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					    Morning Express
            06 February 2013




    Focus of the Day
                                                                                                 Indices
a




Sohu (SOHU.US)                                                                        LT
                                                                                                                Close       1d %     Ytd %
                                                                           Neutral
                                                                                     BUY
                                                                                                 HSI            23,149       -2.27     2.17
                                                                                                 H Shares       11,813       -2.82     3.30
4Q results beat; positive on Sogou/webgames;                                               BUY   SH A            2,547        0.21     7.20
                                                                        SELL
fine-tune TP                                                                                     SH B              278        0.13    13.68
                                                                                                 SZ A              987        1.22     7.34
          Yuan MA                yuan.ma@bocomgroup.com                                          SZ B              848       -1.03    19.19
                                                                                 Stock
                                                                                                 DJIA           13,979        0.71     6.68
    Last Closing: US$46.49   Upside: +18.5%    Target Price: US$55.1↓                            S&P 500         1,511        1.04     5.97
                                                                                                 Nasdaq          3,172        1.29     5.04
Sohu’s reported solid 4Q revenue, which set a record high, beating consensus/our                 FTSE            6,283        0.58     6.53
                                                                                                 CAC             3,695        0.95     1.47
estimates by 11%/9%.                                                                             DAX             7,665        0.35     0.69
                                                                                                 Source: Bloomberg
        Game revenue increased by 29% YoY and 5% QoQ to USD158.9mn, on growth
                                                                                                 Indicators
        momentum of TLBB and Wartune. Web game revenue accounted for 20% of total                                  Close    3m %     Ytd %
        game revenue, increasing from 8% last year. At least 3 games are scheduled in 2013.      Brent             116.52     8.16     4.87
                                                                                                 Gold            1,673.55    -2.47    -0.11
                                                                                                 Silver             31.85    -0.45     4.94
        Sogou revenue grew by 68% YoY or 10% QoQ. We do not think Sogou's 1Q13 lower             Copper          8,305.00     8.35     4.72
        guidance is due to new players in the market but rather seasonality. Sogou               JPY                93.63   -14.18    -7.35
                                                                                                 GBP                 1.57    -2.10    -3.65
        continued to extend into the mobile area with new products, such as voice assistant      EURO                1.36     5.99     2.94
        and real-time GPS. Video ad maintained fast growth trend and is expected to profit
                                                                                                 bps change                   3m       6m
        in 18-24 months.                                                                         HIBOR             0.39      -0.01    -0.02
                                                                                                 US 10 yield       2.00       0.25     0.43
We lift our revenue forecasts for 2013E/14E on solid growth of video and Sogou                   Source: Bloomberg
businesses, but fine-tune 2013E/14E EPS estimates on heavier spending on bandwidth
                                                                                                 HSI Technical
cost and product development cost in 2013. We cut our TP to US$55.1, implying 4.5X               HSI                                 23,149
2013E Cyou business, and US$424mn value for the Sogou business, partially offset by the          50 d MA                             22,878
                                                                                                 200 d MA                            20,799
loss in video. Maintain Buy rating.                                                              14 d RSI                                44
                                                                                                 Short Sell (HK$m)                    9,165
    Baidu (BIDU.US)                                                                   LT
                                                                                                 Source: Bloomberg
                                                                           Neutral
                                                                                     BUY

4Q beat consensus; aggressive movements in mobile                                          BUY
                                                                        SELL
field; margin pressure in 2013
          Yuan MA                yuan.ma@bocomgroup.com                          Stock

    Last Closing: US$107.2    Upside: +23%      Target Price: US$132

Baidu’s 4Q12 results beat consensus slightly but margins contracted on higher TAC and
bandwidth costs, as well as greater spending on market promotion/R&D headcount and
consolidation of iQiyi.

Mobile strategy – to build up its mobile ecosystem around mobile search: 1) Around
80mn DAU for mobile web search products; 2) mobile voice assistant to be integrated
with its vertical services; 3) for client software, DAU of Baidu map app reached 3.5mn,


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Morning Express                                                       06 February 2013




while iQiyi app had 100mn+ downloads with 30%+ from mobile. However, as noted in                  Hang Seng Index (1 year)
our 3Q note and stressed by the management, there is still a gap between mobile                    24,000
                                                                                                   22,000
search and its monetization. Baidu is emphasizing user experience for long-term market             20,000
                                                                                                   18,000
share gain instead of short-term profit.
                                                                                                   16,000
                                                                                                   14,000
We lower our estimates on Baidu’s revenue due to slightly weaker company guidance




                                                                                                             1/2/12
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and the company’s de-emphasis of short-term profit. Given the impact of consolidation
of iQiyi and increased TAC due to Baidu’s growing union traffic, as well as expectation of        Source: Company data, Bloomberg
higher marketing cost, we lower our operating margin estimates and trim our TP to
                                                                                                  HS China Enterprise Index (1 year)
US$132, implying 25x 2013E PE. However, we are positive on Baidu’s outlook given its
                                                                                                   13,000
aggressive strategy in building up the mobile ecosystem. Maintain Buy.                             12,000
                                                                                                   11,000
                                                                                                   10,000
China Resources Enterprise (291.HK)                                                    LT
                                                                                                    9,000
                                                                                                    8,000
                                                                            Neutral
                                                                                      BUY           7,000
Viewed slightly negative on the acquisition of Kingway




                                                                                                             1/2/12
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                                                                                                             1/1/13
                                                                                                             1/2/13
                                                                       SELL                 BUY
Brewery
                                                                                                  Source: Company data, Bloomberg
   Phoebe WONG              phoebe.wong@bocomgroup.com                            Stock
                                                                                                  Shanghai A-shares (1 year)
 Last Closing: HK$26.9     Upside: -11.5%    Target Price: HK$23.8→
                                                                                                   2,800
                                                                                                   2,600
CR Snow Brewery (CRSB), 51% owned by CRE, announced its proposal to acquire all                    2,400
assets (except a plant and a piece of land in Shenzhen) of Kingway Brewery (124HK, NR)             2,200
                                                                                                   2,000
for a consideration of Rmb5,384m. The move came as no surprise to us as the acquisition            1,800
has been long awaited by the market. Our initial view is slightly negative, in view of the

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less visible synergistic effect and the seemingly aggressive pricing (particularly when
taking into account the slowing growth outlook of China’s beer sector and the operation           Source: Company data, Bloomberg
being loss-making). We estimate the deal (assuming completion by 1Q13) will cut our               Shenzhen A-shares (1 year)
forecast EPS by 3% in FY13E and FY14E. With CRE’s net cash of HK$3.8bn in FY13E, we
                                                                                                   1,200
believe internal financing can be well satisfied and cash call is unlikely. Pending more           1,100
                                                                                                   1,000
details from management discussion, our forecasts remain unchanged. We reiterate                     900
                                                                                                     800
Neutral on its unattractive valuation and maintain our target price of HK$23.8 (based on             700
                                                                                                     600
FY13E SOTP).
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                                                                                                            1/2/13
Coal Sector                                                                                       Source: Company data, Bloomberg
Coal bi-weekly report: Coking coal price recovery to continue
                                                                                                  Result Announcement This Week
       Wei HE               hewei@bocomgroup.com
                                                                       UP        MP         OP    Date         Company           Code
                                                                                                  06/02/2013   CAPMALLSASIA-S       6813   Final
                                                                                                  06/02/2013   CITIC TELECOM        1883   Final
Thermal coal prices at ports slipped further during the period on supply-demand                   06/02/2013   HENGLI COMM PPT       169   Final
                                                                                                  06/02/2013   NAGACORP             3918   Final
imbalance amid restrictions of shipping conditions. Bohai Rim steam coal with
                                                                                                  06/02/2013   SMIC                  981     1Q
calorific value of 5500 Kcal per kilogram fell RMB3 on average to RMB628/tonne over               07/02/2013   CIFI HOLD GP          884   Final
the past two weeks, almost hitting the lowest level of RMB626/tonne reported in                   07/02/2013   MANULIFE-S            945   Final
                                                                                                  07/02/2013   SANDS CHINA LTD      1928   Final
2012. Thermal coal prices climbed slightly in the international market. The price                 07/02/2013   SBI HLDGS-DRS        6488     3Q
spread between Qinghuangdao 5500 Kcal thermal coal and Australia BJ coal                          07/02/2013   Z-OBEE                948     3Q
                                                                                                  08/02/2013   SAN MIGUEL HK         236   Final
narrowed further to RMB26/tonne, much lower than the normal level of
                                                                                                  08/02/2013   SUNWAH KINGSWAY       188 Interim
RMB80-100/tonne. However, we expect the thermal coal prices at ports would                        08/02/2013   UNITED GENE GP        399 Interim
continue to be weak in Feb due to production suspension of some factories during                  Source: BOCOM Int’l
the CNY holiday and adverse shipping conditions amid extreme weather. Meanwhile,
the Ministry of Railway announced recently that the investments for the country’s
railway construction would reach RMB650bn in 2013, building 5200km of new

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Morning Express                                                 06 February 2013




railways. The construction would boost both the iron/steel and cement industries.
Given the demand recovery, coking coal prices continued its upward momentum
with Grade-9 Linfen coking coal price climbing from its low level of RMB1070/tonne
in Sept 2012 to RMB1400/tonne, representing a growth of 30.8%, and we expect
more upside potential. Maintain “Market Perform” rating.

Coal Sector
Amended industry policies to focus more on environmental protection,
new technologies and enhancing industry concentration
       Wei HE             hewei@bocomgroup.com
                                                                 UP    MP     OP

The NDRC recently issued Coal Industry Policies (Amendments). First issued as
document No. 80 by the NDRC in Nov 2007, the policies have helped to promote the
structural adjustment of the industry, accelerate the change of the mode of
development of the industry, and facilitate the healthy development of the industry.
The amendments this time pertain to the timeframe and scope of industry
development. There are few changes in chapter structure, but the number of
provisions has increased, with more details in development goals, industry planning,
entry requirements, industry associations and technologies. Overall, the amended
version places more focus on environmental protection, new technologies and
increasing industry concentration. Maintain “Market Perform” sector rating.




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                                                                                                                                         06 February 2013




      Last Closing: US$46.49                   Upside: +18.5%                  Target Price: US$55.1↓                         Internet Sector

Sohu (SOHU.US)                                                                                                       UP                           MP                             OP
4Q results beat; positive on Sogou/webgames; fine-tune TP

Financial Highlights
Y/E 31 Dec                          2011       2012E           2013E           2014E           2015E                                                       LT
Revenue (US$m)                        853       1,084           1,316           1,555           1,751                    Neutral
                                                                                                                                                          BUY
YoY growth                           39%         27%             21%             18%             13%
Net profit (US$m)                     230         194             240             293             341                                                                  BUY
                                                                                                                   SELL
YoY growth                           16%        -15%             23%             22%             17%
EPS (US$)                            4.99        2.55            3.51            4.39            5.00
DPS (US$)                                -          -               -               -                -
Dividend yield                           -          -               -               -                -
                                                                                                                                         Stock
PE                                     9.3       18.3            13.3            10.6              9.3
Source: Company, BOCOM Int’l estimates

     Solid 4Q revenues, set record high: Non-GAAP fully diluted EPS attributable to Sohu was
     USD0.73, down 47% YoY and 5% QoQ, beating consensus and our estimate by 11% and 9%,                           Game revenue exceeded the high end of
     respectively. Revenue was USD299mn, up 22% YoY and 5% QoQ, exceeding the high end of                          guidance by US$3.5mn, beating our
                                                                                                                   expectation by 3% on growth momentum
     guidance by 6mn. Net profit before non-controlling interest was USD51mn, up 8% YoY and down                   of TLBB and Wartune.
     8% QoQ, while non-GAAP net income attributable to Sohu was USD23mn, down 9% YoY and 4%
     QoQ. Gross margin was 69%, higher than 66% in 3Q12 due to reduced content cost, but lower                     Pipeline in 2013 includes Dou Po Cang
     than 71% in 4Q11 on higher content bandwidth costs, TAC, and revenue sharing costs.                           Qiong (DPCQ, 斗破苍穹 ), Grand
                                                                                                                   Chase (永恒冒险 ), and Haishen (海
     Game revenue exceeded high end of guidance by US$3.5mn, beating our expectation by 3%,                        神).
     on growth momentum of TLBB and Wartune. Game revenue increased by 29% YoY and 5% QoQ
                                                                                                                   We do not think Sogou’s lower 1Q13
     to USD158.9mn. Web game revenue accounted for 20% of total game revenue, increased from                       guidance is due to new player in the
     8% last year.                                                                                                 market but rather seasonality.
      *   Aggregate PCU for MMO increased 1% QoQ to 1.1mn. ARPU increased 11% QoQ and 60%                          SOTP target price of US$55.1 implies
          YoY to RMB353 from RMB319. APA declined by 31% YoY and 9% QoQ to 2.2mn, due to less                      4.5x 2013 Cyou value and US$424mn of
          low spending players as Cyou continued its strategy of the previous 2 quarters of giving                 Sogou. Maintain Buy.
          away virtual items and decreasing in-game promotions in TLBB.
      *   For web games, revenue increased 21% QoQ and 232% YoY, mainly driven by Wartune. The           Stock data
          number of active accounts increased 32% YoY but declined 17% QoQ to 55.3mn. The QoQ
                                                                                                         52w High                                                                    59.49
          decrease was mainly due to seasonality effects associated with student players. Aggregate      52w Low                                                                     33.75
          charging accounts (ACA) increased 1% QoQ to 1.68mn due to increased number of Wartune,         Market cap (US$m)                                                           1,768
          but partially offset by DDTank. Average revenue per active charging account (ARCA) continued   Issued shares (m)                                                              38
          to grow to RMB120 from RMB100, up 20% QoQ and 216% YoY, boosted by higher spending             Avg daily vol (m)                                                            1.45
          players in Wartune and updates of DDTank in 4Q.                                                1-mth change(%)                                                             -2.94
                                                                                                         YTD change(%)                                                               -1.80
      *   Pipeline for 2013: Dou Po Cang Qiong (DPCQ, 斗破苍穹), based on one of the most                    50d MA                                                                      44.50
          popular novels on the Internet, is expected to perform healthily and steadily judging from     200d MA                                                                     42.39
          its 4 years’ operating data and martial arts feature. Grand Chase (永恒冒险), a licensed           14-day RSI                                                                  46.00
          ARPG game, could satisfy players’ requirement of many game features. 7road just                Source: Company data, Bloomberg
          launched Haishen (海神) on 24th Jan, which is well received.                                     1 Year performance chart
     Ad business was driven by Sogou and video sector. Search revenue grew by 68% YoY or 10%
                                                                                                                              sohu US Equity          AHX H Index   MXCN Index
                                                                                                         10%




     QoQ, with 39.8k advertisers and 71mn search queries. Mobile search traffic accounted for less          F-12       A-12                    J-12                 O-12          D-12


     than 10% of total Sogou traffic. We do not think Sogou’s lower 1Q13 guidance is due to new          -10%


     players in the market, but rather seasonality. Sogou continued to extend into the mobile area
     with new products, such as voice assistant and real-time GPS. Voice assistant, including input      -30%

     method, browser and search actions, may become one of the major functions on the mobile
     search platform. Video ad maintained fast growth trend and is expected to break even in
     18-24 months.                                                                                       -50%


                                                                                                         Source: Company data, Bloomberg
     SOTP TP trimmed to US$55.1; maintain Buy rating: We lift our revenue forecasts for
     2013E/14E by 2.8%/2.4% on solid top line growth of video ad and Sogou businesses.                   Ma Yuan (Martina), Ph.D
     However, as Sogou and the video business are still making loss along with heavier                   Yuan.ma@bocomgroup.com
     spending on bandwidth cost and product development cost in 2013, we fine-tune                       Tel: (8610) 8800 9788 - 8039
     our 2013E/14E EPS estimates to USD3.51/4.39 from USD3.85/4.40 in our last report.                   Gu Xinyu (Connie), CPA
     We cut our TP to US$55.1 from US$56.7, implying 4.5X 2013E Cyou business, and                       conniegu@bocomgroup.com
     US$424mn for the Sogou business, partially offset by the loss of video. Maintain Buy rating.        Tel: (8610) 8800 9788 - 8045

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                                                                                                                                06 February 2013




      Last Closing: US$107.2                    Upside: +23%            Target Price: US$132                         Internet Sector

Baidu (BIDU.US)                                                                                            UP                              MP                                 OP
4Q beat consensus; aggressive moves in the mobile field and
margin pressure in 2013
Financial Highlights
Y/E 31 Dec                              2011       2012        2013E    2014E       2015E
                                                                                                                                                 LT
Revenue (RMB m)                       14,501     22,306        28,263   36,696      46,186                      Neutral
                                                                                                                                                BUY
YoY growth                              83%        54%           27%      30%         26%
Net profit (RMB m)                     6,638     10,456        11,187   12,841      14,954
                                                                                                         SELL                                                    BUY
YoY growth                              88%        58%            7%      15%         16%
EPS (RMB)                                19.4       30.5         32.9     38.0        44.1
Vs. Consensus (+/- %)                       -          -            -        -           -
Dividend yield                              -          -            -        -           -
                                                                                                                                 Stock
PE                                       35.5       22.2         20.3     17.5        15.0
Source: Company, BOCOM Int’l estimates


     4Q12 results beat consensus slightly. Non-GAAP diluted EPS attributable to Baidu in                 TAC, as a percentage of revenue, was up
     4Q12 was RMB8.18, down 7% QoQ and up 36% YoY, beating consensus by 1.2%. Total                      from 9.4% in 3Q2012 to 10.5%, mainly
                                                                                                         due to 1) higher proportion of contextual
     revenue was RMB6.335bn, up 1% QoQ and 42% YoY, exceeding the high end of                            ads; and 2) promotion of hao123.
     management guidance. Gross margin was down to 74% from 78% in 3Q2012, dragged                       Baidu has started to build a mobile
     by higher traffic acquisition cost (TAC) and bandwidth costs. Operating margin                      ecosystem with 80mn+ DAU for mobile
                                                                                                         search products. The organic growth is
     decreased to 48.3% from 56.9%, mainly due to greater spending on market promotion                   supported by expanding partnerships and
     and R&D headcount, as well as the consolidation of iQiyi in Dec which dragged                       voice assistant as well as client software
                                                                                                         installations, etc.
     operating margin by 1%.                                                                             We lower our estimates for 2013E/14E,
                                                                                                         due to lower company guidance for 1Q13
     Solid operating data but margin pressure ahead in 2013. The number of active                        top line and a soft search market.
     online marketing customers increased by 16k to 406k in 4Q, while quarterly ARPU                     However, we are positive on Baidu’s
                                                                                                         outlook given its aggressive strategy in the
     decreased slightly to RMB15.5k from RMB16k, mainly due to the lower spending                        development of mobile products.
     power of newly-added SME customers in 2nd/3rd-tier cities. TAC, as a percentage of                  We trim our TP to US$132, maintain buy.
     total revenue, was up from 9.4% in 3Q2012 to 10.5%, mainly due to 1) higher
     proportion of contextual ads; and 2) promotion of hao123. Given these reasons, and
     the aggressive moves of new market entrants, we have modeled in 1% growth in TAC
                                                                                               Stock data
     ratio per quarter to 14.5% in 4Q2013, thus gradually normalizing to the level before      52w High                                                                        154.15
     Google’s exit. Bandwidth costs also increased 1% sequentially, attributable to iQiyi      52w Low                                                                          85.96
     consolidation and cloud development.                                                      Market cap (US$m)                                                               37,476
                                                                                               Issued shares (m)                                                                  272
                                                                                               Avg daily vol (m)                                                                 6.12
     Mobile strategy – to build up its mobile ecosystem around mobile search. 1) Baidu         1-mth change %                                                                    2.44
     has around 80mn daily active users of mobile web search product. Apart from the           YTD change %                                                                      6.89
                                                                                               50d MA                                                                          101.46
     organic growth, Baidu is expanding partnerships with handset makers for pre-              200d MA                                                                         113.05
     installation, and other platforms such as UCweb to exchange traffic. 2) Baidu has         14-day RSI                                                                       51.62
     launched mobile voice assistant to be integrated with its vertical services, such as      Source: Company data, Bloomberg
     Baidu Post Bar and Baidu Knows; 3) For client software, installations of the Baidu
     map app grew over 50% QoQ in 4Q2012, increasing the number of daily active users          1 Year performance chart
     to 3.5mn; iQiyi APP had 100mn+ downloads with 30%+ from mobile. However, as
                                                                                                                       bi du us Equity          AHXH I ndex      MXCN Index

                                                                                               20%



     noted our 3Q notes and stressed by the management, there is still a gap between
     mobile search and its monetization. Baidu is emphasizing user experience for                 F-12        A-12                       J-12                 O-12             D-12

     long-term market share gain instead of short-term profit.                                 -10%




