研究报告全文：31Jan2023CMBInternationalGlobalMarketsEquityResearchEconomicsPerspectiveChinaMacroMonitorStillintheearlystageofrecoveryThesignificantincreaseinpassengersandtouristsduringtheCNYholidayBingnanYEPhDindicatesChinaseconomyisonitswayofrecoveryHoweverwecannotuse85237618967linearextrapolationtopredictitsrecoverypathinfutureWebelieveChinasyebingnancmbicomhkeconomymayseeadiagonalupwardW-shapedresumptionafterreopeningKevinZhangConsumptionandserviceactivitiesfirstlydeclineafterthepandemicoutbreak85253364682andthenrecoveraspeoplestarttogooutTheearlystageofrecoveryisdrivenkevinzhangcmbicomhkbyrestorationofmobilityThentherecoverymomentummayslowashousingsaleslargedurableconsumptionbusinesscapexmaytakelongertorecoverandoverseasrecessionmayimpactChinasmanufacturingsectorAsconfidence20222023FemploymentimprovetheeconomywillbraceforthelatestageofrecoveryDecJanFebMarGDPYoYquarterly29-32supportedbydurableconsumptioncapexWemaintainourforecastonChinasVAIOYoY13-2325ServiceindexYoY-08-2028GDPgrowthat51for2023and47for2024TheriskforourforecastshouldRetailsalesYoY-18-2126befromtheupsideChinasliquiditycreditpolicyshouldremainaccommodativeFAIYoYYTD51-4847ExportsofgoodsYoY-99-90-70-100unlesshousingsalesorinflationsignificantlyincreasesThegrowthofImportsofgoodsYoY-75-70-60-40outstandingsocialfinancingmaygraduallyreboundamidcreditpolicylooseningCPIYoY18202221PPIYoY-07-04-07-13WebelieveChinawillcontinuewiththepro-businessshiftatleastinnexttwoRMBloansYoY111110112113yearstorestorebusinessconfidencegrowthmomentumM2YoY118116114113SocialfinancingRmbtrn13551144NewRMBloansRmbtrn14441035Chinaeconomyisinearlystageofrecoverydrivenbyrestorationof3MShibor24223723423210YT-bondrate284293295298mobilityThemobilityhasgraduallyrecoveredinChinaasthecountrySourceWindCMBIGMdismantledthezero-CovidpolicyAfterbeinglockeddownforalongtimetheChinesepeoplecouldnotwaittogooutWesawsignificantYoYincreasesofpassengerstouristsandmoviegoersintheChineseNewYearholidaythisyearTransportationcateringtravelaccommodationrecreationclothingfootwearcosmeticspersonalcareshouldbenefitaspeoplestarttogooutinsteadofstayingathomeSupportedbytheresumptionofthosesectorsChinaeconomywillseethefirstroundofrecoveryin1H23TheGDPgrowthmayrisefrom29in4Q22to32in1Q23and69in2Q23Basedonourcalculationtherecoveryofabovesectorsshouldcontributeover15ppttoChinasGDPgrowththisyearHousingsalesdurableconsumptionbusinesscapexmaytakelongertorecoverTheCovid-19pandemichousingmarketslumpandtechregulatorycrackdownhasseverelyhurtconfidenceemploymentandincomeintheprivatesectorThenumberofdomesticpassengersandtouristsduringtheChineseNewYearholidaywasstillabout40and11respectivelylowerthantheirpre-pandemiclevelsMeanwhiletherewasacyclicaldowngradeinconsumptionasthepercapitaconsumptionexpenditureoftravelersfellnoticeablycomparedwiththepre-pandemiclevelThatiswhyChinascoreCPIgrowthremainedbelow1againstthebackdropofhighglobalinflationTheChinesehouseholdsandprivatebusinessneedsometimetorestoretheirconfidenceandregaingrowthmomentuminthelargeexpendituresWebelievehousingsalesdurableconsumptionbusinesscapexmaytakelongertorecoverHousingsalesandrelateddurableconsumptionmaybottomoutin1H23andimprovein2H23PropertydevelopmentinvestmentmayseelessYoYdeclinesthisyearcomparedwithlastyearChinaeconomymayseeadiagonalupwardW-shapedresumptionafterreopeningConsumptionandserviceactivitiesfirstlydeclineafterthepandemicoutbreakandthenrecoveraspeoplestarttogooutTherestoredPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk31Jan2023mobilitysupportsanearlystageofrecoveryespeciallyintransportationcateringtravelaccommodationrecreationclothingfootwearcosmeticspersonalcareHoweverhousingsaleslargedurableconsumptionbusinesscapexmaytakelongertorecoverashouseholdincomebusinessconfidencewasseverelydamagedlastyearInadditionoverseasrecessionriskmaybringdownsidepressureonChinasexportsindustrialoutputandmanufacturinginvestmentChinasrecoverymomentummayslowaftertheearlystageofrecoveryAsconfidenceemploymentincomegraduallyimprovetheeconomywillmoveintothelatestageofrecoverysupportedbyhousingsalesdurableconsumptionbusinesscapexWemaintainourforecastonChinasGDPgrowthat51for2023and47for2024TheriskforourforecastliesintheupsideLiquiditycreditpolicyshouldremainaccommodativeashousingmarketrecoveryisslowandreflationismildChinasliquidityandcreditpolicyshouldremainaccommodativeunlesshousingsalessignificantlyreboundsorinflationsharplypicksupInthebasescenarioChinashousingmarketshouldseeagradualandslowrecoverywhilethereflationpressureshouldbemoderateThereforethePBOCshouldmaintainampleliquiditysupplytofacilitatecreditrevivalAsliquiditydemandnoticeablyreboundsamidmorerisktakingandhighercreditdemandmoneymarketratesmaymildlyrisein2023HoweverthecentralbankwillnotseekliquiditytighteningasChinasGDPgrowthremainsbelowpotentialgrowthandthereflationriskismanageableItispossibletoseeadditionalRRRcutthisyearThePBOCwillmaintaineasingcreditpolicyformanufacturingserviceprivatebusinessandSMEsThecentralbankwillguidebankstorolloverdebtofpropertydevelopersandlocalgovernmentfinancingvehiclesWeseeadditionaldownsideroomforthedown-paymentratiosandcontractratesofmortgageloansforfirst-homeandsecond-homebuyersChinamaycontinuewiththepro-businessshiftinnexttwoyearsThepandemichousingmarketslumptechregulatorycrackdownandSino-USconflictmakeitmoredifficultforChinatoachieveits2035visiongoalTheChinesepolicymakersareveryclearaboutthisastheyhavequicklychangedvariouspolicieswithapro-businessshiftafterthe20thPartyCongressThenewcabinetleaderstrytoreturntothepolicyframeworkwiththeeconomicdevelopmentasthepriorityAgainGDPgrowthandattractingcapitalwillbeimportantKPIsforlocalgovernmentofficialsinnexttwoyearsWehaveseenadismantlingofzero-CovidpolicycontinuingrescuepolicyforpropertymarketchangingpolicystancetowardsinternetsectorandgreatereffortstoimprovetieswiththeUSEUAustraliaWebelieveChinamaycontinuewiththepro-businessshiftinnexttwoyearstorestorebusinessconfidenceandgrowthmomentumPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE231Jan2023Figure1ChinaEconomyForecast20092010201120122013201420152016201720182019202020212022F2023F2024FGDPRealGDPYoY941069679787470686967602284305147NominalGDPUStrn5161768596104110112123139143147178180190211PercapitaGDPUS3823454155976280705775867923806587979880101241040412615127201345014983InflationYoYGDPdeflator02698023211100154335120546221121CPI07335426262014201621292509202225PPI54556017191952146335031881410516GDPbyindustryYoYAgriculture40434245384139334035313171414043Industryconstruction10312710784807259605958492587384244-VAIOofenterprisesabovedesignatedsize110157139100978361606662572896364346Service96979580838388818380721985235951ContributiontoGDPGrowthpptConsumption54506344394249453943350253103734Investment80673933413316312729171811151210Netexports40110602020105080305080617050203DemandindicatorsYoYFAI304245238206196157100817259542949514353-Manufacturing266269318220185135814248953122135915565-Propertydevelopment161332279162198105106970959970441005030-Infrastructure42218565137212203173157149183334021158050Retailsales159188185145131120107104102908039125026555Exportsofgoods160313203797860297779990536296703565Importsofgoods112388249437205143551611582706301110545MonetaryconditionsM2YoY2771971361381361221331138181871019011811095M1YoY3242127965933215221411815448635376672NewRMBloansRMBtrn968075828998117127135162168196200213237254TotalsocialfinancingRMBtrn139140128158173165154178262225256349314320352380RRRforlargebanks1551852102002002001751701701451301251151101009510YT-bondrates3733900003584563622833023883243143142772913103151YLPR5735514304304304304304304303653553555YLPR480465465430415415PublicfinanceFiscalrevenueYoY11721325012910286584574623839107156550FiscalexpenditureYoY21917821615311383132637687812903625040GeneraldeficittoGDPratio27251815202124292926283731283128SpecialfundrevenueYoY9339235218119348226120106482060050SpecialfundexpenditureYoY9737918177117327321134288372570120LGspecialbondquotatoGDPratio051015223732303129BOPExchangeratesTradesurplusofgoodstoGDPratio48403036374253443927283532393031TradesurplusofservicetoGDPratio05040609132020212121181006040709CurrentaccountbalanceGDP48391825152327171502071718221517FinancialaccountbalancetoGDPratio38463404360540370912010402060103ErroromissiontoGDPratio08090210070618191713091109120709ForexreserveUStrn240285318331382384333301314307311322325315320310USRMBspotrateyear-end683659630623605620649695651687697654637695660640SourceWindCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE331Jan2023MobilityinChinaafterEconomyReopeningTourismAfterbeinglockeddownforalongtimeChinesepeoplecouldnotwaittotravelorreturntotheirhometownsduringCNY2023Thenumberofdomestictouristsduring2023CNYrose231comparedtothesameperiodin2022andreached886of2019CNYlevelMeanwhiledomestictourismrevenueincreased30YoYfrom2022equivalentto731of2019CNYlevelPassengerflowThedailyaveragerailwaypassengerflowrose57YoYduring2023CNYandreached831of2019CNYlevelMeanwhilethenumberofdomesticairtripsincreased798YoYabout72ofthelevelduring2019CNYholidayMoviemarketConsumptionandsocialactivityofyoungpeopleisthefirsttorecoverDomesticmovieboxofficereachedRMB67bnduring2023CNYup120YoYfrom2022TrafficcongestionindexsubwaypassengerflowAsmorepeopleleftlargecitiestotheirhometownforCNYholidaytrafficcongestionindexandsubwaypassengerflowdeclinedinmostlargecitiesexceptafewhottraveldestinationslikeXianFigure2DailyPassengerFlowDuringtheSpringRushFigure3DailyNumberofFlightsSourceWINDCMBIGMSourceWINDCMBIGMFigure4YoYChangeofDailyAverageTrafficCongestionIndexbyCitySourceWindCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE431Jan2023Figure5YoYGrowthofDailyAverageSubwayPassengerFlowbyCitySourceWindCMBIGMFigure6SubwayPassengerFlowWeeklyAverageSourceWINDCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE531Jan2023Figure7DailyNumberofFilmAudienceFigure8DailyBoxOfficeRevenueSourceWINDCMBIGMSourceWINDCMBIGMHousingMarketAutoSalesConstructionActivityinChinaChinashousingsalesfurtherdeclinedduetoholidayeffectweakincomegrowthlowconfidenceCommoditybuildingsalesinJan2023decreasedby315and417YoYinTier1andTier23citiesrespectivelyListingpriceofsecond-handhousecontinuedtodeclineNewhousinginventoryremainedhighasmonthofinventoryfurtherincreasedamidsalesdeclinePassengervehiclesalesalsoweakenedPassengervehiclesalesvolumedropped205YoYinthefirsthalfofJanuary2023afterrising128lastDecemberCapacityoperationrateofsemi-steeltyredeclinedsharplymainlyduetoChineseNewYearholidayConstructionactivitiesturnedweakclosetoChineseNewYearholidayCapacityoperationrateofdeformedsteelbarandasphaltplantfurtherdeclinedasconstructionactivitiesturnedweakclosetoCNYHoweverconstructionmaterialpricesmildlypickedupthankstosentimentimprovementaftereconomyreopeningFigure9YoYGrowthofCommodityBuildingSalesFigure10ListingPriceIndexofSecond-handHouseSourceWINDCMBIGMSourceWINDCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE631Jan2023Figure11NewHousingSupplyin10CitiesFigure12AutoSalesVolumethousandunitsmonths9003580030700256005002040015300102001005002023202220212020201920182017201620152014201320122011NewhousingsupplyforsalesLHSMonthofsupplybasedon60DsalesRHSSourceWINDCMBIGMSourceWINDCMBIGMNote10citiesincludeBeijingShanghaiGuangzhouShenzhenHangzhouNanjingQingdaoSuzhouNanchangXiamenFigure13CapacityOperationRateFigure14SteelConstructionMaterialPriceSourceWINDCMBIGMSourceWINDCMBIGMChinaExportsamidUSRecessionRiskChinasexportsmayhavetemporarilyimprovedinJanuarybeforefurtherdeterioratingSouthKoreasforeigntradeisknownasacanaryinthecoalmineforglobaleconomybecauseitisthefirstcountrytoreleasetradedataanditstradeperformanceinmajorproductslikesemiconductoriscloselyrelatedtoglobalbusinesscycleConsideringitsclosetraderelationshipwithChinaSouthKoreastradewithChinahasaparalleltrendwithChinastotaltradeSouthKoreasexportsdropped27YoYinthefirst20daysofJanuary2023afterdeclining96inthesameperiodofthepreviousmonthMeanwhileitsexportstoChinaandimportsfromChinarespectivelyrose161and97YoYupfromthedeclinesof211and116inDecemberItseemedChinasexportsmayhavetemporarilyimprovedinJanuaryastheeconomyreopeningprobablyremovedsupplychaindisruptionsChinasimportsmayhavealsoreboundedthankstoimprovementofdomesticdemandaftereconomyreopeningUSyieldcurvecontinuedtosendwarningsignalforarecessionaheadUS10Y3Mand10Y2YTreasuryyieldcurvesinvertedfurthersignallinghigherrecessionriskaheadUS5YbreakeveninflationratefurtherdroppedasinflationexpectationsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE731Jan2023continuedtodeclineTheUSFedisexpectedtoslowdownitstighteningpaceasitmayraisefederalfundratesby25bpsthisweekThepolicyratewouldreach45-475afterthemoveandinvestorsexpectthepolicyratetopeakaround495aftertheFedsMarchmeetingTheUSFedhascontinuedtoshrinkitsbalancesheetfromUS9trilliontoUS85trillionrecentlyFinancingcostsforUSprivatesectorhavedroppedrecentlyWiththerecessionriskpricedinUSlong-terminterestrateshavedroppednoticeablyrecentlyUS30-yearmortgageratedroppedtothelowestinmonthsat613followedbyarapidreboundinmortgageapplicationvolumeinthepastfewweeksECRIleadingindicatorincreasedto1483inJanuaryfrom1437inDecemberHoweverweeklyretailsalesreportedbyRedbookResearchcontinuedtrendingdownwardsalongwithmilderinflationFigure15GrowthofSouthKoreaExportsImportsFigure16ChinaExportsofGoodsSourceWINDCMBIGMSourceWINDCMBIGMNotethelatestmonthcoveredthefirst20daysFigure17USTermSpreadasALeadingIndicatorforFigure18USBreakevenInflationtoReflectRecessionRiskInflationExpectationsSourceWINDCMBIGMSourceWINDCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE831Jan2023Figure192YT-bondRatesPrecedeFedPolicyRatesFigure20FedsAssetsinItsBalanceSheetSourceWINDCMBIGMSourceWINDCMBIGMFigure21FinancingCostsofUSPrivateSectorFigure22USM2andBanksCreditSupply40YoY353025201510505201620122013201420152017201820192020202120222023M2supplyBankscreditsupplySourceWINDCMBIGMSourceWINDCMBIGMFigure23USMortgageRatesDemandFigure24LeadingindicatorsforUSEconomySourceWINDCMBIGMSourceWINDCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE931Jan2023FactoryActivitiesinChinaFactoryactivitiessoftenedclosetotheholidayandamidexportslumpThedailycoalconsumptionofpowergeneratorsinSouthChinadeclineddramaticallywithanincreaseofdaysofcoalinventoryOutboundcoalvolumebyshipinQinhuangdaoalsodeclinednoticeablywithamildsofteningofcoalpriceFigure25PowerGeneratorsCoalConsumptioninFigure26OutboundCoalVolumePriceinSouthChinaQinhuangdaoPortSourceWINDCMBIGMSourceWINDCMBIGMCommodityInflationChinasReflationRiskCommodityinflationmayfurtherdeclineGlobalM2growthasaleadingindicatorprecedescommodityinflationDuetobaseeffectandglobalrecessionriskcommodityinflationmayfurtherdeclinein1H23DespiteaboostfromChinaseconomyreopeningmostcommoditypricesareunlikelytoseesignificantreboundduetosofteningdemandandimprovingsupplychainsGoldpriceincludesawarpremiumasitsimpliedpricebasedonUSreal-termratesshouldbemuchlowerthanthecurrentlevelChinasreflationpressureshouldbemoderateaftereconomyreopeningChinasreopeninghasboostedinvestorsentimentinthecommoditymarketHoweverthereflationpressureshouldbemoderateduetothreereasonsFirstdomesticdemandespeciallyhousingsalesdurableconsumptionbusinesscapexshouldseeagradualresumptionwithoutoverheatingriskSecondoverseasdemandwillcontinuetosoftenamidrisingrecessionriskChineseexportershavetotransfersomeproductsupplyintodomesticmarketThirdtheimpactoftheCovidwavehaslimitedimpactonChinaslaborparticipationandChinamaynothavelaborshortageriskChinas2YT-bondrateswhicharesensitivetocoreinflationexpectationshavemildlyclimbedrecentlyasasignalformoderatereflationaheadinChinaThewholesalereferencepriceofKweichouMoutaihasalsomildlyclimbedindicatingamoderateresumptionofbusinessactivitiesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1031Jan2023Figure27GlobalM2GrowthCommodityPriceFigure28USReal-termRateGoldPriceSourceWINDCMBIGMSourceWINDCMBIGMFigure29US10YRatesCopper-to-goldPriceRatioFigure30BDIChinaIndustrialPriceSourceWINDCMBIGMSourceWINDCMBIGMFigure31AgriculturalPriceinChinaFigure32LiveHogPriceinChinaSourceWINDCMBIGMSourceWINDCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1131Jan2023Figure33WholesaleReferencePriceofMOUTAIFigure34ModerateCoreCPIReflationinChinaSourceWINDCMBIGMSourceWINDCMBIGMChinasliquidityconditionRMBexchangeRatesLiquidityconditionThePBOCshouldmaintainampleliquiditysupplyashousingmarketresumptionisgradualandreflationpressureismoderateLiquiditydemandmayincreaseasriskappetiteandcreditdemandreboundThereforemoneymarketratesmaymildlyrisein2023Therecentincreaseofbanks7DreporatewasmainlyduetoseasonalfactorandthereporateshoulddeclineafterChineseNewYearholidayBondmarketLong-termbondratesmildlyroseaftereconomyreopeningamidexpectationsofresumptionandreflationRMBexchangeratesRenminbireboundedagainstUSdollarasthenorthboundfundinflowintoAsharemarketsignificantlyincreasedinJanuary2023LookingforwardrenminbimayhaveadditionalupsideroomasSino-USinterestspreadspickupamidUSrecessionandChinarecoveryFigure35PBOCPolicyRatesFigure36ChinasMoneyMarketFundingCostSourceWINDCMBIGMSourceWINDCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1231Jan2023Figure37ChinaT-bondRatesFigure38USRMBRatesInterestSpreadsSourceWINDCMBIGMSourceWINDCMBIGMFigure39USHKDRatesInterestRatesFigure40EMVolatilityForeignFundFlowintoAShareMarketSourceWINDCMBIGMSourceWINDCMBIGMChinaEconomyForecastUpsideriskforourforecastonChinas2023GDPgrowthTheGDPgrowthin1Q23predictedbyAI1isaround36higherthanourforecastof32TheeconomicactivitiesshouldcontinuetorecoverinFebruaryandMarchwhichmeansthe1Q23GDPgrowthforecastmaybefurtherrevisedupinnexttwomonthsCPIandPPIgrowthmaydeclinebeforereboundingCPIandPPIgrowthmayfirstdeclineandthenreboundCoreCPIgrowthmaymoderatelyriseasconsumptionandserviceinflationgraduallyreboundafterreopeningTotalsocialfinancinggrowthmayreboundamidcreditpolicylooseningTheYoYgrowthofoutstandingsocialfinancingmaygraduallypickupthankstocreditpolicylooseningHoweverM2growthmaygraduallydeclineasriskaversionsentimentdrops1ThedataisfromWindDatabaseandprovidedbyBeijingTengjingBigDataTechnologyCompanyPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1331Jan2023Figure41GDPGrowthMayGraduallyRecoverFigure42CPIMaySlowBeforePickingUpSourceWINDCMBIGMSourceWINDCMBIGMFigure43CoreInflationMayMildlyRiseFigure44PPIMayDeclineBeforeReboundingSourceWINDCMBIGMSourceWINDCMBIGMFigure45M2GrowthMayGraduallyDeclineAmidFigure46TotalSocialFinancingGrowthMayRecoveringRiskAppetiteReboundAmidCreditPolicyEasingSourceWINDCMBIGMSourceWINDCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1431Jan2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBIGMwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE15