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DAILY Navigator

China and Hong Kong May 12, 2011

Top Charts of the Day Highlight

CN Auto sector – April passenger car sales HK Wasion (03393.HK, HK$4.28, OP): Prices & shipments to rise for key products in
up 2.8% YoY 2H11
CN Real estate sector – Sales down 20% Impressive results for first two rounds of bid solicitation in 2011; sales to grow markedly in
WoW last week 2H11. Gross margin to rebound significantly on policy changes. 12M target price of HK$5.5;
reiterate Outperform rating.

Upcoming Visits 02 Top Charts of the Day V 08 Trader Daily J


Date Company CN Auto sector – April passenger car sales CN China’s April CPI slightly above
up 2.8% YoY forecast; Market still seeking direction
CN Real estate sector – Sales down 20% HK HSI ends session down 0.18%
Recent In-depth Reports
WoW last week
Date Company 10 Statistics K
08/03 Bank of China 04 Top Stock Ideas b HK Valuation table
(03988.HK/3988 HK)
HK Wasion (03393.HK, HK$4.28, OP):
25/03 China market strategy – 2Q10
Prices & shipments to rise for key products
01/04 Want Want China
in 2H11
(00151.HK/151 HK)
14/04 Traditional Chinese medicine
sector: Targeting cardiovascular & 06 Non-Tech F
cerebrovascular disease HK MicroPort Scientific (00853.HK,
03/05 Tianneng Power HK$5.7, N): 1H11 results to be flat;
(00819.HK/819 HK) near-term catalysts elusive
20/05 Regent Manner
(01997.HK/1997 HK)
11/06 Chigo (00449.HK/449 HK)
30/06 China market strategy - 3Q10
12/10 China market strategy - 4Q10
09/11 Guangzhou Shipyard
(00317.HK/317 HK)
06/12 Shandong Molong
(00568.HK/568 HK)
29/12 China & Hong Kong market
strategy - 1Q11
06/01 Digital China (00861.HK/861 HK)
27/01 Retail sector: A new era – Right
market, right brands, right stocks
11/03 Real estate sector:
17/03 TCL Communication
(02618.HK/2618 HK
08/04 China & Hong Kong market
strategy - 2Q11

Institutional portal: http://research.kgi.com 1


DA ILY Navigator China Top Charts of the Day V

Auto sector – April 1 Stephen Wang


2 852.2878.6898
passenger car sales up 3 stephen.wang@kgia.com
2.8% YoY

Conclusion

According to the China Association of Automobile Manufacturers, China’s passenger car unit
sales were 1.14mn in April, down 15.2% MoM but up 2.8% YoY. Sports utility vehicle unit
sales grew fastest among passenger cars, up 18.1% YoY to 124.1k units, followed by sedan
and multi-purpose vehicle (MPV), which rose 4.2% YoY and 3.9% YoY, respectively, to
791.4k units and 40k units. Crossover sales declined most sharply, down 10.5% YoY, to
186.8k units. Car inventories grew 3.4% YoY in April to 428.5k at the automaker level,
estimated based on passenger car output and sales. Crossover saw inventory grow most, by
around 21k units, among all types of passenger cars. MPV inventory increased 600 units, while
sedan and SUV inventories decreased 4.2k units and 3.3k units, respectively.

We think the auto market is slowing on several factors. Car sales growth was only 7.5% in
January-April, which is slower than expected. This could herald lower-than-forecast growth in
2011. Sales performance by vehicle type was a mixed bag. While SUV sales grew a strong 38.4%
YoY in the period, crossover sales fell 6.7% YoY. Although Great Wall Motor’s (02333.HK) SUV
sales growth slowed, overall passenger car sales growth hit a hefty 46.7% in January-April.
Given the nine new models slated for debut in 2011, we will keep a close eye on the company.
Affected by the recent Japan earthquake, the market share of Japanese brands declined from
21% in March to 15% in April. The figure could hit a yearly low in May. The share prices of
Guangzhou Automobile (02238.HK) and Dongfeng Motor (00489.HK) are cheap at present, in
our opinion. If component supply recovers, sales could rebound and earnings grow.

Passenger car sales up 2.8% YoY in April


Passenger car sales, ‘000 units
1,600

In April, 1.14mn passenger cars were 1,200


sold, up 2.8% YoY
800

400

0
2001 2001 2001 2001 2001 2001 2001 2001 2001 2001 2001 2001
2006 2007 2008 2009 2010 2011

Source: China Association of Automobile Manufacturers; KGI Research

Passenger car inventory up 3.4% MoM in April


Difference between output and sales, ‘000 units
150
100
In April passenger car sales were
50
14.2k units fewer than output,
0
boosting inventory by 3.4% MoM
(50)
(100)
(150)
2001 2001 2001 2001 2001 2001 2001 2001 2001 2001 2001 2001
2006 2007 2008 2009 2010 2011

Source: China Association of Automobile Manufacturers; KGI Research

Institutional portal: http://research.kgi.com May 12, 2011 2


DAILY Navigator China Top Charts of the Day V

Real estate sector – 1 Stephen Wang


2 852.2878.6898
Sales down 20% WoW 3 stephen.wang@kgia.com
last week

Conclusion

Commodity housing sales in the 24 cities tracked by us dropped 18.6% WoW last week (May
1-7). However, they grew 33.7% YoY, up from 28.4% in the previous week, due to a rapid
sales decline last May, caused by housing market reign-in measures announced by the state in
April 2010. Only four of the 24 cities saw home unit sales rise WoW, while all tier-one cities
experienced unit declines of 20-40% WoW. Among tier-two cities, Kunming, Chongqing and
Fuzhou fell most WoW, by 72.6%, 47.6% and 48.6%, respectively. Unit sales in cities in the
Yangtze River Delta and the Pearl River Delta jumped 75% YoY and 64% YoY, respectively,
due to a policy-led lower comparison base. Seven cities registered higher home inventories
WoW, rising by a higher rate of 3.3% on average. Home inventories of fifteen cities grew
31% YoY. Sales prices were relatively stable.

In April, unit sales in the 24 cities declined 20% YoY. Vanke (000002.SZ), the real estate
leader in China, and Poly Real Estate (600048.SS) performed poorly in April in terms of unit
sales, reflecting continued effect of the cooling policy. Given the WoW unit sales decline in the
first week of May, we anticipate growing pressure in the real estate market over the next few
months. For this reason and likely more rein-in measures, we remain neutral on China’s real
estate sector.

Home sales down 20% WoW last week


Region City Weekly sales (units) Accumulated sales (units) Units available for sale Time
The 18th YoY WoW The 18th YoY No. YoY WoW needed for
week of (%) (%) week of (%) (%) (%) destocking
2011 2011 (weeks)

Last week 24 cities saw home sales Beijing 2,912 (13.0) (45.2) 51,596 (22.1) 62,783 (28.0) 0.1 22
Tianjin 1,387 5.7 31.6 30,073 (8.4) - - - 0
fall and home inventories continue Jinan 495 6.5 (8.8) 18,494 202.9 - - - 0
B ohai Bay
growing R im
Dalian 403 (47.0) 19.2 7,813 (31.0) 55,673 205.8 3.6 138
Qingdao 1,419 - (25.4) 26,826 - 62,871 35.4 (0.1) 44
Shijiazhuang 683 19.4 (9.4) 14,781 - - - - -
Sub-average (5.7) (6.3) 35.3 (28.0) 1.2
Shanghai 2,589 42.0 (29.8) 59,579 7.0 50,656 33.9 (0.7) 20
Nanjing 471 111.2 (25.6) 14,203 (9.4) 33,441 41.9 (0.5) 71
Yangtze River Suzhou 602 83.6 (24.6) 13,615 (10.4) 21,878 40.3 0.1 36
Delta Wuxi 411 31.7 (20.0) 8,973 (39.8) 50,615 11.4 0.1 123
Ningbo 332 107.4 (8.2) 15,968 70.2 94,799 35.4 0.4 286
Sub-average 75.2 (21.7) 3.5 38.7 (0.1)
Shenzhen 448 59.4 (18.1) 11,437 1.1 30,404 (1.8) (2.3) 68
Guangzhou 1,350 3.0 (19.9) 23,159 22.4 39,218 23.0 (2.1) 29
Dongguan 942 - (31.3) 17,266 - - - - -
Fuzhou 141 (46.2) (47.6) 5,448 (26.4) - - - -
Pearl River
Xiamen 299 28.9 (13.3) 5,267 (39.5) - - - -
Delta
Foshan 504 13.3 (5.4) 18,355 92.1 343,792 7.8 0.4 682
Huizhou 486 42.9 (36.2) 8,050 7.6 11,202 23.8 (4.1) 23
Shantou 166 348.6 0.1 4,723 213.0 - - - -
Sub-average 64.3 (20.3) 38.6 13.2 (2.1)
Chongqing 2,127 (31.8) (48.6) 52,954 (33.7) 106,150 5.7 57.3 50
Chengdu 803 (62.6) (13.9) 27,853 8.0 - - - -
Kunm ing 1,268 - (72.6) 29,815 - - - - -
Inland China
Changsha 964 (30.0) (20.6) 17,815 (45.0) - - - -
Nanchang 699 - 17.5 8,949 - 6,740 - (6.1) 10
Sub-average (41.4) (27.6) (23.6) 5.7 25.6
Average 0 33.7 (18.6) 0 18.9 0 31.0 3.3 94
Source: Wind

Institutional portal: http://research.kgi.com May 12, 2011 3


DA ILY Navigator Hong Kong Top Stock Ideas b
low margin, as seen in 2010, should dissipate. Among peers, Clou
Wasion (03393.HK/3393 HK)
Electronics (002121.SZ) announced its bidding results with the
Prices & shipments to rise for key products in 2H11 winning bid price close to Rmb180 for single-phase meters, versus
Rmb150-160 a year earlier, and over Rmb700 for three-phase
HK$4.28 Outperform Company update meters, versus Rmb500-600 a year earlier. We expect Wasion’s
Maintained
bottom-line growth to outpace its revenue growth in 2011.

1 Stephen Wang 1 Jerry Weng (Coordinator)


Figure 3: Gross margin to rebound from trough in 2011
2 852.2878.6898 2 86.21.6125.8671
3 stephen.wang@kgia.com Percent 2010 2011
Single Phase 19.7 22.0
Ŝ Impressive results for first two rounds of bid solicitation Three Phase 38.0 40.0
in 2011; sales to grow markedly in 2H11 DCT 42.0 46.0
Ŝ Gross margin to rebound significantly on policy changes W GH 35.0 37.0
Ŝ 12M target price of HK$5.5; reiterate Outperform rating EE 47.0 40.0
Total 32.0 34.7
Sales to grow markedly in 2H11 Source: Company data; KGI Asia Limited
State Grid Corporation of China (SGCC) completed two rounds of
bid solicitations for 28.99mn smart power meters by end-April,
achieving 58% of its 50mn goal. As such, the number of smart
Conclusion
meters actually demanded by SGCC will likely exceed its initial
expectation. Waison was one of the winning bidders in the first two
rounds of bid solicitation, especially for three-phase meter projects. We think Wasion will display robust sales growth and gross margin
recovery in 2011. Also, we forecast China’s smart meter demand to
Figure 1: Waison’s market share up in single-phase meter bids total 60mn units in full-year 2011, as SGCC achieves its goal of
1st round of SGCC's solicitation 2nd round of SGCC's solicitation first-round replacement by 2014. The number of suppliers will be
Winner No. ('000) We ighting (%) Winner No. ('000) Weighting (%)
reduced to around 50 upon the release of new bidding measures.
Clou 598 6.8 Waison 926 7.3
Jiangsu Linyang 545 6.2 Jiangsu Linyang 911 7.2
Wasion looks to enjoy market share gains on the back of its
W aison 535 6.1 Kaifa 792 6.3 leadership. Shares are currently trading at a respective 13.5x and
N ingbo Sanxing 512 5.8 Clou 770 6.1 10.3x our EPS projections of HK$0.32 for 2011 and HK$0.42 for
Hangzhou Haixing 495 5.6 Hangzhou Haixing 574 4.5
2012. Our 12-month target price is set at HK$5.5. We reiterate our
Source: SGCC; KGI Asia Limited
Outperform rating.

Figure 2: Waison dominant in three-phase meter bids


Year to Sales Gross profits EBIT EBITDA Net profits EPS
2nd round of SGCC's solicitation
31-Dec (Rmb mn) (Rmb mn) (Rmb mn) (Rmb mn) (Rmb mn) (Rmb)
Winner No. of 1.0S Weighting No. of 1.0S Weighting No. of 1.0S Weighting 2010A 1,331 428 182 182 191 0.21
meters (%) m eters (%) meters (%) 2011F 1,706 593 277 297 254 0.27
('000) ('000) ('000) 2012F 2,122 749 361 383 324 0.35
W aison 149.5 10.1 23.6 18.3 1.0 100.0 2013F 2,470 875 426 450 384 0.41
1st round of SGCC's solicitation Year to EV/Sales EV/EBIT EV/EBITDA P/E EV/Inv. C. ROAE
31-Dec (x) (x) (x) (x) (x) (%)
Winner No. of 1.0S Weighting No. of 1.0S Weighting No. of 1.0S Weighting 2010A 3.9 28.4 28.4 28.4 1.9 8.7
meters (%) m eters (%) meters (%) 2011F 2.1 12.9 12.0 15.5 1.1 10.9
('000) ('000) ('000) 2012F 1.8 10.9 10.2 13.0 1.1 12.6
W aison 92.0 8.4 10.9 6.9 8.0 100.0 2013F 1.6 9.0 8.5 11.0 0.9 13.1
Sector Machinery Manufacturing 52-week trading range (HK$) 3.6 - 6.4
Source: SGCC; KGI Asia Limited 12M target price (HK$/shr) Mkt cap-HK$ bn/US$ mn
5.5 4.0/510
Upside/downside (%) 28.5 Outstanding shares (mn) 929
The percentile of excess return (%) 86 Free floating shares (%) 50
Waison saw order flow surge from a year earlier in May. In particular, Dividend yield-12/11E (%) N.A. The Largest Shareholder (%):XIN-BAO Investment 50
orders for three-phase meters jumped 141.6% YoY, versus growth Book value/shr-12/11E (Rmb) 2.6 3M avg. daily trading (mn) 2.4
P/B-12/11E (x) 1.6 Abs. Performance (3,6,12M)(%) -3.8; -18; -12.7
of 31.2% YoY for single-phase meter orders. These contracts will Net debt/equity-12/11(%) Cash Rel. Performance (3,6,12M)(%) -10.8; -10.9; -21.1
begin to contribute in 2H11, implying a market entry point in the
medium term.

Gross margin to rebound significantly on policy changes


Waison will no longer pursue top-line growth at the cost of
profitability in 2011, since SGCC has modified its smart meter
bidding policies. Bidders with the lowest quote will not necessarily
win the project. Instead, their product quality, track record and
capacity will all be taken into consideration. As a result, Waison’s

Institutional portal: http://research.kgi.com May 12, 2011 4


DAILY Navigator Hong Kong Top Stock Ideas b
Balance Sheet Profit & Loss
Year to 31 Dec (Rmb mn) 2009A 2010A 2011F 2012F 2013F Year to 31 Dec (Rmb mn) 2009A 2010A 2011F 2012F 2013F
Total Assets 3,176 3,615 4,146 4,916 5,458 Sales 1,078 1,331 1,706 2,122 2,470
Current Assets 2,053 2,307 3,161 3,846 4,331 Cost of Goods Sold 593 903 1,113 1,373 1,595
Cash & ST Investments 758 696 1,090 1,278 1,345 Gross Profit 485 428 593 749 875
Inventories 327 443 543 667 759 Operating Expenses 213 246 316 388 450
Accounts Receivable 721 841 1,122 1,419 1,665 Operating Profit 272 182 277 361 426
Others 247 327 406 482 561 Net Interest Income (12) (24) (34) (49) (56)
Non-current Assets 1,123 1,308 985 1,070 1,128 Interest Income 2 4 4 6 7
Interest Expense 14 28 38 55 63
LT Investments 5 66 10 10 10
Net Investment Income/(Loss) 0 0 0 0 0
Net fixed Assets 627 666 395 480 538
Net other Non-op. Income/(Loss) 11 51 34 42 49
Others 490 577 580 580 580
Net Extraordinaries 0 0 0 0 0
Total Liabilities 1,028 1,380 1,724 2,169 2,328
Pretax Income 272 209 277 354 419
Current Liabilities 831 1,253 1,544 1,924 2,088
Income Taxes 10 17 23 29 35
Accounts Payable 478 669 793 940 1,092 Net Profit After Extraordinaries 262 191 254 324 384
ST Borrowings 250 391 538 734 721 EBITDA 272 182 297 383 450
Others 103 192 213 250 274 EPS (Rmb) 0.30 0.21 0.27 0.35 0.41
Long-term Liabilities 197 128 179 245 240
Source: Company data; KGI Asia Limited estimates
Long-term Debts 169 110 179 245 240
Others 28 18 0 0 0
Shareholders' Equity 2,148 2,235 2,422 2,747 3,131
Common Stock 9 9 9 9 9 Cash Flow
Capital Surplus 1,345 1,350 1,350 1,350 1,350
Year to 31 Dec (Rmb mn) 2009A 2010A 2011F 2012F 2013F
Retained Earnings 794 875 1,062 1,387 1,771
Operating Cash Flow 14 159 (41) 34 166
Preferred Stock 0 0 0 0 0
Net Profit 262 191 254 324 384
Source: Company data; KGI Asia Limited estimates Depreciation & Amortization 0 0 20 22 24
Change in Working Capital (253) (35) (315) (313) (242)
Others 5 3 0 0 0
Investment Cash Flow (231) (189) 303 (107) (82)
Key Ratios
Net CAPEX (190) (39) 251 (107) (82)
Year to 31 Dec (Rmb mn) 2009A 2010A 2011F 2012F 2013F Change in LT Investment (5) (64) 56 0 0
Growth (% YoY) Change in Other Assets (37) (86) (3) 0 0
Sales 1.8 23.4 28.2 24.4 16.4 Free Cash Flow (217) (30) 263 (73) 85
OP (3.6) (33.2) 52.3 30.2 18.1 Financing Cash Flow 463 (33) 131 262 (18)
EBITDA (3.6) (33.2) 63.3 28.8 17.6 Change in Share Capital 501 (104) (67) (0) (0)
NP 0.2 (27.0) 32.9 27.6 18.4 Net Change in Debt (35) 82 216 262 (18)
EPS (6.7) (31.1) 33.0 27.6 18.4 Change in Other LT Liab. (3) (10) (18) 0 0
Profitability (%) Net Cash Flow 246 (63) 394 188 67
Gross Margin 45.0 32.1 34.7 35.3 35.4
Operating Margin 25.2 13.7 16.2 17.0 17.2 Source: Company data; KGI Asia Limited estimates
EBITDA Margin 25.2 13.7 17.4 18.0 18.2
Net Profit Margin 24.3 14.4 14.9 15.3 15.5
ROAA 9.2 5.6 6.6 7.2 7.4
Rates of Return on Invested Capital
ROAE 14.8 8.7 10.9 12.6 13.1
Year to COGS Dep./Amortization SGA Exp. Operating
Stability 1- + + =
31-Dec Revenue Revenue Revenue Margin
Gross Debt/Equity (%) 19.5 22.4 29.6 35.6 30.7 2009A 55.0% 0.0% 19.8% 25.2%
Net Debt/Equity (%) Net cash Net cash Net cash Net cash Net cash 2010A 67.9% 0.0% 18.5% 13.7%
Interest Coverage (x) 20.0 8.5 8.2 7.4 7.6 2011F 64.1% 1.2% 18.5% 16.2%
Interest & ST Debt Coverage (x) 1.1 0.6 0.5 0.5 0.6 2012F 63.7% 0.0% 18.3% 18.0%
2013F 63.6% 0.0% 18.2% 18.2%
Cash Flow Interest Coverage (x) 1.0 5.7 (1.1) 0.6 2.6
Year to Operating Working capital Net PPE Other Assets Capital
Cash Flow/Interest & ST Debt (x) 0.1 0.4 (0.1) 0.0 0.2 1/ + + =
31-Dec Revenue Revenue Revenue Turnover
Current Ratio (x) 2.5 1.8 2.0 2.0 2.1 2009A 0.7 0.6 0.5 0.6
Quick Ratio (x) 2.1 1.5 1.7 1.7 1.7 2010A 0.6 0.5 0.4 0.6
2011F 0.7 0.2 0.3 0.8
Net Debt (Rmb mn) (199) (267) (284) (336) (342)
2012F 0.7 0.2 0.3 0.8
Per Share Data (Rmb) 2013F 0.7 0.2 0.2 0.9
EPS 0.30 0.21 0.27 0.35 0.41 Year to Operating Capital Cash 1 - Tax After-tax Return
x x =
CFPS 0.30 0.21 0.30 0.37 0.44 31-Dec Margin Turnover Rate on Inv. Capital
BVPS 2.31 2.41 2.61 2.96 3.37 2009A 25.2% 0.6 96.4% 13.9%
2010A 13.7% 0.6 91.7% 8.1%
SPS 1.16 1.43 1.84 2.28 2.66
2011F 16.2% 0.8 91.7% 12.0%
EBITDA/Share 0.31 0.20 0.30 0.39 0.46 2012F 18.0% 0.8 91.7% 13.8%
DPS 0.07 0.07 N.D. N.D. N.D. 2013F 18.2% 0.9 91.7% 14.4%
Activity Source: Company data; KGI Asia Limited estimates
Asset Turnover (x) 0.4 0.4 0.4 0.5 0.5
Days Receivables 244.0 230.6 240.0 244.0 246.0
Days Inventory 110.8 121.5 116.2 114.6 112.2
Days Payable 161.9 183.5 169.7 161.8 161.4
Cash Cycle 193.0 168.6 186.5 196.9 196.8
Source: Company data; KGI Asia Limited estimates

Institutional portal: http://research.kgi.com May 12, 2011 5


DA ILY Navigator Hong Kong Non-Tech f
Orthopedics to be another driver
MicroPort Scientific (00853.HK/ 853 HK)
MicroPort is extending its spine-focused business overseas this year,
1H11 results to be flat; near-term catalysts elusive as four models have obtained CE certification abroad. To accelerate
the move, the firm is planning to acquire various local peers. We
HK$5.7 Neutral Company visit estimate that the orthopedics business will become the No.2 growth
Maintained
driver, in addition to stent, on strong R&D capabilities and a focus
and high-end products (e.g. spine-related devices). The timing of the
1 Stephen Wang 1 T.J. Hsu
2 852.2878.6898 2 86.21.6125.8677 acquisition’s shift into profitability is currently unclear.
3 stephen.wang@kgia.com
We have lowered our 2011 estimates
Ŝ 2011 gross margin to drop on stiff competition & lower MicroPort expected the bid for heart stents to begin in 2Q11, but
stent prices in 2H10 now it seems to be delayed. As such, the negative impact on 2011
Ŝ Limited contribution from second-tier products, e.g. EP &
results will be lower than previously expected. We have raised our
diabetes devices, as they’re in early stage of marketing
2011 sales forecast by 6% to Rmb863mn. Also, given lowered
Ŝ Expectation of price cuts priced in; maintain Neutral on
ex-factory prices in 1Q11 and more R&D and management expenses,
stretched valuation
we have cut our 2011 net profits forecast by 12% to Rmb297mn.
Gross margin to trend lower on lower stent prices 2011 EPS is likely to hit Rmb0.21.
The next round of bidding for heart stents will take place in 2H11.
Figure 1: Breakdown of 2011 forecast revisions
Unlike previous practices, this bid will be conducted by local
Rmb mn Previous Revision Change (%)
governments, which may mean a prolonged process. We forecast a
Sales 813 863 6.2
10% drop in the winning bid price. Our sensitivity analysis shows Gross profits 689 729 5.8
that such a drop, evenly burdened by distributors and the firm, Operating profits 348 292 (16.1)
would lead stent gross margin to fall 2.1ppt from July. But the drop Net profits 337 297 (11.9)
may narrow to 1.5 ppts in 2011 as the bidding process will likely EPS(Rmb) 0.23 0.21 (8.7)
take longer. Restocking demand among distributors may be weak Gross margin (%) 84.7 84.5 0.2 ppt

on expectations of stent price cuts. This would decelerate Source: KGI Asia Limited
MicroPort’s sales growth in 1H11 and undermine interim results.

Price competition intensifying with more competitors Valuation and Recommendation


Rivals Lepu Medical (300003.SZ) and Shandong-based JW Medical
lowered their ex-factory prices by 5% in 4Q10. MicroPort followed
Given the expected declining gross margin of stent, which makes up
suit in 1Q11 with the same reduction. As heart stents of different
86% of sales, and higher R&D and management expenses, we have
brands are largely similar for doctors, initial moves to cut prices can
cut our 2011 EPS forecast to Rmb0.21 (HK$0.25). The orthopedics
lead to price wars. As such, we expect MicroPort’s blended gross
business may become a bright spot upon acquisition, though the
margin to shrink 2% YoY in 2011.
timeline is not yet clear. We think expectations of price drops are
We also note that new entrants, such as Beijing-based Essen, are as priced in, but short-term catalysts are lacking. We have lowered our
technology-competitive as big names MicroPort and Lepu. As such, target PEG from 0.95x from 0.9x, translating into a fair PE of 23.2x.
market competition is set to intensify. Our new target price of HK$5.8 implies limited upside. Accordingly,
we have kept our Neutral rating unchanged.
Limited contributions from EP & insulin pump near term
MicroPort has two electrophysiological (EP) devices, i.e. EasyFinder Year to Sales Gross profits EBIT EBITDA Net profits EPS
31-Dec (Rmb mn) (Rmb mn) (Rmb mn) (Rmb mn) (Rmb mn) (Rmb)
(slated for in 3Q11) and FireMagic. These catheters, used to treat 2010A 728 630 264 285 240 0.51
2011F 863 729 292 294 297 0.21
supraventricular tachycardia, are considered traditional products, 2012F 1,065 895 362 413 358 0.25
thus retain limited business growth potential. We don’t expect the 2013F 1,362 1,151 477 536 470 0.33
Year to EV/Sales EV/EBIT EV/EBITDA P/E EV/Inv. C. ROAE
EP business to pick up substantially until Columbus and other atrial 31-Dec (x) (x) (x) (x) (x) (%)
fibrillation-related devices hit market the in 2014. 2010A 7.6 21.0 19.4 9.6 2.7 20.4
2011F 6.4 19.1 18.9 23.7 2.5 14.9
2012F 4.9 14.4 12.6 19.7 2.0 16.3
Insulin pump is faced with a similar fate. Given its high price tag, 2013F 3.6 10.1 9.0 15.0 1.6 18.0
Sector Bio-tech 52-week trading range (HK$) 5.3 - 7.7
Insulin pump is unlikely to be covered by medical insurance any time 12M target price (HK$/shr) 5.8 Mkt cap-HK$ bn/US$ mn 8.2/1,054
Upside/downside (%) 1.8 Outstanding shares (mn) 1,442
soon. Its market acceptance is thus hampered.
The percentile of excess return (%) 72 Free floating shares (%) 34
Dividend yield-Dec '11E (%) N.A. The Largest Shareholder (%): Otsuka Pharmaceutical 33
All in all, sales of these second-tier products are set to maintain Book value/shr-Dec '11E (Rmb) 1.4 3M avg. daily trading (mn) 3
P/B-Dec '11E (x) 3.5 Abs. Performance (3,6,12M)(%) -6.9%,NA,NA
robust growth due to low comparison bases, but their sales Net debt/equity-Dec '11E (%) Cash Rel. Performance (3,6,12M)(%) -3.8%,NA,NA
contributions will be limited over the next two years.

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DAILY Navigator Hong Kong Non-Tech F
Balance Sheet Profit & Loss
Year to 31 Dec (Rmb mn) 2009A 2010A 2011F 2012F 2013F Year to 31 Dec (Rmb mn) 2009A 2010A 2011F 2012F 2013F
Total Assets 712 2,174 2,451 2,883 3,449 Sales 561 728 863 1,065 1,362
Current Assets 484 1,867 1,901 2,343 2,811 Cost of Goods Sold 78 98 134 170 211
Cash & ST Investments 284 1,572 1,581 1,945 2,307 Gross Profit 483 630 729 895 1,151
Inventories 57 85 103 131 162 Operating Expenses 238 366 438 533 674
Accounts Receivable 134 202 201 248 317 Operating Profit 244 264 292 362 477
Others 10 8 16 19 25 Net Interest Income (10) 13 51 51 68
Non-current Assets 228 307 550 539 637 Interest Income 8 4 55 56 68
Interest Expense 17 (9) 4 5 0
LT Investments 0 0 0 0 0
Net Investment Income/(Loss) 0 0 0 0 0
Net fixed Assets 194 260 500 489 587
Net other Non-op. Income/(Loss) 15 19 17 21 27
Others 33 47 50 50 50
Net Extraordinaries 0 0 0 0 0
Total Liabilities 324 203 433 507 603
Pretax Income 250 295 360 435 572
Current Liabilities 261 163 355 415 503
Income Taxes 63 55 63 77 102
Accounts Payable 5 11 11 15 19 Net Profit After Extraordinaries 186 240 297 358 470
ST Borrowings 83 50 97 96 95 EBITDA 261 285 294 413 536
Others 174 102 247 304 389 EPS (Rmb) 1.64 0.51 0.21 0.25 0.33
Long-term Liabilities 63 40 78 92 100
Source: Company data; KGI Asia Limited estimates
Long-term Debts 4 4 3 4 5
Others 59 36 75 88 95
Shareholders' Equity 388 1,971 2,018 2,375 2,846
Common Stock 0 0 0 0 0 Cash Flow
Capital Surplus 50 1,567 1,567 1,567 1,567
Year to 31 Dec (Rmb mn) 2009A 2010A 2011F 2012F 2013F
Retained Earnings 337 404 451 809 1,279
Operating Cash Flow 263 102 419 391 512
Preferred Stock 0 0 0 0 0
Net Profit 186 240 297 358 470
Source: Company data; KGI Asia Limited estimates Depreciation & Amortization 17 21 2 51 59
Change in Working Capital 60 (160) 120 (17) (17)
Others 0 0 0 0 0
Investment Cash Flow (56) (100) (245) (41) (157)
Key Ratios
Net CAPEX (77) (85) (240) (38) (154)
Year to 31 Dec (Rmb mn) 2009A 2010A 2011F 2012F 2013F Change in LT Investment 0 0 0 0 0
Growth (% YoY) Change in Other Assets 21 (15) (5) (3) (3)
Sales 15.6 29.8 18.6 23.4 27.9 Free Cash Flow 208 1 174 351 355
OP 12.3 7.9 10.6 24.1 31.7 Financing Cash Flow (198) 1,287 (165) 13 7
EBITDA 13.0 9.1 3.1 40.6 29.7 Change in Share Capital (206) 1,343 (250) 0 0
NP 4.2 28.8 23.8 20.2 31.5 Net Change in Debt (10) (33) 46 0 0
EPS 3.8 (68.8) (59.6) 20.2 31.5 Change in Other LT Liab. 19 (23) 39 13 7
Profitability (%) Net Cash Flow 10 1,289 9 364 362
Gross Margin 86.1 86.5 84.5 84.0 84.5
Operating Margin 43.6 36.2 33.8 34.0 35.0 Source: Company data; KGI Asia Limited estimates
EBITDA Margin 46.6 39.2 34.0 38.8 39.3
Net Profit Margin 33.2 33.0 34.4 33.6 34.5
ROAA 27.9 16.6 12.9 13.4 14.9
Rates of Return on Invested Capital
ROAE 46.9 20.4 14.9 16.3 18.0
Year to COGS Dep./Amortization SGA Exp. Operating
Stability 1- + + =
31-Dec Revenue Revenue Revenue Margin
Gross Debt/Equity (%) 22.4 2.7 5.0 4.2 3.5 2009A 10.9% 3.0% 42.5% 43.6%
Net Debt/Equity (%) Net cash Net cash Net cash Net cash Net cash 2010A 10.6% 2.9% 50.3% 36.2%
Interest Coverage (x) 15.6 (33.4) 94.5 88.0 -- 2011F 15.3% 0.2% 50.7% 33.8%
Interest & ST Debt Coverage (x) 2.7 6.8 3.6 4.4 6.0 2012F 11.2% 4.8% 50.0% 34.0%
2013F 11.2% 4.3% 49.5% 35.0%
Cash Flow Interest Coverage (x) 15.4 (11.8) 108.7 78.2 --
Year to Operating Working capital Net PPE Other Assets Capital
Cash Flow/Interest & ST Debt (x) 2.6 2.4 4.2 3.9 5.4 1/ + + =
31-Dec Revenue Revenue Revenue Turnover
Current Ratio (x) 1.9 11.4 5.4 5.6 5.6 2009A 0.1 0.3 0.1 2.0
Quick Ratio (x) 1.6 10.9 5.1 5.3 5.3 2010A 0.3 0.4 0.1 1.4
2011F 0.1 0.6 0.1 1.3
Net Debt (Rmb mn) (187) (858) (1,500) (1,663) (2,026)
2012F 0.1 0.5 0.0 1.6
Per Share Data (Rmb) 2013F 0.1 0.4 0.0 1.7
EPS 1.64 0.51 0.21 0.25 0.33 Year to Operating Capital Cash 1 - Tax After-tax Return
x x =
CFPS 1.78 0.56 0.21 0.28 0.37 31-Dec Margin Turnover Rate on Inv. Capital
BVPS 3.40 1.37 1.40 1.65 1.97 2009A 43.6% 2.0 74.6% 65.7%
2010A 36.2% 1.4 81.3% 40.9%
SPS 4.92 0.50 0.60 0.74 0.94
2011F 36.2% 1.4 82.5% 41.5%
EBITDA/Share 2.15 0.56 0.20 0.25 0.33 2012F 33.8% 1.3 82.2% 36.6%
DPS 2.20 0.17 N.D. N.D. N.D. 2013F 34.0% 1.6 82.2% 44.3%
Activity Source: Company data; KGI Asia Limited estimates
Asset Turnover (x) 0.8 0.5 0.4 0.4 0.4
Days Receivables 87.1 101.3 85.0 85.0 85.0
Days Inventory 36.9 42.4 43.5 44.9 43.5
Days Payable 3.4 5.6 4.7 5.1 5.0
Cash Cycle 120.6 138.1 123.9 124.8 123.6
Source: Company data; KGI Asia Limited estimates

Institutional portal: http://research.kgi.com May 12, 2011 7


DAILY Navigator China Trader Daily j
Indices
Trader Comments
May-11 May-10 May-9
SSEA 3,020 3,027 3,008
Turnover (Rmb bn) 107 96 94 China’s April CPI slightly above forecast; Market still seeking direction
↑ 522 664 717 China’s stocks fluctuated after the release of April macro data, with losses of steel mills
↓ 457 306 260 outweighing gains of paper, cement producers. The benchmark Shanghai Composite Index
→ 227 236 229
slipped 0.25% to 2,883 points. Meanwhile, the Shenzhen Index closed down 0.12% at
SZSA 1,268 1,266 1,259
12,203.
Turnover (Rmb bn) 71 63 62
↑ 647 786 927
↓ 555 386 270 The weak sentiment was triggered by speculation of another imminent interest rate hike. We
→ 107 137 109 think the market must continue to find a direction before any meaningful positives arise.

Top 10 gainers
Companies Gain
Quick Bullets
Shanghai Ningbo Fuda (600724) 10.0
A-share Eastern Communications (600776) 10.0
Qiangshan Paper (600103) 10.0 㞕 China released April macro data on Wednesday. New loans hit Rmb739.6bn in April,
Veken Elite (600152) 10.0 higher than Bloomberg consensus, while CPI sustained at 5.3%. Interest rate hike
Guannong Fruit & Antler (600251) 10.0 speculation seems to have cooled given a sign of slowdown found in April's economic
Shenzhen Sun Phar,(300216) 15.4
indicators. (China Securities Journal)
A-share Tond Chemical (002360) 10.0
Norinco International (000065) 10.0 㞕 NDRC mulls “window guidance" for the country's industry associations in order to
GuanFu Modern Household (002102) 10.0 contain runaway prices. (Shanghai Securities News)
Guangzheng Steel Structure (002524) 10.0
㞕 The Shanghai branch of the PBoC has vowed to strengthen its monitoring of abnormal
Top 10 active cross-border capital flows to fight hot money. (Yicai)
Companies Turnover
(Rmb mn)
Shanghai Rare-Earth Hi-Tech (600111) 3,524
A-share HaiTong Securities (600837) 1,647
3F New Materials (600636) 1,480
Baotou Steel Union (600010) 1,395
Shanxi Coking (600740) 1,339
Shenzhen TCL Corporation (000100) 1,752
A-share China Nonferrous Construction (000758) 1,340
Advanced Tech & materials (000969) 968
Salt Lake Potash (000792) 794
Tibet Development (000752) 632

SSEA performance
Daily trading volume, Rmb bn (LHS); SSEA (RHS)
350 4,000
300
3,500
250
200 3,000

150 2,500
100
2,000
50
0 1,500
Apr-10 May-10 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Jan-11 Mar-11 May-11
Trading volume SSEA

Source: Wise

SZSA performance
Daily trading volume, Rmb bn (LHS); SZSA (RHS)
240 1,600
210
1,400
180
1,200
150
120 1,000
90
800
60
30 600

0 400
Apr-10 May-10 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Jan-11 Mar-11 May-11
Trading volume SZSA

Source: Wise

Institutional portal: http://research.kgi.com May 12, 2011 8


DAILY Navigator Hong Kong Trader Daily j
Major Indices
Trader Comments
May-11 May-9 May-6
HSI 23,291 23,336 23,159
HS Composite 3,322 3,319 3,287 HSI ends session down 0.18%
GEI 770 770 763 Hong Kong stocks swung between losses and gains as developers fell after a report showed
HS Info Tech 2,724 2,708 2,694 inflation in China exceeded the government's target, while commodity stocks gained on
HSMCI 7,337 7,307 7,249
higher crude and metal prices. Among large caps, HSBC (0005.HK) fell 1.36% to HK$82.85,
HSCCI 4,285 4,257 4,199
China Mobile (0941.HK) rose 0.90% to HK$72.25, and HKEX (0388.HK) fell 0.63% to
HSCEI 12,962 12,934 12,848
HS-FIN 34,238 34,435 34,228 HK$173.60. Mainland insurers: China Life (2628.HK) fell 0.18% to HK$26.80, Ping An
HS-UTIL 43,871 44,050 43,624 (2318.HK) fell 0.42% to HK$82.65, and CPIC (2601.HK) rose 0.76% to HK$33.05. Property
HS-PPT 28,858 28,963 28,570 stocks: Cheung Kong (0001.HK) rose 0.12% to HK$117.10, SHK (0016.HK) rose 0.24% to
HS-C&I 13,191 13,148 13,048 HK$120.80, Hang lung PPT (0101.HK) fell 0.43% to HK$34.30, and Henderson Land
Turnover ($mn) 75,327 57,535 70,279
(0012.HK) rose 0.19% to HK$51.80. Energy stocks: PetroChina (0857.HK) rose 1.31% to
Advanced 623 669 554
Declined 503 442 556
HK$10.80, Sinopec (386.HK) rose 0.26% to HK$7.67, and CNOOC (0883.HK) rose 1.74% to
Unchanged 225 229 227 HK$18.62. Hang Seng China Enterprises index rose 27 points or 0.21% to 12,962. The
benchmark CEI rose 27 points, despite the Shanghai market falling 0.25% on the day.
Futures
May-11 May-9 May-6 Mining stocks: Chalco (2600.HK) fell 0.84% to HK$7.03, VTM Mining (0893.HK) rose 2.17%
HSI (May) 23,135 23,160 22,970 to HK$3.29, and Jiangxi Copper (0358.HK) rose 0.40% to HK$24.65. Coal producers: China
HSI (Jun) 22,984 23,027 22,817 Shenhua (1088.HK) rose 0.14% to HK$35.00, Yanzhou Coal (1171.HK) rose 2.97% to
HSCEI (May) 12,930 12,893 12,771 HK$29.45, and China Coal (1898.HK) fell 2.68% to HK$10.16. Mainland lenders: ICBC
HSCEI (Jun) 12,772 12,749 12,625
(1398.HK) fell 0.46% to HK$6.42, CCB (0939.HK) rose 0.13% to HK$7.21, and BOC
(3988.HK) was unchanged. Meanwhile, CM Bank (3968.HK) fell 0.30% to HK$19.74, Bocom
Top Ten
(3328.HK) fell 0.12% to HK$7.99, and Minsheng Bank (1988.HK) rose 0.13% to HK$7.41.
Company Code Turnover
Home appliance stocks: Skyworth Digital (751.HK) rose 2.16% to HK$5.19, TCL Multimedia
(HK$mn)
HSBC HOLDINGS 0005 2,780 (1070.HK) rose 0.31% to HK$3.20, and Gome (0493.HK) fell 3.20% to HK$2.72. Telecom
CNOOC 0883 1,539 equipment stocks: China Wireless (2369.HK) fell 0.34% to HK$2.88, Sim Tech (2000.HK) fell
TENCENT 0700 1,464 2.06% to HK$1.42, and Comba (2342.HK) rose 0.40% to HK$9.84.
CCB 0939 1,445
PETROCHINA 0857 1,437
AIA 1299 1,318
ICBC 1398 1,234 Quick Bullets
SMIC 0981 1,179
CHINA MOBILE 0941 1,149
㞕 Billionaire Cheng Yu-tung acquired a 15% stake in Giordano International, the company
CHINA GLASS-NEW 3300 916
said in a statement last night. Cheng bought about 218mn shares at an average price of
HK$4.81 each, the company said, without saying when the transaction took place.
Hang Seng Index chart
㞕 Milan Station Holdings’ HK$27mn retail tranche for its initial public offering in Hong
Daily Turnover, HK$bn (LHS); HIS (RHS)
120 25,000
Kong is 500 to 600 times oversubscribed, the Standard reported, citing Ben Cheng, Cash
100 24,500
24,000
Financial Services Group. Executive director and Nelson Chan, Bright Smart Securities and
80 23,500 Commodities chief executive.
60 23,000
22,500
40
22,000 㞕 Tencent Holdings Ltd., China’s biggest Internet company by revenue, said first-quarter
20 21,500
0 21,000
profit jumped 61%, beating analysts’ estimates, after offering new online games to
2/24 3/7 3/16 3/25 4/6 4/15 4/28 5/11
boost sales. Net income climbed to Rmb2.87bn from Rmb1.78bn a year earlier, Tencent
Trading volume Share price
said in a statement to the Hong Kong stock exchange today. That beat the Rmb2.36bn
Source: Reuters; KGI Asia Limited
average of seven analyst estimates compiled by Bloomberg. Sales rose 50% to
Rmb6.34bn.
Hang Seng H-Share Index chart
Daily Turnover, HK$bn (LHS); HIS (RHS)
35 14,000
30 13,500
25 13,000
20 12,500
15 12,000
10 11,500
5 11,000
0 10,500
2/24 3/7 3/16 3/25 4/6 4/15 4/28 5/11
Trading volume Share price

Source: Reuters; KGI Asia Limited

Institutional portal: http://research.kgi.com May 12, 2011 9


DAILY Navigator Hong Kong Statistics k
Valuation table
Code Company FYE Rating Mkt cap Price Target Up/down Absolute performance (%) Relative performance (%)
HK$ bn US$mn (HK$) (HK$) (%) 3m 6m 12m 3m 6m 12m
Auto 00425 MINTH GROUP Dec Outperform 12 1,536 11. 20 13.94 24.5 (7.9) (23.6) 7.9 (8.6) (19.1) (7.9)
00489 Dongfeng Motor Dec Outperform 35 4,533 12. 38 8.20 (33.8) (5.9) (31.5) 23.8 (6.6) (27.4) 5.7
01114 Brilliance China Dec Underperform 29 3,660 7. 78 0.56 (92.8) 33.9 (3.2) 210.0 32.9 2.5 164.6
01211 BYD Dec Neutral 16 2,054 28. 20 12.30 (56.4) (21.3) (43.3) (57.6) (21.9) (39.9) (63.8)
01899 Xingda International Dec Outperform 14 1,742 8. 91 9.00 1.0 11.2 10.7 92.4 10.4 17.2 64.3
02333 Greatwall Motor Dec Outperform 14 1,854 13. 20 14.00 6.1 7.7 26.0 153.8 6.9 33.4 116.7
03808 SINOTRUCK Dec Outperform 17 2,149 6. 07 8.10 33.4 (17.5) (32.7) (13.9) (18.1) (28.7) (26.5)
Banking 00939 CCB Dec Neutral 1,683 215,713 7. 20 7.89 9.6 7.3 (8.0) 18.2 6.5 (2.6) 0.9
01398 ICBC Dec Neutral 536 68,681 6. 45 6.56 1.7 12.4 (2.7) 18.2 11.5 3.0 0.9
03328 Ba nk of Comm. Dec Neutral 185 23,656 8. 00 8.50 6.3 7.2 (10.7) 2.7 6.4 (5.5) (12.3)
03968 CMB Dec Neutral 53 6,757 19. 80 22.50 13.6 8.9 (12.8) 12.6 8.1 (7.6) (3.9)
03988 Ba nk of China Dec Neutral 1,081 138,635 4. 26 4.15 (2.6) 7.6 (10.9) 13.6 6.8 (5.6) (3.0)
Bio-tech 00189 Dongyue Group Dec Outperform 19 2,447 9. 09 4.93 (45.8) 108.0 154.6 444.3 106.5 169.6 364.6
00325 Trauson Dec Outperform 2 315 3. 17 4.76 50.2 (9.2) (22.5) N.A. (9.8) (17.9) N.A.
00503 Lansen Pharmaceutica l Dec Outperform 1 155 2. 91 4.93 69.4 (9.3) (29.2) (36.2) (10.0) (25.0) (45.5)
00853 Microport Scientific Corp. Dec Neutral 8 1,041 5. 63 7.56 34.3 (8.9) (30.6) N.A. (9.6) (26.5) N.A.
01066 Weigao Group Dec Neutral 16 2,057 11. 34 31.20 175.1 24.9 10.1 39.6 24.0 16.6 19.1
02877 Shineway Pharm Dec Outperform 17 2,152 20. 30 29.80 46.8 3.9 (24.0) (8.4) 3.1 (19.5) (21.8)
Cement 00691 China Shanshui Cement Dec Outperform 25 3,213 8. 94 8.10 (9.4) 63.1 59.4 175.9 61.9 68.7 135.5
00914 Anhui Conch Dec Neutral 120 15,354 33. 90 26.60 (21.5) 48.5 53.4 128.0 47.4 62.4 94.7
01313 Chinares Cement Dec Outperform 49 6,327 7. 57 4.94 (34.7) 32.3 29.0 N.A. 31.4 36.6 92.9
Coal 01088 China Shenhua Dec Neutral 695 89,121 34. 95 36.00 3.0 14.2 (5.9) 12.7 13.4 (0.4) (3.8)
01171 Ya nzhou Coal Dec Neutral 141 18,034 28. 60 35.30 23.4 29.1 15.3 47.4 28.2 22.1 25.8
Energy 01205 Citic Resources Holdiings Dec Outperform 10 1,303 1. 68 1.80 7.1 3.1 (20.0) 3.1 2.3 (15.3) (12.0)
01393 Hedili Industry Dec Outperform 15 1,904 7. 21 8.25 14.4 9.6 (17.2) (6.8) 8.8 (12.3) (20.5)
Food 00073 Asian Citrus Dec Outperform 11 1,349 8. 67 10.30 18.8 (10.7) (15.0) 70.4 (11.4) (10.0) 45.5
00151 Want Want China Dec Outperform 93 11,886 7. 02 6.45 (8.2) 12.7 (6.8) 29.3 11.9 (1.3) 10.4
00168 Tsingtao Brewery Dec Outperform 59 7,552 43. 60 13.22 (69.7) 26.6 (0.9) 17.7 25.6 4.9 0.5
00220 U-Presid China Dec Outperform 17 2,118 4. 59 5.80 26.4 8.5 (19.5) 16.0 7.7 (14.7) (1.0)
00322 Tingyi Dec Outperform 115 14,791 20. 65 23.00 11.4 9.6 0.0 12.8 8.8 5.9 (3.7)
00538 Ajisen (China) Dec Outperform 17 2,144 15. 66 6.30 (59.8) 25.7 10.6 113.8 24.8 17.1 82.5
00904 China Green Apr Outperform 6 759 6. 70 8.90 32.8 (11.8) (19.6) (22.6) (12.5) (14.8) (34.0)
00968 Little Sheep Dec Neutral 5 650 4. 93 3.50 (29.0) 2.7 (3.7) 17.4 2.0 2.0 0.2
01068 Yurun Food Dec Outperform 42 5,408 27. 55 22.00 (20.1) 21.1 (14.0) 25.2 20.2 (9.0) 6.9
02319 China Mengniu Dec Outperform 35 4,544 24. 85 25.60 3.0 13.7 10.0 13.5 12.9 16.4 (3.1)
03889 Global Sweeteners Dec Outperform 2 244 1. 82 1.84 1.1 22.1 9.0 22.1 21.2 15.4 4.3
Industrial 00580 Sun King Power Dec Outperform 2 284 1. 62 2.60 60.5 (19.8) (40.2) N.A. N.A. N.A. N.A.
00923 Fook Woo Mar Outperform 5 697 2. 21 3.86 74.7 (18.5) (28.5) (6.4) (19.1) (24.3) (20.1)
01044 Hengan International Dec Outperform 73 9,304 63. 50 49.00 (22.8) 12.0 (13.0) 14.8 11.2 (7.8) (2.0)
01685 Boer Power Dec Outperform 6 823 8. 25 12.30 49.1 5.8 12.2 N.A. 5.0 18.9 N.A.
01868 Neo-Neon Dec Neutral 3 332 2. 83 2.42 (14.5) (29.6) (39.4) (44.2) (30.1) (35.8) (52.4)
01997 Regent Manner Dec Outperform 3 354 2. 76 5.80 110.1 (8.9) 48.8 48.0 (9.6) 57.6 26.3
02002 Sunshine Paper Dec Outperform 2 245 2. 38 3.42 43.7 15.5 (5.9) 74.4 14.7 (0.4) 48.8
00838 EVA Precision Dec Outperform 6 735 6. 53 6.48 (0.8) (3.0) (5.4) 76.5 (3.7) 0.2 50.7
03393 Waison Group Dec Outperform 4 522 4. 32 7.00 62.0 (4.6) (16.4) (7.7) (5.3) (11.5) (21.2)
Infrastructure 00390 China Railway Group Dec Neutral 82 10,513 3. 85 5.90 53.2 (28.2) (37.4) (20.3) (28.7) (33.7) (32.0)
01186 China Railway Cons Dec Neutral 15 1,863 7. 00 12.80 82.9 (24.3) (29.2) (22.3) (24.9) (25.1) (33.7)
01800 China Comm. Cons. Dec Neutral 30 3,871 6. 82 9.10 33.4 8.6 (9.7) 2.2 7.8 (4.3) (12.7)
Machinery 00317 Guangzhou Shipyard Dec Outperform 7 931 14. 68 25.00 70.3 (10.5) (18.9) 17.3 (11.1) (14.1) 0.1
00569 China Automation Dec Outperform 6 796 6. 09 6.36 4.4 (9.5) 0.8 5.0 (10.2) 6.8 (10.4)
00631 Sany Heavy Equipment Dec Outperform 19 2,429 9. 13 14.20 55.5 29.2 19.9 64.2 28.2 27.0 40.2
00658 C Transmission Dec Outperform 13 1,670 10. 46 18.50 76.9 (9.7) (35.8) (40.0) (10.3) (32.0) (48.8)
01157 CHANGSHA ZOOMLION HEAVDec Outperform 113 14,440 19. 44 27.00 38.9 7.5 N.A. N.A. 6.7 N.A. N.A.
01683 Int'l Mining Machine Dec Outperform 11 1,458 8. 75 8.90 1.7 43.4 25.7 134.6 42.4 33.1 100.2
01766 China South Locomotive Dec Outperform 16 2,024 7. 80 5.48 (29.7) (23.2) (11.7) 34.5 (23.8) (6.5) 14.8
02338 Weichai Power Dec Outperform 6 810 49. 95 41.00 (17.9) 0.6 (9.1) 71.2 (0.1) (3.7) 46.1

Source: Company data; KGI Asia Limited estimates

Institutional portal: http://research.kgi.com May 12, 2011 10


DAILY Navigator Hong Kong Statistics k
Valuation table
Code Company FYE Rating Mkt cap Price Target Up/down Absolute performance (%) Relative performance (%)
HK$ bn US$mn (HK$) (HK$) (%) 3m 6m 12m 3m 6m 12m
Non-ferrous Metal 03993 China Molybdenum Dec Neutral 9 1,126 6. 70 7.72 15.2 (8.6) (14.3) 25.7 (9.3) (9.3) 7.3
02626 Hunan Non-ferrous Dec Neutral 5 655 3. 13 4.18 33.5 4.0 (17.6) 3.0 3.2 (12.8) (12.1)
01818 Zhaojin Mining Dec Neutral 47 6,073 32. 50 34.00 4.6 20.6 11.3 100.4 19.7 17.9 71.0
Petrochemica l 00196 Honghua Group Dec Neutral 3 409 0. 99 1.10 11.1 (5.7) (31.3) (15.4) (6.4) (27.2) (27.8)
00338 Shanghai Petrochemica l Dec Outperform 28 3,545 3. 84 4.16 8.3 (16.2) (1.5) 36.7 (16.8) 4.3 16.7
00568 Shangdong Molong Dec Outperform 4 452 8. 83 17.00 92.5 (9.2) (8.5) 5.5 (9.9) (3.1) (9.9)
00839 Tianda Oil Pipeline Dec Outperform 2 307 2. 95 6.15 108.5 (20.7) (21.3) (12.7) (21.3) (16.7) (25.5)
01866 China XLX Fertiliser Dec Neutral 3 340 2. 65 3.60 35.8 (16.4) (25.6) (11.7) (17.0) (21.2) (24.6)
02883 China Oilfield Dec Outperform 65 8,288 14. 38 25.80 79.4 3.0 2.0 55.3 2.2 8.0 32.6
03983 China Bluechem Dec Outperform 12 1,524 6. 71 6.80 1.3 2.9 8.6 42.8 2.2 15.0 21.9
Port 02880 Dalian Port Dec Outperform 14 1,752 3. 09 3.80 23.0 (3.7) (17.2) (7.8) (4.4) (12.3) (21.3)
03378 Xiamen Port Dec Neutral 4 528 1. 51 1.60 6.0 (7.4) (7.9) 11.0 (8.0) (2.5) (5.2)
03382 Tianjin Port Dev Dec Neutral 3 410 1. 79 2.00 11.7 (12.3) (13.1) (5.3) (12.9) (8.0) (19.2)
Power 00182 China WindPower Group Dec Outperform 6 756 0. 81 1.23 51.9 3.8 1.2 2.5 3.1 7.2 (12.5)
00836 China Resources Power Dec Neutral 76 9,775 16. 16 14.62 (9.5) 22.1 9.0 6.9 21.2 15.5 (8.8)
00902 Huaneng International Dec Neutral 55 7,063 4. 57 4.60 0.7 7.0 3.2 4.6 6.2 9.2 (10.7)
00916 Longyuan Power Dec Neutral 59 7,608 7. 95 8.19 3.0 16.4 (2.5) 1.8 15.5 3.3 (13.1)
00991 Datang Power Dec Neutral 10 1,294 3. 08 5.36 74.0 15.4 (1.6) 2.7 14.5 4.2 (12.4)
01071 Huadian Power Dec Neutral 13 1,623 1. 87 2.14 14.4 17.6 2.7 6.9 16.7 8.8 (8.8)
Property 00272 Shui On Land Dec Outperform 18 2,308 3. 47 5.73 65.1 (8.0) (21.5) 0.3 (8.6) (16.9) (14.4)
00337 SPG Land Dec Outperform 3 431 3. 28 6.30 92.0 (18.2) (25.1) (11.1) (18.8) (20.7) (24.1)
00410 SOHO China Dec Outperform 35 4,443 6. 68 8.67 29.8 10.8 (0.6) 67.4 10.0 5.3 42.9
00688 China Overseas Land & InvestmDec Outperform 121 15,512 14. 80 18.80 27.0 6.3 (12.9) 3.5 5.5 (7.8) (11.7)
00817 Franshion Property Dec Neutral 20 2,565 2. 30 2.61 13.5 2.2 (13.2) 9.5 1.5 (8.1) (6.5)
01109 China Resources Land Dec Outperform 73 9,379 13. 58 20.00 47.3 1.6 (16.2) (0.7) 0.9 (11.2) (15.3)
01224 CC Land Dec Outperform 14 1,842 2. 77 4.55 64.4 (2.8) (16.1) 9.5 (3.5) (11.1) (6.5)
01813 KW G Property Dec Outperform 28 3,651 5. 49 8.30 51.2 (3.9) (23.0) 36.6 (4.6) (18.5) 16.6
Railway 00525 Guangshen Railway Dec Outperform 23 2,979 3. 28 4.40 34.1 3.8 (2.4) 19.7 3.0 3.4 2.2
Toll Road 01052 GZI Transport Dec Outperform 7 912 4. 25 5.50 29.4 (3.8) (3.4) 1.9 (4.6) 2.3 (13.0)
Retail 00198 SMI CORP Dec Outperform 1 118 0. 37 0.61 67.0 0.0 (24.0) (37.1) (0.7) (19.5) (46.3)
00210 Prime Success Int'l Dec Neutral 11 1,388 6. 61 6.25 (5.4) (5.6) (27.7) (16.6) (6.3) (23.4) (28.8)
00331 PCD STORES Dec Outperform 8 1,046 2. 04 2.98 46.2 (12.1) (22.7) (10.9) (12.7) (18.2) (24.0)
00825 Nwds China Jun Underperform 11 1,415 6. 62 5.10 (23.0) 10.0 (14.2) 3.0 9.2 (9.2) (12.1)
00980 Lianhua Dec Outperform 7 865 32. 60 11.70 (64.1) (8.0) (2.2) 23.7 (8.7) 3.5 5.6
00493 Gome Dec Neutral 36 4,596 2. 81 1.76 (37.4) 3.3 4.5 27.1 2.5 10.6 8.5
01361 361 Degree Dec Outperform 11 1,403 5. 47 8.00 46.3 (0.5) (23.9) (2.0) (1.3) (19.4) (16.3)
01368 Xtep Dec Outperform 13 1,607 5. 77 6.00 4.0 9.9 (17.8) (2.2) 9.1 (13.0) (16.5)
01833 Intime Department Store Dec Outperform 22 2,788 12. 42 13.54 9.0 12.3 (0.8) 87.6 11.5 5.0 60.2
01880 Belle International Dec Outperform 129 16,501 15. 26 17.50 14.6 21.3 2.6 59.9 20.4 8.6 36.5
03308 Golden Ea gle Dec Outperform 41 5,278 21. 20 16.00 (24.5) 7.5 (3.2) 47.2 6.7 2.5 25.7
03389 Xinyu Hengdeli Dec Neutral 11 1,411 4. 43 1.34 (69.8) 3.0 3.3 43.8 2.3 9.3 22.8
08277 Wumart Dec Neutral 9 1,170 18. 02 5.50 (69.5) 21.3 (6.9) 17.2 20.4 (1.4) 0.0
Shipping 01138 China Shipping Dev. Dec neutral 28 3,592 8. 23 10.90 32.4 (6.8) (34.9) (22.2) (7.5) (31.1) (33.6)
01919 China COSCO Dec Neutral 19 2,405 7. 27 10.20 40.3 (11.4) (23.2) (20.5) (12.1) (18.7) (32.2)
02866 CSCL Dec Outperform 37 4,748 3. 17 4.10 29.3 (11.2) (7.6) 8.9 (11.9) (2.1) (7.0)
Steel 00347 Angang New Steel Dec Outperform 11 1,350 9. 70 21.24 119.0 (13.1) (24.2) (12.3) (13.7) (19.8) (25.1)
Technology 00268 Kingdee Int'l Dec Outperform 12 1,586 4. 94 5.81 17.7 11.6 35.0 128.0 10.8 43.0 94.6
00757 Solargiga Dec Neutral 5 586 2. 53 1.95 (22.9) 44.6 32.5 66.4 43.5 40.3 42.1
00861 Digitial China Mar Outperform 17 2,151 15. 38 19.10 24.2 2.7 (1.0) 29.5 1.9 4.8 10.5
00877 O-Net Dec Outperform 3 449 4. 20 6.65 58.4 (13.8) (31.1) 14.4 (14.4) (27.1) (2.3)
00819 Tianneng Power Dec Outperform 4 524 3. 77 4.53 20.3 13.9 0.5 (18.2) 13.1 6.5 (30.2)
00951 Chaowei Power Dec Neutral 3 374 2. 90 3.39 17.0 8.2 (9.7) N.A. 7.4 (4.3) N.A.
02018 AAC Acoustic Dec Outperform 26 3,322 21. 10 14.25 (32.5) 4.7 4.2 83.2 3.9 10.3 56.4
02342 COMBA Dec Outperform 13 1,673 9. 80 10.55 7.6 12.1 18.8 12.5 11.3 25.8 (4.0)
03888 Kingsoft Corp Dec Neutral 6 737 5. 17 4.86 (6.0) 21.6 12.9 (8.8) 20.8 19.5 (22.2)
Textile / Apparel 01382 Pacific Textiles Mar Underperform 7 896 4. 88 2.20 (54.9) (1.2) 9.9 5.6 (1.9) 16.4 (9.8)
00321 Texwinca Holdings Mar Outperform 12 1,497 8. 80 6.80 (22.7) 4.0 (5.6) 12.5 3.3 (0.0) (3.9)
Water Utilities 00371 Beijing Enterprises Water Dec Outperform 17 2,152 2. 45 3.20 30.7 (5.3) 9.3 10.1 (6.0) 15.8 (6.0)
02128 China Lia nsu Group Dec Outperform 22 2,854 7. 42 8.50 14.6 (1.3) 46.4 N.A. (2.1) 55.0 N.A.

Source: Company data; KGI Asia Limited estimates

Institutional portal: http://research.kgi.com May 12, 2011 11


DAILY Navigator Hong Kong Statistics k
Valuation table
Code Company EPS (HK$/shr) EPS growth (%) P/E (x) P/B (x) EV/EBITDA (x) YIELD (%) ROAE (%)
2008 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010
Auto 00425 MINTH GROUP 0.52 0.76 0.85 46.3 11.3 17.2 15.5 2.8 2.7 17.0 11.5 1.0 2.0 17.5 18.1
00489 Dongfeng Motor 0.55 0.70 0.83 27.1 18.6 24.4 20.6 4.7 3.9 10.9 5.1 N.A. N.A. 21.5 20.6
01114 Brilliance China (0.01) (0.02) (0.02) N.A. N.A. (601.6) (688.8) 5.6 5.7 332.4 452.9 N.A. N.A. N.A. N.A.
01211 BYD 0.80 0.76 1.12 (4.8) 48.6 51.6 34.7 4.7 4.2 6.7 4.4 3.0 3.3 9.4 12.7
01899 Xingda International 0.35 0.46 0.65 30.9 55.8 26.5 18.9 2.8 2.2 14.8 9.7 N.A. N.A. 55.6 69.6
02333 Greatwall Motor 0.55 1.10 2.25 99.3 104.8 16.6 8.1 2.2 1.8 19.3 5.0 1.6 1.6 14.3 24.6
03808 SINOTRUCK 0.47 0.58 0.82 21.8 42.9 14.6 10.2 1.0 0.9 5.2 3.5 0.8 0.8 7.3 9.7
Banking 00939 CCB 0.47 0.54 0.72 15.0 32.4 18.4 13.9 3.5 3.1 N.A. N.A. 2.4 3.6 20.8 0.0
01398 ICBC 0.39 0.46 0.54 0.2 0.2 19.5 16.5 3.8 3.2 N.A. N.A. 2.2 3.1 0.2 0.2
03328 Bank of Comm. 0.71 0.82 0.94 15.7 14.8 13.5 11.8 2.5 2.1 N.A. N.A. 1.7 1.7 19.8 19.3
03968 CMB 1.89 2.29 2.51 20.9 9.7 12.0 10.9 3.2 2.6 N.A. N.A. 0.9 0.6 29.7 26.4
03988 Bank of China 0.29 0.38 0.45 27.7 19.1 15.7 13.2 2.5 2.3 N.A. N.A. 2.8 3.9 17.5 19.3
Bio-tech 00189 Dongyue Group 0.12 0.09 0.41 (20.6) 343.8 134.8 30.4 11.1 8.4 39.3 15.4 0.3 0.3 8.4 31.3
00325 Trauson 0.14 0.18 0.20 26.8 11.2 24.9 22.4 8.7 2.5 27.7 16.3 N.A. N.A. 42.5 16.0
00503 Lansen Pha rmaceutical 0.13 0.19 0.21 45.5 11.0 15.2 13.7 3.7 1.7 17.7 12.6 2.6 1.9 28.0 16.7
00853 Microport Scientific Corp. 1.85 1.92 0.75 3.8 (60.9) 4.0 10.4 1.9 4.9 35.2 22.5 33.1 N.A. 46.9 25.6
01066 Weigao Group 0.64 0.77 0.70 21.6 (11.2) 20.3 22.6 4.9 8.1 36.6 26.2 0.8 1.3 23.4 22.8
02877 Shineway Pharm 0.57 1.09 1.23 92.7 12.7 25.7 22.8 7.3 6.1 25.1 21.7 1.7 0.9 31.6 28.9
Cement 00691 China Shanshui Cement 0.48 0.30 0.43 (37.7) 43.4 41.5 29.0 5.7 4.9 32.0 14.0 0.7 0.5 14.4 18.2
00914 Anhui Conch 1.74 2.34 1.61 34.5 (31.2) 20.1 29.2 2.5 4.0 31.9 15.8 N.A. 0.8 13.3 15.3
01313 Chinares Cement 0.40 0.26 0.46 (36.9) 79.0 29.7 16.6 3.6 3.0 19.4 11.4 0.3 0.4 12.7 19.5
Coal 01088 China Shenhua 1.58 1.88 2.16 18.8 15.2 25.8 22.4 4.8 4.1 14.2 12.5 1.1 1.2 20.4 19.8
01171 Yanzhou Coal 1.55 0.98 1.65 (36.5) 67.1 40.2 24.1 5.7 4.7 24.7 14.5 1.3 1.5 14.7 21.4
Energy 01205 Citic Resources Holdiings 0.06 0.03 0.12 (46.0) 275.7 51.3 13.6 1.2 1.1 15.4 7.9 N.A. N.A. 2.4 8.5
01393 Hedili Industry 0.49 0.14 0.35 (71.3) 150.5 51.5 20.6 2.4 2.2 34.6 17.2 1.2 1.1 6.7 11.0
Food 00073 Asian Citrus N.A. 6.91 1.41 N.A. (79.6) 1.7 8.5 2.7 2.1 N.A. N.A. 0.8 1.2 16.4 17.4
00151 Want Want China 0.16 0.18 0.24 18.3 30.3 38.0 29.2 12.0 10.6 31.3 23.6 2.3 2.7 32.6 38.6
00168 Tsingtao Brewery 0.63 1.09 1.36 N.A. 24.2 55.3 44.5 8.4 7.3 42.4 22.3 0.4 0.4 17.5 17.6
00220 U-Presid China 0.11 0.27 0.31 N.A. 15.6 23.9 20.7 3.2 2.9 13.7 11.5 2.1 2.4 13.7 14.7
00322 Tingyi 0.36 0.53 0.65 46.2 22.7 38.9 31.7 10.6 9.1 17.3 14.1 1.3 1.6 29.2 30.8
00538 Ajisen (China) 0.21 0.26 0.35 27.9 32.2 59.2 44.8 7.0 6.3 34.0 25.6 0.4 0.7 12.3 14.8
00904 China Green 0.61 0.73 0.85 N.A. 16.9 12.8 10.9 2.3 2.0 7.9 6.4 2.0 2.3 19.6 19.8
00968 Little Sheep 0.16 0.15 0.18 N.A. 24.8 46.7 37.4 5.9 5.5 27.5 20.9 1.1 1.3 13.1 15.3
01068 Yurun Food 0.74 0.96 1.11 29.2 15.5 28.7 24.8 7.2 6.0 28.6 21.0 0.9 1.0 26.5 26.3
02319 China Mengniu (0.75) 0.97 1.10 N.A. 14.2 35.6 31.2 5.9 5.1 15.8 12.7 0.6 0.6 20.5 17.6
03889 Global Sweeteners 0.15 0.13 0.24 (13.5) 87.7 22.3 10.0 1.2 1.1 11.1 6.6 N.A. N.A. 5.4 11.1
Industrial 00580 Sun King Elec 0.04 0.03 0.03 (13.6) (3.2) 67.0 69.3 11.2 3.1 N.A. N.A. 2.0 N.A. 22.4 7.1
00923 Fook Woo 0.16 0.12 0.19 (28.3) 68.7 19.2 11.4 5.2 1.7 22.6 11.5 0.0 0.0 19.9 14.3
01044 Hengan International 1.17 1.78 2.11 51.6 18.7 35.7 30.1 10.7 9.5 26.1 20.6 1.8 2.2 30.7 33.5
01685 Boer Power 0.08 0.12 0.28 N.A. 143.4 98.8 40.6 43.9 5.2 73.8 27.0 0.0 N.A. 43.9 22.8
01868 Neo-Neon 0.21 0.19 0.12 (2.7) (31.6) 14.6 24.1 0.7 0.8 (6.3) 16.1 0.9 2.2 5.5 3.2
01997 Regent Manner 0.29 0.43 0.58 49.9 35.4 6.4 4.7 0.2 0.2 4.1 2.9 38.2 54.5 14.6 17.2
02002 Sunshine Paper 0.19 0.12 0.25 (33.7) 101.1 26.6 13.2 0.9 1.4 25.3 13.3 0.0 0.6 3.4 12.5
00838 EVA Precision 0.12 0.05 0.38 (58.3) 686.8 136.0 17.3 4.8 3.3 37.5 12.3 0.5 1.1 3.4 24.4
03393 Waison Group 0.34 0.34 0.38 N.A. 10.1 17.3 15.7 2.2 2.0 22.5 21.8 1.4 2.2 14.8 13.4
Infrastructure 00390 China Railway Group 0.07 0.32 0.41 330.7 28.7 16.6 12.9 1.6 1.4 8.5 7.3 1.2 1.6 9.9 11.5
01186 China Railway Cons 0.38 0.52 0.64 37.3 22.6 18.5 15.1 2.0 1.8 (1.2) (0.8) 1.8 2.2 11.0 12.4
01800 China Comm. Cons. 0.48 0.63 0.87 31.6 36.4 14.9 10.9 2.5 2.1 3.5 2.6 1.0 1.3 18.0 20.7
Machinery 00317 Guangzhou Shipyard 1.95 1.22 1.80 (37.2) 46.6 16.6 11.3 2.7 2.3 10.5 6.2 2.9 1.7 17.4 22.1
00569 China Automation 0.21 0.29 0.36 42.3 21.0 28.7 23.7 4.3 3.7 24.3 19.6 0.6 0.7 19.4 18.7
00631 Sany Heavy Equipment 0.11 0.28 0.42 159.4 51.3 45.4 30.0 5.3 4.5 N.A. N.A. N.A. 4.7 17.0 16.2
00658 C Transmission 0.65 0.91 1.00 39.6 9.2 15.9 14.5 3.5 2.9 21.5 15.7 0.0 0.0 20.1 22.0
01157 CHANGSHA ZOOMLION HEAV 0.48 0.69 0.95 44.1 36.8 39.1 28.4 12.9 4.8 47.4 20.0 0.2 0.2 39.2 26.8
01683 Int'l Mining Machine 0.14 0.21 0.36 53.5 71.6 58.3 34.0 20.0 4.7 48.4 28.6 N.A. N.A. 41.5 20.1
01766 China South Locomotive 0.19 0.18 0.25 (3.4) 40.0 60.4 43.1 6.1 5.4 5.1 3.8 0.3 N.A. 10.6 13.2
02338 Weichai Power 2.72 3.40 3.94 24.9 15.8 20.3 17.6 4.7 3.7 1.4 0.5 0.5 0.5 26.2 23.7

Source: Company data; KGI Asia Limited estimates

Institutional portal: http://research.kgi.com May 12, 2011 12


DAILY Navigator Hong Kong Statistics k
Valuation table
Code Company EPS (HK$/shr) EPS growth (%) P/E (x) P/B (x) EV/EBITDA (x) YIELD (%) ROAE (%)
2008 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010
Non-ferrous Metal 03993 China Molybdenum 0.40 0.13 0.23 (68.6) 85.7 73.9 39.8 0.9 0.9 6.7 4.1 4.3 5.1 4.7 8.6
02626 Hunan Non-ferrous (0.34) (0.16) 0.06 N.A. N.A. (26.8) 70.6 1.4 1.4 25.7 13.5 2.1 1.4 N.A. 2.0
01818 Zha ojin Mining 0.43 0.61 0.97 41.2 58.7 73.9 46.6 12.2 10.3 48.8 34.5 N.A. 0.8 17.5 24.0
Petrochemica l 00196 Hongh ua Group 0.23 (0.05) 0.10 N.A. N.A. (29.5) 13.6 0.9 0.9 N.A. N.A. 7.7 N.A. N.A. 6.6
00338 Shangha i Petrochemical (1.02) 0.26 0.33 N.A. 28.3 20.4 15.9 2.2 1.9 22.8 10.5 0.7 0.7 11.2 12.8
00568 Shangdong Molong 1.09 0.96 1.17 (12.3) 21.8 12.7 10.5 2.7 1.5 17.7 7.7 0.6 1.2 23.3 17.3
00839 Tianda Oil Pipeline 0.47 0.31 0.53 (34.2) 73.8 13.3 7.6 1.8 1.5 14.0 4.6 1.4 1.4 14.2 21.4
01866 China XLX Fertiliser 0.39 0.14 0.19 (64.1) 35.8 26.1 19.3 1.9 1.8 22.1 17.4 2.3 N.A. 7.3 9.6
02883 China Oilfield 0.81 0.82 1.08 1.1 31.1 24.3 18.5 3.4 2.9 13.7 11.1 0.8 0.7 14.9 17.1
03983 China Bluechem 1.07 0.65 0.75 (38.8) 15.1 14.2 12.3 1.4 1.4 9.8 7.6 3.6 N.A. 9.9 11.3
Port 02880 Dalian Port 0.31 0.24 0.21 (21.9) (15.7) 17.5 20.7 1.6 1.2 31.8 14.2 2.2 1.7 9.3 7.9
03378 Xiamen Port 0.16 0.09 0.12 (45.5) 34.2 23.6 17.6 1.3 1.2 16.1 7.9 3.2 3.9 5.4 7.0
03382 Tianjin Port Dev 0.07 0.08 0.10 3.2 36.7 23.7 17.3 0.9 0.8 11.2 9.5 2.5 2.7 3.7 4.9
Power 00182 China Win dPower Group 0.02 0.02 0.05 (6.7) 120.4 54.6 24.8 2.8 2.5 90.7 22.5 N.A. N.A. 5.3 10.6
00836 China Resources Power 0.37 1.14 1.02 204.6 (10.3) 14.2 15.8 2.0 1.8 12.2 11.9 1.4 1.2 16.4 12.2
00902 Huaneng International (0.38) 0.48 0.37 N.A. (22.8) 13.1 17.0 1.5 1.5 20.2 9.5 N.A. 1.9 12.5 9.0
00916 Longyuan Power 0.08 0.20 0.28 165.0 39.7 55.0 39.4 3.2 2.9 37.6 19.3 N.A. N.A. 6.9 7.8
00991 Datang Power 0.75 0.94 0.00 24.7 N.A. 4.5 N.A. 0.6 0.5 3.2 N.A. N.A. N.A. 13.8 0.0
01071 Huadian Power (0.50) 0.20 0.03 N.A. (83.5) 12.9 77.9 1.0 1.0 9.9 12.4 11.9 N.A. 8.4 1.2
Property 00272 Shui On Land 0.41 0.65 0.65 60.9 (0.4) 7.4 7.4 1.0 0.9 9.6 24.9 2.9 2.3 13.9 12.1
00337 SPG Land 0.17 0.76 1.02 351.9 34.8 6.0 4.4 1.1 0.9 7.1 7.4 2.2 1.7 19.1 21.8
00410 SOHO China 0.09 0.75 0.82 732.0 10.2 12.4 11.2 2.4 2.1 12.1 4.0 2.5 3.3 21.1 19.9
00688 China Overseas Land & Investm 0.65 0.92 1.51 41.4 65.3 16.2 9.8 2.9 2.2 11.5 8.3 1.4 1.6 19.8 25.6
00817 Frans hion Property 0.17 0.12 0.05 (27.8) (56.9) 18.9 44.0 1.2 1.2 6.9 9.5 0.9 1.0 7.4 2.8
01109 China Resources Land 0.46 0.88 1.20 92.0 36.0 15.4 11.3 1.8 1.6 17.4 11.6 1.7 2.0 12.7 14.4
01224 CC Land (0.16) (0.03) 0.10 N.A. N.A. (110.5) 27.3 1.2 1.2 N.A. N.A. 1.1 1.4 N.A. 2.2
01813 KWG Property 0.08 0.31 0.52 272.8 68.3 24.5 14.6 3.2 2.9 33.2 15.8 0.8 1.7 7.6 11.7
Railway 00525 Guangshen Railway 0.20 0.22 0.25 7.7 13.0 20.7 18.3 1.2 1.1 8.5 7.3 2.1 2.1 5.9 6.3
Toll Road 01052 GZI Transport 0.39 0.27 0.39 (30.6) 45.7 21.9 15.0 1.1 1.1 N.A. N.A. 2.8 3.7 5.0 7.2
Retail 00198 SMI CORP N.A. (0.02) 0.16 N.A. N.A. (15.5) 2.2 (10.9) 68.5 (38.2) 14.8 N.A. N.A. N.A. (275.9)
00210 Prime Success Int'l 0.30 0.36 0.47 20.5 29.8 18.1 14.0 4.6 3.6 10.3 8.2 1.1 1.8 28.3 28.8
00331 PCD Stores N.A. 1.54 0.09 -- (94.2) 1.8 31.6 4.7 4.2 31.5 27.0 0.8 0.8 21.9 14.0
00825 Nwds China 0.29 0.30 0.34 2.1 13.7 22.0 19.3 2.5 2.3 10.9 8.3 1.4 2.3 11.9 12.6
00980 Lianhua 0.73 0.80 0.93 9.5 15.4 56.1 48.6 8.6 7.7 1.7 1.2 0.7 0.8 16.2 16.8
00493 Gome 0.10 0.10 0.11 (26.1) 12.4 38.1 33.9 4.8 4.2 18.4 13.5 0.8 1.0 14.7 15.1
01361 361 Degree N.A. 0.49 0.53 -- 6.6 15.3 14.4 5.1 3.8 15.1 9.8 N.A. 3.1 44.7 30.3
01368 Xtep 0.48 0.35 0.42 (27.0) 21.2 22.8 18.8 4.9 4.2 17.7 12.7 1.5 N.A. 23.0 24.0
01833 Intime Department Store 0.25 0.31 0.37 25.8 19.2 55.3 46.4 7.4 6.8 57.0 38.7 0.9 0.8 13.8 15.2
01880 Belle International 0.24 0.30 0.43 26.1 42.9 50.8 35.6 8.4 7.0 44.9 25.0 0.4 0.9 17.7 21.5
03308 Golden Eagle 0.40 0.27 0.59 (31.8) 114.9 107.5 50.0 23.7 16.5 47.7 39.2 0.2 0.2 22.7 39.0
03389 Xinyu Hengdeli 0.22 0.20 0.25 (10.2) 25.0 31.1 24.9 5.4 4.7 19.7 16.6 1.0 1.2 18.5 20.1
08277 Wulmart 0.47 0.40 0.48 (15.2) 19.6 62.2 52.0 9.7 8.5 12.7 10.0 N.A. N.A. 16.3 17.5
Shipping 01138 China Shipping Dev. 1.86 0.37 0.67 (80.2) 83.2 31.0 16.9 1.5 1.5 18.9 13.2 5.2 1.0 5.0 9.1
01919 China COSCO 1.34 (0.45) 0.20 N.A. N.A. (22.3) 49.7 1.8 1.7 (17.7) 5.6 N.A. N.A. N.A. 3.6
02866 CSCL 0.00 (0.65) 0.40 N.A. N.A. (6.7) 10.8 1.7 1.5 (10.2) 8.5 1.1 2.7 N.A. 14.9
Steel 00347 Angan g New Steel 2.08 2.37 0.00 14.1 N.A. 5.7 N.A. 1.2 1.2 0.6 N.A. 2.6 N.A. 22.9 0.0
Technology 00268 Kingdee Int'l 0.09 0.10 0.13 17.0 22.6 65.2 53.1 11.5 9.5 25.3 18.9 0.3 0.3 19.9 19.6
00757 Solargiga 0.06 (0.07) 0.06 N.A. N.A. (49.4) 59.9 3.4 3.5 (46.5) 50.2 0.5 0.5 N.A. 5.9
00861 Digital China 0.42 0.69 0.80 65.5 16.3 22.3 19.2 5.0 4.0 17.4 12.6 0.9 0.8 22.2 22.4
00877 O-Net N.A. 0.14 0.25 -- 84.7 30.8 16.7 12.9 2.4 35.1 11.8 0.0 0.0 N.A. 24.5
00819 Tianneng Power 0.28 0.31 0.38 13.7 20.2 16.7 13.9 2.7 2.5 14.2 11.3 1.7 2.2 18.4 18.5
00951 Chaowei Power 0.20 0.32 0.36 57.4 14.0 12.7 11.1 3.5 2.0 11.3 9.0 0.0 2.3 32.5 23.3
02018 AAC Acoustic 0.60 0.59 0.99 (1.1) 67.2 49.5 29.6 8.2 6.7 44.2 25.7 0.7 1.0 18.0 24.9
02342 COMBA 0.22 0.45 0.55 102.7 24.1 21.9 17.7 4.8 3.9 15.6 13.3 1.5 1.8 22.5 24.2
03888 Kingsoft Corp 0.34 0.43 0.43 25.7 0.3 16.7 16.7 4.0 3.5 13.1 12.2 2.2 2.0 26.4 22.5
Textile / Apparel 01382 Pacific Textiles 0.28 0.26 0.28 (7.0) 6.0 18.6 17.5 2.2 2.0 9.5 8.4 3.1 2.9 12.7 12.1
00321 Texwinca Holdings 0.70 0.65 0.69 (7.1) 6.7 13.6 12.7 2.8 2.5 9.1 7.8 4.5 4.8 21.6 21.0
Water Utilities 00371 Beijin g Enterprises W ater 0.00 0.03 0.07 521.1 147.4 87.2 35.2 6.4 5.2 68.8 35.4 N.A. N.A. 8.8 16.3
Water Utilities 02128 China Liansu Group 0.07 0.34 0.49 44.8 21.1 30.5 20.8 18.9 5.9 30.7 16.1 0.0 1.3 87.8 44.9

Source: Company data; KGI Asia Limited estimates

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KGI's Ratings Rating Definition


Outperform (OP) The stock's excess return over the next twelve months is ranked in the top 40% of
KGI's coverage universe in the related market (e.g. Taiwan).
Neutral (N) The stock's excess return over the next twelve months is ranked in the range between
the top 40% and the bottom 40% of KGI's coverage universe in the related market
(e.g. Taiwan).
Underperform (U) The stock's excess return over the next twelve months is ranked in the bottom 40%
of KGI's coverage universe in the related market (e.g. Taiwan).
Not Rated (NR) The stock is not rated by KGI.
Restricted (R) KGI policy and/or applicable law regulations preclude certain types of
communications, including an investment recommendation, during the course of
KGI's engagement in an investment banking transaction and in certain other
circumstances.
Excess return = 12M target price/current price-1

Note When an analyst publishes a new report on a covered stock, we rank the stock's
excess return with those of other stocks in KGI's coverage universe in the related
market. We will assign a rating based on its ranking. If an analyst does not publish a
new report on a covered stock, its rating will not be changed automatically.

Disclaimer
This information has been compiled from sources we believe to be reliable, but we do not hold ourselves
responsible for its completeness or accuracy. It is not an offer to sell or solicitation of an offer to buy any securities.
KGI Asia Limited and its affiliates and their officers and employees may or may not have a position in or with
respect to the securities mentioned herein. KGI Asia Limited (or one of its affiliates) may from time to time
perform investment banking or other services or solicit investment banking or other business for any company
mentioned in this report. All opinions and estimates included in this report constitute our judgment as of this date
and are subject to change without notice.

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