IID Keynote: Keynote – Internet Models: What Worked, What Didn’t & What’s Next? Alan Hellawell, DB
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IID Keynote: Keynote – Internet Models: What Worked, What Didn’t & What’s Next? Alan Hellawell, DB

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    IID Keynote: Keynote – Internet Models: What Worked, What Didn’t & What’s Next? Alan Hellawell, DB IID Keynote: Keynote – Internet Models: What Worked, What Didn’t & What’s Next? Alan Hellawell, DB Presentation Transcript

    • Deutsche Bank AGBusiness models that haveworked, those with,challenges…and what’s nextApril 26 2013April 26, 2013India Internet DayAlan Hellawellalan.hellawell@db.com(852) 2203 6240Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have aconflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investmentdecision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 054/04/2013
    • Table of contents• How the world views the China & global Internet 2• Models that have worked 10• Models that have worked… 10• …those with challenges 25• …and what’s next 32Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 13124/04/2013 15:59:21 2010 DB Blue template
    • How the world views the China & globalHow the world views the China & globalInternetDeutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 13224/04/2013 15:59:21 2010 DB Blue template
    • A turbulent few years…The MSCI World Internet Software & Services Index outperformed the S&PyHistoric performance of tech IPOspIndex by 19% since 2010. However, this is not the case in China…...Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 13324/04/2013 15:59:21 2010 DB Blue templateSource: Bloomberg
    • China internet sector deratingThe S&P has outperformed the Nasdaq China Technology Index by 44% sinceHistoric performance of tech IPOsp q gy y2010. Holdings in the index include Tencent (8%), Baidu (8%), Sina (7.7%),Lenovo (5.4%), Sohu (4.7%), Qihoo360 (4.5%), NetEase (4.2%).Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 13424/04/2013 15:59:21 2010 DB Blue templateSource: Bloomberg
    • China IPO activity showing a real slowdownTotal deal count and IPO deal size in ChinaHistoric performance of tech IPOs69457897.2131.1116.11001201408001000nnt Total deal count and IPO deal size in China24740957846110147.459.423.720406080200400600US$billionDealCoun10102002008 2009 2010 2011 2012 Till April 2013Deal Count Value (US$ billion)5060Number of tech IPOs20304050mberofIPOsonfile190102006 2007 2008 2009 2010 2011 2013NumDeutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 13524/04/2013 15:59:21 2010 DB Blue templateSource: Bloomberg
    • Software issuers outperformed Internet & New Media issuersSoftware issuers outperformed Internet & New Media issuersTech sector breakdown of IPOsHistoric performance of tech IPOsTech sector breakdown of IPOsJan-Apr 2012 Jan-Apr 2013US$m Number of deals US$m Number of dealsUS$ u be o dea s US$ u be o dea sSoftware & Services 1,174.0 8 321.7 3Internet & New Media 496.1 5 0.0 0Hardware/Semis 131.1 1 0.0 0Performance of tech IPOs since 2009 by sector(a)Clean Tech 61.9 1 92.9 1Other 161.9 2 851.6 3Performance of tech IPOs since 2009 by sector(a)41.2%34 9%80.1%45.4%50.0%60.0%180)16.7%3.6%33.3% 34.9%(1.0%)25.8%28.2%NA NA21.2%(10 0%)0.0%10.0%20.0%30.0%40.0%eperfprmance(T+1(1.0%)(17.9%)(31.6%)(40.0%)(30.0%)(20.0%)(10.0%)Hardware/Semis Internet & New Media Software & ServicesAverageN t ( ) i l d T h IPO i 2010 b US$50 D t f A il 2013Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 13624/04/2013 15:59:21 2010 DB Blue templateNote: (a) includes Tech IPOs since 2010 above US$50m. Data as of April 2013.Source: Bloomberg and Dealogic
    • The venture sideActivity seems to be on the wane• VC’s invested $1.4 billion into 231 Internet-specific companies in 1Q2013, down 11% in dollars and 5% lower in deals than 4Q 2012 when$1.5 billion went into 243 deals. Two of the top ten deals for the quarterwere in the Internet specific categorywere in the Internet-specific category.• Deals in China-based companies in 2012 fell 40% to $3.7 billion from ayear earlier (Dow Jones VentureSource.) There is a pipeline of aroundy ( ) p p800 companies still waiting to list their shares.• Why?• Inability to exit portfolio companies because of difficult IPOconditions• Concerns over “VIE”, alleged accounting fraud, evidence ofslowing growthDeutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 20134/24/20137Source: Bloomberg
    • Client views on China internetSummary of investor views after two weeks in the USStill generally cautiousSentiment still well off “Pre-Renren highs.”Continuing concerns over VIE, SEC/PCAOB pursuit ofauditorsInordinate focus on the largest players80% of meeting time spent on Baidu and TencentDramatic reduction in discussion of smaller cap namesover past few yearsMany questions on trajectory of digital ad spend recoveryMany questions on trajectory of digital ad spend recoveryHeavy focus on levels of competition in certain sub-sectorsSearchSearchE-commerceDeutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 201324/04/2013 15:59:21 2010 DB Blue template8
    • Client views on China internet (cont.)( )Extensive discussion around potential M&A transactionIntense focus on what mobile means to the big Chineseinternet namesWhen will mobile contribute positively to Baidu?What is the monetization time-line of Weixin?How does mobile impact China e-commerce?Questions about “going global” (eg – Tencent plans)Many questions around IPO pipelineDeutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 201324/04/2013 15:59:21 2010 DB Blue template9
    • Models that have workedModels that have worked…Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 131024/04/2013 15:59:21 2010 DB Blue template
    • C2C: “Copy-to-China”pyTime of launch Number of users U.S. China Number of users Time of launchFeb-04 Over 1b Facebook SNS Renren over 200m Dec-05Jun-06 500m Twitter Microblogging Sina Weibo over 500m Aug-09May 03 150m Linkedin Professional SNS Ushi com over 1m Feb 10May-03 150m Linkedin Professional SNS Ushi.com over 1m Feb-10Feb-05 800m Youtube Online video Youku 300m Jun-06Sep-98 Over 1b Google Search Baidu 500m Jan-00Nov-08 41m Groupon Group buy Lashou 20m Mar-10Sep-95 150m eBay E-commerce Taobao ~500m May-03J l 04 100 Y l R i Di i 55 A 03Jul-04 100m Yelp Review Dianping.com 55m Apr-03Jun-09 100m WhatsApp Mobile IM WeChat over 300m Jan-11Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 131124/04/2013 15:59:21 2010 DB Blue templateSource: Company data
    • Models that have worked…overtaking predecessorsg pSome models resembled western peers onceSome models resembled western peers onceupon a time, but have since vastly overtakenthose earlier modelsthose earlier models…Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 131224/04/2013 15:59:21 2010 DB Blue template
    • The Vipshop example: Flash salesVipshopp p pFlash sale offers daily sales events selling a limited quantity of discounted products andservices online for a limited period of time.Vipshop provides online flash sales for Chinese consumers, combining e-commerce anddiscount sales channelsThe company partners with leading brands by selling their excess inventory at discountpricesOver 5,800 brands and over 250 merchandising staffProduct categoriesSportswearCosmeticsApparel2,7592010 –2012th b 6 7Brand partner growth over time(1)Accessories HandbagsFootwear4111,0752,759growth by 6.7xTravelHome goodsChildren4112010 2011 2012S C d tDeutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 20134/24/2013 2010 DB Blue template13Source: Company dataNote: Number of brand partners is a cumulative number since 2009, which includes primarily brand owners, and to a lesser extent, brand distributors and resellers.
