Company Report: Sinotrans Shipping (00368 HK)...2.0 2.5 3.0 1-v 6-v 11-v 16-v 21-v 26-v 1-c 6-c 11-c 16-c 21-c 26-c 31-c 5-n 10-n 15-20-25-30-(%) 2 year 5 year 10 year Source: Bloomberg

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See the last page for disclaimer Page 1 of 15

Hong Kong Market Fixed Income Research Focus Dayton Wang 王庆鲁

香港市场固定收益焦点 +86 755 23976680

[email protected]

2 February 2015

Table of Contents | 目录

Market Updates and Outlook | 市场更新及近期展望

Summary of Covered Companies’ Debt Issue | 覆盖公司发债概览

Dim Sum Bond Market Overview | 点心债市场纵览

Credit Spread Monitor | 息差监测

Monthly Feature | 月度专题

Data Monitor | 数据指标监测

Key Economic Data for Leading Economies | 主要经济体重要经济数据

U.S. government yield for the past 3 months 美国国债近 3个月收益率走势

0.0

0.5

1.0

1.5

2.0

2.5

3.0

1-N

ov

6-N

ov

11-N

ov

16-N

ov

21-N

ov

26-N

ov

1-D

ec

6-D

ec

11-D

ec

16-D

ec

21-D

ec

26-D

ec

31-D

ec

5-J

an

10-J

an

15-J

an

20-J

an

25-J

an

30-J

an

(%) 2 year 5 year

10 year

Source: Bloomberg

China government yield for the past 3 months 中国国债近 3个月收益率走势

3.0

3.2

3.4

3.6

3.8

4.0

1-N

ov

6-N

ov

11-N

ov

16-N

ov

21-N

ov

26-N

ov

1-D

ec

6-D

ec

11-D

ec

16-D

ec

21-D

ec

26-D

ec

31-D

ec

5-J

an

10-J

an

15-J

an

20-J

an

25-J

an

30-J

an

(%) 2 year 5 year

10 year

Source: Bloomberg

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Market Updates and Outlook

U.S. Treasury bond yield rebounded from record lows; we expect it to trend up given the latest FOMC statement. U.S.

debt rallied in early January after a drop in durable-goods orders and lower-than-forecast corporate results suggested a

slowing global economy may be impinging on U.S. growth. However, our expectation to see a rising Treasury bond yield is

unchanged as we are getting closer to a Federal Reserve decision to move off the zero floor. The latest FOMC statement still

shows greater possibility for a rate hike in the middle of the year on the grounds of greater confidence in the long-term trend of

U.S. economic growth from the Federal Reserve, which the current economic condition was described as “solid” instead of

“moderate” in the previous issue of the statement. Recent economic readings were very supportive as well, which included

rising consumer confidence, above-50 level PMI and dropping unemployment rate, although 4Q GDP growth rate was below

market expectation. Regarding overseas economic condition, the Federal Reserve did have some concerns, however it was

not over pessimistic about it as dropping oil price nevertheless provided a positive stance to consumers.

PBOC’s reserves repurchase action on Tuesday (January 27, 2015) signals neutral sentiment towards short-term

monetary loosening; we expect China’s government bond yield to decrease at a slower pace. PBOC announced two

rounds of reverse repurchase on Tuesday, one was 28-day in maturity at 4.80% and the other one was 7-day in maturity at a

rate of 3.85%. In our view, the market may react negatively to the headline reverse repo rate of 4.80%, as it seems relatively

high and signals that the central bank is reluctant to further suppress the money market rates. Since mid January, we have

witnessed that China government bond yield kept dropping riding on the expectation of further monetary loosening in 2015.

Current bond yield has reached the pre rate cut level of last November. We reason the signal from reverse repo rate may

dampen the dropping yield in the short-term.

The kick-off of European QE is expected to drive the Eurozone bond yield lower. On January 22, the European Central

Bank (ECB) announced a quantitative easing programme worth an estimated 1.1 trillion euro. The outline of such programme

entails buying 60 billion euros of private and public sector debts each month until September 2016; of which, 50 billion euros

will be spend on sovereign and European Union agency bonds and the rest of 10 billion euros will be spent on repacked

private debts including asset-back securities and covered bonds. The QE effectively creates extra demand for targeted bonds

and provides ample money in European economies in order to re-inflate them. Therefore, we see Eurozone bond yield will

decrease further amid low inflation.

Recent 2-year government bond yield in the U.S., China and Eurozone

0.400

0.450

0.500

0.550

0.600

0.650

0.700

0.750

0.800

1-N

ov-1

4

11-N

ov-1

4

21-N

ov-1

4

1-D

ec-1

4

11-D

ec-1

4

21-D

ec-1

4

31-D

ec-1

4

10-J

an-1

5

20-J

an-1

5

30-J

an-1

5

(%)U.S. 2yr

3.000

3.100

3.200

3.300

3.400

3.500

3.600

1-N

ov-1

4

11-N

ov-1

4

21-N

ov-1

4

1-D

ec-1

4

11-D

ec-1

4

21-D

ec-1

4

31-D

ec-1

4

10-J

an-1

5

20-J

an-1

5

30-J

an-1

5

(%)China Govt 2yr

(0.200)

(0.150)

(0.100)

(0.050)

0.000

0.050

0.100

1-N

ov-1

4

11-N

ov-1

4

21-N

ov-1

4

1-D

ec-1

4

11-D

ec-1

4

21-D

ec-1

4

31-D

ec-1

4

10-J

an-1

5

20-J

an-1

5

30-J

an-1

5

(%)Eurozone 2yr

Source: Bloomberg, Guotai Junan International. Prices as of January 28, 2015

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Summary of Covered Companies’ Debt Issues

Stock

Ticker

Company

Name

Sector Issuer

Name

Issue

Date

Debt

Type

Debt

Ticker

Cry Principal

Amount

Duration Maturity

Date

Interest

Rate

Use of

Proceeds

Company's

Debt ratios

Remarks

(in local$ mn) (in % p.a.)

00916 HK Longyuan Power Energy China Longyuan Power Group

Corporation Limited

2014-11-20 ST note 041452062.IB RMB 5,000.0 120 days 2015-3-24 4.050 Supplement working

capital

1H14: net gearing 187.0% Sound operation and below average gearing ratio,

default risk is minimal.

00991 HK Datang Power Energy Datang International Power

Generation Co., Ltd.

2014-12-15 Corporate bond 011423007.IB RMB 2,000.0 90 days 2015-3-23 5.500 Repay mature debts,

adjust debt structure

and lower financial

cost

1H14: net gearing 419.2% Coal-fired power business was sound but the

Company's operationg was dragged by coal-

chemical projects and net gearing ratio was higher

than industry average. However the coal-fired

power business is able to generate sufficient cash

flow for the Company's operation. Default risk is

minimal.

01088 HK China Shenhua Energy China Shenhua Energy Company

Limited

2015-1-6 Super ST note 011567001 .IB RMB 5,000.0 270 days 2015-10-4 4.550 Supplement working

capital

1H14: net gearing 217.7% Sound operation and below average gearing ratio,

default risk is minimal.


Limited

2015-1-20 USD bond USD 500.0 3 year 2018-1-20 2.500 Repay offshore loans 1H14: net gearing 217.7% Same as above.


Limited



Limited


00177 HK Jiangsu Expressway Expressway Jiangsu Expressway Co. ltd 2015-1-19 Super ST notes 011584001 RMB 300.0 90 days 2015-4-20 4.800 General working

capital

3Q14: net gearing 31.7% Sound operation and adequate debt level, default

risk is minimal

Source: the Companies, Guotai Junan International.

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Dim Sum Bond Market Overview

Financial services companies dominated the primary Dim Sum bond market in the first month of 2015. Over the period

between December 30, 2014 and January 29, 2015, a total of RMB 4.3 billion worth of new Dim Sum bond issues were

competed or announced. Looking at the issuer’s breakdown by sector, 91.3% of the monthly issues measured by the amount

raised came from financial services companies (~RMB 3.9 billion). Based on current maturity distribution, bonds that coming

due in 2015 account for 20.2% of the total outstanding balance. As for the outlook in 2015, we remain optimistic about the

offshore RMB bond market in 2015 based on the expected buoyant supply of Dim Sum bonds and investors’ demand for

defensive instruments in a currency that is being internationalized. We believe the rationale for greater supply of Dim Sum

bond will stem from more trades being settled in RMB, which will not be affected by recent drop of the currency, in our view.

After taking into account of the currency volatility, we see the yield on Dim Sum bonds to be attractive.

Annual amount of Dim Sum bond issues Amount issued breakdown by sectors

(December 30, 2014 – January 29, 2015)

2,916

28,169

49,824

69,982

252,534

0

50,000

100,000

150,000

200,000

250,000

300,000

2010 2011 2012 2013 2014

(RMB mn)

3.9

0.4

(in RMB bn)

Financials

Government

Source: Bloomberg, Guotai Junan International. Source: Bloomberg, Guotai Junan International.

Note: “Government” sector also includes bonds issued by policy banks such as

China development bank and Asian development bank.

Maturity distribution of outstanding balance of

Dim Sum bonds, by month in 2015 Maturity distribution of outstanding balance of

Dim Sum bonds, by year

0.1%

1.4%

1.9%

3.2%

1.1%

3.5%

1.2%1.1%

0.8% 0.7%

2.9%

2.2%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Jan

Feb

Mar

Ap

r

Ma y

Jun

Jul

Aug

Sep

Oct

No

v

Dec

(RMB mn) Outstanding balance (LHS)

% of total outstanding balance (RHS)

20.2%

24.5%

30.5%

7.4% 17.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

10,000

30,000

50,000

70,000

90,000

110,000

130,000

150,000

2015 2016 2017 2018 2019 and thereafter

(RMB mn) Outstanding balance (LHS)

Source: Bloomberg, Guotai Junan International. Source: Bloomberg, Guotai Junan International.

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Credit Spread Monitor

Credit spread of emerging markets corporate bonds rose on the back of an expected slower world economy. We

believe the recent rise in emerging markets corporate bond spread was a market reaction to World Bank’s recent cut in global

economic growth forecast. On January 17, World Bank expected the world economy to expand at rate of 3.0% in 2015,

comparing to 3.4% that it estimated in June 2014. It believed that U.S. will be the only remaining economic growth engine for

the world’s economy. Among emerging markets, Brazil and Russia’s economic outlook appeared less optimistic, which mainly

attributed the lowering forecast. On the U.S. corporate bond credit spread front, we see the spread turned into stable after a

small spike in mid January, as it could be explained by the country’s economic condition gradually turning from improving to

solid. As for our expected credit spread progression, we believe U.S. corporations are at the early stage of another leveraging

cycle, which is likely to result in a narrowing credit spread.

Option-adjusted spread & 1-month change% by sectors

USD bonds, as at January 29, 2015 U.S. corporate bond yield spreads over U.S.

treasury bonds, 3-month period

125.0

215.2

97.6

110.3

146.4

98.1

91.1

87.4

179.4

167.4

111.1

94.6

548.4

408.3

520.5

506.9

562.9

429.5

456.1

476.5

463.3

542.8

321.9

455.1

114.7

472.3

339.5

572.9

481.2

417.8

480.6

228.1

340.9

343.6

IG total

IG.Energy

IG.Consumer Staples

IG.Utilities

IG.Communication

IG.Health Care

IG.Industrials

IG.Technology

IG.Materials

IG.Financials(Sub)

IG.Consumer Disc.

IG.Financials(Sr)

HY total

HY.Utilities

HY.Consumer Staples

HY.Technology

HY.Industrials

HY.Consumer Disc.

HY.Energy

HY.Financials(Sr)

HY.Financials(Sub)

HY.Communication

HY.Materials

HY.Health Care

EM total

EM.Health Care

EM.Consumer Staples

EM.Industrials

EM.Technology

EM.Energy

EM.Financials(Sub)

EM.Financials(Sr)

EM.Materials

EM.Utilities

EM.Communication

EM.Consumer Disc.

Investm

ent

Gra

de

Hig

h Y

ield

Em

erg

ing

Mark

et

OAS

5.1%

9.8%

5.2%

1.4%

4.8%

1.7%

1.6%

0.1%

8.1%

6.7%

5.6%

3.1%

4.2%

8.7%

5.6%

18.8%

3.3%

-14.0%

13.7%

2.0%

3.1%

8.1%

5.7%

1.1%

8.7%

16.9%

6.7%

8.5%

4.9%

12.4%

7.6%

7.6%

11.7%

10.4%

7.5%

-18.7%

1m Chg%

150

200

25029-O

ct

3-N

ov

8-N

ov

13-N

ov

18-N

ov

23-N

ov

28-N

ov

3-D

ec

8-D

ec

13-D

ec

18-D

ec

23-D

ec

28-D

ec

2-J

an

7-J

an

12-J

an

17-J

an

22-J

an

27-J

an

bps Corporate Bond AAA Corporate Bond AA

Corporate Bond A Corporate Bond BAA

Source: Bloomberg, Guotai Junan International Note: The yield spreads of different rating categories are calculated by

taking the difference between bond yields of each category and the 10-year generic U.S. government bond yields. This spread is a proxy of

credit spread but it still entails liquidity premium or discount as the bond yield represents all maturities at each rating category.

Spread multiples to AAA yield spread, 3-month period

0.9

1

1.1

1.2

1.3

1.4

1.5

1.6

1.7

29-O

ct

3-N

ov

8-N

ov

13-N

ov

18-N

ov

23-N

ov

28-N

ov

3-D

ec

8-D

ec

13-D

ec

18-D

ec

23-D

ec

28-D

ec

2-J

an

7-J

an

12-J

an

17-J

an

22-J

an

27-J

an

XAA/AAA A/AAA BAA/AAA

Source: Bloomberg, Guotai Junan International

Note: emerging market countries include Argentine Republic, Bolivarian Republic of Venezuela, Federation of Malaysia, Federative Republic of Brazil, Republic of

Colombia, Republic of Indonesia, Republic of Panama, Republic of Peru, Republic of South Africa, Republic of Turkey, Republic of the Philippines, Russian Federation,

Ukraine ,and United Mexican States.

Source: Bloomberg, Guotai Junan International

Note: The yield multiple is calculated by dividing the yield spread of each rating category by that of the same base rating grade, which is AAA grade

here. It provides an indicator of relative credit risk for each credit category. A narrowing multiple here means the credit risk entailed in the

specific grade is decreasing compared to AAA grade.

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Monthly Feature: Expecting More Possible Defaults on China’s SME Privately Placed Debt

On January 27, RMB 110 million worth of SME privately placed debt experienced difficulties to repay the interest and

principle; the debts were issued under the name of Dongfei Marzuoli Textile Machinery (“Dongfei”) in January 2012 with a

maturity of two years. Although it is not the first time we see a such possible default on SME privately placed debt

(approximately 8 incidents based on media reports over the past two years), what made the market somehow surprised was

the fact that the 3rd

party guarantor of the debts, a local LGFV in Dongtai City (“东台市交通投资集团有限公司”), where the

Company was founded, refused to carry out its “contractual responsibility” to pay off the debts. In a public statement, the local

LGFV defended by saying only provided guarantee on the credit rating of the debts and would not be fully liable for any of the

interests and principle of the debts. Reading between the lines, we have the following three key expectations:

- We see more possible defaults on China’s SME privately placed debt given the slowing growth momentum in

corporate earnings. We think the recent macroeconomic condition of China is yet to be said in the improving stage and

hasn’t fundamentally solve the two key problems that being faced by SMEs: limited channels for funding and higher cost

of borrowing. We don’t see the recent headline rate cut on benchmark lending rate will alter the landscape of SME

lending in the near-term.

- Debt investors will pay more attention to the legal risk in the credit enhancement process. Last November, CSRC

promulgated regulations regarding company debts issues and trading (“公司债券发行与交易管理办法”), which effectively

created privately placed debts market. We believe market participants will learn the lesson from the abovementioned

legal dispute involving a 3rd

party guarantor and start paying more attention to the legal risk.

- LGFV debts could be placed under more scrutiny this year. Coincidently, the abovementioned LGFV has an

outstanding debt balance of RMB 3.3 billion under its own name. We foresee the credit risk of these LGFV debts will be

assessed more frequently amid rising NPL ratio in China.

China’s outstanding debt balance breakdown by instrument types (As of January 30, 2015)

Yield to Maturity of AAA-rated LGFV debt

672

92765

(RMB bn)

Government bond

Local government bond

Financial bond

Enterprise bond

Mid-term notes

ST notes

Others

Ordinary company bond

Privately placed debt

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

Jan-1

2

Mar-

12

May-1

2

Jul-12

Sep-1

2

Nov-1

2

Jan-1

3

Mar-

13

May-1

3

Jul-13

Sep-1

3

Nov-1

3

Jan-1

4

Mar-

14

May-1

4

Jul-14

Sep-1

4

Nov-1

4

Jan-1

5

(%)

1 year

2 year

3 year

Source: China Bond, Guotai Junan International. Source: China Bond, Guotai Junan International.

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Data monitor

New issuance in Hong Kong within the past 1-month period, as at January 30, 2015 Date Issuer Coupon Maturity $ Outstanding amount

(in local $ million, except B) Industry

subgroup

1/29 Cn Const Bk Asia 0.80 8/5/2015 USD 53 Money Center Banks 1/29 Icbc Asia Ltd FRN 2/3/2016 USD 180 Commer Banks Non-US 1/28 China Const Asia 1.20 2/5/2016 USD 71 Money Center Banks 1/28 Icbc Asia Ltd 1.15 2/3/2016 USD 10 Commer Banks Non-US 1/28 Wing Lung Bank 3.31 2/5/2016 CNY 100 Commer Banks Non-US 1/28 Icbc Asia Ltd 0.77 8/3/2015 USD 74 Commer Banks Non-US 1/28 Icbc Asia Ltd 1.05 2/3/2016 USD 19 Commer Banks Non-US 1/27 Cn Const Bk Asia 1.18 2/4/2016 HKD 230 Money Center Banks 1/27 Cn Const Bk Asia 3.45 8/4/2015 CNY 80 Money Center Banks 1/27 Fubon Bank Hk ZERO 8/3/2015 HKD 440 Commer Banks Non-US 1/27 Icbc Asia Ltd 0.78 8/3/2015 USD 101 Commer Banks Non-US 1/27 Bk Of East Asia 0.82 8/6/2015 USD 35 Commer Banks Non-US 1/27 Wing Lung Bank 4.10 2/8/2016 CNY 60 Commer Banks Non-US 1/26 Public Bank Hk FRN 2/4/2016 HKD 500 Commer Banks Non-US 1/26 Hong Kong T-Bill ZERO 8/5/2015 HKD 9B Sovereign 1/26 Hong Kong T-Bill ZERO 5/6/2015 HKD 30.31B Sovereign 1/26 Hk Govt Bond Pro 1.06 2/5/2020 HKD 1.5B Sovereign 1/26 Wing Lung Bank 3.30 2/3/2016 CNY 200 Commer Banks Non-US 1/26 Hk Mtge Corp ZERO 5/5/2015 CNY 275 Finance-Mtge Loan/Banker 1/26 Bk Of East Asia 0.40 5/5/2015 USD 15 Commer Banks Non-US 1/25 Far East Horizon 4.00 2/4/2022 HKD 100 Finance-Leasing Compan 1/23 Icbc Asia Ltd ZERO 7/30/2015 USD 10 Commer Banks Non-US 1/23 Bk Of East Asia 1.15 1/29/2016 HKD 350 Commer Banks Non-US 1/22 Bk Of East Asia ZERO 7/30/2015 USD 25 Commer Banks Non-US 1/22 Haiting 2015 4.20 7/29/2020 USD 700 Diversified Finan Serv 1/22 Boci Finl Prod 3.42 1/25/2016 AUD 1 Finance-Invest Bnkr/Brkr 1/22 Boci Finl Prod 3.73 1/25/2016 CNY 8 Finance-Invest Bnkr/Brkr 1/22 Boci Finl Prod 3.12 5/22/2015 AUD 2 Finance-Invest Bnkr/Brkr 1/22 Boci Finl Prod 1.26 1/25/2016 SGD 3 Finance-Invest Bnkr/Brkr 1/22 Bk Of East Asia 0.36 4/28/2015 USD 21 Commer Banks Non-US 1/21 Bk Of East Asia FRN 1/29/2016 USD 50 Commer Banks Non-US 1/21 Baosteel Fin 15 3.88 1/28/2020 USD 500 Steel-Producers 1/21 Stand Chart Hk ZERO 5/1/2015 USD 30 Money Center Banks 1/21 Bk Of East Asia ZERO 1/28/2016 HKD 500 Commer Banks Non-US 1/21 Kookmin Bank Hk ZERO 4/28/2015 USD 10 Money Center Banks 1/21 Bk Of East Asia 0.82 7/29/2015 USD 20 Commer Banks Non-US 1/20 Boci Finl Prod 0.65 2/4/2015 HKD 196 Finance-Invest Bnkr/Brkr 1/20 Boci Finl Prod 3.41 4/21/2015 CNY 19 Finance-Invest Bnkr/Brkr 1/20 Boci Finl Prod 3.24 5/21/2015 AUD 6 Finance-Invest Bnkr/Brkr 1/20 Boci Finl Prod 0.80 5/21/2015 HKD 34 Finance-Invest Bnkr/Brkr 1/20 Boci Finl Prod 3.23 5/21/2015 AUD 2 Finance-Invest Bnkr/Brkr 1/20 Boci Finl Prod 3.73 1/21/2016 CNY 7 Finance-Invest Bnkr/Brkr 1/20 Boci Finl Prod 3.54 1/21/2016 AUD 1 Finance-Invest Bnkr/Brkr 1/20 Boci Finl Prod 4.08 1/21/2016 CNY 7 Finance-Invest Bnkr/Brkr 1/20 Bk Of East Asia 0.85 7/29/2015 USD 30 Commer Banks Non-US 1/20 Bk Of East Asia 1.25 1/28/2016 USD 30 Commer Banks Non-US 1/20 Cn Const Bk Asia 1.00 1/27/2016 USD 18 Money Center Banks 1/20 New World China 5.00 1/28/2022 HKD 800 Real Estate Oper/Develop 1/20 Wing Lung Bank 3.20 1/29/2016 CNY 87 Commer Banks Non-US 1/20 Csi Finl Product 4.00 7/22/2015 USD 10 Special Purpose Entity 1/20 Wing Lung Bank 3.75 1/28/2016 CNY 92 Commer Banks Non-US 1/19 Bk Of East Asia ZERO 1/15/2016 USD 25 Commer Banks Non-US 1/19 Boci Finl Prod 3.65 1/20/2016 CNY 7 Finance-Invest Bnkr/Brkr 1/19 Boci Finl Prod 3.50 3/20/2015 CNY 25 Finance-Invest Bnkr/Brkr 1/19 Boci Finl Prod 3.28 4/20/2015 AUD 3 Finance-Invest Bnkr/Brkr 1/19 Boci Finl Prod 3.10 5/20/2015 AUD 11 Finance-Invest Bnkr/Brkr 1/19 Boci Finl Prod 2.96 4/20/2015 AUD 1 Finance-Invest Bnkr/Brkr 1/19 Boci Finl Prod 2.70 3/20/2015 CNY 39 Finance-Invest Bnkr/Brkr 1/19 Boci Finl Prod 3.57 4/20/2015 CNY 8 Finance-Invest Bnkr/Brkr 1/19 Hong Kong T-Bill ZERO 4/29/2015 HKD 30.58B Sovereign 1/19 Hong Kong T-Bill ZERO 7/29/2015 HKD 11B Sovereign 1/19 Hong Kong T-Bill ZERO 1/27/2016 HKD 1.3B Sovereign 1/19 Cn Const Bk Asia 1.20 1/26/2016 HKD 700 Money Center Banks 1/19 Bk Of East Asia 1.20 1/28/2016 USD 100 Commer Banks Non-US 1/19 Cn Const Bk Asia 1.06 1/26/2016 HKD 178 Money Center Banks 1/18 Icbc Asia 1.12 2/26/2016 HKD 4 Commer Banks Non-US 1/16 Hk Mtge Corp FRN 1/27/2016 GBP 50 Finance-Mtge Loan/Banker 1/16 Bk Of East Asia ZERO 1/25/2016 HKD 300 Commer Banks Non-US 1/16 Dah Sing Bank FRN 1/21/2016 HKD 400 Commer Banks Non-US 1/16 Icbc Asia Ltd ZERO 1/25/2016 CNY 300 Commer Banks Non-US 1/16 Cn Const Bk Asia ZERO 1/25/2016 HKD 300 Money Center Banks 1/16 Bk Of East Asia ZERO 7/25/2016 HKD 300 Commer Banks Non-US 1/16 Cn Const Bk Asia 1.26 1/22/2016 USD 20 Money Center Banks 1/16 Wing Lung Bank 3.60 1/29/2016 CNY 117 Commer Banks Non-US 1/16 Bk Of East Asia ZERO 7/21/2015 USD 20 Commer Banks Non-US

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1/16 Cn Const Bk Asia ZERO 7/25/2016 CNY 300 Money Center Banks 1/16 Everbright Bk/Hk 1.30 1/22/2016 HKD 154 Commer Banks Non-US 1/15 Bk Of East Asia ZERO 4/27/2015 HKD 490 Commer Banks Non-US 1/15 Bk Of East Asia ZERO 7/23/2015 USD 10 Commer Banks Non-US 1/15 Boci Finl Prod 2.90 3/16/2015 AUD 2 Finance-Invest Bnkr/Brkr 1/15 Boci Finl Prod 3.10 4/16/2015 AUD 2 Finance-Invest Bnkr/Brkr 1/15 Boci Finl Prod 3.85 1/19/2016 CNY 11 Finance-Invest Bnkr/Brkr 1/15 Bk Of East Asia 1.20 1/21/2016 HKD 154 Commer Banks Non-US 1/15 Bk Of East Asia 0.37 1/27/2016 JPY 2.2B Commer Banks Non-US 1/15 Bea China Ltd ZERO 4/19/2015 CNY 1,000 Commer Banks Non-US 1/15 Dah Sing Bank 1.09 1/21/2016 HKD 150 Commer Banks Non-US 1/14 Boci Finl Prod 1.00 8/17/2015 HKD 40 Finance-Invest Bnkr/Brkr 1/14 Boci Finl Prod 2.56 2/16/2015 CNY 15 Finance-Invest Bnkr/Brkr 1/14 Swire Pro Mtn Fi 2.90 1/23/2025 HKD 200 Real Estate Oper/Develop 1/14 Hong Kong Mtg Co 3.00 1/23/2045 HKD 500 Finance-Mtge Loan/Banker 1/14 Bk Of East Asia 1.23 1/22/2016 USD 20 Commer Banks Non-US 1/14 China Const Asia 0.39 4/21/2015 USD 27 Money Center Banks 1/14 Hsbc/Singapore FRN 1/21/2020 USD 300 Commer Banks Non-US 1/14 Everbright Bank ZERO 1/22/2016 USD 40 Commer Banks Non-US 1/14 Hk Govt Bond Pro 2.22 8/7/2024 HKD 3B Sovereign 1/13 Bank East Asia L 1.23 1/20/2016 HKD 150 Commer Banks Non-US 1/13 Boci Finl Prod 4.10 4/13/2015 NZD 1 Finance-Invest Bnkr/Brkr 1/13 Boci Finl Prod 3.00 2/13/2015 AUD 2 Finance-Invest Bnkr/Brkr 1/13 Boci Finl Prod 3.10 4/14/2015 AUD 4 Finance-Invest Bnkr/Brkr 1/13 Bank East Asia L 1.15 1/20/2016 HKD 240 Commer Banks Non-US 1/13 Bank East Asia L ZERO 4/21/2015 USD 48 Commer Banks Non-US 1/13 Hong Kong Mtg Co FRN 1/22/2016 GBP 200 Finance-Mtge Loan/Banker 1/13 Bk Of East Asia 1.15 1/19/2016 HKD 150 Commer Banks Non-US 1/13 Dah Sing Bank 1.10 1/19/2016 HKD 150 Commer Banks Non-US 1/12 Hong Kong T-Bill ZERO 7/22/2015 HKD 11B Sovereign 1/12 Hong Kong T-Bill ZERO 4/22/2015 HKD 32.24B Sovereign 1/12 Stand Chart Hk ZERO 4/16/2015 CAD 12 Money Center Banks 1/12 Kookmin Bank Hk ZERO 1/7/2016 USD 20 Money Center Banks 1/11 Boci Finl Prod 3.20 5/5/2015 CNY 31 Finance-Invest Bnkr/Brkr 1/11 Fubon Bank Hk 1.00 7/13/2015 HKD 100 Commer Banks Non-US 1/11 Boci Finl Prod 3.52 7/13/2015 CNY 22 Finance-Invest Bnkr/Brkr 1/11 Dbs Bank Hk Ltd FRN 1/15/2016 HKD 250 Commer Banks Non-US 1/11 Boci Finl Prod 3.14 3/12/2015 CNY 63 Finance-Invest Bnkr/Brkr 1/9 China Const Asia 1.30 1/14/2016 USD 100 Money Center Banks 1/9 Fubon Bank Hk 1.00 7/10/2015 HKD 450 Commer Banks Non-US 1/9 Dbs Bank (Hk) 0.70 1/15/2016 USD 30 Commer Banks Non-US 1/9 China Const Asia ZERO 1/12/2016 HKD 178 Money Center Banks 1/9 Fubon Bank Hk 1.08 12/31/2015 HKD 80 Commer Banks Non-US 1/8 Dbs Bank (Hk) ZERO 4/15/2015 HKD 140 Commer Banks Non-US 1/8 Woori Bank Hk ZERO 1/4/2016 USD 20 Commer Banks Non-US 1/8 Boci Finl Prod 3.40 4/9/2015 CNY 19 Finance-Invest Bnkr/Brkr 1/8 Boci Finl Prod 3.44 1/11/2016 AUD 1 Finance-Invest Bnkr/Brkr 1/8 Boci Finl Prod 3.70 1/11/2016 CNY 6 Finance-Invest Bnkr/Brkr 1/8 Boci Finl Prod 1.00 2/9/2015 SGD 1 Finance-Invest Bnkr/Brkr 1/8 Boci Finl Prod 2.56 3/9/2015 CNY 46 Finance-Invest Bnkr/Brkr 1/8 Boci Finl Prod 4.20 7/9/2015 NZD 3 Finance-Invest Bnkr/Brkr 1/8 Boci Finl Prod 1.10 2/9/2015 SGD 5 Finance-Invest Bnkr/Brkr 1/8 Wing Lung Bank 2.95 1/19/2016 CNY 84 Commer Banks Non-US 1/8 China Const Asia 3.15 1/19/2016 CNY 103 Money Center Banks 1/8 Icbc Asia Ltd 1.12 2/15/2016 HKD 10 Commer Banks Non-US 1/8 Icbc Asia Ltd 1.06 7/13/2015 USD 84 Commer Banks Non-US 1/8 Icbc Asia Ltd 1.06 7/13/2015 USD 309 Commer Banks Non-US 1/8 Icbc Asia Ltd 1.12 2/15/2016 HKD 10 Commer Banks Non-US 1/8 Bk Of Shanghai H 1.78 1/13/2016 USD 64 Commer Banks Non-US 1/7 Stand Chart Hk ZERO 1/28/2045 USD 500 Money Center Banks 1/7 China Const Asia 1.20 1/13/2016 HKD 160 Money Center Banks 1/7 China Const Asia 1.03 1/15/2016 USD 30 Money Center Banks 1/7 China Const Asia 1.05 1/15/2016 HKD 150 Money Center Banks 1/6 China Const Asia ZERO 7/14/2015 HKD 250 Money Center Banks 1/6 Fubon-Cncl01/15 ZERO 7/14/2015 HKD 0 Commer Banks Non-US 1/6 Boci Finl Prod 0.54 4/8/2015 HKD 44 Finance-Invest Bnkr/Brkr 1/6 Boci Finl Prod 3.80 10/7/2015 CNY 6 Finance-Invest Bnkr/Brkr 1/6 Boci Finl Prod 0.50 4/8/2015 HKD 41 Finance-Invest Bnkr/Brkr 1/6 Hkcg Finance 3.35 1/14/2030 HKD 187 Gas-Distribution 1/6 Bank East Asia L 2.25 1/13/2018 USD 20 Commer Banks Non-US 1/6 Dah Sing Bank FRN 1/11/2016 HKD 300 Commer Banks Non-US 1/6 Wing Lung Bank 2.91 1/15/2016 CNY 100 Commer Banks Non-US 1/5 Hkt Capital No 1 ZERO 1/15/2030 USD 300 Telecom Services 1/5 Boci Finl Prod 0.40 2/6/2015 HKD 70 Finance-Invest Bnkr/Brkr 1/5 Boci Finl Prod 0.65 1/20/2015 HKD 0 Finance-Invest Bnkr/Brkr 1/5 Carnival Group 6.00 1/5/2017 HKD 130 Diversified Operations 1/5 Hong Kong T-Bill ZERO 4/15/2015 HKD 30.48B Sovereign 1/5 Hong Kong T-Bill ZERO 7/15/2015 HKD 11B Sovereign 1/5 Kdb Asia Ltd ZERO 7/13/2015 CNY 100 Fiduciary Banks 1/5 Stand Chart Hk ZERO 4/13/2015 USD 70 Money Center Banks 1/5 Stand Chart Hk ZERO 4/13/2015 USD 50 Money Center Banks 1/5 Wing Lung Bank 3.10 1/12/2016 CNY 50 Commer Banks Non-US 1/5 Hk Mtge Corp ZERO 4/13/2015 CNY 238 Finance-Mtge Loan/Banker

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1/4 New Times Energy 8.00 1/2/2022 HKD 3 Metal Processors&Fabrica 1/4 Boci Finl Prod 3.75 7/6/2015 CNY 31 Finance-Invest Bnkr/Brkr 1/4 Boci Finl Prod 3.35 4/8/2015 CNY 5 Finance-Invest Bnkr/Brkr 1/4 Boci Finl Prod 3.75 1/5/2016 CNY 8 Finance-Invest Bnkr/Brkr 1/4 Boci Finl Prod 3.65 1/5/2016 CNY 20 Finance-Invest Bnkr/Brkr 1/4 Boci Finl Prod 0.70 5/5/2015 HKD 22 Finance-Invest Bnkr/Brkr 1/4 Boci Finl Prod 3.25 5/5/2015 AUD 1 Finance-Invest Bnkr/Brkr 1/4 Boci Finl Prod 3.68 7/6/2015 CNY 6 Finance-Invest Bnkr/Brkr 1/2 Fubon Bank Hk ZERO 4/9/2015 HKD 230 Commer Banks Non-US 1/2 China Const Asia FRN 1/7/2016 HKD 510 Money Center Banks 1/2 Kookmin Bank Hk ZERO 3/13/2015 USD 20 Money Center Banks 1/1 Fubon Bank Hk ZERO 4/9/2015 HKD 20 Commer Banks Non-US 1/1 Boci Finl Prod 3.28 4/20/2015 AUD 1 Finance-Invest Bnkr/Brkr 1/1 Boci Finl Prod 3.01 4/20/2015 AUD 13 Finance-Invest Bnkr/Brkr 1/1 Hong Kong Mtg Co 1.45 1/12/2018 HKD 500 Finance-Mtge Loan/Banker 1/1 Wing Lung Bank 2.88 1/13/2016 CNY 200 Commer Banks Non-US 12/29 Boci Finl Prod 3.13 1/30/2015 NZD 3 Finance-Invest Bnkr/Brkr 12/29 Boci Finl Prod 0.80 3/27/2015 HKD 6 Finance-Invest Bnkr/Brkr 12/29 Boci Finl Prod 3.09 4/30/2015 AUD 1 Finance-Invest Bnkr/Brkr 12/29 Boci Finl Prod 3.12 4/30/2015 AUD 2 Finance-Invest Bnkr/Brkr 12/29 Hong Kong T-Bill ZERO 4/8/2015 HKD 31.51B Sovereign 12/29 Hong Kong T-Bill ZERO 7/8/2015 HKD 9B Sovereign 12/29 Kdb Asia Ltd ZERO 3/30/2015 USD 20 Fiduciary Banks 12/28 Dbs Bank (Hk) FRN 1/6/2016 HKD 387 Commer Banks Non-US 12/28 Boci Finl Prod STEP 12/29/2016 CNY 6 Finance-Invest Bnkr/Brkr 12/28 Boci Finl Prod STEP 12/29/2016 AUD 2 Finance-Invest Bnkr/Brkr Source: Bloomberg Note1: outstanding amount with “B” means billion.

Note2: issues here include new bonds and but excludes certificates of deposit in Hong Kong.

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Selected bond market indexes

Developed market: U.S. bond index U.S. sovereign bond index (3M period)

100

110

120

130

140

150

160

2010 2011 2012 2013 2014 2015

U.S. sovereign

U.S. corporate / Investment Grade

U.S. corporate / High yield

145

147

149

151

153

155

157

115

120

125

130

135

140

145

1-N

ov

6-N

ov

11-N

ov

16-N

ov

21-N

ov

26-N

ov

1-D

ec

6-D

ec

11-D

ec

16-D

ec

21-D

ec

26-D

ec

31-D

ec

5-J

an

10-J

an

15-J

an

20-J

an

25-J

an

30-J

an

U.S. sovereign (LHS)

U.S. corporate / Investment Grade (LHS)

U.S. corporate / High yield (RHS)

Source: Bloomberg Source: Bloomberg

Developed market: Eurozone bond index Eurozone bond index (3M period)

95

105

115

125

135

145

155

165

2010 2011 2012 2013 2014 2015

Eurozone sovereign

Eurozone corporate / Investment Grade

Eurozone corporate / High yield

155

156

157

158

159

160

161

129

131

133

135

137

139

1-N

ov

6-N

ov

11-N

ov

16-N

ov

21-N

ov

26-N

ov

1-D

ec

6-D

ec

11-D

ec

16-D

ec

21-D

ec

26-D

ec

31-D

ec

5-J

an

10-J

an

15-J

an

20-J

an

25-J

an

30-J

an

Eurozone sovereign (LHS)

Eurozone corporate / Investment Grade (LHS)

Eurozone corporate / High yield (RHS)


Developed markets: Japan and Hong Kong bond index Japan and Hong Kong bond index (3M period)

97

102

107

112

117

99

101

103

105

107

109

2010 2011 2012 2013 2014 2015

Japan corporate / Investment grade in yen (LHS)

Hong Kong sovereign (RHS)

109

110

110

111

111

112

112

113

113

107

107

107

108

108

108

108

108

1-N

ov

6-N

ov

11-N

ov

16-N

ov

21-N

ov

26-N

ov

1-D

ec

6-D

ec

11-D

ec

16-D

ec

21-D

ec

26-D

ec

31-D

ec

5-J

an

10-J

an

15-J

an

20-J

an

25-J

an

30-J

an

Japan corporate / Investment grade in yen (LHS)

Hong Kong sovereign (RHS)


Notes on bond indexes:

1. Corporate bond indexes: The USD index includes USD-denominated securities with a minimum par amount of 250million that are publicly issued by U.S. and non-U.S. corporate issuers. The EUR Index includes securities with a minimum par amount of 250million that are publicly issued in the European bond

market and denominated in EUR. JPY Index includes securities with a minimum par amount of 20,000MM and are publicly issued in the Japanese bond market.

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Emerging markets: sovereign and corporate bond indexes

Emerging markets: sovereign and corporate bond indexes (3M period)

95

105

115

125

135

145

155

2010 2011 2012 2013 2014 2015

Emerging markets sovereign bond

Emerging markets corporate bond

130

135

140

145

150

1-N

ov

6-N

ov

11-N

ov

16-N

ov

21-N

ov

26-N

ov

1-D

ec

6-D

ec

11-D

ec

16-D

ec

21-D

ec

26-D

ec

31-D

ec

5-J

an

10-J

an

15-J

an

20-J

an

25-J

an

30-J

an

Emerging markets sovereign bond

Emerging markets corporate bond


China bond index: generic corporate bond China bond index: credit bond

125

130

135

140

145

150

Jan-1

4

Feb-1

4

Mar-

14

Apr-

14

May-1

4

Jun-1

4

Jul-14

Aug-1

4

Sep-1

4

Oct-

14

Nov-1

4

Dec-1

4

Jan-1

5

Generic corporate bond total return

125

130

135

140

145 Jan-1

4

Feb-1

4

Mar-

14

Apr-

14

May-1

4

Jun-1

4

Jul-14

Aug-1

4

Sep-1

4

Oct-

14

Nov-1

4

Dec-1

4

Jan-1

5

Credit bond total return


China bond index: high grade corporate bond China bond index: high yield corporate bond

125

130

135

140

145

150

Jan-1

4

Feb-1

4

Mar-

14

Apr-

14

May-1

4

Jun-1

4

Jul-14

Aug-1

4

Sep-1

4

Oct-

14

Nov-1

4

Dec-1

4

Jan-1

5

High grade corporate total return

125

130

135

140

145

150

155

160

Jan-1

4

Feb-1

4

Mar-

14

Apr-

14

May-1

4

Jun-1

4

Jul-14

Aug-1

4

Sep-1

4

Oct-

14

Nov-1

4

Dec-1

4

Jan-1

5

High yield corporate total return


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Interest rate monitor

U.S. treasuries yield curve

(As at 2 February, 2015) China government bond yield curve

(As at 30 January, 2015)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

1M 3M 6M 1Y 2Y 3Y 5Y 7Y 10Y 30Y

(%)

02-Feb-15

1M Ago

3.0

3.2

3.4

3.6

3.8

4.0

4.2

4.4

1Y

2Y

3Y

4Y

5Y

6Y

7Y

8Y

9Y

10

Y

15

Y

20

Y

30

Y

40

Y

50

Y

(%)

30-Jan-15 1 week ago

1M ago 3M ago


U.S. treasury note yield (Year 2008 to present) U.S. treasury note yield (3M period)

0.0

1.0

2.0

3.0

4.0

5.0

2008 2009 2010 2011 2012 2013 2014 2015

(%) 2 year 5 year

10 year

0.0

0.5

1.0

1.5

2.0

2.5

3.0

1-N

ov

6-N

ov

11-N

ov

16-N

ov

21-N

ov

26-N

ov

1-D

ec

6-D

ec

11-D

ec

16-D

ec

21-D

ec

26-D

ec

31-D

ec

5-J

an

10-J

an

15-J

an

20-J

an

25-J

an

30-J

an

(%) 2 year 5 year

10 year


China government bond yield (Year 2008 to present) China government bond yield (3M period)

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2008 2009 2010 2011 2012 2013 2014 2015

(%) 2 year 5 year

10 year

3.0

3.2

3.4

3.6

3.8

4.0

1-N

ov

6-N

ov

11-N

ov

16-N

ov

21-N

ov

26-N

ov

1-D

ec

6-D

ec

11-D

ec

16-D

ec

21-D

ec

26-D

ec

31-D

ec

5-J

an

10-J

an

15-J

an

20-J

an

25-J

an

30-J

an

(%) 2 year 5 year

10 year


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China money market rate: SHIBOR (Year 2009 to present) China money market rate: SHIBOR (3M period)

1.0

3.0

5.0

7.0

9.0

11.0

2009 2010 2011 2012 2013 2014

(%)7D 1M 3M

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

1-N

ov

6-N

ov

11-N

ov

16-N

ov

21-N

ov

26-N

ov

1-D

ec

6-D

ec

11-D

ec

16-D

ec

21-D

ec

26-D

ec

31-D

ec

5-J

an

10-J

an

15-J

an

20-J

an

25-J

an

30-J

an

(%)7D 1M 3M


Turnover and scale monitor on HKMA’s Central Money Markets Unit (CMU)

Turnover of all CMU Issues in the secondary market (all currencies)

Turnover of all CMU Issues in the secondary market by currency (HKD equivalent)

(50.0%)

0.0%

50.0%

100.0%

150.0%

200.0%

50,000

75,000

100,000

125,000

150,000

175,000

200,000

De

c-1

2

Fe

b-1

3

Ap

r-1

3

Ju

n-1

3

Au

g-1

3

Oct-

13

De

c-1

3

Fe

b-1

4

Ap

r-1

4

Ju

n-1

4

Au

g-1

4

Oct-

14

De

c-1

4

HKD mn Amount (LHS) yoy (RHS)

0%

20%

40%

60%

80%

100%

De

c-1

2

Fe

b-1

3

Ap

r-1

3

Ju

n-1

3

Au

g-1

3

Oct-

13

De

c-1

3

Fe

b-1

4

Ap

r-1

4

Ju

n-1

4

Au

g-1

4

Oct-

14

De

c-1

4

Other foreign currency USD RMB HKD

Source: Hong Kong Monetary Authority, Guotai Junan International

Source: Hong Kong Monetary Authority, Guotai Junan International Note: HKD/RMB is based on the average for each year: 2011: 1.20, 2012:

1.23, 2013:1.27, and 2014: 1.28. HKD/USD is based on 7.8

Outstanding amount of all CMU Issues (all currencies)

Outstanding amount of all CMU Issues by currency (HKD equivalent)

0%

10%

20%

30%

40%

50%

60%

700,000

750,000

800,000

850,000

900,000

950,000

1,000,000

1,050,000

De

c-1

2

Fe

b-1

3

Ap

r-1

3

Ju

n-1

3

Au

g-1

3

Oct-

13

De

c-1

3

Fe

b-1

4

Ap

r-1

4

Ju

n-1

4

Au

g-1

4

Oct-

14

De

c-1

4

HKD mn

Amount (LHS) yoy (RHS)

0%

20%

40%

60%

80%

100%

De

c-1

2

Fe

b-1

3

Ap

r-1

3

Ju

n-1

3

Au

g-1

3

Oct-

13

De

c-1

3

Fe

b-1

4

Ap

r-1

4

Ju

n-1

4

Au

g-1

4

Oct-

14

De

c-1

4

Other foreign currency USD RMB HKD

Source: Hong Kong Monetary Authority, Guotai Junan International

Source: Hong Kong Monetary Authority, Guotai Junan International Note: HKD/RMB is based on the average for each year: 2011: 1.20, 2012:

1.23, 2013:1.27, and 2014: 1.28. HKD/USD is based on 7.8

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Recently Published Key Economic Data for China, U.S. and Euro-zone

Economy Indicator Data Period

Current value

Mom / Qoq YoY Market consensus

China Official PMI Jan-15 49.8 (0.3) ppt (0.7) ppt 50.2 China BJ new residential prop. ASP yoy Dec-14 (3.4%) (0.8) ppt (24.0) ppt n.a. China BJ new residential prop. ASP mom Dec-14 (0.2%) 0.1 ppt (0.8) ppt n.a. China Exports(bn USD) Dec-14 227.5 7.5% 9.7% 6.0%

China Imports(bn USD) Dec-14 177.9 13.2% (2.4%) (6.2%) China Trade surplus(bn USD) Dec-14 49.6 (8.9%) 96.5% 49.0 China CPI yoy Dec-14 1.5% 0.1 ppt (1.0) ppt 1.5% China PPI yoy Dec-14 (3.3%) (0.6) ppt (1.9) ppt (3.1%)

China M1 yoy Dec-14 3.2% 0.0 ppt (6.1) ppt 3.3% China M2 yoy Dec-14 12.2% (0.1) ppt (1.4) ppt 12.5% China New RMB loans(bn) Dec-14 697.3 (18.2%) 44.5% 880.0 China Total social financing(bn RMB) Dec-14 1,694.5 47.9% 37.5% 1,200.0

China Industrial Production YoY Dec-14 7.9% 0.7 ppt (1.8) ppt 7.4% China Retail sales (bn RMB) Dec-14 2,580.1 9.9% 11.9% 11.7% China Fixed asset investment(bn RMB) Dec-14 50,200.5 n.a. Ytd 15.7% Ytd 15.7% U.S. Unemployment Rate Dec-14 5.6% (0.3) ppt (1.1) ppt 5.7%

U.S. Change in Nonfarm payrolls ('000) Dec-14 252.0 1.6% 200.0% 240.0 U.S. ISM manufacturing Dec-14 55.5 (1.1) ppt (1.0)ppt 57.5 U.S. Survey of Consumer Confidence Sentiment Jan-15 98.2 4.6 ppt 17.0 ppt 98.2 U.S. Housing Starts annualized(SA'000) Dec-14 1,089.0 4.4% 5.3% 1,040.0

U.S. New Home Sales annualized(SA'000) Dec-14 481.0 11.6% 10.1% 450.0 U.S. Existing Home Sales('000) Dec-14 5,040.0 2.4% 3.5% 5,080.0 U.S. S&P/CS 20 Home Price Indices Oct-14 172.9 (0.2%) 4.3% 173.0 U.S. Real GDP growth QoQ (Annualized) Dec-14 2.6% (2.4) ppt (0.9) ppt 3.0%

Euro-zone GDP qoq Sep-14 0.2% 0.1 ppt 0.0 ppt 0.2% Euro-zone GDP yoy Sep-14 0.8% 0.0 ppt 1.1 ppt 0.8% Source: China Customs, the People's Bank of China, National Bureau of Statistics of China, U.S. Bureau of Labor Statistics, U.S. Department of Commerce, U.S.

Labor department, Euro Stat.

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Company Rating Definition

The Benchmark: Hong Kong Hang Seng Index

Time Horizon: 6 to 18 months

Rating Definition

Buy Relative Performance >15%;

or the fundamental outlook of the company or sector is favorable.

Accumulate Relative Performance is 5% to 15%; or the fundamental outlook of the company or sector is favorable.

Neutral Relative Performance is -5% to 5%;

or the fundamental outlook of the company or sector is neutral.

Reduce Relative Performance is -5% to -15%; or the fundamental outlook of the company or sector is unfavorable.

Sell Relative Performance <-15%;

or the fundamental outlook of the company or sector is unfavorable.

Sector Rating Definition

The Benchmark: Hong Kong Hang Seng Index

Time Horizon: 6 to 18 months

Rating Definition

Outperform Relative Performance >5%; or the fundamental outlook of the sector is favorable.

Neutral Relative Performance is -5% to 5%;

or the fundamental outlook of the sector is neutral.

Underperform Relative Performance <-5%; or the fundamental outlook of the sector is unfavorable.

DISCLOSURE OF INTERESTS

(1) The Analysts and their associates do not serve as an officer of the issuer mentioned in this Research Report.

(2) The Analysts and their associates do not have any financial interests in relation to the issuer mentioned in this Research Report.

(3) Except for Shandong Chenming Paper Holdings Limited-H shares(01812) and China All Access (Holdings) Limited(00633), Sinopec Shanghai Petrochemical Company Limited-H shares(00338), Guangshen Railway Company Limited-H shares(00525), Guotai Junan International Holdings Limited (01788) and Binhai Investment Company Limited (02886), Guotai Junan and its group companies do not

hold equal to or more than 1% of the market capitalization of the issuer mentioned in this Research Report.

(4) Guotai Junan and its group companies have had investment banking relationships with Jiangsu Express-H shares (00177) / China All Access Holdings Ltd. (00633) / China Dredging (00871) / Huaneng Power-H shares (00902) / Huaneng Renewables Corporation Limited-H shares (00958) / Modern Land (01107) / Yanzhou Coal Mining Co., Ltd.-H shares (01171) / Merry Garden Holdings Ltd.

(01237) / Powerlong Real Estate (01238) / Baguio Green (01397) / Chanjet Information Technology-H shares (01588) / Redco Properties (01622) / China Creative Home (01678) / Colour Life (01778) / CGN Meiya (01811) / China Int'l Marine Containers (Group)

Co., Ltd.-H shares (02039) / Shanghai Electric-H shares (02727) / China Shipping Container Lines Co. Ltd.- H Shares (02866) / Xiezhong International Holdings Limited (03663) / Xiao Nan Guo (03666) / China U-Ton Holdings Ltd. (06168) and China Wood Optimization

(08099) mentioned in this Research Report within the preceding 12 months.

DISCLAIMER

This Research Report does not constitute an invitation or offer to acquire, purchase or subscribe for securities by Guotai Junan Securities (Hong Kong) Limited ("Guotai Junan"). Guotai Junan and its group companies may do business that relates to companies covered in research

reports, including investment banking, investment services and etc. (for example, the placing agent, lead manager, sponsor, underwriter or invest proprietarily).

Any opinions expressed in this report may differ or be contrary to opinions or investment strategies expressed orally or in written form by sales persons, dealers and other professional executives of Guotai Junan group of companies. Any opinions expressed in this report may differ or be contrary to opinions or investment decisions made by the asset management and investment banking groups of Guotai Junan.

Though best effort has been made to ensure the accuracy of the information and data contained in this Research Report, Guotai Junan does not guarantee the accuracy and completeness of the information and data herein. This Research Report may contain some forward-looking estimates and forecasts derived from the assumptions of the future political and economic conditions with inherently unpredictable and

mutable situation, so uncertainty may contain. Investors should understand and comprehend the investment objectives and its related risks, and where necessary consult their own financial advisers prior to any investment decision.

This Research Report is not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation or which would subject Guotai Junan and its group companies to any registration or licensing requirement within such jurisdiction.

© 2015 Guotai Junan Securities (Hong Kong) Limited. All Rights Reserved. 27/F., Low Block, Grand Millennium Plaza, 181 Queen’s Road Central, Hong Kong.

Tel.: (852) 2509-9118 Fax: (852) 2509-7793 Website: www.gtja.com.hk

Company Report: Sinotrans Shipping (00368 HK)...2.0 2.5 3.0 1-v 6-v 11-v 16-v 21-v 26-v 1-c 6-c 11-c 16-c 21-c 26-c 31-c 5-n 10-n 15-20-25-30-(%) 2 year 5 year 10 year Source: Bloomberg

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