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					Overweight Banks, Equal-weight
Insurers in next 6 months
—— Investment Strategy of Financial Sector




Robert Hu, Tina Sun
May. 15th, 2009
Contents

1.   Outlook of China Economy


2.   Overweight Banking Sector due to Rapid loans growth and Steady
     assets quality


3.   Equal-weight Insurance Sector since valuation priced in long term
     assumptions


4.   Our Top Picks




                                                       www.sw108.com   申万研究   2
1.1 Recovery of China Economy is foreseeable

 GDP growth saw the bottom at 4Q2008 and recovers QoQ in 2009
 This round, drivers come from regional transition

       GDP growth by SWS forecast                               Regional Transition


                                                                               Service+Finance+R&D




                                                      Consumptions In Central Areas

                                             Urbanization In Central Areas: Real
                                               Estate, Industrial Engineering


                                             Industrial Relocation :Capital Intensive

                                         Industrial Relocation :Labor
                                                   Intensive

                                     Infrastructure
                                     Investment

                                      2009     2010               2015                  2020          2030


                                                                                          Source:SWS Research

                                                                         www.sw108.com               申万研究       3
Contents

1.   Outlook of China Economy


2.   Overweight Banking Sector due to Rapid loans growth and Steady
     assets quality


3.   Equal-weight Insurance Sector since valuation priced in long term
     assumptions


4.   Our Top Picks




                                                       www.sw108.com   申万研究   4
2.1 Incremental loans are likely to arrive at 7.4 trillion
 At the end of 1Q2009, the incremental loans reached 4.58 trillion
 Incremental demands for loans come from stimulus package

  25,000                                                                                     30.00% 100%

  20,000                                                                                     25.00%   80%
                                                                                             20.00%
  15,000                                                                                              60%
                                                                                             15.00%
  10,000                                                                                              40%
                                                                                             10.00%
   5,000                                                                                     5.00%    20%
      0                                                                                      0.00%    0%



                                                                                     2009E
           1999

                  2000

                         2001

                                  2002

                                         2003

                                                2004

                                                       2005

                                                                2006

                                                                       2007

                                                                              2008
                                                                                                            1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
                                                                                                       State Budget           Domestic Loans       Bonds
                                FAI (Billion)                 FAI growth
                                                                                                       Foreign Inv.           Own Capital          Others


                                                                                                                        Source:CEIC,SWS Research


  Assuming domestic loans will account 20% of total FAI funds source(5%
   higher than 2008’s and close to year 2004), the incremental needs for
   loans will be around 7 trillion.



                                                                                                                              www.sw108.com        申万研究         5
2.1 Incremental loans are likely to arrive at 7.4 trillion
                         Loans to GDP ratio                               Incremental loans issued by quarters

     40,000                                                 1.40   120%
     35,000                                                 1.20
                                                                   100%
     30,000                                                 1.00
     25,000                                                        80%
                                                            0.80
     20,000
                                                            0.60   60%
     15,000
     10,000                                                 0.40   40%
      5,000                                                 0.20
                                                                   20%
          0                                                 0.00
                                                                    0%


                                                      E
            97

                    99


                            01

                                    03

                                            05


                                                     07

                                                    09
         19

                 19


                         20

                                 20

                                         20


                                                  20
                                                                           2004     2005        2006      2007    2008
                                                 20
                   Total loans(Bn)           Loans to GDP                                  1Q   2Q   3Q   4Q
                                                                                                Source:CEIC,SWS Research

  If the loans to GDP ratio reaches historical peak, the incremental loans
   will arrive at 7.2 trillion for the whole year.
  Banks are very likely to issued 60% of total incremental loans in
   1Q2009 due to no credit crunch.Thus the incremental loans will arrive
   at 7.6 trillion for the whole year.
  Our final forecast for incremental loans is 7.4 trillion RMB, 24% yoy
   growth

                                                                                                www.sw108.com      申万研究    6
2.2 NIM will stabilize in the 2Q2009

 Benchmark loans rate declined 216 basis points
 Yields contraction occurred in different interest bearing assets


      Yield on 3-year government bond                                                                       Yield on discount bills

  4.50%
                                                                         12%
  4.00%
  3.50%                                                                  10%

  3.00%                                                                  8%
  2.50%                                                                  6%
  2.00%                                                                  4%
  1.50%
                                                                         2%
  1.00%
                                                                         0%
  0.50%




                                                                                                                   Nov-07




                                                                                                                                                                         Nov-08
                                                                                                 Jul-07




                                                                                                                                                       Jul-08
                                                                               Mar-07

                                                                                        May-07



                                                                                                          Sep-07




                                                                                                                                     Mar-08

                                                                                                                                              May-08



                                                                                                                                                                Sep-08




                                                                                                                                                                                           Mar-09
                                                                                                                            Jan-08




                                                                                                                                                                                  Jan-09
  0.00%
                                     Jul-08




                                                       Nov-08
          Jan-08




                                                                Jan-09
                            May-08
                   Mar-08




                                              Sep-08




                                                                               Annualized direct discount rate                                             6-month deposit rate




                                                                                                                                                       Source:SWS Research




                                                                                                                                     www.sw108.com                                  申万研究            7
2.2 NIM will stabilize in the 2Q2009

 NIM suffered a dramatic decline in last six months


                        NIM contraction for six H-listed banks


            3.80%
            3.60%
            3.40%
            3.20%
            3.00%
            2.80%
            2.60%
            2.40%
            2.20%
            2.00%
                    1Q2008      2Q2008        3Q2008         4Q2008        1Q2009

                      ICBC      CCB       BOC       BOCOM         CMB        CITIC


                                                Source:Company announcements,SWS Research




                                                                      www.sw108.com         申万研究   8
   2.2 NIM will stabilize in the 2Q2009
   Yield on loans will increase due to higher per. of normal loans
   Cost on liabilities will decrease due to replacement of time deposits


                     NIM simulation on ICBC                                           NIM simulation on CITIC

7.5%                                                         3.6%   7.5%                                                         4.1%

7.0%                                                         3.1%   7.0%                                                         3.6%

6.5%                                                                6.5%                                                         3.1%
                                                             2.6%
6.0%                                                                6.0%                                                         2.6%
                                                             2.1%
5.5%                                                                5.5%                                                         2.1%

5.0%                                                         1.6%   5.0%                                                         1.6%

4.5%                                                         1.1%   4.5%                                                         1.1%
       2008      1Q2009      2Q2009     3Q2009     4Q2009                  2008      1Q2009      2Q2009     3Q2009      4Q2009

       Yield on loans (Left axis)     Yield on investments                 Yield on loans (Left axis)     Yield on investments
       Cost on deposits               NIM                                  Cost on deposits               NIM



                                                                                                                Source:SWS Research




                                                                                                   www.sw108.com          申万研究          9
2.2 NIM will stabilize in the 2Q2009

 Do not need to worry about interest rate liberalization
 NIM does not have much room to drop compared to other countries
 Hardly to be promoted by government


                                      HSBC’s NIM worldwide
              14.0%

              12.0%            2006    2007    2008

              10.0%

               8.0%

               6.0%

               4.0%

               2.0%

               0.0%



                                                                      USA
                                                             Middle
                      Europe


                               Hong
                               Kong

                                        Hang
                                        Seng


                                                  Malaysia




                                                                                       HSBC
                                                                              Brazil



                                                                                       Total
                                                              East



                                                                        Source:SWS Research


                                                                              www.sw108.com    申万研究   10
2.3 Assets quality is maintained steady

 Regional transition will be the key driver for a steady assets quality in
  Mid term
 China economy will not stumble in 2010 or 2011
 Regional transition creates a more balanced loans exposure

 Short term: Enough provisions have been charged

          Provisions charged through collectively                            NPL ratio and Coverage ratio (1Q2009)
                        assessed(2008)

   100%                                                               250%                                             2.50%
    90%
    80%                                                               200%                                             2.00%
    70%
    60%                                                               150%                                             1.50%
    50%
    40%                                                               100%                                             1.00%
                                                    68.79%
    30%    60.25%
                     49.04%    51.97%                        52.18%
    20%                                    45.05%                     50%                                              0.50%
    10%
     0%                                                                0%                                              0.00%
            ICBC       CCB      BOC        BOCOM     CMB      CITIC           ICBC   CCB    BOC BOCOM CMB      CITIC

                   Collectively Assessed    Individually Assessed                     Coverage ratio   NPL ratio


                                                                                                       Source:SWS Research


                                                                                              www.sw108.com        申万研究        11
2.4 Better QoQ result will be upside catalyst
          Forecast on net profit growth of China banks                          Still attractive compared to historical valuation
 80.00%
           70.18%                                                              40                                                36.91                                                                                              6.0
 70.00%                                                                                                                                                              5.23
                                                                               35
                                                                                                                                                                                                                                    5.0
 60.00%              52.35%                                                    30
                                                                               25                                                                                                                                                   4.0
 50.00%
                                                                               20                                                                                                                                                   3.0
 40.00%                        31.88%                                          15                                                                                                                                                   2.0
 30.00%                                                                        10
                                                                                5                                                                                                               1.34                                1.0
 20.00%                                                                                                                                                                                                     6.74
                                                                                0                                                                                                                                                   0.0
                                                                  5.00%




                                                                                                               Aug-06
                                                                                                                        Nov-06


                                                                                                                                          Apr-07
                                                                                                      Jun-06




                                                                                                                                                                                                         Oct-08
                                                                                                                                                   Jul-07




                                                                                                                                                                                                Jul-08
                                                                                    Dec-05
                                                                                             Mar-06




                                                                                                                                                            Sep-07
                                                                                                                                                                     Dec-07
                                                                                                                                                                              Feb-08




                                                                                                                                                                                                                           Mar-09
                                                                                                                                 Jan-07




                                                                                                                                                                                       May-08



                                                                                                                                                                                                                  Jan-09
 10.00%
                                                        -1.88%
  0.00%                                 -5.05% -3.25%
            2Q08     3Q08     4Q08      1Q09   2Q09      3Q09     4Q09
-10.00%
                                                                                                                                                   PE                         PB

                    PB-ROE Table for H-listed banks
 30.0%    ROE                                                                   Upside catalysts:
 25.0%
                                                                Hang Seng
                                                                                Improving loans mix
                                                                                Better quarterly operating results
                                        CMB
 20.0%
                                CCB
                                ICBC
 15.0%
                             BOCOM                                              Recovery of China economy
                      BOCStandard
           CITIC
                         Charted
 10.0%                BOCHK
                                                                         PB
                      HSBC
  5.0%
      0.7              1.7              2.7             3.7              4.7
                                     Source:Datastream, SWS Research
                                                                                                                                              www.sw108.com                                                   申万研究                        12
Contents

1.   Outlook of China Economy


2.   Overweight Banking Sector due to Rapid loans growth and Steady
     assets quality


3.   Equal-weight Insurance Sector since valuation priced in long term
     assumptions


4.   Our Top Picks




                                                       www.sw108.com   申万研究   13
3.1 Long term: Rapid premiums growth maintained
 CAGR of life insurance premium in 2009-2025 is expected to be 16%
 Upgrade insurance depth under strong economy
 Fast development in western and central region
 Tax Preferential Policy for Pension Insurance


                                                  Insurance Density Worldwide                                                         Insurance Depth Worldwide
                                      3,000                                                France
                                                                                                                 14.0%
     life business penetration(US$)




                                                                                 Japan
                                      2,500                                                                      12.0%
                                                                                   Singapore
                                      2,000
                                                                                                                 10.0%
                                                                                                United States
                                                                  South Korea                                    8.0%
                                      1,500                                        Italy      Canada             6.0%                                      4.40%
                                                                                           Germany
                                      1,000                           Bahamas
                                                                                                                 4.0%                                                                    2.04%
                                                                                Spain                            2.0%
                                       500
                                                                                                                 0.0%




                                                                                                                                     South




                                                                                                                                                             India
                                                                                                                                                            World
                                                                                                                                                            United
                                                                                                                                                  France
                                                                                                                                     Japan
                                                                                                                                     Korea



                                                                                                                                             Switzerland




                                                                                                                                                            States
                                                                                                                         Hong Kong
                                         0        PR China




                                                                                                                                                                                          PR China
                                                                                                                                                                     Australia

                                                                                                                                                                                 Spain



                                                                                                                                                                                                     Brazil
                                                                                                                           Taiwan
                                              0    10,000    20,000   30,000     40,000       50,000    60,000

                                                                per capita GDP(US$)




                                                                                                                                         Source:CEIC,Swiss Re,SWS Research




                                                                                                                                                    www.sw108.com                  申万研究                       14
3.1 Long term: Rapid premiums growth maintained
                                      S shape curve for insurance density                                                    Insurance density in different regions (RMB)
                         250



                         200                                                              Beijing          Shanghai
 Insurance density US$




                         150

                                                 人均GDP处于2000-4000
                                                 美元是保险密度快速增
                         100                     长阶段



                         50                                                  Tianjin
                                       Fujian     Jiangsu
                                 Xinjiang                        Zhejiang
                                                            Guangdong
                          0                       Shangdong
                               200    700       1200    1700      2200      2700   3200    3700     4200    4700    5200
                                                                                                       GDP per cap US$


                                       Premiums exposure for China insurers
             100%                                                                                                           0-100
                                                                     15%                   13%
                                            20%                                                                  20%        100-300
                                                                                                                            300-1000
                         80%                                         15%                   16%
                                                                                                                            1000+
                                                                                                                 24%
                         60%                42%

                                                                                                                                       Source:Company Announcement, SWS Research
                         40%
                                                                     70%                   71%
                                                                                                                 56%        China Life may benefit from
                         20%                38%                                                                              regional transition since its
                                                                                                                             mature networks
                          0%
                                       China Life                Ping An life          Tai Ping life            PICC
                                                               Eastern             Central          Western
                                                                                                                                                 www.sw108.com       申万研究          15
3.1 Long term: Wider Interest Spread
                                                                           Cost of fund of insurance players
 According to some international
                                                                                                   China Life   Ping An   CIIIH
  experience, interest spread of life                      Breakdown of life insurance reserve
  insurance product is 1.65-2.63%                            Traditonal                              26.8%      18.0%     10.0%
  with an average of 2%                                      Participating                           71.8%      42.0%     50.0%
                                                             Universal                               1.5%       40.0%     40.0%
 China insurance players has                              Cost of fund
                                                             Traditonal                              2.5%        4.0%     2.5%
  potential to raise their interest                          Participating                           4.0%        4.0%     4.0%
  spread through a higher                                    Universal                               3.8%        4.0%     3.6%
  investment yield in the long run
                                                           Actural cost of fund                      3.6%        4.0%     3.7%
                                                           Guaranteed interest rate                  2.5%        3.5%     2.5%


            Interest spread of diff. sectors                           Interest spread of insurance products
   3.5%                                                                               China Life     Ping An      CIIH
   3.0%
                                                           Traditional                 2.68%          1.20%      2.76%
                                                           Participating               1.18%          1.20%      1.26%
   2.5%
                                     low
                                     低限        高限
                                               High
                                                           Universal                   1.38%          1.20%      1.66%
   2.0%
                                                           Interest spread              1.58%         1.20%      1.57%
   1.5%

   1.0%

   0.5%                                                                                                 Source:SWS Research

   0.0%
          银行
          Bank       债券基金
                    Debt fund      股票基金
                                Equity fund         保险
                                               Insurance




                                                                                          www.sw108.com            申万研究           16
3.2 Short term: Premiums growth is likely to drop
 Premiums growth rate is expected to be 5%-10% in 2009, low possibility to beat
  market expectation
 Short term driver:
 Credit rate is attractive
 Supply-driven, the increase of sales agents
 Short term challenges:
 Declining credit rate
 Increasing base period
                                                              Declining Universal’s Crediting Rate
                   6.5%

                   6.0%

                   5.5%

                   5.0%
                                                                                                                                                                                                        4.75%
                   4.5%
                                                                                                                                                                                                        4.05%
                   4.0%                                                                                                                                                                                 3.85%
                                                                                                                                                                                                        3.80%
                   3.5%                                                                                                                                                                                 3.60%

                   3.0%
                                                                        Nov-06




                                                                                                                               Nov-07




                                                                                                                                                                                      Nov-08
                                                     Jul-06




                                                                                                            Jul-07




                                                                                                                                                                    Jul-08
                          Jan-06




                                                                                 Jan-07




                                                                                                                                        Jan-08




                                                                                                                                                                                               Jan-09
                                            May-06




                                                                                                   May-07




                                                                                                                                                           May-08
                                                               Sep-06




                                                                                                                     Sep-07




                                                                                                                                                                             Sep-08
                                   Mar-06




                                                                                          Mar-07




                                                                                                                                                 Mar-08




                                                                                                                                                                                                         Mar-09
                                                         China Life                           Ping An                         Huatai                      Taikang                      TPL

                                                                                                                                  Source:CEIC,SWS Research

                                                                                                                                                                                                                  www.sw108.com   申万研究   17
3.2 Short term: Reprice pressure exists in investments
 Unlike banking sector, the cost of liabilities is close to the bottom currently, but yield
  on assets will keep declining due to ongoing replacement of investments

                                           China Life   Ping An    CIIH
     Investment assets breakdown
       Cash and term deposits                20.0%       22.0%    18.0%
       Bond
         Government bond                     20.0%       17.0%    20.0%
         Financial bond                      20.0%       14.0%    17.0%
         Corporate bond                      19.0%       19.0%    18.0%
         Others                               6.0%        6.0%    10.0%
       Equity                                10.0%       12.0%    12.0%
       Other(Real estate/Infrastructure)      5.0%       10.0%     5.0%
     Investment yield
       Cash and term deposits                3.0%        3.0%     3.0%
       Bond
         Government bond                      2.9%        2.9%     2.9%
         Financial bond                       3.4%        3.4%     3.4%
         Corporate bond                       4.5%        4.5%     4.5%
         Others                               3.5%        3.5%     3.5%
       Equity                                10.0%       10.0%    10.0%
       Other(Real estate/Infrastructure)      6.0%        6.0%     6.0%

     Investment yield of new investments     4.23%       4.49%    4.36%
     Investment yield of old investments     5.50%       5.50%    5.50%

     Proportion of added new investments     25%         30%       25%
     Proportion of old investments           75%         70%       75%

     Total investment yield                  5.18%       5.20%    5.21%

                                                     Source:SWS Research

                                                                           www.sw108.com   申万研究   18
3.3 Valuation has reflected long term expectation

 CAGR of life insurance premium in 2009-2025 is expected to be 16%
 NBV/APE keep steady due to wider interest spread
 Discount rate=11.5%


                                    The current valuation is not attractive

  Ping An            Method/benchmark Multiple/discount rate(%) Value(HK$m) Value per share(RMB) % of SOTP
  Life insurance
  EV                           FY2009E                             80,176           10.92
  NBV                          FY2009E         11.50%              10,416            1.42
  FNBV                NBM*FY2009E NBV              20             208,320           28.36
  AV                                                              288,496           39.28            81%
  Other business
  Non-life                     Peer P/B           1.5               8,137            1.66             3%
  banking                      Peer P/B           1.2               8,789            1.44             3%
  securities                   Peer P/B           2.0               3,845            1.05             2%
  Other business               Peer P/B           1.0              36,370            4.95            10%
  SOTP                                                            345,637           48.37           100%
  Shares (million)                7,345
  Target Price (HK$)                             1.13                               54.86


                                                                                    Source:SWS Research




                                                                                         www.sw108.com       申万研究   19
3.3 Valuation has reflected long term expectation
   China Life         Method/benchmark Multiple/discount rate(%) Value(HK$m) Value per share(RMB) % of SOTP
   EV                           FY2009E                            268,294           9.49            39%
   NBV                          FY2009E         11.50%              16,702           0.59
   FNBV                NBM*FY2009E NBV             25              417,550           14.77           61%
   AV                                                              685,844           24.27           100%
   Shares (million)              28,265
   Target Price (HK$)                             1.13                               27.52



   CIIH                       Method/benchmark Multiple/discount rate(%) Value(HK$m) Value per share(RMB) % of SOTP
   TPL
   EV                                   FY2009E                             10,417
   NBV after expense overrun            FY2009E         11.50%               1,014
   FNBV                        NBM*FY2009E NBV             25               25,345
   AV(100% of TPL)                                                          35,762
   CIIH's 50.05% stake in TPL                                               17,899           12.67          82.20%
   other businesses/assets
   TPI(50.05% stake)                    Peer P/B          1.5                 273             0.29           1.88%
   CIRe(100% stake)                     Peer P/B          1.5                1,962            2.08          13.51%
                              mgmt)
   Others(insurance int./assetPeer P/B                    1.0                 523             0.37           2.40%
   Shares (million)                       1,413
   Sub-total                                                                21,609           15.41         100.00%


                                                                                       Source:SWS Research



  Equal-weight the insurance sector



                                                                                           www.sw108.com         申万研究   20
Contents

1.   Outlook of China Economy


2.   Overweight Banking Sector due to Rapid loans growth and Steady
     assets quality


3.   Equal-weight Insurance Sector since valuation priced in long term
     assumptions


4.   Our Top Picks




                                                       www.sw108.com   申万研究   21
4.1 Earnings Forecast of Financial Sector

      Last Price(HKD)   2008 PE   2009 PE   2008 PB   2009 PB    NBVM          Rating
CITIC       4.00         10.35      9.83     1.44       1.31                 Buy
BOC         2.88         10.15      9.40     1.39       1.29                 Outperform
BOCOM       6.77         10.30      9.87     1.95       1.68                 Outperform
ICBC        4.65         12.37     11.98     2.26       2.08                 Neutral
CCB         4.79         10.66     10.03     2.12       1.91                 Neutral
CMB        17.86         10.99     11.56     2.91       2.47                 Neutral

Ping An      49.35        -       35.10      3.73      3.18       16.55      Outperform
China Life   27.55      32.39     25.31      3.80      3.23       25.09      Neutral
CIIH         13.00        -       32.50      4.00      3.51       18.25      Neutral
PICC          4.69        -       45.95      2.11      2.02                  Neutral
Ming An       0.90        -       30.00      0.78      0.77                  Neutral

CEL          17.54      27.41     26.58      2.11      1.70                  Outperform
                                                                   Source:SWS Research
                                                                Note:Last price as May.15th




                                                                      www.sw108.com           申万研究   22
4.2 Our Top Pick: China CITIC Bank (998.HK)
  Investment Thesis
  High capital adequacy ratio underpinned the highest loans growth among 6 HK
   listed banks
  Valuation attractive compared to its peers
  Great potential in fee business due to synergy with CITIC Group
      High CAR supports rapid loans growth                   Higher NIM due to corporate business franchise
                                                             3.4%
     45.0%
     40.0%                                                   3.2%
     35.0%                                                   3.0%
     30.0%
     25.0%                                                   2.8%
     20.0%                                                   2.6%
     15.0%
                                                             2.4%
     10.0%
      5.0%                                                   2.2%
     0.0%
                                                             2.0%
             ICBC


                    CCB



                             BOC




                                               CMB



                                                     CITIC
                                      BOCOM




                                                                    2005    2006    2007     2008      1Q2009
                                                                       ICBC         CCB             BOC
                                                                       BOCOM        CMB             CITIC
                          2005-2008   1Q2009

                                                                                           Source:SWS Research
  Upside Catalysts
  Large amounts of incremental bills turn to general loans
  Better QoQ results due to increasing net interest income

                                                                                   www.sw108.com       申万研究      23
4.2 Our Top Pick: China Everbright Limited (165.HK)
 CEL has a 39.31% stake in China Everbright Securities(CES) and a 6.23% stake in
  China Everbright Bank (CEB)
           RNAV                                         PB ratio of CES
               12.50            1.0           1.3       1.5         2.0     2.5        3.0
                0.8            10.47         11.48     12.15       13.83   15.51      17.19
                1.0            10.82         11.83     12.50       14.18   15.86      17.54
   PB ratio of  1.3            11.34         12.35     13.03       14.71   16.39      18.07
     CEB        1.6            11.87         12.88     13.55       15.23   16.91      18.59
                2.0            12.57         13.58     14.25       15.93   17.61      19.29
                2.5            13.44         14.45     15.12       16.80   18.48      20.16


                                                      Upside catalyst
                                                      CES succeed its IPO in A-share market
      1.5x 09PB
       8.57
                                       2.5x 09PB      CES’s operating results beat our
                                           8.4
                  Bull Case:                           expectation
                  RNAV=19.59 HKD
                                                      Revaluation on banking sector
                                                      Dividend received from CEB
                     1.5x 09PB
                        2.62


          CES     CEB   Hong Kong business

                                                                            www.sw108.com     申万研究   24
Disclaimer
The views expressed in this report accurately reflect the personal views of the analyst. The analyst declares that neither he/she nor his/her associate serves as an officer of nor has
any financial interests in relation to the listed corporation reviewed by the analyst. None of the listed corporations reviewed or any third party has provided or agreed to provide any
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whether individually or as a group (i) are not involved in any market making activities for any of the listed corporation reviewed; or (ii) do not have any individual employed by or
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listed corporation reviewed or (iv) do not, presently or within the last 12 months, have any investment banking relationship with the listed corporation reviewed.

Undertakings of the Analyst
Robert Hu
I am conferred the Professional Quality of Securities Investment Consulting Industry by the Securities Association of China or have equivalent professional competence. I issue this
report independently and objectively with due diligence. This report distinctly and accurately reflects my research opinions. I have never been, am not, and will not be compensated
directly or indirectly in any form for the specific recommendations or opinions herein.
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Introduction of Share Investment Rating
Security Investment Rating:
When measuring the difference between the markup of the security and that of the market’s benchmark within six months after the release of this report, we define the terms as
follows:
Buy: with a markup more than 20% better than that of the market;
Outperform:With a markup 5% to 20% better than that of the market;
Neutral: with a markup less than 5% better or worse than that of the market;
Underperform: with a markup more than 5% worse than that of the market.
Industry Investment Rating:
When measuring the difference between the markup of the industry index and that of the market’s benchmark within six months after the release of the report, we define the terms as
follows:
Overweight:Industry performs better than that of the whole market;
Neutral: Industry performs about the same as that of the whole market;
Underweight:Industry performs worse than that of the whole market.

We would like to remind you that different security research institutions adopt different rating terminologies and rating standards. We adopt the relative rating method to recommend
the relative weightings of investment. The clients’ decisions to buy or sell securities shall be based on their actual situation, such as their portfolio structures and other necessary
factors. The clients shall read through the whole report so as to obtain the complete opinions and information and shall not rely solely on the investment ratings to reach a
conclusion. The Company employs its own industry classification system. The industry classification are available at our sales personnel if you are interested.
CSI300 is the benchmark employed in this report for A-share listed firms and FXI/SYWG Triple-C Index is the benchmark employed in this report for HK-listed firms.




                                                                                                                                        www.sw108.com                   申万研究               25
Disclaimer
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                                                                                                                                            www.sw108.com                    申万研究     26
申万研究 • 拓展您的价
值 Research • CHINA Value Revealed
SYWG




Shanghai SWS Research & Consulting Co., Ltd.
Robert Hu
huhaoping@sw108.com


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