06 3 ?y? ÎÐ < x Äpg.jrj.com.cn/acc/Res/HK_RES/STOCK/2015/2/4/e2046969-8e76-47c… · two companies will seek to develop solar power projects to supply electricity directly to Beijing

kuxsmi:2651kuxe

Materials | Company Research Bringing China to the World

SWS Research Co. Ltd is a subsidiary of Shenwan Hongyuan Securities. 99 East Nanjing Road, Shanghai | +86 21 2329 7818 www.swsresearch.com

2015 年 2 月 4 日

买入维持

开发分布式光伏增加协同效应北控水务集团 (371:HK)

Market Data: Feb, 03

Closing Price (HK$) 4.88

Price Target (HK$) 8.22

HSCEI 11,769

HSCCI 4,519

52-week High/Low (HK$) 5.80/2.20

Market Cap (US$m) 5,453

Market Cap (HK$m) 42,266

Shares Outstanding (m) 8,661

Exchange Rate (Rmb-HK$) 1.27

Price Performance Chart:

Source: Bloomberg

Analyst Rong Ye A0230512110001 AYZ033 [email protected] Dimi Du A0230514070005 BEE282 [email protected]

Related Reports "Ambitious expansion" – 11 September 2014

Financial summary and valuation 2012 2013 2014E 2015E 2016E

Revenue (HK$m) 3,727.00 6,406.46 7,675.38 11,080.38 14,624.05 YOY (%) 40.43 71.89 19.81 44.36 31.98 Net income (HK$m) 867.00 1,145.40 1,682.27 2,720.70 3,973.46 YOY (%) 25.47 32.11 46.87 61.73 46.05 EPS (HK$) 0.11 0.14 0.18 0.30 0.43 Diluted EPS (HK$) 0.11 0.14 0.18 0.30 0.43 ROE (%) 8.86 8.15 10.93 16.16 21.56 Debt/asset (%) 65.70 63.96 60.10 64.23 66.90 Dividend Yield (%) 0.82 1.13 1.13 1.82 2.66 PE (x) 44.96 34.91 26.63 16.46 11.27 PB (x) 3.14 2.38 2.45 2.25 2.07 EV/Ebitda (x) 37.57 23.24 16.31 11.57 8.87 Note: Diluted EPS is calculated as if all outstanding convertible securities, such as convertible preferred shares, convertible

debentures, stock options and warrants, were exercised.

投资要点：

光伏电站的协同效应。北控水务集团同金彩控股达成协议一同开发光伏电站项

目。金彩控股将向北控水务增发合计价值 HK$14 亿的新股（每股价格

HK$0.79）。通过增发获配售后北控水务将持有金彩控股约 34.95%的股份，成为

公司第一大股东。两家公司将共同开发光伏电站部分供给于北控水务污水处理厂

用电需求。

电费下降。北控水务将相金彩控股提供污水处理厂的地面及厂房屋顶，用于建设

分布式光伏电站，并以此方便向金彩直接采购电力。北控水务计划未来一共建造

800 至 1000 兆瓦光伏电站，用以提供北控水务约 20-30%的用电量。我们预计此

笔采购将每年为北控水务最多节省 9750 万元成本，相当于 14 年营成本的 8%和

14 年全部成本的 2.2%。

资本开支增加。我们预计这项股权交易将增加北控水务未来两年的资本开支至每

年 HK$127 亿元。这些资本开支将多数用于污水处理项目产能的收购和开发，维

持公司每年 4百万吨日处理能力的增长。

维持买入。北控水务期望光伏项目内部收益率达到 10-15%，维持同污水处理相

同的水平，保证公司毛利维持稳定。由于光伏项目开发处于初期阶段，我们未在

模型中反映成本节约带来的业绩增厚。我们维持之前的 14-16 盈利预测不变（非

别为 HK$16.8 亿，HK$27.2 亿和 HK$39 亿。我们维持公司目标价 HK$8.22，相较

当前股价有 68%的涨幅，我们维持买入评级。

The company does not hold any equities or

derivatives of the listed company

mentioned in this report (“target”), but then

we shall provide financial advisory services

subject to the relevant laws and

regulations. Any affiliates of the company

may hold equities of the target, which may

exceed 1 percent of issued shares subject

to the relevant laws and regulations. The

company may also provide investment

banking services to the target. The

Company fulfills its duty of disclosure within

its sphere of knowledge. The clients may

contact [email protected] for

relevant disclosure materials or log into

www.swsresearch.com under disclosure

column for further information. The clients

shall have a comprehensive understanding

of the disclosure and disclaimer upon the

last page.

Materials | Company Research Bringing China to the World

SWS Research Co. Ltd is a subsidiary of Shenwan Hongyuan Securities. 99 East Nanjing Road, Shanghai | +86 21 2329 7818 www.swsresearch.com

2015 年 2 月 4 日

买入维持

开发分布式光伏增加协同效应北控水务集团 (371:HK)

Market Data: Feb, 03

Closing Price (HK$) 4.88

Price Target (HK$) 8.22

HSCEI 11,769

HSCCI 4,519

52-week High/Low (HK$) 5.80/2.20

Market Cap (US$m) 5,453

Market Cap (HK$m) 42,266

Shares Outstanding (m) 8,661

Exchange Rate (Rmb-HK$) 1.27

Price Performance Chart:

Source: Bloomberg

Analyst Rong Ye A0230512110001 AYZ033 [email protected] Dimi Du A0230514070005 BEE282 [email protected]

Related Reports "Ambitious expansion" – 11 September 2014

Financial summary and valuation 2012 2013 2014E 2015E 2016E

Revenue (HK$m) 3,727.00 6,406.46 7,675.38 11,080.38 14,624.05 YOY (%) 40.43 71.89 19.81 44.36 31.98 Net income (HK$m) 867.00 1,145.40 1,682.27 2,720.70 3,973.46 YOY (%) 25.47 32.11 46.87 61.73 46.05 EPS (HK$) 0.11 0.14 0.18 0.30 0.43 Diluted EPS (HK$) 0.11 0.14 0.18 0.30 0.43 ROE (%) 8.86 8.15 10.93 16.16 21.56 Debt/asset (%) 65.70 63.96 60.10 64.23 66.90 Dividend Yield (%) 0.82 1.13 1.13 1.82 2.66 PE (x) 44.96 34.91 26.63 16.46 11.27 PB (x) 3.14 2.38 2.45 2.25 2.07 EV/Ebitda (x) 37.57 23.24 16.31 11.57 8.87 Note: Diluted EPS is calculated as if all outstanding convertible securities, such as convertible preferred shares, convertible

debentures, stock options and warrants, were exercised.

投资要点：

光伏电站的协同效应。北控水务集团同金彩控股达成协议一同开发光伏电站项

目。金彩控股将向北控水务增发合计价值 HK$14 亿的新股（每股价格

HK$0.79）。通过增发获配售后北控水务将持有金彩控股约 34.95%的股份，成为

公司第一大股东。两家公司将共同开发光伏电站部分供给于北控水务污水处理厂

用电需求。

电费下降。北控水务将相金彩控股提供污水处理厂的地面及厂房屋顶，用于建设

分布式光伏电站，并以此方便向金彩直接采购电力。北控水务计划未来一共建造

800 至 1000 兆瓦光伏电站，用以提供北控水务约 20-30%的用电量。我们预计此

笔采购将每年为北控水务最多节省 9750 万元成本，相当于 14 年营成本的 8%和

14 年全部成本的 2.2%。

资本开支增加。我们预计这项股权交易将增加北控水务未来两年的资本开支至每

年 HK$127 亿元。这些资本开支将多数用于污水处理项目产能的收购和开发，维

持公司每年 4百万吨日处理能力的增长。

维持买入。北控水务期望光伏项目内部收益率达到 10-15%，维持同污水处理相

同的水平，保证公司毛利维持稳定。由于光伏项目开发处于初期阶段，我们未在

模型中反映成本节约带来的业绩增厚。我们维持之前的 14-16 盈利预测不变（非

别为 HK$16.8 亿，HK$27.2 亿和 HK$39 亿。我们维持公司目标价 HK$8.22，相较

当前股价有 68%的涨幅，我们维持买入评级。

The company does not hold any equities or

derivatives of the listed company

mentioned in this report (“target”), but then

we shall provide financial advisory services

subject to the relevant laws and

regulations. Any affiliates of the company

may hold equities of the target, which may

exceed 1 percent of issued shares subject

to the relevant laws and regulations. The

company may also provide investment

banking services to the target. The

Company fulfills its duty of disclosure within

its sphere of knowledge. The clients may

contact [email protected] for

relevant disclosure materials or log into

www.swsresearch.com under disclosure

column for further information. The clients

shall have a comprehensive understanding

of the disc claimer upon the

last page.

kuxsmi:2651kuxe

Please refer to the last page for important disclosures Page 1

04 February 2015 Utilities | Company Research

Investment Highlights:

Solar farm synergy. Beijing Enterprises Water has reached an agreement with

Jin Cai Holdings (1250:HK), a cigarette packaging manufacturer looking into

investing in developing solar power projects, under which Jin Cai will issue

new shares to Beijing Enterprises Water, at a cost of HK$1.4bn, or a per-share

price of HK$0.79. The consideration will be paid in installments over a period

of two years. After completion of the issue, Beijing Enterprises Water will hold

a 34.95% stake in Jin Cai, making it the company’s largest shareholder, and the

two companies will seek to develop solar power projects to supply electricity

directly to Beijing Enterprises Water.

Lower power costs. Beijing Enterprises Water will provide a combination of

ground and rooftop space at its waste water treatment (WWT) plants for Jin

Cai to develop distributed-scale solar power facilities, to be directly sold to

Beijing Enterprises Water The company plans to install 800-1000MW of solar

capacity at its WWT plants in the long-term, which would cover 20-30% of

BEW’s WWT plant power demand. We calculate that this would translate to

cost savings of up to HK$97.5m per annum, accounting for 8% of its 2014

operating costs (2.2% of 2014 total expenses).

Higher Capex. The deal will raise Beijing Enterprises Water Capex in the

coming two years to c.HK$12.7bn each year. The majority of spending is

directed to WWT capacity expansion, with the company having stated a target

of acquiring additional capacity of 4mt/day yearly.

Maintain BUY. Beijing Enterprises Water seeking to achieve an internal rate of

return (IRR) of 10-15% at the solar projects close to the IRR it records at its

WWT projects. If achieved, this would keep the company’s margins relatively

stable. We have yet to factor-in the cost savings from the direct power

purchases from the solar farms given the current early stage of project

development. As a result, we maintain our previous earnings forecasts

unchanged at HK$1.68bn (+46.9% YoY) for 14E, and HK$2.72bn (61.7%YoY)

for 15E and HK3.9bn (46%YoY) for 16E. We maintain our target price at

HK$8.22. With 68% upside, maintain BUY.



Investment Highlights:

Solar farm synergy. Beijing Enterprises Water has reached an agreement with

Jin Cai Holdings (1250:HK), a cigarette packaging manufacturer looking into

investing in developing solar power projects, under which Jin Cai will issue

new shares to Beijing Enterprises Water, at a cost of HK$1.4bn, or a per-share

price of HK$0.79. The consideration will be paid in installments over a period

of two years. After completion of the issue, Beijing Enterprises Water will hold

a 34.95% stake in Jin Cai, making it the company’s largest shareholder, and the



Lower power costs. Beijing Enterprises Water will provide a combination of

ground and rooftop space at its waste water treatment (WWT) plants for Jin

Cai to develop distributed-scale solar power facilities, to be directly sold to

Beijing Enterprises Water The company plans to install 800-1000MW of solar

capacity at its WWT plants in the long-term, which would cover 20-30% of

BEW’s WWT plant power demand. We calculate that this would translate to

cost savings of up to HK$97.5m per annum, accounting for 8% of its 2014

operating costs (2.2% of 2014 total expenses).

Higher Capex. The deal will raise Beijing Enterprises Water Capex in the

coming two years to c.HK$12.7bn each year. The majority of spending is

directed to WWT capacity expansion, with the company having stated a target

of acquiring additional capacity of 4mt/day yearly.

Maintain BUY. Beijing Enterprises Water seeking to achieve an internal rate of

return (IRR) of 10-15% at the solar projects close to the IRR it records at its

WWT projects. If achieved, this would keep the company’s margins relatively

stable. We have yet to factor-in the cost savings from the direct power

purchases from the solar farms given the current early stage of project

development. As a result, we maintain our previous earnings forecasts

unchanged at HK$1.68bn (+46.9% YoY) for 14E, and HK$2.72bn (61.7%YoY)

for 15E and HK3.9bn (46%YoY) for 16E. We maintain our target price at

HK$8.22. With 68% upside, maintain BUY.

kuxsmi:2651kuxe



Beijing Enterprises Water has reached an agreement with Jin Cai Holdings

(1250:HK), a cigarette packaging manufacturer looking into investing in

developing solar power projects, under which Jin Cai will issue new shares to

Beijing Enterprises Water, at a cost of HK$1.4bn, or a per-share price of

HK$0.79. The consideration will be paid in installments over a period of two

years. After completion of the issue, Beijing Enterprises Water will hold a

34.95% stake in Jin Cai, making it the company’s largest shareholder, and the



Fig 1: BEW will become the major shareholder for Jincai Holdings

Number of ordinary

share as at the date of this announcement

%

Number of ordinary share as immediately after completion and

conversion in full of all the Preference Shares

%

Ocean Ahead International Limited (“Ocean Ahead”)

240,000,000 75 240,000,000 4.73

The First Subscriber (BEW) – – 1,772,151,900 34.95

The Second Subscriber – – 759,493,671 14.98

The Third Subscriber – – 759,493,670 14.98

Other Shareholders 80,000,000 25 1,538,794,540 30.35

Total 320,000,000 100 5,069,933,781 100

Source: Company data, SWS Research

Fig 2: Electricity cost accounts c.40% of total cost for WWT operation

39%33% 36% 34% 34%

18%16%

18% 17% 17%

8%

8%10% 10% 11%

35%43%

36% 39% 38%

0%

20%

40%

60%

80%

100%

2012 2013 2014E 2015E 2016E

Electricity Labor Maintenance Other


Lower power costs. Beijing Enterprises Water will provide a combination of ground

and rooftop space at its waste water treatment (WWT) plants for Jin Cai to

develop distributed-scale solar power facilities, to be directly sold to Beijing

Enterprises Water The company plans to install 800-1000MW of solar capacity at

its WWT plants in the long-term, which would cover 20-30% of BEW’s WWT plant

power demand. We calculate that this would translate to cost savings of up to



Beijing Enterprises Water has reached an agreement with Jin Cai Holdings

(1250:HK), a cigarette packaging manufacturer looking into investing in

developing solar power projects, under which Jin Cai will issue new shares to

Beijing Enterprises Water, at a cost of HK$1.4bn, or a per-share price of

HK$0.79. The consideration will be paid in installments over a period of two

years. After completion of the issue, Beijing Enterprises Water will hold a

34.95% stake in Jin Cai, making it the company’s largest shareholder, and the



Fig 1: BEW will become the major shareholder for Jincai Holdings

Number of ordinary

share as at the date of this announcement

%

Number of ordinary share as immediately after completion and

conversion in full of all the Preference Shares

%

Ocean Ahead International Limited (“Ocean Ahead”)

240,000,000 75 240,000,000 4.73

The First Subscriber (BEW) – – 1,772,151,900 34.95

The Second Subscriber – – 759,493,671 14.98

The Third Subscriber – – 759,493,670 14.98

Other Shareholders 80,000,000 25 1,538,794,540 30.35

Total 320,000,000 100 5,069,933,781 100


Fig 2: Electricity cost accounts c.40% of total cost for WWT operation

39%33% 36% 34% 34%

18%16%

18% 17% 17%

8%

8%10% 10% 11%

35%43%

36% 39% 38%

0%

20%

40%

60%

80%

100%

2012 2013 2014E 2015E 2016E

Electricity Labor Maintenance Other


Lower power costs. Beijing Enterprises Water will provide a combination of ground

and rooftop space at its waste water treatment (WWT) plants for Jin Cai to

develop distributed-scale solar power facilities, to be directly sold to Beijing

Enterprises Water The company plans to install 800-1000MW of solar capacity at

its WWT plants in the long-term, which would cover 20-30% of BEW’s WWT plant

power demand. We calculate that this would translate to cost savings of up to

kuxsmi:2651kuxe



HK$97.5m per annum, accounting for 8% of its 2014 operating costs (2.2% of 2014

total expenses).

Fig 3: BEW could save up Rmb78m by purchasing power from distributed solar farm build on its WWT plants.

Power saving analysis 2014E

Total power consumption (GWh) 1300

Electricity price (from the grid, Rmb/KWh) 0.75

Electricity price (from Distributed sloar farm, Rmb/KWh) 0.55

Electricity procurement cost saving 0.2

Total power procurement saving (Rmb m) 78

Total power procurement saving (HK$ m) 97.5

Percentage of power purchased from distributed solar farm 30%


The deal will raise Beijing Enterprises Water Capex in the coming two years to

c.HK$12.7bn each year. The majority of spending is directed to WWT capacity

expansion, with the company having stated a target of acquiring additional

capacity of 4mt/day yearly. The subscription will increase the company capex

of HK$1.4bn in next two years. As the company seek to achieve fast growth in

terms of WWT capacity by acquiring 4mt/day each year, the capex spending

could amount to HK$8bn each year (assuming every 1t/day WWT capacity cost

the company HK$2k). The environmental water construction requires capex of

HK$4bn for the company making the total capex spending to reach HK$12.7bn

each year for the next couple years.

Fig 4: Capex increase fast in 2015

40

80 80

40

40 40

0.7 0.7

0

20

40

60

80

100

120

140

2014E 2015E 2016E

WWT Environmental construction (BT) Acquisition of Jincai Holdings

HK$ bn


Beijing Enterprises Water seeking to achieve an internal rate of return (IRR) of 10-15% at the solar projects close to the IRR it records at its WWT projects. If achieved, this would keep the company’s margins relatively stable. We have yet to factor-in the cost savings from the direct power purchases from the solar farms given the current early stage of project development. As a result, we maintain our previous earnings forecasts unchanged at HK$1.68bn (+46.9% YoY) for 14E, and HK$2.72bn (61.7%YoY) for 15E and HK3.9bn



HK$97.5m per annum, accounting for 8% of its 2014 operating costs (2.2% of 2014

total expenses).

Fig 3: BEW could save up Rmb78m by purchasing power from distributed solar farm build on its WWT plants.

Power saving analysis 2014E

Total power consumption (GWh) 1300

Electricity price (from the grid, Rmb/KWh) 0.75

Electricity price (from Distributed sloar farm, Rmb/KWh) 0.55

Electricity procurement cost saving 0.2

Total power procurement saving (Rmb m) 78

Total power procurement saving (HK$ m) 97.5

Percentage of power purchased from distributed solar farm 30%


The deal will raise Beijing Enterprises Water Capex in the coming two years to

c.HK$12.7bn each year. The majority of spending is directed to WWT capacity

expansion, with the company having stated a target of acquiring additional

capacity of 4mt/day yearly. The subscription will increase the company capex

of HK$1.4bn in next two years. As the company seek to achieve fast growth in

terms of WWT capacity by acquiring 4mt/day each year, the capex spending

could amount to HK$8bn each year (assuming every 1t/day WWT capacity cost

the company HK$2k). The environmental water construction requires capex of

HK$4bn for the company making the total capex spending to reach HK$12.7bn

each year for the next couple years.

Fig 4: Capex increase fast in 2015

40

80 80

40

40 40

0.7 0.7

0

20

40

60

80

100

120

140

2014E 2015E 2016E

WWT Environmental construction (BT) Acquisition of Jincai Holdings

HK$ bn


Beijing Enterprises Water seeking to achieve an internal rate of return (IRR) of 10-15% at the solar projects close to the IRR it records at its WWT projects. If achieved, this would keep the company’s margins relatively stable. We have yet to factor-in the cost savings from the direct power purchases from the solar farms given the current early stage of project development. As a result, we maintain our previous earnings forecasts unchanged at HK$1.68bn (+46.9% YoY) for 14E, and HK$2.72bn (61.7%YoY) for 15E and HK3.9bn

kuxsmi:2651kuxe



(46%YoY) for 16E. We maintain our target price at HK$8.22. With 68.5% upside, we maintain our BUY recommendation.



(46%YoY) for 16E. We maintain our target price at HK$8.22. With 68.5% upside, we maintain our BUY recommendation.

kuxsmi:2651kuxe



APPENDIX Consolidated Income Statement

Consolidated Cash Flow Statement

Rmbm 2012 2013 2014E 2015E 2016E

Profit Before Taxation 1,092 1,497 2,243 3,628 5,298

Depr And Amortisation 25 34 43 21 13

Finance Cost 509 797 1,038 1,307 1,546

Losses From Investments 1 0 0 0 0

Change In Working Capital -1,542 -2,671 -3,579 -7,644 -8,594

Others 0 18 0 0 0

CF From Operating Activities -357 -759 -1,336 -4,017 -3,296

Capex 1,466 2,391 2,998 6,977 7,892

Other CF From Investing Activities

32 -41 0 0 0

CF From Investing Activities -560 -2,857 -72 -73 -75

Equity Financing 0 2,297 0 0 0

Net Change In Liabilities 4,127 3,726 971 1,042 3,931

Dividend And Interest Paid -505 -789 -1,038 -1,307 -1,546

Other CF From Financing Activities

-999 191 0 0 0

CF From Financing Activities 2,623 5,425 -67 -265 2,385

Net Cash Flow 1,636 1,632 -1,475 -4,356 -986

FCFF 1230.55 1545.97 2039.46 3359.86 4818.44

FCFE 5,867 6,069 4,048 5,709 10,296

Source：SWS Research

Rmbm 2012 2013 2014E 2015E 2016E

Revenue 3,727 6,406 7,675 11,080 14,624

WT 1,531 2,525 3,872 6,643 9,864

BT 1,974 3,764 3,686 4,320 4,643

Other 222 118 118 118 118

Cost of Sales -2,290 -3,901 -4,374 -5,796 -6,815

WT -591 -913 -1,223 -1,977 -2,712

BT -1,660 -3,004 -3,133 -3,801 -4,086

Other 39 -17 18 18 18

Gross Profit 1,437 2,506 3,302 5,284 7,809

Other Income 662 634 691 782 782

Ebitda 1,971 2,952 3,992 6,066 8,590

EBIT 1,531 2,178 3,181 4,935 6,844

Finance Costs -494 -788 -1,038 -1,307 -1,546

Profit Before Tax 1,092 1,497 2,243 3,628 5,298

Income Tax Expense -225 -352 -561 -907 -1,324

Minority Interests 117 61 90 145 212

Profit for the Year 867 1,145 1,682 2,721 3,973

Source: SWS Research



APPENDIX Consolidated Income Statement

Consolidated Cash Flow Statement

Rmbm 2012 2013 2014E 2015E 2016E

Profit Before Taxation 1,092 1,497 2,243 3,628 5,298

Depr And Amortisation 25 34 43 21 13

Finance Cost 509 797 1,038 1,307 1,546

Losses From Investments 1 0 0 0 0

Change In Working Capital -1,542 -2,671 -3,579 -7,644 -8,594

Others 0 18 0 0 0

CF From Operating Activities -357 -759 -1,336 -4,017 -3,296

Capex 1,466 2,391 2,998 6,977 7,892

Other CF From Investing Activities

32 -41 0 0 0

CF From Investing Activities -560 -2,857 -72 -73 -75

Equity Financing 0 2,297 0 0 0

Net Change In Liabilities 4,127 3,726 971 1,042 3,931

Dividend And Interest Paid -505 -789 -1,038 -1,307 -1,546

Other CF From Financing Activities

-999 191 0 0 0

CF From Financing Activities 2,623 5,425 -67 -265 2,385

Net Cash Flow 1,636 1,632 -1,475 -4,356 -986

FCFF 1230.55 1545.97 2039.46 3359.86 4818.44

FCFE 5,867 6,069 4,048 5,709 10,296

Source：SWS Research

Rmbm 2012 2013 2014E 2015E 2016E

Revenue 3,727 6,406 7,675 11,080 14,624

WT 1,531 2,525 3,872 6,643 9,864

BT 1,974 3,764 3,686 4,320 4,643

Other 222 118 118 118 118

Cost of Sales -2,290 -3,901 -4,374 -5,796 -6,815

WT -591 -913 -1,223 -1,977 -2,712

BT -1,660 -3,004 -3,133 -3,801 -4,086

Other 39 -17 18 18 18

Gross Profit 1,437 2,506 3,302 5,284 7,809

Other Income 662 634 691 782 782

Ebitda 1,971 2,952 3,992 6,066 8,590

EBIT 1,531 2,178 3,181 4,935 6,844

Finance Costs -494 -788 -1,038 -1,307 -1,546

Profit Before Tax 1,092 1,497 2,243 3,628 5,298

Income Tax Expense -225 -352 -561 -907 -1,324

Minority Interests 117 61 90 145 212

Profit for the Year 867 1,145 1,682 2,721 3,973


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Consolidated Balance Sheet

Rmbm 2012 2013 2014E 2015E 2016E

Current Assets 13,679 15,212 10,977 12,493 13,074

Bank Balances And Cash 4,291 5,513 938 1,946 1,987

Trade And Other Receivables 8,164 8,469 8,947 9,456 9,995

Inventories 30 55 0 0 0

Other Current Assets 1,194 1,175 1,091 1,091 1,091

Long Term Investment 2,419 3,025 3,089 3,155 3,222

PPE 528 379 386 394 402

Intangible And Other Assets 14,665 25,571 28,976 36,610 45,192

Total Assets 31,290 44,187 43,428 52,653 61,890

Current Liabilities 19,956 27,430 25,111 32,626 39,961

Borrowings 13,275 17,451 16,236 22,904 27,265

Trade And Other Payables 6,681 8,147 8,875 9,722 10,696

Other Current Liabilities 0 1,833 0 0 2,000

Long Term Liabilities 602 -1,000 990 1,192 -557

Total Liabilities 20,558 28,262 26,101 33,818 41,404

Minority Interests 2,264 2,627 2,758 2,896 3,041

Shareholder Equity 0 0 0 0 0

Share Capital 691 844 869 869 869

Reserves 7,776 12,454 13,699 15,069 16,576

Equity Attributable 8,467 13,298 14,568 15,938 17,445

Total Liabilities And Equity 31,290 44,187 43,428 52,653 61,890




Consolidated Balance Sheet

Rmbm 2012 2013 2014E 2015E 2016E

Current Assets 13,679 15,212 10,977 12,493 13,074

Bank Balances And Cash 4,291 5,513 938 1,946 1,987

Trade And Other Receivables 8,164 8,469 8,947 9,456 9,995

Inventories 30 55 0 0 0

Other Current Assets 1,194 1,175 1,091 1,091 1,091

Long Term Investment 2,419 3,025 3,089 3,155 3,222

PPE 528 379 386 394 402

Intangible And Other Assets 14,665 25,571 28,976 36,610 45,192

Total Assets 31,290 44,187 43,428 52,653 61,890

Current Liabilities 19,956 27,430 25,111 32,626 39,961

Borrowings 13,275 17,451 16,236 22,904 27,265

Trade And Other Payables 6,681 8,147 8,875 9,722 10,696

Other Current Liabilities 0 1,833 0 0 2,000

Long Term Liabilities 602 -1,000 990 1,192 -557

Total Liabilities 20,558 28,262 26,101 33,818 41,404

Minority Interests 2,264 2,627 2,758 2,896 3,041

Shareholder Equity 0 0 0 0 0

Share Capital 691 844 869 869 869

Reserves 7,776 12,454 13,699 15,069 16,576

Equity Attributable 8,467 13,298 14,568 15,938 17,445

Total Liabilities And Equity 31,290 44,187 43,428 52,653 61,890


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Key Financial Ratios 2012 2013 2014E 2015E 2016E

Ratios per share (HK$)

Earnings per share 0.11 0.14 0.18 0.30 0.43

Operating CF Per Share 0.11 0.14 0.18 0.30 0.43

Dividend Per Share -0.05 -0.10 -0.15 -0.46 -0.38

Key Operating Ratios(%) 0.04 0.05 0.05 0.09 0.13

Net Assets Per Share 1.55 2.05 1.99 2.17 2.36

ROIC

ROE 16.2 26.2 35.8 56.4 82.1

Gross Margin 8.9 8.2 10.9 16.2 21.6

Ebitda Margin 38.6 39.1 43.0 47.7 53.4

EBIT Margin 36.6 36.4 46.0 49.3 52.1

Growth Rate Of Revenue 23.3 24.1 32.5 37.5 41.5

Growth Rate Of Profit 40.4 71.9 19.8 44.4 32.0

Debt To Asset Ratio 25.5 32.1 46.9 61.7 46.0

Turnover Rate Of Net Assets 65.7 64.0 60.1 64.2 66.9

Turnover Rate Of Total Assets 34.7 40.2 44.3 58.8 71.4

Effective Tax Rate 0.0 0.0 0.0 0.0 0.0

Dividend Yield 35.3 36.8 29.4 24.2 23.7

Valuation Ratios (x) 0.8 1.0 1.1 1.7 2.5

PE

PB 48.2 37.4 28.5 17.6 12.1

EV Sale 3.4 2.5 2.6 2.4 2.2

EV/Ebitda 14.6 8.9 7.9 6.0 4.8




Key Financial Ratios 2012 2013 2014E 2015E 2016E

Ratios per share (HK$)

Earnings per share 0.11 0.14 0.18 0.30 0.43

Operating CF Per Share 0.11 0.14 0.18 0.30 0.43

Dividend Per Share -0.05 -0.10 -0.15 -0.46 -0.38

Key Operating Ratios(%) 0.04 0.05 0.05 0.09 0.13

Net Assets Per Share 1.55 2.05 1.99 2.17 2.36

ROIC

ROE 16.2 26.2 35.8 56.4 82.1

Gross Margin 8.9 8.2 10.9 16.2 21.6

Ebitda Margin 38.6 39.1 43.0 47.7 53.4

EBIT Margin 36.6 36.4 46.0 49.3 52.1

Growth Rate Of Revenue 23.3 24.1 32.5 37.5 41.5

Growth Rate Of Profit 40.4 71.9 19.8 44.4 32.0

Debt To Asset Ratio 25.5 32.1 46.9 61.7 46.0

Turnover Rate Of Net Assets 65.7 64.0 60.1 64.2 66.9

Turnover Rate Of Total Assets 34.7 40.2 44.3 58.8 71.4

Effective Tax Rate 0.0 0.0 0.0 0.0 0.0

Dividend Yield 35.3 36.8 29.4 24.2 23.7

Valuation Ratios (x) 0.8 1.0 1.1 1.7 2.5

PE

PB 48.2 37.4 28.5 17.6 12.1

EV Sale 3.4 2.5 2.6 2.4 2.2

EV/Ebitda 14.6 8.9 7.9 6.0 4.8


kuxsmi:2651kuxe



Information Disclosure： 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 Analyst I (We) am (are) conferred the Professional Quality of Securities Investment Consulting Industry by the Securities Association of China and have registered as the Securities Analyst. I hereby issue this report independently and objectively with due diligence, professional and prudent research methods and only legitimate information is used in this report. I am also responsible for the content and opinions of this report. I have never been, am not, and will not be compensated directly or indirectly in any form for the specific recommendations or opinions herein. Disclosure with respect to the Company The company is a subsidiary of Shenwan Hongyuan Securities. The company is a qualified securities investment consulting institute approved by China Securities Regulatory Commission with the code number ZX0065. Releasing securities research reports is the basic form of the securities investment consulting services. The company may analyze the values or market trends of securities and related products or other relevant affecting factors, provide investment analysis advice on securities valuation/ investment rating, etc. by issuing securities research reports solely to its clients. The Company fulfills its duty of disclosure within its sphere of knowledge. The clients may contact [email protected] for the relevant disclosure materials or log into www.swsresearch.com for the analysts' qualifications，the arrangement of the quiet period and the affiliates’

shareholdings. Introduction of Share Investment Rating Security Investment Rating：

When measuring the difference between the markup of the security and that of the market’s benchmark within six months after the release of this report, we define the terms as follows: Trading BUY: Share price performance is expected to generate more than 20% upside over a 6-month period. BUY: Share price performance is expected to generate more than 20% upside over a 12-month period. Outperform: Share price performance is expected to generate between 10-20% upside over a 12-month period. Hold: Share price performance is expected to generate between 10% downside to 10% upside over a 12-month period. Underperform: Share price performance is expected to generate between 10-20% downside over a 12-month period. SELL: Share price performance is expected to generate more than 20% downside over a 12-month period. 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；

Equal weight： 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 is available at our sales personnel if you are interested. HSCEI is the benchmark employed in this report.

Disclaimer： This report is to be used solely by the clients of SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities, 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 public information, 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.swsresearch.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. Save and except as otherwise stipulated in this report, the contactor upon the first page of the report only acts as the liaison who shall not provide any consulting services. 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 clients should make investment decisions independently and solely at your own risk. Please be reminded that in any event, the company will not share gains or losses of any securities investment with the clients. Whether written or oral, any commitment to share gains or losses of securities investment is invalid. 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. Please be particularly cautious to the risks and exposures of the market via investment.



Information Disclosure： 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 Analyst I (We) am (are) conferred the Professional Quality of Securities Investment Consulting Industry by the Securities Association of China and have registered as the Securities Analyst. I hereby issue this report independently and objectively with due diligence, professional and prudent research methods and only legitimate information is used in this report. I am also responsible for the content and opinions of this report. I have never been, am not, and will not be compensated directly or indirectly in any form for the specific recommendations or opinions herein. Disclosure with respect to the Company The company is a subsidiary of Shenwan Hongyuan Securities. The company is a qualified securities investment consulting institute approved by China Securities Regulatory Commission with the code number ZX0065. Releasing securities research reports is the basic form of the securities investment consulting services. The company may analyze the values or market trends of securities and related products or other relevant affecting factors, provide investment analysis advice on securities valuation/ investment rating, etc. by issuing securities research reports solely to its clients. The Company fulfills its duty of disclosure within its sphere of knowledge. The clients may contact [email protected] for the relevant disclosure materials or log into www.swsresearch.com for the analysts' qualifications，the arrangement of the quiet period and the affiliates’

shareholdings. Introduction of Share Investment Rating Security Investment Rating：

When measuring the difference between the markup of the security and that of the market’s benchmark within six months after the release of this report, we define the terms as follows: Trading BUY: Share price performance is expected to generate more than 20% upside over a 6-month period. BUY: Share price performance is expected to generate more than 20% upside over a 12-month period. Outperform: Share price performance is expected to generate between 10-20% upside over a 12-month period. Hold: Share price performance is expected to generate between 10% downside to 10% upside over a 12-month period. Underperform: Share price performance is expected to generate between 10-20% downside over a 12-month period. SELL: Share price performance is expected to generate more than 20% downside over a 12-month period. 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；

Equal weight： 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 is available at our sales personnel if you are interested. HSCEI is the benchmark employed in this report.

Disclaimer： This report is to be used solely by the clients of SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities, 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 public information, 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.swsresearch.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. Save and except as otherwise stipulated in this report, the contactor upon the first page of the report only acts as the liaison who shall not provide any consulting services. 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 clients should make investment decisions independently and solely at your own risk. Please be reminded that in any event, the company will not share gains or losses of any securities investment with the clients. Whether written or oral, any commitment to share gains or losses of securities investment is invalid. 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. Please be particularly cautious to the risks and exposures of the market via investment.

kuxsmi:2651kuxe



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 which shall be treated as non-public information. 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.

Disclaimer This report was prepared, approved, published and distributed by the SWS Research Co., Ltd ( subsidiary of Shenwan Hongyuan Securities ) located outside of the United States (a “non-US Group Company”). This report is distributed in the U.S. by Enclave Capital LLC, a U.S. registered broker dealer, on behalf of SWS Research Co., Ltd only to major U.S. institutional investors (as defined in Rule 15a-6 under the U.S. Securities Exchange Act of 1934 (the “Exchange Act”)) pursuant to the exemption in Rule 15a-6 and any transaction effected by a U.S. customer in the securities described in this report must be effected through Enclave Capital LLC (19 West 44th Street, suite 1700, New York, NY 10036). Neither the report nor any analyst who prepared or approved the report is subject to U.S. legal requirements or the Financial Industry Regulatory Authority, Inc. (“FINRA”) or other regulatory requirements pertaining to research reports or research analysts. No non-US Group Company is registered as a broker-dealer under the Exchange Act or is a member of the Financial Industry Regulatory Authority, Inc. or any other U.S. self-regulatory organization. The information has been compiled or arrived from sources believed to be reliable and in good faith, but no representation or warranty, express or implied is made as to their accuracy, completeness or correctness. SWS Research Co., Ltd has not verified the factual accuracy, assumptions, calculations or completeness of the information. Accordingly, SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) accepts no liability whatsoever for any direct or consequential loss or damage arising from (i) the use of this communication (ii) reliance of any information contained herein, (iii) any error, omission or inaccuracy in any such Information or (iv) any action resulting there from. SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) provides the information for the purpose of the intended recipient’s analysis and review. Accordingly you are advised to verify the factual accuracy, assumptions, calculations or completeness of the information. Analyst Certification Each of the analysts identified in this report certifies, with respect to the companies or securities that the individual analyses, that (1) the views expressed in this report reflect his or her personal views about all of the subject companies and securities and (2) no part of his or her compensation was, is or will be directly or indirectly dependent on the specific recommendations or views expressed in this report. Important US Regulatory Disclosures on Subject Companies This material was produced by SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) solely for information purposes and for the use of the recipient. It is not to be reproduced under any circumstances and is not to be copied or made available to any person other than the recipient. It is distributed in the United States of America by Enclave Capital LLC and elsewhere in the world by SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) or an authorized affiliate of SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ). This document does not constitute an offer of, or an invitation by or on behalf of SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) or its affiliates or any other company to any person, to buy or sell any security. The information contained herein has been obtained from published information and other sources, which SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) or its Affiliates consider to be reliable. None of SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) accepts any liability or responsibility whatsoever for the accuracy or completeness of any such information. All estimates, expressions of opinion and other subjective judgments contained herein are made as of the date of this document. Emerging securities markets may be subject to risks significantly higher than more established markets. In particular, the political and economic environment, company practices and market prices and volumes may be subject to significant variations. The ability to assess such risks may also be limited due to significantly lower information quantity and quality. By accepting this document, you agree to be bound by all the foregoing provisions. 1. SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) or its Affiliates have not recently been the beneficial owners of 1% or more of the securities mentioned in this report. 2. SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) or its Affiliates have not managed or co-managed a public offering of the securities mentioned in the report in the past 12 months. 3. SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) or its Affiliates have not received compensation for investment banking services from the issuer of these securities in the past 12 months and do not expect to receive compensation for investment banking services from the issuer of these securities within the next three months. 4. However, one or more person of SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) or its affiliates may, from time to time, have a long or short position in any of the securities mentioned herein and may buy or sell those securities or options thereon either on their own account or on behalf of their clients. 5. As of the publication of this report Enclave Capital LLC, does not make a market in the subject securities. 6. SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) or its Affiliates may, to the extent permitted by law, act upon or use the above material or the conclusions stated above or the research or analysis on which they are based before the material is published to recipients and from time to time provide investment banking, investment management or other services for or solicit to seek to obtain investment banking, or other securities business from, any entity referred to in this report

Distribution in Singapore If distributed in Singapore, this report is meant only for Accredited Investors and Institutional Investors as defined under Section 4A of the Securities and Futures Act of Singapore. If you are not an Accredited Investor or an Institutional Investor, you shall ignore the report and its contents. The Singapore recipients of the report are to contact the Singapore office of Shenyin Wanguo Singapore Private Limited at 65-6323-5208, or 65-6323-5209 in respect of any matters arising from, or in connection with, the report.



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 which shall be treated as non-public information. 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.

Disclaimer This report was prepared, approved, published and distributed by the SWS Research Co., Ltd ( subsidiary of Shenwan Hongyuan Securities ) located outside of the United States (a “non-US Group Company”). This report is distributed in the U.S. by Enclave Capital LLC, a U.S. registered broker dealer, on behalf of SWS Research Co., Ltd only to major U.S. institutional investors (as defined in Rule 15a-6 under the U.S. Securities Exchange Act of 1934 (the “Exchange Act”)) pursuant to the exemption in Rule 15a-6 and any transaction effected by a U.S. customer in the securities described in this report must be effected through Enclave Capital LLC (19 West 44th Street, suite 1700, New York, NY 10036). Neither the report nor any analyst who prepared or approved the report is subject to U.S. legal requirements or the Financial Industry Regulatory Authority, Inc. (“FINRA”) or other regulatory requirements pertaining to research reports or research analysts. No non-US Group Company is registered as a broker-dealer under the Exchange Act or is a member of the Financial Industry Regulatory Authority, Inc. or any other U.S. self-regulatory organization. The information has been compiled or arrived from sources believed to be reliable and in good faith, but no representation or warranty, express or implied is made as to their accuracy, completeness or correctness. SWS Research Co., Ltd has not verified the factual accuracy, assumptions, calculations or completeness of the information. Accordingly, SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) accepts no liability whatsoever for any direct or consequential loss or damage arising from (i) the use of this communication (ii) reliance of any information contained herein, (iii) any error, omission or inaccuracy in any such Information or (iv) any action resulting there from. SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) provides the information for the purpose of the intended recipient’s analysis and review. Accordingly you are advised to verify the factual accuracy, assumptions, calculations or completeness of the information. Analyst Certification Each of the analysts identified in this report certifies, with respect to the companies or securities that the individual analyses, that (1) the views expressed in this report reflect his or her personal views about all of the subject companies and securities and (2) no part of his or her compensation was, is or will be directly or indirectly dependent on the specific recommendations or views expressed in this report. Important US Regulatory Disclosures on Subject Companies This material was produced by SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) solely for information purposes and for the use of the recipient. It is not to be reproduced under any circumstances and is not to be copied or made available to any person other than the recipient. It is distributed in the United States of America by Enclave Capital LLC and elsewhere in the world by SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) or an authorized affiliate of SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ). This document does not constitute an offer of, or an invitation by or on behalf of SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) or its affiliates or any other company to any person, to buy or sell any security. The information contained herein has been obtained from published information and other sources, which SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) or its Affiliates consider to be reliable. None of SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) accepts any liability or responsibility whatsoever for the accuracy or completeness of any such information. All estimates, expressions of opinion and other subjective judgments contained herein are made as of the date of this document. Emerging securities markets may be subject to risks significantly higher than more established markets. In particular, the political and economic environment, company practices and market prices and volumes may be subject to significant variations. The ability to assess such risks may also be limited due to significantly lower information quantity and quality. By accepting this document, you agree to be bound by all the foregoing provisions. 1. SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) or its Affiliates have not recently been the beneficial owners of 1% or more of the securities mentioned in this report. 2. SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) or its Affiliates have not managed or co-managed a public offering of the securities mentioned in the report in the past 12 months. 3. SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) or its Affiliates have not received compensation for investment banking services from the issuer of these securities in the past 12 months and do not expect to receive compensation for investment banking services from the issuer of these securities within the next three months. 4. However, one or more person of SWS Research Co., Ltd. ( subsidiary of Shenwan Hongyuan Securities ) or its affiliates may, from time to time, have a long or short position in any of the securities mentioned herein and may buy or sell those securities or options thereon either on their own account or on behalf of their clients. 5. As of the publication of this report Enclave Capital LLC, does not make a market in the subject securities. 6. SWS Research Co., Ltd. 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06 3 ?y? ÎÐ < x Äpg.jrj.com.cn/acc/Res/HK_RES/STOCK/2015/2/4/e2046969-8e76-47c… · two companies will seek to develop solar power projects to supply electricity directly to Beijing