Key takeaways from our 2016 TMT conference Luxshare attended our 2016 TMT conference this week. Keytakeaways include: (1) its continued share gain at Apple (type Cconnector related and others), (2) stronger momentum in 2H16, and(3) acoustic and antenna products represent mid- to long-termopportunity. Management maintains FY16 sales guidance for a 20-40% y-y increase with top customer contribution up by 30-40% y-y. What drives strong 2H16 momentum? 2016 is another backend-loaded year and we expect strong salesmomentum to start from 3Q16, driven mainly by (1) Apple iPhone’sdongle (convertor), (2) Macbook external power cord (Type C) , and(3) new iPhone lightning cable. On 1Q16’s lower base, we expect2Q16 sales to rise 31% q-q, followed by 42% q-q growth in 3Q16. Dominant position in global Type C connector area Management says it currently has 70% global market share in thetype C connector area and targets to maintain this at the 30% level inthe long run. We see an ongoing type C connector trend in consumerelectronics, especially in the NB space. Asus and HP are ahead ofpeers on aggressively adopting type C on their NBs, in our view,while Dell tends to use type C on higher-end models. Reiterate Buy with a TP of RMB36 In the A-share TMT universe, we continue to prefer Luxshare mainlyon its continued share gain story and superior market position tobenefit from the upcoming type C connector demand. The messagefrom management reinforced our positive view and we reiterate ourBUY rating with a TP of RMB36, based on 30x FY16E P/E.

At 33% discount to NAV; Maintain BUY and TP of HKD12.0 Vanke has adopted flexible pricing strategy since Sept 11. Mgmt guidedgross margin for the unrecognized contract sales sold in 2H11 will bearound 25% (post LAT). We cut our FY12/13 EPS by 10/8% to reflect anuncertain market outlook. Maintain BUY and TP of HKD12. Key downsiderisk is a prolonged slowdown in the market.

2010 results beat expectation. Sany-A more than doubled profits y-y Increase was driven by surprise sales ofexcavators, concrete pumps, and wholeyear contribution of the newly injectedtruck crane and chassis assets. Marginsare also expected to improve y-y. In 2010Sany-A sold 14,154 excavators which is41.5%; ahead of their original 10,000target. With 8.5% market share, Sanystrengthened its position as a leadingdomestic excavator player. Sany-A raisedits excavator sales target for 2011, to25,000-30,000 from 20,000. The expectedmarket share would be 13.8% if the wholesector’s sales increase by 30% y-y in2011, at which time Sany-A would surpass foreign brands to lead themarket. In January, Sany-A sold 1,579 excavators, with 14.5% marketshare; Doosan Infracore and Komatsu’s market share dropped to a 6.7%and 10.6% respectively from ~15% previously. There is an acceleratingdeclining trend of excavator market share for foreign brands since 2H10. More positive than Street on 2011 outlook. We were one of the few houses in mid 2010 to maintain a positive viewon the construction machinery sector and on Sany-A . We are still morepositive than the Street in our 2011 sector outlook, and believe Sany-Ashould outperform the sector. Sany-A is replicating its successfulconcrete-business model to its excavator, truck crane, crawler crane, andkey-components (hydraulic cylinder) business, and it may expand intoengines, hydraulic systems and valves. Sany-A is a concrete equipment,excavator, and crawler-crane market leader and is catching up to themarket leader in the truck-crane segment. More colour on Sany Group expansion. The Sany Group has a clear 12th five-year revenue target, of RMB300bby 2015, and more than 70% is expected to be contributed from Sany-A. This implies 2015 sales will be five times that of 2010E. Also, the SanyGroup has entered the electric market (including wind turbine), offshoreheavy, port, and key component market. If it reaches its target, SanyGroup will be China’s largest equipment group in 2015. Top BUY, we lift TP to RMB38.00. We expect strong 2010E results with net profit up by 186%; we alsoraised our 2010-12E forecast. The new TP is RMB38.00, derived byapplying 17x 2012E P/E. We raised our target P/E multiple on excavatorsales’ positive surprise. Our revised earnings will grow at 52% and 32%in 2011-12E. The counter trades at 15.6x 2011E P/E or 11.8x 2012E P/E,45% potential upside, BUY. We’ll be more positive if macro control ismilder than our soft-landing assumption, or bearish if it is harsher.