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Recovery of Valuation Premium for Earnings Visibility—— Investment strategy for HK listed consumption discretionary sector
Haitao Wang
May 2009
www.sw108.com
申万研究 2
1. Underpinned by the economy-China’s consumption sector
2. Resilient?-Snapshot of the discretionary sector
3. They gonna be winners-Stock picking
Contents
www.sw108.com
申万研究 3
Source: CEIC, SWS estimates
1.1 Growth story of China’s economy
-30
-20
-10
0
10
20
3019
53
1956
1959
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
E
GDP (%) GDP per Capita (%)
Bottoming out
China’s GDP and GDP per Capita growth (1953-2012E)
www.sw108.com
申万研究 4
Source: CEIC, SWS Research estimates
1.2 The driving factor of consumption: People’s income growth
China’s residents’ disposal income growth (1991-2012E)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
0%
5%
10%
15%
20%
25%
30%
35%
40%
Residents' savings (RHS) Urban personal income (%) Rural personal income (%)
To bottomout
www.sw108.com
申万研究 5
Source: CEIC, SWS Research estimates
1.3 China’s urbanization is steadily picking up
China’s urbanization rate (1988-2020E)
45
57
0
10
20
30
40
50
60 CAGR 1%
www.sw108.com
申万研究 6
Source: CEIC, SWS estimates
1.4 Bigger stake in China’s resident consumption
China’s consumption breakdown
0%
10%
20%
30%
40%
50%
60%
70%
80%
Consumption % resident consumption
gov consumption
More contribution from resident consumption
Source: Thomson Reuters, SWS Research
Private consumption to GDP (2008)
35.4%
52.9%55.1% 55.6% 56.2%
58.4% 59.3% 59.9% 61.2% 61.9%
65.4% 65.8%
69.9% 70.1%
74.1%
www.sw108.com
申万研究 7Source: CEIC, SWS Research
1.5 China’s regional economy growth: back to front
CAGR of regional GDP growth in previous 10 yrs
CAGR of regional GDP growth in previous 5 yrs
11.7 11.8
12.0 12.1
12.1 12.2
12.4 12.5
12.7 12.8
13.0
AH HuN HuB JX CQ HeB Shanxi HeN SH BJ Shaanxi
12.2 12.2
12.4 12.5
12.6 12.8
12.9 12.9
13.1
13.7 13.8
BJ SH Shanxi HeB HuN JX AH HuB CQ Shaanxi HeN
www.sw108.com
申万研究 8
Source: NSB, SWS
1.6 Consumption growth in central China is more robust
Sales retail sales in central China
gradually catch up (1995-2007)
Sales retail sales growth in west China
has room of development (1995-2007)
HeN, 375
HuN, 283
0
50
100
150
200
250
300
350
400
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
BJ SH HeB HeN HuB HuN
CNY bln
Almost all total social retail sales of Central China provinces and first-tier cities converges in recent years.
BJSH
0
50
100
150
200
250
300
350
400
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
BJ SH AH JX CX Shaanxi Shanxi
CNY bln
Still there is large gap between the retail sales of first-tier cities and Western China provinces.
www.sw108.com
申万研究 9
1.7 Consumptions potential of central area is enormous
2008 Marginal propensity of consumption (denoted by consumption to income ratio) in other area is bigger than that of East China
65.4%
67.3%
69.9%70.4%
East China Central China West China Northeast China
Source: CEIC, SWS Research
www.sw108.com
申万研究 10
1.8 Consumptions potential of central area is enormous (con’d)
Consumption per capita in East and Central China are about CNY11,000 and CNY6,000 respectively in 2008.
The consumption in Central China count 7% of national GDP.
Sensitivity analysis shows resilient contributions of consumption to GDP growth, assuming a GDP growth rate of 9%.
Source: SWS Research
7000 8000 9000 10000 11000
GDP Growth 9% 0.74% 0.84% 0.95% 1.05% 1.16%
Consumptions Per Capita In Central AreasContributions of Central Areas Consumptions to
GDP Growth
www.sw108.com
申万研究 11
1.9 Consumptions potential of central area is enormous (con’d)
According to the experiences of Shanghai, when the annual average income per Capita reaches CNY15,000, consumption of discretionary consumer goods would enter into a high growth period.
The annual average income per capita in Central China is around CNY15,000 now. So explosive consumption growth could be observed soon in those areas.
Source: CEIC, SWS Research
0
5000
10000
15000
20000
25000
30000
35000
Explosive growth in consumption ahead!
www.sw108.com
申万研究 12
1.10 Conclusion
We are bullish on the secular prospect for Chinese economic growth from the perspectives of economic structural shift or economic transition.
China’s economy tends to bottom out in the next 2-3 years, mainly due to the robust economic growth in central China area.
As a matter of fact, the consumption in central China gradually matches that in first-tier cities in terms of social retail sales in recent 5 years. We believe the trend is irreversible, in consideration of relatively low proportion of consumption in GDP breakdown.
Besides, the steady growth in people’s income and high savings rate both underpin the national consumption as well.
www.sw108.com
申万研究 13
1. Underpinned by the economy-China’s consumption sector
2. Resilient?-Snapshot of the discretionary sector
3. They gonna be winners-Stock picking
Contents
www.sw108.com
申万研究 14
Source: NSB, SWS
2.1 Consumption growth is more stable
China’s consumption growth is more stable (1998.6-2009.3)
-40
-30
-20
-10
0
10
20
30
40
50
60
Jul-9
8
Nov
-98
Mar
-99
Jul-9
9
Nov
-99
Mar
-00
Jul-0
0
Nov
-00
Mar
-01
Jul-0
1
Nov
-01
Mar
-02
Jul-0
2
Nov
-02
Mar
-03
Jul-0
3
Nov
-03
Mar
-04
Jul-0
4
Nov
-04
Mar
-05
Jul-0
5
Nov
-05
Mar
-06
Jul-0
6
Nov
-06
Mar
-07
Jul-0
7
Nov
-07
Mar
-08
Jul-0
8
Nov
-08
Mar
-09
FAI (%, YoY) Industrial added value (%, YoY)
Total social retail sales (%, YoY) Net export (%, YoY)
www.sw108.com
申万研究 15
Source: NSB, SWS
2.2 Consumption growth in discretionary goods is less resilient
Less resilient sales growth vs. fast recovery (2001.7-2009.3)
2.9 8.4 9.4 10 6.3 7.3 15.7 1.4
14.2 13.8
15.7
11.6 11.7 10.7
7.7
18.4
Pou
ltry
& e
gg
Bev
erag
e
Toba
& li
quor
App
arel
Foo
twea
r
Text
ile
Cos
met
ic
Jew
llery
Growth in Mar 09 Monthly volatility of sector earnings
www.sw108.com
申万研究 16
Source: Thomson Reuters, SWS Research
2.3 Historical valuation discrepancy was self-destructed
0
0.5
1
1.5
2
2.5
2006
-1-1
2006
-3-1
2006
-5-1
2006
-7-1
2006
-9-1
2006
-11-
120
07-1
-120
07-3
-120
07-5
-120
07-7
-120
07-9
-120
07-1
1-1
2008
-1-1
2008
-3-1
2008
-5-1
2008
-7-1
2008
-9-1
2008
-11-
120
09-1
-120
09-3
-1
Relative valuation
Relative valuation
We believe the mean reversion process will continue
0
5
10
15
20
25
30
35
2006
-1-1
2006
-3-1
2006
-5-1
2006
-7-1
2006
-9-1
2006
-11-
1
2007
-1-1
2007
-3-1
2007
-5-1
2007
-7-1
2007
-9-1
2007
-11-
1
2008
-1-1
2008
-3-1
2008
-5-1
2008
-7-1
2008
-9-1
2008
-11-
1
2009
-1-1
2009
-3-1
Leading PER of Discretionary Leading PER of staples
PER comparison
Mean reverting of relative valuation (2006-2008) Valuation comparison (2006-2008)
www.sw108.com
申万研究 17
Source: Euromonitor, SWS
2.4.1 Overview of sub-sectors: Apparel & Footwear
Robust growth in apparel sector (2002-2011E)
Source: Euromonitor, SWS
Robust growth in footwear sector (2002-2011E)
0
200
400
600
800
1000
1200
1400
2002 2003 2004 2005 2006 2007 2008 2009E 2010E 2011E
CNY bln
CAGR of 14.6%
0
5
10
15
20
25
30
35
2002 2003 2004 2005 2006 2007 2008 2009E 2010E 2011E
CNY bln
CAGR of 9.9%
www.sw108.com
申万研究 18
Source: Euromonitor, SWS
2.4.2 Overview of sub-sectors: Sports goods
Robust growth in sportswear market (2003-2012E)
Source: SWS estimates
Market share of sportswear (2008)
Nike, 11.3 Adidas, 10.0
Li Ning, 9.1
Anta, 5.8
Kappa, 5.6
Xtep, 4.9
Others, 53.4
0
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009E 2010E 2011E 2012E
CNY bln
CAGR of 23.2%
www.sw108.com
申万研究 19
Source: Euromonitor, SWS
2.4.3 Overview of sub-sectors: Retail
Robust growth in department store market (2000-2011E)
Source: SWS estimates
Rapid development of chained store (2001-2006)
0
100
200
300
400
500
600
700
800
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E 2010E 2011E
CNY bln
CAGR of 12%
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
0
2
4
6
8
10
12
2001 2002 2003 2004 2005 2006
Sales to total social retails sales (%) Sales of top 100 chained store (CNY 100mln, RHS)
www.sw108.com
申万研究 20
1. Underpinned by the economy-China’s consumption sector
2. Resilient?-Snapshot of the discretionary sector
3. They gonna be winners-Stock picking
Contents
www.sw108.com
申万研究 21
3.1 Two dimensions: stock picking in discretionary sector
As we are bullish on the prospects of the economy in Central China, we likes those companies with rich networks in inland China.
As investors are suggested to benefit from the recovery of valuation, we likes those companies with relatively lower valuation due to pessimistic market moods.
Also we prefer market leaders which could benefit from the economic rally.
Belle (01068.hk) is our top pick. We’re also bullish on the prospects of Li Ning (02331.hk) in view of its Eastern sports culture in indoor games and sophisticated management.
www.sw108.com
申万研究 22
3.1 Two dimensions: stock picking in discretionary sector (con’d)
Source: SWS Research
Li Ning
ANTAChina DongXiang
Belle
Ports
Parkson
Golden Eagle
Intime
Maoye
Lianhua SupermarketWumart Stores
China Resources
POU SHENG INTL
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
0 2 4 6 8 10 12
09PE
G
Network rank
Belle and Li Ning are our favorites in the next 3-6 months
www.sw108.com
申万研究 23
3.1.1 Belle: Central China’s business accounting for 50%
Belle’s national network (2008)
0-100
100-200
200-300
300-400
400+
Source: Company, SWS
Notes: # of outlets
www.sw108.com
申万研究 24
3.1.2 ANTA ： Focus on central China
ANTA’s national network (2008)
0-100
100-200
200-300
300-400
400+
Source: Company, SWS
Notes: # of outlets
www.sw108.com
申万研究 25
3.1.3 Parkson ： Commitment to Central China
Parkson’s national network (2008)
0-100
100-200
200-300
300-400
400+
Source: Company, SWS
Notes: # of outlets
www.sw108.com
申万研究 26
Source: Company, SWS
3.1.4 Ajisen ： Steady penetration into Central China
Ajisen’s national network (2008)
0-1
1-10
10-30
30-50
50+Notes: # of outlets
www.sw108.com
申万研究 27
3.2.1 Worst is over: Belle （ 01880.hk） Catalyst: Re-rated when 09 interim
results announced, due to the recovery in sales with economic rally
Highlights: Margins are to bottom out since 09, thanks to less promotion activities
Earnings forecast ： EPS CNY0.27, CNY0.31, CNY0.37 for 09, 10,11
Risks: Continued promotion in footwear industry due to sluggish economy
-20
0
20
40
60
80
100
120
0
10
20
30
40
50
60
70
80
90
100
07A 1H08 2H08 08A 09E 10E 11E 12E
Top line growth (%,LHS) Bott om line growth (%)
2008 Belle’s product mix
Belle’s projected growth rate
Belle’s projected margin
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
06A 1H07 07A 1H08 2H08 08A 09E 10E 11E 12E
Company owned footwear brands Distribution footwear brands
1st-tier sportswear brands 2nd-tier sportswear brands
9
14
19
24
29
34
39
44
46
47
48
49
50
51
52
53
54
55
56
57
06A 1H07 2H07 07A 1H08 2H08 08A 09E 10E 11E 12E
SG&A to Revenue GPM (%,LHS) NPM (%)Source: SWS Research
www.sw108.com
申万研究 28
3.2.2 Ease of cash flow burden in 2009: Li Ning （ 02331.hk） Catalyst: Better-than-expected order
book growth for 1Q10
Highlights I: No major M&A events in 2009, so ~CNY200 could be added to free CF compared to 2008
Highlights II: Less cash is to be invested in inventories after destocking is completed beyond 2Q09
Earnings forecast ： EPS CNY0.85, CNY0.99, CNY1.12 for 09, 10,11
0
20
40
60
80
100
120
140
0
5
10
15
20
25
30
35
40
2003 2004 2005 2006 2007 2008E 2009E 2010E 2011E 2012E
Fashion sportswear market (CNY bn)
Sportswear market (CNY bn)
39.2 36.5 34.8 30 35.4 39.3 39.9 42.7 45.3 43 45 45.5
0102030405060708090
100
2001 2002 2003 2004 2005 2006 1H2007 2007 1H20082008E 2009E 2010E
Breakdown of Li Ning's Turnover by product category (2001-2010E)
Footwear(%) Apparel(%) Accessories(%)
52335853
6200
70007600
0
2000
4000
6000
8000
10000
12000
1000
2000
3000
4000
5000
6000
7000
8000
2003 2004 2005 2006 2007 1H2008 2008E 2009E 2010E
'LiNing' brand store count and revenue (2003-2010E)
Revenue (CNY mln, LHS) Franchised outlets count
Previous estimation
Source: SWS Research
www.sw108.com
申万研究 29
3.3 Special focus
Finally, there are four stocks we would like to remind of.
These stocks are our favorites in long-run, yet in the coming 3-6 months, the investment opptunities in them are tiny either due to the high valuation level or due to lack of catalysts.
In case the operational environment changes rapidly, investors could long or short the stocks accordingly.
www.sw108.com
申万研究 30
3.3.1 Resilient sale momentum: Ports Design （ 00589.hk） Highlights: Margin expansion
through softening raw material and adjusting product mix
Earnings forecast ： CNY0.82, CNY0.97, CNY1.16 for 09, 10,11EPS.
Risks: Continued trade-down due to slowed growth in personal disposal income
270299
325
357 360377
398414
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
0
50
100
150
200
250
300
350
400
450
2003A 2004A 2005A 2006A 2007A 2008E 2009E 2010E
Total retail outlets (LHS) Growth rate % (RHS)
-40%
-20%
0%
20%
40%
60%
80%
2005A 2006A 2007A 2008E 2009E 2010E 2011E 2012E
Retail growth % OEM growth %
ODM growth % Total revenue growth %
0%
20%
40%
60%
80%
100%
2005A 2007A 2009E 2011E
Overall GP Margin Retail GP Margin
OEM GP Margin ODM GP MarginSource: SWS Research
www.sw108.com
申万研究 31
3.3.2 Undervalued partly due to short record and tax: ANTA （ 02020.hk）
Source: SWS Research
47085193 5468
56676050
63506700
0
3000
6000
9000
0
4000
8000
12000
2004 2005 2006 2007H 20071H20083Q20082008A2009E2010E2011E
Franchised store count and revenue (2004-2011E)
Revenue (CNY mln, LHS) Franchised outlets count
Previously forecasted
92.1
43.830405060708090
100110120
ASPs of Footwear and Sportswear
Footwear Apparel
0%10%20%30%40%50%60%70%80%90%
100%
2004A 2005A1H2006A2006A1H2007A2007A1H2008A2008A 2009E 2010E 2011E
Breakdown of ANTA's Turnover by product category (2004-2011E)
Footwear Apparel Accessories
Highlights: Wise market positioning and good control of inventories
Risks: Effective tax rate tends to rise by more than expected during 2009E-2012E
Earnings forecast ： CNY0.45, CNY0.51, CNY0.56 for 09, 10,11EPS.
www.sw108.com
申万研究 32
3.3.3 Buy on dips: Parkson （ 03368.hk） Highlights: Steady network
expansion with 4 new stores to be added in 09, or representing aggregate sales floor of 120,000 sqm. 2 new stores have already been opened in BJ and SH.
Risks: Weakening bargaining power over brands due to competition
Earnings forecast ： CNY0.38, CNY0.48, CNY0.57 for 09, 10,11EPS. Current valuation is demanding, so buying on dips.
47.74
4.65
40.76
21.3617.32
5.61
20
11.75 11
GSP (%) Equity-weighted retail space (%)
sales per sqm (%)
GSP & Sales per sqm
2007A 2008A 2009E
17.8 16.2 15.7
(1.1)
34.6
21.8 18.8
-20
0
20
40
Opearting revenue
Opearting expense
Purchase of goods
Staff costs
Depre. and
amort.
Rental expenses
Other operating expenses
2008 Revenue and expenses growth YoY (%)
0%10%20%30%40%50%60%70%80%90%
100%
2002A 2003A 2004A 2005A 2006A 2007A 2008A 2009E 2010E 2011E
PRG's Concessionaire Sales
Groceries and perishables
Household, electrical goods and others
Cosmetics and accessories
Fashion and apparelSource: SWS Research
www.sw108.com
申万研究 33
3.3.4 Beneficiary of ‘SH World Expo’: Ajisen (China) (00538.hk)
Ajisen’s growth of revenue and outlet count
Highlights: Significant recovery in sss growth in April 09
Risks: Store count failing to reach 405 in 2009 and 455 in 2010, negatively impacting earnings growth
Earnings forecast ： CNY0.28, CNY0.36, CNY0.44 for 09, 10,11EPS.
Ajisen economies of scale（ 2007-2011E）
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
42.0%44.0%46.0%48.0%50.0%
Rev
enu
e
SG&A as % of Revenue
Given the growth of revenue, the propotion of SG&A declines moderately.
GPM of Ajisen(China)
0
500
1000
1500
2000
2500
0
100
200
300
400
500
600
2003 2005 2007 2009E 2011E
Outlet count(LHS) Revenue(CNY mln)
CAGR of 2008 to 2011 = 13.8%
63.1%
59.8% 59.8%
63.3%
67.7%66.7% 66.5% 66.7%
67.2%
2003A 2004A 2005A 2006A 2007A 2008E 2009E 2010E 2011E
Gross profit margin of Ajisen
Source: SWS Research
www.sw108.com
申万研究 34
3.4 Peer group comparison
Source: Bloomberg, SWS Research
Peer Group Comparison (2009.5.15)
HK listed China consumer PER (09,x) PEG (09,x) ROE (09,%) PBR (09,x) EV/EBITDA 09 Dividend Yield %
Burberry Group 14.3 5.0 22.6 3.2 8.2 3.4
Christian Dior 11.9 2.9 12.2 1.3 6.2 3.1
Hugo Boss AG 10.9 - 50.9 4.7 6.9 8.1
LVMH 15.2 5.1 13.2 2.0 8.4 2.8
Polo Ralph Lauren 11.8 1.0 15.5 1.7 5.5 0.4
Adidas 13.5 1.6 12.2 1.3 6.5 2.1
Hennes &Mauritz 19.1 2.0 41.2 7.5 10.3 4.3
Nike 13.4 1.1 21.5 2.8 8.2 2.0
Esprit 11.2 1.3 33.6 3.8 7.6 4.0
Li Ning 20.3 0.7 38.7 6.8 11.2 1.3
ANTA 16.7 0.5 22.3 3.6 10.1 2.5
China DongXiang 15.6 0.4 19.6 2.8 8.2 1.7
Belle 18.8 0.9 16.3 2.9 10.1 1.3
Ports 14.6 1.1 37.2 4.9 9.4 0.0
Parkson 26.9 1.2 26.3 6.6 14.5 1.5
Golden Eagle 18.5 0.6 33.4 6.0 8.5 5.0
Intime 16.3 0.4 9.1 1.3 7.9 2.4
Maoye 10.6 1.5 19.5 1.7 3.9 4.0
Hengan Int'l 23.4 0.9 25.6 5.5 14.4 2.1
Lianhua Supermarket 14.2 0.8 15.6 2.1 0.1 2.7
Wumart Stores 19.5 0.8 17.3 3.1 7.9 2.2
GOME 5.9 0.2 19.1 1.2 6.7 0.0
China Resources 20.2 1.0 7.7 1.5 8.6 2.5
GIORDANO INTL 10.5 0.9 9.8 1.2 4.3 4.8
POU SHENG INTL 15.0 0.6 5.9 0.8 5.9 0.0
Average 15.5 1.4 21.9 3.2 8.0 2.6
www.sw108.com
申万研究 35
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 compensation or other benefits in connection with this report to any of the analyst, the Company or the group company(ies). A group company(ies) of the Company confirm that they, 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 associated with any group company(ies) of the Company serving as an officer of any of the listed corporation reviewed; or (iii) do not have any financial interest in relation to the 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 AnalystHaitao WangI 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. Information Disclosure with respect to the CompanyThe Company fulfills its duty of disclosure within its sphere of knowledge. The clients may contact [email protected] for the relevant disclosure materials.
Introduction of Share Investment RatingSecurity 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.
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This report is to be used solely by the clients of Shenyin & Wanguo Securities Research Institute Co, Ltd. (hereinafter referred to as the “Company”). The Company will not deem any other person as its client notwithstanding his receipt of this report.This report is based on published information which the Company believes to be reliable, however, the authenticity, accuracy or completeness of such information is not warranted by the Company. The materials, tools, opinions and speculations contained herein are for the clients’ reference only, and are not to be regarded or deemed as an invitation for the sale or purchase of any security or other investment instruments. The clients understand that the text message reminder and telephone recommendation are no more than a brief communication of the research opinions, which are subject to the complete report released on the Company’s website (http://www.sw108.com). The clients may ask for follow-up explanations if they so wish.The materials, opinions and estimates contained herein only reflect the judgment of the Company on the day this report is released. The prices, values and investment returns of the securities or investment instruments referred to herein may fluctuate. At different periods, the Company may release reports which are inconsistent with the materials, opinions and estimates contained herein. The clients shall consider the Company’s possible conflict of interests which may affect the objectivity of this report, and shall not base their investment decisions solely on this report. The investment and services referred to herein may not be suitable for certain clients and shall not constitute personal advice for individual clients. The Company does not ensure that this report fully takes into consideration of the particular investment objectives, financial situations or needs of individual clients. The Company strongly suggests the clients to consider themselves whether the opinions or suggestions herein are suitable for the clients’ particular situations; and to consult an independent investment consultant if necessary.Under no circumstances shall the information contained herein or the opinions expressed herein forms an investment recommendation to anyone. Under no circumstances shall the Company be held responsible for any loss caused by the use of any contents herein by anyone.Independent investment consultant should be consulted before any investment decision is rendered based on this report or at any request of explanation for this report where the receiver of this report is not a client of the Company.
The Company possesses all copyrights of this report. The Company reserves all rights related to this report. Unless otherwise indicated in writing, all the copyrights of all the materials herein belong to the Company. In the absence of any prior authorization by the Company in writing, no part of this report shall be copied, photocopied, replicated or redistributed to any other person in any form by any means, or be used in any other ways which will infringe upon the copyrights of the Company. All the trademarks, service marks and marks used herein are trademarks, service marks or marks of the Company, and no one shall have the right to use them at any circumstances without the prior consent of the Company.This report may be translated into different languages. The Company does not warrant that the translations are free from errors or discrepancies.This report is for distribution in Hong Kong only to persons who fall within the definition of professional investors whether under the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong) (the “SFO”) or the Securities and Futures (Professional Investor) Rules (Chapter 571D of the laws of the Hong Kong under the SFO).This report is for distribution in the United Kingdom only to persons who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) order 2001 (as amended) (the “Order”) or (ii) are persons falling within Article 49(2)(a) to (d) (“High Net Worth Companies, Unincorporated Associations, etc”) of the Order (All such persons together being referred to as “Relevant Persons”). This document is directed only at Relevant Persons. Other Persons who are not Relevant Persons must not act or rely upon this document or any of its contents.Neither this report nor any copy of it may be taken or transmitted into the United States of America, its territories or possessions or distributed, directly or indirectly, in the United States of America, its territories or possessions or to any U.S. person (Within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended). Any failure to comply with this restriction may constitute a violation of U.S. securities laws. Neither this report nor any copy of it may be taken or transmitted into Canada. The distribution of this report in other jurisdictions may be restricted by law and persons into whose possession this report comes should inform themselves about, and observe, any such restrictions. By accepting this report the clients agree to be bound by the foregoing limitations.
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Shanghai SWS Research & Consulting Co., Ltd.
Haitao Wang
申万研究 • 拓展您的价值SYWG Research • CHINA Value Revealed
