www.dbsvickers.com ed-TH / sa- AH Auto sales to remain weak in 3Q July auto sales continued to slow, magnitude of declines larger than in June Passenger vehicle (PV) sales dipped by c.6.6%; commercial vehicle (CV) sales fell nearly 10% y-o-y SUV the only segment recording volume sales growth but price competition is intensifying Top pick is Minth (425 HK); a weaker RMB is expected to benefit its export sale. Automakers are facing pressure due to a weak 3Q Auto sales weakness worse than expected; possible improvement in 4Q. Concerns on the health of the Chinese economy and a volatile stock market continue to weigh on China’s auto sales. Last month, total sales volume fell by 7.1% y-o-y, the largest drop in the past two years. Both PV and CV recorded declines, of 6.6% and 9.9% in July respectively. The Chinese government’s effort to stem further weakness in the economy may ease the macro concerns, which should help to stabilise the auto market. We expect volume sales to see some improvements in 4Q as the industry enters the traditional peak sales season. Due to the slow YTD sales performance, we have revised down our PV volume growth assumption from the previous 8% to about 6% for this year. Overall, the vehicle market is expected to post a slower growth of 3% vs 6.8% last year. PV hit by sharp decline in sedan sales. The sedan market has been weak this year, recording the biggest drop of 19.7% last month. The SUV market is the only strong segment with a 34% y-o-y expansion in July. The Chinese PV brands performed better, expanding by 5.1% last month with a 39% market share. Sales of foreign PV brands were weak, and we expect to see more price competition from the sino-foreign JV brands. Macro weakness hitting CV segment. Sales of CV have been weak since Apr-14 and last month, it contracted by 9.9%. For 7M15, total CV sold fell by 13.7%. The truck segment is the hardest hit, which we attribute to the slowdown of the Chinese economy. We expect total CV sales to decline by at least 10% this year. In 2014, it fell by 6.8%. HSI : 24,498 ANALYST Rachel MIU +852 2863 8843 [email protected]Recommendation & valuation FY15 Upside PE HK$ HK$ % x US$m Auto manufacturers Brilliance China (1114 HK)* 10.46 15.30 46 Hold 7.3 6,786 Dongfeng Motor (489 HK) 9.30 15.70 69 Buy 4.6 10,337 Geely Auto (175 HK)* 3.21 3.70 15 Hold 9.1 3,643 Great Wall Motor (2333 HK)* 24.95 48.10 93 Hold 5.6 9,791 Guangzhou Auto (2238 HK) * 6.44 8.30 29 Buy 7.2 5,345 BAIC Motor (1958 HK)^ 6.72 n.a. n.a. NR 6.7 6,584 CQ Changan 'B' (200625 CH)^ 14.30 21.80 52 NR 5.2 8,602 SAIC Motor 'A' (600104 CH)^ 20.06 n.a. n.a. NR 7.3 35,613 Auto dealers China ZhengTong (1728 HK)* 3.87 5.50 42 Buy 6.4 1,103 Dah Chong Hong (1828 HK) 3.58 4.95 38 Buy 7.1 846 ZhongSheng (881 HK)* 4.37 6.70 53 Buy 5.9 1,211 Auto parts & components Minth Group (425 HK) 15.76 19.10 21 Buy 10.9 2,246 Nexteer Automotive (1316 HK)* 6.93 9.30 34 Buy 10.7 2,233 Xinchen China (1148 HK)* 2.40 4.40 83 Buy 6.6 399 Xingda Int'l (1899 HK)^ 2.04 n.a. n.a. NR 9.4 397 Mkt Cap Company Price Target Price Recom # ^ Consensus * TP & Rating under review # Fair value Source: Thomson Reuters, DBS Vickers DBS Group Research . Equity 12 August 2015 China / Hong Kong Industry Focus China Auto Sector Refer to important disclosures at the end of this report
19
Embed
China / Hong Kong Industry Focus China Auto Sectorpg.jrj.com.cn/acc/Res/CN_RES/INDUS/2015/8/12/98765cd3-8ae6-4f40-9...Industry Focus China Auto Sector Page 2 Expect auto market to
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
www.dbsvickers.com
ed-TH / sa- AH
Auto sales to remain weak in 3Q
July auto sales continued to slow, magnitude of declines larger than in June
SUV the only segment recording volume sales growth but price competition is intensifying
Top pick is Minth (425 HK); a weaker RMB is expected to benefit its export sale. Automakers are facing pressure due to a weak 3Q
Auto sales weakness worse than expected; possible improvement in 4Q. Concerns on the health of the Chinese economy and a volatile stock market continue to weigh on China’s auto sales. Last month, total sales volume fell by 7.1% y-o-y, the largest drop in the past two years. Both PV and CV recorded declines, of 6.6% and 9.9% in July respectively. The Chinese government’s effort to stem further weakness in the economy may ease the macro concerns, which should help to stabilise the auto market. We expect volume sales to see some improvements in 4Q as the industry enters the traditional peak sales season. Due to the slow YTD sales performance, we have revised down our PV volume growth assumption from the previous 8% to about 6% for this year. Overall, the vehicle market is expected to post a slower growth of 3% vs 6.8% last year.
PV hit by sharp decline in sedan sales. The sedan market has been weak this year, recording the biggest drop of 19.7% last month. The SUV market is the only strong segment with a 34% y-o-y expansion in July. The Chinese PV brands performed better, expanding by 5.1% last month with a 39% market share. Sales of foreign PV brands were weak, and we expect to see more price competition from the sino-foreign JV brands.
Macro weakness hitting CV segment. Sales of CV have been weak since Apr-14 and last month, it contracted by 9.9%. For 7M15, total CV sold fell by 13.7%. The truck segment is the hardest hit, which we attribute to the slowdown of the Chinese economy. We expect total CV sales to decline by at least 10% this year. In 2014, it fell by 6.8%.
^ Consensus * TP & Rating under review # Fair value Source: Thomson Reuters, DBS Vickers
DBS Group Research . Equity 12 August 2015
China / Hong Kong Industry Focus
China Auto Sector Refer to important disclosures at the end of this report
Industry Focus
China Auto Sector
Page 2
Expect auto market to stay weak in 3Q; expect improvement in 4Q
The Chinese auto market has posted several months’ of sales contraction since Apr-15. According to China Association of Automobile Manufacturers, total sales volume fell by 7.1% y-o-y to 1.5m units in July, the largest drop in the past two years. For 7M15, auto sales in China inched up a mere 0.4%, one of the weakest periods so far. As expected, automakers cut production last month to ease the inventory pressure. Total units produced shrunk by 11.8% y-o-y to about 1.52m units compared to a sales volume of 1.5m units. We also saw the inventory alert index dipping to 53.4% last month compared to 64.6% in June. The SUV segment continued to hog the limelight, indicating that the overall SUV market is still in a robust state. However, we expect price competition to intensify with automakers trying to outsell rivals this year. So far this year, the SUV price index has fallen by c.4ppts.
SUV price index
75
80
85
90
95
100
105
Feb-
07Ju
n-07
Oct
-07
Feb-
08Ju
n-08
Oct
-08
Feb-
09Ju
n-09
Oct
-09
Feb-
10Ju
n-10
Oct
-10
Feb-
11Ju
n-11
Oct
-11
Feb-
12Ju
n-12
Oct
-12
Feb-
13Ju
n-13
Oct
-13
Feb-
14Ju
n-14
Oct
-14
Feb-
15Ju
n-15
Jan-07 = 100
Source: CEIC
Revised down 2015 auto sales projections. The Chinese government’s effort to stem further weakness in the economy may help ease the macro concerns, which should help to stabilise the auto market in China. We expect volume sales to see some improvement in 4Q as the industry enters the traditional peak sales season. Due to the slow YTD sales performance, we have revised down our PV volume growth assumption from the previous 8% to about 6% this year, and total volume sales (including commercial vehicle) at 3%.
Our recommendations
F/X impact and top pick. We prefer Minth (425 HK) as the company derives about 40% of its sales from overseas customers while most of its production costs are in RMB. Notwithstanding the translation impact on US dollar assets and liabilities, a weaker RMB could boost its export competitiveness. A 5% change in RMB against the foreign currency could translate into about 8% impact on post-tax profits.
On the other hand, we expect Nexteer (1316 HK) to post some FX losses, given that about 20% of its revenue is derived from Europe and the depreciation of the euro against the USD would hit its profitability. We estimate a 10% movement in USD against the euro to translate into about 4-5% impact on post-tax profits. This also partly explains the recent weakness in its share price.
Awaiting for better guidance following interim results. All the auto companies will release their interim results this month. There will be better clarity on the individual auto companies with respect to profit margins and volume sales outlook for 2H. At present, we expect Geely and GAC to meet 1H earnings expectations. For the auto dealerships, we foresee the weakness in new car sales gross margins to drag on their 1H profits.
