研究报告全文：25Sep2023CMBInternationalGlobalMarketsEquityResearchEconomicPerspectivesMacroInsightsUSRMBoutlookamideconomicasynchronicityUSRMBrateschangeintandemwithUS-SinointerestratedifferentialsastheBingnanYEPhDtwovariablesbothreflecteconomicasynchronicityinthetwolargesteconomies85237618967ThelatestcyclewithstrongUSdollarandweakrenminbiwasduetostrongeryebingnancmbicomhkeconomyintheUSthaninEuropeandChinaandhighergeopoliticalrisksaftertheRussia-UkrainewarLookingforwardrenminbimayremainweakinneartermFrankLiu85237618957beforemildappreciationin2024NextyearUS-SinointerestratedifferentialsfrankliucmbicomhkmayshrinkasUSnominalGDPgrowthgraduallydeclinesandChinasnominalGDPgrowthslowlyreboundsUSRMBratesareexpectedtoreach72atend-2023and70atend-202474FactorsinfluencingUSdollarindexthedynamicsintherelativestrength72ofUSeconomyandriskaversionsentimentinglobalmarketWhentheUS70economyperformsbetterthanothereconomiesUSdollartendstoappreciate68WhenriskaversionsentimentrisesUSdollartendstostrengthenSince66EURUSrateisthelargestcomponentinUSdollarindexeconomic64asynchronicitybetweenUSandEurozoneandgeopoliticalrisksrelatedto62EuropehasasignificantinfluenceonUSdollarindex6020162022201020112012201320142015201720182019202020212023FactorsinfluencingUSRMBrateUS-Sinoeconomicasynchronicityand2009geopoliticalrisksespeciallyrelatedtoChinaUSRMBrateshaveastrongerCNYcorrelationwithUS-Sinoshort-terminterestratedifferentialsthanwithlong-SourceWindCMBIGMtermonesUS-SinotensionsespeciallyoverChineseTaiwanissuecould115indexnoticeablyweakenrenminbiwhilestrengtheningUSdollar110ThelatestcyclewithstrongUSdollarweakrenminbistrongereconomyintheUSthaninEuropeChinahighergeopoliticalrisksaftertheRussia-105UkrainewarandincreasingconcernsaboutgeopoliticaltensionsinTaiwan100Strait95OutlookforUSdollarRMBratesaheadAstheUSeconomyandinflation90remainsresilientorstickyinneartermUSdollarmayremainstronginnext85severalweeksHoweverthedollarmayweakenin2024whentheUS20162017201820192020202120222023economyandinflationgraduallyslowsIftheRussia-UkrainewarcouldendinCFETSRMBindexUSindex2024marketsentimentforEurozoneeconomyandtheEurowouldbeSourceWindCMBIGMsignificantlyboostedRenminbimayremainweakinneartermbeforemildappreciationin2024PossibleweakeningofUSdollarandagradualrecoveryofChinaseconomyshouldprovidesomesupporttorenminbiScenarioAnalysisonUSRMBratesatend-20243MLibor-USGDPChinaGDPScenariosShiborUSRMBgrowthgrowthdifferentialsS1USmildslowdownChinamoderaterecovery1549235710S2USsharpslowdownChinamoderaterecovery0848165690S3USmildrecessionChinamoderaterecovery0147070665S4USmildslowdownChinatepidgrowth1442260725S5USsharpslowdownChinatepidgrowth0741190705S6USmildrecessionChinatepidgrowth0040095685SourceWindCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk25Sep2023WhatfactorswillinfluenceUSdollarindexThemovingtrendofUSdollarindexreflectsthedynamicsintherelativestrengthofUSeconomyandriskaversionsentimentinglobalmarketWhentheUSeconomyperformsmorestronglythanothereconomiesUSdollarindextendstoincreaseChangesofriskaversionsentimentinglobalmarketalsohaveanimpactonUSdollarindexUSdollarisasafehaveninglobalmarketwiththedominateroleininternationalmonetarysystemGlobalinvestorsconsidertheUSasthesafestplacetoinvestWhenriskaversionsentimentrisesinvestorstendtosellothercurrenciestobuyUSdollarandtheUSdollarindexwillincreaseEconomicasynchronicityordivergencebetweentheUSandEurozonehasasignificantimpactonUSdollarindexUSdollarindexisameasureofthedollarsvalueagainstsixmajorcurrenciestheeuroJapaneseyenBritishpoundCanadiandollarSwedishkronaandSwissfrancTheeuroisthelargestcomponentwithitsweightat576andtheremainingfivecurrenciesrespectivelyaccountedfor136JPY119GBP91CAD42SEKand36CHFintheindexDuetothehighweightoftheEURUSrateintheUSdollarindexeconomicpolicydivergenceinEurozoneandtheUShasthegreatestimpactontheUSdollarindexWhentheUSeconomygrowsstrongerthantheEurozoneeconomytheFedwilladoptatighterpolicythantheECBThentheUS-EurozoneinterestspreadswillincreaseandtheUSdollarindextendstoincreaseAccordingtoourcalculationusingweeklydatain2005-8M23thesimplecorrelationcoefficientsofUSdollarindexwith3MLibor-EuribordifferentialsUS-Eurozone2YT-bondratedifferentialsand10YT-bondratedifferentialsrespectivelyreachedaround074079and070GeopoliticalrisksespeciallythoserelatedtoEuropetendtoweakentheEuroandstrengthenUSdollarindexEurozoneeconomyismorefragiletoexternalgeopoliticalshocksthantheUSeconomyduetoitshigherdependenceonforeigntradeandcross-borderinvestmentInadditionUSdollarcanbenefitfromtheflight-to-safetyeffectwhengeopoliticalrisksarehighFromtheperspectiveofbalanceofpaymentscapitalflowhasamoresignificantinfluenceonexchangeratesthantradeflowdoesastheformeraccountforover80ofdailyforextradeintheglobalmarketWenoteUSdollarindexhasasimilartrendlikefinancialaccountbalanceinUSsannualBOPFigure1US-globalgrowthgapandUSdollarindexFigure2USGDPasofWorldGDPanddollarindexpptindexindex3150361602140341303211303012002811012610010024290223802070470199119971971197319751977197919811983198519871989199319951999200120032005200720092011201320152017201920212016201820202022198219841986198819901992199419961998200020022004200620082010201220141980USGDPasofworldGDPnextyearLHSUS-globalGDPgrowthgapLHSUSdollarindexRHSUSdollarindexRHSSourceWindCMBIGMestimatesSourceWindCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE225Sep2023Figure3UScurrentaccountandfinancialaccountFigure4USEURindexandUS-EurozonespreadasofGDPindexindex8160115361501102414010512130100120009511090211008524908068075387070420062010201420182005200720082009201120122013201520162017201920202021202220231994199620141986198819901992199820002002200420062008201020122016201820202022CurrentaccountbalanceLHSUSdollarindexLHSFinancialaccountbalanceLHSUSEURindexLHSUSdollarindexRHSUS-Eurozone2YT-bondratedifferentialsRHSSourceWindCMBIGMestimatesSourceWindCMBIGMestimatesFigure5USEurozoneGDPGrowthFigure6USEurozoneCompositePMIYoY2YCAGRfor2Q20-1Q21index57031601503540793011201315102023201920202021202220202019202120222023USGDPEurozoneGDPUSEurozoneGermanyFranceSourceWindCMBIGMestimatesSourceWindCMBIGMestimatesWhatfactorswillinfluenceUSRMBratesUSRMBrateschangeintandemwithUS-SinodifferentialsininterestratesastheyarebothdeterminedbytheeconomicasynchronicityordivergenceinthetwocountriesWhenChinaseconomybecomesstrongerthanitsUScounterpartthePBOCwouldadoptatighterpolicythantheFedUS-SinointerestratedifferentialsandUSRMBratestendtodeclineWhenChinaseconomybecomesweakerthantheUSthePBOCspolicyshouldbemoreaccommodativethantheFedsUS-SinointerestratedifferentialsandUSRMBratestendtoincreaseUSRMBrateshaveastrongercorrelationwithUS-Sinoshort-terminterestratedifferentialsthanwithlong-termonesBasedonourcalculationusingweeklydatain2014-8M23thesimplecorrelationcoefficientsofUSRMBrateswith3MLibor-ShibordifferentialsUS-Sino2YT-bondratedifferentialsand10YT-bondratedifferentialsrespectivelyreachedaround075065and045Ifweuseannualdatain2007-2022thesimplecorrelationcoefficientswererespectivelyat087081and061Currenteconomicconditiondeterminesshort-terminterestratesasthecentralbankfixespolicyrateswhichareoftenovernightor7DinterbankratesLong-termratesreflectbothcurrenteconomicconditionaswellasexpectationsaboutfutureeconomicprospectIftheexpectationsareadaptivecurrenteconomicconditionhasamoreimportantinfluenceonlong-termratesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE325Sep2023Wenoteasynchronizationbetween10YT-bondratesandnominalGDPgrowthintheirmovingtrendinboththeUSandChinaGeopoliticalrisksespeciallythoserelatedtoChinahaveanimportantinfluenceonUSRMBratesUSdollarisasafehavenasmostglobalinvestorsthinktheUSisthesafestplacetoinvestRenminbiremainsariskyassetinglobalmarketWhengeopoliticalrisksincreaseUSdollartendstostrengthenagainstrenminbiInparticulargeopoliticalrisksrelatedtoChinalikeUS-SinotensionsoverChineseTaiwanissuecouldnoticeablyweakenrenminbiwhilestrengtheningUSdollarThereisnosignofdirectexchangerateinterventionusingofficialFXreservesasthePBOCsFXpositonhasremainedstablesince2017HoweverthecentralbankmaintainssomemanagementoverFXmarketexpectationsthroughcentralparityrateverbalinterventionFXdepositRRRadjustmentandwindowguidanceforlargebanksThosepolicytoolscouldhavesomeeffectsintheshorttermasthereisamantraintheFXmarketdontfightagainstthecentralbankHowevertheycanhardlychangethetrendofUSRMBratesinthemediumtermwhicharedeterminedbyeconomicfundamentalsTheMudell-FlemingtrilemmaindicatesonecountrycanonlyachieveonesideofthetrilemmatrianglewithtwoofthethreeoptionsautonomousmonetarypolicyfreecapitalflowandafixedexchangerateThePBOCclearlyknowsexchangerateflexibilityisthekeyforChinatomaintainautonomousmonetarypolicytosupportdomesticeconomictargetsThePBOCstargetisnottochangethetrendofrenminbibuttoavoidpossibledisorderlyovershootingorinstabilityriskinthemarketThecentralbankhassomefearsoffloatingasChinahasalargepoolofrenminbisavingsseekingfordiversificationandalargenumberofimmatureindividualinvestorswithsevereherdingbehaviorInadditionChineseenterpriseshaveforeigncurrencyliabilityandexchangerateriskmanagementproductsarenotsufficientlydevelopedToavoidpossiblecapitaloutflowriskstriggeredbyrenminbidepreciationthePBOCmaintainscarefulmanagementoverbothcapitalaccountandrenminbiexchangerateFigure7USRMBratesinterestdifferentialsFigure8Scatterplotwithquarterlydatain2015-3Q23USRMBppt74USRMB765y01237x6839474R064257237227070106868166662643644625626062014201620182020202260USRMBRHS54321012US-Sino3MLibor-ShibordifferentialsLHS3MLibor-ShibordifferentialspptSourceWindCMBIGMestimatesSourceWindCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE425Sep2023Figure9USnominalGDPgrowthandinterestratesFigure10Chinanominalgrowthandinterestrates1225701020608506154401023050202010465008202420232022202120202019201820172016201520142013201220112010200920082007NominalGDPGrowthLHS3MShiborLHS19982006202419861988199019921994199620002002200420082010201220142016201820202022NominalGDPGrowth3MLibor10YT-bondrates10YT-bondratesRHSSourceWindCMBIGMestimatesSourceWindCMBIGMestimatesFigure11USRMBratescapitalflowtoChinaFigure12Sino-USinterestspreadscapitalinflowUSbnpptUSbn15074350100722305070100150681010066015030642001502506230060270201020112012201320142015201620172018201920202021202220232014201820222015201620172019202020212023Sino-US10YT-bondratedifferentialsLHSFinancialaccountomissionerrorLHSUSRMBRHSNetforeignreceiptinFARHSSourceWindCMBIGMestimatesSourceWindCMBIGMestimatesFigure13PBOCsFXpositionFigure14TheMudell-FlemingtrilemmaRmbtrn30independentMP252015105020052014201820042006200720082009201020112012201320152016201720192020202120222023PBOCsforexassetfreecapitalflowfixedexchangerateSourceWindCMBIGMestimatesSourceWindCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE525Sep2023ReasonsforstrongUSdollarweakRMBinthelatestcycleFirstlytheUSeconomyhasbeenstrongerthanmostothereconomiesUSeconomicgrowthhascontinuedtobeatexpectationsthisyearwithadeclineofrecessionriskThelabormarkethasremainedtightwithstablegrowthofhouseholdincomeandconsumptionInflationhasgraduallydeclinedbutremainedabovetheFedstargetTherecentFedmeetingindicateshigherinterestratesforlongerinfutureSecondlyEurozoneeconomyhasbeenweakasitslargesteconomyGermanymayseearecessionthisyearTheRussia-UkrainewarhascausedsupplychaindisruptionsandstagflationpressureasEurozoneusedtorelyonRussiaforenergysupplyTheECBspolicytighteningafterhighinflationhasalsodampenedeconomicgrowthinEurozoneInvestorsbelieveEurozoneeconomyismorefragiletoenergyinflationandhighinterestratesthanUSeconomyThirdlyChinaseconomyhasbeenweakerthanexpectedashousingmarkethasslumpedbusinessandhouseholdconfidencehasremainedlowandexportshaveshrunkDespitecontinuouspolicylooseningChinashousingmarketcontinuedtoslumpinsummerseasonPrivatebusinesssentimentremainedlowasmanufacturingPMIwasstillincontractionaryrangeandentrepreneurswerecautioustoincreaseborrowingsforcapexandemploymentexpansionHouseholdconfidencewasalsoweakasconsumptionrecoveredveryslowlyChinasexportscontinuedtodeclineasglobalconsumersshiftedfromgoodsconsumptiontoserviceconsumptionandwesterncountriestriedtodiversifytheirsupplychainsbeyondChinaChinascentralbankfacespressureforadditionalpolicyratecutFinallyyetimportantlytheRussia-UkrainewarandUS-SinotensionsoverChineseTaiwanissuehaveweakenedEuroandrenminbibyincreasinggeopoliticalrisksTheRussia-UkrainewarhasworsenedeconomicprospectandsecurityconditioninEuropeandaflighttosafetyhasdampenedEurowhilestrengtheningUSdollarTheRussia-UkrainewarhasalsoworsenedtherelationshipbetweenChinaandwesterncountriesandincreasedinvestorsconcernaboutgeopoliticalrisksrelatedtoTaiwanStraitMultinationalcompaniesacceleratedsupplychaindiversificationwithChina1strategywhileChineseenterprisesandindividualsincreasedoutwardinvestmenttoavoidalleggsinonebasketBothUSdollarandgoldgainedmuchfromtheriseofgeopoliticalrisksandtheweakeningoftheEuroaftertheRussia-UkrainewarTakegoldasanexamplethecurrenthighgoldpriceincludesapremiumduetothegeopoliticalrisksandweakEuroBasedonourresearchreal-termyieldsofUS10YT-bondscouldexplainover95ofgoldpricefluctuationsin2018-2021Asthereal-termyieldsrosesharplyfrom-1atend-2021to21inthepastfewweeksgoldpricewassupposedtodropfromUS1800ouncetobelowUS1000ouncebutitremainedaboveUS1900ouncePLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE625Sep2023Figure15CitigroupEconomicSurpriseIndexFigure16USjobvacancyratioandwagegrowthindexmonthlyX3YoY725020061501002550045010013150200225030001200220042006200820102012201520172019202120192021202220232020VacancytounemploymentratioLHSUSEuropeChinaLaborcompensationgrowthRHSSourceWindCMBIGMestimatesSourceWindCMBIGMestimatesFigure17USCoreCPIGrowthFigure18ChinasretailsalesFAIexportsYoYYoY2YCAGRfor20212YCAGRforretailsalesfromMar2023142512201015810654025010215202018201620172019202020212022202325CoreCPIServiceexcludingrent20192020202120222023CoregoodsRentRetailsalesFAIExportsofgoodsSourceWindCMBIGMestimatesSourceWindCMBIGMestimatesFigure19ChinasVAIOServiceoutputindexFigure20US10-Yreal-termratesandgoldpriceYoY2YCAGRfor2021andfromMar2023USounce10422002000318005216001400101200010008001560024001020162007200820092010201120122013201420152017201820192020202120222023US10Yreal-termratesLHS1520192020202120222023GoldpriceRHSVAIOServiceoutputindexGoldpriceexplainedbyUS10Yreal-termratesRHSSourceWindCMBIGMestimatesSourceWindCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE725Sep2023OutlookforUSdollarRMBratesinnextfourquartersUSdollarislikelytoremainstronginnextseveralweeksbeforepossibleweakeningin2024TherearetwokeyfactorsthatdeterminethefuturetrendofUSdollarindexOnefactoristhedynamicsofUSeconomicgrowthanddisinflationUSeconomicgrowthmayremainresilientwithCPIYoYgrowthstayingatabove3innextthreemonthsHighinterestratesmaylastforawhileHoweverstickyinflationtightlabormarketandhighinterestrateswillcontinuetohurttheUSeconomywithrisingcostdeclininglaborproductivityandtighteningcreditconditionUSeconomicgrowthandinflationisexpectedtonoticeablyslowin2024whenthestrongUSdollarmayfaceaturningpointTheotherfactoristhedynamicsoftheRussia-UkrainewarandEurozoneeconomyIftheRussia-Ukrainewarcouldendin2024marketsentimentforEurozoneeconomyandtheEurowouldbesignificantlyboostedRenminbimayremainweakinneartermbeforemildappreciationin2024WeexpectUSRMBtoreach720atend-2023and70atend-2024ForonethingUSdollarmayremainstronginnextseveralweeksbeforepossibleweakeningin2024andrenminbiisgenerallyoppositetoUSdollarinthemovingtrendFortheotherChinaseconomymaybraceforamoderaterecoverycyclewithapossibleimprovementofSino-USrelationshipinnextfourquartersChinesepolicymakerswillcontinuetoloosenpropertypoliciesandexpandcreditsupplyuntiltherealestatemarketstabilizesMeanwhileemploymentconditionandhouseholdconfidencemaygraduallyimproveaslabor-intensiveservicesectorscontinuetorecoverInadditionSino-USrelationshipmayseesomeimprovementatleasttemporarilyChinesepolicymakerswanttolowergeopoliticalrisksinTaiwanStraittorestorebusinessconfidenceandreducecapitaloutflowpressureUSgovernmentwantstoextendtheeconomicexpansioncycleandrelievepressureforbusinessesbyshiftingfromdecouplingtosmallyardhighfenceonChinaThestrongUSdollarwithhighinterestrateshasseverelydepressedglobalfinancialmarketsThediscountofemergingmarketstocksrelativetotheUSstockshasreachedhistoricalhighHKstockmarkethasalsofacedliquiditypressureduetoahighproportionofUSdollarfundsinthemarketthelinkageofHKdollarinterestrateswithUSdollarinterestratesunderthelinkedexchangeratesystemaswellaslowriskaversionsentimentamidUS-SinotensionsHangSengindexhasastrongcorrelationwithUSRMBrateastheyarebothinfluencedbyChinasbusinesscycleUSdollarliquiditycycleandgeopoliticalrisksarerelatedtoSino-USrelationshipespeciallyIfUSdollarcouldturnweakwithreboundsonrenminbiin2024HKmarketsentimentwilldefinitelyimprovePLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE825Sep2023Figure212YT-bondratesprecedefedpolicyratesFigure22FinancingcostsofUSprivatesector101891681471265104836241022019202020082009201020112012201320142015201620172018202120222023201719901993199619992002200520082011201420202023Fedfundrate2YT-bondrateBBcorporatebonds30Yfixed-ratemortageLPRsSourceWindCMBIGMestimatesSourceWindCMBIGMestimatesFigure23UStermspreadsandrecessionprobabilityFigure24USM2andcreditgrowthYoY4803037025260205011540010301205210030520012003200620092011201420172019202220132018201420152016201720192020202120222023US10Y3MtermspreadsLHS2012Recesionprobability12monthaheadRHSM2supplyBankscreditsupplyConsumercreditSourceWindCMBIGMestimatesSourceWindCMBIGMestimatesFigure25ChinahousingsalesrecoveryratiosFigure26Chinasunemploymentratehousingrentcomparedto2019growthYoY200653180216060140112055100080506014020452201820192020202120222023UrbansurveyedunemploymentrateLHS2020-072020-092020-112021-012021-032021-052021-072021-092021-112022-012020-012020-032020-052022-032022-052022-072022-092022-112023-012023-032023-052023-072023-09Tier1citiesTier2citiesTier3citiesHousingrentgrowthRHSSourceWindCMBIGMestimatesSourceWindCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE925Sep2023Figure27US-SinonominalGDPgrowth10YT-bondFigure28MSCIChinaindexCRBindustrialmetalratedifferentialsindexpptpptnaturallogarithmofnaturallogarithmof1020indexindex5751551005700004056551015360102025153025520082012201620202005200620072009201020112013201420152017201820192021202220233Q131Q173Q201Q131Q143Q141Q153Q151Q163Q163Q171Q183Q181Q193Q191Q201Q213Q211Q223Q221Q233Q24F1Q24F3Q23FMSCIChinaindexLHSUS-SinonominalGDPgrowthdifferentialsLHSCRBindustrialindexRHSUS-Sino10YT-bonddifferentialsRHSCRBmetalindexRHSSourceWindCMBIGMestimatesSourceWindCMBIGMestimatesFigure29USDollarEMstockpremiumtoUSstockFigure30USHKDrateLibor-Hibordifferentialsindexindexbps120350791801157811030078120105250781007860952007890780851507880100757860705078781202013201520032005200720092011201720192021202320152022201720182019202020212023USindexLHS2016MSCIEMSP500premiumindexRHSUSHKDLHS3MLibor-HibordifferentialsRHSSourceWindCMBIGMestimatesSourceWindCMBIGMestimatesFigure31StrongcorrelationbetweenHangSengFigure32EMvolatilitynorthboundinflowtoAindexUSRMBratesharesindexindexRmbbndailyaverage60107434000558507262900045470403526824000300252662019000154641062018201920202021202220236214000201820192020202120222023EmergingmarketETFvolatilityindexLHSUSRMBLHSHangsengindexRHSNorthboundinflowtoAsharesRHSSourceWindCMBIGMestimatesSourceWindCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1025Sep2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBIGMwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE11