Greater China Property Conference：21-22April 2016in Hong Kong

Disclosures & Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it. Issuer of report: The Hongkong and Shanghai Banking Corporation Limited View HSBC Global Research at: https://www.research.hsbc.com   Hong Kong and China property stocks have both slightly outperformed their relative market indices, but we believe investors still lack long-term conviction  1Q16 sales for China developers have been encouraging, but policy reversal in tier 1 cities is hampering investors’ sentiment despite constructive valuations  In Hong Kong, the physical market has clearly weakened and near-term uncertainty looks set to linger Volatility prevails thus far. China property stocks have rebounded somewhat from a bad start to the year, but they, in our view, still trade on valuations far from reflecting the much improved physical market environment. The March reporting season saw divergent results for companies under our coverage, and we believe stability across operations, margins and dividends has replaced high growth expectation as key investment parameters. In Hong Kong, the residential price downtrend is well on its course, but the paramount question is the magnitude, and we believe that will be contingent on how well the Hong Kong economy and labour force hold up amid global economic challenges and more particularly the evolving state of the Chinese economy in 2016. Policy bifurcation and the implication will be a key focus. Despite listed Chinese developers’ asset exposure being mostly skewed towards tier 2 cities, investors remain concerned with the potential shocks brought on by policy reversal in selected tier 1 cities and whether it will derail developers’ sales plan for 2016. Our conviction is that tier 2 cities will continue to be the ‘sweet spot’ under the government’s present initiative to anchor economic stability to the property market. April sales momentum to date, after a strong 1Q16, will be an important barometer to assess the impact of tier 1 city policy tightening. Re-investment appetite of developers after 18 months of slower starts and land purchases will also shed some light on the growth outlook beyond 2016. Need to assess downside risks of the Hong Kong physical market. The recent rebound in the share prices of Hong Kong property companies was helped by reduced interest rate hike expectations, a pick-up in primary residential launches since early March, and the resilience in 1Q16 commercial rents, amid investors’ concerns over falling asset prices. Pressure on home price lingers, owing to a slowing economy and the housing policy remaining at a status quo despite the initial sign of price weakness. Investors should focus on the latest update on market trends, as well as developers’ primary project launch strategies. We also believe investors should discuss with the companies their respective capital management strategies. 19 April 2016 Derek Kwong* AnalystThe Hongkong and Shanghai Banking Corporation Limitedderekkwong@hsbc.com.hk +852 2996 6629 Michelle Kwok* AnalystThe Hongkong and Shanghai Banking Corporation Limitedmichellekwok@hsbc.com.hk +852 2996 6918 Perveen Wong*, CFA AnalystThe Hongkong and Shanghai Banking Corporation Limitedperveenwong@hsbc.com.hk +852 2996 6571 Albert Tam* Associate The Hongkong and Shanghai Banking Corporation Limitedalbert.p.h.tam@hsbc.com.hk +852 2822 4395 * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/ qualified pursuant to FINRA regulations Greater China Property Conference EQUITIES REAL ESTATE HK & CHINA 21-22 April 2016 in Hong Kong abc EQUITIES  REAL ESTATE 19 April 2016 2 Stocks under coverage 3 Agile Property (3383 HK) 4 Cheung Kong Property (1113 HK) 6 China Jinmao Group (817 HK) 8 Guangzhou R&F (2777 HK) 10 Hang Lung Properties (101 HK) 12 Henderson Land (12 HK) 14 Hui Xian REIT (87001 HK) 16 Hysan Development (14 HK) 18 Jinmao (China) Investment (6139 HK) 20 Joy City Property (207 HK) 22 Kerry Properties (14 HK) 24 KWG (1813 HK) 26 Longfor Properties (960 HK) 28 Shimao Property (813 HK) 30 Shui On Land Limited (272 HK) 32 Sino Land (83 HK) 34 Sino Ocean Land Holdings (3377 HK) 36 Sun Hung Kai Properties (16 HK) 38 The Wharf (Holdings) Ltd (4 HK) 40 Stocks not under coverage 43 China SCE Property (1966 HK) 44 China South City Holdings (1668 HK) 45 CIFI Holdings Group (884 HK) 46 Colour Life Services Group (1778 HK) 47 Hopewell Holdings Limited (54 HK) 48 Logan Property (3380 HK) 49 Minmetals Land (230 HK) 50 Yuexiu REIT (405 HK) 51 Yuzhou Properties (1628 HK) 52 Disclosure appendix 56 Disclaimer 59 Contents In this document HSBC may comment on the potential economic impact dependent on the outcome of the UK Referendum. HSBC is not taking a political position and this document and the information contained herein are not intended to promote or procure, o