研究报告全文：MN23Aug2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateAntaSports2020HKCostscontrolandefficiencygainsarethekeys1H23resultswasastrongbeatprimarilydrivenbyFILAsrobustOPmarginandTargetPriceHK10797thelimitedAPexpensesRetailsalesgrowthinMay-Aug2023couldstillbePreviousTPHK9820weakbutmarginimprovementshouldcontinueandwehavenowturnedmoreUpDownside390positiveCurrentvaluationof20xFY23EPEisnottoodemandingCurrentPriceHK7765Astrongbeatfor1H23ifweexcludeAmersone-offimpairmentAntaChinaConsumerDiscretionarygroupssalesgrewby14YoYtoRMB296bnroughlyinlinewithCMBIestwhilenetprofitincreasedby32YoYtoRMB48bn4aboveCMBIWalterWOOestmainlyaffectedbyone-offimpairmentofRMB11bnforPeak85237618776walterwoocmbicomhkPerformanceabrandunderAmerHoweverifwelookattheadjnetprofitexcludingotherincomeandlossesoperatingprofittheyincreasedbyRaphaelTSE5732beatingCMBIestby1814Infactsuchastrongbeatwas85239000856dueto1FILAsexceptionallygoodOPmarginexpansionfrom225inraphaeltsecmbicomhk1H22to297in1H23and2lowerthanexpectedAPexpensesonlyat71asoftotalsalesvs9-10inthepastStockDataFY23EguidanceforAntabrandwasmaintainedandwethinkitisMktCapHKmn2099135Avg3mthstoHKmn5302marginallyachievableManagementreiteratedthe10salesgrowth52wHighLowHK124006900targetforAntabrandandaYoYOPmarginimprovementDespiteaTotalIssuedSharesmn27033relativelyweakretailsalesgrowthduringMay-Aug2023unliketheratherSourceFactSetrobustJan-Apr2023westillthinkthegrowthratecouldgraduallyimproveShareholdingStructurein2H23Ethanksto1lowbasein4Q222moreinnovativeproductMrDingShizhongFamily545launchesespafterthemanagementchange3resumptionofwholesalesBlackRockFund16growthasactionslikecutintradefairordersandinventorytakebackSourceHKExnormalizedWealsothinktheAPexpenseswillpickupin2H23EinordertofundthemarketingaroundbasketballandParisOlympicsthereforeweSharePerformanceAbsoluteRelativeexpecttheOPmargintostayatabout21similarto1H23and2H221-mth-78-11FY23EguidanceforFILAbrandwasalsomaintainedbutwethinkthe3-mth-117-23marginbeatshouldsustainThe10salesgrowthtargetforFILAwas6-mth-256-145unchangedbutwearenowmoreoptimisticonOPmarginimprovementSourceFactSetWefindFILAssalesgrowthin1H23impressiveespwhenmore12-mthPricePerformanceconsumersarewillingtotradedownanditwasclearlytheresultofseriesofsuccessfulreformsForinstancefootwearsalesforFILAisgrowingfastat20andnowaccountingforcloseto40ofsaleswas10-20inthepasttennisandgolfproductsbecomemorepopularandiconicandthesell-thruratefornewproductsin1H23hasalreadyexceeded80Thanksto1surgeinsalesperstoretoaboutRMB1mnand2closuresofmanyunderperformingstoresFILAOPmarginhadjumpedtoabout30in1H23andwenowexpecta26forFY23Eimplyinga22for2H23ESourceFactSetMaintainBUYandraiseTPtoHK10797basedon27xFY23ERecentReportsunchangedvs5-yearaverageof26xsupportedby1425salesNPChinaLilang1234HK1H23inlineCAGRduringFY22-25EWerevisedupFY23E24E25ENPforecastsbyandFY23Eguidancemaintained101010tofactorinabetteroperatingleverage17Aug23EarningsSummaryLiNing2331HKReiteratedguidancebutweremainedcautiousYE31DecFY21AFY22AFY23EFY24EFY25E14Aug23RevenueRMBmn4932853651619607091179805YoYgrowth38988155144125Xtep1368HKAhigh-quality2Q23andguidanceunchangedOperatingprofitRMBmn113721122914494171982024920Jul23NetprofitRMBmn8219082450108978135030160300EPSReportedRMB277272357442525AntaSports2020HKAslightbeatin2Q23butoutlookisstillfragileYoYgrowth4921731223918719Jul23PEx229255194157132PBx5957483933Topsports6110HKInitiationYield1115182533Localizationandefficiency-ledturnaroundROE31126730231030830Jun23Netgearing393539627693740SourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk23Aug2023MomentumforotherbrandsandAmerexcludingtheimpairmentisstillfairlystrongOtherbrandsDescenteandKolonsalesgrowthwasunbelievablefastatcloseto80thereforetheCompanyhadraiseditssalesgrowthtargetto40from30AsincreaseinstoreproductivityisthemajorgrowthdriverwebelieveitsOPmargincanfurtherimproveAmerssalesEBITgrowthwasalsoimpressiveat30150butthenetprofitwasdraggedbyone-offimpairmentSinceAmerSportssmid-termtargetof5EUR10bn3mainbrandsDTCandChinaduringFY19-2024EhaveallbeenachievedonschedulemanagementisconfidenttoproposeanewoneandaimingfordoubledigitsalesgrowthduringFY24E-28EEarningsrevisionFigure1EarningsrevisionNewOldDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue619607091179805616487055679412050505Grossprofit379724421750176377384396949922060605EBIT1449417198202491297915697185061179694Netprofitatt995712338146479057111531325699106105DilutedEPSRMB35704424525232473999475399106105Grossmargin61362462961262362901ppt0ppt0pptEBITmargin23424325421122223323ppt2ppt21pptNetprofitattmargin16117418414715816714ppt16ppt17pptSourceCompanydataCMBIGMestimatesFigure2CMBIGMestimatesvsconsensusCMBIGMConsensusDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue619607091179805621867172582023-04-11-27Grossprofit379724421750176382644454651310-08-07-22EBIT144941719820249136851622418995596066Netprofitatt9957123381464794561133613419538891DilutedEPSRMB357044245252341640854824458389Grossmargin613624629615621626-02ppt02ppt03pptEBITmargin23424325422022623214ppt16ppt22pptNetprofitattmargin16117418415215816409ppt16ppt2pptSourceBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE223Aug2023ResultssummaryFigure3ResultsreviewHalfYearActual1H23E1H222H221H232H23vs1H222H221H232H23ECMBIGHalfyearlyYoYYoYYoYEYoYCMBIGMRMBmnMRevenue259652768629645323151441417296030COGS-9856-11477-10890-13098-10805Grossprofit161091620918755192171211619187980GPmargins620585633595635Otherincomegains821130763712225928SDexpenses-9437-10192-10074-11768250715-10953-8SDexpsales-363-368-340-364-370Adminexpenses-1701-1886-1695-186132150-1-1747-3Adminexpsales-66-68-57-58-59Otheropex00000OperatingprofitEBIT5792543876236809-273225669014OPmargins223196257211226Otheritems00000Netfinanceincome-2211935612489301Netfinincomesales-0104120403Profitafterfinancingcosts57705557797969346779Associatedcoms00000Jointlycontrolledcoms-178206-51633059Pre-taxprofit5592576374637264-36332668389Tax-1642-1468-2169-1660-1778Taxsales-63-53-73-51-60Effectivetaxrate-294-255-291-229-260Minorityinterests36229354639448114Netprofitatt3588400247485209-73323045804NPmargins138145160161155SalesAnta1336014363141701643126761414425-2FILAothers12605133231547515884322319151782GPmarginsAnta55151555851354315pptFILAothers686674692688710-18pptOPmarginsAnta222212212208220-08pptFILAothers22517429722323562pptSourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE323Aug2023Figure4Resultspreview-fullyearFY23EFY24EFullyearlyRMBmnFY22FY23EFY24EYoYYoYRevenue5365161960709111514COGS-21333-23988-26694Grossprofit3231837972442171716GPmargins602613624Otherincomegains212818591985SDexpenses-19629-21842-250051114SDexpsales-366-353-353Adminexpenses-3587-3556-4071-114Adminexpsales-67-57-57Otheropex000OperatingprofitEBIT1123014432171272919OPmargins209233242Otheritems000Netfinanceincome97480695Netfinincomesales020810Profitafterfinancingcosts113271491317822Associatedcoms000Jointlycontrolledcoms28-186