小摩发表研究报告，指长汽（02333）第三季核心盈利受累汇兑亏损，剔除后录盈利19.5亿元人民币，大致符合该行预期。调升2021-22年盈利预期分别17%及30%，目标价由12元升至17元，评级“增持”。 该行预期中国乘用车行业明年上半年销售增长20%，首季可反弹逾30%，因经济从低基数复苏和消费信心修复。 该行指，相信公司明年会推出10款新产品，有助跑赢大市。公司H股股价今年至今已升127%，跑赢MSCI中国汽车行业的94%，预期该股仍可持续优于市场表现。

Gree reported its 3Q16 results which missed our numbers at the operating profit level. We believe Gree’s 3Q16 result wasnegatively impacted by rebates paid to distributors in 3Q16. We note that there was a significant amount of rebates paid todistributors in 4Q15 last year, suggesting there may have been some timing shift in payment of distributor rebates. In turn,we would expect a better rate of sales and earnings growth in 4Q16 relative to 3Q16. We note that according to a BusinessHerald article, Gree is planning to revise its acquisition plan for Yinlong. 3Q16 result 3Q16 turnover increased 5.8% yoy to RMB33,245m (JPMf +14.5%). 3Q16 gross profit was RMB10,569m, down 12.8% yoy (JPMf +23.4%). 3Q16 gross margin contracted by ~680bps to31.8%. 3Q16 reported operating profit was RMB5,640m, growing 15.4% yoy. This compares to JPMf for reported operatingprofit of RMB6,326m. Reported operating profit margin increased ~140bps yoy (v JPMf ~203bps increase). 3Q16 underlying operating profit (including net interest) RMB5,655m, declining 1.2% yoy. This compares to JPMf ofRMB6,822m. 3Q16 profit attributable to equity shareholders was RMB4,827m, growing 14.1% yoy (JPMf RMB4,997m).

Midea management presented at the J.P. Morgan China Summit held on June 13-15 in Beijing. Our key takeaways fromthe conference are detailed in this note. Limited updates with respect to proposed KUKA acquisition. The company said it was not in a position to givemuch more information about its proposed acquisition of KUKA given the ongoing bid situation. The main concernremains regulatory approval, while another condition of the bid requires Midea to be able to gain over 30% ownershipof KUKA. Depending on the number of board seats the company can obtain, Midea may be able to fulfill its ambitions(to have access to the KUKA technology) with 30% ownership. The company has a positive outlook for the roboticsindustry in China given that rising labor costs would likely prompt the need for factory automation. Air conditioner channel inventory clearance continues. Air conditioner channel inventory clearance will likelycontinue for the remainder of FY16, implying the likelihood of a sales decline for this category in FY16. Prices declinedat a single-digit-rate last year. However, pricing is expected to be more normal this year with the potential for price risesin 2H16. Midea continues to expect strong growth in refrigerators and washing machines. The company continues toexpect double-digit sales growth for the washing machine and refrigerator categories. The company expects the washingmachine category to grow faster than the refrigerator category in FY16. While Haier has publicly indicated that it willstart to focus more on the lower-end segments within these two categories, Midea has yet to see this negatively impactits performance. Small home appliance sales expected to grow in FY16. The company expects small home appliances sales to growby a high-single-digit rate in FY16. Volume growth for some of the larger product categories within small homeappliances has been relatively low (e.g. rice cookers). However, Midea aims to achieve strong growth in some othercategories such as air purifiers. Midea expects a limited impact from the entry of GE Appliances into China. The company also expects to see alimited competitive impact from the eventual entry of GE Appliances into the Chinese market (following QingdaoHaier’s acquisition of GE Appliances). The company notes that among western brands, only Siemens has done well inthe domestic Chinese market. It is also worthwhile noting that the initial focus of Midea’s Toshiba acquisition will be onthe Chinese market. Investment ThesisOn our forecasts, Midea is still attractively valued at ~10x FY16E P/E with a ~4% dividend yield. We believe current valuationsprovide investors with multiple expansion optionality due to with increasing smart home appliance penetration and favourablegovernment policies. ValuationOur Dec-17 PT is Rmb26.4. Our PT is based on a target P/E of ~10.5x and our earnings forecasts for the year ended Dec-18. Ourtarget P/E is at a slight discount to our target P/E for Qingdao Haier given that Qingdao Haier has historically always traded at apremium to Midea.

1H15 earnings grew 66% yoy to RMB 263m。 Songcheng announced its 1H15 earnings today with net profit increasing 66% yoy to RMB 263m, in-line with company guidance and our estimate. Revenue grew 47% yoy to RMB 573m, driven by strong performance of cultural shows in Sanya, Lijiang and Jiuzhaigou Valley. We reiterate our Buy recommendation with a target price of RMB79. Strong growth in cultural shows。 Total revenue increased 47% yoy to RMB 573m, with number of visitors up 67% yoy to over 9 million. Romantic show of Songcheng and Romantic show of Sanya reported continuous growth of 21% yoy to RMB 213m and 46% yoy to RMB 143m, respectively. In our view, this could be attributable to the strong brand equity Songcheng has built over the years, as well as the popularity brought in by “Running Man,” a popular TV show and movie in China. Romantic shows of Lijiang, launched in Mar-2014, reported revenue of RMB 72m, up 65% yoy. EBIT margin improved 6ppts。 EBIT margin expanded 6ppts to 59%, thanks to 8% yoy decline in sales and marketing expenses and 4% yoy decrease in administrative expenses. We believe Songcheng is now benefiting from its brand equity, which supports high visitor volume growth with minimum marketing effort. Creative events, such as “Huachi Festival” and “Naked-Wedding” also drew lots of media attention and helped promote Songcheng. Accelerated expansion pace under asset-light model。 Songcheng now has 5 Romantic Show projects up and running, 1 in construction, and 6 more in the planning stage (with 1 project abroad in Singapore.) The company also started to expand on an asset-light model with the acquisition of Mystery of Tibet and the opening of Romantic Show of Mount Tai on 28 July. (See our recent report, Songcheng - Leader to consolidate the market, for details.) On the strategic level, Songcheng introduced a concept that will bring offline live entertainment (i.e. Romantic Shows), online entertainment (i.e. Six Rooms), tourism & leisure (i.e. 51dmq.com) and IP together to create a comprehensive eco-system. Six Rooms consolidation approved by CSRC。 In 1H15, Six Rooms’ page visit grew more than 40% yoy, and the number of active mobile users increased over 120% yoy. The consolidation of Six Rooms was approved by the CSRC on 24 July, which will bring additional revenue and earnings to Songcheng in 2H15E. In addition, we believe the consolidation of Songcheng and Six Rooms could potentially synergies and new products.

Great Wall Motor (GMW)’s 1Q15 results were moderately (~5%) above ourforecasts. Although the stock's remarkable rally (e.g. ~80% in six months or ~30%YTD for both H and A shares vs MSCI China Auto Index up ~28%/30% in sixmonths/YTD) might prompt investors to consider taking profit, we recommendholding on to long positions through its aggressive, and thus far very successful,model cycle. We lift our earnings forecasts by 4% and PT to HK$66/Rmb62. Why can the stock go higher? We upgraded GWM to OW in Oct-14 (clickhere) on the belief that the sales performance of its high-end SUV (e.g. H9)would beat market expectations, whilst the company’s aggressive model cyclewould further boost its earnings and eventually drive the stock's multiple. YTDconsensus FY15 estimates have been raised by 10%, while the 12-monthforward PER of the H-shares, for instance, also expanded from 9x in Jan-15 tothe current 11x based on our analysis. Despite this, we anticipate there is moreto go because:1.From a top-down view, we believe the SUV segment will continue to enjoysuperior growth in China until penetration hits or exceeds 30% (vs current25%). GWM is best positioned to benefit from this secular boom, given itshighest concentration (>95% of revenue) in SUV across all OEMs. 2. GWM’s comprehensive model portfolio and cycle (Table 3), plus value for moneymodels, suggest rivals, foreign or local, may not catch up anytime soon. This isbest proven by the negligible discount (1.4%) of its most popular SUV, H6-despite it entering the fifth year of model cycle. 1Q15 earnings up 26% yoy: We summarize the results call in this report. Rating, risks: We retain OW on H/A share with new Dec-15 PT of HK$66/Rmb62 (from HK$60/Rmb56) based on 13.5/15x forward PER, respectively. Risks: worse than expected sales and margins.

Yanzhou Coal (YZC) reported FY13 that beat expectations, as its principalShandong operations staged a solid 2H13 performance. While coal marketsremain depressed, we see limited downside at current levels. With consensusupgrades likely, in our view, and YZC shares trading near historical lows, weview favorable risk-reward and upgrade to OW rating. FY13 results above guidance. YZC reported FY13 NPAT of RMB777munder IFRS (-87% yoy). Excluding forex losses and asset impairment(pretax RMB3.3Bn), we estimate core NPAT of RMB3.4Bn, -8% yoy,ahead of estimates (JPMe: RMB2.6Bn, Street; RMB1.0Bn). Better-thanexpectedcost reduction (-8% yoy, JPMe -7%) and coal sales volume (+12%yoy, JPMe +5%) helped cushion ASP falls (-13% yoy). Pleasingly, YZC’sprincipal Shandong operations (76% of 2013 GP) performed strongly in2H13, with GP of Rmb334/t, +33% hoh. That said, negative operating cashflow (-RMB2.2Bn, IFRS) and free cash flow (-RMB11.9Bn) pushed netgearing (ND/E) higher to 111% (2012: 63%). DPS of Rmb2 cents wasdeclared at a 13% payout ratio (2012: 29%). 2014 plan – +7% self produced coal sales, +3% capex. YZC believes theoversupplied situation is keeping coal prices at low levels. For 2014, YZCtargets stable coal sales (+1% yoy) with higher self produced coal sales(69Mt, +7% yoy) offset by lower coal trading with similar capex (+3% yoy).No cost target was provided. We keep our 2014 and 2015 forecastsunchanged, 88% and 72% above consensus, respectively. Upgrade to OW rating, keep price target at HKD8.00. Given the coreearnings beat, we expect consensus upgrades will likely provide near-termsupport for YZC shares. With YZC shares now trading near historical lowsat 0.5x PB, we see favorable risk-reward. In the near term, Daqin rail'soverhaul and IPP summer restocking in May-June should stabilize coalmarkets. Upgrade to OW rating (from N), keep PT Dec-14 at HKD8.00.

We believe 2014 is going to be volatile for China banks, on both stockperformance and in terms of operating environment. We believe BOC will delivermore stable returns than its peers due to more resilient NIM and lower exposure toareas with high regulatory risks, such as interbank and WMP. BOC is trading at10% to H-share banks and a 20% discount (13E P/B) to ABC, CCB and ICBC, onaverage. We believe this discount will narrow as the market appreciates a stablebank with the highest dividend yield (Table 1) amid a volatile market. We upgradeBOC to OW from a Neutral rating, with our price targets revised up by ~2% toHKD4.35 and RMB3.4 for H/A shares. Our PT implies 2014E P/B of 0.9x. More stable NIM than peers. 18% and 8% of BOC’s average interest earningassets are from overseas or domestic FX operations in 1H13, respectively, thehighest exposure among China banks. We believe that the NIM of these twoareas are likely to be stable or even slightly improve in 2014 and 2015, and thusBOC’s overall NIM is set to be more stable compared to peers, in our view. Key beneficiary of recovering export growth. BOC has higher concentrationin export-related sectors, and is more active in trade finance business. Webelieve a recovery in export growth will be positive for its fee income and assetquality. In addition, a macro recovery in developed markets should be accretiveto the profit growth of BOC's overseas subsidiaries. Concerns on RMB appreciation overplayed: BOC has hedged its net FXposition by using FX swaps, and thus net position has been negative since 2012(Table 12). In the past few years, despite RMB appreciation, BOC hasrecognized net FX gains. And the impact on equity has been immaterial. Upside on capital not being recognized: BOC has outstanding convertiblebonds of RMB39.4bn. We calculate that adjusting for dividend payout, strikeprice at mid 2015 will be RMB2.43, lower than current A-share trading price ofRMB2.56. This will likely encourage a higher debt-to-equity conversion rate. We calculate that full conversion would lift 2015e tier 1 ratio by 36bps. Key downside risks: a) worse-than-expected asset quality as growth slows downin China; b) worse-than-expected contraction on domestic RMB NIM amidinterest rate de-regulation; c) regulatory risks on WMP and interbank business.

Baosteel held its FY12 investor conference on 1 April 2013. In summary,while industry overcapacity is expected to persist with export markets andsteel plates to remain weak, management expects operating conditions in 2013to be better than 2012 and remains upbeat on its Zhanjiang project. Keypoints: Like-for-like sales to be flat. Baosteel provided guidance for crude steeloutput of 22.56Mt and sales volume of 22.26Mt, down 7% and 6% yoy,respectively. However, stripping out the contributions of the divestedstainless and special steel divisions, volumes were broadly flat yoy, with themarginal reduction due to a planned blast furnace overhaul. Overcapacity remains a structural issue but 2013 operating conditionslikely better than 2012. According to company statistics, China’s crudesteel production capacity is estimated to be c920Mt as at the end of 2012while output was 717Mt (operating at 78% utilization) with apparentconsumption at 672Mt. The company forecasts 2013 crude steel output togrow by 2.8% yoy to c737Mt, while apparent consumption is forecast at698Mt (+3.9% yoy). While management did not provide a specific forecastfor industry capacity, it noted that capacity utilization will likely remain atc75%, which implies 2013E capacity at c982Mt (+6.7% yoy). That said,Baosteel commented in its FY12 results that 2013 operating conditionswould likely be better than 2012. Bright prospects for the Zhanjiang project. Management sees theZhanjiang project as the strategic future of the company. Baosteel is lookingto position the under-construction 8Mt project at the cutting edge ofoperating efficiency, targeting high-end market segments such asautomobiles and home appliances. Chinese steel exports facing trade frictions. Despite the majority ofChinese steel production being consumed domestically and less than 10%being sold through export markets, Baosteel notes that there have been risingtrade-related frictions involving China. Anti-dumping and anti-subsidy tradecases that have traditionally been an issue in Europe and North America areemerging in South-East Asia, Latin America and other emerging economics. Given these are China's primary export markets, Baosteel expects thatChinese steel export volumes are likely to be capped although the companyis looking to maintain its own export sales ratio at c10% in 2013E. Plate market remains weak. Baosteel expects the medium and thick platemarket to remain weak over the medium term, given: 1) Oversupply andovercapacity in the domestic plate market, 2) growing plate capacity inSouth Korea, 3) No obvious catalysts for a demand uplift from themachinery sector. Following the closure of its Luojing facilities in 2012,Baosteel still expects to produce c1.2Mt of medium and thick plate goingforward. Given the current weakness in the plate market, it will look tominimize losses and focus on cost control and improved marketing efforts.

Following in the footsteps of Baosteel, Angang has announced a series ofasset divestments and transfers with its parent that should strengthen itsprofitability and balance sheet. Along with lower depreciation charges that itrecently announced, we upgrade core 2013E profits to Rmb1.5bn (fromRmb0.4bn). With a rebound in the steel cycle currently under way, Angangremains our top pick in the sector for its leverage to flat steels.

Baosteel continues to stand tall in a sector struggling to generate profits,delivering a commendable set of numbers in 3Q during a sharp steelindustry downturn. With a bottoming of the current steel cycle emerging,Baosteel announced its buy-in to a new 10mtpa steel project. Given itsdomestic dominance in high end steels and an attractive yield, stay OW. Solid 3Q core results. Baosteel reported headline 3Q12 net income ofRmb1.18Bn. Excluding a Rmb490m pre-tax gain on the sale of stainlesssteel assets, we estimate a core 3Q12 NPAT of Rmb814m (JPMe:Rmb1bn, consensus Rmb863m), -48% qoq / -35% yoy. Revenues fell by5% qoq primarily from a from a 12% fall in ASPs despite a 7% rise involume. Lower operating and SG+A costs (-4% and -14% qoqrespectively) were not sufficient to prevent a 45% fall in 3Q OP fell by45% with OP margins down to 6.5% (2Q12: 8.1%). Positive free cashflow in 3Q (Rmb1.5bn) helped to push ND/E down to 40% (1H12 43%). Cautious 4Q outlook, buys into Zhanjiang project – keep forecastsunchanged. Baosteel forecasts 4Q steel prices to stabilize given‘favorable’ government policies but notes that raw material costs remaina risk. Despite this cautious guidance, we remain optimistic of a 4Qprofit rebound as indicated by spot steel price spreads and keep ourforecasts unchanged (Rmb5bn core profit). In a separate release, theBoard approved the Rmb5bn purchase of an effective c20% stake in the10Mt Rmb40bn Zhanjiang project. Approval has also been granted forthe sale of Baosteel’s Corex assets to its parent (for Rmb2.7bn). At thispoint, no indication of timing has been provided on these events. Keep Dec-12 PT at Rmb6.00. Key PT risks include execution on keygrowth projects, changes in government steel industry policies,fluctuations in steel and raw materials prices. Baosteel is also vulnerableto any auto industry downturn as it is its highest margin business.

Initiate coverage with Overweight, Dec-11 price target Rmb31.5:Given its low P/B multiple relative to high ROE, we expect the stock tore-rate on an improving macro environment and benign property marketoutlook in China. On the back of its higher-than-industry average volumegrowth, better profitability and superior asset quality, we expect IndustrialBank to deliver 20%/18% EPS growth in 2011/2012. Investment positives: 1) Higher-than-industry average loan yield andbanking spread thanks to its innovative and practical management, whichled to lending consistent with the macro outlook. It is also a pioneer inniche markets, such as “green finance”. 2) Strong interbank and treasurybusinesses make the bank potentially well-prepared for future interest ratederegulation. 3) Highly efficient operations (very low CIR and cost toasset ratios). 4) Superior asset quality metrics, reflecting consistent goodrisk management. Issues and challenges: 1) Higher-than-industry average exposure to realestatemakes the shares more sensitive to news on the property sector,although the asset quality of their property-related loan is high amonglocal-listed peers. 2) Credit costs could rise over the next few years asCBRC pushes for 2.5% LLR/Loan. (JPM estimates the bank to haveLLR/Loan of 1.5%/1.8%/2.0% for 2010/11/12E). 3) Liability businessneeds to be further improved to reduce LD ratio to below 75%. 4) LGFVloans remain an overhang. Valuation, price target, risks: Although we are confident in the bank’searnings ability, our assumptions in fair valuation are conservativeconsidering potentially higher provision and capital requirements. We useda normalized P/B of 1.4x and ROE of 14.1% (vs. FY11E ROE of 22.3%)to derive our Dec-11 PT of Rmb31.5, suggesting 30% upside potential,implying 1.4x 2012E P/B and 7.1x 2012E P/E. Key risks to our pricetarget are shorter-than-expected grace period to reach 2.5% LLR/Loan,severe credit tightening, and a deterioration in the Chinese propertymarkets.

Introducing Dec-11 PT of HK$8.5/Rmb7: As we roll forward our P/BVbasedPTs to Dec-11 from Dec-10, our PTs rise by 17% to HK$8.5 andRmb7.0 for ICBC-H and ICBC-A, respectively. Despite some modest finetuningof our estimates line by line, our 2010-2012 bottom-line estimatesare largely unchanged. Above-average earnings growth from below-average loan growth:While ICBC’s loan growth may decelerate to 13% in 2011, below the sectoraverage of about 15%, we expect ICBC to maintain over 20% earningsgrowth in 2011. Steady margin expansion on the back of improving creditpricing power and a rising rate environment, coupled with strong feebusiness, are helping ICBC grow its bottom line with less reliance oncapital-intensive lending business. Meanwhile, its very liquid balance sheetmay also benefit from bond reinvestment. Low provision pressure: We think ICBC’s earnings are highly resilient topotential regulation changes thanks to its already strong balance sheet andsuperior operating profitability. Its relatively prudent and conservative creditmanagement and high reserve level leave little room for higher credit costsin the next two years under a benign economic outlook. We expect ICBC’sLLR to reach 2.5% of total loans in 2010, so there should be no moreprovisioning pressure from 2011 onwards even if CBRC requires a 2.5%LLR/loan ratio. Maintain OW on both ICBC-A and ICBC-H: Within H-share state banks,our top pick among bigger banks is now ICBC, which is more of a puredomestic play in view of rising rates and a strong economy in China. YTD,ICBC has lagged behind many of its peers, partly due to its higher valuationand relatively low “alpha”. However, we believe ICBC now has the abilityto maintain an above-20% ROE even in the next 3-5 years. While we seepotentially better returns in ICBC-A from a 12-to-18-month view, this ismore dependent on A-share market liquidity rather than fundamentals, in ourview. Tactically, we believe domestic investors may continue to favorhigher-growth smaller banks in a relatively bullish market environment.

Solid Q3 result; Asset injection to boost capacity: Yangtze reported aset of solid results: net profit came in at Rmb7.2bn, 87% of our full yearforecast. We believe the company is on track to achieve our full yearestimate of Rmb8.3bn in 2010. Yangtze Power acquired 12.6GW hydrogeneration capacity from its parent at a total consideration ofRmb104bn. Yangtze Power settled the transaction by: 1) assumingRmb49bn debt in target assets; 2) issue of 1.6bn shares at Rmb12.68 pershare to parent; 3) Cash payment of Rmb34.9bn. Hydro generation is back on track: Negatively affected by the droughtseason in early 2010, Yangtze Power had been suffering sluggishgeneration. However, its latest announced 1-9M generation figuressuggest that the generation trend finally turned around: total powergeneration in 1-9M was 80.3bn kWh, implying 139% YoY growth dueto capacity growth from asset injection, and it is on track to achieve ourfull year forecast. Stable long term income: We believe hydro generation operation riskis significantly lower compared to coal-fired generation thanks toimmunity to fuel cost & priority in generation dispatching, thus leadingto higher earnings visibility. Hydro power tariff has been at significantdiscount to coal-fired tariff, however, we do not expect the tariffalignment between hydro & coal-fired generation to happen in the nearterm. Positive outlook intact: We maintain OW on Yangtze Power & adjustour Dec-2011 PT (DCF derived PT with WACC of 7.9%) to Rmb9.8after factoring in 1.6bn new shares issuance for parent asset injection &50% stock dividend announced in July 2010. Currently the stock istrading at 15x 2011 PER, inline with its domestic peers. However, webelieve Yangtze Power should deserve a valuation premium due tohigher earnings visibility & lower operation risk in hydro generation.

From government to supplier-driven pricing in 2011: Cement pricesin eastern/southern/northern China have been strong since 3Q10, thanksto government's control on electric power usage and hence a reduction incement supply. While we believe cement price will remain a supplydriventheme (rather than demand) in 2011, power-control led pricingmomentum will not last long in our view. Instead, we expect supplier'sdiscipline will play a much more important role, with industry leaderstaking the lead such as Conch, CNBM and BBMG. In other words, webelieve supplier’s discipline together with industry consolidation andM&A will be main driver to cement price in 2011. Investment themes in 2011: In addition to supplier's discipline, weexpect three other top-down drivers next year. 1) Regional differential interms of cement price and profitability will remain with northwesternChina enjoying the highest price premium over national average due toits geographical difficulty to entry and dominated by only one majorplayer - Sinoma (1893 HK). 2) Economic housing measures will benefitcompanies with exposure to major cities such as Beijing and Shanghai. BBMG (2009 HK) is the largest supplier in Beijing. 3) In the publicsector, China’s 12th Five-year plan will boost infrastructure spendingand construction in rural and western areas. Earnings revision: We revise up Conch’s 2010/11 earnings estimatesmoderately by 3% to reflect lower than expected minority interest in itslatest 3Q results and leave all other assumptions unchanged. PT, risks: We maintain Neutral on Conch-H share and OW on A-share,with our new Dec-11 PT of HK/Rmb35 from Jun-11 PT of HK/Rmb29,on 3.0x PB or mid-cycle average. Risks: Worse than expected demandand overcapacity in China, and Conch’s earnings growth in 2011.

3Q10 results summary: Anhui Conch reported its 3Q10 results today,~10% ahead of our forecast and largely in line with consensus. Accumulated PAT after minority is Rmb3,159mn (41% growth) onrevenue of Rmb22,358mn (27% growth). Gross margin was sustained at26.7% by 3Q10, up rom 24.9% in 1H10 and versus our full yearestimate 27%. EPS for the year through Sep. is Rmb0.89/shr. First take on 3Q10 results: Conch did not disclose any operatingstatistics in 3Q10 results (e.g. sales volume, capacity, per tonnage profitor ASP) and only released limited financial results. Both gross marginand Opt. margin are broadly in line with our expectation; our tax rateforecast (18%) is however slightly lower than actual results (19.7%) in3Q10. Leverage measured by net debt to equity dropped slightly to 37%by 3Q10 from 41% in 1H10. ROE in 1Q-3Q10 is 12.6% (not annualized)vs. our full year forecast of 13.6%. PT, risks: We maintain Neutral rating on Conch-H and OW on Conch-A unchanged at this stage, with Jun-11 PT Rmb/HK29, based on LTmid-cycle average 2.9x PB. Historically, Conch is largely tradingbetween 2-5x forward P/B. We believe a mid-cycle average is reasonableconsidering demand/supply environment and pricing outlook in Chinamarket in 2011.l Risks to our analysis lies in worse than expecteddemand and overcapacity in China cement market, and Conch’s earningsgrowth in 2010/11. We will discuss with management on the company’s3Q10 results tomorrow and obtain further operating statistics beforemaking any adjustment to our forecast.