Kingsways Snapshot

Hong Kong & China Market Daily

Whats Hot Today:
China & HK Indices HSCEI HSCCI Shanghai A Shanghai B Shenzhen A Shenzhen B HSI Comm & Ind. Finance Properties Utilities Key Int'l Indices Dow Jones S&P 500 Nasdaq NIKKEI Index FTSE Index CAC Index DAX Index Interest Rates HK Prime Hibor 3M US Prime US 10-yr bond yield US Fed funds Market Sentiment CDS Monitor - USD SR 5Y Greece Ireland Italy Portugal Spain VIX ADRs ALUMINUM COR-ADR CHINA EASTRN-ADS CHINA LIFE-ADR CHINA MOBILE-ADR CHINA PETRO-ADR CHINA SOUTH-ADR CHINA TELECO-ADR CHINA UNICOM-ADR CITY TELECOM-ADR CNOOC LTD-ADR GUANGSHEN RA-ADR HSBC HOLDING-ADR HUANENG POWR-ADR PETROCHINA -ADR SEMICONDUCTOR-AD SINOPEC SHA-ADR YANZHOU COAL-ADR
Source: Bloomberg

July 21, 2011

CLOSE 12,382.67 4,182.10 2,926.56 286.68 1,276.98 748.77 22,003.69 12,868.77 30,959.81 27,737.42 47,021.03 CLOSE 12,571.91 1,325.84 2,814.23 10,005.90 5,853.82 3,754.60 7,221.36 1D 0.70% 1.02% -0.10% 0.67% 0.19% 0.76% 0.46% 0.68% 0.19% 0.84% 0.56% 1D -0.12% -0.07% -0.43% 0.05% 1.10% 1.61% 0.40% YTD -2.4% 0.3% -0.5% -5.8% -5.5% -9.2% -4.5% -0.8% -8.4% -7.5% 12.6% YTD 8.6% 5.4% 6.1% -9.2% -9.2% -9.2% -9.2%

Energy Administration may tighten approval for wind farm projects China Medical System (867 HK) issues positive profit alert CNBM (3323 HK) plans to issue 1bn A-shares
Corporate News Commentary/ Reports Summary

According to China Securities Journal, China Energy Administration may soon

revoke the authority of provincial NDRC to approve onshore wind farm projects with capacity below 50MW. So far, 93% of the onshore wind farm projects in China have been approved by the local government. After the issuance of the new policy, approval of wind farm investments may slow down, reducing the demand for wind turbine and components. Hence, Goldwind (2208 HK HK$6.46) and China High Speed Transmission (658 HK HK$7.06) may be affected. (Johnny Lau)

CURRENT 1-YR AGO 5.00% 5.00% 0.26% 3.25% 2.95% 0.25% CURRENT 2,372.76 1,060.01 287.10 1,092.36 341.07 19.09 CLOSE ($) 20.01 23.35 50.67 48.08 97.54 31.82 66.99 19.47 11.60 224.43 20.52 48.78 20.24 148.40 3.11 44.43 38.10 1D -0.10% 1.97% -0.08% 3.15% -0.48% -0.31% -0.18% -0.61% -2.19% -4.42% 0.59% 1.39% 0.70% 0.18% -3.72% 0.91% -0.50% 0.37% 3.25% 2.88% 0.25% YTD 120.9% 72.4% 20.4% 118.7% -2.4% 8.6% YTD -12.20% -8.14% -17.17% -3.10% 1.93% 4.29% 28.14% 36.63% -21.67% -5.85% 4.96% -4.43% -5.33% 12.86% -15.03% -13.85% 24.51%

China Medical System (867 HK HK$7.50) issued positive profit alert for the
1H 2011. The increase is mainly attributable to (1) steady sales growth and effective cost control; and (2) the acquisition of Tianjin Precede Medical Trade Development, a wholly-owned subsidiary of Great Move Ltd, has committed to achieve not less than HK$150 million of net profit in 2011. The company is trading at 16X PE for 2012. (Eva Chun)

CNBM (3323 HK HK$16.44) plans to issue no more than 1bn new A-shares
on the Shanghai Stock Exchange, raising no less than Rmb15bn. Timing and the issue price will be determined subject to obtaining all necessary approvals. About half of the proceeds will be used for acquisitions and CAPEX while the balance goes to repayment of debts. The proposed A-share issue will account for about 15.63% of the enlarged share capital. (Howard Wong)

US Market News

China Market News

U.S. stocks fell, a day after the best rally since March for the Standard & Poors 500 Index, as concern the government will fail to increase the debt limit overshadowed higher-than-estimated earnings at Apple Inc. United Technologies Corp. lost 1.8% as Boeing Co. picked a rival engine maker to upgrade its 737 jet. Yahoo! Inc., Altria Group Inc. and Johnson Controls Inc. slid at least 2.4% as results disappointed investors. Apple jumped 2.7% after record sales of iPads and iPhones lifted profit, helping the company join 89% of S&P 500 members topping estimates so far in the earnings season.

China market stayed cautious on concerns over slower economic growth and uncertainties in the U.S. and European markets. Banking and property stocks turned mixed on uncertain policy risk after more voice hinting a further rate hike in the near term. Resources and metals plays kept weighed by uncertain economic outlook. Automakers kept its weak tones on worry more cities may also introduce purchase restrictions after the southwest city of Guiyang in Guizhou province's move; SAIC Motor (600104) -1.39%.

Latest Research Reports Date Company 19-Jul Baofeng Modern International (1121) 13-Jul YGM Trading (375) 13-Jul Good Friend International (2398) 11-Jul Solargiga (757) 4-Jul Recruit Holdings Ltd (550) 28-Jun Oriental Watch (398) 27-Jun Chen Hsong (57) Kingsway Events Date 26-Jul 15-16 Sep Company
Baofeng Modern International (1121)

Analyst Steve Chow Steve Chow

Johnny Lau/Helen Fung

Johnny Lau Steve Chow

Steve Chow/Helen Fung

Johnny Lau

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Kingsway Research
20-Jul-11 Upside (%) PER (X)** Dividend yield FY2 FY2

Snapshot (21-Jul-2011 )

Absolute perform ance Latest 3M% report date

Nam e

Ticker

1D(%)

Rec. TP (HK$)

Hist

FY1

1M%

HANG SENG INDEX HSI HANG SENG CHINA ENT INDX HSCEI CSI 300 INDEX SHSZ300 APOLLO SOLAR ENE AV CONCEPT HLDG BOSIDENG INTL CHEN HSONG HLDGS CHINA SHINEWAY CHINA SINGYES SO CHINA VANADIUM CHINA STATE CONS CHU KONG PETROLE COMBA TELECOM SY * COMTEC SOLAR GCL POLY ENERGY GLORIOUS SUN ENT * JU TENG INTL HDG KING STONE ENERG LIJUN INTL PHARM NEWOCEAN ENERGY SUNNY OPTICAL TIANDE CHEMICAL TIANNENG POWER TONGDA GROUP HLD VITASOY INTL HLD XINYI GLASS HOLD XTEP INTERNATION YGM TRADING ZHAOJIN MINING-H 566 595 HK HK

0.5 0.7 (0.1) 5.1 0.0 (0.4) (1.6) (2.5) 2.5 1.4 (1.0) 0.6 8.1 (0.7) 2.0 1.4 (1.9) 3.4 0.0 (1.1) (0.5) 0.0 (3.0) 0.0 (1.2) (7.6) 2.6 0.0 (1.8) BUY BUY HOLD BUY BUY BUY BUY HOLD BUY UR BUY UR HOLD HOLD BUY HOLD BUY BUY BUY BUY BUY HOLD BUY BUY BUY HOLD 1.14 2.25 3.08 5.00 27.1 UR 4.70 UR 5.90 UR 5.40 UR 2.23 4.20 0.338 2.69 2.57 3.20 2.40 UR 0.60 5.87 13.38 6.70 36.40 15.80 267.7 80.0 37.5 38.9 94.7 UR 67.3 UR 78.8 UR 86.9 UR (24.9) 104.9 (81.4) 92.1 47.7 58.4 28.3 UR 79.1 1.9 94.2 54.4 52.9 6.0

17.3 15.3 21.9 (51.7) 7.8 13.4 18.3 11.6 17.2 11.6 36.3 39.1 29.6 13.3 26.2 37.1 3.1

11.9 10.1 14.0 3.1 8.6 12.6 8.8 9.9 12.8 9.7 24.8 9.2 19.1 8.5 44.2 11.6 4.8

10.4 8.8 11.4 1.8 4.8 11.3 8.2 8.5 9.9 7.8 18.9 7.6 15.3 5.2 31.8 11.1 3.7 72.8 9.5 7.6 7.9 3.7 16.0 6.3 20.7 8.9 10.5 7.9 9.7

3.9% 3.7% 2.0% 7.7% 0.0% 6.9% 6.1% 4.9% 1.4% 2.1% 1.7% 3.2% 1.6% 1.6% 0.3% 5.4% 4.9% 0.0% 3.7% 0.9% 3.2% 7.1% 1.9% 6.8% 4.9% 5.9% 7.2% 7.1% 3.7%

0.7 1.9 6.3 (7.5) (10.7) 9.8 6.8 (2.1) (6.9) 4.9 4.2 4.4 (12.6) (0.7) 6.8 0.7 (4.2) (20.9) (6.7) 0.6 1.0 8.1 34.9 (2.9) (3.2) (3.1) (17.0) 32.1 (9.4)

(8.8) (9.3) (6.8) (47.5) (20.9) (13.2) (19.6) (27.4) (15.0) (26.4) 0.0 (20.7) (18.5) (38.1) (14.2) (3.9) (22.1) (50.3) (34.0) 12.3 (19.2) (2.6) (5.0) (13.7) (15.0) 23-Jun-10 19-Jan-11 27-Jan-11 27-Jun-11 01-Apr-11 31-Mar-10 16-Sep-10 11-Mar-11 31-Mar-11 31-Mar-09 29-Apr-11 20-Nov-09 27-Apr-09 02-Nov-10 28-Mar-11 02-Nov-10 17-Nov-10 16-Feb-11 01-Apr-11 09-Feb-11 10-Dec-10 22-Nov-10

3998 HK 57 HK

2877 HK 750 893 HK HK

3311 HK 1938 HK 2342 HK 712 HK

3800 HK 393 HK

3336 HK 663 HK

N/A 107.1 N/A 15.5 18.2 5.1 13.4 14.0 22.7 15.6 13.9 12.0 15.0 12.2 10.9 11.6 4.4 19.6 8.4 20.5 10.9 12.7 9.8 10.6

2005 HK 342 HK

2382 HK 609 819 698 345 868 HK HK HK HK HK

(24.8) 16-May-11 (25.0) 24.1 (22.1) 09-Feb-11 13-Jul-11 08-Mar-11

1368 HK 375 HK

1818 HK

* Target prices of companies marked w ith (*) have been updated in a research note dated 22-Jun-09 due to a global change in equity risk premium assumption. ** Calculated by Kingsw ay research.

Kingsway Research Team

Analyst Eva Chun Helen Fung Howard Wong Johnny Lau Steve Chow Xianlong Zhu Phone No./Email (852) 2283 7321 / eva.chun@kingswaygroup.com (852) 2283 7307 / helen.fung@kingswaygroup.com (852) 2283 7350 / howard.wong@kingswaygroup.com (852) 2283 7618 / johnny.lau@kingswaygroup.com (852) 2283 7306 / steve.chow@kingswaygroup.com (86) 755 3336 7129 / zhu.xianlong@kingswaygroup.cn Sector Coverage

Pharmaceutical, Real Estates Hong Kong Retail Oil and Gas Equipments and Services Industrials, Renewable Energy Chemicals, Consumers Household Durables, Construction Materials

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Kingsway Research
Mark e t Watch Major Com m oditie s and Curre ncie s
Q TD % Go ld ( U S $ / o z ) P l a t i num ( U S $ / o z ) S ilv e r ( U S $ / o z ) 2000 18 0 0 16 0 0 30 14 0 0 12 0 0 10 0 0 J ul-10 20 20000 150 0 0 10 0 0 0 J ul-10 Go ld Silver (RHS) 40 30000 2 50 0 0 159 8 .70 1775 3 9 .55 Plat . 11.1 (0 .2 ) 4 .4 Y TD % 12 .5 0 .1 2 7.9 Yo Y% 3 4 .1 16 .4 12 2 .2 50 Co p per (US$ / t) N i c ke l ( U S $ / t ) Ti n ( U S $ / t ) 3 50 0 0 9 ,755 2 4 ,0 4 5 2 8 ,3 0 0 Tin Nickel C o p p er (R HS)

Snapshot (21-Jul-2011 )

Q TD % 3 .5 (7.9 ) (11.0 )

Y TD % 1.6 (2 .8 ) 5.2

Yo Y% 4 2 .2 2 3 .3 54 .1 110 0 0 10 0 0 0 9000 8000 70 0 0

Oct -10

J an-11

Ap r-11

10 J ul-11

Oct -10

J an-11

Ap r-11

6000 J ul-11

Q TD % C rud e O i l ( U S $ / b b l ) N a t ura l G a s ( U S $ / M M b t u) 12 0 9 8 .54 4 .50 (7.7) 2 .6

Y TD % 7.8 2 .2

Yo Y% 2 8 .7 (0 .3 )

Co al C hi C o ke ( R mb / t ) C hi S t e a m ( U S $ / t ) A us t S t e a m ( U S $ / t ) 2 0 50 150 .0 5 12 0 .4 0

Q TD % 1.0 8 .4 (2 .0 )

Y TD % 4 .6 17.4 (4 .5)

Yo Y% 17.1 2 9 .4 2 5.2

C rude Oil
110 10 0 90 80 4 70 60 J ul-10 3 J ul-11 5

16 0

Aus t-S te a m C hi C o ke (R HS )

C hi S te a m
2200

Na tura l Ga s (R HS )
6 14 0

2000 12 0 18 0 0

10 0

Oct -10

J an-11

Ap r-11

80 J ul-10

Oct -10

J an-11

Ap r-11

16 0 0 J ul-11

Q TD % U S $ Ind e x 74 .6 8 0 (1.6 )

Y TD % (5.5)

Yo Y% (10 .4 ) RMB 6 .4 59

Q TD % 1.4

Y TD % 2 .3

Yo Y% 4 .9

90

6 .8 5

85

6 .75

80

6 .6 5

75

6 .55

70 J ul-10

Oct -10

J an-11

Ap r-11

J ul-11

6 .4 5 J ul-10

Oct -10

J an-11

Ap r-11

J ul-11

Q TD % E uro P o und 1.7 1.6 1.5 1.4 2 5 1.6 16 0 .7 0 .8

Y TD % 6 .5 3 .5

Yo Y% 11.8 6 .6 Yen Wo n 10 0 78 .8 5 10 55.0 5

Q TD % 5.4 4 .0

Y TD % 2 .9 6 .7

Yo Y% 10 .4 14 .2 13 0 0

Ye n
95 90 1.4 85 1.3 1.2 80

Wo n (R HS )
12 50 12 0 0 1150 110 0 10 50 J ul-11

GB P
1.1 J ul-10 Oct -10 J an-11

Euro
Ap r-11 J ul-11 75 J ul-10 Oct -10 J an-11 Ap r-11

S o urc e : B lo o m be rg

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US Economic Calendar
Expected Release Date 20-Jul-11 21-Jul-11 26-Jul-11 26-Jul-11 27-Jul-11 29-Jul-11 1-Aug-11 2-Aug-11 3-Aug-11 3-Aug-11 5-Aug-11 10-Aug-11 11-Aug-11 12-Aug-11 12-Aug-11 16-Aug-11 16-Aug-11
Trade Balance MoM MoM MoM MoM QoQ MoM MoM QoQ QoQ MoM Indicators CPI Freq MoM

Snapshot (21-Jul-2011 )

China Economic Calendar

Expected Release Date 1-Aug-11 9-Aug-11 9-Aug-11 9-Aug-11 9-Aug-11 10-Aug-11 11-Aug-11 11-Oct-11 18-Oct-11

Indicators Existing Home Sales Initial Jobless Claims Consumer Confidence New home Sales Durable Goods Orders GDP ISM Manufacturing PMI Personal Income & Spending Factory Orders Auto Sales Employment Report Wholesale Inventories Trade Balance Business Inventories Retail Sales Housing Starts / Building Permits Industrial Production PPI CPI

Freq MoM WoW MoM MoM MoM QoQ MoM MoM MoM MoM MoM MoM MoM MoM MoM MoM MoM MoM MoM

Obs Date Aug-11 Jul-11 Jul-11 29-Jun Jun-11 Mar-11 Jul-11 Jun-11 Jun-11 Jul-11 Jul-11 Jun-11 Jun-11 Jun-11 Jul-11 Jul-11 Jul-11 Jul-11 Jul-11

Indicators PMI Manufacturing Retail Sales Industrial Production PPI CPI Trade Balance Money Supply - M2 Foreign Exchange Reserves GDP Wholesale Prices Coincident Index Real Estate Climate Index Govt Expenditure & Revenue

Freq MoM MoM MoM MoM MoM MoM MoM QoQ YoY MoM MoM MoM MoM

Obs Date Jul-11 Oct-11 Jul-11 Aug-11 Aug-11 Jul-11 Jul-11 Dec-11 Dec-11

Hong Kong Economic Calendar

Expected Release Date 21-Jul-11 28-Jul-11 31-Jul-11 1-Aug-11 3-Aug-11 12-Aug-11 18-Aug-11 18-Aug-11 15-Sep-11 15-Sep-11

Obs Date Jul-11 Jul-11 Oct-11 Jul-11 Mar-09 Jun-11 Jul-11 Jul-11 Jun-11 Jun-11

17-Aug-11 18-Aug-11

Money Supply - M2 Retail Sales PMI GDP Composite Interest Rate Unemployment Rate Industrial Production Producer Prices Index Foreign Currency Reserve

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Notice of interest disclosure filed by substantial shareholders for the tw o previous trading days Name of listed corporation Name of substantial shareholder Addchance Holdings Ltd. Boer Pow er Holdings Ltd. Boer Pow er Holdings Ltd. Lee & Man Paper Manufacturing Ltd. Lee & Man Paper Manufacturing Ltd. Lee & Man Paper Manufacturing Ltd. TC Interconnect Holdings Ltd. TC Interconnect Holdings Ltd. TC Interconnect Holdings Ltd. Tongda Group Holdings Ltd. Sung Chung Kw un Jia Lingxia Qian Yixiang Gold Best Holdings Ltd Lee Wan Keung Lee Wong Wai Kuen Yeung Hoi Shan Yeung Hoi Shan Zhao Man Qi Wang Ya Nan

Snapshot (21-Jul-2011 )

No. of shares bought/ Average price per share sold/ involved 600,000(L) HKD 0.842 500,000(L) HKD 3.995 500,000(L) HKD 3.995 5,330,000(L) HKD 4.177 5,330,000(L) HKD 4.177 5,330,000(L) HKD 4.177 100,000(L) HKD 2.792 100,000(L) HKD 2.792 100,000(L) HKD 2.792 1,000,000(L) HKD 0.330

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Disclaimer

Snapshot (21-Jul-2011 )

This document is not an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The securities referred to in this document may not be eligible for sale in some jurisdiction. Neither this document nor any portion hereof may be taken distributed or transmitted directly or indirectly into such jurisdiction nor to any resident thereof. Any failure to comply with this restriction may constitute a violation of the applicable laws and regulations and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. This document has been produced for private circulation and may not be copied, photocopied, duplicated, or redistributed without prior written consent of Kingsway Financial Services Group Limited (formerly known as Kingsway SW Securities Limited) (KSL) and its affiliated companies (collectively, Kingsway Group). This report is distributed in Hong Kong Special Administrative Region of the Peoples Republic of China (Hong Kong) by KSL which is registered as a licensed corporation under the Securities and Futures Ordinance (Cap.571 of The Laws of Hong Kong) with the Securities and Futures Commission of Hong Kong (SFC) and its SFC CE number is ADF346. The information contained in this report has been taken from sources believed to be reliable but no representation or warranty expressed or implied is made as to their accuracy or correctness. This report is published for the assistance of recipients but is not to be relied upon as authoritative or taken in substitution for the exercise of judgment by any recipient. It is not to be construed as an offer, invitation or solicitation to buy or sell any securities of the company or companies covered herein. Any recommendation contained in this report does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. All opinions and estimates reflect our judgment on the date of this report and are subject to change without notice. KSL, including its parent, subsidiaries and/or affiliates, may act as lead or co-manager in an offering of the securities of any issuer discussed herein, may from time to time perform financial services or other advisory services for, or solicit financial services or other business from, any issuer. Within the past year, KSL, including its parent, subsidiaries and/or affiliates, may have acted as market maker or traded on a principal basis in the financial instruments of any issuer discussed herein and may act as underwriter, placement agent, advisor or lender to such issuer. KSL, including its parent, subsidiaries, affiliates, shareholders, officers, directors, and employees may have long or short positions in, and buy or sell, the securities, commodities or derivatives (including options) or any other financial instruments thereof, of any issuers. An employee of KSL, including its parent, subsidiaries and/or affiliates, may act as director, or be represented on the boards of directors, of any such entities or issuers.

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