研究报告全文：MN9Feb2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateYumChina9987HKRobustrecoveryandstoreexpansionaheadTargetPriceHK554614Q22resultshouldhavebeenwellexpectedandtheturnaroundisalreadyherePreviousTPHK46505YUMCisoneofoursectortoppicksbecausewethinkitcanfurthersurpriseUpDownside155themarketinFY23Eduetoits1refinedstoreeconomics2decentroomforupwardrevisionontheopeningplanand3theinclusioninstockconnectCurrentPriceHK48000programmerecentlyHencewemaintainBUYandraiseTPtoHK55461ChinaConsumerDiscretionarybasedon33xFY23EPEAsoft4Q22waswellexpectedSalesfellby9YoYtoUS21bnNetWalterWOOprofitdroppedby89YoYtoUS51mnmissingCMBIestby52but85237618776walterwoocmbicomhkbeatingBBGestby10WebelievethisistotallyunderstandablegiventheCOVID-19outbreaksinNovandDec2022KFCwashighlyresilientRaphaelTSEwithjust3SSSdropanda127restaurantOPmarginvs86last85239000856yearwhilePizzaHutwasundergreatpressurewith8SSSdeclineandaraphaeltsecmbicomhkrestaurantOPmarginofjust19vs59lastyearNetnumberofstoresincreasedby5381159in4Q22FY22inlinewiththeCompanysguidanceStockDataof1000to1200whichisfairlyencouragingunderthepandemicMktCapHKmn2011200TheworstshouldhavegoneandweforecastMSDSSSGinFY23EAvg3mthstoHKmn4421Whilewedoconcurwithmanagementsviewofanon-linearrecoveryin52wHighLowHK4940029000TotalIssuedSharesmn4190FY23EwealsoexpecttheSSStoreturntoMSDgrowthsupportedby1SourceFactSetdecentstartinCNYwhereSSSGhadgoneupbyMSDbetterthanTaiErCouCouHDLs30-102salesrecoveryforstoreslocatedintheShareholdingStructuretouristattractionsandtransportationhubsrecorded20-30SSSGInvesco95duringCNY3thecompanysshiftinprioritytosalesgrowth4lowbaseBlackRock73SourceHKExlastyearashighas4300storeswereaffectedin4Q22and5excellentpipelineofnewproductsegwholechickenandbeefburgerlaunchedlastSharePerformanceyearwereextremelysuccessfulandalreadycontributed5ofsalesAbsoluteRelativeTargeting1100to1300netnewstoresinFY23Eandwesee1-mth9883reasonableupsideThistargetannouncedbythemanagementis3-mth227-45effectivelyimplying8to10YoYgrowthinFY23Enoaccelerationfrom6-mth282207the10lastyearandwedofindittooconservativebecause1thereSourceFactSetshouldbenodragsbyCOVID-19anymore2mixofgrossclosuresshould12-mthPricePerformancedropasSSSimproves3theeffectiveroomforexpansionshouldhavebeenlargergiventhesmallerstoreformatand4manypeershaveannouncedacceleratedexpansionplansegMCDistargeting900grossnewstoresinChinavs800lastyearandSBUXiskeepingitstargetof9000storesby2026implying800to1200newstoreseachyearvs650lastyearMaintainBUYandraiseTPtoHK55461OurnewTPisbasedon33xFY23EPEupfrom30xcloseto2sdabovethe5yearsaverageof27xSourceFactSetsincetheindustryisenteringanupcycleandwellsupportedby32NPCAGRduringFY22-25EWeadjustedFY23E24ENPby1-5tofactorinweakerSSSGbutabetterKFCmarginYUMCiscurrentlytradingat28xFY23EPEnotdemandingEarningsSummaryYE31DecFY21AFY22AFY23EFY24EFY25ERevenueUSmn98539569110721241413938YoYgrowth19229157121123OperatingprofitUSmn1386629111713701718NetprofitUSmn9900442088081087013628EPSReportedUS228104217268336YoYgrowth1705441086234254PEx262455282228182PBx3327312825Yield0811111316ROE13859117132148SourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk9Feb2023DecentupsidesinmarginexpansiondrivenbySSSrecoveryandbetterstoreeconomicsOnonehandweareforecastingastableGPmargininFY23Ewhichconsistsof1LSDcommodityinflationchickenpricemaycontinuetoclimband2lessbutsmarterpromotionsOntheotherhandwebelieve1thepressurefromwagesinflationaboutMSDand2absenceofrentalreliefsaboutUS86mninFY22equaltoroughly08pptofsalesinFY23Ecouldbemorethanoffsetby1theimprovedstoreeconomicsasaresultofmoreautomationssmallersizelessdepreciationduetolowercapexetcwherethebreakevenpointhadgonedownby20achievedifthesamestoresalesreached80ofthe2019levelevidencedbytheshortenedpaybackperiodofjust23yearsforKFCPizzaHut2highersalesmixfromthesemoreprofitablenewstoresand3therecoveryofPizzaHutsofflinesalesandhenceitsstoreproductivityAllinallwedoexpecttherestaurantlevelOPmargintoreach163inFY23Eevenhigherthanthe160backinFY19EarningsrevisionFigure1EarningsrevisionNewOldDiffUSmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue1107212414139381163613131na-49-55naGrossprofit78148769985682209283na-49-55naOperatingProfit11171370171811061457na10-60naNetprofit881108713638731145na09-50naEPSUScents21692677335720012623na8421naGrossmargin706706707706707na-01ppt-01pptnaEBITmargin10111012395111na06ppt-01pptnaNetprofitattmargin8088987587na05ppt0pptnaSourceCompanydataCMBIGMestimatesFigure2CMBIGMestimatesvsconsensusCMBIGMConsensusDiffUSmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue110721241413938113991285114949-29-34-68Grossprofit7814876998568321907310599-61-33-70OperatingProfit1117137017181086133217902929-40Netprofit881108713638209951261759281EPSUScents21692677335719062358305513813699GrossMargin706706707730706709-24ppt0ppt-02pptOperatingMargin1011101239510412006ppt07ppt04pptNetMargin80889872778408ppt1ppt13pptSourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE29Feb2023FocusChartsFigure3SalesandnetprofitattgrowthFigure4GPrestaurantprofitNPattmargin80718717715120997047067068060264019231016124041016014816317020137141-6-3-40951000818088-5546-80FY19AFY20AFY21AFY22AFY23EFY24EFY19AFY20AFY21AFY22AFY23EFY24EGPmarginsRestaurantprofitmarginbasedonCompanysalesSalesgrowthNPattgrowthNPattmarginSourceCompanydataCMBIGMestimatesSourceCompanydataCMBIGMestimatesFigure5SSSGduring2023CNYbybrandFigure6SSSGbybrand35107552442553310155-5-35300-6-7-10-8-5-15-14-15-10-10FY19AFY20AFY21AFY22AFY23EFY24EXBXBYumTaiErJMJCouHDLNayukiChinaCouKFCPizzaHutSourceCompanydataCMBIGMestimatesSourceCompanydataCMBIGMestimatesFigure7NumberofrestaurantsgrowthbybrandFigure8Restaurantprofitmarginbybrand18201841616178178161614163171701315714131414160149163131491214137141126121211111310101051071110899286820192020202120222023EFY19AFY20AFY21AFY22AFY23EFY24EYumChinaMCDStarbucksKFCPizzahutTotalSourceCompanydataCMBIGMestimatesSourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE39Feb2023ResultsReviewFigure9ResultsreviewQuarterlyHalfyearly1Q222Q223Q224Q224Q22EActvs3Q214Q211Q222Q223Q224Q22EUSmnYoYYoYEYoYEYoYCMBICMBIRevenue2554229126682128268520884-135-92506-17Foodandpaper-743-679-792-627-787-630-727Grossprofit1811161218761501189814581-155-101779-18GPmargins709704703705707698710Otherincomegains10628-25-24-24-21-7205Payrollbenefits-591-583-667-549-603-5702322-2-653-13Payrollbenefitssales-231-254-250-258-225-273-260Rentotheropex-694-669-738-605-691-57014-70-15-735-22Rentotheropexsales-272-292-277-284-257-273-293Adminexpenses-339-310-236-210-242-219-25-33-29-29-244-10Adminexpsales-133-135-88-99-90-105-97Otheropex-19-45-19-32-22-37-47OperatingprofitEBIT1786331918131641-44-6578-9493-56OPmargins7027672381182037Investmentgainloss-39-11-3719-15723Netfinanceincome16131214253311201Netfinanceincomesales06060407091604Profitafterfinancingcosts15563516611432681127Associatedcoms0000000Jointlycontrolledcoms0000000Pre-taxprofit15563516611432681-52-56110-87127-36Tax-44-159-56-31-97-25-43Taxsales-17-69-21-15-36-12-17Effectivetaxrate-284-250-337-272-298-309-340Minorityinterests71100215-21-123Netprofitatt1044751008320851-57-54100-89105-52NPmargins412073739772442SalesKFC18011636201715942017159110-812-31793-113Pizzahut5514795474485614041-172-16538-250Others2021761048610793-43-52-47-47174-467Total2554229126682128268520884-135-92506-167RestaurantOPmarginbybrandKFC1368615213420612712007pptPizzahut8259107861341970-51pptOthers000000000000000pptTotal11068132115179988414pptSourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE49Feb2023AssumptionsFigure10CMBIGMsassumptionsMajorassumptionsFY21AFY22AFY23EFY24EFY25ESalesbysegmentUSmnKFC-dineinsales48184457502854936116KFC-deliverysales21852762335439384506PH-dineinsales13401125131314531677PH-deliverysales76983597711241225Others741390399406414Total98539569110721241413938SalesbysegmentgrowthKFC-dineinsales160-7512892113KFC-deliverysales347264214174144PH-dineinsales170-161168106154PH-deliverysales1988617015090Others57-474241719Total192-29157121123SalesnetworkbybrandUSmnKFC81689094100341097411914PizzaHut25902903322335633903Others103095099010401120Total1178812947142471557716937RestaurantprofitmarginbybrandKFC145155176182194Pizzahut10691112125135Others-13-46-020405Total137141163170182CostsbreakdownFoodandpapersales285296294294293Payrollandemployeebenefitssales229250243243241Rentalandotheroperatingexpensessales270272265262256GAexpensessales5762605856Franchiseesexpensessales6629252219Effectivetaxrate265304250250250NPattmargin10046808898NPattgrowth263-554993234254SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE59Feb2023ValuationFigure11Peersvaluationtable3yrs12mUpROEYieldPriceMktCapYearPExPBxPEGTPDown-xCompanyTickerRatingLCLCsideHKmnEndFY1EFY2EFY1EFY2EFY1EFY1EFY1ELeadingGreaterChinaCateringYumChina9987HKBUY554614800016200845Dec-21596286353213810908Jiumaojiu9922HKBUY19701900427636Dec-218783417059672002Haidilao6862HKBUY207919447108359Dec-212049400110885061101Nayuki2150HKBUY7386191910617Dec-21na4462018nana00Helens9869HKNRna1360na17230Dec-21na3435246151na00TamJai2217HKNRna251na3365Mar-2217910922191930916CafeDeCoral341HKBUY1512138498106Mar-223672102826170218Xiabuxiabu520HKNRna755na8201Dec-21na2664237271na09Yihai1579HKBUY10852259531827167Dec-2133627751441886009GourmetMaster2723TTNRna15500na7288Dec-2151627024224911718Avg7032954539314408Med5162813835492009InternationalCateringYumBrandsYUMUSNRna12934na285988Dec-21251219nanana1919McdonaldsMCDUSNRna26734na1537000Dec-21253229nanana1623StarbucksCorpSBUXUSNRna10683na963727Oct-21315264nanana1720RestBrandsQSRUSNRna6813na241066Dec-212162221081003972932ChipotleCMGUSNRna17229na373621Dec-214073361721763851500DardenDRIUSNRna14959na142909May-2219217285813982233DominosPizzaDPZUSNRna35720na99256Jan-22295252nanana5012WendysCoWENUSNRna2273na38009Jan-222682281021373842822ShakeShackSHAKUSNRna5907na19544Dec-21nana616056nanaWingstopIncWINGUSNRna16551na38867Dec-211002858nanana5504JollibeeFoodsJFCPMNRna24200na38789Dec-2129029339361801510Avg34930795982812717Med27924193903852120H-sharesConsumerStaplesUPC220HKNRna720na31099Dec-212151682020993651Tingyi322HKNRna1278na72005Dec-2122516239371744470WantWant151HKNRna493na58587Mar-22132120302925618061ChinaMengniu2319HKBUY5700379050149903Dec-2122319931281581713NongfuSpring9633HKBUY5300446519502155Dec-215474581751384113811Vitasoy345HKNRna1660na17775Mar-2214696315349150601Budweiser1876HKBUY2720234516310558Dec-2139833634341013009Tsingtao168HKBUY8600752014131901Dec-2126523135311542718CRBeer291HKBUY7100570025184918Dec-2137630261541563510DaliFoods3799HKNRna350na47929Dec-2112210820181855041Avg39727150441684529Med24521535331573615SourceBloombergCompanydataCMBIGMestimatescoveredbyJosephWongPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE69Feb2023Figure12Forward12MPEvaluationbandSourceBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE79Feb2023FinancialSummaryINCOMESTATEMENT2020A2021A2022A2023E2024E2025EYE31DecUSmnRevenue826398539569110721241413938Costofgoodssold234228122836325736444082Grossprofit592170416733781487699856Operatingexpenses524562986010672074378179Sellingexpense000000Adminexpense591663704786857934Staffcosts173022582389269330193361Otherrentalrelatedexpenses814968984112512431374Others166018931390154316981846Operatingprofit9611386629111713701718Otherincome28564394223742ShareoflossesprofitsofassociatesJV000000EBITDA141119021172169019902382Depreciation431505478513563625Otheramortisation191165605740Interestincome43608488113137Interestexpense000000NetInterestincomeexpense43608488113137Otherincomeexpense1045426303438Pre-taxprofit11081392687117414491817Incometax295369209294362454Aftertaxprofit813102347888110871363Minorityinterest293336000Netprofit78499044288110871363BALANCESHEET2020A2021A2022A2023E2024E2025EYE31DecUSmnCurrentassets493647163940521863307486Cashequivalents115811361130227732794310Restrictedcash310528602022202220222022Accountreceivables996764768595Inventories398432417488546611Prepayment176221307355398447Othercurrentassets000000Non-currentassets593985077886749974067508PPE176522512118232425062648Right-of-useassets216426122219221922192219InvestmentinJVsassos85292266266266266Intangibles24627215999422Goodwill83221421988145512371237Othernon-currentassets8479381136113611361136Totalassets108751322311826127171373614994Currentliabilities206723832166237925712790Short-termborrowings000000Accountpayables70883083095310671195Taxpayable725168686868Othercurrentliabilities128715021268135714371527Non-currentliabilities233729182500250025002500Long-termborrowings000000Othernon-currentliabilities233729182500250025002500Totalliabilities440453014666487950715290Sharecapital482949674291429142914291Retainedearnings210528922191260833724330Otherreserves4636367894010011083Totalshareholdersequity647179227160783986649704Minorityinterest000000Totalequityandliabilities647179227160783986649704PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE89Feb2023CASHFLOW2020A2021A2022A2023E2024E2025EYE31DecUSmnOperatingProfitbeforetaxation11081392687117414491817Depreciationamortization450516543573620664Taxpaid11116020294362454Changeinworkingcapital69530828394Others6249902035332180Netcashfromoperations111411311413206920082121InvestingCapitalexpenditure419689679720745767Acquisitionofsubsidiariesinvestments28811523000Others240251180000Netcashfrominvesting3109855522720745767FinancingDividendpaid95203202202262323Netborrowings000000Proceedsfromshareissues219500000Sharerepurchases875466000Others3435176000Netcashfromfinancing2058313844202262323NetchangeincashCashatthebeginningoftheyear104611581136113022773279Exchangedifference401553000Others723747114710021031Cashattheendoftheyear115811361130227732794310GROWTH2020A2021A2022A2023E2024E2025EYE31DecRevenue5819229157121123Grossprofit6018944161122124Operatingprofit67442546776227254EBITDA62348384442177197Netprofit100263554993234254PROFITABILITY2020A2021A2022A2023E2024E2025EYE31DecGrossprofitmargin717715704706706707Operatingmargin11614166101110123EBITDAmargin171193122153160171ReturnonequityROE16313859117132148GEARINGLIQUIDITYACTIVITIES2020A2021A2022A2023E2024E2025EYE31DecCurrentratiox242018222527Receivableturnoverdays413125252525Inventoryturnoverdays606539546546546546Payableturnoverdays10379981068106810681068VALUATION2020A2021A2022A2023E2024E2025EYE31DecPE284262455282228182PEdiluted284262455282228182PB353327312825PCFPS200230142120124117Divyield040811111316SourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE99Feb2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBISwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE10