China Everbright Research Limited Please read the analysts and company disclosure and the disclaimer in the last page Equities Hong Kong/China Initial Coverage Company Report Prince Frog (1259 HK) To grow rapidly on improved brand image and channel expansion Prince Frog International Holdings Limited is a leading Chinese company focusing on the production of personal care products for children aged between 3 and 12, including moisturizing cream, shampoo & bath products, oral care products, etc. The company also engages in production and sale of diapers, adults’ personal care products, etc. We expect the company’s EPS will witness a CAGR of 26.2% over 2013-15. We apply 20x PE to Prince Frog’s 2013E earnings, corresponding to a TP of HK$6.75. Initiate coverage with Buy. Initiate Buy. The children’s personal care market enjoys huge upside. We estimate the birth peak under the existing population structure will emerge sometime around 2014, and the growth in the number of children aged between 4 and 12 will extend to at least 2018. If the one-child policy is relaxed to allow families to have a second child, positive impact from such policies changes, coupled with the fact that the post-80s will enter the peak age of marriage and childbearing will bring a wave of baby care products consumption. The continuous growth in household income as well as the increase in ability and willingness to consume will enable the children's personal care products market to keep expanding. Capacity expansion and channel extension being two driving forces of growth. After the company's new production line comes into operation, the production capacity of cream and bath products will reach 20,000 tons and 60,000 tons respectively, with a total value of around Rmb5bn. Capacity expansion will lay a good foundation for the further expansion of market share. For fast-moving consumer goods, channel development is critical, and the consolidation of traditional channels as well as expansion of KA channels will provide Price Frog with a new growth engine. At present, the company is doing a good job in expanding KA channels, with its KA sales value totalling Rmb150m in 1H13. Differentiated animation marketing strategy to promote brand image. The company has invested in three seasons of Frog Prince animation series to promote and strengthen its brand image in the eyes of children and parents. It also entered into a cooperative agreement with Hangzhou Magic Mall Animation Production Co., Ltd. to launch diverse forms of marketing, e.g. stage plays. We believe stepping into the animation industry can offer support to the company’s core business, and the company will hopefully explore new profitability models in the area of animation. Investment Summary Year End Dec 2011 2012 2013E 2014E 2015E Turnover (Rmb m) 1,269 1,572 1,900 2,441 3,096 Growth (%) 51.45 23.87 20.85 28.49 26.85 Net profit (Rmb m) 184 241 272 374 485 Growth (%) 27.32 31.08 12.68 37.71 29.62 EPS (Rmb) 0.18 0.24 0.27 0.37 0.48 Growth (%) 27.32 31.08 12.68 37.71 29.62 PE (x) 23.3 17.7 15.8 11.4 8.8 OCF/Share (Rmb) 0.18 0.26 0.25 0.32 0.47 PB (x) 4.5 3.7 3.1 2.5 2.0 EV/EBITDA (x) 16.4 12.7 9.9 7.4 5.4 DPS (Rmb) 0.04 0.05 0.06 0.08 0.11 Yield (%) 0.9 0.9 1.1 1.5 2.0 Source: Company data, CER estimates 26 September 2013 China / Consumer Goods BUY Share Price Target Price Upside HK$5.36 HK$6.75 26% (As of September 25 2013) Gu Yan 86-021-22167198 [email protected]52-wk Range (HK$) 2.35-6.13 DVD yield (%) 1.1 Latest Key Data FF no of shares (m) 476 FF (%) 47.14 FF market cap (HK$ m) 2,553 12M daily turnover (HK$ m) 23.70 12M volatility (%) 52.54 PEG FY13-15E (x) 0.8 RoE FY12-13E (x) (%) 20 P/B FY13E (x) 3.1 Net debt/equity FY13E (%) Net Cash Performance (%) 1M YTD 12M Absolute 5.3 64.4 118.8 Relative to HSCEI -1.5 71.7 109.9 Major shareholder (%) Prince Frog International 32.09 Xie Jinling 15.77 Free Float 47.14 Price Chart HK$ Turnover (HK$m) 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 23/11/2011 23/1/2012 23/3/2012 23/5/2012 23/7/2012 23/9/2012 23/11/2012 23/1/2013 23/3/2013 23/5/2013 23/7/2013 0 50 100 150 200 250 300 Prince Frog HSI Source: Bloomberg, CER estimates
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China Everbright Research Limited Please read the analysts and company disclosure and the disclaimer in the last page
Equities Hong Kong/China Initial Coverage Company Report
Prince Frog (1259 HK) To grow rapidly on improved brand image and channel expansion Prince Frog International Holdings Limited is a leading Chinese company focusing on the production of personal care products for children aged between 3 and 12, including moisturizing cream, shampoo & bath products, oral care products, etc. The company also engages in production and sale of diapers, adults’ personalcare products, etc. We expect the company’s EPS will witness a CAGR of 26.2% over 2013-15. We apply 20x PE to Prince Frog’s 2013E earnings, corresponding to a TP of HK$6.75. Initiate coverage with Buy. Initiate Buy.
The children’s personal care market enjoys huge upside. We estimate the birth peak under the existing population structure will emerge sometime around 2014, and the growth in the number of children aged between 4 and 12 will extend to at least 2018. If the one-child policy is relaxed to allow families to have a second child, positive impact from such policies changes, coupled with the fact that the post-80s will enter the peak age of marriage and childbearing will bring a wave of baby care products consumption.The continuous growth in household income as well as the increase in ability and willingness to consume will enable the children's personal care products market to keep expanding.
Capacity expansion and channel extension being two driving forces of growth. After the company's new production line comes into operation, the production capacity of cream and bath products will reach 20,000 tons and 60,000 tons respectively, with a total value of around Rmb5bn. Capacity expansion will lay a good foundation for the further expansion of market share. For fast-moving consumer goods, channel development is critical, and the consolidation of traditional channels as well as expansion of KA channels will provide Price Frog with a new growth engine. At present, the company is doing a good job in expanding KA channels, with its KA sales value totalling Rmb150m in 1H13.
Differentiated animation marketing strategy to promote brand image. The company has invested in three seasons of Frog Prince animation series to promote and strengthen its brand image in the eyes of children and parents. It also entered into a cooperative agreement with Hangzhou Magic Mall Animation Production Co., Ltd. to launch diverse forms of marketing, e.g. stage plays. We believe stepping into the animation industry can offer support to the company’s core business, and the company will hopefully explore new profitability models in the area of animation.
Investment Summary Year End Dec 2011 2012 2013E 2014E 2015ETurnover (Rmb m) 1,269 1,572 1,900 2,441 3,096
Growth (%) 51.45 23.87 20.85 28.49 26.85 Net profit (Rmb m) 184 241 272 374 485
Latest Key Data FF no of shares (m) 476FF (%) 47.14FF market cap (HK$ m) 2,55312M daily turnover (HK$ m) 23.7012M volatility (%) 52.54PEG FY13-15E (x) 0.8RoE FY12-13E (x) (%) 20P/B FY13E (x) 3.1Net debt/equity FY13E (%) Net Cash
Performance (%) 1M YTD 12M
Absolute 5.3 64.4 118.8Relative to HSCEI -1.5 71.7 109.9
Major shareholder (%)
Prince Frog International 32.09Xie Jinling 15.77Free Float 47.14
Price Chart HK$ Turnover (HK$m)
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CHINA / CONSUMER GOODS
China Everbright Research Limited Please read the analysts and company disclosure and the disclaimer in the last page 2
Prince Frog: A Leading Chinese Brand of Children’s Personal Care Products
Prince Frog International Holdings Limited is a leading Chinese company focusing on children’s personal care products and integrating R&D, manufacturing and marketing services. The company primarily engages in the design and supply of various children’s personal care products under its self-owned brand Frog Prince, including skincare products, bath & shampoo products, oral care products as well as diapers, etc.
Prince Frog’s sales network covers various provinces, autonomous regions and municipalities of China. The company distributes products to different types of retailers, e.g. hypermarkets, supermarket, convenient stores, etc via distributors, and it has captured a leading position in tier-two, tier-three and tier-four markets taking advantage of the broad distribution network.
Figure 1: Prince Frog’s development history
Source: Company results, Everbright Securities
After becoming public in 2011, Prince Frog’s net profit rose 31.1% YoY to Rmb240m in 2012, on turnover of Rmb1.57bn, up 23.9% YoY.
Figure 2: Prince Frog’s turnover growth over 2010-12 Figure 3: Prince Frog’s net profit growth over 2010-12
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Source: Company results, Everbright Securities Source: Company results, Everbright Securities
For 1H13, the company’s revenue amounted to Rmb630m, up 7.9% YoY, with sales revenue from its core business, that is, children’s personal care products, trending up 43.7% YoY. The company’s net profit slid down 28.8% to Rmb72.8m, mainly attributable to the ceasing of household hygiene products business and the expiry of income tax concessions.
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China Everbright Research Limited Please read the analysts and company disclosure and the disclaimer in the last page 3
The Children’s Personal Care Products Industry will Keep Growing Rapidly in the Next Few Years
Growth in the number of children aged between four and twelve is expected to extend to at least 2018
We estimate the birth peak under the existing population structure will emerge sometime around 2014, and the growth in the number of children aged between 4 and 12 will extend to at least 2018.
If the one-child policy is relaxed to allow families to have a second child, positive impact from such policies changes, coupled with the fact that the post-80s will enter the peak age of marriage and childbearing, will hopefully trigger a surge in baby care products consumption.
Figure 4: The number of women aged between 22 and 29 is expected to peak in 2014
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Source: NBSC, Everbright Securities
Income growth and changes in consumption concepts to support the continuous growth in expenditures for children’s products
Thanks to economic development and the income distribution reform, per capita disposable income of urban households experienced a CAGR of 12% over 2006-11. Going forward, with per capita income keeping rising, residents’ ability and willingness to consume are expected to increase continuously.
Figure 5: Per capita disposable income of China’s urban households increased year by year
Figure 6: Per capita consumption expenditure of China’s urban households increased year by year
China Everbright Research Limited Please read the analysts and company disclosure and the disclaimer in the last page 4
Since the introduction of the one-child policy, children have gradually become the focus of Chinese families, with grandparents and parents being more willing to spend on Children’s products.
With people’s education levels gradually trend up, people’s way of thinking and lifestyles undergo changes, with more attention being attached to the raising and education of children. The new generation of parents are more inclined to high-end consumptions and consumption of high-price products.
Expenditures for children’s personal care products are highly susceptible to income growth, so the continuous growth in household income as well as the increase in ability and willingness to consume will enable the children's personal care products market to keep expanding, in our view.
Children and baby care products market will growth at a CAGR of 17.2% over 2013-15
According to Euromonitor, the overall sales value of baby and child-specific products hit Rmb12.8bn by the end of 2012, Rmb5.4bn out of which were contributed by baby shampoo and bath products, with tier three and tier four cities accounting for a percentage of 40%. It’s estimated that size of the baby shampoo and bath products market will reach Rmb8.7bn by 2015, indicating a CAGR of 17.2%. The size of Children’s shampoo and bath market was Rmb7.4bn as at the end of 2012, and the amount is expected to reach Rmb11.9bn by 2015, corresponding to a CAGR of 17.2%. Size of the overall baby and child-specific products market is on track to exceed Rmb20bn by 2015.
Figure 7: Size of the baby care market for infants aged between 0 and 3 (Rmb m)
China Everbright Research Limited Please read the analysts and company disclosure and the disclaimer in the last page 5
By market share, several brands, including Johnson’s Baby, Frog Prince, Haiermian, Elsker and Yumeijing are top brands in moisturizing cream, shampoo and shower gel segments. Johnson’s Baby tops all other brands with a market share of nearly 30%. In the children’s oral care products segment where some leading household chemicals companies don’t have operations, Colgate takes a leading position with a market share of 26%.
Figure 9: Market share mix of the bath and shampoo products market (2012)
Figure 10: Market share mix of the moisturizing cream market (2012)
Figure 11: Market share mix of the oral care market (2012)
In conclusion, the baby and child-specific products market is still at a period of growth. Benefiting from the aforementioned increase in the number of children, income growth, and changes in consumer behaviour, the industry is expected to maintain considerable growth with a CAGR of about 17% in the next few years.
The competitive landscape of the industry is currently dominated by brands including Johnson’s Baby, Frog Prince, etc. Among these dominant brands, as a famous international brand, Johnson’s Baby has long captured a leading position, while the market share of some rising domestic brands with good operating capabilities also expands year by year.
CHINA / CONSUMER GOODS
China Everbright Research Limited Please read the analysts and company disclosure and the disclaimer in the last page 6
Frog Prince: A domestic Brand at the “Teenage Stage”
Focusing on children with successful differentiated competitive strategies
By age, Frog Prince currently focuses on children aged between three and twelve, which is not overlapped with Johnson’s Baby’s target users aged between zero and three. As such, fierce competition between the two brands can be avoided. Differentiated competitive strategies, coupled with multi-year consumer education, enable Prince Frog to perform well in the children’s personal care market and seize large market share.
In 2012, the market share of Frog Prince moisturizing cream reached 29%, while that of Frog Prince bath & shampoo products and oral care products reach 17% and 16% respectively.
Figure 12: Frog Prince’s share in the bath and shampoo products market
Figure 13: Frog Prince’s share in the moisturizing cream market
Figure 14: Frog Prince’s share in the oral care market
After the company's new production line comes into operation, the production capacity of cream and bath products will reach 20,000 tons and 60,000 tons respectively, with a total value of around Rmb5bn. We believe capacity expansion will be a driving force of the company’s growth in the future, and its share in the children’s personal care market is well-placed to expand further.
Expanding modern channels and making breakthroughs step by step
Quality channel network in tier three and tier four cities represent an advantage Prince Frog enjoys. After years of operations, the company’s distribution channels in tier three and tier four cities are relatively mature. It will actively develop modern channels on basis of the existing channel network.
We believe Prince Frog needs to gain access to KA channels if it wants to keep promoting the brand image, and the company launched a new product series - Pure Love in hopes of entering KA markets. Pure Love is a series of medium to high-end products targeting KA channels. Pure Love products feature relatively high prices and gross margin.
As at the end of 2012, Prince Frog had altogether 197 distributors and 8700 stores, and by 1H13, the number of distributors increased to 212 (including e-commerce channels and Wal-Mart stores). The company gained access to 2117 supermarkets and stores during 1H13, including 268 KA stores.
CHINA / CONSUMER GOODS
China Everbright Research Limited Please read the analysts and company disclosure and the disclaimer in the last page 7
Figure 15: Number of Frog Prince’s distributors
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Source: Company results, Everbright Securities
According to our investigations in Shanghai, Frog Prince has entered all primary KA stores except Auchan in Shanghai.
Figure 16: Frog Prince’s sales counter in RT-Mart (Zhabei Store) Figure 17: Frog Prince’s sales counter in Century Mart (Xijiao store)
Meanwhile, according to our knowledge, Prince Frog will adopt the strategy of focusing on various regions and making breakthroughs step by step. For example, the company would focus on expanding in a specific region during a specific period. Besides distributing products through related channels in the region, Prince Frog would also work to promote brand image and brand awareness within a short time via advertisements on local TV channels, outdoor advertisements, promotion activities, etc.
For fast-moving consumer goods, channel development is critical, and the consolidation of traditional channels as well as expansion of KA channels will provide Price Frog with a new growth engine.
Attaching importance to channel maintenance and boosting sales with various methods
Under the development idea of expanding KA channels, Prince Frog has begun to aggressively explore the KA market. Given capital support from the IPO, gaining access to KA channels is no more a problem, and business operations after entering these channels become even more crucial. Prince Frog attaches high importance to the maintenance of channels, and it has established a targeted
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China Everbright Research Limited Please read the analysts and company disclosure and the disclaimer in the last page 8
management system covering both quality control and the selling process with consideration given to management of distributors and sales persons, product quality, packaging, promotion, etc. Moreover, Kelly Chen is the spokesperson for the Frog Prince brand.
Figure 18: Winter promotion Fgiure19: In-store gift promotion
Source: Public disclosure, Everbright Securities Source: Public disclosure, Everbright Securities
Sales value from KA channels increased from Rmb61m in 2011 to Rmb204m in 2012, and the amount was Rmb150m for 1H13. Based on these data, Prince Frog did a good job in expanding KA channels. At present, sales from KA channels account for 20% of the company’s total revenue, and it aims to increase the percentage to 50%. As Prince Frog attaches importance to channel maintenance, as well as brand communication and consumer education, this target will hopefully be achieved within three to five months, in our view.
Figure 20: Sales value from KA channels (Rmb m)
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Differentiated animation marketing strategy to promote brand image
The company has invested in three seasons of Frog Prince animation series to promote and strengthen its brand image in the eyes of children and parents. It also entered into a cooperative agreement with Hangzhou Magic Mall Animation Production Co., Ltd. to launch diverse forms of marketing, e.g. stage plays. We believe stepping into the animation industry bodes well for the company’s core business, and the company will hopefully explore new profitability models in the area of animation, e.g. charging royalties for animations, investing in film shooting, authorizing other derivatives, etc.
CHINA / CONSUMER GOODS
China Everbright Research Limited Please read the analysts and company disclosure and the disclaimer in the last page 9
Earnings Forecasts and Investment Rating
Key assumptions and earnings forecasts
Assumptions:
1. Demand for children’s personal care products keeps robust, and the company’s revenue growth surpasses that of the industry average.
2. The percentage of KA products, which feature relatively high profit margins, is poised to increase from around 20% to 50% by 2015, and the company’s overall gross margin increases year by year.
3. Selling expense ratio and administrative expense ratio basically remain at the similar levels as compared with the previous years.
4. Income tax concessions expire starting from 2013, with the tax rate returning to 25% and remaining at this level.
Our forecasts for Prince Frog’s revenue and gross margin are as follows:
Figure 21: Revenue and gross margin forecasts
2011 2012 2013E 2014E 2015E
Revenue (Rmb m) 917.60 1,277.65 1,715.19 2,240.50 2,875.84
Growth rate 71.31% 39.24% 34.25% 30.63% 28.36%Children’s personal care products
Gross margin 48.98% 50.58% 51.04% 51.47% 51.91%
Revenue (Rmb m) 50.20 48.66 49.44 51.91 57.10
Growth rate 9.88% -3.06% 1.60% 5.00% 10.00%Adults’ personal care products
Gross margin 27.70% 29.10% 29.10% 29.10% 29.10%
Revenue (Rmb m) 118.33 103.97 135.16 148.68 163.54
We expect the EPS of Prince Frog will be Rmb0.27, Rmb0.37, and Rmb0.48 over 2013-15 respectively, representing a CAGR of 26.2%.
The PE valuation for Prince Frog, which has become listed for a relatively short period of time, has already risen to 15x-20x since the beginning of this year, but it still lags industry peers in terms of PE level. We believe the company’s market capitalization is still small, and with the market gradually understanding its fundamentals while both the company and the overall industry recording swift growth, its valuation level is poised to keep rising. We apply 20x PE to Prince Frog’s 2013E earnings, corresponding to a TP of HK$6.75. Initiate coverage with Buy.
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Figure 22: Valuation of Prince Frog kept rising over the past year
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Prince Frog Hengan International L'OCCITANE Magic Holdings
Source: Bloomberg
Upside catalysts
Long-term catalysts: The relaxing of China’s one-child policy could result in an increase in the number of children. Consumers’ willingness to purchase personal care products for children aged between four and twelve. The company successfully expands modern channels and channels in tier-one cities. Frog Prince’s share in the children’s personal care market increases further.
Short-term catalyst: The percentage of sales contributed by KA products increases.
Risks
Channel maintenance costs turn out to be too high
Effectiveness of market expansion efforts misses expectation
Rivals launch products of higher quality or better brands
CHINA / CONSUMER GOODS
China Everbright Research Limited Please read the analysts and company disclosure and the disclaimer in the last page 11
Company Background
Prince Frog International Holdings Limited is a leading Chinese company focusing on the production of personal care products for children aged between 3 and 12, including moisturizing cream, shampoo & bath products, oral care products, etc. The company also engages in production and sale of diapers, adults’ personal care products, etc.
Income Statement (Consolidated) Year to 31 Dec (Rmb m) 2011 2012 2013E 2014E 2015E
Operating income 1,269 1,572 1,900 2,441 3,096
Operating cost (731) (850) (975) (1,236) (1,546)
Operating margin 538 722 925 1,205 1,550
Operating expenses (320) (434) (568) (708) (901)
Other revenue 5 13 15 15 15
Other Income/Losses - - - - -
Operating profit 223 300 372 512 664
Finance cost, net (4) (1) 1 1 1
Pre-tax profit 219 299 373 513 665
Income tax (35) (58) (100) (138) (179)
Minorities - - - - -Net profit attributable to the parent company
184 242 272 375 485
EBITDA 226 299 377 523 679
EBIT 218 287 357 497 649
EPS (Rmb) 0.18 0.24 0.27 0.37 0.48
DPS (Rmb) 0.04 0.05 0.06 0.08 0.11
Source: Company, CER estimates
Cash Flow Statement (Consolidated) Year to 31 Dec (Rmb m) 2011 2012 2013E 2014E 2015E
Operating cash flow 187 262 256 320 478
Net profit 184 241 272 374 485
Depreciation & amortization 8 12 21 26 30
Change in working capital (6) (7) (40) (84) (46)
Others 1 16 4 4 9
Investing cash flow (67) (360) (110) (96) (70)
Net Capex (68) (110) (101) (81) (51)
Change in LT investment - - - - -
Change in other assets 1 (250) (10) (16) (19)
Free cash flow (14) (80) 112 (70) 284
Financing cash flow 544 (69) (48) (59) (81)
Change in share capital 8 (0) - - -
Net change in debt 14 (30) - - -
Change in other LT liab. 521 (39) (48) (59) (81)
Net cash flow 664 (167) 98 165 327
Source: Company, CER estimates
Balance Sheet (Consolidated) Year to 31 Dec (Rmb m) 2011 2012 2013E 2014E 2015E
Financial Summary Year to 31 Dec 2011 2012 2013E 2014E 2015E
Growth (%)
Revenue 51 24 21 28 27
EBITDA 34 33 26 39 30
EBIT 29 32 24 39 31
Net profit 27 31 13 38 30
EPS 27 31 13 38 30
Margins (%)
Gross 42 46 49 49 50
EBITDA 18 19 20 21 22
EBIT 17 18 19 20 21
Net 14 15 14 15 16
Others (%)
Effective tax rate 16 19 27 27 27
Payout ratio 16 16 18 18 18
RoCE 50 34 31 28 32
Average ROE 19 21 20 22 23
Average ROA 17 19 18 20 21
Source: Company, CER estimates
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 months Hold Expected to outperform or underperform the benchmark index by <5% over the next six months Reduce Expected to underperform the benchmark index by 5 - 15% over the next six months Sell Expected to underperform the benchmark index by >15% over the next six months Analyst Certification 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 report
covered. Disclosure China Everbright Securities International Limited, a substantial shareholder of China Everbright Research Limited, does not have financial interests (including stock holding) that equal 1% or more of the market capitalization of the company under review at the date this report is published; does not have investment banking relationship with the company under review within the past 12 months; and does not have market-making activities in the stock. None of our staff is an officer of the company. Disclaimer This report has been prepared by China Everbright Research Limited with the contribution by Everbright Securities Company Limited – Everbright Securities Research. China Everbright Research Limited does not guarantee, either expressed 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 referred to herein or otherwise. Opinions in this report are subject to change by the original writer without notice. China Everbright Research Limited does not accept any liability whatsoever, directly, indirectly, consequential or incidental that may arise from 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 may from time to time have long or short positions in securities, warrants, futures, options, derivatives or any other interests and/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, financial situation, risk tolerance or the particular needs of any investor. Before enter into any investment contract, individual should exercise judgment or seek for professional advice when necessary. The information contained herein is believed to 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 be reproduced 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
