Ricky Lai 黎柏坚公司报告：中国移动 (00941 HK) +852 2509 2603 ricky.lai@gtjas.com.hk 9 October 2014 Stronger than Expected 4G Subscriber Growth, “Accumulate” 高于预期的4G用户增长，“收集” GTJA Research 国泰君安研究 Company Report: China Mobile (00941 HK) Accumulate Rating: Upgraded 收集 (上调) 评级：    6-18m TP 目标价: Stronger than expected 4G subscriber growth. There were 29.6 million 4G subscriber net additions in the first eight months of 2014. We revise up FY14-16 4G subscriber net additions estimations by 1.0%/2.5%/3.0%, respectively. Stronger than expected 4G network coverage. China Mobile has completed the 500k 4G base stations year target and is expected to reach 700k 4G base stations by the end of FY14. Better network coverage supports 4G subscriber growth with better quality. Upgrade the investment rating to “Accumulate” and raise the TP from HK$80.00 to HK$99.00. Due to adjustments of subscribers’ estimations and ARPU estimations, FY14-16 EPS is revised up by 15.0%/22.3%/25.8%, respectively. The new TP represents 12.6x FY14 PER, 11.6x FY15 PER, 11.1x FY16 PER and 1.7x FY14 PBR. We upgrade the Company’s investment rating to “Accumulate” in light of robust 4G subscriber growth with stronger data traffic usage. 高于预期的 4G 用户增长。2014 年首八个月的 4G 净增数为 29.6 百万。我们上调 14-16 HK$91.950 Stock performance 股价表现 25.0 % of return 20.0 15.0 10.0 5.0 0.0 (5.0) (10.0) (15.0) (20.0) (25.0) (30.0) Oct-13 Jan-14 Apr-14 HSI Index Jul-14 Sep-14 China Mobile 好于预期的 4G 网络覆。中国移动已经完成了 50 万个 4G 基站的全年目标，预计到 14 年年底将达至 70 万个 4G 基站。更好的网络覆盖有更优质的服务将可支持 4G 用户增长。  HK$80.00 Share price 股价：财年 4G 用户净增数预测 1.0%/2.5%/3.0%。  HK$99.00 Revised from 原目标价: Change in Share Price 股价变动上调公司的投资评级至“收集”及目标价从 80.00 港元上调至 99.00 港元。由于调整用户数 Abs. % 绝对变动 % Rel. % to HS index 相对恒指变动 % Avg. share price(HK$) 平均股价（港元）及 ARPU 的预测，分别上调 14-16 财年每股盈利预测 15.0%/22.3%/25.8%。新目标价相当于 12.6 倍 14 年市盈率、11.6 倍 15 年市盈率、11.1 倍 16 年市盈率及 1.7 倍 14 年市净率。我们上调公司的投资评级至“收集”，因 4G 用户増长强劲及更高的数据使用。 1M 1 个月 3M 3 个月 1Y 1年 (8.2) 22.1 10.1 (1.2) 22.6 9.1 95.8 90.0 80.1 Source: Bloomberg, Guot ai Junan Internat ional. Year End 年结 Net Profit EPS EPS PER BPS PBR DPS Yield ROE 收入股东净利每股净利每股净利变动市盈率每股净资产市净率每股股息股息率净资产收益率 (RMB m) (RMB m) (RMB) (△%) (x) (RMB) (x) (RMB) (%) (%) 2012A 581,835 129,274 6.431 2.5 11.5 35.991 2.1 2.777 3.8 18.8 2013A 630,177 121,692 6.054 (5.9) 11.8 39.241 1.8 2.621 3.7 16.1 2014F 718,436 123,279 6.133 1.3 11.7 45.207 1.6 2.655 3.7 14.5 2015F 797,037 133,629 6.648 8.4 10.8 49.703 1.4 2.878 4.0 14.0 2016F 857,742 139,509 6.940 4.4 10.3 52.909 1.4 3.004 4.2 13.5 Shares in issue (m) 总股数 (m) Market cap. (HK$ m) 市值 (HK$ m) 3 month average vol. 3 个月平均成交股数 (‘000) 52 Weeks high/low (HK$) 52 周高/低 20,379.5 1,873,895.0 22,552.5 101.700/64.500 Major shareholder 大股东 China Mobile Group 74.2% Free float (%) 自由流通比率 (%) 25.8 FY14 Net gearing (%) FY14 净负债/股东资金 (%) Net Cash FY14 Est. NAV (HK$) FY14 每股估值（港元） 107.0 Company Report 12/31 Turnover Source: the Company, Guotai Junan International. See the last page for disclaimer China Mobile 中国移动 (00941 HK)  Page 1 of 6 Revise up FY14-16 4G subscriber net additions by 1.0%/2.5%/3.0%, respectively. 4G subscriber net additions in the first eight months of 2014 were 29.6 million, better than expected. The 4G subscriber net additions kept rising in the first eight Company has launched a series of low end multi-mode 4G smartphones with aggressive service plans to capture the improving needs of the high speed data network. We expected the 4G subscribers can surpass the Company’s target of 50 million in FY14. Although China Mobile reduces handset subsidies in FY14, the availability of low end 4G smartphones can fill 9 October 2014 months showing the success of the Company’s service plan and the improving supplies of low end 4G smartphones. The the subscriber growth. China Mobile’s 4G base stations have reached the FY14 target of 500k and is expected to reach 700k by the end of FY14. We expect the better network coverage could support the Company’s subscriber growth and stimulate data usage. We revise up FY14-16 4G subscriber net additions estimations by 1.0%/2.5%/3.0%, respectively. We expect China Mobile’s mobile ARPU would be improved with higher 4G subscriber proportions. FY14-16 mobile ARPU is revised up by 2.5%/3.0%/3.3%, respectively. Figure-1: China Mobile’s Monthly 4G Subscribers Net Figure-2: China Mobile’s 4G Subscribers Estimations Additions and MoM Growth Million Million 4G Subscriber Net Additions (LHS) 10 MoM Growth (RHS) 8 65.1% 7 100 80% 90 70% 80 95 9.1 76.2% 9 90% 6.5 60% 5.8 80 70 55 60 6 50% 50 40.6% 5 40% 38.0% 4 40 3.3 3 2.0 30 20% 20 10% 10 1 11.3% 8.4% 0 0% Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 0 FY14F Aug-14 Source: the Company. FY15F FY16F Source: the Company, Guotai Junan International. Revise down FY14-16 3G subscriber net additions by 0.1%/0.6%/0.8%, respectively. 3G subscriber net additions in the first eight months of 2014 were 50.6 million, lower than expected, which was due to the Company’s shift of marketing focus from 3G to 4G. The recent monthly 3G subscriber net additions showed a decreasing trend in recent month. We revise down FY14-16 3G subscriber net additions estimations by 0.1%/0.6%/0.8%, respectively. Figure-3: China Mobile’s Monthly 3G Subscribers Net Figure-4: China Mobile’s 3G Subscribers Estimations Additions and MoM Growth and YoY Growth Million 3G Subscriber Net Additions (LHS) Million MoM Growth (RHS) 16 400 14.2 150% 100% 118.0% 10.8 9.5 9.6 35.6% 90% 20% 7.0% 0.4% 71.7% 5.1 -7.1% 2 -33.0% -38.5% 2.2 -26.8% -20% 2.4 1.3 -39.7% -48.3% 0 Aug-13 Nov-13 Source: the Company. See the last page for disclaimer Feb-14 60% 44.4% 0% 4.3 -21.7% 191.6 200 7.0 6.5 26.9% 120% 60% 40% 8 336.6 276.6 300 10.5 10 4 316.6 80% 11.6 May-14 -60% 30% 14.5% 6.3% -40% -45.1% Aug-14 100 87.9 0 0% FY12 FY13 FY14F FY15F FY16F Source: the Company, Guotai Junan International. Page 2 of 6 Company Report 105.9% 6 YoY Growth (RHS) 120% 14 12 3G Subscribers (LHS) 中国移动 (00941 HK) 1.5 1.3 China Mobile 2 30% In-line 2G subscriber net losses. 2G subscriber net losses in the first eight months of 2014 were 51.3 million, in-line with expectations. We maintain FY14-16 2G subscriber net losses to be 78 million/100 million/120 million, respectively. China Figure-5: China Mobile’s Monthly 2G Subscribers Net Figure-6: China Mobile’s 2G Subscribers Estimations Additions and MoM Growth and YoY Growth Million Million 0 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 YoY Growth (RHS) 700 10% 623.6 -1.1 -2 2G Subscribers (LHS) 9 October 2014 Mobile’s aggregate 2G subscribers in FY14-16 are expected to be 498.8 million/398.8 million/278.8 million, respectively. 576.8 600 4.2% -2.4 0% 498.8 500 -4 398.8 -4.4 400 -4.9 -4.7 -6 -6.2 -6.0 -5.6 -5.5 -5.9 -7.1 -8 -8.0 278.8 -13.5% 300 -6.6 -10% -7.5% -20% -20.0% 200 -30.1% -30% 100 -9.6 0 -40% FY12 -12 FY14F FY15F FY16F Source: the Company, Guotai Junan International. Table-1: China Mobile’s Subscriber Net Additions Estimations OLD Million 2014F 2015F 2016F 2014F 4G 54.5 78.0 92.2 55.0 NEW 2015F 80.0 2016F 95.0 2014F 1.0% CHANGE 2015F 2.5% 2016F 3.0% 3G 90.0 100.0 125.0 85.0 40.0 20.0 (0.1%) (0.6%) (0.8%) 2G (78.0) (100.0) (120.0) (78.0) (100.0) (120.0) 0.0% 0.0% 0.0% Source: Guotai Junan International. Profit Revisions: FY14-16 net profit is revised up by 15.0%/22.3%/25.8%, respectively. FY14-16 revenue is revised up by 8.4%/15.6%/19.9%, due to the adjustments to the mobile subscriber and ARPU estimations. FY14-16 net profit is revised up by 15.0%/22.3%/25.8%, accordingly. 中国移动 (00941 HK) Source: the Company. FY13 China Mobile -10 Table-2: Financial Estimation Revisions 2014F 662,867 OLD 2015F 689,214 2016F 715,441 2014F 718,436 NEW 2015F 797,037 2016F 857,742 2014F 8.4% CHANGE 2015F 15.6% 2016F 19.9% Operating Profit 116,579 120,221 122,977 137,521 151,885 160,180 18.0% 26.3% 30.3% Net Profit 107,212 109,311 110,921 123,279 133,629 139,509 15.0% 22.2% 25.8% 5.334 5.438 5.518 6.133 6.648 6.940 15.0% 22.3% 25.8% RMB (Million) Total Operating Revenue EPS (RMB) Source: Guotai Junan International. Valuation: Upgrade the Company’s investing rating to “Accumulate” and revise up the TP from HK$80.00 to HK$99.00. We data traffic usage with higher 4G subscriber proportions. The new TP represents 12.6x FY14 PER, 11.6x FY15 PER, 11.1x FY16 PER and 1.7x FY14 PBR. See the last page for disclaimer Page 3 of 6 Company Report upgrade the Company’s investment rating to “Accumulate” in light of the Company’s robust 4G subscriber growth and stronger PER Company Ticker Currency China Unicom Hong Kong Ltd 762 HK China Mobile Ltd 941 HK China Telecom Corp Ltd-H ROE(%) D/Y (%) EV/EBITDA ROA(%) 14F 14F 14F 14F 0.9 5.7 2.0 3.6 2.5 1.5 13.3 3.3 4.7 9.0 1.0 0.9 6.5 2.2 3.8 3.6 3.3 3.1 2.7 23.7 4.8 6.7 4.2 15.0 3.4 3.2 3.0 17.4 3.2 3.9 5.5 16.3 14.4 1.3 1.3 1.3 7.1 4.0 7.5 4.1 16.9 14.8 13.1 2.0 1.9 1.7 12.3 3.2 5.0 4.8 14.2 13.7 12.6 1.6 1.5 1.4 11.6 3.0 4.5 7.4 Price 14F 15F HKD 11.400 16.8 HKD 91.950 13.3 728 HK HKD 4.680 8 HK HKD Smartone Telecom 315 HK Hutchison Telecomm Hong Kong 215 HK PB 16F 14F 15F 16F 14.3 11.7 0.9 0.9 13.4 12.6 1.7 1.6 16.0 14.6 12.8 1.0 4.940 16.0 14.1 12.3 HKD 10.460 20.2 16.2 HKD 3.080 18.8 Simple Average Weighted Average HK Listed Companies Pccw Ltd 9 October 2014 Table-3: Peer Comparisons: US Listed Companies At&T Inc T US USD 35.150 13.5 13.0 12.5 1.9 1.9 1.9 14.5 5.3 6.1 6.0 Verizon Communications Inc VZ US USD 49.870 14.0 12.8 12.3 11.8 9.4 7.4 81.9 4.3 8.1 8.0 Centurylink Inc CTL US USD 40.820 15.5 15.7 15.8 1.4 1.5 1.5 8.2 5.3 6.1 5.1 Simple Average 14.3 13.8 13.5 5.1 4.3 3.6 34.9 4.9 6.8 6.4 Weighted Average 13.9 13.1 12.5 6.9 5.7 4.6 47.9 4.8 7.1 6.9 JP Listed Companies Nippon Telegraph & Telephone 9432 JP JPY 6378.000 12.5 12.0 10.8 0.8 0.8 0.8 7.0 3.0 3.8 2.9 Kddi Corp Ntt Docomo Inc 9433 JP 9437 JP JPY JPY 6631.000 1742.500 16.6 15.5 12.8 14.3 11.5 13.3 2.0 1.3 1.8 1.2 1.7 1.2 12.9 8.4 2.2 3.7 5.2 4.2 7.1 6.3 Softbank Corp 9984 JP JPY 7311.000 16.5 15.8 13.7 4.4 3.6 2.8 29.5 0.5 8.8 4.4 Simple Average 15.3 13.7 12.4 2.1 1.9 1.6 14.5 2.3 5.5 5.2 Weighted Average 15.3 13.9 12.5 2.3 1.9 1.7 15.2 2.3 5.7 5.1 VOD LN GBp 204.300 0.9 30.7 29.9 0.8 0.8 0.8 83.3 6.3 7.3 45.6 Deutsche Telekom Ag-Reg DTE GR EUR 11.384 18.1 17.2 15.4 2.0 2.0 1.8 10.7 4.4 5.8 3.6 SCMN VX CHF 544.000 16.8 16.5 16.3 4.3 4.0 3.7 27.1 4.0 8.2 8.0 Telenor Asa TEL NO NOK 135.800 15.2 13.0 11.8 2.6 2.5 2.4 17.7 5.6 6.4 9.0 Telecom Italia Spa TIT IM EUR 0.852 12.3 12.0 11.8 0.9 0.8 0.8 7.6 1.8 5.0 3.9 Simple Average 12.7 17.9 17.0 2.1 2.0 1.9 29.3 4.4 6.5 14.0 Weighted Average 10.6 21.1 20.1 1.8 1.8 1.7 40.5 5.0 6.7 20.6 11.0 Swisscom Ag-Reg Other Developed Market Telstra Corp Ltd TLS AU AUD 5.400 15.7 16.2 15.1 4.9 4.9 4.7 32.3 5.7 7.3 Singapore Telecom Ltd ST SP SGD 3.740 16.3 15.8 14.8 2.5 2.4 2.3 15.3 4.6 13.4 9.2 Simple Average 16.0 16.0 15.0 3.7 3.6 3.5 23.8 5.1 10.3 10.1 Weighted Average 16.0 16.0 15.0 3.8 3.8 3.6 24.8 5.2 10.0 10.2 Overall Average 15.0 15.2 14.2 3.0 2.7 2.5 22.9 4.0 6.8 8.1 Overall Weighted Average 14.0 15.5 14.5 3.3 2.9 2.6 28.0 4.1 6.8 10.0 China Mobile Vodafone Group Plc 中国移动 (00941 HK) EU Listed Companies Company Report Source: Bloomberg. See the last page for disclaimer Page 4 of 6 Financial Statements and Ratios Balance Sheet 2014F 318,339 320,673 30,216 49,208 718,436 2015F 289,688 416,875 31,424 59,049 797,037 2016F 269,410 487,744 32,681 67,906 857,742 (9,909) (18,727) (21,553) (23,911) (25,140) (25,998) (31,312) (34,622) (100,848) (104,699) (135,784) (150,640) (31,256) (34,376) (39,514) (43,837) (80,232) (91,834) (94,115) (103,615) (41,448) (61,363) (71,125) (80,501) (140,272) (157,531) (187,512) (208,027) (429,105) (494,528) (580,915) (645,152) (25,732) (37,101) (162,113) (47,176) (111,506) (90,063) (223,871) (697,562) Year end Dec 31, RMB m PP&E Construction in progress Land lease prepayments Goodwill Interest in associates and JCE Deferred tax assets Others Total non-current assets 2012A 430,509 55,507 14,244 36,894 48,349 13,544 6,469 605,516 2013A 479,227 85,000 19,735 36,894 53,940 17,401 8,006 700,203 2014F 591,503 101,120 19,893 36,894 61,940 18,619 7,052 837,021 2015F 637,075 113,553 20,052 36,894 70,180 19,922 6,759 904,435 2016F 644,170 112,205 20,212 36,894 78,832 23,907 6,647 922,867 Inventories Accounts receivable Other receivables Prepayment and other current assets Deposits with banks 7,195 11,722 8,605 15,913 331,997 9,152 13,907 11,649 11,832 374,977 9,427 14,463 11,882 13,015 337,479 9,709 15,042 12,120 14,187 310,481 10,001 15,643 12,362 15,463 285,642 70,906 44,931 66,420 118,248 192,107 255 446,593 741 467,189 867 453,553 917 480,703 1,066 532,285 Cash and cash equivalents Operating profit Non-operating net income 152,730 615 135,649 910 137,521 1,037 151,885 1,151 160,180 1,239 Interest income 12,661 15,289 14,849 13,661 12,568 Finance costs (390) (331) (112) (100) (109) Share of P/L of associates 5,684 7,062 8,000 8,240 8,652 Profit before taxation 171,300 158,579 161,295 174,838 182,530 Taxation Profit after taxation (41,919) 129,381 (36,776) 121,803 (37,904) 123,391 (41,087) 133,751 (42,895) 139,636 Non-controlling interests Net profit EBITDA EPS (RMB) 107 129,274 253,578 6.431 111 121,692 240,348 6.054 112 123,279 273,305 6.133 122 133,629 302,525 6.648 127 139,509 322,293 6.940 Cash Flow Statement Year end Dec 31, RMB m Profit before taxation Net interest expenses (income) Depreciation and amortization 2012A 171,300 (12,271) 101,241 2013A 158,579 (14,958) 105,085 2014F 161,295 (14,737) 136,170 2015F 174,838 (13,562) 151,029 2016F 182,530 (12,460) 162,502 Others Change in working capital Tax paid Cash flow from operation 7,316 14,821 (41,919) 240,488 (62) 16,848 (36,776) 228,716 9,000 23,675 (37,904) 277,499 10,760 27,232 (41,087) 309,210 10,348 27,093 (42,895) 327,119 CAPEX Bank deposit change Others (109,275) (184,900) (225,200) (210,000) (200,000) (90,606) (44,378) 38,452 27,291 24,950 4,233 29,132 (12,403) (13,616) (14,688) Cash flow from investment (195,648) (200,146) (199,151) (196,324) (189,738) Share issuance Interest expense Dividends paid Others Cash flow from finance 204 (390) (55,821) (4,000) (60,007) 255 (331) (52,675) (1,600) (54,351) 398 (100) (57,842) (3,300) (60,843) 498 (109) (60,387) (3,299) (63,296) 21,693 44,931 (205) 66,420 52,043 66,420 (215) 118,248 74,085 118,248 (225) 192,107 Total assets Accounts payable 1,052,109 1,167,392 1,290,574 1,385,138 1,455,153 123,896 173,157 174,889 176,637 178,404 57,988 61,789 62,407 63,031 63,661 103,774 10,856 125,811 8,706 127,069 9,228 128,340 9,782 129,623 10,369 Others Total current liabilities 1,282 297,796 1,450 370,913 891 374,484 1,119 378,910 2,687 384,744 Interest-bearing borrowings Others Total non-current liabilities Total liabilities 28,619 385 29,004 326,800 4,989 766 5,755 376,668 4,490 860 5,351 379,608 4,041 952 4,993 383,753 3,637 901 4,538 388,822 Non-controlling interests Share capital Reserves 1,862 2,142 721,305 1,951 2,142 786,631 2,063 2,145 906,532 2,185 2,313 2,147 2,150 996,903 1,061,409 Shareholders' equity Total equity BPS (RMB) 723,447 725,309 35.991 788,773 790,724 39.241 908,677 999,050 1,063,558 910,740 1,001,236 1,065,871 45.207 49.703 52.909 Deferred revenue, current portion Accrued expenses and other payables Current taxation Key Financial Ratios Year end Dec 31, RMB m EBITDA margin (%) Operating margin (%) Net profit margin (%) ROE (%) ROA (%) Current ratio (X) Net gearing 2012A 44.0 26.2 22.2 18.8 12.9 1.5 Net cash 2013A 38.5 21.5 19.3 16.1 11.0 1.3 Net cash 2014F 38.5 19.1 17.2 14.5 10.0 1.2 Net cash 2015F 38.4 19.1 16.8 14.0 10.0 1.3 Net cash 2016F 38.0 18.7 16.3 13.5 9.8 1.4 Net cash Company Report Cash balance change (15,167) (25,780) Cash balance at beginning of year 86,259 70,906 Foreign exchange rate change (186) (195) Cash balance at end of year 70,906 44,931 Source: the Company, Guotai Junan International. 319 (112) (53,362) (3,500) (56,655) Others Total current assets 9 October 2014 2013A 355,686 206,886 28,239 39,366 630,177 China Mobile Leased lines Interconnection Depreciation Personnel Selling expenses Cost of products sold Other operating expenses Total operating expenses 2012A 368,025 166,348 26,040 21,422 581,835 中国移动 (00941 HK) Income Statement Year end Dec 31, RMB m Voice services Data services Others Sales of products Total operating revenue See the last page for disclaimer Page 5 of 6 Company Rating Definition The Benchmark: Hong Kong Hang Seng Index Rating Definition Buy Relative Performance >15%; or the fundamental outlook of the company or sector is favorable. Relative Performance is 5% to 15%; or the fundamental outlook of the company or sector is favorable. Accumulate Neutral Relative Performance is -5% to 5%; or the fundamental outlook of the company or sector is neutral. Reduce Relative Performance is -5% to -15%; or the fundamental outlook of the company or sector is unfavorable. Sell Relative Performance <-15%; or the fundamental outlook of the company or sector is unfavorable. 9 October 2014 Time Horizon: 6 to 18 months Sector Rating Definition The Benchmark: Hong Kong Hang Seng Index Time Horizon: 6 to 18 months Rating Outperform Definition Relative Performance >5%; or the fundamental outlook of the sector is favorable. Neutral Relative Performance is -5% to 5%; or the fundamental outlook of the sector is neutral. Underperform Relative Performance <-5%; or the fundamental outlook of the sector is unfavorable. (4) The Analysts and their associates do not serve as an officer of the issuer mentioned in this Research Report. The Analysts and their associates do not have any financial interests in relation to the issuer mentioned in this Research Report. Except for Shandong Chenming Paper Holdings Limited-H shares (01812), China All Access (Holdings) Limited (00633) and China U-Ton Holdings Limited (06168), Guotai Junan and its group companies do not hold equal to or more than 1% of the market capitalization of the issuer mentioned in this Research Report. Guotai Junan and its group companies have not had investment banking relationships with the issuer mentioned in this Research Report within the preceding 12 months. DISCLAIMER This Research Report does not constitute an invitation or offer to acquire, purchase or subscribe for securities by Guotai Junan Securities (Hong Kong) Limited ("Guotai Junan"). Guotai Junan and its group companies may do business that relates to companies covered in research reports, including investment banking, investment services and etc. (for example, the placing agent, lead manager, sponsor, underwriter or invest proprietarily). China Mobile (1) (2) (3) 中国移动 (00941 HK) DISCLOSURE OF INTERESTS Any opinions expressed in this report may differ or be contrary to opinions or investment strategies expressed orally or in written form by sales persons, dealers and other professional executives of Guotai Junan group of companies. Any opinions expressed in this report may differ or be contrary to opinions or investment decisions made by the asset management and investment banking groups of Guotai Junan. Though best effort has been made to ensure the accuracy of the information and data contained in this Research Report, Guotai Junan does not guarantee the accuracy and completeness of the information and data herein. This Research Report may contain some forward-looking estimates and forecasts derived from the assumptions of the future political and economic conditions with inherently unpredictable and mutable situation, so uncertainty may contain. Investors should understand and comprehend the investment objectives and its related risks, and where necessary consult their own financial advisers prior to any investment decision. This Research Report is not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation or which would subject Guotai Junan and its group companies to any registration or licensing requirement within such jurisdiction. See the last page for disclaimer Company Report © 2014 Guotai Junan Securities (Hong Kong) Limited. All Rights Reserved. 27/F., Low Block, Grand Millennium Plaza, 181 Queen’s Road Central, Hong Kong. Tel.: (852) 2509-9118 Fax: (852) 2509-7793 Website: www.gtja.com.hk Page 6 of 6