425Pre-taxprofit1135514727182473024Tax-3110-3829-4744Taxsales-58-62-67Effectivetaxrate-274-260-260Minorityinterests6559401165Netprofitatt75909957123383124NPmargins141161174SalesAnta2772330601348641014FILAothers2592831359360472115GPmarginsAnta532534540FILAothers680690700OPmarginsAnta217210217FILAothers200260270SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE423Aug2023OperatingnumbersFigure5SportswearbrandssalesgrowthtrendOperatingnumbers1Q202Q203Q204Q201Q212Q213Q214Q211Q222Q223Q224Q221Q232Q23E3Q23E4Q23ENikeChinasales-418194291-24-8-20-13611888AdidasChinasales-580-57156-16-15-24-35-35-27-50-916520AntabrandsSSSG-ve20-veLow-veMid-veHigh-Antabrandsretailsales-veLSDveLSDveLSD40-4535-40-veMSDveMSD-veHSDveMSDveHSD111725teensteensteens-ve20-veMid--veLow--veMid-Corebrand-veLSD-veMSD-veMSD35-4035-40veHSDveMSDveLSDveHSDveHSD25teensteensteens-ve20-veLow--veLow-veMid--veHigh-KidsveMSD45-50Over20veMSD20-25veLSDveHSDveMSDveHSD25teensteensteensteensOnlineveMSDOver40Over50Over25Over60Over4525-3030-35Over30veHSDveHSDveMSD-veLSDveMSDveLow-veLow--veLow-veHigh-FILAbrandsretailsales-veMSD20-2525-3075-8030-35veMSDveHSDveMSD-veHSDveHSD1024teensteensteensteens-ve20--veMid-ClassicCorebrandveMSDveMSDveMSD80Over20FlatFlat-veMSD-veDD-veLSDveLSDveMSD25teensveMid-veMid-veMid--veLow-Kids-veLSDOver30Over30Over20100Over40veHSDveLSD-veHSDveLSDteensteensteensteensveMid-veLow-FusionveMSDOver70Over50Over50150Over80Over20-veMSDveLSDveHSD-veHSDveLSDteensteensOnline160Over80Over9070-80Over40Over4020-2525-30Over20veMSDOver65Over40Over4060-65115-veLow-Otherbrands-veHSD25-3050-5555-6070-7535-4030-3540-4520-2540-4575-8070-75120teensveMid--veLow-DescenteOver6090Over801501005040-4540-45Over20Over3570-7560-65teensteens-veHigh--veHigh--veHigh-KolonveLSD20-2530-40Over75403040-45Over20Over55100100teensteensteensveLow-veLowveHighveLowveLow-veLow--veHigh-LiNinggroupsSSSGna-veMSDveLSDnaveHSD-veHSDveLSDteens80202020teensteens-veHigh-veLowveLowveMidveMid-veHigh--veHighDirectretailna-veMSDveHSDnaveMSD-veLSDveHSDteens90302020teens20-veLow-veLowveMidveHigh-veLow--veHigh--veLowWholesalesna-veMSDveMSDnaveHSD-veLSDveLSDteens7020teensteensteens20veLow-veMidveHighveLowveHighveMidveHighveMidveLow--veLowE-CommercenaveLSD-veLSDveLSDteens20303080302030teens20-veHigh-veMid-veHighveLowveLowveLowveHighveMid--veLow-veMid-LiNinggroupsretailsales-veMSDveMSD-veHSDveMSD531teensteens8090403020teensteensteens-veMid-veLow-veLowveHighveMidveHighveMidveLow-veMid-veMid-veHighDirectretailFlatveMSD-veHSD30teens908030203020teensteens20-veHigh-veLow-veLowveLowveHighveHighveLowveLow--veLowveMid-Wholesales-veHSD-veLSD-veHSDveMSDteensteens8090302020teens20teensveLow-veHighveLowveMidveHighveMidveLowveMidveMid-veLow-veLow-E-Commerce100veMSDveMSDteens2040309050403020teensteensXtepbrandsSSSG-ve20-Mid50-veMid-veMid-veHigh-Xtepbrandsretailsales-veLSDveMSDveHSD30-3520-2530-3520-25-veHSD2016262560teensteensteens361DegreebrandsSSSG-ve20--veLow-veHigh-veLow-veHigh-veHigh-veLow-veMid-veLow-veLow-361Degreebrandsretailsales-veHSDveLSD15-20Flat25teensteensteensteensteensteensteensteensteensKids20-2530-3515-2025-3020-2520-2520-25veLSD20-2520-25E-Commerce35-40504045253530PouShengsSSSG-33-18-13-132-11-25-29-21-25-10-27013PouShengssales-2500148-15-25-27-25-24-8-20717720-ve20--veHigh--veHigh-veHigh--veLow-veLow-Topsportsretailsales-veLSD81525teens20teensteens20veMid-veMidto-veLowveLowveLow-veLowveLow-veHigh--veLow-veMid-DongXiangsSSSG-veMSDveMSDveHSDtoHighHigh--veMSDtoMid-toMid-toMid-toMidSDtoMidSDteenstoMidSDteensSDteensteensteensteensveLow-veMidto-veMidto-veMidveLow-ve25-veLow-veLow--veMid-veMid-DongXiangsretailsalesveMSD60-70toMid-High--veMSDHigh-veLSD20totoMid-to30MidSDteensteensteensteensteensteens30teens-ve30--veLow-DirectretailFlatveMSD70-7535teens-veLow-ve30-ve30-ve20-E-Commerce35-40teens353530SourceCompanydataCMBIGMestimatesNikesyearendisinMayeg4Q18calendaryear2Q19fiscalyearSep-Nov2018PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE523Aug2023ValuationFigure6Peersvaluationtable3yrs12mUpPBROEYieldYTDPriceMktCapYearPExPEGTPDown-xperfxCompanyTickerRatingLCLCsideHKmnEndFY1EFY2EFY2EFY0FY1EFY1EFY1EHsharesSportswearAntaSports2020HKBUY10797776539219953Dec-22194157472400821241LiNingCo2331HKBUY529737254298193Dec-22204169331681618450XtepIntl1368HKBUY11177754420448Dec-22166134211140931108361DegreesIntl1361HKNRna390na8064Dec-228169081090544171TopsportsIntl6110HKBUY9006633641114Feb-2315513036180085797PouShengIntl3813HKNRna066na3515Dec-22654404460137120ChinaDX3818HKNRna027na1590Mar-235042021200159129Avg131106221240753112Med155130211140837120InternationalSportswearNikeNKEUSNRna10166na1219085May-232722311113461714131AdidasADSGYNRna18430na282130Dec-22na43472220004446PumaPUMGYNRna6214na79707Dec-2225319034128121496UnderArmourUAAUSNRna725na24005Mar-23145117152082800287LululemonLULUUSNRna37917na377640Jan-233182771123191000183SkechersSKXUSNRna5019na60881Dec-22148123181310600196VfCorpVFCUSNRna1913na58317Apr-23948124390163307ColumbiaCOLMUSNRna7431na35723Dec-22162139221622416152WolverineWWWUSNRna813na5067Dec-2217454175650150256MizunoCorp8022JPNRna453500na6480Mar-2311610610902717612AsicsCorp7936JPNRna509300na51991Dec-22315272511581511748Avg20018444900717104Med16813924131101496SourceBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE623Aug2023Figure7Forward12MPEvaluationbandSourceBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE723Aug2023AssumptionsFigure8MajorassumptionsMajorassumptionsFY21AFY22AFY23EFY24EFY25ESalesbysegmentgrowthShoes507174160125100Apparels32131153161145Accessories36564120120120Total38988155144125SalesbybrandgrowthAnta477141120120110AntaKids500150100140130FILA251-1415012090DescenteOthers511261500260240E-commerce61617780170150Total38988155144125SalesnetworkAnta68326924704971247174AntaKids25712679285429292979FILA20541984195019752025DescenteOthers459477491521551Total1191612064123441254912729GPmarginsAnta523532534540545FILA705680690700700Others705664690720740Total616602613624629OpexbreakdownAPExpensessales124103969896Labourcostssales135151146146147RDexpensessales5960616060Rentalexpensessales116115111110107Sellingdistributioncostssales360366353353347Adminexpensessales5967575757OPmarginAnta206217210217230FILA247200260270280Others184206240250260Total223209233242253Effectivetaxrate269274260260260NPattmargin157141161174184NPattgrowth496-17312239187SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE823Aug2023FinancialSummaryINCOMESTATEMENT2020A2021A2022A2023E2024E2025EYE31DecRMBmnRevenue355124932853651619607091179805Costofgoodssold148611892421333239882669429629Grossprofit206513040432318379724421750176Operatingexpenses128882068123216253982907532241Sellingexpense107661775319629214732464627392Adminexpense125118122308249127882992RDexpense87111161279143416411857Others000000Operatingprofit88261137211229144941719820249Otherincome106316492127192120562314ShareoflossesprofitsofassociatesJV6018128186425559EBITDA93161194411971150631774920683Depreciation414443474329317301Otheramortisation76129268240234132Interestincome27139260992911351365Interestexpense407443511511511511Otherincomeexpense000000Pre-taxprofit80891124011355147271824721662Incometax252030213110382947445632Minorityinterest40749965594011651383Netprofit556982198245108981350316030BALANCESHEET2020A2021A2022A2023E2024E2025EYE31DecRMBmnCurrentassets327173990245445546016488575881Cashequivalents153231759223919309353914948014Accountreceivables6614691475208685993911186Inventories548676446254722980458929Prepayment000000STbankdeposits502469896989698969896989Othercurrentassets270763763763763763Non-currentassets191502276622803227922351724600PPE218428533131354540794736InvestmentinJVsassos965890279055886992959853Intangibles1579153112811060844730Othernon-currentassets572993559336931892999281Totalassets5186762668682487739388402100481Currentliabilities117151594316954185702028422028Short-termborrowings196817481748174817481748Accountpayables237631463546398844384926Taxpayable150718161816181618161816Othercurrentliabilities586492339844110181228213539Non-currentliabilities143281506215062150621506215062Long-termborrowings124561142511425114251142511425Othernon-currentliabilities187236373637363736373637Totalliabilities260433100532016336323534637090Sharecapital261261261261261261Retainedearnings181852266324832312203858346670Otherreserves556759997744794687129576Totalshareholdersequity240132892332837394264755556507Minorityinterest181127403395433555016884Totalequityandliabilities5186762668682487739388402100481PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE923Aug2023CASHFLOW2020A2021A2022A2023E2024E2025EYE31DecRMBmnOperatingProfitbeforetaxation80891124011355147271824721662Depreciationamortization490572742569551434Taxpaid218126773110382947445632Changeinworkingcapital34612821796525356387Others452030084836978648Netcashfromoperations74581186111265116391378416029InvestingCapitalexpenditure6491360751744851958Acquisitionofsubsidiariesinvestments84940000Others119032150000Netcashfrominvesting19234669751744851958FinancingDividendpaid140424563676336842085695Netborrowings33431960000Proceedsfromshareissues2100000Sharerepurchases000000Others59552295511511511511Netcashfromfinancing122949474187387947196206NetchangeincashCashatthebeginningoftheyear82211532317592239193093539149Exchangedifference338240000Others676422456327701682148865Cashattheendoftheyear153231759223919309353914948014GROWTH2020A2021A2022A2023E2024E2025EYE31DecRevenue4738988155144125Grossprofit10747263175164135Operatingprofit0928813291187177EBITDA7828202258178165Netprofit1047603322239187PROFITABILITY2020A2021A2022A2023E2024E2025EYE31DecGrossprofitmargin582616602613624629Operatingmargin249231209234243254EBITDAmargin262242223243250259ReturnonequityROE253311267302310308GEARINGLIQUIDITYACTIVITIES2020A2021A2022A2023E2024E2025EYE31DecNetdebttoequityx020405060707Currentratiox282527293234Receivableturnoverdays680512512512512512Inventoryturnoverdays134714741070110011001100Payableturnoverdays584607607607607607VALUATION2020A2021A2022A2023E2024E2025EYE31DecPE352229255194157132PEdiluted352229255194157132PB745957483933PCFPS256280201174147126Divyield081115182533EV204009519853251922053185189317697581681105EVSales574036302521EVEBITDA21916616112310081SourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1023Aug2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBISwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE11