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Table of Contents

These reports were compiled using a product of Thomson Reuters www.thomsonreuters.com

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Rpt. 22203669 XINCHEN CHINA POWER HOLDINGS LTD 2 - 35

20-Jul-2013 WRIGHT INVESTORS SERVICE

- WRIGHT REPORTS, ALEX, ET AL


17-Jul-2013 SUN HUNG KAI FINANCIAL

- LI, HANNAH, ET AL


17-Jul-2013 SUN HUNG KAI FINANCIAL

- LI, HANNAH, ET AL


21-Jun-2013 WRIGHT INVESTORS SERVICE

- WRIGHT REPORTS, ALEX, ET AL


29-May-2013 SUN HUNG KAI FINANCIAL

- SO, DANIEL, ET AL


29-May-2013 SUN HUNG KAI FINANCIAL

- SO, DANIEL, ET AL


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Company FundamentalsCompany Fundamentals\Company Profile

COMPANY PROFILEF i g u r e s i n C h i n e se R e n m i m b i

A Wright Investors' Service Research Report:

Xinchen China Power Holdings Ltd440 Wheelers Farms Road

Milford, CT 06461 U.S.A.

Wright Quality Rating:DANN

Xinchen China Power Holdings Ltd. Xinchen China Power Holdings Limited is an

investment holding company. The Company is a automotive engine manufacturer.

The Company operates in the three segments: gasoline engines segment, diesel

engines segment, as well as engine components and service income segment. The

Company's main products include light-duty gasoline and diesel engines, as well as

engine components. The Company manufactures and sells 36 models of automotive

engines, which are installed in a range of photovoltaic vehicles (PVs) and light

commercial vehicles (LCVs), including sedans, sports utility vehicles (SUVs), multi-purpose vehicles (MPVs), small buses, minibuses, small and light-duty trucks.

Stock Price (7/12/2013): 2.02

Stock Chart

Recent stock performance

1 Week -5.9%

4 Weeks -1.0%

13 Weeks 27.1%

52 Weeks %

Chairman

Xiao An Wu

Executive Director & ChiefExecutive

Yunxian Wang

Chief Financial Officer

Bingchu Xu

Secretary

Sam Ming Fung

Officers

Earnings / Dividends (as of 12/31/2012)

Earnings Dividends

Most Recent Qtr 0.07 n.a.

Last 12 Months 0.31

Ratio Analysis

Price / Earnings Ratio 6.51 Dividend Yield N/A

Price / Sales Ratio 0.74 Payout Ratio N/A

Price / Book Ratio 1.43 % Held by InsidersN/A

Key Data

Ticker:1148

2012 Sales:

2,572,741,000

Major Industry:Aerospace

Sub Industry:Engines, Components &

Parts Mfrs.

Country:

China

Currency:

Chinese Renmimbi

Fiscal Year Ends:

December

Employees

1,020

Exchanges:

HKG

Share Type:

Ordinary

Market Capitalization:

1,896,871,888

Total Shares

Outstanding:

940,199,794

Closely Held Shares:N/A

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Address

Jianmen Road West Fucheng District

MIANYANG Sichuan 1-1108CHINA

PhoneHome Page

http://www.xinchenpower.com

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Company Fundamentals\Comparative Business Analysis

Comparative Business Analysis: Xinchen China Power Holdings LtdReport Date: July 19, 2013

Company Description

Xinchen China Power Holdings Ltd. Xinchen China Power Holdings Limited is an investment holding company. The

Company is a automotive engine manufacturer. The Company operates in the three segments: gasoline engines

segment, diesel engines segment, as well as engine components and service income segment. The Company'smain products include light-duty gasoline and diesel engines, as well as engine components. The Company

manufactures and sells 36 models of automotive engines, which are installed in a range of photovoltaic vehicles

(PVs) and light commercial vehicles (LCVs), including sedans, sports utility vehicles (SUVs), multi-purpose

vehicles (MPVs), small buses, minibuses, small and light-duty trucks.

Competitor Analysis

Xinchen China Power Holdings Ltd operates in the Motor vehicle parts and accessories sector. This analysis

compares Xinchen China Power Holdings Ltd with three other companies: Dongfeng Elec. & Tech., Ltd. (2011

sales of 2.58 billion Chinese Renmimbi [US$421.36 million] of which 78% was Car Parts), Guizhou GuihangAutomotive Components (2012 sales: 2.61 billion Chinese Renmimbi [US$425.84 million] of which 88% was

Motor Vehicle Industry), and China Automotive Systems Inc (2012 sales of 2.12 billion Chinese Renmimbi

[US$345.19 million] of which 56% was Henglong). Note: not all of these companies have the same fiscal year:

the most recent data for each company are being used.

Sales Analysis

Xinchen China Power Holdings Ltd reported sales of 2.57 billion Chinese Renmimbi (US$419.43 million) for the year

ending December of 2012. This represents an increase of 11.5% versus 2011, when the company's sales were2.31 billion Chinese Renmimbi. This was the fourth straight year of sales growth at Xinchen China Power Holdings

Ltd. Sales of Gasoline Engines saw an increase of 14.2% in 2012, from 1.80 billion Chinese Renmimbi to 2.06

billion Chinese Renmimbi.

Xinchen China Power Holdings Ltd currently has 1,020 employees. With sales of 2.57 billion Chinese Renmimbi

(US$419.43 million) , this equates to sales of US$411,210 per employee. This is much higher than the three

comparable companies, which had sales between US$60,385 and US$95,437 per employee. Note that some of

the figures stated herein could be distorted based on exact classification of employees and subcontractors.

Sales Comparisons (Most Recent Fiscal Year)

Recent Stock Performance

The current (7/12/2013) price of this stock is 2.02 Chinese Renmimbi. During the past 13 weeks, the stockhas increased 27.1%. During the 12 months ending 12/31/2012, earnings per share totalled 0.31 Chinese

Renmimbi per share. Thus, the Price / Earnings ratio is 6.51. Note that the earnings number Includes Or Excludes

Extraordinary Charge Or Credit. The P/E ratio of 6.5 is lower than the P/E ratios of all three comparable

companies, which are currently trading between 7.2 and 22.3 times earnings. This company is currently tradingat 0.74 times sales. Xinchen China Power Holdings Ltd is trading at 1.43 times book value.

Summary of company valuations (as of 7/12/2013).

Company

Year

Ended

Sales

(blns)

SalesGrowth

Sales/

Emp (US$) Largest Region

Xinchen China Power Holdings Ltd Dec 2012 2.573 11.5% 411,210 China (100.0%)

Dongfeng Elec. & Tech., Ltd. Dec 2011 2.585 12.0% 84,644 N/A

Guizhou Guihang Automotive Components Dec 2012 2.612 -1.7% 60,385 China (95.3%)

China Automotive Systems Inc Dec 2012 2.117 -5.6% 95,437 China (86.6%)

Company P/E

Price/

Book

Price/

Sales

52 Wk

Pr Chg

Xinchen China Power Holdings Ltd 6.5 1.43 0.74 N/A

Dongfeng Elec. & Tech., Ltd. 18.9 2.84 0.74 -15.72%

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The market capitalization of this company is 1.90 billion Chinese Renmimbi (US$309.25 million) .

Dividend Analysis

This company has paid no dividends during the last 12 months. The company has not paid any dividends duringthe previous 4 fiscal years.

Profitability Analysis

On the 2.57 billion Chinese Renmimbi in sales reported by the company in 2012, the cost of goods sold totalled

2.02 billion Chinese Renmimbi, or 78.3% of sales (i.e., the gross profit was 21.7% of sales). This gross profit

margin is lower than the company achieved in 2011, when cost of goods sold totalled 77.3% of sales. Xinchen

China Power Holdings Ltd's gross profit margin of 21.7% was fairly close to the gross profit margins of all three

comparable companies (which had gross profits in 2012 between 20.6% and 22.4% of sales). The company's

earnings before interest, taxes, depreciation and amorization (EBITDA) were 428.30 million Chinese Renmimbi, or16.6% of sales. This EBITDA to sales ratio is roughly on par with what the company achieved in 2011, when the

EBITDA ratio was 17.9% of sales. The three comparable companies had EBITDA margins that were all less

(between 7.2% and 13.2%) than that achieved by Xinchen China Power Holdings Ltd. In 2012, earnings before

extraordinary items at Xinchen China Power Holdings Ltd were 290.11 million Chinese Renmimbi, or 11.3% of

sales. This profit margin is lower than the level the company achieved in 2011, when the profit margin was 11.3%

of sales. Earnings before extraordinary items have grown for each of the past 3 years (and since 2010, earningsbefore extraordinary items have grown a total of 94%). The company's return on equity in 2012 was 28.1%. This

was significantly worse than the already high 40.2% return the company achieved in 2011. (Extraordinary items

have been excluded).

Profitability Comparison

Xinchen China Power Holdings Ltd reports profits by product line. During 2012, the itemized operating profits atall divisions were 517.79 million Chinese Renmimbi, which is equal to 20.1% of total sales. Of all the product lines,

Diesel Engines had the highest operating profits in 2012, with operating profits equal to 24.6% of sales. In fact,

during each of the previous 4 years, Diesel Engines has had the highest operating profits of all product lines at

Xinchen China Power Holdings Ltd. Gasoline Engines had the lowest operating profit margin in 2012, with the

operating profit equal to only 18.8% of sales. (This product line is the largest product line at Xinchen China

Power Holdings Ltd, accounting for approximately 80% of sales in 2012). This marks the fourth year in which

Gasoline Engines had the lowest operating profit margins.

Inventory Analysis

As of December 2012, the value of the company's inventory totalled 214.73 million Chinese Renmimbi. Since the

cost of goods sold was 2.02 billion Chinese Renmimbi for the year, the company had 39 days of inventory on

hand (another way to look at this is to say that the company turned over its inventory 9.4 times per year). In

terms of inventory turnover, this is an improvement over December 2011, when the company's inventory was

221.20 million Chinese Renmimbi, equivalent to 45 days in inventory. The 39 days in inventory is lower than the

three comparable companies, which had inventories between 41 and 101 days at the end of 2012.

Research and Development

Research and Development Expenses at Xinchen China Power Holdings Ltd in 2012 were 15.66 million Chinese

Renmimbi, which is equivalent to 0.6% of sales. In 2012, R&D expenditures dropped both as a percentage of

Guizhou Guihang Automotive Components 22.3 1.68 1.06 3.78%

China Automotive Systems Inc 7.2 1.01 0.57 67.32%

Company Year

GrossProfitMargin

EBITDAMargin

Earnings

before

extras

Xinchen China Power Holdings Ltd 2012 21.7% 16.6% 11.3%


Dongfeng Elec. & Tech., Ltd. 2011 20.6% 8.9% 5.3%Guizhou Guihang Automotive Components 2012 22.4% 7.2% 4.4%

China Automotive Systems Inc 2012 21.9% 13.2% 5.9%

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sales and in actual amounts: In 2011, Xinchen China Power Holdings Ltd spent 19.78 million Chinese Renmimbi on

R&D, which was 0.9% of sales.

Financial Position

Xinchen China Power Holdings Ltd does not appear to be very efficient in collecting payments: As of December

2012, the accounts receivable for the company were 1.49 billion Chinese Renmimbi, which is equivalent to 212

days of sales. This is an improvement over the end of 2011, when Xinchen China Power Holdings Ltd had 251

days of sales in accounts receivable.

Financial Positions

Company Year

Days

AR

Days

Inv.

R&D/

Sales

Xinchen China Power Holdings Ltd 2012 212 39 0.6%

Dongfeng Elec. & Tech., Ltd. 2011 117 41 N/A

Guizhou Guihang Automotive Components 2012 108 101 N/A

China Automotive Systems Inc 2012 240 60 N/A

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Company Fundamentals\Summary Analysis

SUMMARY ANALYSIS: Xinchen China Power Holdings LtdPe r S h a r e - Ch i n e se R e n m i m b i

Year PriceValue Ratios Equity Capital Earnings Dividends

Fiscal Yr

Ends:December

Market

PriceLast

Price/

EarningsRatio

Price/

BookRatio

DividendYield

%

EarnedGrowth

% Profit

Rate(ROE)

Book

ValueBegin Yr

12 Month

EarningsPer Share

% Change

%

PayoutRatio

12 Month

DividendsPer Share

7/12/2013 2.02 6.5 1.4 0.0 n/a n/a n/a 0.31 n/c n/c 0.00%

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Company Fundamentals\Sales Analysis

SALES ANALYSIS: Xinchen China Power Holdings LtdF i g u r e s i n t h o u s a n d s o f Ch i n e s e Re n m i m b i

Year

Sales

Cost of

Goods Sold

Earnings before

Interest,

Taxes,

Depreciation, and

Amortization

(EBITDA)

After Tax Income

before

Extraordinary

Charges and

Credits Employees

Amount

in

thousands

Year-

to-year

Growth

Amounti n

t h o u s a n d s

% ofSales

Amount

in

thousands

% of

Sales

Amount

in

thousands

% of

Sales Number

Sales

Per

Employee

After TaxIncome

PerEmployee

2009 1,285,167 n/c 1,064,770 82.9% 118,668 9.2% 58,277 4.5% n/a n/a n/a

2010 1,945,114 51.4% 1,587,422 81.6% 221,370 11.4% 149,457 7.7% n/a n/a n/a

2011 2,307,748 18.6% 1,783,995 77.3% 384,242 16.7% 260,389 11.3% n/a n/a n/a

2012 2,572,741 11.5% 2,015,308 78.3% 404,782 15.7% 290,109 11.3% 1,020 2,522,295 284,421

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Company Fundamentals\Price Analysis

PRICE ANALYSIS: Xinchen China Power Holdings LtdPe r S h a r e - Ch i n e se R e n m i m b i

Quarter

High

Price

Low

Price

Closing

Price

Quarterly

%Change

12 months

%Change

2013 Jan-Mar 1.986 1.610 1.793 n/a n/a

Apr-Jun 2.536 1.510 2.058 14.7% n/a

7/12/2013 2.018 27.1%

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Company Fundamentals\Earnings & Dividends Analysis

EARNINGS AND DIVIDENDS ANALYSIS: Xinchen China PowerHoldings LtdPe r Sh a r e - Ch i n e se R e n m i m b i

F is c a l Y e a r En d s i n D e c e m b e r

Fiscal

Years

Earnings Per Share Dividends Per Share

12 Months QuarterlyReportedEarnings 12 Months QuarterlyReportedDividends

Earnings

%

Change

Q1Mar.

Q2Jun.

Q3Sep.

Q4Dec. Dividends

%

Change

Q1Mar.

Q2Jun.

Q3Sep.

Q4Dec.

%

Payout

2009 0.07 n/c n/a n/a n/a n/a n/a n/c n/a n/a n/a n/a 0.0%

2010 0.19 156.2% n/a n/a n/a n/a n/a n/c n/a n/a n/a n/a 0.0%

2011 0.32 69.0% n/a n/a n/a n/a n/a n/c n/a n/a n/a n/a 0.0%

2012 n/a n/c n/a n/a n/a 0.07 n/a n/c n/a n/a n/a n/a 0.0%

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Financial Statement AnalysesFinancial Statement Analyses\Balance Sheet - Common Size

Balance Sheet - (Common Size): Xinchen China Power Holdings LtdFigures are expressed as Percent of Total Assets.Total Assets are in millions of Chinese Renmimbi.

Fiscal Year 2012 2011 2010 2009

Fiscal Year End Date 12/31/2012 12/31/2011 12/31/2010 12/31/2009

Assets

Total Assets 3,080.0 2,763.1 1,918.9 1,511.0

Cash & Short Term Investments 27.4% 19.9% 14.3% 20.2%

Cash 27.4% 19.9% 14.3% 20.2%

Short Term Investments

Receivables (Net) 48.5% 57.5% 55.9% 46.6%

Inventories -Total 7.0% 8.0% 13.1% 13.8%

Raw Materials 3.8% 3.4% 2.6% 3.5%

Work in Process 0.6% 0.7% 1.4% 1.2%

Finished Goods 2.6% 3.9% 9.1% 9.1%

Progress Payments & Other

Prepaid Expenses 0.1% 0.2% 0.1% 0.4%

Other Current Assets 0.0% 0.0% 0.0% 0.0%

Current Assets - Total 83.0% 85.6% 83.5% 81.0%

Long Term Receivables 0.0% 0.0% 0.0% 0.0%

Investment in Associated Companies 1.6% 0.0% 0.0% 0.0%

Other Investments 0.0% 0.0% 0.0% 0.0%

Property Plant and Equipment - Gross 19.4% 19.3% 23.7% 27.8%

Accumulated Depreciation 8.8% 8.7% 11.1% 11.4%

Property Plant and Equipment Net 10.6% 10.5% 12.6% 16.4%

Other Assets 4.8% 3.8% 3.9% 2.5%

Deferred Charges 2.0% 2.3% 3.3% 1.0%

Tangible Other Assets 0.0% 0.0% 0.0% 0.0%

Intangible Other Assets 2.9% 1.6% 0.6% 1.6%

Total Assets 100.0% 100.0% 100.0% 100.0%

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Liabilities & Shareholders' Equity

Total Liabilities & Shareholders'Equity

3,080.0 2,763.1 1,918.9 1,511.0

Accounts Payable 23.8% 35.2% 35.9% 37.1%

Short Term Debt & Current Portion of

Long Term Debt6.5% 5.9% 9.2% 6.2%

Accrued Payroll

Income Taxes Payable 1.6% 1.1%

Dividends Payable

Other Current Liabilities 23.9% 19.3% 19.3% 21.2%

Current Liabilities - Total 55.7% 61.5% 64.4% 64.5%

Long Term Debt 0.0% 0.1% 0.2% 2.1% Long Term Debt ExcludingCapitalized Leases

0.0% 0.1% 0.2% 2.1%

Capitalized Lease Obligations 0.0% 0.0% 0.0% 0.0%

Provision for Risks and Charges

Deferred Income 1.3% 1.0% 1.6% 0.2%

Deferred Taxes -0.0% -0.0% -0.0% -0.1%

Deferred Taxes - Credit 0.0% 0.0% 0.0% 0.0%

Deferred Taxes - Debit 0.0% 0.0% 0.0% 0.1%

Deferred Tax Liability in UntaxedReserves

Other Liabilities 0.0% 0.0% 0.0% 0.0%

Total Liabilities 57.1% 62.6% 66.2% 66.7%

Non-Equity Reserves 0.0% 0.0% 0.0% 0.0%

Minority Interest 0.0% 0.0% 0.0% 0.0%

Preferred Stock 0.0% 0.0% 0.0% 0.0%

Preferred Stock Issued for ESOP

ESOP Guarantees - Preferred Issued

Common Equity 42.9% 37.4% 33.8% 33.3%

Total Liabilities & Shareholders' Equity 100.0% 100.0% 100.0% 100.0%

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Financial Statement Analyses\Balance Sheet - Year-Year % Change

Balance Sheet - (Year to Year Percent Change): Xinchen China Power

Holdings LtdFigures are the Percent Changes from the Prior Year.

Fiscal Year 2012 2011 2010 2009


Assets

Total Assets 11.5% 44.0% 27.0%

Cash & Short Term Investments 53.0% 101.1% -10.5%

Cash 53.0% 101.1% -10.5%

Short Term Investments

Receivables (Net) -6.0% 48.0% 52.4%

Inventories -Total -2.9% -12.0% 20.5%

Raw Materials 25.3% 85.8% -4.2%

Work in Process -7.3% -22.6% 43.1%

Finished Goods -26.5% -38.5% 26.8%

Progress Payments & Other

Prepaid Expenses -24.6% 62.1% -49.6%

Other Current Assets

Current Assets - Total 8.0% 47.7% 30.8%

Long Term Receivables

Investment in Associated Companies

Other Investments

Property Plant and Equipment - Gross 12.3% 17.1% 8.2%

Accumulated Depreciation 12.6% 13.4% 23.4% Property Plant and Equipment Net 12.0% 20.4% -2.4%

Other Assets 40.6% 40.8% 95.6%

Deferred Charges -2.3% -2.2% 332.4%

Tangible Other Assets

Intangible Other Assets 101.7% 276.8% -51.2%

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Total Assets 11.5% 44.0% 27.0%

Liabilities & Shareholders' Equity

Total Liabilities & Shareholders'Equity

11.5% 44.0% 27.0%

Accounts Payable -24.7% 41.3% 22.7%

Short Term Debt & Current Portion ofLong Term Debt

21.3% -7.3% 90.3%

Accrued Payroll

Income Taxes Payable 64.4%

Dividends Payable

Other Current Liabilities 38.1% 43.6% 15.9%

Current Liabilities - Total 1.0% 37.5% 26.9%

Long Term Debt -100.0% 0.0% -87.5%

Long Term Debt ExcludingCapitalized Leases

-100.0% 0.0% -87.5%

Capitalized Lease Obligations

Provision for Risks and Charges

Deferred Income 46.4% -10.2% 727.5%

Deferred Taxes

Deferred Taxes - Credit

Deferred Taxes - Debit -46.4% 27.3% -31.1%

Deferred Tax Liability in UntaxedReserves

Other Liabilities

Total Liabilities 1.5% 36.2% 26.0%

Non-Equity Reserves

Minority Interest

Preferred Stock

Preferred Stock Issued for ESOP

ESOP Guarantees - Preferred Issued

Common Equity 28.1% 59.2% 29.0%

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Total Liabilities & Shareholders' Equity 11.5% 44.0% 27.0%

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Financial Statement Analyses\Income Statement - Common Size

Income Statement - (Common Size): Xinchen China Power Holdings LtdFigures are expressed as Percent of Net Sales or Revenues.Net Sales or Revenues are in millions of Chinese Renmimbi.

Fiscal Year 2012 2011 2010 2009

Net Sales or Revenues 2,572.7 2,307.7 1,945.1 1,285.2

Cost of Goods Sold 78.3% 77.3% 81.6% 82.9%

Depreciation, Depletion & Amortization 1.4% 1.8% 2.8% 3.7%

Gross Income 20.3% 20.9% 15.6% 13.4%

Selling, General & Administrative Expenses 5.0% 4.8% 6.2% 7.5%

Other Operating Expenses 0.0% 0.0% 0.0% 0.0%

Operating Expenses - Total 84.7% 83.9% 90.6% 94.1%

Operating Income 15.3% 16.1% 9.4% 5.9%

Extraordinary Credit - Pretax 0.0% 0.0% 0.0% 0.0%

Extraordinary Charge - Pretax 0.0% 0.0% 0.0% 0.0%

Non-Operating Interest Income 0.2% 0.2% 0.4% 0.6%

Reserves - Increase/Decrease

Pretax Equity in Earnings 0.0% 0.0% 0.0%

Other Income/Expense - Net -1.1% -1.4% -1.2% -1.0%

Earnings before Interest, Taxes, Depreciation &Amortization (EBITDA)

15.7% 16.7% 11.4% 9.2%

Earnings before Interest & Taxes(EBIT) 14.4% 14.8% 8.6% 5.5%

Interest Expense on Debt 1.2% 2.0% 0.9% 0.9%

Interest Capitalized 0.1% 0.4% 0.0% 0.0%

Pretax Income 13.3% 13.2% 7.7% 4.6%

Income Taxes 2.0% 1.9% 0.0% 0.1%


Equity in Earnings 0.0% 0.0% 0.0% 0.0%

After Tax Other Income/Expense 0.0% 0.0% 0.0% 0.0%

Discontinued Operations 0.0% 0.0% 0.0% 0.0%

Net Income before Extraordinary Items/PreferredDividends

11.3% 11.3% 7.7% 4.5%

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Extraordinary Items & Gain/Loss Sale of Assets 0.0% 0.0% 0.0% 0.0%

Preferred Dividend Requirements 0.0% 0.0% 0.0% 0.0%

Net Income after Preferred Dividends - available toCommon

11.3% 11.3% 7.7% 4.5%

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Financial Statement Analyses\Income Statement - Year-Year % Change

Income Statement - (Year to Year Percent Change): Xinchen China Power

Holdings LtdFigures are the Percent Changes from the Prior Year.

Fiscal Year 2012 2011 2010 2009

Net Sales or Revenues 11.5% 18.6% 51.4%

Cost of Goods Sold 13.0% 12.4% 49.1%

Depreciation, Depletion & Amortization-

15.9%-21.8% 12.0%

Gross Income 8.4% 58.5% 76.3%

Selling, General & Administrative Expenses 16.1% -8.3% 25.8%

Other Operating Expenses

Operating Expenses - Total 12.5% 9.9% 45.8%

Operating Income 6.1% 102.8% 140.4%

Extraordinary Credit - Pretax

Extraordinary Charge - Pretax

Non-Operating Interest Income 23.3% -48.6% 9.5%

Reserves - Increase/Decrease

Pretax Equity in Earnings

Other Income/Expense - Net

Earnings before Interest, Taxes, Depreciation &Amortization (EBITDA)

5.3% 73.6% 86.5%

Earnings before Interest & Taxes(EBIT) 8.0% 104.2% 137.2%

Interest Expense on Debt-

36.6%164.5% 59.5%

Interest Capitalized-

74.1%

Pretax Income 12.3% 103.3% 151.8%

Income Taxes 17.5% 12,023.3% -70.4%

Minority Interest

Equity in Earnings

After Tax Other Income/Expense

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Discontinued Operations

Net Income before Extraordinary Items/PreferredDividends

11.4% 74.2% 156.5%

Extraordinary Items & Gain/Loss Sale of Assets

Preferred Dividend Requirements

Net Income after Preferred Dividends - available toCommon

11.4% 74.2% 156.5%

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Financial Statement Analyses\Sources of Capital - Net Change

Sources of Capital: Xinchen China Power Holdings LtdCurrency figures are in millions of Chinese Renmimbi.Year to year % changes pertain to reported Balance Sheet values.

Fiscal Year 2012 2011 2010 2009


Total Capital 1,322.5 1,036.4 652.5 534.5

Percent of Total Capital

Short Term Debt 15.0% 15.8% 27.1% 17.4%

Long Term Debt 0.0% 0.4% 0.6% 6.0%

Other Liabilities 0.0% 0.0% 0.0% 0.0%

Total Liabilities 132.9% 167.0% 194.7% 188.7%


Preferred Stock 0.0% 0.0% 0.0% 0.0%

Retained Earnings 90.2% 87.1% 68.7% 56.6%

Common Equity 100.0% 99.6% 99.4% 94.0%

Total Capital 100.0% 100.0% 100.0% 100.0%

Year to Year Net Changes

Short Term Debt 3.5 -1.3 8.4 9.3

Long Term Debt -0.4 0.0 -2.8 3.2

Other Liabilities 0.0 0.0 0.0 0.0

Total Liabilities 2.7 46.0 26.2 100.8

Minority Interest 0.0 0.0 0.0 0.0

Preferred Stock 0.0 0.0 0.0 0.0

Retained Earnings 29.0 45.4 14.6 30.3

Common Equity 29.0 38.4 14.6 50.3

Total Capital 28.6 38.4 11.8 53.5

Year to Year Percent Changes

Short Term Debt 21.3% -7.3% 90.3%

Long Term Debt -100.0% 0.0% -87.5%

Other Liabilities

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Total Liabilities 1.5% 36.2% 26.0%

Minority Interest

Preferred Stock

Retained Earnings 32.2% 101.2% 48.3%

Common Equity 28.1% 59.2% 29.0% Total Capital 27.6% 58.8% 22.1%

Total Liabilities & Common Equity

Total Liabilities 1,757.5 1,730.7 1,270.4 1,008.5

Net Change in Liabilities as% of Total Liabilities

1.5% 26.6% 20.6% 100.0%

Common Equity 1,322.5 1,032.4 648.5 502.5

Net Change in Common Equity as% of Common Equity

21.9% 37.2% 22.5% 100.0%

Cash Flow

Operating Activities 386.4 223.0 -23.0 142.8

Financing Activities 29.7 65.8 54.9 75.3

Investing Activities 79.1 27.8 2.2 199.6

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Financial Ratio AnalysesFinancial Ratio Analyses\Accounting Ratios

Accounting Ratios: Xinchen China Power Holdings Ltd

Fiscal Year 2012 2011 2010 2009


Receivables Turnover 1.7 1.5 1.8 1.8

Receivables - Number of Days 218.8 210.6 166.8

Inventory Turnover 9.2 7.6 6.9

Inventory - Number of Days 39.5 48.3 52.9

Gross Property, Plant & EquipmentTurnover

4.3 4.3 4.3 3.1

Net Property, Plant & EquipmentTurnover

7.9 7.9 8.0 5.2

Depreciation, Depletion & Amortization% of Gross Property, Plant & Equipment

5.9% 7.9% 11.8% 11.4%

Depreciation, Depletion & AmortizationYear to Year Change

-0.7 -1.2 0.6 4.8

Depreciation, Depletion & AmortizationYear to Year % Change

-15.9% -21.8% 12.0%

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Financial Ratio Analyses\Asset Utilization

Asset Utilization: Xinchen China Power Holdings LtdFigures are expressed as the ratio of Net Sales.Net Sales are in millions of Chinese Renmimbi.

Fiscal Year 2012 2011 2010 2009


Net Sales 2,572.7 2,307.7 1,945.1 1,285.2

Cash & Cash Equivalents 32.7% 23.9% 14.1% 23.8%

Short-Term Investments

Accounts Receivable 58.1% 68.9% 55.2% 54.8%

Inventories 8.3% 9.6% 12.9% 16.2%

Other Current Assets 0.0% 0.0% 0.0% 0.0%

Total Current Assets 99.3% 102.5% 82.3% 95.3%

Total Long Term Receivables &Investments

1.9% 0.0% 0.0% 0.0%

Long Term Receivables 0.0% 0.0% 0.0% 0.0%

Investments in AssociatedCompanies

1.9% 0.0% 0.0% 0.0%

Other Investments 0.0% 0.0% 0.0% 0.0%

Property, Plant & Equipment - Gross 23.2% 23.1% 23.4% 32.7%

Accumulated Depreciation 10.6% 10.4% 10.9% 13.4%

Property Plant & Equipment - Net 12.7% 12.6% 12.4% 19.3%

Other Assets 5.8% 4.6% 3.9% 3.0%

Total Assets 119.7% 119.7% 98.7% 117.6%

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Financial Ratio Analyses\Employee Efficiency

Employee Efficiency: Xinchen China Power Holdings LtdValues per Employee are in Chinese Renmimbi.

Fiscal Year 2012

Fiscal Year End Date 12/31/2012

Employees 1,020

Values per Employee

Sales 2,522,295

Net Income 284,421

Cash Earnings 344,975

Working Capital 821,845

Total Debt 195,049

Total Capital 1,296,570

Total Assets 3,019,645

Year to Year % Change per Employee

Employees

Sales

Net Income

Cash Earnings

Working Capital

Total Debt

Total Capital

Total Assets

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Financial Ratio Analyses\Fixed Charges Coverage

Fixed Charges Coverage: Xinchen China Power Holdings Ltd

Fiscal Year 2012 2011 2010 2009


EBIT/Total Interest Expense 12.4 7.3 9.4 6.3

EBIT/Net Interest 15.0 8.0 17.6 19.5

EBIT/(Total Interest Exp + Pfd Div) 12.4 7.3 9.4 6.3

EBIT/Dividends on Common Shares

EBIT/(Dividends on Common + Pfd)

EBITDA/Total Interest Expense 13.6 8.2 12.5 10.7

EBITDA/Net Interest 16.5 9.0 23.2 32.8

EBITDA/(Total Interest Exp + Pfd Div) 13.6 8.2 12.5 10.7

EBITDA/Dividends on Com Shares

EBITDA/(Dividends on Com + Pfd)

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Financial Ratio Analyses\Leverage Analysis

Leverage Analysis: Xinchen China Power Holdings Ltd

Fiscal Year 2012 2011 2010 2009


Long Term Debt % of EBIT 0.0% 1.2% 2.4% 45.3%

Long Term Debt % of EBITDA 0.0% 1.0% 1.8% 27.0%

Long Term Debt % of Total Assets 0.0% 0.1% 0.2% 2.1%

Long Term Debt % of Total Capital 0.0% 0.4% 0.6% 6.0%

Long Term Debt % of Com Equity 0.0% 0.4% 0.6% 6.4%

Total Debt % of EBIT 53.9% 49.1% 108.0% 177.0%

Total Debt % of EBITDA 49.1% 43.7% 81.7% 105.3%

Total Debt % of Total Assets 6.5% 6.1% 9.4% 8.3%

Total Debt % of Total Capital 15.0% 16.2% 27.7% 23.4%

Total Debt % of Total Capital & ShortTerm Debt

13.1% 14.0% 21.8% 19.9%

Total Debt % of Common Equity 15.0% 16.3% 27.9% 24.9%

Minority Interest % of EBIT 0.0% 0.0% 0.0% 0.0%

Minority Interest % of EBITDA 0.0% 0.0% 0.0% 0.0%

Minority Interest % of Total Assets 0.0% 0.0% 0.0% 0.0%

Minority Interest % of Total Capital 0.0% 0.0% 0.0% 0.0%

Minority Interest % of Com Equity 0.0% 0.0% 0.0% 0.0%

Preferred Stock % of EBIT 0.0% 0.0% 0.0% 0.0%

Preferred Stock % of EDITDA 0.0% 0.0% 0.0% 0.0%

Preferred Stock % of Total Assets 0.0% 0.0% 0.0% 0.0%

Preferred Stock % of Total Capital 0.0% 0.0% 0.0% 0.0%

Preferred Stock % of Total Equity 0.0% 0.0% 0.0% 0.0%

Common Equity % of Total Assets 42.9% 37.4% 33.8% 33.3%

Common Equity % of Total Capital 100.0% 99.6% 99.4% 94.0%

Total Capital % of Total Assets 42.9% 37.5% 34.0% 35.4%

Capital Expenditure % of Sales 1.4% 2.8% 4.7% 2.7%

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Fixed Assets % of Common Equity 24.7% 28.2% 37.3% 49.3%

Working Capital % of Total Capital 63.4% 64.3% 56.0% 46.9%

Dividend Payout 0.0% 0.0% 0.0% 0.0%

Funds From Operations % of Total Debt 176.9% 191.3% 116.6% 86.1%

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Financial Ratio Analyses\Liquidity Analysis

Liquidity Analysis: Xinchen China Power Holdings Ltd

Fiscal Year 2012 2011 2010 2009


Total Current Assets % Net Sales 99.3% 102.5% 82.3% 95.3%

Cash % of Current Assets 33.0% 23.3% 17.1% 25.0%

Cash & Equivalents % of Current Assets 33.0% 23.3% 17.1% 25.0%

Quick Ratio 1.4 1.3 1.1 1.0

Receivables % of Current Assets 58.5% 67.2% 67.0% 57.5%

Receivable Turnover - number of days 218.8 210.6 166.8

Inventories % of Current Assets 8.4% 9.3% 15.7% 17.0%

Inventory Turnover - number of days 39.5 48.3 52.9

Inventory to Cash & Equivalents -number of days

1,412.6 896.4 392.3 527.9

Receivables % of Total Assets 48.5% 57.5% 55.9% 46.6%

Current Ratio 1.5 1.4 1.3 1.3

Total Debt % of Total Capital 13.1% 14.0% 21.8% 19.9%

Funds from Operations % of Current

Liabilities

20.5% 18.9% 17.1% 11.1%

Funds from Operations % of Long TermDebt

8,032.5% 5,273.1% 336.4%

Funds from Operations % of Total Debt 176.9% 191.3% 116.6% 86.1%

Funds from Operations % of TotalCapital

26.6% 31.0% 32.3% 20.1%

Cash Flow (in milllions of ChineseRenmimbi)

Operating Activities 386.4 223.0 -23.0 142.8

Financing Activities 29.7 65.8 54.9 75.3

Investing Activities 79.1 27.8 2.2 199.6

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Financial Ratio Analyses\Per-Share Ratios

Per Share Data: Xinchen China Power Holdings LtdFigures are expressed as per unit of respective shares.Figures are in Chinese Renmimbi.

Fiscal Year 2012 2011 2010 2009


Sales 2.74 2.45 9.73 6.43

Operating Income 0.42 0.39 0.91 0.38

Pre-tax Income 0.36 0.32 0.75 0.30

Net Income (Continuing Operations) 0.36 0.32 0.75 0.30

Net Income Before Extra Items 0.31 0.28 0.75 0.29

Extraordinary Items 0.00 0.00 0.00 0.00

Net Income After Extraordinary Items 0.31 0.28 0.75 0.29

Net Income Available to CommonShares

0.31 0.32 0.19 0.07

Fully Diluted Earnings 0.31 0.32 0.19 0.07

Common Dividends

Cash Earnings 0.37 0.39 0.26 0.13

Book Value 1.41 1.10 3.24 2.51

Retained Earnings 1.27 0.96 2.24 1.51

Assets 3.28 2.94 9.59 7.55

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Financial Ratio Analyses\Profitability Growth

Profitability Analysis: Xinchen China Power Holdings LtdCurrency figures are in Chinese Renmimbi.

Fiscal Year 2012 2011 2010 2009


Gross Income Margin 20.3% 20.9% 15.6% 13.4%

Operating Income Margin 15.3% 16.1% 9.4% 5.9%

Pretax Income Margin 13.3% 13.2% 7.7% 4.6%

EBIT Margin 14.4% 14.8% 8.6% 5.5%

Net Income Margin 11.3% 11.3% 7.7% 4.5%

Return on Equity - Total 24.6% 31.0% 26.0%

Return on Invested Capital 23.0% 28.8% 22.9%

Return on Assets 10.7% 12.5% 9.7%

Asset Turnover 0.8 0.8 1.0 0.9

Financial Leverage 15.0% 16.3% 27.9% 24.9%

Interest Expense on Debt 29,774,000 46,951,000 17,753,000 11,130,000

Effective Tax Rate 15.2% 14.5% 0.2% 2.1%

Cash Flow % Sales 13.7% 13.9% 10.8% 8.4%

Selling, General & AdministrativeExpenses % of Sales

5.0% 4.8% 6.2% 7.5%

Research & Development Expense 0.6% 0.9% 1.0% 1.0%

Operating Income Return On TotalCapital

27.6% 58.8% 22.1%

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Wright Quality Rating AnalysesWright Quality Rating Analyses\Investment Acceptance

Wright Quality Rating - Investment Acceptance: Xinchen China Power

Holdings LtdCurrency figures are in millions of U.S. Dollars.

Wright Quality Rating DANN

Investment Acceptance Rating DANNTotal Market Value of Shares Outstanding - Three Year Average 0

- Current Year 329

Public Market Value (Excludes Closely Held) - Three Year Average 0

- Current Year 329

Trading Volume - Three Year Average

- Current Year

Turnover Rate - Three Year Average 0.0%

- Current Year 0.0%

Stock Exchange ListingsHKG

Number of Institutional Investors 0

Number of Shareholders

Closely Held Shares as % of Total Shares Outstanding 0.0%

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Wright Quality Rating Analyses\Financial Strength

Wright Quality Rating - Financial Strength: Xinchen China Power Holdings

Ltd


Financial Strength RatingDANN

Total Shareholders' Equity (Millions of U.S. Dollars) 212

Total Shareholders' Equity as % Total Capital 100.0%

Preferred Stock as % of Total Capital 0.0%

Long Term Debt as % of Total Capital 0.0%

Long Term Debt (Millions of Chinese Renmimbi) 0

Lease Obligations (Millions of Chinese Renmimbi) 0

Long Term Debt including Leases (Millions of Chinese Renmimbi) 0

Total Debt as % of Total Capital 13.1%

Fixed Charge Coverage Ratio: Pretax Income to Interest Expense & PreferredDividends

12.5

Fixed Charge Coverage Ratio: Pretax Income to Net Interest Income & PreferredDividends

15.1

Quick Ratio (Cash & Receivables / Current Liabilities) 1.4

Current Ratio (Current Assets / Current Liabilities) 1.5

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Wright Quality Rating Analyses\Profitability & Stability

Wright Quality Rating - Profitability & Stability: Xinchen China Power Holdings

Ltd


Profitability & Stability RatingDANN

Profit Rate of Earnings on Equity Capital - Time-Weighted Normal

- Basic Trend

Cash Earnings Return on Equity - Time-Weighted Average

- Basic Trend

Cash Earnings Return on Equity - Stability Index

Return On Assets (Time-Weighted Average)

Pre-Tax Income as % of Total Assets (Time-Weighted Average)

Operating Income as % of Total Assets (Time-Weighted Average)

Operating Income as % of Total Capital (Adjusted Rate) 0.0%

Pre-Tax Income as % of Total Assets (Time-Weighted Average)

Operating Income as % of Total Assets (Time-Weighted Average)

Operating Income as % of Total Capital (Adjusted Rate) 0.0%

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Wright Quality Rating Analyses\Corporate Growth

Wright Quality Rating - Corporate Growth: Xinchen China Power Holdings

LtdFigures are expressed on a Per Share Basis.


Growth Rating DANNNormal Earnings Growth 0.0%

Cash Earnings Growth 0.0%

Cash Earnings Stability Index 0.0%

Earned Equity Growth 0.0%

Dividend Growth 0.0%

Operating Income Growth 0.0%

Assets Growth 0.0%

Sales/Revenues Growth 0.0%

Copyright2000-2012. Distributed by Wright Investors' Service, Inc. All Rights Reserved.Except for quotations by established news media, no pages in this report may be reproduced,stored in a retrieval system, or transmitted for commercial purposes, in any form or by anymeans, electronic, mechanical, photocopying, recording, or otherwise without prior written

permission. Information is believed reliable, but accuracy, completeness and opinions are notguaranteed. This report is provided for general information only, is not to be consideredinvestment advice, and should not be relied upon for investment decisions.

This report is provided as is, without warranty of any kind, express or implied, including, butnot limited to warranties of merchantability, fitness for a particular purpose or non-infringement.

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Investment Daily Note 18 July 2013

Sun Hung Kai Financial 1

IN TODAYS ISSUE

Stocks Last TargetStop

lossesPositive Factors

Power Xinchen

(1148.HK)2.68 3.00 2.40

BMWs transfer of enginetechnology. Productioncapacity growth

Zhongyu Gas

(3633.HK)1.85 2.20 1.60

Adverse impact factored in.Share price may catch up

QE-exit fears calmed by Bernankes comments. NASDAQ hit new high

Federal Reserve Chairman Ben Bernanke said in his testimony to Congress

that the U.S. central banks asset purchases are by no means on a preset

course, and the pace of asset purchases would depend on the economic

health, while the accommodative monetary policy will remain appropriate.

The U.S. three major indices rallied, among which the Dow edged up 18

points, closing at 15,470. The NASDAQ hit a fresh high at closing. Hong

Kong ADRs gained in the U.S. market, with their closing prices effectively

putting the HSI at 21,465, up 93 points. New York gold futures in August

marched beyond the US$1,300/oz level in early trade, but it pared early gain

after Bernanke said the Fed would begin scaling back its asset purchases

later this year, and it closed at US$1,277.5/oz, down US$12.9/oz. Led by a

decline in U.S. crude inventory last week, New York crude oil futures in

August closed at US$106.48/bbl, up US$0.48/bbl.

HSI rose 59 pts as investors kept wait-and-watch attitude

Hong Kong stocks were in range-bound trading as the market stayed on the

sidelines ahead of Fed chairman Ben Bernankes congressional testimony

tonight. The Hang Seng Index opened 56-point higher but reversed part of

early gain in the afternoon session. The HSI closed at 21,371, up 59 points.

The HSCEI closed at 9,480, up 61 points. Market turnover was HK$48.47bn.

The Shanghai Composite fell ~1% at 2,044 points.

Jewelry retailers were driven up afterLuk Fook (590.HK, HK$22.1) surged

~6% on a sharp rise of first-quarter same-store sales growth. King Fook

(280.HK, HK$0.67) soared 17.5% after it said it would close down the

losing-making securities arm by the end of July. China Shenhua (1088.HK,

HK$21.8) jumped 5.3% as both coal output and coal sales increased in June,

while the three major coal mining stocks rebounded. China Resources

(Holdings) chairman Song Lin was involved in graft accusations, which led

to a slump of the groups and subsidiaries share prices, among which CR

Power (836.HK, HK$17.98) plummeted 10%. Anhui Conch (914.HK,

HK$23.4) gained 6.1% after it sold its cement and clinker production line.


Equity Indices

Close d-d (%) YTD(%)

Hang Seng Index 21,371 0.3 (5.7)

HSCEI 9,480 0.7 (17.1)

DJIA 15,470 0.1 18.1

S&P 500 1,680 0.3 17.9

NASDAQ 3,610 0.3 19.6

DAX 8,254 0.7 8.4

CAC 40 3,872 0.5 6.3

FTSE 100 6,571 0.2 11.4

Nikkei 225 14,615 0.4 41.1

Taiwan weighted 8,258 (0.0) 7.3

Shanghai Comp. 2,044 (1.0) (9.9)

Shenzhen Comp. 8,063 (1.5) (11.5)

Hong Kong Market Turnover

HK$bn % chg.

HSI 14.9 3.4

HSCCI 4.2 27.1

HSCEI 9.9 21.3

Main Board 48.5 0.0

Major ETF

Close1D chg

(%)

D chg

%)

CSOP A50(2822.HK)

9.17 (0.50) .60

ChinaAMC CSI300 (3188.HK)

28.95 (0.50) .40

E Fund CSI 100

(3100.HK)27.00 (0.60) .90

X WISE CSI 300(2827.HK)

24.95 (1.00) .50

SPDR Gold Trust(2840.HK)

964.00 (0.10) .80

Value Gold ETF(3081.HK)

31.50 (0.30) .60

Value Japan ETF(3084.HK)

12.60 0.20 .80

C-SHS CSI 300(3008.HK)

14.44 (0.10) .90

Source: Bloomberg

Reports available at:

http://www.shkfg.comhttp://www.thomsonreuters.comhttp://www.capitaliq.comBloomber Code:

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HSI consolidated while waiting for breakout of 250-day MA

Source: Bloomberg and SHK Financial

Power Xinchen to ride on BMWs tech transfer and new production capacity

China has seen strong vehicle sales in 2013 with vehicle sales up 12.3% yoy to

10.78mn units in 1H13. Demand for auto components improved on the back of positive

stock replenishment among automakers and rapid production of new vehicles. The

Ministry of Commerce said China recorded over 120mn units of total vehicles in use in

2012, almost a double from 2007. The auto industry will be under a high turnover

period amid a sharp rise of vehicles in use, which could be supportive for the

development of auto-component industry.

Power Xinchen (1148.HK, HK$2.68), a spin-off of BMWs authorized carmaker

Brilliance China (1114.HK, HK$9.10), is principally engaged in production and sales

of automotive engines for passenger and light-duty commercial vehicles in China.

Power Xinchens share price has recently gained the momentum and it is a good stock

pick for short-term speculation.

Power Xinchens CEO earlier confirmed that BMW agreed on the transfer of engine

technology and therefore Power Xinchen may start production by mid-2014. The new

engines shall be applied to BMW Brilliance 5-series and Brilliance Chinas light

commercial vehicle Jinbei. The technology transfer may bode well for Power

Xinchen to improve its engine quality and expand its market share. In addition, Power

Xinchens joint venture with Dongfeng Motor (486.HK, HK$9.59) may enhance

technological progress and business development in the future.

The production facilities have maintained a 100% utilization rate over the past four

years and the new production base in Mianyang would further expand production

capacity. On the other hand, the new production line (possibly commenced by 2014)

may lift gross margin as it enables production of high-end automotive engines with an

annual target of 50,000 units of BMW-authorized engines.

The valuation is appealing with a 7X historical P/E. Technically, the share price

yesterday rallied beyond the 10-day MA, 20-day MA and the short-term downtrend

and further uptrend is expected. Recommendation: Buy now, targeting HK$3.00, with

stop-losses at HK$2.40.

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Xinchen Power (1148.HK) rallied beyond 10-day, 20-day MA and short-term downtrend


Zhongyu Gas may catch up with adverse impact factored in

With rumors about Chinas natural gas price hike for non-household users, the

downstream natural gas suppliers have been under downside pressure, while some

industry peers such as ENN Energy (2688.HK, HK$43.90), China Gas (384.HK,

HK$8.70) rebounded and tested their highs following corrections. In our view,

Zhongyu Gas (3633.HK, HK$1.85) may catch up due to its recent underperformance.

Zhongyu Gas is a leading natural gas supplier in Shandong and Henan with business

operations in 34 cities as of the end of 2012. Net profit sharply rose 160% in FY12.

However, the natural gas providers share price was dragged down after it reported

disappointing 1Q13 results, with revenue up 13% to HK$710mn and net profit up 9%

only to HK$40.39mn during the period.

The forecast-missing results in 1Q13 may be attributable to an absence of large

natural-gas projects in operation during the period, and hence we believe there could be

a remarkable growth in gas projects when the West-East Gas Pipeline projects are put

into operation soon. Meanwhile, the share price may be driven higher if the

second-quarter results could improve from the first quarter. We remain our positive

view towards Zhongyu Gas as the central government is striving to promote the use ofclean energy to tackle pollution problems with policy support for the natural gas

industrys long-term development.

With negative impact fully factored in, the share price is technically staying flat and is

reasonably valued. Recommendation: Buy now, targeting HK$2.20, with stop-losses at

HK$1.60.

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Zhongyu Gas (3633.HK) found support at 250-day MA


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ECONOMIC DATA RELEASES AND EVENTS

Date Country/region Event Period Survey Prior

Thu 18 JulChina Actual FDI (YoY) Jun 1.0% 0.3%

US Initial Jobless Claims Jul 12

US Continuing Claims Jul 6

US Philadelphia Fed. Jul 5.5 12.5

US Leading Indicators Jun 0.3% 0.1%

China Property Prices Jun

Fri 19 JulJapan All Industry Activity Index (MoM) May 1.2% 0.4%

Mon 22 JulUS Chicago Fed Nat Activity Index Jun -0.30

US Existing Home Sales Jun 5.27M 5.18M

US Existing Home Sales MoM Jun 1.6% 4.2%

Tue 23 JulUS House Price Index MoM May 0.7%

US Richmond Fed Manufact. Index Jul 8

Euro-Zone Consumer Confidence (Advance) Jul -18.8

Wed 24 JulChina HSBC Flash Manufacturing PMI Jul 48.2

US MBA Mortgage Applications Jul 19

US Markit US PMI Preliminary Jul

US New Home Sales Jun 484K 476K

US New Home Sales MoM Jun 1.7% 2.1%

Euro-Zone PMI Manufacturing (Advance) Jul 48.8

Euro-Zone PMI Services (Advance) Jul 48.3

Euro-Zone PMI Composite (Advance) Jul 48.7

Thu 25 JulUS Initial Jobless Claims Jul 19

US Continuing Claims Jul 13

US Durable Goods Orders Jun 1.0% 3.7%

Euro-Zone M3 (YoY) Jun 2.9%

Sources: Bloomberg and Sun Hung Kai Financial; Note: Hong Kong time

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APPENDICES

MAJOR INDEX FORWARD P/E

HSI HSCEI

Shanghai Composite S&P 500

Sources: Bloomberg and Sun Hung Kai Financial

Major Index Valuations and Estimated Earnings Growth

Index

FY12E P/E

(X)

Long-term avg.

fwd. P/E (X)

Deviation

from avg. (%)

FY1 EPS growth

(%)

FY2 EPS growth

(%)

HSI 10.2 14.1 (27.8) (2.8) 8.6

HSCEI 7.0 13.5 (47.6) 10.0 9.4

ShanghaiComposite 9.0 18.0 (50.0) 22.6 13.0

S&P 500 15.2 14.5 5.1 6.6 11.6


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MARKET DATA

Previous Days Best/Worst Performers

Stockcode

Price(HK$)

1D chg.(%)

1W chg.(%)

1M chg.(%)

Ytd chg.(%)

Turnover(HK$m)

FY1P/E (X)

FY2P/E (X)

Best

Anhui Conch 914.HK 23.400 6.1 13.6 6.6 (17.0) 810.3 11.7 10.1

China Shenhua 1088.HK 21.800 5.3 7.9 (7.4) (35.8) 502.1 7.5 7.2

CNBM 3323.HK 6.930 3.6 8.8 (5.1) (38.9) 373.2 4.6 3.8

China Coal 1898.HK 4.100 3.0 1.7 (12.4) (51.3) 143.7 6.6 6.4

Minsheng Bank 1988.HK 8.250 2.5 8.3 (5.1) (7.9) 594.4 4.5 4.1

Worst

China Res Power 836.HK 17.980 (10.0) (10.8) (2.4) (9.1) 831.5 8.8 8.0

Tsingtao Brewery 168.HK 57.050 (3.1) 2.2 6.2 24.7 74.1 29.9 25.9

BYD Company 1211.HK 31.450 (2.9) 10.9 (4.6) 35.3 118.0 57.2 39.7

Weichai Power 2338.HK 24.050 (2.8) 4.8 (7.0) (30.1) 38.1 10.6 9.0

China Longyuan 916.HK 8.190 (2.7) 0.0 2.9 52.8 136.5 17.0 13.3Note: Best/worst performers from HSI, HSCEI and HSCCI.

HSCI Volume Filter

CompanyStockcode

Price(HK$)

1D chg.(%)

Avg. vol.(m shares)

Prev. vol.(m shares)

%increase

FY1P/E (X)

FY2P/E (X)

HN Renewables 958.HK 2.820 (5.1) 27.0 187.9 596.6 17.6 12.9

China Res Power 836.HK 17.980 (10.0) 10.3 45.6 341.7 8.8 8.0

CITIC Resources 1205.HK 1.120 2.8 4.9 19.4 295.3 8.6 5.5

Vodone 82.HK 0.590 7.3 8.9 31.1 251.4 N/A N/A

Silver Grant Int'l 171.HK 1.130 0.9 0.8 2.5 214.8 N/A N/A

GA Pack 468.HK 4.660 (2.3) 2.9 8.6 193.0 14.7 11.7

China Dongxiang 3818.HK 1.340 1.5 19.1 55.2 188.7 29.4 25.8

China Power 2380.HK 3.020 3.8 14.1 40.4 187.1 8.4 7.7

Luk Fook 590.HK 22.100 6.0 2.7 7.4 174.2 9.7 8.0

AMVIG 2300.HK 3.200 2.9 0.6 1.5 169.6 7.6 7.0

* Volume filter applies to Hang Seng Composite Index constituents only** Average volume is for the previous 30 trading days

Most Short Sold Stocks

Company

Stock

code

Price

(HK$)

1D chg.

(%)

Short sellvolume(HK$m)

% of totalmarket turnover

% stock'sown turnover

FY1

P/E (X)

FY2

P/E (X)

Tencent 700.HK 330.000 0.1 261.0 5.1% 16.7% 29.0 23.9

Anhui Conch 914.HK 23.400 6.1 248.0 4.8% 30.6% 11.7 10.1

Minsheng Bank 1988.HK 8.250 2.5 198.7 3.9% 33.4% 4.5 4.1

HSBC 5.HK 85.500 0.5 179.2 3.5% 27.6% 11.2 10.3

CCB 939.HK 5.490 0.4 170.5 3.3% 17.8% 5.1 4.8

China Mobile 941.HK 81.950 0.7 154.1 3.0% 18.7% 10.3 10.7

PetroChina 857.HK 9.190 0.8 117.8 2.3% 24.2% 10.3 9.5

China Shenhua 1088.HK 21.800 5.3 98.6 1.9% 19.6% 7.5 7.2

AIA 1299.HK 34.400 (0.1) 86.7 1.7% 18.0% 17.9 15.7

CNOOC 883.HK 13.780 0.4 84.4 1.6% 16.2% 8.0 7.7

* Applies to Hang Seng Composite Index constituents only

42


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Treasury Yields / Interest Rates

Latest (%) 5D chg. (bps) 30D chg. (bps) Ytd chg. (bps) yoy chg. (bps)

U.S. 2-year Treasury yield 0.2926 (3.65) 3.05 5.35 5.47



HK 1-month HIBOR 0.2079 0.07 0.14 (13.29) (9.39)HK 3-month HIBOR 0.3829 0.14 0.64 0.29 (1.96)

SH 1-month SHIBOR 4.5300 40.20 (275.20) (147.00) 140.78

SH 3-month SHIBOR 4.6620 (2.90) (65.70) (80.71) 86.88

Exchange Rates

Latest 5D % chg. 30D % chg. Ytd % chg. yoy % chg.

USD/HKD 7.7574 0.0 (0.0) (0.1) (0.0)

EUR/USD 1.3116 0.1 (2.1) (0.6) 6.9

GBP/USD 1.5213 0.2 (2.7) (6.4) (2.7)

USD/JPY 99.6700 0.7 4.6 (13.0) 26.4

AUD/USD 0.9213 0.3 (2.9) (11.3) (10.1)

NZD/USD 0.7890 0.5 (1.3) (4.7) (1.1)

USD/CAD 1.0408 0.4 1.9 (4.7) 2.6

USD Index 82.6760 (0.1) 2.6 3.6 (0.5)

Energy and Raw Material Prices

Latest 5D % chg. 30D % chg. Ytd % chg. yoy % chg.

Gold (USD/oz.) 1,277.1 (0.7) (6.6) (23.7) (19.6)

Silver (USD/oz.) 19.4 (3.9) (10.6) (36.0) (29.1)

Aluminum (USD/t) 1,803.5 (0.8) (2.2) (13.0) (5.9)

Copper (USD/t) 6,890.0 1.0 (2.7) (13.1) (10.4)

Hot roll steel (USD/t) 507.5 0.0 (1.9) (4.7) (6.9)

Cotton (USD/lb.) 84.3 (3.5) (5.2) 11.3 16.8

CRB Index 288.0 0.6 0.6 (2.4) (2.7)

Brent (USD/barrel) 109.4 1.8 3.3 (1.1) 7.1

WTI (USD/barrel) 106.5 (0.0) 8.9 16.0 20.4


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Companies Listed on both the A-share and H-share Markets

CompanyH share

codePrice

(HK$)A share

codePrice

(RMB)

A-sharepremium toH-share (%) Company

H sharecode

Price(HK$)

A sharecode

Price(RMB)

A-sharepremium toH-share (%)

Yizheng Chem 1033 2.090 600871 8.470 412.4 SZ Expressway 548 2.640 600548 2.740 31.2

Shandong Molong 568 2.360 002490 8.720 367.1 CEA 670 2.390 600115 2.450 29.6

Luoyang Glass 1108 1.410 600876 4.640 316.0 CSCL 2866 1.930 601866 1.930 26.4

Shanghai Petrochem 338 2.500 600688 8.190 314.2 Dongfang Electric 1072 10.580 600875 10.370 23.9

Chongqing Iron 1053 1.050 601005 2.850 243.2 Anhui Expressway 995 3.590 600012 3.510 23.6

Tianjin Capital 1065 2.890 600874 7.770 239.9 China Oilfield 2883 15.560 601808 14.840 20.6

Beiren Printing 187 3.390 600860 8.780 227.4 Maanshan Iron 323 1.760 600808 1.630 17.1

NE Electric 42 0.930 000585 2.320 215.4 CSA 1055 3.020 600029 2.730 14.3

Kunming Machine 300 2.000 600806 4.780 202.2 CM Bank 3968 13.160 600036 11.400 9.5

Nanjing Panda 553 3.560 600775 8.010 184.5 Huadian Power 1071 3.560 600027 3.080 9.4

Shandong Xinhua 719 1.900 000756 4.120 174.1 PetroChina 857 9.190 601857 7.920 9.0

Yanzhou Coal 1171 5.630 600188 10.110 127.0 A-H PREMIUM ----- ----- ----- ----- 8.2

Beijing N Star 588 1.720 601588 2.990 119.8 China COSCO 1919 3.410 601919 2.910 7.9

Jingwei Textile 350 4.780 000666 7.760 105.2 Bank of China 3988 3.170 601988 2.680 6.9

Zijin Mining 2899 1.560 601899 2.530 105.0 ABC 1288 3.120 601288 2.540 2.9

Datang Power 991 3.350 601991 5.380 103.0 ICBC 1398 4.930 601398 3.950 1.3

Hisense Kelon 921 5.040 000921 7.760 94.7 Sinopec 386 5.560 600028 4.450 1.2

Dalian Port 2880 1.500 601880 2.250 89.6 CCB 939 5.490 601939 4.370 0.6

Guangzhou Ship 317 6.560 600685 9.530 83.7 BoComm 3328 4.970 601328 3.950 0.5

Sichuan Expressway 107 1.970 601107 2.690 72.6 CSR 1766 4.880 601766 3.790 (1.8)Chenming Paper 1812 2.960 000488 3.900 66.6 China Shenhua 1088 21.800 601088 16.280 (5.6)

Jiangxi Copper 358 12.840 600362 16.600 63.4 Air China 753 5.350 601111 3.990 (5.7)

CHALCO 2600 2.520 601600 3.240 62.5 Sh Pharma 2607 15.320 601607 11.260 (7.1)

SH Electric 2727 2.630 601727 3.350 61.0 Weichai Power 2338 24.050 000338 17.600 (7.5)

MCC 1618 1.350 601618 1.630 52.6 ChinaLife 2628 18.680 601628 13.540 (8.4)

China Coal 1898 4.100 601898 4.920 51.7 Guangshen Railway 525 3.230 601333 2.290 (10.4)

Guangzhou Phar 874 29.550 600332 35.290 51.0 Tsingtao Brewery 168 57.050 600600 38.800 (14.0)

Xinjiang Goldwind 2208 4.730 002202 5.640 50.8 China Railway 390 3.750 601390 2.550 (14.0)

ZTE 763 11.580 000063 13.690 49.5 Ping An 2318 50.650 601318 34.380 (14.2)

BYD Company 1211 31.450 002594 35.020 40.8 Huaneng Power 902 8.230 600011 5.450 (16.3)

Minsheng Bank 1988 8.250 600016 9.040 38.5 Jiangsu Expressway 177 7.840 600377 5.130 (17.3)

Guangzhou Automobile 2238 7.570 601238 8.280 38.3 Angang Steel 347 4.210 000898 2.740 (17.7)

China Ship Dev 1138 3.300 600026 3.540 35.6 CPIC 2601 25.750 601601 16.690 (18.1)

BBMG 2009 4.640 601992 4.930 34.3 China Rail Cons 1186 7.180 601186 4.550 (19.9)

CITIC Bank 998 3.600 601998 3.820 34.2 Anhui Conch 914 23.400 600585 14.390 (22.3)


44


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Address: 42/F, The Lee Gardens, 33 Hysan Avenue, Causeway Bay, Hong Kong

Phone: (852) 3920 2888

Fax: (852) 3920 2789

Web: http://www.shkfg.com

Analysts

Hannah Li, CAIA

Minnie Li

Disclosure of Interests

Research Analyst Certification

The views about any and all of the subject securities and issuers expressed in this report accurately reflect the personal views of the research analyst(s)

primarily responsible for this report; and the analysts are paid in part based on the profitability of Sun Hung Kai Investment Services Limited("SHKIS") and its affiliates (collectively called "SHKF") which includes revenue from investment banking activities.

Research Analyst Conflicts

Financial Interests:The research analyst(s) who prepared this report and/or his/her/their associates has/have no financial interests in relation to listed corporation(s)covered in this report.

Relevant Relationships:The research analyst(s) who prepared this report and his/her/their associates do not serve as officer(s) of listed corporation(s) covered in this report.

SHKF's Financial Interests and Business Relationships

SHKF may make a market in, or may, as principal or agent, buy or sell securities (or derivat ives thereon) of issuer(s) mentioned in this report. SHKFmay have a financial interest in the issuer(s) mentioned in this report, including a long or short position in its/their securities and/or options, futures orother derivative instruments based thereon, or vice versa. Likewise, SHKF, including its officers or employees may serve or have served as an officer,director or in an advisory capacity for any issuer(s) mentioned in this report. SHKF may also, from time to time, solicit, perform or have performedinvestment banking, underwriting or other services (including acting as adviser, manager, underwriter or lender) within the last 12 months for anyissuer(s) referred to in this report. Information about conflicts of interest relevant to this report is available at this SHKF website:

http://www.shkresearch.com/rp/disclosureOfInterests.html

Disclaimer

This report is provided for information and discussion purposes only. None of the views contained in this report constitute a solicitation or an offer byany member of SHKIS, their directors, representatives and / or employees to buy or sell, whether as principal or agent, any securities, futures, optionsor other financial instruments.This report is intended for receipt by those to whom it is supplied by SHKIS and is not intended for distribution to, or use by, any person or entity inany jurisdiction or country where such distribution or use would be contrary to law or regulation, or which would subject SHKIS to any regulatoryrequirement within such jurisdiction or country. Any person or entity who is in possession of this report and who intends to act or rely upon theinformation contained in it must satisfy himself / herself that he / she is not subject to any local requirement which restricts or prohibits him / her fromdoing so.Although the information in this report is obtained or compiled from sources that SHKIS believes to be reliable, it does not represent or warrant,whether expressly or impliedly, the accuracy, validity, timeliness or completeness of any such information. SHKIS expressly disclaims any warrantieswhether express or implied, of fitness for a particular purpose, or duties of care, in favor of any third party relying upon this report. Informationcontained in this report may change at any time and SHKIS gives no undertaking to provide notice of any such change. Opinions and estimates statedin this report are a reflection of the views of the relevant analysts as at the date of this report and may also change at any time. SHKIS gives noundertaking to provide notice of any such change. If in doubt, you should consult your qualified financial and/ or other professional adviser.The instruments and investments discussed in this report may not be suitable for all investors, and this report has no regard to the specific investmentobjectives, investment experience, financial situation or needs of any particular recipient. Investors must make their own investment decisions based

on their own investment objectives and financial position. The value of, and income from, an investment may vary because of changes in interest ratesor foreign exchange rates, changes in the price of securities or indices, changes in operational or financial conditions of companies and other factors.There may be time limitations on the exercise of, or the exercise of rights associated with, the instruments and investments discussed in this report.Past performance is not necessarily a guide to future performance.In no event will SHKIS or any other member of SHKF be liable or have any responsibility for loss of any kind, whether direct, indirect, consequentialor incidental, resulting from the act or omission of any third party occurring in reliance upon the contents of this report even if SHKF is aware of suchact or omission at the time that it occurs.

2013 SHKIS. All rights reserved. This report may not be reproduced or redistributed, in whole or in part, without the written permission of SHKISand SHKIS accepts no liability whatsoever for the actions of third parties in this respect.

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2013 7 18

1

(%)

(%)

21,371 0.3 (5.7)

9,480 0.7 (17.1)

15,470 0.1 18.1

500 1,680 0.3 17.9

3,610 0.3 19.6

DAX 8,254 0.7 8.4

CAC40 3,872 0.5 6.3

100 6,571 0.2 11.4

225 14,615 0.4 41.1

8,258 (0.0) 7.3

2,044 (1.0) (9.9)

8,063 (1.5) (11.5)

(%)

14.9 3.4

4.2 27.1

9.9 21.3

48.5 0.0

ETF

1

(%)

5

(%)

A50

(2822.HK) 9.17 (0.5) 2.6

(3188.HK) 28.95 (0.5) 3.4

(3100.HK) 27 (0.6) 2.9

XA50

(2823.HK) 9.33 (0.4) 3.2

X 300

(2827.HK) 24.95 (1.0) 2.5

SPDR ETF

(2840.HK) 964 (0.1) 2.8

ETF

(3081.HK) 31.5 (0.3) 1.6

ETF

(3084.HK) 12.6 0.2 1.8

(3008.HK) 14.44 (0.1) 3.9

http://www.shkfg.comhttp://www.thomsonreuters.com

http://www.capitaliq.com

2013 7 18

18 15,470 ADR 21,465 93

8 1,300 1,277.5 12.9 8 106.48 48

59 56 21,371 59

9,480 61 484.72,044 1%

590.HK22.1 6%280.HK0.67 17.5% 1088.HK21.8 6 5.3%836.HK17.98 914.HK23.4 6.1%

1148.HK 2.68 3.00 2.40 3633.HK 1.85 2.20 1.60

46


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2

250

12.3% 1,078

1.2 2007

1114.HK9.10 1148.H2.68

5 489.HK9.59

4

5

47


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2013 7 18

3

7

10 20 3.00 2.40

1148.HK 10 20

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4

2688.HK43.90 384.HK8.70 3633.HK1.85 34 160% 13% 7.1 9%4,039.4

2.20 1.60

3633.HK250

49


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2013 7 18

5

7 18 6 12

7 6

FED 7 5.5 12.5

6 0.3% 0.1%

6

7 19 () 5 1.2% 0.4%

7 22 6 -0.30

6 5.27M 5.18M

() 6 1.6% 4.2%

7 23 ( ) 5 0.7%

7 8

() 7 -18.8

7 24 PMI 7 48.2

MBA 7 19

Markit PMI 7

6 484K 476K () 6 1.7% 2.1%

- () 7 48.8

- () 7 48.3

- ( ) 7 48.7

7 25 7 19

7 13

50


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2013 7 18

6

6 1.0% 3.7%

M3 () 6 2.9%

51


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2013 7 18

7

500

2012 ()

()

(%)

2012(%)

2013(%)

10.2 14.1 (27.8) (2.8) 8.6

7.0 13.5 (47.6) 10.0 9.4

9.0 18.0 (50.0) 22.6 13.0

500 15.2 14.5 5.1 6.6 11.6

52


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2013 7 18

8

(

)

(%)

(%)

(%)

(%)

(

)

914.HK 23.400 6.1 13.6 6.6 (17.0) 810.3 11.7 10.1

1088.HK 21.800 5.3 7.9 (7.4) (35.8) 502.1 7.5 7.2

3323.HK 6.930 3.6 8.8 (5.1) (38.9) 373.2 4.6 3.8

1898.HK 4.100 3.0 1.7 (12.4) (51.3) 143.7 6.6 6.4

1988.HK 8.250 2.5 8.3 (5.1) (7.9) 594.4 4.5 4.1

836.HK 17.980 (10.0) (10.8) (2.4) (9.1) 831.5 8.8 8.0

168.HK 57.050 (3.1) 2.2 6.2 24.7 74.1 29.9 25.9

1211.HK 31.450 (2.9) 10.9 (4.6) 35.3 118.0 57.2 39.7

2338.HK 24.050 (2.8) 4.8 (7.0) (30.1) 38.1 10.6 9.0

916.HK 8.190 (2.7) 0.0 2.9 52.8 136.5 17.0 13.3

() %

()

()

(%)

958.HK 2.820 (5.1) 27.0 187.9 596.6 17.6 12.9

836.HK 17.980 (10.0) 10.3 45.6 341.7 8.8 8.0

1205.HK 1.120 2.8 4.9 19.4 295.3 8.6 5.5

82.HK 0.590 7.3 8.9 31.1 251.4 171.HK 1.130 0.9 0.8 2.5 214.8

468.HK 4.660 (2.3) 2.9 8.6 193.0 14.7 11.7

3818.HK 1.340 1.5 19.1 55.2 188.7 29.4 25.8

2380.HK 3.020 3.8 14.1 40.4 187.1 8.4 7.7

590.HK 22.100 6.0 2.7 7.4 174.2 9.7 8.0

2300.HK 3.200 2.9 0.6 1.5 169.6 7.6 7.0* ** 30

() % (%) (%)

700.HK 330.000 0.1 261.0 5.1% 16.7% 29.0 23.9

914.HK 23.400 6 .1 248.0 4.8% 30.6% 11.7 10.1

1988.HK 8.250 2.5 198.7 3.9% 33.4% 4.5 4.1

5.HK 85.500 0 .5 179.2 3.5% 27.6% 11.2 10.3

939.HK 5.490 0.4 170.5 3.3% 17.8% 5.1 4.8

941.HK 81.950 0 .7 154.1 3.0% 18.7% 10.3 10.7

857.HK 9.190 0.8 117.8 2.3% 24.2% 10.3 9.5

1088.HK 21.800 5.3 98.6 1.9% 19.6% 7.5 7.2

1299.HK 34.400 (0.1) 86.7 1.7% 18.0% 17.9 15.7

883.HK 13.780 0.4 84.4 1.6% 16.2% 8.0 7.7

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2013 7 18

9

(%) () () () ()

0.2926 (3.65) 3.05 5.35 5.47

2.4757 (9.64) 29.03 59.95 96.79

3.5668 (6.29) 22.53 67.27 96.33

0.2079 0.07 0.14 (13.29) (9.39)

0.3829 0.14 0.64 0.29 (1.96)

4.5300 40.20 (275.20) (147.00) 140.78

4.6620 (2.90) (65.70) (80.71) 86.88

(%) (%) (%) (%)

/ 7.7573 0.0 (0.0) (0.1) (0.0)

/ 1.3115 0.1 (2.1) (0.6) 6.9

/ 1.5213 0.2 (2.7) (6.4) (2.7)

/ 99.6800 0.7 4.6 (13.0) 26.4

/ 0.9212 0.3 (2.9) (11.3) (10.1)

/ 0.7892 0.5 (1.2) (4.7) (1.1)

/ 1.0409 0.4 1.9 (4.7) 2.6

82.6820 (0.1) 2.6 3.6 (0.5)

(%) (%) (%) (%)

(/) 1,277.6 (0.7) (6.6) (23.7) (19.6)

(/) 19.4 (3.7) (10.4) (36.0) (29.0)

(/) 1,803.5 (0.8) (2.2) (13.0) (5.9)

(/) 6,890.0 1.0 (2.7) (13.1) (10.4)

(/) 507.5 0.0 (1.9) (4.7) (6.9)

(/) 84.3 (3.5) (5.2) 11.3 16.8

CRB 288.0 0.6 0.6 (2.4) (2.7)

(/) 109.4 1.8 3.3 (1.1) 7.1

WTI (/) 106.5 (0.0) 8.9 16.0 20.4

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10

A H

H

()A

()

AH

() (%) H

()A

()

AH(

)

(%)

1033 2.090 600871 8.470 412.4 548 2.640 600548 2.740 31.2

568 2.360 002490 8.720 367.2 670 2.390 600115 2.450 29.6

1108 1.410 600876 4.640 316.1 2866 1.930 601866 1.930 26.4

338 2.500 600688 8.190 314.2 1072 10.580 600875 10.370 23.9

1053 1.050 601005 2.850 243.2 995 3.590 600012 3.510 23.6

1065 2.890 600874 7.770 239.9 2883 15.560 601808 14.840 20.6

187 3.390 600860 8.780 227.5 323 1.760 600808 1.630 17.1

42 0.930 000585 2.320 215.4 1055 3.020 600029 2.730 14.3

300 2.000 600806 4.780 202.2

3968 13.160 600036 11.400 9.5

553 3.560 600775 8.010 184.5 1071 3.560 600027 3.080 9.4

719 1.900 000756 4.120 174.2 857 9.190 601857 7.920 9.0

1171 5.630 600188 10.110 127.1 AH ----- ----- ----- ----- 8.2

588 1.720 601588 2.990 119.8 1919 3.410 601919 2.910 7.9

350 4.780 000666 7.760 105.3 3988 3.170 601988 2.680 6.9

2899 1.560 601899 2.530 105.1 1288 3.120 601288 2.540 2.9

991 3.350 601991 5.380 103.1 1398 4.930 601398 3.950 1.3

921 5.040 000921 7.760 94.7 386 5.560 600028 4.450 1.2

2880 1.500 601880 2.250 89.7 939 5.490 601939 4.370 0.6

317 6.560 600685 9.530 83.7 3328 4.970 601328 3.950 0.5

107 1.970 601107 2.690 72.7 1766 4.880 601766 3.790 (1.8)

1812 2.960 000488 3.900 66.6 1088 21.800 601088 16.280 (5.6)

358 12.840 600362 16.600 63.5 753 5.350 601111 3.990 (5.7)

2600 2.520 601600 3.240 62.6 2607 15.320 601607 11.260 (7.1)

2727 2.630 601727 3.350 61.1 2338 24.050 000338 17.600 (7.5)

1618 1.350 601618 1.630 52.7 2628 18.680 601628 13.540 (8.4)

1898 4.100 601898 4.920 51.7 525 3.230 601333 2.290 (10.4)

874 29.550 600332 35.290 51.0 168 57.050 600600 38.800 (14.0)

2208 4.730 002202 5.640 50.8

390 3.750 601390 2.550 (14.0)

763 11.580 000063 13.690 49.5 2318 50.650 601318 34.380 (14.2)

1211 31.450 002594 35.020 40.8 902 8.230 600011 5.450 (16.3)

1988 8.250 600016 9.040 38.5 177 7.840 600377 5.130 (17.3)

2238 7.570 601238 8.280 38.3 347 4.210 000898 2.740 (17.7)

1138 3.300 600026 3.540 35.6 2601 25.750 601601 16.690 (18.0)

2009 4.640 601992 4.930 34.3 1186 7.180 601186 4.550 (19.9)

998 3.600 601998 3.820 34.2 914 23.400 600585 14.390 (22.2)

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11

33 42

852 3920 2888

852 3920 2789

www.shkfg.com

, CAIA

""""

,

http://www.shkresearch.com/rp/disclosureOfInterests.html

/

2013

56


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Company Fundamentals\Company Profile

COMPANY PROFILEF i g u r e s i n C h i n e se R e n m i m b i

A Wright Investors' Service Research Report:

Xinchen China Power Holdings Ltd440 Wheelers Farms Road

Milford, CT 06461 U.S.A.

Wright Quality Rating:DANN

Xinchen China Power Holdings Ltd. Xinchen China Power Holdings Limited is an

investment holding company. The Company is a automotive engine manufacturer.

The Company operates in the three segments: gasoline engines segment, diesel

engines segment, as well as engine components and service income segment. The

Company's main products include light-duty gasoline and diesel engines, as well as

engine components. The Company manufactures and sells 36 models of automotive

engines, which are installed in a range of photovoltaic vehicles (PVs) and light

commercial vehicles (LCVs), including sedans, sports utility vehicles (SUVs), multi-purpose vehicles (MPVs), small buses, minibuses, small and light-duty trucks.

Stock Price (6/14/2013): 2.04

Stock Chart

Recent stock performance

1 Week -8.5%

4 Weeks 18.6%

13 Weeks 10.7%

52 Weeks %

Chairman

Xiao An Wu

Executive Director & ChiefExecutive

Yunxian Wang

Chief Financial Officer

Bingchu Xu

Secretary

Sam Ming Fung

Officers

Earnings / Dividends (as of 12/31/2012)

Earnings Dividends

Most Recent Qtr 0.07 n.a.

Last 12 Months 0.31

Ratio Analysis

Price / Earnings Ratio 6.57 Dividend Yield N/A

Price / Sales Ratio 0.74 Payout Ratio N/A

Price / Book Ratio 1.45 % Held by InsidersN/A

Key Data

Ticker:1148

2012 Sales:

2,572,741,000

Major Industry:Aerospace

Sub Industry:Engines, Components &

Parts Mfrs.

Country:

China

Currency:

Chinese Renmimbi

Fiscal Year Ends:

December

Employees

1,020

Exchanges:

HKG

Share Type:

Ordinary

Market Capitalization:

1,916,258,808

Total Shares

Outstanding:

940,199,794

Closely Held Shares:N/A

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Address

Jianmen Road West Fucheng District

MIANYANG Sichuan 1-1108CHINA

PhoneHome Page

http://www.xinchenpower.com

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Company Fundamentals\Comparative Business Analysis

Comparative Business Analysis: Xinchen China Power Holdings LtdReport Date: June 20, 2013

Company Description

Xinchen China Power Holdings Ltd. Xinchen China Power Holdings Limited is an investment holding company. The

Company is a automotive engine manufacturer. The Company operates in the three segments: gasoline engines

segment, diesel engines segment, as well as engine components and service income segment. The Company'smain products include light-duty gasoline and diesel engines, as well as engine components. The Company

manufactures and sells 36 models of automotive engines, which are installed in a range of photovoltaic vehicles

(PVs) and light commercial vehicles (LCVs), including sedans, sports utility vehicles (SUVs), multi-purpose

vehicles (MPVs), small buses, minibuses, small and light-duty trucks.

Competitor Analysis

Xinchen China Power Holdings Ltd operates in the Motor vehicle parts and accessories sector. This analysis

compares Xinchen China Power Holdings Ltd with three other companies: Dongfeng Elec. & Tech., Ltd. (2011

sales of 2.58 billion Chinese Renmimbi [US$421.36 million] of which 78% was Car Parts), Guizhou GuihangAutomotive Components (2011 sales: 2.66 billion Chinese Renmimbi [US$433.33 million] of which 37% was

Seal), and China Automotive Systems Inc (2012 sales of 2.12 billion Chinese Renmimbi [US$345.19 million] ).

Note: not all of these companies have the same fiscal year: the most recent data for each company are being

used.

Sales Analysis

Xinchen China Power Holdings Ltd reported sales of 2.57 billion Chinese Renmimbi (US$419.43 million) for the year

ending December of 2012. This represents an increase of 11.5% versus 2011, when the company's sales were2.31 billion Chinese Renmimbi. This was the fourth straight year of sales growth at Xinchen China Power Holdings

Ltd. Sales of Gasoline Engines saw an increase of 14.2% in 2012, from 1.80 billion Chinese Renmimbi to 2.06

billion Chinese Renmimbi.

Xinchen China Power Holdings Ltd currently has 1,020 employees. With sales of 2.57 billion Chinese Renmimbi

(US$419.43 million) , this equates to sales of US$411,210 per employee. This is much higher than the three

comparable companies, which had sales between US$58,820 and US$92,150 per employee. Note that some of

the figures stated herein could be distorted based on exact classification of employees and subcontractors.

Sales Comparisons (Most Recent Fiscal Year)

Recent Stock Performance

The current (6/14/2013) price of this stock is 2.04 Chinese Renmimbi. During the past 13 weeks, the stockhas increased 10.7%. During the 12 months ending 12/31/2012, earnings per share totalled 0.31 Chinese

Renmimbi per share. Thus, the Price / Earnings ratio is 6.57. This company is currently trading at 0.74 times

sales. Xinchen China Power Holdings Ltd is trading at 1.45 times book value.

Summary of company valuations (as of 6/14/2013).

Company

Year

Ended

Sales

(blns)

SalesGrowth

Sales/

Emp (US$) Largest Region

Xinchen China Power Holdings Ltd Dec 2012 2.573 11.5% 411,210 China (100.0%)

Dongfeng Elec. & Tech., Ltd. Dec 2011 2.585 12.0% 84,644 N/A

Guizhou Guihang Automotive Components Dec 2011 2.658 16.0% 58,820 N/A

China Automotive Systems Inc Dec 2012 2.117 -5.6% 92,150 N/A

Company P/E

Price/

Book

Price/

Sales

52 Wk

Pr Chg

Xinchen China Power Holdings Ltd 6.6 1.45 0.74 N/A

Dongfeng Elec. & Tech., Ltd. 20.3 3.05 0.80 -12.40%

Guizhou Guihang Automotive Components 32.4 2.02 1.23 9.71%

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The market capitalization of this company is 1.92 billion Chinese Renmimbi (US$312.41 million) .

Dividend Analysis

This company has paid no dividends during the last 12 months. The company has not paid any dividends during

the previous 4 fiscal years.

Profitability Analysis

On the 2.57 billion Chinese Renmimbi in sales reported by the company in 2012, the cost of goods sold totalled

2.02 billion Chinese Renmimbi, or 78.3% of sales (i.e., the gross profit was 21.7% of sales). This gross profit

margin is lower than the company achieved in 2011, when cost of goods sold totalled 77.3% of sales. The

company's earnings before interest, taxes, depreciation and amorization (EBITDA) were 428.30 million Chinese

Renmimbi, or 16.6% of sales. This EBITDA to sales ratio is roughly on par with what the company achieved in

2011, when the EBITDA ratio was 17.9% of sales. The three comparable companies had EBITDA margins that

were all less (between 8.9% and 11.1%) than that achieved by Xinchen China Power Holdings Ltd. In 2012,earnings before extraordinary items at Xinchen China Power Holdings Ltd were 290.11 million Chinese Renmimbi, or

11.3% of sales. This profit margin is lower than the level the company achieved in 2011, when the profit margin

was 11.3% of sales. Earnings before extraordinary items have grown for each of the past 3 years (and since

2010, earnings before extraordinary items have grown a total of 94%). The company's return on equity in 2012

was 28.1%. This was significantly worse than the already high 40.2% return the company achieved in 2011.

(Extraordinary items have been excluded).

Profitability Comparison

Xinchen China Power Holdings Ltd reports profits by product line. During 2012, the itemized operating profits atall divisions were 517.79 million Chinese Renmimbi, which is equal to 20.1% of total sales. Of all the product lines,

Diesel Engines had the highest operating profits in 2012, with operating profits equal to 24.6% of sales. In fact,

during each of the previous 4 years, Diesel Engines has had the highest operating profits of all product lines atXinchen China Power Holdings Ltd. Gasoline Engines had the lowest operating profit margin in 2012, with the

operating profit equal to only 18.8% of sales. (This product line is the largest product line at Xinchen China

Power Holdings Ltd, accounting for approximately 80% of sales in 2012). This marks the fourth year in which

Gasoline Engines had the lowest operating profit margins.

Inventory Analysis

As of December 2012, the value of the company's inventory totalled 214.73 million Chinese Renmimbi. Since the

cost of goods sold was 2.02 billion Chinese Renmimbi for the year, the company had 39 days of inventory on

hand (another way to look at this is to say that the company turned over its inventory 9.4 times per year). Interms of inventory turnover, this is an improvement over December 2011, when the company's inventory was

221.20 million Chinese Renmimbi, equivalent to 45 days in inventory. The 39 days in inventory is lower than the

three comparable companies, which had inventories between 41 and 111 days at the end of 2012.

Research and Development

Research and Development Expenses at Xinchen China Power Holdings Ltd in 2012 were 15.66 million Chinese

Renmimbi, which is equivalent to 0.6% of sales. In 2012, R&D expenditures dropped both as a percentage of

sales and in actual amounts: In 2011, Xinchen China Power Holdings Ltd spent 19.78 million Chinese Renmimbi onR&D, which was 0.9% of sales.

Financial Position

China Automotive Systems Inc 5.2 0.71 0.41 12.56%

Company Year

Gross

ProfitMargin

EBITDAMargin

Earnings

before

extras



Dongfeng Elec. & Tech., Ltd. 2011 20.6% 8.9% 5.3%

Guizhou Guihang Automotive Components 2011 24.4% 11.0% 4.2%

China Automotive Systems Inc 2012 22.2% 11.1% 5.9%

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Xinchen China Power Holdings Ltd does not appear to be very efficient in collecting payments: As of December

2012, the accounts receivable for the company were 1.49 billion Chinese Renmimbi, which is equivalent to 212

days of sales. This is an improvement over the end of 2011, when Xinchen China Power Holdings Ltd had 251

days of sales in accounts receivable.

Financial Positions

Company Year

Days

AR

Days

Inv.

R&D/

Sales

Xinchen China Power Holdings Ltd 2012 212 39 0.6%

Dongfeng Elec. & Tech., Ltd. 2011 117 41 N/AGuizhou Guihang Automotive Components 2011 122 111 N/A

China Automotive Systems Inc 2012 240 60 N/A

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Company Fundamentals\Summary Analysis

SUMMARY ANALYSIS: Xinchen China Power Holdings LtdPe r S h a r e - Ch i n e se R e n m i m b i

Year PriceValue Ratios Equity Capital Earnings Dividends

Fiscal Yr

Ends:December

Market

PriceLast

Price/

EarningsRatio

Price/

BookRatio

DividendYield

%

EarnedGrowth

% Profit

Rate(ROE)

Book

ValueBegin Yr

12 Month

EarningsPer Share

% Change

%

PayoutRatio

12 Month

DividendsPer Share

6/14/2013 2.04 6.6 1.4 0.0 n/a n/a n/a 0.31 n/c n/c 0.00%

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Company Fundamentals\Sales Analysis

SALES ANALYSIS: Xinchen China Power Holdings LtdF i g u r e s i n t h o u s a n d s o f Ch i n e s e Re n m i m b i

Year

Sales

Cost of

Goods Sold

Earnings before

Interest,

Taxes,

Depreciation, and

Amortization

(EBITDA)

After Tax Income

before

Extraordinary

Charges and

Credits Employees

Amo

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