Industry Focus
China Auto Sector
Page 3
Monthly vehicle sales
'000 units J ul/14 J un/15 J ul/15 YoY
growth(%)
MoMgrowth
(%)
7M14 7M15 YTD YoYgrowth
(%)
As a % oftotal PV(7M15)
China total v ehicle sales 1,618 1,803 1,503 (7.1) (16.6) 13,301 13,358 0.4
Brilliance China (1114 HK) Dongfeng Motor (489 HK)
0
5
10
15
20
25
Jan-
10
Jun-
10
Dec
-10
May
-11
Nov
-11
Apr
-12
Oct
-12
Mar
-13
Sep-
13
Mar
-14
Aug
-14
Feb-
15
Jul-1
5
x
Avg: 10.9x
+1SD: 14x
-1SD: 7.8x
0
2
4
6
8
10
12
14
Dec
-05
Oct
-07
Aug
-09
Jun-
11
Apr
-13
Feb-
15
x
Avg: 7.2x
+1SD: 9.1x
-1SD: 5.2x
Geely (175 HK) Great Wall Motor (2333 HK)
0
5
10
15
20
25
2008
2009
2010
2011
2012
2013
2014
2015
x
Avg: 10x
+1SD: 14.2x
-1SD: 5.7x
0
5
10
15
20
25
Dec
-03
May
-05
Nov
-06
Apr
-08
Sep-
09
Feb-
11
Aug
-12
Jan-
14
Jun-
15
x
Avg: 7.1x
+1SD: 10.9x
-1SD: 3.4x
Guangzhou Auto (2238 HK) BAIC (1958 HK)
5
10
15
20
25
30
35
40
Aug
-10
Aug
-11
Jul-1
2
Jul-1
3
Jun-
14
May
-15
x
Avg: 14x
+1SD: 19.8x
-1SD: 8.1x
4.0
5.0
6.0
7.0
8.0
9.0
10.0
11.0
Dec
-…D
ec-…
Jan-
15Ja
n-15
Jan-
15Fe
b-15
Feb-
15Fe
b-15
Mar
…M
ar…
Mar
…M
ar…
Apr
-…A
pr-…
Apr
-…M
ay…
May
…M
ay…
May
…Ju
n-15
Jun-
15Ju
n-15
Jul-1
5Ju
l-15
Jul-1
5A
ug…
Aug
…
x
Avg: 8x
+1SD: 9.1x
-1SD: 6.8x
Source: Thomson Reuters, DBS Vickers
Industry Focus
China Auto Sector
Page 13
PE charts (continued)
CQ Changan ‘B’ (200625 CH) SAIC (600104 CH)
0
5
10
15
20
25
Jan-
09
Feb-
10
Mar
-11
Apr
-12
Apr
-13
May
-14
Jun-
15
x
Avg: 7.9x
+1SD: 11.2x
-1SD: 4.5x
2
4
6
8
10
12
14
Jan-
10
Jun-
10
Dec
-10
May
-11
Nov
-11
Apr
-12
Oct
-12
Mar
-13
Sep-
13
Mar
-14
Aug
-14
Feb-
15
Jul-1
5
x
Avg: 7.5x
+1SD: 9.1x
-1SD: 5.9x
China Zhengtong (1728 HK) Dah Chong Hong (1828 HK)
0
5
10
15
20
25
30
35
40
Dec
-10
Oct
-11
Aug
-12
Jul-1
3
May
-14
Mar
-15
x
Avg: 15.3x
+1SD: 23.1x
-1SD: 7.5x
0
5
10
15
20
25
Dec
-09
Sep-
10
Jun-
11
Feb-
12
Nov
-12
Aug
-13
May
-14
Feb-
15
x
+1SD: 15.5x
Avg: 11.8x
-1SD: 8.1x
Zhongsheng Group (881 HK)
0
5
10
15
20
25
30
35
Mar
-10
Jan-
11
Nov
-11
Sep-
12
Jul-1
3
May
-14
Mar
-15
x
Avg: 17.6x
+1SD: 23.5x
-1SD: 11.7x
Source: Thomson Reuters, DBS Vickers
Industry Focus
China Auto Sector
Page 14
PE charts (continued)
Minth (425 HK) Nexteer Automotive (1316 HK)
0
5
10
15
20
25
30
Dec
-05
Oct
-07
Aug
-09
Jun-
11
Apr
-13
Feb-
15
x
Avg: 10.8x
+1SD: 14.6x
-1SD: 7.1x
4
6
8
10
12
14
16
Oct
-13
Nov
-13
Jan-
14Fe
b-14
Apr
-14
May
-14
Jun-
14A
ug-1
4Se
p-14
Nov
-14
Dec
-14
Feb-
15M
ar-1
5M
ay-1
5Ju
n-15
Jul-1
5
x
Avg: 10.4x
+1SD: 12.3x
-1SD: 8.5x
+2SD: 14.1x
-2SD: 6.6x
Xinchen (1148 HK) Xingda Int’l (1899 HK)
468
1012141618202224
Mar
-13
Jul-1
3
Dec
-13
May
-14
Sep-
14
Feb-
15
Jun-
15
x
Avg: 11.7x
+1SD: 15.6x
-1SD: 7.9x
0
5
10
15
20
25
30
35
40
Dec
-06
Dec
-07
Dec
-08
Dec
-09
Dec
-10
Dec
-11
Dec
-12
Dec
-13
Dec
-14
Dec
-15
x
Avg: 11.2x
+1SD: 18.2x
-1SD: 4.1x
Source: Thomson Reuters, DBS Vickers
Industry Focus
China Auto Sector
Page 15
PB charts
Brilliance China (1114 HK) Dongfeng Motor (489 HK)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Jan-
10
Jun-
10
Dec
-10
May
-11
Nov
-11
Apr
-12
Oct
-12
Mar
-13
Sep-
13
Mar
-14
Aug
-14
Feb-
15
Jul-1
5
x
Avg: 2.8x
+1SD: 3.5x
-1SD: 2x
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Dec
-05
Oct
-07
Aug
-09
Jun-
11
Apr
-13
Feb-
15
x
Avg: 1.4x
+1SD: 1.8x
-1SD: 1x
Geely (175 HK) Great Wall Motor (2333 HK)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2008
2009
2010
2011
2012
2013
2014
2015
x
Avg: 1.5x
+1SD: 2.1x
-1SD: 0.9x
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Dec
-03
May
-05
Nov
-06
Apr
-08
Sep-
09
Feb-
11
Aug
-12
Jan-
14
Jun-
15
x
Avg: 1.4x
+1SD: 2.1x
-1SD: 0.6x
Guangzhou Auto (2238 HK) BAIC (1958 HK)
0.0
0.5
1.0
1.5
2.0
2.5
Aug
-10
Aug
-11
Jul-1
2
Jul-1
3
Jun-
14
May
-15
x
Avg: 1.2x
+1SD: 1.5x
-1SD: 0.9x
0.60
0.80
1.00
1.20
1.40
1.60
1.80
Dec
-14
Dec
-14
Jan-
15Ja
n-15
Jan-
15Fe
b-15
Feb-
15Fe
b-15
Mar
-15
Mar
-15
Mar
-15
Mar
-15
Apr
-15
Apr
-15
Apr
-15
Ma y
-15
Ma y
-15
Ma y
-15
Ma y
-15
Jun-
15Ju
n-15
Jun-
15Ju
l-15
Jul-1
5Ju
l-15
Au g
-15
Au g
-15
x
Avg: 1.4x
+1SD: 1.6x
-1SD: 1.2x
Source: Thomson Reuters, DBS Vickers
Industry Focus
China Auto Sector
Page 16
PB charts (continued)
CQ Changan ‘B’ (200625 CH) SAIC (600104 CH)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Jan-
09
Feb-
10
Mar
-11
Apr
-12
Apr
-13
May
-14
Jun-
15
x
Avg: 1.4x
+1SD: 2.3x
-1SD: 0.5x
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Jan-
10
Jun-
10
Dec
-10
May
-11
Nov
-11
Apr
-12
Oct
-12
Mar
-13
Sep-
13
Mar
-14
Aug
-14
Feb-
15
Jul-1
5
x
Avg: 1.4x
+1SD: 1.8x
-1SD: 1x
China Zhengtong (1728 HK) Dah Chong Hong (1828 HK)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Dec
-10
Oct
-11
Aug
-12
Jul-1
3
May
-14
Mar
-15
x
Avg: 1.4x
+1SD: 2.1x
-1SD: 0.9x
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Dec
-09
Sep-
10
Jun-
11
Feb-
12
Nov
-12
Aug
-13
May
-14
Feb-
15
x
+1SD: 1.9x
Avg: 1.4x
-1SD: 0.9x
Zhongsheng Group (881 HK)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Mar
-10
Jan-
11
Nov
-11
Sep-
12
Jul-1
3
May
-14
Mar
-15
x
Avg: 2.1x
+1SD: 3x
-1SD: 1.2x
Source: Thomson Reuters, DBS Vickers
Industry Focus
China Auto Sector
Page 17
PB charts (continued)
Minth (425 HK) Nexteer (1316 HK)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Dec
-05
Oct
-07
Aug
-09
Jun-
11
Apr
-13
Feb-
15
x
Avg: 1.5x
+1SD: 2x
-1SD: 1x
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Oct
-13
Nov
-13
Jan-
14Fe
b-14
Apr
-14
May
-14
Jun-
14A
ug-1
4Se
p-14
Nov
-14
Dec
-14
Feb-
15M
ar-1
5M
ay-1
5Ju
n-15
Jul-1
5
x
Avg: 2.3x
+1SD: 2.8x
-1SD: 1.9x
+2SD: 3.3x
-2SD: 1.4x
Xinchen (1148 HK)
0.60.81.01.21.41.61.82.02.22.42.6
Mar
-13
Jul-1
3
Dec
-13
May
-14
Sep-
14
Feb-
15
Jun-
15
x
Avg: 1.4x
+1SD: 1.8x
-1SD: 1x
Source: Thomson Reuters, DBS Vickers
Industry Focus
China Auto Sector
Page 18
DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps)
FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)
Share price appreciation + dividends GENERAL DISCLOSURE/DISCLAIMER This report is prepared by DBS Vickers (Hong Kong) Limited (“DBSVHK”), a direct wholly-owned subsidiary of DBS Vickers Securities Holdings Pte Ltd ("DBSVH"). This report is intended for clients of DBSV Group only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVHK. The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBSVHK and/or DBSVH) do not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. DBSVHK accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. DBSVH is a wholly-owned subsidiary of DBS Bank Ltd. DBS Bank Ltd along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. DBSVHK, DBS Bank Ltd and their associates, their directors, and/or employees may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies. Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company (or companies) referred to in this report. The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by DBSVHK and/or DBSVH (and/or any persons associated with the aforesaid entities), that:
a. such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and
b. there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein.
Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report. DBS Vickers Securities (USA) Inc ("DBSVUSA"), a U.S.-registered broker-dealer, does not have its own investment banking or research department, nor has it participated in any investment banking transaction as a manager or co-manager in the past twelve months. ANALYST CERTIFICATION The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of the date the report is published, the analyst and his / her spouse and/or relatives and/or associate who are financially dependent on the analyst, do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities, directorships and trustee positions).
Industry Focus
China Auto Sector
Page 19
COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBSVHK and its subsidiaries do not have a proprietary position in the securities recommended in this report as of the date the report is
published.
2. DBSVHK, DBSVUSA, DBS Bank Ltd and/or other affiliates may beneficially own a total of 1% or more of any class of common equity securities of the subject companies mentioned in this document as of the latest available date of the updated information.
3. Compensation for investment banking services: DBSVHK, DBSVUSA, DBS Bank Ltd and/or other affiliates have received compensation, within the past 12 months, and within the next 3 months may receive or intends to seek compensation for investment banking services from Astra International Terbuka (ASII IJ) mentioned in this document.
DBSVUSA does not have its own investment banking or research department, nor has it participated in any investment banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.
RESTRICTIONS ON DISTRIBUTION General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or
located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
Australia This document is being distributed in Australia by DBSVHK, which is exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 2001 [“CA”] in respect of financial services provided to the recipients. DBSVHK is regulated by the Securities and Futures Commission under the laws of Hong KONG, which differ from Australian laws. Distribution of this report is intended only for “wholesale investors” within the meaning of the CA.
Hong Kong This report is being distributed in Hong Kong by DBS Vickers (Hong Kong) Limited which is licensed and regulated by the Hong Kong Securities and Futures Commission.
Indonesia This report is being distributed in Indonesia by PT DBS Vickers Securities Indonesia.
Malaysia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies.
Wong Ming Tek, Executive Director, ADBSR
Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No. 198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from, or in connection with the report.
Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd. Research reports distributed are only intended for institutional clients only and no other person may act upon it.
United Kingdom
This report is being distributed in the UK by DBS Vickers Securities (UK) Ltd, who is an authorised person in the meaning of the Financial Services and Markets Act and is regulated by The Financial Conduct Authority. Research distributed in the UK is intended only for institutional clients.
Dubai
This research report is being distributed in The Dubai International Financial Centre (“DIFC”) by DBS Bank Ltd., (DIFC Branch) having its office at PO Box 506538, 3rd Floor, Building 3, East Wing, Gate Precinct, Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates. DBS Bank Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This research report is intended only for professional clients (as defined in the DFSA rulebook) and no other person may act upon it.
United States Neither this report nor any copy hereof may be taken or distributed into the United States or to any U.S. person except in compliance with any applicable U.S. laws and regulations. It is being distributed in the United States by DBSV US, which accepts responsibility for its contents. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBS Vickers Securities (USA) Inc (“DBSVUSA”) directly and not its affiliate.
Other jurisdictions
In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.
DBS Vickers (Hong Kong) Limited
18th Floor Man Yee building, 68 Des Voeux Road Central, Central, Hong Kong