34%/11%/10%. In 2015, net
profit amounted to Rmb548mn, way above the requirement. We thus believe the future
growth merits attention.

Figure 36: Earnings requirements for unlocking

Unlocking
Evaluation period Performance evaluation index Unlocking ratio
period
First 2015 Net profit in
Net profit for2015
2015cannot
cannotbelow
be below
Rmb 20%
Rmb348mn
348mn
Second 2016 Net profit in
Net profit for2016
2016cannot
cannotbelow
be below
Rmb 20%
Rmb465mn
465mn
Third 2017 Net profit in
Net profit for2017
2017cannot
cannotbelow
be below
Rmb 20%
Rmb515mn
515mn
Net profit for 2018 cannot be below
Fourth 2018 Net profit in 2018 cannot below Rmb
Rmb569mn 40%
569mn
Source: Company announcement, CICC Research

Please read carefully the important disclosures at the end of this report
21
 CICC Research: December 30, 2016

Initiate coverage with Conviction BUY

We are upbeat on Guoxuan’s future growth. The company currently mainly focuses
on the lithium-ion automotive batteries and traditional electrical equipment; considering
the AFV market boom and its rising output/sales, we forecast 2016~18e revenue to rise
106% (pro forma 87%)/42%/35% YoY to Rmb565mn/804mn/1.088bn; net profit to rise
78% (pro forma 68%)/37%/28% YoY to Rmb1.042bn/1.425bn/1.829bn, or EPS of
Rmb1.19/1.63/2.09. We initiate our coverage with Conviction BUY. The stock is
currently trading at 19x/15x 2017/18e P/E. We set a target price of Rmb45.00,
implying 28x/22x 2017/18e P/E and 46% upside room from its current price.

Figure 37: Earnings forecast breakdown

2014 2015 2016E 2017E 2018E
Revenue (Rmb mn) 1,014 2,745 5,647 8,043 10,882
Power Battery (Rmb mn) 994 2,135 4,678 6,407 7,773
Proportion 98% 78% 83% 80% 71%
YoY 33% 115% 119% 37% 21%
Capacity (bn Ah) 1.4 7.5 16.5 29.5 37.5
Sale volume (bn Ah) 1.3 3.1 7.7 12.0 17.2
Transmission and distribution products (Rmb mn) - 552 910 1,366 1,639
Proportion - 20% 16% 17% 15%
YoY 65% 50% 20%
Others (Rmb mn) 20 59 59 270 1,470
Proportion 2% 2% 1% 3% 14%
YoY 188% 0% 361% 444%
Net Profit (Rmb mn) 251 585 1,042 1,425 1,829
Power Battery (Rmb mn) 243 488 905 1,216 1,430
Proportion 97% 83% 87% 85% 78%
YoY 101% 86% 34% 18%
Transmission and distribution products (Rmb mn) - 71 112 172 200
Proportion - 12% 11% 12% 11%
YoY 58% 54% 17%
Others (Rmb mn) 8 26 25 37 199
Proportion 3% 4% 2% 3% 11%
YoY 229% -4% 49% 432%
Source: Company data, CICC Research

Figure 38: Guoxuan’s 2017e revenue breakdown Figure 39: Guoxuan’s 2017e net profit breakdown
Transmission Others Transmission Others
and 3% and 3%
distribution distribution
products products
17% 12%
LFP
LFP 1.62%
2.49% Ternary
Ternary batteries
batteries LFP batteries 11% LFP batteries
12% 65% 72%

Source: CICC Research Source: CICC Research

Please read carefully the important disclosures at the end of this report
22
 CICC Research: December 30, 2016

Figure 40: Financial statement

Rmb mn 2013A 2014A 2015A 2016E 2017E 2018E
P&L
Revenue 781 1,014 2,745 5,647 8,043 10,882
Gross profit 416 514 1,220 2,267 3,017 3,920
Selling expenses -51 -60 -210 -433 -616 -834
G&A -84 -93 -272 -560 -797 -1,078
Financial expenses -26 -18 -22 -7 20 46
Operating profit 193 276 636 1,275 1,624 2,054
Profit before tax 257 291 680 1,207 1,650 2,118
Tax -38 -41 -93 -165 -225 -289
Net income 220 251 585 1,042 1,425 1,829
Cash Flow
Operating cashflow 24 213 520 1,133 2,039 2,606
Investing cashflow -184 -164 -500 -161 -618 -618
Financing cashflow 22 147 1,110 118 -164 -224
Cash and cash equivalents change -139 195 1,132 1,090 1,256 1,763
Balance Sheet
Current Assets 1,143 1,743 4,556 8,205 11,552 15,736
Fixed Assets 274 476 1,358 1,487 1,494 1,397
Current liabilities 752 1,185 2,745 4,978 7,229 9,888
Long-term liabilities 169 315 898 898 898 898
Shareholder's equity 854 1,104 3,016 4,198 5,388 6,897
Total asset 1,809 2,635 6,713 10,100 13,541 17,709
Source: Company data, CICC Research

Figure 41: P/E & P/B bands

PE Band PB Band
Px_Last 14x 24x 34x 44x Px_Last 1.6x 4.4x 7.2x 10x

60 RMB 60 RMB

50 50

40 40

30 30

20 20

10 10

0 0
Jan/14 Jun/14 Nov/14 Apr/15 Sep/15 Feb/16 Jul/16 Dec/16 Jan/14 Jun/14 Nov/14 Apr/15 Sep/15 Feb/16 Jul/16 Dec/16

Source: Wind Info, CICC Research

Figure 42: Comparable valuations

Market cap. PE PB ROE
Company Ticker Currency Price EPS
(mn) (X) (X) (%)
2016/12/16 14A 15A 16E 17E 14A 15A 16E 17E 14A 15A 16E 17E 14A 15A 16E 17E
Guoxuan High-Tech 002074.SZ RMB 30.86 27,290 0.29 0.67 1.19 1.63 108 46 26 19 24 9 6 5 23 19 25 26
Desay Battery 000049.SZ RMB 39.98 8,622 1.14 1.12 1.09 1.48 35 36 37 27 11 9 7 6 37 28 22 24
Cam el Group 601311.SH RMB 16.99 14,321 0.79 0.72 0.73 0.95 22 24 23 18 4 3 3 3 18 14 13 15
EVE Energy 300014.SZ RMB 28.87 12,604 0.21 0.38 0.65 1.13 137 76 45 26 12 7 6 5 9 9 13 19
Great Pow er 300438.SZ RMB 33.91 8,039 0.96 1.13 0.50 0.75 35 30 68 45 5 3 8 7 13 11 13 16
Token Science 300088.SZ RMB 15.80 18,161 0.32 0.21 0.30 0.54 49 75 52 29 4 5 5 4 8 7 9 15
Wanxiang Qianchao 000559.SZ RMB 13.85 30,652 0.37 0.34 0.39 0.45 37 41 35 31 7 8 7 6 18 19 20 21
Chengfei Integration 002190.SZ RMB 33.41 11,070 0.12 0.26 0.43 0.91 278 129 77 37 7 7 6 6 3 5 8 16
J&R Optim um Energy 300116.SZ RMB 18.80 22,343 0.04 0.07 0.21 0.59 527 266 92 32 7 10 6 5 1 4 11 20
Aucksun 002245.SZ RMB 8.87 8,962 0.41 0.25 0.26 0.44 22 36 33 20 3 5 5 4 12 15 14 19
Sm arter Energy 600869.SH RMB 7.82 17,244 0.18 0.21 0.29 0.37 42 37 27 21 2 4 3 3 6 10 13 14
AVERAGE 0.44 0.49 0.55 0.84 118 72 47 28 8 6 6 5 13 13 15 19

Source: Wind Info, CICC Research. Shading indicates CICC forecasts; others use Wind consensus.

Please read carefully the important disclosures at the end of this report
23
 CICC Research: December 30, 2016

Risks

► AFV and automotive battery sales disappoint. Strong AFV output/sales should
boost the sales of automotive batteries; however, if FAV growth disappoints,
Guoxuan’s core revenue might decline with slower earnings growth.

► Safety issues. As safety is one of the most important factors for batteries, any
explosions or fire accidents would hurt the brand, thus causing major losses. Thus,
safety issues might dampen both demand and earnings.

► Revaluation of the growth segment. Affected by the uncertainty in the sector

policy and market expectations, the growth segment is subject to revaluation risk,
which might hurt its valuation and share price.

Please read carefully the important disclosures at the end of this report
24
 CICC Research

Important legal disclosures

General Disclosures
This report has been produced by China International Capital Corporation Hong Kong Securities Limited (CICCHKS). This report is based on information available
to the public that we consider reliable, but CICCHKS and its associated company(ies)(collectively, hereinafter “CICC”) do not represent that it is accurate or
complete. The information and opinions contained herein are for investors’ reference only and do not take into account the particular investment objectives,
financial situation, or needs of any client, and are not an offer to buy or sell or a solicitation of an offer to buy or sell the securities mentioned. Under no
circumstances shall the information contained herein or the opinions expressed herein constitute a personal recommendation to anyone. Investors should make
their own independent evaluation of the information contained in this research report, consider their own individual investment objectives, financial situation and
particular needs. CICC does not provide tax, accounting, or legal advice to our clients, and all investors are advised to consult with their tax, accounting, or legal
advisers regarding any potential investment. Neither CICC nor its related persons shall be liable in any manner whatsoever for any consequences of any reliance
thereon or usage thereof.

The performance information (including any expression of opinion or forecast) herein reflect the most up-to-date opinions, speculations and forecasts at the time
of the report’s production and publication. Such opinions, speculations and forecasts are subject to change and may be amended without any notification. At
different periods, CICC may release reports which are inconsistent with the opinions, speculations and forecasts contained herein.

The analysts named in this report may have from time to time discussed with our clients, including CICC salespeople, traders, and other professionals, or may
discuss in this report, trading strategies that reference catalysts or events that may have a near-term impact on the market price of the equity securities discussed
in this report, which impact may be directionally counter to the analysts' published price target expectations for such stocks. Any such trading strategies are distinct
from and do not affect the analysts' fundamental equity rating for such stocks as described herein.

CICC’s salespeople, traders, and other professionals may provide oral or written market commentary or trading ideas that may be inconsistent with, and reach
different conclusions from, the recommendations and opinions presented in this report. Such ideas or recommendations reflect the different assumptions, views
and analytical methods of the persons who prepared them, and CICC is under no obligation to ensure that such other trading ideas or recommendations are
brought to the attention of any recipient of this report. CICC’s asset management area, proprietary trading desks and other investing businesses may make
investment decisions that are inconsistent with the recommendations or opinions expressed in this report.

Unless stated otherwise, any performance data quoted represents past performance. Past performance is not a indicator of future performance. No representation
or warranty is made that any returns indicated will be achieved. Certain assumptions may have been made in this analysis which have resulted in any returns
detailed herein. Changes to the assumptions may have a material impact on any returns detailed.

To the extent this material is provided to any recipient, this material is provided solely on the basis that the recipient has the capability to independently evaluate
investment risk and is exercising independent judgment in evaluating investment decisions in that its investment decisions will be based on its own independent
assessment of the opportunities and risks presented by a potential investment, market factors and other investment considerations.

This report is distributed in Hong Kong by CICCHKS, which is regulated by the Securities and Futures Commission. Queries concerning CICC Research from
readers in Hong Kong should be directed to our Hong Kong sales representatives. The CE numbers of SFC licensed authors of this report are disclosed by the
authors’ names on the cover page.

This report is distributed in Singapore only to accredited investors and/or institutional investors, as defined in the Securities and Futures Act, by China International
Capital Corporation (Singapore) Pte. Limited (“CICCSG”), which is regulated by the Monetary Authority of Singapore. By virtue of distribution by CICCSG to these
categories of investors in Singapore, disclosure under Section 36 of the Financial Adviser Act (which relates to disclosure of a financial adviser’s interest and/or its
representative’s interest in securities) is not required. Recipients of this report in Singapore should contact CICCSG in respect of any matter arising from or in
connection with this report. This report is not intended for and should not be distributed or passed on, directly or indirectly, to any other person in the jurisdiction
of Singapore.

This report is distributed in the United Kingdom by China International Capital Corporation (UK) Limited (“CICCUK”), which is authorised and regulated by the
Financial Conduct Authority. The investments and services to which this report relates are only available to persons of a kind described in Article 19 (5), 38, 47 and
49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005. This report is not intended for retail clients. In other EEA countries, the report
is issued to persons regarded as professional investors (or equivalent) in their home jurisdiction.
This report will be made available in other jurisdictions pursuant to the applicable laws and regulations in those particular jurisdictions.

Continued on next page

 CICC Research

Special Disclosures
CICC does and seeks to do business with companies covered in CICC Research. As a result, investors should be aware that CICC and/or its associated persons may
have a conflict of interest that could affect the objectivity of this report.

Disclosures in relation to the Companies contained this report could be found at http://research.cicc.com/disclosure_en, or in the published latest
company-specific research.

Distribution of ratings is available at http://research.cicc.com/en/disclosure/general.xhtml.

Explanation of stock ratings: “Conviction BUY” indicates analyst perceives absolute return of 30% or more over the next 6~12 months; “BUY” absolute return of
20% or more; “HOLD” between +20% and -10%; “SELL” -10% and below; “Conviction SELL” -20% and below. Asterisk denotes non-directional rating change:
coverage initiation or resumption, addition to or removal from Conviction BUY/SELL rating level.

Explanation of sector ratings: Analyst expects a sector rated “OVERWEIGHT” to outperform the market by 10% or more over the next 6~12 months,
“EQUAL-WEIGHT” to end up between 10% below and 10% above the market, and “UNDERWEIGHT” to fall behind the market by 10% or more, over the next
6~12 months.

Copyright of this report belongs to CICC. Any form of unauthorized distribution, reproduction, publication, release or quotation is prohibited
without CICC’s written permission.
V160908
Translation: Xinyue ZHANG
Editing: Dom FITZSIMMONS, Se CHEN, Jim SATKO
Beijing Shanghai
China International Capital China International Capital
Corporation Limited Corporation Limited – Shanghai Branch
28th Floor, China World Office 2 32nd Floor Azia Center
1 Jianguomenwai Avenue 1233 Lujiazui Ring Road
Beijing 100004, P.R. China Shanghai 200120, P.R. China
Tel: (86-10) 6505-1166 Tel: (86-21) 5879-6226
Fax: (86-10) 6505-1156 Fax: (86-21) 5888-8976
Shenzhen Singapore
China International Capital China International Capital
Corporation Limited – Shenzhen Branch Corporation (Singapore) Pte. Limited
#2503, 25th Floor, China Merchants Bank Tower #39-04, 6 Battery Road
7088 Shennan Boulevard, Futian District Singapore 049909
Shenzhen 518040, P.R. China Tel: (65) 6572-1999
Tel: (86-755) 8319-5000 Fax: (65) 6327-1278
Fax: (86-755) 8319-9229
Beijing Jianguomenwai Avenue Branch Beijing Kexueyuan South Road Branch
1st Floor, Capital Tower 6th Floor, Block A, Raycom Infotech Park
6A Jianguomenwai Avenue 2 Kexueyuan South Road, Haidian District
Beijing 100022, P.R. China Beijing 100022, P.R. China
Tel: (86-10) 8567-9238 Tel: (86-10) 8286-1086
Fax: (86-10) 8567-9235 Fax: (86-10) 8286 1106
Shanghai Defeng Road Branch Shenzhen Fuhuayilu Branch
Room 1105, Building A Room 201, Annex Building
299-1 Defeng Road, Fengxian District Shenzhen Duty Free Commercial Tower
Shanghai 201400, P.R. China 6 Fuhua 1st Road, Futian District
Tel: (86-21) 5879-6226 Shenzhen 518048, P.R. China
Fax: (86-21) 6887-5123 Tel: (86-755) 8832-2388
Fax: (86-755) 8254-8243
Nanjing Hanzhong Road Branch Guangzhou Tianhe Road Branch
Section C, 30th Floor, Asia Pacific Tower 40th Floor, Teemtower
2 Hanzhong Road, Gulou District 208 Tianhe Road
Nanjing 210005, P.R. China Guangzhou 510620, P.R. China
Tel: (86-25) 8316-8988 Tel: (86-20) 8396-3968
Fax: (86-25) 8316-8397 Fax: (86-20) 8516-8198
Xiamen Lianyue Road Branch Wuhan Zhongnan Road Branch
4th Floor, Office Building, Paragon Center 4301-B, Poly Plaza
1 Lianyue Road, Siming District 99 Zhongnan Road, Wuchang District
Xiamen 361012, P.R. China Wuhan 430070, P.R. China
Tel: (86-592) 515-7000 Tel: (86-27) 8334-3099
Fax: (86-592) 511-5527 Fax: (86-27) 8359-0535
Chongqing Honghu Road (West) Branch Tianjin Nanjing Road Branch
1st & 10th Floors, Ourui Lanjue Center 10th Floor, Tianjin Global Trading Center
Block 9, Honghu Road (W), New North District 219 Nanjing Road, Heping District
Chongqing 401120, P.R. China Tianjin 300051, P.R. China
Tel: (86-23) 6307-7088 Tel: (86-22) 2317-6188
Fax: (86-23) 6739-6636 Fax: (86-22) 2321-5079
Foshan Jihua 5th Road Branch Yunfu Xinxing Dongdi North Road Branch
12th Floor, Trend International Business Building 2nd Floor, Service Building C1, Wens Science &
2 Jihua 5th Road, Chancheng District Technology Garden, Dongdi North Road
Foshan 528000, P.R. China Xincheng Town, Xinxing County
Tel: (86-757) 8290-3588 Yunfu 527499, P.R. China
Fax: (86-757) 8303-6299 Tel: (86-766) 2985-088
Fax: (86-766) 2985-018
Ningbo Yangfan Road Branch Fuzhou Wusi Road Branch
11th Floor, Building Five, 999 Yangfan Road 38th Floor, Henglicheng Office Building
Hi-tech Industrial Development Zone No.128 Wusi Road, Gulou District
Ningbo 315103, P.R. China Fuzhou 350001, P.R. China
Tel: (86-574) 8907-7288 Tel: (86-591) 8625 3088
Fax: (86-574) 8907-7328 Fax: (86-591) 8625 3050
Hong Kong
China International Capital
Corporation (Hong Kong) Limited
29th Floor, One International Finance Centre
1 Harbour View Street
Central, Hong Kong
Tel: (852) 2872-2000
Fax: (852) 2872-2100
United Kingdom
China International Capital
Corporation (UK) Limited
Level 25, 125 Old Broad Street
London EC2N 1AR, United Kingdom
Tel: (44-20) 7367-5718
Fax: (44-20) 7367-5719
Shanghai Middle Huaihai Road Branch
398 Huaihai Road (M)
Shanghai 200020, P.R. China
Tel: (86-21) 6386-1195
Fax: (86-21) 6386-1180
Hangzhou Jiaogong Road Branch
1st Floor, Euro American Center
18 Jiaogong Road
Hangzhou 310012, P.R. China
Tel: (86-571) 8849-8000
Fax: (86-571) 8735-7743
Chengdu Binjiang Road (East) Branch
1st & 16th Floors, Shangri-La Center
Block 9B, Binjiang Road (East)
Chengdu 610021, P.R. China
Tel: (86-28) 8612-8188
Fax: (86-28) 8444-7010
Qingdao Middle Hongkong Road Branch
11th Floor, Shangri-La Center
Block 9, Hongkong Road (M), South District
Qingdao 266071, P.R. China
Tel: (86-532) 6670-6789
Fax: (86-532) 6887-7018
Dalian Gangxing Road Branch
16th Floor, Wanda Center
6 Gangxing Road, Zhongshan District
Dalian 116001, P.R. China
Tel: (86-411) 8237-2388
Fax: (86-411) 8814-2933
Changsha Chezhan Road (North) Branch
3rd Floor, Annex Building, Securities Tower
459 Chezhan Road (North), Furong District
Changsha 410001, P.R. China
Tel: (86-731) 8878-7088
Fax: (86-731) 8446-2455