研究报告全文：MN23Aug2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateXtep1368HKThegrowthstoryisintactdespitevolatility2H23resultswasroughlyinlinewethinkinventoryandAPexpensesarenotTargetPriceHK1141aconcernManagementreiteratedthelistedco-levelFY23EguidancewhilePreviousTPHK1117retailsalestrendisresilientandimprovinginJul-Aug2023HencewemaintainUpDownside472BUYgivenitsattractivevaluationof16xFY23EPEand07xPEGCurrentPriceHK7751H23resultsroughlyinlineFor1H23XtepgroupssalesincreasedbyChinaConsumerDiscretionary15YoYtoRMB65bn23higherthanBBGCMBIestwhichwasaWalterWOOmixtureofaround1119120growthforXtepabout15MSDfor85237618776kidse-commerceKPSMandNetprofitalsoroseby13YoYtowalterwoocmbicomhkRMB665mnfairlyinlinewithBBGCMBIestasadecentGPmarginimprovementwasmorethanoffsetbyasurgeinopexAPandRDRaphaelTSEexpensesrocketed5165andstaffcostsalsofell1785239000856raphaeltsecmbicomhkInventorymighthaveincreasedbuttheconditionishealthyAverageinventorydaysin1H23increasedto115daysfrom90daysinFY22butStockDatathatwasonlya5increaseintermsofabsoluteamounthalfofthatareMktCapHKmn204200relatedtothenewbrandswhicharealloperatingundertheDTCmodelAvg3mthstoHKmn52252wHighLowHK1098685Xtephasdonealottode-stockbyrevisingdownthetradefairordersTotalIssuedSharesmn26348voluntarilyanditwillcontinuetocleartheoldinventorythrubothofflineegSourceFactSettheoutletsandonlinechannelsManagementexpecttheretaildiscountstoShareholdingStructureslightlywidento30offanytimein2H23EwhentheclearancearrivesMrDingShuiPoFamily490hencewethinkitisundercontrolInfactapartfromtheoldinventoriestheJPMorganChase46newproductsarehighlysuccessfultoowherethesellthruratein1Q23andSourceHKEx2Q23wereallabove70achievinga3-5pptYoYimprovementSharePerformanceThelistedcolevelFY23Eguidance15-20salesgrowthandevenAbsoluteRelativefasternetprofitgrowthismaintainedSalesgrowthmayacceleratein1-mth08773-mth-99-192H23Ebecause1tradefairsalesgrowthcouldstarttoconvergewithretail6-mth-136-15salesgrowth2XtepsproductsarevalueformoneyenoughtowinmoreSourceFactSetmarketsharesespwhenmoreconsumersstarttotradedown3Xtepdemonstratedstrengthintherunningcategoriesmarketsharesofthetop12-mthPricePerformance100runnersinChinacontinuetoclimbto42in1H23from35inFY22accordingto98RunMoreoverwebelieveNPmargincouldatleastbeflattishinFY23EasAPandRDexpensesarelikelytobefront-loadedandaccountedforlessthan133ofsaleswhilestaffcostsarecurbedbymorestaffcutsMaintainBUYbutraiseTPtoHK1141basedon23xFY23EPESourceFactSetremainsunchangedand13xsdabovethe5-yearaverageof15xWerevisedupFY23E24E25Enetprofitby276tofactorinbetterRecentReportsmarginsItistradingat16xFY23EPEand07xPEGnotdemandingatallAntaSports2020HKCostscontrolandefficiencygainsarethekeysEarningsSummary23Aug2023YE31DecFY21AFY22AFY23EFY24EFY25EChinaLilang1234HK1H23inlineRevenueRMBmn1001312930151031754520012andFY23EguidancemaintainedYoYgrowth22529116816214117Aug2023OperatingprofitRMBmn13961464180622672680LiNing2331HKReiteratedguidanceNetprofitRMBmn88949123116201512618425butweremainedcautiousEPSReportedRMB03603604405706914Aug2023YoYgrowth72106229298218Xtep1368HKAhigh-quality2Q23PEx17819215612099andguidanceunchangedPBx202220191720Jul2023Yield2918304048ROE116112135162180Topsports6110HKInitiationLocalizationandefficiency-ledNetgearing17968192150turnaroundSourceCompanydataBloombergCMBIGMestimates30Jun2023PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk23Aug2023RetailsalegrowthpickedupagaininJul-Aug2023andFY23guidancewasreiteratedXtepsretailsalesgrowthacceleratedtoabouthigh-teensinJul-Aug2023from10inMay-Jun2023Withlowbasein4Q22the20FY23EretailsalesgrowthtargetisnothardtoachieveNewbrandlikeSauconyhasdoneagreatjobandwearelookingforwardtoitsfullpotentialinChinaSMsalesjumpedby120YoYandfirstprofitwasrecordedsincetheset-upoftheJVinFY19TheFY23Etargetasaresultwasraisedfrom60to70retailsalesgrowthManagementalsohighlightedthatthereformforSauconywasthoroughfromproductstobrandingtostoresetcandtheyexpectthefinancialsstarttoexplodeonceitssalesexceededRMB10bnlevelWethinkSauconyisveryclosetothetargetandwouldbeabletoachieveitinjust1-2yearsEarningsrevisionFigure1EarningsrevisionNewOldDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue151031754520012150141742919868060707Grossprofit625873018384616171998259161415EBIT180622672680176121202527267061Netprofitatt115715021829113214031721227063DilutedEPSRMB043905700694043005330653227063Grossmargin41441641941041341604ppt03ppt03pptEBITmargin12012913411712212702ppt08ppt07pptNetprofitattmargin77869175818701ppt05ppt05pptSourceCompanydataCMBIGMestimatesFigure2CMBIGMestimatesvsconsensusCMBIGMConsensusDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue15103175452001215082178102073901-15-35Grossprofit62587301838462507429870401-17-37EBIT1806226726801670206024858210179Netprofitatt115715021829113814071703166774DilutedEPSRMB043905700694043505400656105659Grossmargin4144164194144174200ppt-01ppt-01pptEBITmargin12012913411111612009ppt14ppt14pptNetprofitattmargin77869175798201ppt07ppt09pptSourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE223Aug2023ResultssummaryFigure3ResultsreviewHalfYear1H23EActualHalfyearly1H222H221H232H231H222H221H232H23ECMBIGvsRMBmnYoYYoYYoYEYoYMCMBIRevenue56847247652285803723151863263COGS-3297-4342-3725-5119-3663Grossprofit23872905279734613819171926635GPmargins420401429403421Otherincomegains237793365722152SDexpenses-1046-1644-1510-1600354744-3-113933SDexpsales-184-227-232-186-180Adminexpenses-656-798-636-10983613-338-715-11Adminexpsales-115-110-98-128-113Otheropex00000OperatingprofitEBIT92254398782035-247511031-4OPmargins1627515196163Otheritems00000Netfinanceincome-28-63-74-16-32135Netfinanceincomesales-05-09-11-02-05Profitafterfinancingcosts8934809128041000Associatedcoms-11-15-12-6Jointlycontrolledcoms00000Pre-taxprofit88247991779137-25465993-8Tax-293-155-246-301-318Taxsales-52-21-38-35-50Effectivetaxrate-332-325-268-380-320Minorityinterests-1-86-12Netprofitatt59033166549138-311348673-1NPmargins1044610257106SalesbysegmentMassmarket48986230543072503619111652893Athleisure630773749963365219257243Professionalsports157244344367106951205131310Total56847247652285803723151863263SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE323Aug2023Figure4Resultsreview-FullYearFY22FY23EFY24EFullyearlyRMBmnFY22FY23EFY24EYoYYoYYoYRevenue129301510317545291716COGS-7639-8845-10244Grossprofit529262587301271817GPmargins409414416Otherincomegains317393404SDexpenses-2690-3110-3501421613SDexpsales-208-206-200Adminexpenses-1454-1734-1936221912Adminexpsales-112-115-110Otheropex000OperatingprofitEBIT14641806226752326OPmargins113120129Otheritems-12-719Netfinanceincome-91-91-94Netfinanceincomesales-07-06-05Profitafterfinancingcosts136117092192Associatedcoms000Jointlycontrolledcoms000Pre-taxprofit13611709219262628Tax-449-547-680Taxsales-35-36-39Effectivetaxrate-330-320-310Minorityinterests-9511Netprofitatt9221157150212630NPmargins717786SalesbysegmentMassmarket111281268014567261415Athleisure140317112030442219Professionalsports400711948997833Total129301510317545291716SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE423Aug2023OperatingnumbersFigure5SportswearbrandssalesgrowthtrendOperatingnumbers1Q202Q203Q204Q201Q212Q213Q214Q211Q222Q223Q224Q221Q232Q23E3Q23E4Q23ENikeChinasales-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-Nov2018PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE523Aug2023AssumptionsFigure6MajorassumptionsMajorassumptionsFY21AFY22AFY23EFY24EFY25ESalesbysegmentRMBmnShoes5928776091621074112344Apparels38874897563164767318Accessories198273309327350Total1001312930151031754520012SalesbysegmentgrowthShoes175309181172149Apparels312260150150130Accessories2253831306070Total225291168162141SalesbysegmentRMBmnMassmarket884111128126801456716474Athleisure9711403171120302315Professionalsports2014007119481223Total1001312930151031754520012SalesbysegmentgrowthYoYMassmarket245259139149131Athleisure-28445220186140Professionalsports1803990778333290Total225291168162141SalesnetworkXtep47224493462847674910Xtepkids11791520167217891878Overseastores250300300300300Total61516313660068567088GPmargins417409414416419OpexbreakdownAPsales102119126121121Staffcostssales111113109104104RDsales2523242626DAsales1719161514Provisionswritebackssales-0204030202Rentalsales0101040404Sellingdistributioncostssales189208206200199Adminexpensessales119112115110109Total308320321310308OPmargins139113120129134Effectivetaxrate309330320310300Netprofitattmargins9171778691Netprofitattgrowth77115255298218SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE623Aug2023ValuationFigure7Peersvaluationtable3yrs12mUpPBROEYieldYTDPriceMktCapYearPExPEGTPDown-xperfxCompanyTickerRatingLCLCsideHKmnEndFY1EFY2EFY2EFY1EFY1EFY1EFY1EHsharesSportswearXtepIntl1368HKBUY11417754720448Dec-22156120211140632108AntaSports2020HKBUY10797852027241340Dec-22228191512181320167LiNing2331HKBUY529736454596084Dec-22199165321681519462361Degrees1361HKNRna390na8064Dec-228169081090544171Topsports6110HKBUY9006723441672Feb-23157132371800856111PouSheng3813HKNRna068na3622Dec-2267450446013693ChinaDX3818HKNRna028na1619Mar-235143021200156113Avg13410922121075294Med156120211140636108InternationalSportswearNikeIncNKEUSNRna10146na1217104May-232712311103461714133AdidasADSGYNRna17424na265751Dec-22na41068220004367PumaPUMGYNRna5962na76194Dec-2224318233128121451UnderArmourUAAUSNRna720na23920Mar-23144116152082800291LululemonLULUUSNRna37942na378004Jan-233182771123191000184SkechersSKXUSNRna5015na60850Dec-22148122181310600195VfCorpVFCUSNRna1896na57808Apr-23938123390163313ColumbiaCOLMUSNRna7388na35526Dec-22161138221622417156WolverineWWWUSNRna809na5044Dec-2217453175650150260MizunoCorp8022JPNRna469500na6725Mar-2312011010902816669AsicsCorp7936JPNRna498500na51012Dec-22308266501581511711Avg1981814490081793Med16713823131101451SourceBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE723Aug2023Figure8Forward12MPEvaluationbandSourceBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE823Aug2023FinancialSummaryINCOMESTATEMENT2020A2021A2022A2023E2024E2025EYE31DecRMBmnRevenue81721001312930151031754520012Costofgoodssold49735835763988451024411628Grossprofit319841785292625873018384Operatingexpenses258830814144484454376164Sellingexpense153718912690311035013988Adminexpense8279371155137214791656RDexpense223252299362456520Others000000Operatingprofit91813961464180622672680Otherincome307299317393404460ShareoflossesprofitsofassociatesJV17461271949EBITDA99614801597197424502875Depreciation6471107127131133Otheramortisation141326405261Interestincome42125262320Interestexpense14485117117117117Otherincomeexpense000000Pre-taxprofit76212871361170921922632Incometax257397449547680790Minorityinterest819951113Netprofit505889912116215131842BALANCESHEET2020A2021A2022A2023E2024E2025EYE31DecRMBmnCurrentassets90271043211484124741367314926Cashequivalents347239303071267323001973Accountreceivables323635284556532161827051Inventories97514971960227026292984Prepayment89914431863217625282883STbankdeposits4373333333333Othercurrentassets811111Non-currentassets354441834491484552955850PPE79611191464186623492916InvestmentinJVsassos218365352345364413Intangibles709671642599545482Othernon-currentassets182020282032203520372038Totalassets125721461515975173191896820776Currentliabilities333440535092581066367458Short-termborrowings642405405405405405Accountpayables147923523079356641304688Taxpayable86123123123123123Othercurrentliabilities112711731485171719782242Non-currentliabilities193925802580258025802580Long-termborrowings151613751375137513751375Othernon-currentliabilities42312051205120512051205Totalliabilities5273663376728391921610038Sharecapital222323232323Retainedearnings467150205185576465157429Otherreserves260529403104314632073266Totalshareholdersequity7299798283138933974510718Minorityinterest0094720Totalequityandliabilities125721461515975173191896820776PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE923Aug2023CASHFLOW2020A2021A2022A2023E2024E2025EYE31DecRMBmnOperatingProfitbeforetaxation76212871361170921922632Depreciationamortization7884132168183195Taxpaid325329449547680790Changeinworkingcapital320447872669746758Others1251071271949Netcashfromoperations3207011856689301230InvestingCapitalexpenditure207414453529614700Acquisitionofsubsidiariesinvestments430000Others784890000Netcashfrominvesting573329453529614700FinancingDividendpaid279356591537689856Netborrowings773120000Proceedsfromshareissues3700000Sharerepurchases600000Others557640000Netcashfromfinancing38096591537689856NetchangeincashCashatthebeginningoftheyear297034723930307126732300Exchangedifference11110000Others513469859398373327Cashattheendoftheyear347239303071267323001973GROWTH2020A2021A2022A2023E2024E2025EYE31DecRevenue01225291168162141Grossprofit99306267183167148Operatingprofit25652149234255182EBITDA24648679236241174Netprofit31076126274302218PROFITABILITY2020A2021A2022A2023E2024E2025EYE31DecGrossprofitmargin391417409414416419Operatingmargin112139113120129134EBITDAmargin122148123131140144ReturnonequityROE71116112135162180GEARINGLIQUIDITYACTIVITIES2020A2021A2022A2023E2024E2025EYE31DecNetdebttoequityx020201000000Currentratiox272623212120Receivableturnoverdays144512861286128612861286Inventoryturnoverdays715937937937937937Payableturnoverdays108514711471147114711471VALUATION2020A2021A2022A2023E2024E2025EYE31DecPE31617819215612099PEdiluted31617819215612099PB232022201917PCFPS2002721325285204154Divyield462918304048EV179876183136198536202515206246209512EVSales221815131210EVEBITDA1811241241038473SourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1023Aug2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBISwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE11