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CREDIT SUISSE SECURITIES RESEARCH & ANALYTICS BEYOND INFORMATION®

Client-Driven Solutions, Insights, and Access

16 April 2015

Asia Pacific/China

Equity Research

Strategy

China Market Strategy STRATEGY

2014 earnings: Deterioration in EPS growth but

with a strong stock market

Figure 1: Net profit growth of China stocks

(60)

(40)

(20)

0

20

40

60

80

100

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Source: Bloomberg, Credit Suisse

We analyse the FY 2014 earnings of Chinese companies in this note

■ FY 2014 earnings growth decelerated to 6.6% YoY. Total FY14 reported earnings of 1,561 companies listed in mainland China, HK and the US reached US$390 bn, up 6.6% versus 2013. However, if we exclude the financial stocks (but include property developers in the calculation), net income was only up marginally, by 1.0% YoY, mainly dragged down by Energy and Materials sectors.

■ Meaningful earnings decline in Energy and Materials sectors. The

Energy sector registered a net profit decline of 15.8% due to the oil price weakness. Materials sector profit had an even sharper drop at 20.1% YoY, as the sector has been suffering from an over-capacity problem. On the other hand, Consumer Discretionary, Financials, Health Care, IT, Telecoms and Utilities sectors saw robust improvement in net earnings.

■ 2H14 earnings deteriorated from 1H14. Earnings of non-financial stocks

deteriorated from 9.9% growth in 1H14 to a 6.7% decline in 2H14, reflecting poor economic growth and deflation pressure. Near-term outlook on earnings remains challenging. At the moment, weak earnings are being completely neglected by the market, but over time market performance has to be supported by earnings performance.

Research Analysts

Vincent Chan

852 2101 6568

vincent.chan@credit-suisse.com

16 April 2015

China Market Strategy 2

Focus table Figure 2: FY14 results of Chinese companies listed in China + HK + US

Mkt cap No. of Sales (US$ bn) Net income(US$ bn)

(US$ bn) Co. FY13 FY14 YoY(%) FY13 FY14 YoY(%)

Consumer Discretionary 650 257 402 448 11.4 22 25 13.2

Automobiles & Components 229 63 179 209 17.1 11 12 9.6

Consumer Durables & Apparel 195 99 104 114 10.1 6 7 24.1

Retailing 99 52 102 106 3.4 3 3 2.4

Consumer Staples 208 88 100 102 2.3 6 6 (1.4)

Food & Staples Retailing 13 5 25 26 4.3 1 1 1.8

Food Beverage & Tobacco 162 69 69 69 0.9 5 4 (4.6)

Energy 706 41 984 949 (3.5) 52 44 (15.8)

Oil, Gas & Consumable Fuels 670 26 971 935 (3.7) 50 42 (16.6)

Energy Equipment & Services 37 15 12 14 9.8 2 2 5.3

Financials 2,322 157 1,185 1,368 15.4 222 244 10.0

Banks 1,269 15 726 838 15.4 178 191 7.0

Diversified Financials 328 20 22 36 62.5 5 10 85.2

Insurance 405 6 270 304 12.7 14 19 37.4

Real Estate 320 116 168 191 13.5 25 24 (0.8)

Health Care 294 113 88 101 14.8 5 6 23.4

Industrials 1,027 360 728 755 3.7 25 29 15.8

Capital Goods 753 285 603 620 2.8 18 20 10.7

Transportation 243 59 122 131 7.7 7 9 29.6

Information Technology 715 219 134 160 20.0 8 12 46.1

Materials 549 269 401 420 4.6 13 10 (20.1)

Chemicals 197 125 90 103 15.0 3 2 (15.2)

Construction Materials 71 30 63 65 2.6 5 4 (0.5)

Metals & Mining 246 85 236 240 1.4 5 3 (42.5)

Telecommunication Services 80 4 112 111 (0.8) 4 4 2.4

Utilities 195 53 93 93 (0.2) 8 9 9.2

Total 6,747 1,561 4,226 4,506 6.6 366 390 6.6

ex-Financials(incl. Property) 4,745 1,520 3,208 3,328 3.7 169 170 1.0

Source: Bloomberg, Credit Suisse

16 April 2015

China Market Strategy 3

A decelerating 2H14 Most Chinese companies had announced their FY2014 results by the end of March. Total

FY14 reported earnings of 1,561 companies listed in mainland China, HK and the US

reached US$390 bn, up 6.6% versus 2013 (FY 2013 net profit growth at 13%). However, if

we exclude the financial stocks (but include property developers in the calculation), net

income was only up marginally, by 1.0% YoY. It was mainly dragged down by Energy and

Materials sectors since the two sectors together account for a large share of total earnings

and registered a meaningful decline in net profit in 2014. On the other hand, Consumer

Discretionary, Financials, Health Care, IT, Telecoms and Utilities sectors recorded decent

earnings growth in 2014.

Figure 3: FY14 results of Chinese companies listed in China + HK + US

Mkt cap No. of Sales (US$ bn) Net income(US$ bn)

(US$ bn) Co. FY13 FY14 YoY(%) FY13 FY14 YoY(%)

Consumer Discretionary 650 257 402 448 11.4 22 25 13.2

Automobiles & Components 229 63 179 209 17.1 11 12 9.6

Consumer Durables & Apparel 195 99 104 114 10.1 6 7 24.1

Retailing 99 52 102 106 3.4 3 3 2.4

Consumer Staples 208 88 100 102 2.3 6 6 (1.4)

Food & Staples Retailing 13 5 25 26 4.3 1 1 1.8

Food Beverage & Tobacco 162 69 69 69 0.9 5 4 (4.6)

Energy 706 41 984 949 (3.5) 52 44 (15.8)

Oil, Gas & Consumable Fuels 670 26 971 935 (3.7) 50 42 (16.6)

Energy Equipment & Services 37 15 12 14 9.8 2 2 5.3

Financials 2,322 157 1,185 1,368 15.4 222 244 10.0

Banks 1,269 15 726 838 15.4 178 191 7.0

Diversified Financials 328 20 22 36 62.5 5 10 85.2

Insurance 405 6 270 304 12.7 14 19 37.4

Real Estate 320 116 168 191 13.5 25 24 (0.8)

Health Care 294 113 88 101 14.8 5 6 23.4

Industrials 1,027 360 728 755 3.7 25 29 15.8

Capital Goods 753 285 603 620 2.8 18 20 10.7

Transportation 243 59 122 131 7.7 7 9 29.6

Information Technology 715 219 134 160 20.0 8 12 46.1

Materials 549 269 401 420 4.6 13 10 (20.1)

Chemicals 197 125 90 103 15.0 3 2 (15.2)

Construction Materials 71 30 63 65 2.6 5 4 (0.5)

Metals & Mining 246 85 236 240 1.4 5 3 (42.5)

Telecommunication Services 80 4 112 111 (0.8) 4 4 2.4

Utilities 195 53 93 93 (0.2) 8 9 9.2

Total 6,747 1,561 4,226 4,506 6.6 366 390 6.6

ex-Financials(incl. Property) 4,745 1,520 3,208 3,328 3.7 169 170 1.0

Source: Bloomberg, Credit Suisse

Consumer Staples' FY14 net profit was down 1.4% YoY, due to a decline in the Food &

Beverage, and Tobacco sub-sectors. We believe it was a result of China's intensified anti-

corruption campaign, which significantly curbed government officials' recreational activities

using fiscal funds.

Energy sector was the obvious victim of the oil price drop with a 15.8% YoY net profit

decline. Among sub-sectors, Oil, Gas & Consumable Fuels' net profit dropped by as high

as 16.6% while Energy Equipment & Services still recorded a 5.3% YoY growth in profit.

Real Estate sector also did not perform very well in 2014. Although property developers

achieved a 13.5% revenue growth, profit was down 0.8% YoY, likely due to the rising cost

of land acquisition in the past few years.

Net income of non-financial

companies was only up by

1.0% YoY in 2014

Anti-corruption campaign

negatively impacted the

Food & Beverage and

Tobacco sub-sectors

Energy sector net profit

dropped 15.8% YoY due to

the oil price drop

Property developers

recorded negative profit

growth

16 April 2015

China Market Strategy 4

Materials was the biggest loser among all the sectors, with 20.1% net profit decline in

2014. Price pressure, due to overcapacity problem in the sector, was the major reason, in

our view. As seen in Figure 3, revenue of Materials companies still maintain a positive

trajectory, but the net profit drop was as high as 42.5% for Metals & Mining.

Telecoms and Utilities sector registered positive net profit growth in 2014, despite

negative revenues. We believe management efficiency contributed to net profit expansion,

while the management efficiency itself was helped by capex and SG&A cost control.

Figure 4: 1H14 results of Chinese companies listed in China + HK + US

Mkt cap No. of Sales (USD bn) Net income(USD bn)

(USD bn) Co. 1H13 1H14 YoY(%) 1H13 1H14 YoY(%)

Consumer Discretionary 650 257 193 216 11.7 11 13 17.6

Automobiles & Components 229 63 85 101 19.6 6 7 18.2

Consumer Durables & Apparel 195 99 51 55 8.3 3 3 33.6

Retailing 99 52 50 51 1.3 2 2 (12.6)

Consumer Staples 208 88 49 52 6.1 3 3 7.2

Food & Staples Retailing 13 5 13 13 5.5 0 0 0.2

Food Beverage & Tobacco 162 69 33 35 6.2 2 3 8.2

Energy 706 41 476 477 0.4 27 27 1.2

Oil, Gas & Consumable Fuels 670 26 470 471 0.1 26 26 (0.1)

Energy Equipment & Services 37 15 5 6 25.9 1 1 41.2

Financials 2,322 157 564 659 16.9 116 129 11.6

Banks 1,269 15 354 413 16.8 95 105 10.6

Diversified Financials 328 20 10 14 44.0 3 4 38.3

Insurance 405 6 141 161 14.6 9 11 14.2

Real Estate 320 116 60 71 18.8 9 10 10.6

Health Care 294 113 42 48 14.2 3 3 17.4

Industrials 1,027 360 317 343 8.2 11 12 8.7

Capital Goods 753 285 260 280 7.8 8 9 9.9

Transportation 243 59 56 62 9.4 3 3 4.6

Information Technology 715 219 59 71 18.6 3 6 59.7

Materials 549 269 187 197 5.1 5 5 (0.7)

Chemicals 197 125 43 44 2.2 1 1 (6.8)

Construction Materials 71 30 27 30 11.8 1 2 52.2

Metals & Mining 246 85 111 117 4.7 2 1 (33.3)

Telecommunication Services 80 4 54 57 4.9 2 2 13.0

Utilities 195 53 43 45 4.5 4 5 13.4

Total 6,747 1,561 1,985 2,165 9.1 186 206 10.9

ex-Financials(incl. Property) 4,745 1,520 1,481 1,576 6.5 79 87 9.9

Source: Bloomberg, Credit Suisse

Materials sector was the

biggest loser

Management efficiency

contributed to Telecoms and

Utilities sectors' net profit

expansion

16 April 2015

China Market Strategy 5

Figure 5: 2H14 results of Chinese companies listed in China + HK + US

Mkt cap No. of Sales (USD bn) Net income(USD bn)

(USD bn) Co. 2H13 2H14 YoY(%) 2H13 2H14 YoY(%)

Consumer Discretionary 650 257 209 232 11.1 11 12 9.0

Automobiles & Components 229 63 94 108 14.8 6 6 1.1

Consumer Durables & Apparel 195 99 53 59 11.8 3 3 16.2

Retailing 99 52 52 55 5.4 2 2 20.8

Consumer Staples 208 88 51 50 (1.4) 3 2 (10.8)

Food & Staples Retailing 13 5 12 12 3.1 0 0 4.7

Food Beverage & Tobacco 162 69 36 34 (4.0) 2 2 (17.9)

Energy 706 41 508 471 (7.2) 25 17 (33.9)

Oil, Gas & Consumable Fuels 670 26 501 464 (7.3) 24 16 (34.5)

Energy Equipment & Services 37 15 7 7 (1.7) 1 1 (21.5)

Financials 2,322 157 622 709 14.0 106 115 8.2

Banks 1,269 15 372 425 14.1 84 86 2.9

Diversified Financials 328 20 12 22 77.1 3 6 134.3

Insurance 405 6 129 143 10.7 5 9 83.4

Real Estate 320 116 108 120 10.6 16 14 (7.4)

Health Care 294 113 45 52 15.4 3 3 29.9

Industrials 1,027 360 411 411 0.2 14 17 21.5

Capital Goods 753 285 344 340 (1.1) 10 11 11.3

Transportation 243 59 65 69 6.2 4 6 47.7

Information Technology 715 219 74 90 21.1 5 7 36.6

Materials 549 269 214 224 4.3 8 5 (32.5)

Chemicals 197 125 47 59 26.7 1 1 (21.4)

Construction Materials 71 30 36 35 (4.3) 3 2 (23.7)

Metals & Mining 246 85 125 123 (1.5) 3 1 (49.5)

Telecommunication Services 80 4 58 54 (6.1) 2 1 (11.5)

Utilities 195 53 49 47 (4.3) 4 4 4.6

Total 6,747 1,561 2,241 2,341 4.5 181 184 2.1

ex-Financials(incl. Property) 4,745 1,520 1,727 1,752 1.4 90 84 (6.7)

Source: Bloomberg, Credit Suisse

If we compare 1H14 and 2H14 earnings growth, 2H14 earnings of most sectors decelerated except for Retailing, Diversified Financials, Insurance, Health care and Industrials. This reflects the sharp worsening in economic growth as well as poor global commodity prices 2H onwards, which is continuing into 2015, implying earnings in 1H15 are still not looking very encouraging.

Earnings growth for most

sectors decelerated in 2H14

compared with 1H14

16 April 2015

China Market Strategy 6

Figure 6: Earning growth comparison for 1H14 and 2H14

Net profit growth (%)

1H14 2H14 2H-1H

Consumer Discretionary 17.6 9.0 (8.6)

Automobiles & Components 18.2 1.1 (17.1)

Consumer Durables & Apparel 33.6 16.2 (17.4)

Retailing (12.6) 20.8 33.4

Consumer Staples 7.2 (10.8) (18.0)

Food & Staples Retailing 0.2 4.7 4.5

Food Beverage & Tobacco 8.2 (17.9) (26.2)

Energy 1.2 (33.9) (35.2)

Oil, Gas & Consumable Fuels (0.1) (34.5) (34.4)

Energy Equipment & Services 41.2 (21.5) (62.6)

Financials 11.6 8.2 (3.4)

Banks 10.6 2.9 (7.7)

Diversified Financials 38.3 134.3 96.0

Insurance 14.2 83.4 69.2

Real Estate 10.6 (7.4) (17.9)

Health Care 17.4 29.9 12.5

Industrials 8.7 21.5 12.9

Capital Goods 9.9 11.3 1.4

Transportation 4.6 47.7 43.1

Information Technology 59.7 36.6 (23.1)

Materials (0.7) (32.5) (31.8)

Chemicals (6.8) (21.4) (14.6)

Construction Materials 52.2 (23.7) (75.8)

Metals & Mining (33.3) (49.5) (16.2)

Telecommunication Services 13.0 (11.5) (24.4)

Utilities 13.4 4.6 (8.8)

Total 10.9 2.1 (8.8)

ex-Financials(incl. Property) 9.9 (6.7) (16.6)

Source: Bloomberg, Credit Suisse

Despite the weak earnings, stock markets surged from 4Q14 onwards, after the PBOC cut interest rates. At present, the strength of A-shares has extended to H-shares, due to a mixture of mainland liquidity and HK/foreign investors expecting mainland money continuing to pour in (so they buy in advance). Earnings and economic weakness is being neglected at the moment. However, based on past experiences, at the end of the day market performance has to be supported by earnings performance, without which a bull market cannot last – no matter how strong is the liquidity story.

Stock markets have surged

since 4Q14 despite weak

earnings

16 April 2015

China Market Strategy 7

Figure 7: The stock market started to rally in 2H14

0

50

100

150

200

250

Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15

Shanghai Composite Index

Source: Bloomberg

For HK/China company results, please refer to the following published Asian Dailies

China Auto (Bin Wang / Mark Mao):

Baoxin Auto Group (31 Mar)

China Zhengtong Auto Services Holding limited (31 Mar)

Zhengzhou Yutong Group (31 Mar)

Zhongsheng Group Holding Limited (30 Mar)

BYD (30 Mar)

Brilliance China Automotive Holdings (27 Mar)

Huayu Automotive System (27 Mar)

Guangzhou Automobile Group (26 Mar)

Power Xinchen (26 Mar)

Dongfeng Motor (26 Mar)

China Yongda Automobiles Services (24 Mar)

Great Wall Motor (23 Mar)

BAIC Motor (23 Mar)

China Anhui Jianghuai (19 Mar)

Geely Automobile Holdings (18 Mar)

China Banks (Victor Wang / Steven Zhu)

China Minsheng Banking Corporation (31 Mar)

Harbin Bank (30 Mar)

Chongqing Rural Commercial Bank (30 Mar)

China Everbright Bank (30 Mar)

China Construction Bank (30 Mar)

China Cinda Asset Management (30 Mar)

16 April 2015

China Market Strategy 8

Bank of Communication (27 Mar)

Industrial & Commercial Bank of China (27 Mar)

Bank of China (26 Mar)

Agricultural Bank of China (25 Mar)

Bank of Chongqing (23 Mar)

China Citic Bank (23 Mar)

Shanghai Pudong Development Bank (19 Mar)

China Merchants Bank (19 Mar)

Ping An Bank (13 Mar)

Consumer Discretionary (Eva Wang)

Midea Group (31 Mar)

Qingdao Haier (31 Mar)

Haier Electronics Group (30 Mar)

Gree Electric Appliance (30 Mar)

Chow Sang Sang (27 Mar)

Hisense Kelon Electrical Holdings (27 Mar)

Shenzhou International (26 Mar)

Chow Tai Fook ( 24 Mar)

Li Ning (19 Mar)

Lifestyle International (17 Mar)

Texhong Textile (17 Mar)

Sa Sa International (17 Mar)

Peak Sport Products (11 Mar)

TCL Corporation (03 Mar)

Consumer Staples (Kevin Yin / Simon Sun / Sophie Chiu)

Bright Dairy & Food Co. (30 Mar)

China Mengniu Dairy (26 Mar)

WH Group (26 Mar)

Hengan (25 Mar)

China Modern Dairy (25 Mar)

Gome (24 Mar)

Tingyi (24 Mar)

Stella (23 Mar)

Ajisen (19 Mar)

Xiabu Xiabu (19 Mar)

Want Want (18 Mar)

CAR Inc. (13 Mar)

Diversified Financials & Insurance ( Arjan Van Veen / Frances Feng)

16 April 2015

China Market Strategy 9

Everbright Securities-A (31 Mar)

China Merchants Securities (31 Mar)

Hong Kong Exchange and Clearing (31 Mar)

China Everbright (30 Mar)

PICC Group (30 Mar)

Haitong Securities (30 Mar)

China Galaxy Securities (30 Mar)

China Pacific-A (30 Mar)

PICC P&C (30 Mar)

China Pacific (30 Mar)

China Taiping (26 Mar)

New China Life (26 Mar)

China Life (25 Mar)

Citic Securities (24 Mar)

Ping An (20 Mar)

Sinolink Securities (16 Mar)

Ping An Insurance (12 Mar)

Value Partners (12 Mar)

Environment & Metals & Mining (Trina Chen / Owen Liang / Gary Xu)

Northern Rare Earth (06 Apr)

CT Environment (02 Apr)

China Everbright International Ltd (01 Apr)

Beijing Enterprises Water Group Ltd (31 Mar)

Angang Steel Company (31 Mar)

Guangdong Investment Limited (30 Mar)

Shandong Gold (30 Mar)

BBMG Corporation (30 Mar)

Guodian Technology & Environment Group Corporation (30 Mar)

China Shanshui Cement Group (30 Mar)

Yanzhou Coal Mining Company (30 Mar)

China National Materials Company (30 Mar)

Tianjin capital Environment Protection (30 Mar)

Dongjiang Environment (30 Mar)

Baosteel (27 Mar)

Aluminium Corporation of China (26 Mar)

Jiangxi Cooper Company (26 Mar)

Maanshan Iron & Steel Co (26 Mar)

China Conch Venture (26 Mar)

16 April 2015

China Market Strategy 10

SIIC Environment (25 Mar)

China National Building Material (25 Mar)

Anhui Conch Cement (24 Mar)

China Molybdenum (24 Mar)

China Shenhua Energy (24 Mar)

Zhaojin Mining (23 Mar)

China Coal (23 Mar)

Dynagreen Environment Protection (23 Mar)

Zijin Mining Group (23 Mar)

West China Cement (17 Mar)

TCC International Holdings (16 Mar)

MMG Ltd. (11 Mar)

Lee & Man Paper (10 Mar)

China Resources Cement (09 Mar)

Nine Dragon Paper (26 Feb)

SIIC Environment (24 Feb)

Health Care ( Iris Wang / Zen Zhou)

Bloomage BioTechnology (07 Apr)

Zhejiang Huahai Pharmaceutical (07 Apr)

China Traditional Chinese Medicine (02 Apr)

Luye Pharma (01 Apr)

Tasly (31 Mar)

Jiangsu Hengrui Medicine (31 Mar)

Shenzhen Salubris Pharmaceuticals (25 Mar)

CSPC Pharmaceutical (25 Mar)

Beijing Tongrentang (24 Mar)

Dawnrays Pharmaceutical (19 Mar)

Wuxi Pharma (12 Mar)

Industrials (Edmond Huang / Baiding Rong)

China Singyes Solar Technologies Holdings (01 Apr)

CSR (01 Apr)

CNR (01 Apr)

China Communication Construction Co. (01 Apr)

China Railway Construction Corporation (31 Mar)

China Railway Group Ltd (31 Mar)

China High Speed Transmission Equipment Group (30 Mar)

Dongfang Electric Corporation (30 Mar)

Xinjiang Goldwind (30 Mar)

16 April 2015

China Market Strategy 11

XJ Electric (27 Mar)

GCL-Poly Energy Holdings (27 Mar)

Wasion Group (24 Mar)

Harbin Electric (24 Mar)

Zhuzhou CSR (23 Mar)

China State Construction International Holdings (23 Mar)

Shanghai Electric (18 Mar)

Boer Power Holdings (09 Mar)

Internet ( Dick Wei / Jialong Shi / Evan Zhou)

Yongyou Network (23 Mar)

Ctrip (23 Mar)

Aisino (19 Mar)

Tencent Holdings (19 Mar)

Jumei International (18 Mar)

Boyaa Interactive International Ltd (16 Mar)

Chengdu B-Ray Media (16 Mar)

Sina Corporation (12 Mar)

Weibo Corporation (12 Mar)

Qihoo 360 (11 Mar)

Bitauto Holdings (10 Mar)

58.com (09 Mar)

YY Inc. (06 Mar)

Tuniu Corporation (05 Mar)

Tarena International (05 Mar)

Macau Gaming (Kenneth Fong / Isis Wong)

Macau Legend Development (27 Mar)

Galaxy Entertainment (20 Mar)

SJM (25 Feb)

Melco International (25 Feb)

MGM China (18 Feb)

Wynn Macau (04 Feb)

Oil & Gas (Thomas Wong / Horace Tse / Kelly Chen)

Yantai Jereh (31 Mar)

China Oilfield Services (31 Mar)

Sinopec Engineering (30 Mar)

Sinopec Kantons Holdings (30 Mar)

CNOOC (27 Mar)

Kunlun Energy (27 Mar)

16 April 2015

China Market Strategy 12

PetroChina (26 Mar)

Anton Oilfield Services (26 Mar)

Sinopec Yizheng (25 Mar)

SPT Energy (24 Mar)

China Petroleum & Chemical Corporation (23 Mar)

Hilong Holdings (23 Mar)

Wanhua Chemical Group (17 Mar)

Offshore Oil Engineering (16 Mar)

China Property (Jinsong Du / Kelvin Tam)

Dalian Wanda (31 Mar)

Shimao Property (01 Apr)

Financial Street (31 Mar)

Shenzhen International Holdings (30 Mar)

Shanghai Shimao (26 Mar)

Shanghai Lujiazui (26 Mar)

China Fortune Land Development (26 Mar)

Agile Property (25 Mar)

Sunac China Holdings (25 Mar)

China World Trade Centre (25 Mar)

KWG Property (25 Mar)

China Overseas Land & Investment (25 Mar)

China Resources Land (24 Mar)

Gemdale (23 Mar)

RiseSun Real Estate Development (20 Mar)

E-House China Holdings (20 Mar)

Leju Holdings (19 Mar)

Sino-Ocean Land Holdings (18 Mar)

Guangzhou R&F (17 Mar)

Poly Real Estate (17 Mar)

Shanghai Jinqiao (16 Mar)

Country Garden (12 Mar)

China Merchants Property (10 Mar)

SOHO China (09 Mar)

Hong Kong Property (Joyce Kwock)

Midland Holdings (27 Mar)

Kerry Logistics (27 Mar)

Swire Properties (19 Mar)

Wheelock and Company Limited (17 Mar)

16 April 2015

China Market Strategy 13

Wharf Holdings (16 Mar)

Hysan Development (11 Mar)

Great Eagle (06 Mar)

Hong Kong Land (06 Mar)

New World Development (02 Mar)

Champion Real Estate (02 Mar)

SHKP (02 Mar)

Cheung Kong Holdings (27 Feb)

Sino Land (11 Feb)

Swire Properties (04 Feb)

Hang Lung Properties (27 Jan)

China Telecoms (Colin McCallum)

China Mobile (19 Mar)

China Telecom (18 Mar)

21 Vianet Group (10 Mar)

China United Network Communications (04 Mar)

China Unicom (04 Mar)

Utilities (Dave Dai / Ran Ma)

Beijing Enterprises Holdings (01 Apr)

Huadian Power International (31 Mar)

Shenzhen Gas Corporation (30 Mar)

ENN Energy (30 Mar)

China Resources Gas (27 Mar)

Longyuan Power (25 Mar)

China Suntien Green Energy (25 Mar)

CGN Power (19 Mar)

China Resources Power Holdings (19 Mar)

Huaneng Renewables (19 Mar)

Hong Kong and China Gas (19 Mar)

16 April 2015

China Market Strategy 14

Companies Mentioned (Price as of 14-Apr-2015)

21 Vianet Group Inc (VNET.OQ, $19.98) 58.com Inc. (WUBA.N, $67.87) Agile Property (3383.HK, HK$5.78) Agricultural Bank of China (1288.HK, HK$4.29) Ajisen (0538.HK, HK$5.11) Aluminum Corporation of China (2600.HK, HK$4.89) Angang Steel Company Ltd (0347.HK, HK$6.47) Anhui Conch Cement Co. Ltd. (0914.HK, HK$31.4) Anton Oilfield Services Group (3337.HK, HK$1.96) BAIC Motor Corporation Limited (1958.HK, HK$10.5) BANK OF CHONG QING (1963.HK, HK$7.93) BBMG Corporation (601992.SS, Rmb12.1) BYD Co Ltd (1211.HK, HK$46.6) Bank of China Ltd (3988.HK, HK$5.34) Bank of Communications (3328.HK, HK$7.66) Baosteel (600019.SS, Rmb7.55) Baotou Rare Earth (600111.SS, Rmb28.7) Baoxin Auto Group Ltd (1293.HK, HK$4.72) Beijing Enterprises Holdings (0392.HK, HK$64.2) Beijing Enterprises Water Group Limited (0371.HK, HK$6.07) Beijing Tongrentang Co Ltd. (600085.SS, Rmb33.89) Bitauto Holdings Limited (BITA.N, $57.14) Bloomage BioTechnology Corporation Limited (0963.HK, HK$18.14) Boer Power Holdings (1685.HK, HK$13.94) Boyaa Interactive International Limited (0434.HK, HK$8.5) Bright Dairy & Food Co., Ltd (600597.SS, Rmb19.84) Brilliance China Automotive Holdings Limited (1114.HK, HK$15.86) CAR Inc. (0699.HK, HK$17.52) CGN Power Co., Ltd. (1816.HK, HK$4.3) CKH Holdings (0001.HK, HK$169.1) CLP Holdings Limited (0002.HK, HK$68.45) CNOOC Ltd (0883.HK, HK$12.42) CSPC Pharmaceutical Group Ltd (1093.HK, HK$7.44) CSR Corporation Limited (1766.HK, HK$17.6) CT Environment (1363.HK, HK$9.49) Champion Real Estate Investment Trust (2778.HK, HK$3.82) Chengdu B-Ray Media Co., Ltd (600880.SS, Rmb15.4) China Anhui Jianghuai Automobile Co., Ltd. (600418.SS, Rmb15.17) China CNR (601299.SS, Rmb28.89) China CNR (6199.HK, HK$18.66) China Cinda Asset Management Co., Ltd (1359.HK, HK$4.73) China Citic Bank (0998.HK, HK$7.16) China Coal Energy Company Limited (1898.HK, HK$5.06) China Communications Construction Co Ltd (1800.HK, HK$15.84) China Conch Venture Holdings Limited (0586.HK, HK$20.75) China Construction Bank (0939.HK, HK$7.51) China Everbright (0165.HK, HK$25.6) China Everbright International Ltd (0257.HK, HK$14.68) China Galaxy Securities (6881.HK, HK$12.88) China High Speed Transmission Equipment Group Co., (0658.HK, HK$6.7) China Mengniu Dairy (2319.HK, HK$42.05) China Merchants Bank (3968.HK, HK$23.1) China Merchants Property Development Co Ltd (000024.SZ, Rmb31.96) China Merchants Securities (600999.SS, Rmb36.92) China Minsheng Banking Corporation (1988.HK, HK$10.68) China Mobile Limited (0941.HK, HK$109.3) China Modern Dairy Holdings Ltd (1117.HK, HK$3.1) China Molybdenum Co. Ltd (3993.HK, HK$7.79) China National Building Material Co (3323.HK, HK$9.11) China National Materials Company Limited (1893.HK, HK$3.1) China Oilfield Services Ltd (2883.HK, HK$16.62) China Overseas Land & Investment (0688.HK, HK$28.45) China Pacific (2601.HK, HK$40.9) China Pacific (601601.SS, Rmb34.82) China Petroleum & Chemical Corporation - H (0386.HK, HK$6.64) China Railway Construction Corporation Limited (1186.HK, HK$16.7) China Railway Group Limited (0390.HK, HK$11.22) China Resources Cement Holdings Ltd (1313.HK, HK$5.04) China Resources Gas (1193.HK, HK$24.35) China Resources Land Ltd (1109.HK, HK$23.75) China Resources Power Holdings (0836.HK, HK$20.85) China Shanshui Cement Group Ltd. (0691.HK, HK$6.58) China Shenhua Energy Company Limited (1088.HK, HK$21.3) China Singyes Solar Technologies Holdings Limited (0750.HK, HK$13.36) China State Construction International Holdings Li (3311.HK, HK$12.3) China Suntien Green Energy Corporation (0956.HK, HK$2.09) China Taiping (0966.HK, HK$29.55) China Telecom (0728.HK, HK$5.62) China Traditional Chinese Medicine Co. Ltd (0570.HK, HK$6.05) China Unicom Hong Kong Ltd (0762.HK, HK$13.56) China United Network Communications Ltd (600050.SS, Rmb6.17) China World Trade Center Co., Ltd. (600007.SS, Rmb17.95)

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China Market Strategy 15

China Yongda Automobiles Services Holding limited (3669.HK, HK$4.96) China Zhengtong Auto Services Holding limited (1728.HK, HK$5.12) Chongqing Rural Commercial Bank (3618.HK, HK$6.1) Chow Sang Sang (0116.HK, HK$17.78) Chow Tai Fook Jewellery Group Limited (1929.HK, HK$8.92) Citic Securities (6030.HK, HK$35.3) Country Garden Holdings Company Limited (2007.HK, HK$3.79) Ctrip.com International (CTRP.OQ, $63.88) Dalian Wanda Commercial Properties Co., Ltd. (3699.HK, HK$55.9) Dawnrays Pharmaceutical (Holdings) Limited (2348.HK, HK$7.23) Dongfang Electric Corporation Limited (1072.HK, HK$18.62) Dongfeng Motor Group Company Limited (0489.HK, HK$13.6) Dynagreen Environmental Protection (1330.HK, HK$7.57) E-House China Holdings Ltd (EJ.N, $6.3) ENN Energy Holdings Ltd (2688.HK, HK$52.65) Everbright Securities (601788.SS, Rmb33.03) Financial Street Holding (000402.SZ, Rmb12.8) GCL-Poly Energy Holdings Limited (3800.HK, HK$2.54) GOME Electrical Appliances Holding Limited (0493.HK, HK$2.19) Galaxy Entertainment Group (0027.HK, HK$37.3) Geely Automobile Holdings Ltd (0175.HK, HK$4.67) Gemdale (600383.SS, Rmb11.72) Great Eagle Hdg. (0041.HK, HK$28.35) Great Wall Motor (2333.HK, HK$56.65) Gree Electric Appliance (000651.SZ, Rmb43.98) Guangdong Investment Limited (0270.HK, HK$11.06) Guangzhou Automobile Group (2238.HK, HK$8.78) Guangzhou R&F Properties Co Ltd (2777.HK, HK$9.42) Guodian Technology & Environment Group Corporation (1296.HK, HK$1.49) Haier Electronics Group Co., Ltd. (1169.HK, HK$25.1) Haitong Securities (6837.HK, HK$24.9) Hang Lung Properties (0101.HK, HK$24.05) Harbin Bank (6138.HK, HK$2.98) Harbin Electric Company Limited (1133.HK, HK$6.09) Hilong Holdings Ltd (1623.HK, HK$2.63) Hisense Kelon Electrical Holdings Company Limited (000921.SZ, Rmb11.3) Hong Kong Exchanges and Clearing (0388.HK, HK$285.6) Hong Kong and China Gas (0003.HK, HK$18.86) Hongkong Land Holdings (HKLD.SI, $7.55) Huadian Power International (1071.HK, HK$7.39) Huaneng Renewables Corporation (0958.HK, HK$3.25) Huayu Automotive Systems Co., Ltd (600741.SS, Rmb19.99) Hysan Development Co. (0014.HK, HK$34.55) Industrial & Commercial Bank of China (1398.HK, HK$6.59) Jiangsu Hengrui Medicine Co. Ltd (600276.SS, Rmb53.04) Jiangxi Copper Company Ltd (0358.HK, HK$16.24) Jumei International Holding Limited (JMEI.N, $19.0) KWG Property Holding Limited (1813.HK, HK$7.0) Kerry Logistics Network Ltd (0636.HK, HK$12.5) Kunlun Energy (0135.HK, HK$9.36) Lee & Man Paper (2314.HK, HK$4.14) Leju Holdings Limited (LEJU.N, $9.02) Li Ning Co Ltd (2331.HK, HK$4.56) Lifestyle International Holdings Ltd (1212.HK, HK$14.42) Luye Pharma Group Ltd. (2186.HK, HK$10.82) MGM China (2282.HK, HK$15.72) MMG Ltd. (1208.HK, HK$3.05) Maanshan Iron & Steel Co Ltd (0323.HK, HK$3.15) Macau Legend Development Limited (1680.HK, HK$2.97) Melco International (0200.HK, HK$13.88) Midea Group (000333.SZ, Rmb33.21) Midland Holdings Ltd (1200.HK, HK$3.51) New China Life (1336.HK, HK$49.0) New World Development (0017.HK, HK$9.77) Nine Dragons Paper Holdings Ltd (2689.HK, HK$5.76) Offshore Oil Engineering Co. Ltd. (600583.SS, Rmb13.61) PICC Group (1339.HK, HK$5.17) PICC P&C (2328.HK, HK$18.0) Peak Sport Products Co.Ltd. (1968.HK, HK$2.59) PetroChina (0857.HK, HK$9.93) Ping An (601318.SS, Rmb84.67) Ping An Bank (000001.SZ, Rmb16.3) Poly Property Group Co., Ltd (0119.HK, HK$4.47) Power Xinchen (1148.HK, HK$4.1) Qihoo 360 Technology Co. Ltd. (QIHU.N, $59.67) Qingdao Haier Co., Ltd. (600690.SS, Rmb26.45) RiseSun Real Estate Development (002146.SZ, Rmb22.8) SIIC Environment Holdings (SIIC.SI, S$0.2) SJM (0880.HK, HK$10.48) SOHO China Ltd (0410.HK, HK$5.7) SPT Energy (1251.HK, HK$1.82) Sa Sa International Holding (0178.HK, HK$4.18) Shandong Gold (600547.SS, Rmb27.46) Shanghai Electric Group Company Limited (2727.HK, HK$7.23)

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China Market Strategy 16

Shanghai Jinqiao Export Processing Zone Developmen (600639.SS, Rmb27.5) Shanghai Lujiazui Finance & Trade Zone Development (600663.SS, Rmb44.84) Shanghai Pudong Development Bank (600000.SS, Rmb17.89) Shanghai Shimao Co Ltd (600823.SS, Rmb20.84) Shenzhen Gas Corporation Ltd. (601139.SS, Rmb11.56) Shenzhen International Holdings Limited (0152.HK, HK$14.38) Shenzhen Salubris Pharmaceuticals Co Ltd (002294.SZ, Rmb51.22) Shenzhou International (2313.HK, HK$37.5) Shimao Property Holdings Ltd (0813.HK, HK$18.02) Sina Corporation (SINA.OQ, $35.46) Sino Land (0083.HK, HK$13.48) Sino-Ocean Land Holdings Ltd (3377.HK, HK$5.75) Sinolink Securities (600109.SS, Rmb27.97) Sinopec Engineering (Group) Co Ltd (2386.HK, HK$8.04) Sinopec Kantons Holdings Ltd (0934.HK, HK$6.5) Sinopec Yizheng Chemical Fibre Company Limited (1033.HK, HK$4.54) Sunac China Holdings Ltd. (1918.HK, HK$8.42) Swire Properties Limited (1972.HK, HK$24.55) TCC International Holdings Limited (1136.HK, HK$3.4) TCL Corporation (000100.SZ, Rmb6.2) Tarena International, Inc. (TEDU.OQ, $12.77) Tasly Pharmaceutical Group Co Ltd (600535.SS, Rmb50.04) Tencent Holdings (0700.HK, HK$161.2) Texhong Textile Group (2678.HK, HK$10.3) Tianjin Capital Environmental Protection (1065.HK, HK$8.85) Tingyi (0322.HK, HK$17.26) Value Partners (0806.HK, HK$11.76) WH Group Limited (0288.HK, HK$5.37) Wanhua Chemical Group Co., Ltd (600309.SS, Rmb25.45) Want Want China Holdings Ltd. (0151.HK, HK$8.64) Wasion Group (3393.HK, HK$10.88) Weibo Corporation (WB.OQ, $14.5) West China Cement Ltd (2233.HK, HK$1.48) Wharf Holdings (0004.HK, HK$57.35) Wheelock and Company Limited (0020.HK, HK$42.15) WuXi PharmaTech (WX.N, $39.16) Wynn Macau (1128.HK, HK$18.26) XJ Electric (000400.SZ, Rmb29.98) Xiabu Xiabu (0520.HK, HK$5.23) Xinjiang Goldwind Science & Technology Co., Ltd. (2208.HK, HK$17.18) YY INC. (YY.OQ, $61.62) Yantai Jereh Oilfield Services Group Co. Ltd (002353.SZ, Rmb39.18) Yanzhou Coal Mining Company Limited (1171.HK, HK$8.29) Yonyou Network (600588.SS, Rmb45.26) Zhaojin Mining Limited (1818.HK, HK$4.65) Zhejiang Huahai Pharmaceutical Co Ltd (600521.SS, Rmb21.78) Zhengzhou Yutong Group Co., Ltd. (600066.SS, Rmb30.87) Zhongsheng Group Holding limited (0881.HK, HK$6.9) Zhuzhou CSR Times Electric Co. Ltd. (3898.HK, HK$59.9) Zijin Mining Group Co., Ltd (2899.HK, HK$3.16)

Disclosure Appendix

Important Global Disclosures

I, Vincent Chan, certify that (1) the views expressed in this report accurately reflect my personal views about all of the subject companies and securities and (2) no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report.

The analyst(s) responsible for preparing this research report received Compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which are generated by Credit Suisse's investment banking activities

As of December 10, 2012 Analysts’ stock rating are defined as follows:

Outperform (O) : The stock’s total return is expected to outperform the relevant benchmark*over the next 12 months.

Neutral (N) : The stock’s total return is expected to be in line with the relevant benchmark* over the next 12 months.

Underperform (U) : The stock’s total return is expected to underperform the relevant benchmark* over the next 12 months.

*Relevant benchmark by region: As of 10th December 2012, Japanese ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. As of 2nd October 2012, U.S. and Canadian as well as European ra tings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment oppo rtunities. For Latin American and non-Japan Asia stocks, ratings are based on a stock’s total return relative to the average total return of the relevant country or regional benchmark; prior to 2nd October 2012 U.S. and Canadian ratings were based on (1) a stock’s absolute total return potential to its current share price and (2) the relative attractiveness of a stock’s total return potential within an analyst’s coverage universe. For Australian and New Zealand stocks, 12 -month rolling yield is incorporated in the absolute total return calculation and a 15% and

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China Market Strategy 17

a 7.5% threshold replace the 10-15% level in the Outperform and Underperform stock rating definitions, respectively. The 15% and 7.5% thresholds replace the +10-15% and -10-15% levels in the Neutral stock rating definition, respectively. Prior to 10th December 2012, Japanese ratings were based on a stock’s total return relative to the average total return of the relevant country or regional benchmark.

Restricted (R) : In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications, including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other circumstances.

Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going forward.

Analysts’ sector weightings are distinct from analysts’ stock ratings and are based on the analyst’s expectations for the fundamentals and/or valuation of the sector* relative to the group’s historic fundamentals and/or valuation:

Overweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is favorable over the next 12 months.

Market Weight : The analyst’s expectation for the sector’s fundamentals and/or valuation is neutral over the next 12 months.

Underweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is cautious over the next 12 months.

*An analyst’s coverage sector consists of all companies covered by the analyst within the relevant sector. An analyst may cover multiple sectors.

Credit Suisse's distribution of stock ratings (and banking clients) is:

Global Ratings Distribution

Rating Versus universe (%) Of which banking clients (%)

Outperform/Buy* 44% (53% banking clients)

Neutral/Hold* 38% (50% banking clients)

Underperform/Sell* 16% (43% banking clients)

Restricted 3%

*For purposes of the NYSE and NASD ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, and Unde rperform most closely correspond to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determined on a relative basis. (Please refer to definitions above.) An investor's decision to buy or sell a security should be based on investment objectives, current holdin gs, and other individual factors.

Credit Suisse’s policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or the market that may have a material impact on the research views or opinions stated herein.

Credit Suisse's policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. For more detail please refer to Credit Suisse's Policies for Managing Conflicts of Interest in connection with Investment Research: http://www.csfb.com/research-and-analytics/disclaimer/managing_conflicts_disclaimer.html

Credit Suisse does not provide any tax advice. Any statement herein regarding any US federal tax is not intended or written to be used, and cannot be used, by any taxpayer for the purposes of avoiding any penalties.

See the Companies Mentioned section for full company names

The subject company (EJ.N, 000333.SZ, 0027.HK, 0883.HK, 2899.HK, 0700.HK, 600583.SS, 1071.HK, 1728.HK, 6138.HK, 0570.HK, 1208.HK, BITA.N, 0699.HK, SINA.OQ, 2386.HK, 1186.HK, WX.N, 3323.HK, 0520.HK, 2778.HK, 2282.HK, 6881.HK, 600019.SS, 2727.HK, 1211.HK, TEDU.OQ, 0322.HK, QIHU.N, 0004.HK, 600418.SS, 0691.HK, 3393.HK, 0257.HK, 600383.SS, 0636.HK, 0857.HK, 0688.HK, 1818.HK, 2313.HK, LEJU.N, 1359.HK, 0347.HK, 1816.HK, 0493.HK, 600597.SS, 0371.HK, 1988.HK, 1288.HK, 1072.HK, 601299.SS, 1136.HK, 0434.HK, 1918.HK, 3699.HK, WB.OQ, 2600.HK, 1893.HK, 0041.HK, 3800.HK, 1336.HK, 3311.HK, 1800.HK, 0998.HK, 601139.SS, 2233.HK, JMEI.N, 3383.HK, 1398.HK, 0002.HK, 000001.SZ, 1109.HK, 0489.HK, 1171.HK, 3968.HK, 1088.HK, 1313.HK, 1114.HK, 1330.HK, 6199.HK, 3988.HK, 3328.HK, 0966.HK, 0939.HK, 0586.HK, 1680.HK, 0658.HK, 1128.HK, WUBA.N, CTRP.OQ, 0386.HK, SIIC.SI, 2007.HK, 0836.HK, 1363.HK, 0392.HK, 2238.HK, 600999.SS, 0958.HK, 2883.HK, 2328.HK, 0119.HK, 0020.HK, 1898.HK) currently is, or was during the 12-month period preceding the date of distribution of this report, a client of Credit Suisse.

Credit Suisse provided investment banking services to the subject company (EJ.N, 0027.HK, 0883.HK, 0700.HK, 600583.SS, 6138.HK, 0570.HK, BITA.N, 0699.HK, SINA.OQ, 1186.HK, 3323.HK, 0520.HK, 6881.HK, 600019.SS, 2727.HK, TEDU.OQ, QIHU.N, 600418.SS, 0691.HK, 600383.SS, 2313.HK, LEJU.N, 1359.HK, 0347.HK, 1816.HK, 0371.HK, 1288.HK, 1072.HK, 601299.SS, 0434.HK, 1918.HK, 3699.HK, WB.OQ, 1893.HK, 3311.HK, 1800.HK, 601139.SS, 2233.HK, JMEI.N, 1398.HK, 000001.SZ, 0489.HK, 1171.HK, 3968.HK, 1114.HK, 6199.HK, 3988.HK, 3328.HK, 0966.HK, 0939.HK, 1680.HK, WUBA.N, SIIC.SI, 0392.HK, 2238.HK, 600999.SS, 0958.HK, 2883.HK, 1898.HK) within the past 12 months.

Credit Suisse provided non-investment banking services to the subject company (000333.SZ, 1728.HK, 1288.HK, 0998.HK, 1398.HK, 3968.HK, 3988.HK) within the past 12 months

Credit Suisse has managed or co-managed a public offering of securities for the subject company (EJ.N, 0883.HK, 0700.HK, 600583.SS, 0570.HK, 0699.HK, SINA.OQ, 0520.HK, 600019.SS, 2727.HK, QIHU.N, 0691.HK, 2313.HK, LEJU.N, 1359.HK, 1816.HK, 1288.HK, 1072.HK, 601299.SS, 1918.HK, 3699.HK, 2233.HK, 1398.HK, 1171.HK, 3968.HK, 6199.HK, 3988.HK, 3328.HK, 0939.HK, WUBA.N, SIIC.SI, 600999.SS, 0958.HK, 2883.HK) within the past 12 months.

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China Market Strategy 18

Credit Suisse has received investment banking related compensation from the subject company (EJ.N, 0027.HK, 0883.HK, 0700.HK, 600583.SS, 6138.HK, 0570.HK, BITA.N, 0699.HK, SINA.OQ, 1186.HK, 3323.HK, 0520.HK, 6881.HK, 600019.SS, 2727.HK, TEDU.OQ, QIHU.N, 600418.SS, 0691.HK, 600383.SS, 2313.HK, LEJU.N, 1359.HK, 0347.HK, 1816.HK, 0371.HK, 1288.HK, 1072.HK, 601299.SS, 0434.HK, 1918.HK, 3699.HK, WB.OQ, 1893.HK, 3311.HK, 1800.HK, 601139.SS, 2233.HK, JMEI.N, 1398.HK, 000001.SZ, 0489.HK, 1171.HK, 3968.HK, 1114.HK, 6199.HK, 3988.HK, 3328.HK, 0966.HK, 0939.HK, 1680.HK, WUBA.N, SIIC.SI, 0392.HK, 2238.HK, 600999.SS, 0958.HK, 2883.HK, 1898.HK) within the past 12 months

Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (EJ.N, 000333.SZ, 0027.HK, 0883.HK, 2899.HK, 0700.HK, 600583.SS, 1169.HK, 1071.HK, 1728.HK, 1212.HK, 6138.HK, 0570.HK, 0538.HK, 0728.HK, 1208.HK, BITA.N, 0003.HK, 0699.HK, SINA.OQ, 2386.HK, 1186.HK, WX.N, 3323.HK, 0520.HK, 0288.HK, 2778.HK, 2282.HK, 6881.HK, 600019.SS, 1968.HK, 2727.HK, TEDU.OQ, 0322.HK, QIHU.N, 0004.HK, 600418.SS, 0691.HK, 1929.HK, 3393.HK, 0257.HK, 600383.SS, 002146.SZ, 0636.HK, 0857.HK, 0358.HK, 0688.HK, 1818.HK, 2313.HK, LEJU.N, 1359.HK, 1193.HK, 0347.HK, 1816.HK, 0493.HK, 601601.SS, 2314.HK, 600597.SS, 0371.HK, 0963.HK, 1288.HK, 3337.HK, 3377.HK, 1072.HK, 601299.SS, VNET.OQ, 1136.HK, 0434.HK, 0017.HK, 1918.HK, 3699.HK, WB.OQ, 2600.HK, 2688.HK, 1893.HK, 0762.HK, 0041.HK, 0151.HK, 600690.SS, 3800.HK, 1336.HK, 3311.HK, 1800.HK, 601139.SS, 002353.SZ, 0388.HK, 2233.HK, JMEI.N, 601992.SS, 3383.HK, 1398.HK, 0002.HK, 0934.HK, 000001.SZ, 1109.HK, 0489.HK, 1171.HK, 0083.HK, 3968.HK, 1088.HK, 1313.HK, 1114.HK, 6199.HK, 3988.HK, 0175.HK, 3328.HK, YY.OQ, 0966.HK, 0939.HK, 0586.HK, 1680.HK, 0658.HK, 1128.HK, WUBA.N, CTRP.OQ, 0386.HK, SIIC.SI, 2007.HK, 1251.HK, 0836.HK, 1363.HK, 0392.HK, 2238.HK, 600999.SS, 600521.SS, 0958.HK, 2883.HK, 2328.HK, 0119.HK, 0020.HK, 1898.HK) within the next 3 months.

Credit Suisse has received compensation for products and services other than investment banking services from the subject company (000333.SZ, 1728.HK, 1288.HK, 0998.HK, 1398.HK, 3968.HK, 3988.HK) within the past 12 months

As of the end of the preceding month, Credit Suisse beneficially own 1% or more of a class of common equity securities of (EJ.N, 2601.HK, 0728.HK, 3323.HK, 0390.HK, 1211.HK, 6030.HK, 0857.HK, 0358.HK, 1359.HK, 2333.HK, 1988.HK, 1288.HK, 3377.HK, 0914.HK, 1336.HK, 1800.HK, 0998.HK, 0388.HK, 1398.HK, 0489.HK, 1339.HK, 6837.HK, 3968.HK, 1088.HK, 3988.HK, 1680.HK, 0386.HK, 3618.HK, 2238.HK, 2883.HK, 2328.HK, 1898.HK).

Credit Suisse has a material conflict of interest with the subject company (EJ.N) . Credit Suisse is an exclusive financial advisor to the Special Committee of Independent Directors of China Real Estate Information Corporation's board of directors relating to the proposed going private transaction by E-House (China) Holdings Limited

Credit Suisse has a material conflict of interest with the subject company (0883.HK) . Credit Suisse is acting as financial advisor to both CNOOC Ltd. and SINOPEC on the acquisition of Marathon Oil Corporation's 20% interest in Block 32, offshore Angola.

Credit Suisse has a material conflict of interest with the subject company (1208.HK) . Credit Suisse Securities (Europe) Limited is acting as financial advisor in connection with the GlencoreXstrata sale of its interest in the Las Bambas copper mine project in Peru to a consortium owned 62.5% by MMG Limited, 22.5% by GUOXIN International Investment Corporation Limited and 15.0% by CITIC Metal Co. Limited.

Credit Suisse has a material conflict of interest with the subject company (BITA.N) . Credit Suisse is acting as financial advisor to Bitauto Holdings Ltd in relation to the investments by JD.com, Inc and Tencent Holdings Ltd in Bitauto.

Credit Suisse has a material conflict of interest with the subject company (SINA.OQ) . Credit Suisse is acting as financial advisor to E-House's wholly-owned subsidiary - CRIC Holdings Limited in its merger with SINA Corporation's online real estate business.

Credit Suisse has a material conflict of interest with the subject company (600383.SS) . Credit Suisse is acting as financial advisor to Gemdale Properties and Investment Corporation Limited regarding the proposed asset acquisition from Gemdale Corporation.

Credit Suisse has a material conflict of interest with the subject company (0857.HK) . Any Nielsen Media Research material contained in this report represents Nielsen Media Research's estimates and does not represent facts. NMR has neither reviewed nor approved this report and/or any of the statements made herein.

Credit Suisse has a material conflict of interest with the subject company (000001.SZ) . Credit Suisse is acting as International Advisor to the Special Committee of the Board of Directors of Shenzhen Development Bank ("Special Committee"). Credit Suisse Founder Securities is acting in the role of Independent Financial Advisor to the Special Committee.

Credit Suisse has a material conflict of interest with the subject company (0386.HK) . Credit Suisse is acting as financial advisor to both CNOOC Ltd. and SINOPEC on the acquisition of Marathon Oil Corporation's 20% interest in Block 32, offshore Angola.

For other important disclosures concerning companies featured in this report, including price charts, please visit the website at https://rave.credit-suisse.com/disclosures or call +1 (877) 291-2683.

Important Regional Disclosures

Singapore recipients should contact Credit Suisse AG, Singapore Branch for any matters arising from this research report.

The analyst(s) involved in the preparation of this report have not visited the material operations of the subject company (EJ.N, 000333.SZ, 0027.HK, 0883.HK, 2899.HK, 0700.HK, 600583.SS, 0941.HK, 1623.HK, 1169.HK, 000921.SZ, 1071.HK, 1728.HK, 1212.HK, 6138.HK, 0570.HK, 1958.HK, 2601.HK, 600276.SS, 0538.HK, 0728.HK, 0323.HK, 600823.SS, 1208.HK, 601318.SS, BITA.N, 0003.HK, 0699.HK, 000651.SZ, SINA.OQ, 1972.HK, 2386.HK, 600535.SS, 1186.HK, 1033.HK, WX.N, 0750.HK, 0813.HK, 0152.HK, 3323.HK, 0520.HK, 601788.SS, 0288.HK, 2778.HK, 2282.HK, 000402.SZ, 6881.HK, 0390.HK, 600019.SS, 2777.HK, 1968.HK, 2727.HK, 1211.HK, TEDU.OQ, 0322.HK, QIHU.N, 0004.HK, 600418.SS, 0691.HK, 0135.HK, HKLD.SI, 1929.HK, 6030.HK, 0410.HK, 2678.HK, 3393.HK, 0257.HK, 600383.SS, 002146.SZ, 0636.HK, 0857.HK, 0014.HK, 0358.HK,

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China Market Strategy 19

1293.HK, 1766.HK, 0688.HK, 1818.HK, 2313.HK, LEJU.N, 1359.HK, 1193.HK, 0347.HK, 1816.HK, 0493.HK, 601601.SS, 2689.HK, 2314.HK, 600597.SS, 2333.HK, 0371.HK, 0001.HK, 2348.HK, 0963.HK, 1988.HK, 0165.HK, 1288.HK, 3337.HK, 3377.HK, 1963.HK, 1072.HK, VNET.OQ, 1136.HK, 600309.SS, 0914.HK, 0880.HK, 0434.HK, 0017.HK, 1918.HK, 1093.HK, 3898.HK, 600000.SS, 3699.HK, WB.OQ, 2600.HK, 2688.HK, 1893.HK, 600547.SS, 0762.HK, 0041.HK, 1148.HK, 3993.HK, 002294.SZ, 0151.HK, 2319.HK, 600690.SS, 3800.HK, 1336.HK, 3311.HK, 1800.HK, 0998.HK, 000024.SZ, 600639.SS, 601139.SS, 002353.SZ, 0270.HK, 0388.HK, 600880.SS, 0116.HK, 2233.HK, JMEI.N, 0200.HK, 600050.SS, 3383.HK, 1398.HK, 2331.HK, 0002.HK, 0934.HK, 000001.SZ, 1109.HK, 0489.HK, 1171.HK, 1339.HK, 6837.HK, 0881.HK, 0083.HK, 3968.HK, 1088.HK, 1088.HK, 600588.SS, 1200.HK, 1813.HK, 2208.HK, 0956.HK, 600663.SS, 1313.HK, 1117.HK, 000100.SZ, 1685.HK, 600741.SS, 1114.HK, 600109.SS, 600085.SS, 1330.HK, 6199.HK, 3988.HK, 0175.HK, 3328.HK, YY.OQ, 0966.HK, 600111.SS, 0939.HK, 0586.HK, 2186.HK, 1680.HK, 3669.HK, 0658.HK, 600066.SS, 1128.HK, WUBA.N, 1296.HK, CTRP.OQ, 0386.HK, 600007.SS, SIIC.SI, 000400.SZ, 2007.HK, 1251.HK, 3618.HK, 0178.HK, 1133.HK, 0836.HK, 1363.HK, 0392.HK, 2238.HK, 600999.SS, 600521.SS, 0958.HK, 2883.HK, 2328.HK, 0119.HK, 0101.HK, 0020.HK, 1898.HK, 0806.HK, 1065.HK) within the past 12 months

Restrictions on certain Canadian securities are indicated by the following abbreviations: NVS--Non-Voting shares; RVS--Restricted Voting Shares; SVS--Subordinate Voting Shares.

Individuals receiving this report from a Canadian investment dealer that is not affiliated with Credit Suisse should be advised that this report may not contain regulatory disclosures the non-affiliated Canadian investment dealer would be required to make if this were its own report.

For Credit Suisse Securities (Canada), Inc.'s policies and procedures regarding the dissemination of equity research, please visit https://www.credit-suisse.com/sites/disclaimers-ib/en/canada-research-policy.html.

The following disclosed European company/ies have estimates that comply with IFRS: (0001.HK).

Credit Suisse has acted as lead manager or syndicate member in a public offering of securities for the subject company (EJ.N, 0883.HK, 0700.HK, 600583.SS, 1728.HK, 6138.HK, 0570.HK, 2601.HK, 601318.SS, BITA.N, 0699.HK, SINA.OQ, 0520.HK, 6881.HK, 600019.SS, 2727.HK, TEDU.OQ, QIHU.N, 0691.HK, 600383.SS, 0688.HK, 2313.HK, LEJU.N, 1359.HK, 1816.HK, 601601.SS, 1288.HK, 1072.HK, 601299.SS, 1918.HK, 3699.HK, 3311.HK, 0270.HK, 2233.HK, 1398.HK, 000001.SZ, 1171.HK, 1339.HK, 6837.HK, 3968.HK, 6199.HK, 3988.HK, 3328.HK, 0966.HK, 0939.HK, 1680.HK, WUBA.N, SIIC.SI, 2238.HK, 600999.SS, 0958.HK, 2883.HK, 2328.HK) within the past 3 years.

As of the date of this report, Credit Suisse acts as a market maker or liquidity provider in the equities securities that are the subject of this report.

Principal is not guaranteed in the case of equities because equity prices are variable.

Commission is the commission rate or the amount agreed with a customer when setting up an account or at any time after that.

To the extent this is a report authored in whole or in part by a non-U.S. analyst and is made available in the U.S., the following are important disclosures regarding any non-U.S. analyst contributors: The non-U.S. research analysts listed below (if any) are not registered/qualified as research analysts with FINRA. The non-U.S. research analysts listed below may not be associated persons of CSSU and therefore may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Credit Suisse (Hong Kong) Limited ..................................................................................................................................................... Vincent Chan

For Credit Suisse disclosure information on other companies mentioned in this report, please visit the website at https://rave.credit-suisse.com/disclosures or call +1 (877) 291-2683.

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China Market Strategy 20

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