     Maintain Buy but cut TP to USD132. We lower our estimates on Baidu’s revenue in
     2013E/14E by 6%/7% due to slightly weaker company guidance for 1Q13 top line and
     the company’s de-emphasis of short-term profit. Given the impact of consolidation of      -40%



     iQiyi and increased TAC due to Baidu’s growing union traffic, as well as higher           Source: Company data, Bloomberg
     expectation on marketing costs, we lower our operating margin for 2013E/14E by
     8ppt/9.5ppt. Given the company’s strategic focus on expanding its mobile business,        Ma Yuan (Martina), Ph.D
                                                                                               yuan.ma@bocomgroup.com
     margins are expected to decrease in the next few years. We trim our TP from US$151        Tel: (8610) 8800 9788 - 8039
     to US$132, implying 25x 2013E PE. However, we are positive on Baidu’s outlook             Gu Xinyu (Connie), CPA
     given its aggressive strategy in building up its mobile eco-system. Maintain “Buy”.       conniegu@bocomgroup.com
                                                                                               Tel: (8610) 8800 9788 - 8045

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                                                                                                                            06 February 2013




      Last Closing: HK$26.9                       Downside: 11.5%          Target Price: HK$23.8→                  Consumer Sector

China Resources Enterprise (291.HK)                                                                           UP              MP               OP
Acquisition of Kingway Brewery viewed as slightly negative

Financial Highlights
Y/E 31 Dec                                2010         2011       2012E      2013E      2014E
                                                                                                                                 LT
Revenue (HK$ m)                          87,138      110,164     131,068    151,905    171,762                    Neutral
                                                                                                                                BUY
Revenue growth (%)                           35           26          19         16         13
Net profit (HK$ m)                        5,674        2,832       1,832      2,047      2,371
                                                                                                            SELL                       BUY
vs. Consensus (%)                            na           na    -5% plus   -5% plus   -5% plus
Recurring EPS (HK$)                        0.79         0.79        0.76       0.85       0.99
Recurring net profit (HK$ m)              1,894        1,889       1,832      2,047      2,371
Recurring net profit growth (%)              34            0          -3         12         16
                                                                                                                            Stock
PER (x)                                    34.0         34.2        35.2       31.5       27.2
Yield (%)                                   1.9          1.7         1.7        1.9        2.2
P/B (x)                                     2.1          1.8         1.7        1.7        1.6
Source: Company, BOCOM Int’l estimates
                                                                                                            Consideration of Rmb5.4bn, priced at
                                                                                                            Rmb3,713 per ml of current annual
                                                                                                            capacity.
CR Snow Brewery (CRSB), 51% owned by CRE, announced its proposal to acquire all
assets (except a plant and a piece of land in Shenzhen) of Kingway Brewery (124HK, NR)                      Viewed slightly negative, with less visible
                                                                                                            synergistic effect and seemingly
for a consideration of Rmb5,384m. The move came as no surprise to us as the                                 aggressive pricing.
acquisition has been long awaited by the market. Our initial view is slightly negative, in
view of the less visible synergistic effect and the seemingly aggressive pricing
(particularly when taking into account the slowing growth outlook of China’s beer
sector and the operation being loss-making). We estimate the deal (assuming
completion by 1Q13) will cut our forecast EPS by 3% in FY13E and FY14E. With CRE’s net
cash of HK$3.8bn in FY13E, we believe internal financing can be well satisfied and cash
call is unlikely. Pending more details from management discussion, our forecasts
remain unchanged. We reiterate Neutral on its unattractive valuation and maintain our
target price of HK$23.8 (based on FY13E SOTP).

     Pricing. At Rmb5,384m, the acquisition is priced at Rmb3,713 per ml of current
                                                                                                    Stock data
     annual capacity. This, compared with the profitable Shandong Xin Immense Brewery
                                                                                                    52w High                                       30.8
     acquired by Tsingtao Brewery (168HK, NR) in late 2010 at Rmb3,405/ml, seems a bit              52w Low                                        18.9
     expensive particularly given Kingway is loss-making and the sector growth outlook              Market cap (HK$bn)                         64,604.4
     now turns less exciting, in our view.                                                          Issued shares (m)                           2,401.6
                                                                                                    Avg daily vol (m)                               2.8
                                                                                                    1-mth change(%)                                -7.6
     Synergy. On the positive side, we see the potential market share gain and the cost             YTD change(%)                                  -3.8
     benefit may help CRE to enhance its competitive edge in Guangdong (particularly                50d MA                                         27.7
     given CRE was less focused in this market in the past). Further, management's                  200d MA                                        25.2
     execution ability, as proven by its track record to turn around the acquired                   14-day RSI                                     42.3
                                                                                                    Source: Company data, Bloomberg
     businesses, is a vote of confidence. That said, given the already intense competition
     in Guangdong dominated by the long standing players Zhujiang (ranking No. 1) and               1 Year Performance chart
     Tsingtao (No. 2), we see the “new fight” may be tougher than it appears. Currently,
                                                                                                      30%
     Kingway and Snow rank No. 3 and 6, respectively, in Guangdong. Kingway has an                    20%
                                                                                                                      HSI              291.HK
     annual production capacity of 1.45m tons. The acquisition will increase CRSB’s                   10%
                                                                                                       0%
     annual capacity by about 9% to 17.5m tons.                                                      -10%
                                                                                                     -20%
                                                                                                     -30%
     Kingway Brewery overview. Kingway Brewery, listed in 1997, is 74%-owned by                      -40%
     Guangdong Holdings Limited. Its major market is Guangdong, which accounted for                     Feb-12     May-12    Aug-12   Nov-12     Feb-13
     59% of FY11 sales volume. Based on the brewery assets to be acquired by CRSB,
     Kingway turned into a net loss of HK$70m in 1H12 (vs. HK$46m net profit in FY11),              Source: Company data, Bloomberg
     hit by intensified market competition and cost pressure. CRSB has agreed to acquire
     all its assets (except a plant and a piece of land in Shenzhen), i.e., a 100% stake of 7       Phoebe Wong
     breweries situated in Shenzhen, Chengdu, Foshan, Dongguan, Shantou, Tianjin and                Phoebe.wong@bocomgroup.com
     Xian. The FY11 NAV of the acquired assets is HK$1,940m.                                        Tel: (852) 2977 9391

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Morning Express                                                        06 February 2013




Market Review
Market will likely remain quiet with lower volume before the Lunar New
Year holiday.
Hong Kong stocks fell on Tuesday amid renewed concern about Europe’s debt crisis and
as Sinopec (386.HK) conducted a share placement which weakened sentiment. All the
sectors within the HSI recorded losses with oil sector falling the most. HSI tumbled 536
pts, or 2.27%, to 23148. HSBC (5.HK) slumped 2.7% to HK$85.45.

China’s services industries expanded at the fastest pace in four months in January,
according to a figure released yesterday. The HSBC services PMI rose to 54 from 51.7 in
December. The trend was in line with the official non-manufacturing PMI announced
during the weekend. But the positive data did not excite the market.

Sinopec announced the issue of 2.845bn new H shares after market close on Monday,
representing 3.2% of total issued shares. The stock fell 6.4% yesterday. Sinopec’s parent
bought a US$2.5bn stake in a Nigerian oil field owned by Total SA in November and is in
talks to buy more than US$1bn of African assets from Afren Plc. The listed company may
use the new proceeds to buy upstream from parent. Adding oil- producing assets would
help Sinopec offset refining losses spurred by Chinese government price controls.

Beijing Capital International Airport (694.HK) said regulators will allow it to charge
domestic carriers’ international flights the same fees as foreign carriers effective 1 April.
Presently, Chinese carriers pay about 40% less than their foreign competitors for
international flights. The news caused aviation sector to tumble 2.6% and China Southern
(1055.HK) dropped 4.2% to HK$4.48.

PBOC added RMB450bn liquidity to the financial system using reverse-repurchase
contracts yesterday, helping banks meet increased demand for cash before the Lunar
New Year holiday. The 14-day agreements were set at a yield of 3.45%, helping push the
benchmark money-market rate down for the first time in seven days.

US stocks recovered on Tuesday after the steep loss the day before. DJIA advanced 99 pts,
or 0.7%, to 13979. The US ISM non-manufacturing PMI for January was at 55.2, slightly
better than expected but lower than the previous 56.1 recorded in December. European
markets were broadly higher after data showing private-sector activity in the euro zone
contracted at the slowest rate in 10 months. Major European indexes gained less than
1%.

In corporate news, Dell’s shares were halted for trading after the company confirmed it
has agreed to be taken private by founder Michael Dell and private-equity firm Silver
Lake Management.




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Morning Express                                                      06 February 2013




News Reaction
China HSBC services PMI rises to four-month high. The HSBC services purchasing
managers’ index (PMI) rose 2.3ppts MoM to 54, hitting a 4-month high in Jan. Meanwhile,
the official non-manufacturing PMI announced on Sunday also climbed to a fifth-month
high of 56.2. Nearly 17% of the sample showed more new businesses on improving
market conditions. The Jan employment index, despite reporting a slight decline on a
monthly basis, was the second highest over the past 19 months. Nearly 7% of the
respondents increased capacity on rising production demand.

Chinese regulators rein in lending of BOC (3988.HK) and ICBC (1398.HK). It is reported
that Bank of China received a warning from the PBoC that the bank had exceeded its
new-loan quota by more than RMB30bn, which could hurt the bank’s ability to keep its
loan-to-deposit ratio below the level allowed by law. The lender also received a warning
from the CBRC for approaching the limit on loans in relation to deposits. ICBC also used
up its loan quota during the first 20 days in Jan and had to stop issuing new loans for the
remainder of the month.

PBoC conducted RMB450bn of reverse repo on 5 Feb with a yield of 3.45%. The PBoC
conducted 14-day reverse repo of RMB450bn on 5 Feb with a yield of 3.45%.

SAFE granted another RMB3bn of RQFII quota in Jan. As China accelerated its approval
procedures for RQFII quotas before the CNY holiday, the SAFE announced that it granted
another RMB3bn of RQFII quota to 3 fund houses including Huaxia, efunds and Harvest
Fund as well as a securities firm, Huatai Securities, in Jan. The enlarged RQFII quota of
RMB70bn have all been granted by now. It is estimated that the allocation of the new
RMB200bn quota might be announced after the CNY holiday.

Sinopec (386.HK) places new H shares with a discount of 9.5% to raise RMB24bn.
Sinopec announced to place 2.845bn H shares which represents approx. 14.5% of the
number of H shares as enlarged by the allotment and issue of the placing shares. The
placing price of HK$8.45 represents a discount of 9.5% to the closing price on 4 Feb 2013.
The net proceeds are expected to be around HK$23.97bn and are intended to be used for
general corporate purposes.




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Morning Express                                                                                          06 February 2013




Economic releases for this week - USA                                                                 Economic releases for this week - China
                                                                   Survey                Prior                                                                   Survey     Prior
6-Feb           MBA mortgage applications                                 -             -8.1%         8-Feb           Consumer Price Index (YoY)                   2.1%     2.5%
7-Feb           Initial jobless claims (k)                           360.0               368.0        8-Feb           Producer Price Index (YoY)                  -1.6%     -1.9%
8-Feb           Consumer       Credit(US$ bn)                        15.00               16.05        8-Feb           Trade balance (US$ bn)                       28.5      31.6
8-Feb           Trade balance (US$ bn)                               -46.0               -48.7        8-15 Feb        New Yuan Loans(bn)                         1,000.0    454.3
                                                                                                      8-15 Feb        Money Supply - M2                           14.2%     13.8%
Source: Bloomberg                                                                                     Source: Bloomberg




BOCOM Research Latest Reports
Data            Report                                                                                                                    Analyst
05 Feb 13      Sinopec (386.HK) - 17% new H-shares for US$3.1bn; time to take profit; Downgrade to LT-BUY                                 Fei Wu
05 Feb 13      Container Shipping Sector - Weekly container shipping commentary                                                           Geoffrey Cheng, CFA
04 Feb 13      Net Dragon (777.HK) - Comments on profit warning                                                                           Martina Ma, PhD, Connie Gu, CPA
01 Feb 13      COSL (2883.HK) - No surprises in 2013 strategy - Maintain cautious approach                                                Fei Wu, Tony Liu
01 Feb 13      Tingyi (322.HK) - Lower to Neutral on heavy A&P and mild revenue growth                                                    Summer Wang
01 Feb 13      Consumer Sector - HK Dec retail sales +9% (in line); 2013 growth expected to see a moderate improvement                    Phoebe Wong, Albert Yip, CFA
31 Jan 13      Kingsoft (3888.HK) - Train-ticket event attested to the company's innovation capability; lift TP                           Martina Ma, PhD, Connie Gu, CPA
31 Jan 13      2013 Outlook - BOCOM Int'l 2013 Top 10 Basket off to a Good Start                                                          Raymond Cheng, CFA, CPA, CA
31 Jan 13      CNOOC (883.HK) - Still hibernating (2013 Strategy Preview)                                                                 Fei Wu, Tony Liu
31 Jan 13      Lenovo Group (992.HK) - A set of record results; reiterate BUY                                                             XIE Jianying (Miles)
31 Jan 13      Guotai Junan Int'l (1788.HK) - Beneficiary of cross-border businesses; initiate with "BUY"                                 Li Wenbing
31 Jan 13      Brokerage Sector - Bullish outlook on favorable policies and innovative & cross-border businesses                          Li Wenbing
30 Jan 13      Sinopec Shanghai Petrochemical (338.HK) - Looking beyond a seemingly bad report card - switch to BUY                       Fei Wu
29 Jan 13      CIFI Holdings (Group) Co. Ltd (884.HK) - Focus on genuine purchasing power                                                 Toni Ho, CFA, Alfred Lau, CFA
29 Jan 13      HK Property Sector - Property weekly for the week of 29th January, 2013                                                    Alfred Lau, CFA
29 Jan 13      Container Shipping Sector - Weekly container shipping commentary                                                           Geoffrey Cheng, CFA
25 Jan 13      Hengan (1044.HK) - Takeaways from management call                                                                          Summer Wang
23 Jan 13      Tian Lun Gas (1600.HK) - Initiation: Reaping acquisition benefits                                                          Fei Wu
23 Jan 13      OOIL (316.HK) - 4Q12 container shipping operating data released                                                            Geoffrey Cheng, CFA
22 Jan 13      Intime (1833.HK) - Upgrade to Buy on above peers' earnings outlook and cash freed up by non-retail                         Albert Yip, CFA
Source: Company data, BOCOM International




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Morning Express                                                       06 February 2013




Hang Seng Index Constituents
Company               BBG       Share           Mkt     5d    Ytd     –––– 52-week ––––      –––––––––– PE –––––––––––   Yield   P/B
name                  code       price          cap    chg    chg          Hi        Lo     2009A     2010E      2011E
                                 (HK$)      (HK$m)     (%)     (%)      (HK$)      (HK$)       (X)       (X)       (X)    (%)    (X)
CHEUNG KONG           1 HK      122.00      282,572    -4.8    2.5     132.70      86.00      10.0      11.6      10.4     2.6    0.9
HANG LUNG PROPER     101 HK      29.25      130,940    -0.5    -5.0     31.65      23.80      15.6      20.3      18.2     2.5    1.1
CHINA SHENHUA-H     1088 HK      31.55      622,285    -4.1    -7.1     36.45      24.15      10.2      10.6      10.2     3.6    2.2
HANG SENG BK         11 HK      124.10      237,260    -1.4    4.5     127.60      99.20      13.2      13.5      12.2     4.2    2.8
CHINA RES LAND      1109 HK      22.40      130,534    -5.5    6.2      24.50      12.40      15.5      18.0      15.2     1.0    2.1
COSCO PAC LTD       1199 HK      12.44       34,658     3.0   12.7      13.32       8.82      13.1      12.1      10.7     3.0    1.2
HENDERSON LAND D     12 HK       53.50      129,194    -7.8    -2.2     59.90      37.00       7.9      17.2      16.6     1.9    0.7
HUTCHISON WHAMPO     13 HK       84.75      361,321    -2.6    4.8      88.00      61.80      18.1      16.0      13.7     2.5    1.0
CHINA COAL ENE-H    1898 HK       8.39      129,698    -3.2    -0.4     10.48       6.08      10.0      10.2       9.8    N/A     1.1
BELLE INTERNATIO    1880 HK      17.32      146,081    -0.2    3.0      18.20      11.80      26.1      24.9      21.3     1.1    5.6
IND & COMM BK-H     1398 HK       5.72     1,939,288   -1.7    4.0       6.00       3.97       7.3       7.0       6.7     4.4    1.6
CHINA MERCHANT       144 HK      27.40       68,271     2.0   10.3      29.00      21.00      19.9      18.2      16.2     3.3    1.6
SUN HUNG KAI PRO     16 HK      121.30      322,278    -5.7    4.4     130.80      85.30       7.3      14.6      14.0     2.8    0.9
NEW WORLD DEV        17 HK       13.84       86,611    -5.5   15.1      15.12       7.95       7.2      12.7      11.3     2.7    0.7
SWIRE PACIFIC-A      19 HK       98.40      145,359    -0.5    2.7     101.30      81.15       8.9      16.1      15.9     3.4    0.7
CLP HLDGS LTD         2 HK       65.90      166,493     0.0    1.6      69.00      62.50      23.2      16.8      14.5     3.9    2.0
AIA GROUP LTD       1299 HK      30.05      361,922    -1.8    -0.7     31.90      24.05      26.9      18.0      16.4     1.1    2.0
HENGAN INTL         1044 HK      77.65       95,434     0.0   11.0      83.45      66.80      30.9      27.6      23.0     1.9    7.4
BANK EAST ASIA       23 HK       31.20       69,486    -2.2    5.2      32.45      24.95      14.0      13.7      15.2     3.0    1.3
PING AN INSURA-H    2318 HK      67.25      512,260    -2.3    3.6      72.70      53.00      20.7      18.8      14.6     0.7    2.9
BOC HONG KONG HO    2388 HK      26.35      278,593    -1.5    9.3      27.10      20.45      14.2      13.6      12.9     4.2    2.0
ALUMINUM CORP-H     2600 HK       3.63       77,406    -3.2    2.3       4.45       2.86      N/A        N/A       N/A    N/A     0.8
CHINA LIFE INS-H    2628 HK      24.85      712,679    -3.5    -1.8     27.35      17.00      37.7      39.9      19.2     1.2    2.6
CITIC PACIFIC        267 HK      12.08       44,085    -3.5    4.5      15.88       8.64       5.1       7.9       9.2     3.7    0.6
CHINA RES ENTERP     291 HK      26.90       64,604    -1.6    -3.8     30.80      18.88      18.5      30.1      25.8     1.7    1.6
CATHAY PAC AIR       293 HK      14.84       58,378    -5.5    4.4      16.38      11.76      33.3      66.0      20.0     2.3    1.1
HONG KG CHINA GS      3 HK       21.65      188,152    -1.4    2.4      22.50      16.02      26.7      26.6      24.7     1.5    4.4
ESPRIT HLDGS         330 HK      10.30       19,972    -5.3    -4.1     18.22       8.13      15.2     124.1      22.9     4.0    0.9
BANK OF COMMUN-H    3328 HK       6.37      485,895    -2.0    9.1       6.70       4.75       5.7       6.3       6.6     2.0    1.1
CHINA PETROLEU-H     386 HK       8.74      748,255    -7.1    -0.5      9.65       6.38      10.8      10.2       8.3     4.3    1.3
HONG KONG EXCHNG     388 HK     146.00      167,872    -0.4   10.7     150.70     100.00      33.3      36.9      31.5     2.7   17.0
BANK OF CHINA-H     3988 HK       3.79     1,086,056    0.0    9.5       4.00       2.73       6.5       6.5       6.4     5.1    1.1
WHARF HLDG            4 HK       67.00      202,960    -2.6   10.6      71.00      39.00       5.1      19.2      18.0     1.7    0.9
LI & FUNG LTD        494 HK      10.50       87,770    -8.5   -23.2     20.15      10.28      14.5      21.8      16.7     4.7    2.5
HSBC HLDGS PLC        5 HK       85.45     1,579,167   -2.1    5.1      88.45      59.80      12.3      12.6      11.1     3.7    1.2
POWER ASSETS HOL      6 HK       67.65      144,383     1.1    2.2      69.20      53.40      15.4      15.0      14.3     3.4    2.5
MTR CORP             66 HK       31.30      181,327    -0.9    2.6      32.30      24.60      14.5      20.0      19.9     2.4    1.3
CHINA OVERSEAS       688 HK      22.95      187,559    -5.9    -0.6     25.60      14.12      11.3      12.0      10.2     1.5    2.4
TENCENT HOLDINGS     700 HK     265.40      491,875    -0.7    6.6     281.00     181.70      32.9      30.0      23.7    N/A    10.5
CHINA UNICOM HON     762 HK      12.34      290,793     1.6    -0.6     14.78       9.45      45.1      33.9      21.4     1.0    1.1
SINO LAND CO         83 HK       13.96       82,925    -6.4    0.1      15.60      10.10       8.3      13.2      13.9     3.3    0.9
CHINA RES POWER      836 HK      22.35      106,516     6.9   13.0      22.45      13.42      21.3      15.5      12.5     1.3    2.2
PETROCHINA CO-H      857 HK      10.64     2,103,078   -4.0    -3.1     11.92       9.03      12.0      12.7      11.0     3.7    1.5
CNOOC LTD            883 HK      15.62      697,375    -3.0    -6.9     18.20      13.18       9.0       8.6       8.8     2.8    2.0
CHINA CONST BA-H     939 HK       6.50     1,622,544   -2.3    4.5       6.75       4.71       6.8       6.8       6.5    N/A     1.4


HANG SENG INDEX                23,148.5   13,509,796   -2.1    2.2    23,944.7   18,056.4     11.9      11.2      10.2     3.4    1.5
Source: Bloomberg




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Morning Express                                                          06 February 2013




China Ent Index Constituents
Company                      BBG     Share          Mkt    5d     Ytd    –––– 52-week ––––    –––––––––– PE –––––––––––   Yield   P/B
name                         code    price          cap    chg    chg        Hi        Lo    2009A     2010E     2011E
                                     (HK$)      (HK$m)     (%)    (%)     (HK$)     (HK$)      (X)        (X)       (X)    (%)    (X)
CHINA SHENHUA-H            1088 HK    31.55   622,285.13   -4.1   -7.1     36.45     24.15     10.2      10.6      10.2     3.6   2.2
SINOPHARM-H                1099 HK    23.20    55,740.91   -4.1   -4.3     27.45     16.76     25.9      23.5      18.7     1.0   2.8
CHINA SHIPPING-H           1138 HK     4.24    18,618.96   -3.6   -4.5      6.46      2.83     N/A       N/A       44.2     2.9   0.5
YANZHOU COAL-H             1171 HK    12.96    97,637.61   -2.6    1.1     20.15      9.92      6.0      10.2      12.3     5.5   1.2
CHINA RAIL CN-H            1186 HK     8.43    96,315.53    3.8   -4.3      9.54      4.81     11.1      10.3       9.3     1.5   1.3
BYD CO LTD-H               1211 HK    25.90    66,128.18   -0.6   11.4     28.45     12.54     43.4     202.0      50.3     0.0   2.3
IND & COMM BK-H            1398 HK     5.72 1,939,287.63   -1.7    4.0      6.00      3.97      7.3       7.0       6.7     4.4   1.6
METALLURGICAL-H            1618 HK     1.67    50,277.75   -4.6   10.6      2.20      1.36     12.4      17.2       8.6     0.0   0.5
TSINGTAO BREW-H            168 HK     46.05    60,122.32    1.5    0.7     51.65     39.40     28.4      28.0      23.8    N/A    4.0
CHINA COM CONS-H           1800 HK     7.55   115,025.52   -4.7    0.9      8.43      5.75      8.4       8.5       7.7     3.0   1.3
CHINA COAL ENE-H           1898 HK     8.39   129,697.52   -3.2   -0.4     10.48      6.08     10.0      10.2       9.8    N/A    1.1
CHINA COSCO HO-H           1919 HK     3.93    50,823.57   -5.8    3.4      5.61      2.75     N/A       N/A        N/A     0.0   1.1
CHINA MINSHENG-H           1988 HK    11.38   395,011.25   -0.4   27.0     12.32      5.35      7.0       7.3       7.1    N/A    1.7
PING AN INSURA-H           2318 HK    67.25   512,260.03   -2.3    3.6     72.70     53.00     20.7      18.8      14.6     0.7   2.9
PICC PROPERTY &            2328 HK    11.58   141,924.25   -0.9    6.6     12.28      7.81     12.3      10.9      10.2     2.3   2.6
ALUMINUM CORP-H            2600 HK     3.63    77,405.63   -3.2    2.3      4.45      2.86     N/A       N/A        N/A    N/A    0.8
CHINA LIFE INS-H           2628 HK    24.85   712,678.94   -3.5   -1.8     27.35     17.00     37.7      39.9      19.2     1.2   2.6
SHANGHAI ELECT-H           2727 HK     3.23    61,227.38    0.3   -2.4      4.48      2.61      9.4       9.2       8.8     2.9   1.1
GUANGZHOU R&F -H           2777 HK    13.60    43,824.20   -3.4    5.4     16.28      7.87      8.5       7.6       7.2     4.6   1.6
CHINA OILFIELD-H           2883 HK    16.68    90,093.58   -2.5    4.4     17.66     10.02     13.8      13.0      11.3    N/A    2.0
ZIJIN MINING-H             2899 HK     2.93    94,525.37   -2.3   -3.9      3.90      2.23     10.5      10.0       8.7    N/A    2.0
CHINA NATL BDG-H           3323 HK    12.44    67,163.88    1.6    9.7     12.80      7.07      8.6      10.0       7.7     2.2   2.0
BANK OF COMMUN-H           3328 HK     6.37   485,895.31   -2.0    9.1      6.70      4.75      5.7       6.3       6.6     2.0   1.1
ANGANG STEEL-H             347 HK      5.68    37,014.79   -6.3    0.0      6.78      3.44     N/A       N/A      111.3     0.0   0.7
JIANGXI COPPER-H           358 HK     20.35    98,010.85   -1.9   -0.2     22.70     15.40     11.4      10.9      10.0     3.1   1.4
CHINA PETROLEU-H           386 HK      8.74   748,254.88   -7.1   -0.5      9.65      6.38     10.8      10.2       8.3     4.3   1.3
CHINA RAIL GR-H            390 HK      4.42    89,237.03    1.6   -2.4      4.98      2.48     11.5      10.8       9.5     1.4   1.0
CHINA MERCH BK-H           3968 HK    18.20   387,845.16   -1.1    6.4     19.02     12.02      7.7       7.8       7.8     2.9   1.7
BANK OF CHINA-H            3988 HK     3.79 1,086,056.38    0.0    9.5      4.00      2.73      6.5       6.5       6.4     5.1   1.1
DONGFENG MOTOR-H           489 HK     12.24   105,461.31   -4.4    2.3     15.80      8.54      8.5       9.7       8.6     1.8   1.7
ZHEJIANG EXPRESS           576 HK      6.64    28,838.28   -0.6    8.9      7.00      4.80     12.9      13.2      12.8     5.8   1.5
CHINA TELECOM-H            728 HK      4.19   339,106.63    0.2   -2.8      4.92      3.23     17.7      18.4      14.3    N/A    1.1
AIR CHINA LTD-H            753 HK      6.59    94,567.77   -2.5    0.6      7.41      4.40     15.1      16.2      11.4     2.2   1.5
ZTE CORP-H                 763 HK     13.90    44,121.86   -4.7    6.4     23.85      9.23     24.8      N/A       19.3     1.8   1.6
PETROCHINA CO-H            857 HK     10.64 2,103,078.00   -4.0   -3.1     11.92      9.03     12.0      12.7      11.0     3.7   1.5
HUANENG POWER-H            902 HK      7.73   117,278.73    2.5    7.8      8.04      4.18     40.4      14.3      10.7     0.8   1.7
ANHUI CONCH-H              914 HK     30.80   147,074.86    1.3    9.2     31.70     19.10     15.4      20.1      14.9     1.4   2.9
CHINA CONST BA-H           939 HK      6.50 1,622,544.25   -2.3    4.5      6.75      4.71      6.8       6.8       6.5    N/A    1.4
DATANG INTL PO-H           991 HK      3.37    64,382.28    6.3   13.9      3.44      2.51     16.4      11.0       8.9     4.1   0.9


