gdz_082914_9191

8/9/2019 GDZ_082914_9191

1/10

China Everbright Research Limited Please read the analysts and c ompany disclosur e and the disclaimer in th e last page

Equities Hong Kong/China Company Update Company Report

GCL-Poly (3800 HK) Improved Margins to Continue

GCL released satisfactory 1H14 result. It is in line with our

expectation and we expect an even better 2H14 result. Given

greater visibility on strong performance, we raise our TP to

HKD3.2.

1H14 result in line with expectation. GCL achieved strongperformance, with revenue and gross profit increased 52.4%and 393.7% YoY. Net profit to shareholders recorded atHK$0.9 bn comparing to loss of HK$0.9bn in the same periodlast year. The improvement is mainly due to the recovery ofGCL’s upstream poly/wafer business with higher ASP andlower production cost.

Domestic downstream demand to surge again in 2H14.NEA reiterated the whole year solar installation target of 13GWin 2014 and announced a few new policies early this month.The new policies help unleash the market demand forground-mounted solar farms and distributive projects. Webelieve downstream demand will start to pick up and reach10GW in 2H14.

China to Close Polysilicon Import Loophole. China’sMinistry of Commerce is to ban the import of tariff-dodgingsolar-grade polysilicon from 1 September. We estimate it couldresult in around 10,000MT decrease in polysilicon supply in thesecond half. The trade action could help stabilize thepolysilicon domestic spot price in 3Q14 and even unleash itsupward potential in 4Q14 from current level.

Maintain Buy. We maintain our earning estimates for thecompany. Given greater visibility on greater downstreamdemand, more stable ASP, continuing cost reduction, we raise

our target price to HKD 3.2, representing 23.7X PE and PEG of0.46 based on 51.3% CAGR in FY14-16 earnings.

Investment Summary

FY-end Dec 2012 2013 2014E 2015E 2016E

Turnover (HK$ m) 22,348 25,530 30,851 33,985 35,407

Growth (%) (12.4) 14.2 20.8 10.2 4.2

Net Profit (HK$ m) (3,516) (664) 2,105 3,462 4,618

Growth (%) NA NA NA 64.6 33.7

EPS (HK$) (0.23) (0.04) 0.14 0.22 0.30

Growth (%) NA NA NA 64.6 33.7

PER (x) N/A N/A 16.3 9.9 7.4

OCF/Share (HK cents) 15 55 49 57 72

P/B (x) 2.1 2.1 2.0 1.7 1.5

EV/EBITDA (x) 18.2 15.3 6.8 5.2 4.0DPS (HK$) - - 0.03 0.04 0.06

Yield (%) - - 1.3 1.8 2.7

Sources: Company data, CER estimates

29 August 2014

China / Alternative Energy / Solar

BUYSharePrice

TargetPrice

Upside

HK$2.68 HK$3.20 19.40%

(As of 28 August 2014)

Daniel YangCE No: BDJ027(852) 2823 [email protected]

52 Week Pri ce Range (HK$) 1.85-3.17Yield (%) --

Latest Key DataFF no of shares (m) 10,452

FF (%) 67.49

FF market cap (HK$ m) 29,057

12M daily turnover (HK$ m) 303.10

12M volatility (%) 52.31678RoE FY13 (%) 1.85-3.17

P/B FY13 (x) 10,452

Net debt/equity FY13 (%) 67.49

Performance (%)1M YTD 12M

Absolute 4.5 15.8 43.3

Relative to HSCEI 6.1 14.7 32.2

Major Shareholder (%) Asia Pacific Energy Fund LTD 30.8

Free float 67.49

Price Chart

HK$ Turnover (HK$ m)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

Feb-14Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14

0

200

400

600

800

1000

1200

1400

1600GCL-Poly Energy HSI

Sources: Bloomberg, CER estimates

8/9/2019 GDZ_082914_9191

2/10

CHINA / ALTERNATIVE ENERGY / SOLAR

China Everbright Research Limited Please read the analysts and company disclosu re and the disclaimer in t he last page 2

1H14 Result in Line with Expectation

GCL released its 1H14 results which is in line with our expectation. Revenueamounted to HK$17.2bn, representing a 52.4% YoY growth. Gross profitincreased by 393.7% YoY to HK$3.7bn attributing to both higher ASP and lower

production cost. Profit attributable to shareholders was HK$0.9bn, comparing toa loss of HK$0.9bn in the same period last year. We are optimistic about GCL’sbusiness in the second half as the margins are likely to improving.

Figure 1: 1H14 result review

HK$ 1H14 1H13 YoY%

Revenue 17,222 11,230 52.4

COS (13,544) (10,554) (28.5)

Gross profit 3,678 745 393.7

Other income 618 341 81.2

Selling and distribution expenses (34) (20) (70.0)

Administrative expenses (1,127) (822) (37.1)

Finance costs (1,406) (1,091) (28.9)

Other expenses

(428) 82 N/A

Profit before tax 1,301 (765) N/A

Income tax (288) (71) (305.6)

Net profit 1,013 (836) N/A

Source: Company data

Polysilicon/wafer manufacturing business, the company’s core businessdelivered satisfactory results with revenue of HK$11.9bn, representing a YoYgrowth of 56.6%. During the period, polysilicon capacity was maintained at65,000MT and wafer capacity increased to 12GW from 10GW at the end of 2013.The company has been operating at full utilization rate and sold 98% of its waferproduced during the period. The production cost decreased 7.6% and 8.6% fromthe end of 2013 for polysilicon and wafer respectively. The ASP recorded 30%and 15% YoY growth for polysilicon and wafer respectively due to a low baseeffect in the same period last year.

For 2H14, the company plans to continue its capacity expansion plan to achievecapacity of 75,000MT and 13GW for polysilicon and wafer respectively inresponse to stronger downstream demand in the second half. The managementis confident to keep full utilization rates for both the polysilicon and waferbusinesses throughout the year based on the contracts on hand.

Also, starting from this year, the company has been switching its wafer productmix towards more high end products, including the S2/S3 series of poly waferand G series of mono wafer. The S2/S3 and G series possess higher PV

efficiency hence enjoy price premiums to ordinary poly wafers. Especially for theG series mono wafer, as more and more solar cells and modules producerschoose mono over poly for its higher efficiency we expect mono wafer to becomethe company’s major product and provide higher margins in the near future.

Figure 2: GCL’s wafer pro duct mix in 2013 and 2014E

Ordinary

Poly wafer

49%

S2 Poly

wafer 49%

S3 Poly

wafer

2%

S2 Poly

wafer

50%

G Mono

wafer

12%

S3 Poly

wafer

38%


8/9/2019 GDZ_082914_9191

3/10



Figure 3: GCL’s wafer produ cts

Wafer PV efficienc y Additional Cost Pr ice premium

Ordinary Poly 17.20% N/A N/A

S2 Poly 17.70% - 5-10%

S3 Poly 17.95% - 10-15%

G1 Mono

18.30%5% 10-15%

G2 Mono 19.50% 5% 15-20%


The company is confident in further cutting production cost in 2H14. By the endof 1H14, the production cost was US$15.25/Kg for polysilicon and the processingcost was US$0.079/w for wafer. Management expects the first 12,000MT FBRproduction line to commerce operation in October and the production cost ofpolysilicon under the FBR technology is significantly lowered to US$9/Kg andUS$8/Kg by the end of 2014 and 2015 respectively, better than previousestimation of US$10/Kg. For the captive power plant, however, its progress isslower than expected. Management postpones the estimated operation date

from July to the end of 2014. We believe the FBR production line together withthe captive power plant could release great potential in cost reduction in 2015.

For the downstream solar farm business, however, the company had only 20MWnew installed capacity in the first half. The progress is slower than ourexpectation but in line with the national trend. Management reiterates theinstallation of 600MW to 800MW solar farm in the second half through GCL NewEnergy (0451.HK, NR), marking the total capacity to 1GW by the end of this year.

8/9/2019 GDZ_082914_9191

4/10



Domestic Downstream Demand to Surge in2H14 Driven by Government Support

After a turnaround along the solar value chain since 2013 due to the boom in

domestic downstream market, the National Energy Administration (NEA) set aneven more ambitious quota of 14GW for 2014. At the same time, it tries to switchthe market focus to distributive project by granting a quota of 8GW, exceedingthe 6GW quota for ground-mounted solar farms. However, in 1H14, thedownstream demand in China was weaker than expected. According to theNEA’s figures, installed capacity was only 3.3GW in 1H14, including 1GW fordistributive projects and 2.3GW for ground-mounted solar farms.

Figure 4: Domestic solar installation (GW)

1.32.3

6

1.5 1

8

2.8 3.3

14

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

1H13 1H14 14 Quota

Ground-mounted

Distributive

Total

Sources: MIIT, CER

The slow installation in ground-mounted solar farms was mainly attributed to tightquota and slow granting of construction approval. In fact the market has greatenthusiasm and incentive in investing in ground-mounted solar projects.However, the initial quota of 6GW set by the NEA can not satisfy the investmentdemand. HK-listed companies alone have a project pipeline around 6GW in 2014.Due to the keen competition, local authorities were more cautious in distributingout quota and slowed down the approval process. While for distributive projects,investors were concerned about the uncertainty of project return as well asdifficulty in finding suitable rooftops, financing and so on. Therefore, most of thesolar project investors were still on the fence and the market demand fordistributive installation was weaker than expected.

In China, the installation progress of distributive projects is far behindground-mounted projects, with only 1GW out of the total 11.3GW solar projectsinstalled in 2013. From NEA’s perspective, to encourage more distributiveinstallation is beneficial as its closer to electricity users. However, we believeNEA’s initial target was too aggressive and the demand for distributive installationis unlikely to exceed ground-mounted installation before 2016.

In order to refuel the downstream installation, NEA reiterated the whole yearsolar installation target of 13GW in 2014 and announced a few new policies earlythis month. Firstly, it is to establish a more efficient ground-mounted solar farmsmanaging system, including flexible quota distributing, corresponding griddevelopment, project quality control and so on. Secondly, it is to reclassifyground-mounted projects which are located in wasteland and below 20MW as

distributive projects, implicitly increasing the quota for ground-mounted projects.Thirdly, it is to enable distributive projects to enjoy the same level of feed-in-tariffas ground-mounted projects (Rmb0.9-1.0/KWH). Last but not least, support fromlocal governments and financial institutions are encouraged.

8/9/2019 GDZ_082914_9191

5/10



In our view, the new policies help unleash the market demand forground-mounted installation by easing the quota and speeding up approvalprocess. As the construction cycle for a typical ground-mounted solar farm is onlya few months, we believe it could again spur domestic downstream market in2H14 with 6GW installation. At the same time, the new policies provide strongsupport to distributive projects by increasing visibility and return. Although someissues remain, like financing, we believe distributive installation will start to pickup and reach 3-4GW in 2H14.

Also in August, NEA revealed that it will research on the feasibility ofimplementing the Renewables Obligation Standard (ROS) in order to furthersupport the development of the renewable energy industry. The ROS generallyplaces obligations on power companies to produce and grid companies to utilizea specified fraction of their electricity from renewable energy sources. The ROSmechanism has been adopted in several countries, including the US, Britain andItaly, and successful in stimulating new renewable energy capacity.

Currently, traditional state-owned power companies’ participation in solar projects

is very low. Also, in some Northwest areas, electricity generated from solarprojects has a low priority in grid connection and in worst case not allowed toconnect to the grid.

Figure 5: China power capacity and electricity producti on comp osition by 1H14

Thermal70.24%

Hydro

20.28%

Nuclear

1.42%Wind

6.61%

Solar

1.45% Nuclear

2.16% Solar

0.40%Wind

3.00%

Hydro

14.19%

Thermal

80.25%

Sources: Wind, CER

In our view, the key drivers of solar industry are robust downstream demand anddecreasing production cost. Therefore, by creating large compulsive downstreamdemand, it may take the whole solar industry into a new booming era once theROS is implemented.

8/9/2019 GDZ_082914_9191

6/10



China to Close Polysilicon Import Loophole

China’s Ministry of Commerce is to ban the import of tariff-dodging solar-gradepolysilicon from 1 September, by halting the application of polysilicon processingfor trade terms. According to a statement on the ministry website, the measure is

in response to rushing polysilicon imports from US, Europe and South Korea. Inour view, it seems more likely to counteract the punitive trade duties on Chinesemodules announced by the US previously. We believe the halt is likely to lastthroughout the year. China may change its mind after the US announcedfavourable final ruling on Chinese modules in Jan 2015.

Early this year, China placed punitive duties on polysilicon import from the US,EU and South Korea, however, importers have been able to avoid tariffs under“trade processing” rules. In 1H14, China imported 46,000MT of polysilicon,increasing 17.4% from a year back; whereby 74.2% of them, namely 34,000MTwere under trade processing. Germany, South Korea and the US are the topthree importers, with 15,000MT, 14,000MT and 10,000MT respectively. With

Germany's Wacker securing a minimum price agreement to exempt from existingduties and Korea's OCI’s low tariff rate of 2.4%, the target of the loophole ispresumably US producers. Given the high tariff rate, we therefore believe theChina market is no longer viable for the US polysilicon makers. Domesticproducers, including GCL, TEBA and Daqo will be the major beneficiaries whileWacker and OCI may also increase their market shares.

Figure 6: 1H14 polysilicon imports to China (MT)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

US Korea Germany Others Total

Normal terms

Trade processing

Sources: CNIA, CER

Figure 7: Major polysilicon producers

Company Country Capacity Anti-dumping tari ff Anti-subsidy tari ff

Hemlock The US 46,000 53.3% 2.1%

REC The US 20,000 57.0% 0.0%

Sunedison The US 4,200

53.7% 0.0%

Wacker Germany 52,000 N/A N/A

OCI Korea 42,000 2.4% 0.0%

GCL-Poly China 75,000 N/A N/A

TEBA China 17,000 N/A N/A

Daqo China 12,000 N/A N/A

Sources: CNIA, Company data

NPD Solarbuzz and PV Pulse estimated the global photovoltaic modulesproduction in 2014 will increase by 10GW to around 50GW. Assuming 1)

Chinese module makers make up for 65% of the production, 2) 90% of themodules are crystalline-silicon modules and 3) average silicon needed per wattof output is 5.5g/W, we estimate total domestic demand for polysilicon is161,000MT this year, slightly below estimated supply of 176,000MT.

8/9/2019 GDZ_082914_9191

7/10



Even though the downstream demand is expected to be much stronger in 2H14than in 1H14, domestic wafer producers have been operating in high or even fullutilization from the beginning of the year. Therefore, the demand for polysilicon isexpected to be steady throughout the year. Hence, we estimate there is around10,000MT decrease in polysilicon supply in the second half thanks to the halt oftrade processing.

Domestic polysilicon spot price has been on a moderate downtrend since itreached one-year-high of US$22.6/Kg in March. We believe the decrease insupply could help stabilize the polysilicon domestic spot price in 3Q14 and evenunleash its upward potential in 4Q14 from current level. However, afterconsidering potential production capacity expansion and average lead time, weestimate the upside is limited to 6.5% and the spot price is not likely to be aboveUS$22/Kg. Historically, wafer spot price fluctuates in parrallel with polysiliconspot price, but less volatile. In our view, wafer price will be steady in 3Q14. Ifpolysilicon spot price goes up by 6.5% in 4Q14, wafer spot price is likely toincrease by around 3%. However, in the long term, we believe both thepolysilicon and wafer spot prices will be edge down, driven by decreasing

production cost.

Figure 8: Domestic pol ysilicon and wafer price trend

14.0015.00

16.00

17.00

18.00

19.00

20.00

21.00

22.00

23.00

J a n - 1 3

M a r - 1 3

M a y - 1 3

J u l - 1 3

S e p - 1 3

N o v - 1 3

J a n - 1 4

M a r - 1 4

M a y - 1 4

J u l - 1 4

S e p - 1 4 E

N o v - 1 4 E

Polysilicon domestic spot price (USD/KG)

0.600.70

0.80

0.90

1.00

1.10

1.20

1.30

1.40

J a n - 1 3

M a r - 1 3

M a y - 1 3

J u l - 1 3

S e p - 1 3

N o v - 1 3

J a n - 1 4

M a r - 1 4

M a y - 1 4

J u l - 1 4

S e p - 1 4 E

N o v - 1 4 E

156mm Poly wafer domestic spot price (USD/Piece)

156mm Mono wafer domestic spot price (USD/Piece)

Sources: Wind, CER

8/9/2019 GDZ_082914_9191

8/10



Key Risks

Launch of captive power plant and FBR production line put off. Any delaysin these projects would affect the company’s cost reduction plan.

Slow progress in new solar farms. The company has ambitious target of600MW to 800MW capacity expansion plan in its solar farms. Delay in theseprojects could affect GCL’s earnings.

Withdrawal of government suppor ts. The governments around the globe mayreadjust their policies for the solar industry, including revising down the FiTs orsubsidies, which will suppress end-market demand and have negative impact onthe supply chain.

Trade disputes. More trade disputes regarding solar products may arise acrossmajor solar markets due to trade protectionism, stirring up uncertainties of supplyand demand in the industry.

8/9/2019 GDZ_082914_9191

9/10



Company BackgroundGCL-Poly is a leading manufacturer of polysilicon and wafer for global solar market. It has ramped up its polysilicon production capacity to65,000MT and wafer production capacity of 12GW at 1Q14. GCL forayed into the downstream solar projects business in recent years and have atotal of 321MW solar projects in operation worldwide. Meanwhile, GCL owns and invests in a total of 19 cogeneration power plants, two incinerationpower plants and one wind power plant in China.

Profit & Loss (Consolidated)FY-end 31 Dec (HK$ m) 2012 2013 2014E 2015E 2016ESales 22,348 25,530 32,587 34,900 37,061

Cost of sales (20,599) (22,490) (25,271) (25,861) (26,089)Gross profit 1,749 3,039 7,316 9,039 10,972Other income 784 965 1,079 1,201 1,245Operating expenses (3,481) (2,285) (2,640) (2,867) (3,094)

Operating profit (948) 1,719 5,756 7,374 9,123Finance cost (2,309) (2,416) (3,019) (2,727) (2,465)Share of P/L of asso. & JCE (4) 441 - - -Pre-tax profit (3.261) (256) 2,737 4,646 6,658

Tax (124) (190) (410) (836) (1,332)

Minorities (130) (218) (233) (381) (533)

Net profit (3,515) (664) 2,094 3,429 4,794

EBITDA 1,877 5,547 9,327 11,065 12,967EBIT (952) 2,160 5,756 7,374 9,123

EPS (HK$) (0.23) (0.04) 0.14 0.22 0.31

DPS (HK$) - - 0.03 0.04 0.06

Sources: Company, CER estimates

Cash Flow (Consolidated)FY-end 31 Dec (HK$ m) 2012 2013 2014E 2015E 2016EOperating cash flow 2,326 8,507 7,704 10,401 10,079

Profit before tax (3,261) (256) 2,737 4,646 6,658

Depreciation & amortization 2,742 3,278 3,450 3,570 3,723

Change in working capital (844) 3,458 (832) 648 (1,053)

Others 3,689 2,027 2,349 1,536 752

Investment cash flow (5,311) (6,668) (1,475) (1,562) (2,333)Net Capex (4,970) (3,483) (1,827) (1,989) (2,769)

Disposal 128 181 - - -

Others (469) (3,366) 352 427 436

Free cash flow (2,985) 1,839 6,229 8,839 7,746

Financing cash flow 617 (329) (544) (6,926) (6,641)

Change in share capital - - - - -

Net change in debt 3,953 2,042 2,475 (3,780) (3,490)

Dividend paid (851) - - (418) (686)

Others (3,336) (1,713) (3,018) (2,727) (2,465)Net impact of exchangefluctuation

(20) 163 - - -

Net cash flow 2,388 1,673 5,685 1,913 1,105


Balance Sheet (Consol idated)FY-end 31 Dec (HK$ m) 2012 2013 2014E 2015E 2016ETotal assets 67,818 76,643 80,585 80,812 83,346Current assets 22,169 28,057 34,362 35,752 39,179

Cash & cash equiv 9,510 14,249 19,531 21,060 21,801Marketable securities & ST 46 12 12 12 12

Account & notes receivable 8,681 11,057 11,931 11,432 13,725

Inventories 3,425 2,462 2,610 2,967 3,359

Others 507 277 278 280 281

Non-current assets 45,649 48,585 46,222 45,060 44,168

LT investments 451 536 536 536 536

Net fixed assets 42,233 43,995 41,611 40,425 39,507

Others 2,965 4,054 4,076 4,099 4,125

Total liabilities 50,048 58,638 61,267 58,228 56,658

Current liabilities 30,439 42,045 44,788 42,555 42,087

Account payable 9,128 13,737 13,695 14,642 16,758

ST borrowings 20,170 26,331 29,116 25,936 23,352

Others 1,141 1,977 1,976 1,977 1,977

Non-current liabilities 19,609 16,593 16,479 15,672 14,571

Long-term debts 16,741 14,460 14,347 13,540 12,438

Others 2,858 2,133 2,133 2,133 2,133

Total equities 17,770 18,005 19,318 22,495 26,397

Shareholders’ equity 16,210 16,146 17,226 20,023 23,392

Minority shareholders 1,560 1,859 2,092 2,473 3,005

Total l iabilities + SH equities 66,258 74,784 78,493 78,250 80,050

Net cash / (debt) (27,401) (26,542) (23,932) (18,416) (13,989)

Working capital (8,270) (13,988) (10,425) (6,803) (2,908)

Total capital employed 37,379 34,598 35,797 38,257 41,259

SH equity + Minorities 17,770 18,005 19,318 22,495 26,397

Net gearing (%) 154.2 147.4 123.9 81.9 53.0Sources: Company, CER estimates

Financial SummaryFY-end 31 Dec 2012 2013 2014E 2015E 2016EGrowth (%)

Revenue -12.4 14.2 27.6 7.1 6.2

EBITDA -79.0 195.5 68.2 18.6 17.2

EBIT NA NA 166 28.1 23.7

Net profit NA NA NA 63.8 39.8

EPS NA NA NA 63.8 39.8

Margins (%)Gross 7.8 11.9 22.5 26.0 29.6

EBITDA 8.4 21.7 28.6 31.7 35.0

EBIT -4.3 8.5 17.7 21.1 24.6

Net -15.2 -1.8 7.1 10.9 14.4

Others (%)

Effective tax rate -3.8 -74.3 15.0 18.0 20.0

Payout ratio - - 20.0 20.0 20.0

RoCE -2.6 6.2 16.1 19.3 22.1

Average RoE -17.6 -3.7 11.2 16.4 19.6

Average RoA -5.2 -0.9 2.7 4.3 5.8

Interest cover (x) -0.4 0.9 1.9 2.7 3.7

Receivables turnover days 87 111 105 100 103

Inventory turnover days 42 32 2 5 28 33

Payables turnover days 72 114 95 95 103


8/9/2019 GDZ_082914_9191

10/10

China Everbright Research Limited

China Everbright Research Limited Rating System Buy Expected to outperform the benchmark index by >15% over the next six months Accumulate Expected to outperform the benchmark index by 5 - 15% over the next six monthsHold Expected to outperform or underperform the benchmark index by 15% over the next six months

Analyst Cert ificat ion

The research analyst(s) primarily responsible for the preparation of this report hereby certify that –(1) All of the views expressed in this report accurately reflect his or her or their personal views about the subject

company or companies and its/theirs securities;(2) No part of his or her or their compensation was/were, is/are or will be directly or indirectly, related to the specific

recommendations or views expressed in this report or any specific investment banking function;(3) He/she/they are not directly supervised by, and do not directly report to, investment banking functions;(4) He/she/they has/have not breach the quiet period restriction of dealing in the securities covered in this report;

(5) He/she/they is/are not an officer and do(es) not hold any directorship in the company or companies this reportcovered.

Disclosure

China Everbright Securities International Limited, a substantial shareholder of China Everbright Research Limited, doesnot have financial interests (including stock holding) that equal 1% or more of the market capitalization of the companyunder review at the date this report is published; does not have investment banking relationship with the company underreview within the past 12 months; and does not have market-making activities in the stock. None of our staff is an officerof the company.

Disclaimer

This report has been prepared by China Everbright Research Limited with the contribution by Everbright SecuritiesCompany Limited – Everbright Securities Research. China Everbright Research Limited does not guarantee, eitherexpressed or implied, the completeness, reliability and accuracy of the materials contained in the report.

This report has been prepared for general reference and no part of this report is to be constructed as an offer, invitation,advertisement or inducement whatsoever, or form to buy or sell any securities or financial instruments whether referredto herein or otherwise. Opinions in this report are subject to change by the original writer without notice. China EverbrightResearch Limited does not accept any liability whatsoever, directly, indirectly, consequential or incidental that may arisefrom the use of or reliance on the contents of this report.

China Everbright Research Limited and its affiliates and their respective associates, directors, employees or officers mayfrom time to time have long or short positions in securities, warrants, futures, options, derivatives or any other interestsand/or underwriting commitments in the securities or financial instruments referred to in this report.

Reports by China Everbright Research Limited do not have regard to the specific investment objectives, financialsituation, risk tolerance or the particular needs of any investor. Before entering into any investment contract, individualshould exercise judgment or seek for professional advice when necessary. The information contained herein is believedto be reliable. Its completeness and accuracy are, however, not guaranteed.

All copyrights are reserved by China Everbright Research Limited. This report or any part of its contents must not bereproduced in whole or in part without the prior written approval of China Everbright Research Limited.

China Everbright Research Limited is licensed by the Securities and Futures Commission (SFC) and is governed under

the rules and regulations of the SFC and the Securities and Futures Ordinances and its subsidiary legislation.

Address: 17/F., Far East Finance Centre, No. 16 Harcourt Road, Hong Kong.Contact No.: (852) 2860-1101

gdz_082914_9191

Documents