All Fintech China Property Financial Sector Other Coverage Weekly China City Commercial Banks - In search for new growth engine July 6, 2018 The regulatory call for financial deleveraging and unwinding of non-standard assets is posing challenges. City commercial banks need to shift their business model from focusing on scale towards innovation and profitability. With larger corporates gradually moving to direct financing, small & micro enterprise and retail business will be the key for them to succeed 35 Far East Consortium - The Value of Diversification June 28, 2018 FEC has a diversified property development portfolio and hotel portfolio in Australia, Singapore, UK&Europe, China, HK and Malaysia and has demonstrated its ability to time different cycles in different markets. In FY18, FEC has turned more bullish in Singapore and UK and increased land purchases in light of potential slowdown in other markets China Macro - Credit spreads likely to stay at elevated levels June 6, 2018 We expect onshore and offshore credit spreads to stay at elevated levels for the rest of 2018. We recommend investors to stick with companies and sectors of manageable debt level, longer debt maturity, strong cash flows, encouraged by policies and have low reliance on shadow credit. A Battle for Survival - Intensified market consolidation & battle for resources May 15, 2018 Tightening on property market comes to the harshest moment. We recommend names with strong access to acquiring lands from M&A, urban redevelopment projects and shanty housing redevelopment. SOE will have advantage in this elimination game: low funding cost, access to land resource and shanty housing redevelopment experience. 2007 HK Country Garden - Sales momentum in lower tier cities continues April 12, 2018 Country Garden's sales momentum remains strong in FY2017 and 1Q18; Revise up price target to HK$17.20, 'HOLD' 3383 HK Agile - Diversifying non-property businesses April 12, 2018 Thanks to the high margin of projects in Hainan and Zhongshan, growth of gross profit improved by 67% YoY to RMB 20.69 bn.Revise up price target to HK$17.80, 'HOLD' 3900 HK Greentown - Uncertainty of profit pattern April 12, 2018 Gross profit margin slightly dropped, low visibility on profit from non-investment projects. 2017 result in line; core net profit increased by 13.5% YoY; Revise up price target to HK$11.62, maintain 'HOLD' 813 HK Shimao - Growth comes back again April 3, 2018 Upgrade to 'BUY', net profit has bottomed out and accelerate its turnover for achievable sales growth. 2017 result in line; core net profit surged by 43.5% YoY Far East Consortium - Strengthening alliance with The Star March 29, 2018 FEC entered share subscription agreement with The Star Entertainment Group (ASX stock code SGR) in which FEC and Chow Tai Fook Group (CTF) each will subscribe for 4.99% of The Star’s new shares; Reiterate “BUY” and Price target of HK$5.34 688 HK COLI - Targeting stable high-quality growth March 27, 2018 Upgrade to 'BUY' on steady growth and revise up price target to HK$33.92revise up price target to HK$33.92, reasonable profitability and low valuation; 2017 results in line 1813 HK KWG Seeking balance between scale and profitability March 27, 2018 Downgrade to 'HOLD' and revise down TP to HK$12.50: 2017 result missed our estimation; core net profit dropped by 19% YoY, expansion execution takes times to testify 960 HK Longfor property Stable growth as always March 27, 2018 Upgrade to 'Buy' and revise up TP to HK$ 25.34: 39% YoY growth of core net profit, GPM enhanced to 34% 3380 HK Logan Property - The best proxy in Great Bay area March 23, 2018 87% YoY growth of core net profit, GPM enhanced to 35%; Revise up price target to HK$12.32, 'HOLD' 1109 HK CR Lands - Winner of next 5 years, BUY March 21, 2018 2017 result: slow growth, but high profitability; CR Lands' multi-channel of land acquisition is irreproducible competitiveness to scale pursuer with high land cost.Upgrade to 'BUY' Revise up price target to HK$34.74 2777 HK R&F properties - High growth but higher gearing March 21, 2018 Solid 2017 result, core net profit grew by 107% YoY; RMB 300 bn of sales target in 2020 implying 54% CAGR in 2017-2020; Revise up price target to HK$23.89, 'HOLD' 3883 HK China Aoyuan - All eyes on scale - targeting RMB 73bn contracted sales in 2018 March 16, 2018 Solid 2017 result, robust growth in net profit, but GPM missed; Execution will be the key to achieve RMB 73bn of 2018 sales target; Revise up price target to HK$8.10, 'HOLD' The market may underestimate a potential trade war March 7, 2018 On March 1, 2018, President Trump proposed that the US would impose 25% import tariffs on steel and 10% on aluminum.Although a trade war may end up in a lose-lose situation for China and the US, we are concerned that the stock market may have underestimated such possibility 35 HK FEC - Acquiring a small casino & hospitality group in Europe March 6, 2018 FEC has announced that it had entered merger agreement with Trans World Corporation, which is engaged in hospitality and gaming business in Germany, Austria and Czech. Reiterate “BUY” and Price target of HK$5.34 Comment on US market plunge February 6, 2018 De-risking mode on; HK stocks may see good entry point on volatility; The global stock selloff may trigger US and Europe investors to take profit on the liquid HK stock market, given the rally in 2017. On the other hand, southbound inflows through Stock Connect program may come to offset this 1813 HK KWG - Shifting to fast track February 5, 2018 Contract sales in Jan. surged 155% YoY to Rmb 5.56 bn. Rmb 100 bn of saleable resource support fastgrowth of contracted sales in 2018 China Macro - Where are we in the financial sector deleveraging process? February 2, 2018 Since end of 2016, the regulators started to roll out a series of regulations aiming at reducing systemic financial risks. We believe this deleveraging process will last throughout 2018 until interbank liability, conduit type of asset management business and non-standard credit have significantly come down. 3380 HK Logan Property - Abundant resource supports rapid growth January 26, 2018 Logan targets 50% growth of contracted sales in 2018; Upgrade PT to HK$12.11; maintain 'HOLD' Land supply reform to support multi land supplies in future January 18, 2018 Minister of Ministry of Land and Resource: Exploring separation of ownership, qualification and use right of rural homestead; government will not be the only land supplier in future 3883 HK China Aoyuan - Targeting RMB 100bn of sales by 2020 January 15, 2018 Positive profit alert for 2017, at least up 75% YoY; Looking forward, the company has strong confidence and targets a RMB 50-60bn of contracted sales in 2018 and RMB 70-80bn of contracted sales in 2019. Reiterate Buy and price target of HK$6.94 Fixed income - Ronshine China - Capex Expansion & Refinancing Pressure in Next 2 Years January 10, 2018 High Capex for expansion ahead and gearing ratio should increase; Marketperform on RONXIN 19, still 180 bps value over MOLAND 19 China Online Consumer Finance Industry December 19, 2017 The online consumer lending industry in China has played an indispensable role in providing consumer finance to the underbanked population. However, recently the fast-rising untamed payday loan lenders have caught regulators’ attention. In this report, we try to have a deep looking on the China consumer finance industry’s competitive landscape. 35 HK FEC - 1H18 review November 28, 2017 1HFY18 net profit surged by 52% yoy to HK$1.0bn (+52% yoy); interim DPS raised to 4 HK$ cents from 3.5 HK$ cents in 1HFY17; Price target upgrade to HK$5.34; hidden gem with deep NAV discount Chinese High Yield Properties November 3, 2017 The story in 2017 is playing safely & holding for carry. Asian bond market continued to enjoy abundant liquidity while Chinese funding contributing increasing shares. Supplies from property sector dominate the Chinese HY names due to depressed onshore bond issuance and a strong physical property market in China. Blockchain, Cryptocurrency and ICO 101 October 2017 Blockchain and cryptocurrency has been a hot topic for a long time while people's interest in it surges again since 2017 along with ICO. We will cut through the hype and see how blockchain, cryptocurrency and ICO really work. China Property Sector 1H17 Results Review September 15, 2017 Majority of developers in 1H2017 delivered improved GPM, lower net gearing and lower borrowing costs. Some companies even showed ambition of further fast growth in next 4-5 years, which we think may look challenging in light of future tightening policies. Global FinTech Survey Report August 20, 2017 Global FinTech industry is entering an era of globalization, driven by FinTech players’ ambition of going global through overseas investments and partnership. In this report, we try to identify important trends investors should pay attention to through conversations with global FinTech leaders and surveys with Asian FinTech investors. 2H17 China Property Sector Outlook - Bubble Burst? Nope! Just Slow Down! June 30, 2017 We expect the property sector valuation to de-rate in 2H17. We selectively overweigh developers with achievable presales growth, less share price gain YTD, and relatively low valuation. China Aoyuan (3883.HK; Buy) - Continuous growth supported by strong execution April 7, 2017 Initiate with Buy rating: High earnings visibility; low valuation; industry consolidation provides growth opportunity. Asia corporate insurance brokers sector - Niche and beautiful March 29, 2017 Asia’s corporate insurance brokerage industry has tremendous growth potential, driven by the growth prospects of the underlying economy and further deepening of insurance penetration rate, in our view. Canvest Environmental Protection Group – Star on the rise February 21, 2017 Canvest Environmental Protection Group is the largest non-state-owned waste-to-energy (WTE) incineration treatment provider in Guangdong Province, by municipal solid waste (MSW) treatment capacity. It is a star on the rise, with ROE expansion and we Initiate with Buy rating. China Rural Banks: New urbanization, new growth engine January 13, 2017 In this report, we look at the macro level data as well as bottom-up financial data of rural banks, in an attempt to provide better insight on their performance trends, challenges they are facing and future opportunities. Wonderful Sky Financial Group - No.1 market leader stepping up the game December 22, 2016 We initiate coverage on?Wonderful Sky (WSFG, 1260.HK) with Buy rating. We identify it as a growth stock with good defensive value. We see deep valuation discount to its peers with dividend yield at 7.0%, and FY17 PE at 8.6x. Initiation of Coverage: Far East Consortium (FEC, 35.HK) October 25, 2016 Far East Consortium International Limited (FEC) is a medium-sized property conglomerate. It has a geographically diversified portfolio with a balanced revenue mix in property development, hotel, car park management and property investment. We initiate coverage on Far East Consortium with a Buy rating.