HANG SENG CHINA ENT INDX             11,813    4,591,819   -2.2    3.3    12,354     8,988      9.8       8.9       8.1     3.5   1.5
Source: Bloomberg




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Morning Express                                                                 06 February 2013




BOCOM International
           11/F, Man Yee Building, 68 Des Voeux Road, Central, Hong Kong
     Main: + 852 3710 3328                   Fax: + 852 3798 0133                www.bocomgroup.com

Rating System
Company Rating                                                              Sector Rating
Buy: Expect more than 20% upside in 12 months                               Outperform (“OP”): Expect more than 10% upside in 12 months
LT Buy: Expect more than 20% upside but longer than 12 months               Market perform (“MP”): Expect low volatility
Neutral: Expect low volatility                                              Underperform (“UP”): Expect more than 10% downside in 12 months
Sell: Expect more than 20% downside in 12 months



Research Team

Deputy Head of Research                                 @bocomgroup.com                                                             @bocomgroup.com
Raymond CHENG,                       (852) 2977 9393       raymond.cheng
CFA, CPA, CA


Strategy                                                                    Economics
Hao HONG, CFA                        (852) 2977 9384           hao.hong     Miaoxian LI                  (86) 10 8800 9788 - 8043          limiaoxian
Benny WONG, CFA                      (852) 2977 9215         benny.wong



Banks                                                                       Internet
Qingli YANG                          (852) 2977 9212           yangqingli   Yuan MA                      (86) 10 8800 9788 - 8039           yuan.ma
Shanshan LI                  (86) 10 8800 9788 - 8058          lishanshan   Connie GU, CPA               (86) 10 8800 9788 - 8045           conniegu
Li WAN                       (86) 10 8800 9788 - 8051              wanli


Coal/ Chemicals & Fertilizers                                               Metals & Mining
Wei HE                       (86) 10 8800 9788 - 8040              hewei    Jovi LI                              (852) 2977 9243                jovi.li
Rongjuan WANG                (86) 10 8800 9788 - 8046       wangrongjuan    Benjamin PEI                 (86) 10 8800 9788 - 8041        benjaminpei


Consumer                                                                    Oil & Gas/ Gas Utilities
Phoebe WONG                          (852) 2977 9391        phoebe.wong     Fei WU                               (852) 2977 9392               fei.wu
Summer WANG                          (852) 2977 9221        summer.wang     Tony LIU                             (852) 2977 9390           xutong.liu
Albert YIP, CFA                      (852) 2977 9205            albertyip
Kevin WANG                           (852) 2977 9386          kevin.wang


Electronics                                                                 Property
Miles XIE                            (852) 2977 9216            miles.xie   Alfred LAU, CFA, FRM                 (852) 2977 9235            alfred.lau
                                                                            Toni HO, CFA, FRM                    (852) 2977 9220              toni.ho


Healthcare                                                                  Telecom & Small/Mid-Caps
Bin WU                       (86) 10 8800 9788 - 8052             wu.bin    Zhiwu LI                             (852) 2977 9209              lizhiwu


Insurance                                                                   Transportation
Jerry LI                     (86) 10 8800 9788 - 8053          liwenbing    Geoffrey CHENG, CFA                  (852) 2977 9380       geoffrey.cheng
                                                                            Ian FENG                             (852) 2977 9381           Yinan.feng




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Morning Express                                                                06 February 2013




Analyst Certification
The authors of this report, hereby declare that: (i) all of the views expressed in this report accurately reflect their personal views about any
and all of the subject securities or issuers; and (ii) no part of any of their compensation was, is, or will be directly or indirectly related to the
specific recommendations or views expressed in this report; (iii) no insider information/ non-public price-sensitive information in relation to
the subject securities or issuers which may influence the recommendations were being received by the authors.
The authors of this report further confirm that (i) neither they nor their respective associates (as defined in the Code of Conduct issued by the
Hong Kong Securities and Futures Commission) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior
to the date of issue of the report; (ii)) neither they nor their respective associates serve as an officer of any of the Hong Kong listed companies
covered in this report; and (iii) neither they nor their respective associates have any financial interests in the stock(s) covered in this report.
Disclaimer
By accepting this report (which includes any attachment hereto), the recipient hereof represents and warrants that he is entitled to receive
such report in accordance with the restrictions set forth below and agrees to be bound by the limitations contained herein. Any failure to
comply with these limitations may constitute a violation of law.
This report is strictly confidential and is for private circulation only to clients of BOCOM International Securities Ltd. This report is being
supplied to you strictly on the basis that it will remain confidential. No part of this report may be (i) copied, photocopied, duplicated, stored
or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for
any purpose without the prior written consent of BOCOM International Securities Ltd.
BOCOM International Securities Ltd, its affiliates and related companies, their directors, associates, connected parties and/or employees may own
or have positions in securities of the company(ies) covered in this report or any securities related thereto and may from time to time add to or
dispose of, or may be interested in, any such securities. Further, BOCOM International Securities Ltd, its affiliates and its related companies may
do and seek to do business with the company(ies) covered in this report and may from time to time act as market maker or have assumed an
underwriting commitment in securities of such company(ies), may sell them to or buy them from customers on a principal basis and may also
perform or seek to perform investment banking, advisory, underwriting, financing or other services for or relating to such company(ies) as well as
solicit such investment, advisory, financing or other services from any entity mentioned in this report. In reviewing this report, an investor
should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest.
The information contained in this report is prepared from data and sources believed to be correct and reliable at the time of issue of this
report. This report does not purport to contain all the information that a prospective investor may require and may be subject to late
delivery, interruption and interception. BOCOM International Securities Ltd does not make any guarantee, representation or warranty,
express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this
report and accordingly, neither BOCOM International Securities Ltd nor any of its affiliates nor its related persons shall not be liable in any
manner whatsoever for any consequences (including but not limited to any direct, indirect or consequential losses, loss of profits and
damages) of any reliance thereon or usage thereof.
This report is general in nature and has been prepared for information purposes only. It is intended for circulation amongst BOCOM
International Securities Ltd’s clients generally and does not have regard to the specific investment objectives, financial situation and the
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construed or considered as an offer, recommendation or solicitation to buy or sell the subject securities, related investments or other
financial instruments thereof.
The views, recommendations, advice and opinions in this report may not necessarily reflect those of BOCOM International Securities Ltd or
any of its affiliates, and are subject to change without notice. BOCOM International Securities Ltd has no obligation to update its opinion or
the information in this report.
Investors are advised to make their own independent evaluation of the information contained in this research report, consider their own
individual investment objectives, financial situation and particular needs and consult their own professional and financial advisers as to the
legal, business, financial, tax and other aspects before participating in any transaction in respect of the securities of company(ies) covered in
this report. The securities of such company(ies) may not be eligible for sale in all jurisdictions or to all categories of investors.
This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any
locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to any law, regulation,
rule or other registration or licensing requirement.
BOCOM International Securities Ltd is a wholly owned subsidiary of Bank of Communications Co Ltd.




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