    • O t ki th t d lOvertaking the western modelBroader addressable market in ChinaChina U.S.Broader universe of popular brandsfor mass marketMarketpositioningMostly focused on high-end andluxury marketsDiscount / outlet retail channelssaturated for mass marketmerchandiseLack of well-developed discount /outlet retail channelCompetition fromoffline channelWell established online presenceand capabilitiesLargely rely on third partyplatforms to build online presenceBrands’ own onlinepresenceLimited upfront depositMost products can be returned tosuppliersNeed to pay for inventory upfrontProducts can not be returned tosuppliersWorking capitalrequirementDeutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 1324/04/2013 15:59:21 2010 DB Blue template14
    • …Vipshop: now so much more than its peersp p pBoth revenues and orders grew more than 200% YoY in 2012Luxury goods account for only 10% of sales. Others are mostly mid to high endgoods.Net revenues(US$ in millions)Total orders(in thousands)21,919191.2%629.1204.7%201.5%299.6184.8%7,2693,0058,752684.1%32 6227.1105.2597.1%9272010 2011 2012 4Q11 4Q1232.62010 2011 2012 4Q11 4Q12Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 20134/24/2013 2010 DB Blue template15Source: Company data
    • Underestimating the strength of a business model:g gVipshopVipshop has outperformed the Nasdaq Composite Index by 335% since March22, 2012 (Vipshop IPO date)Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 20134/24/2013 2010 DB Blue template16Source: Bloomberg
    • A re-rating against peersWhat we learnedg g pWhat we learned• We were clearly too focused on Vipshop’s western peers• Their exact business models• Their exact business models• Their inherent limitations• We underestimated several factors• We underestimated several factors• The power of e-commerce to leapfrog China’s otherwise poorlydeveloped offline discounting infrastructuredeveloped offline discounting infrastructure• Unique cultural attributes of the market• The sheer power of viral marketing, word-of-mouth, etc.p g, ,• Bargain hunting as an “achievement.”M k t C /R t tiMarket Cap/Revenues at timeof Vipshop IPO (3/22/2012)Current Market Cap/Revenues Performance since 3/22/2012Vipshop 1.3 2.4 78%Amazon 1.6 2.0 22%eBay 3.3 4.7 40%Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 20134/24/201317Source: Bloomberg
    • YY.com: uniquely Chinese…q yTh i l i f i f b iThere is also a growing profusion of businessmodels emerging with no predecessors and nocounterparts.Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 131824/04/2013 15:59:21 2010 DB Blue template
    • YY.com: uniquely Chinese (cont)q y ( )YY is a rich communication social platform that connects Internet usersthrough real-time interaction in massive scaleRich communication includes real-time transmission of voice, video and textCore product YY client, a PC-based software, is capable of hosting 1.4mt h t ith h th i li h l t th tiusers to chat with each other in one online channel at the same time.12.7m channels were created on YY’s platform as of Sep 30, 2012Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 131924/04/2013 15:59:21 2010 DB Blue templateSource: Company data
    • YY.com: uniquely Chineseq yUser-created and user-defined online channels can be used to host variousonline activities (i.e. in-game communication, live music show broadcasting,l di d i id f ll )long distance education, video conference calls, etc.)Monetization is a combination of ads-based and virtual item-based revenuemodelsmodelsDeutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 132024/04/2013 15:59:21 2010 DB Blue templateSource: Company data
    • YY: “Largest Real-time Social Platform in China”gViral Growth Scale Stickiness401millionViral Growth Scale Stickinesstotal registered user(“TRU”) accounts (1),(2)52hours70millionper active user (5)>10xmonthly activeusers (“MAU”) (3)84%10million84%market share (6)Dec 2009TRU (2)Sep 2012 TRUs(2)peak concurrentusers (“PCU”) (4)TRUs (2):37 million(2):401 millionDeutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 201321Source: Company data
    • Coming to appreciate unique business models: YY.comg pp qYY h f d h N d C i I d b 48% i N 20 2012YY has outperformed the Nasdaq Composite Index by 48% since Nov 20, 2012(YY IPO date)Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 132224/04/2013 15:59:21 2010 DB Blue templateSource: Bloomberg
    • Up-and-coming internet: DB’s June internet tourp gPrivate companies to be featured on our 2013 tour:• Next generation on-line tour packagetPrivate companies to be featured on our 2013 tour:• Mobile advertising networkoperator• Online classified information platform• Online payments company covering• E-commerce lead generation platform• Mobile commerce platformChild ’ b it• Online payments company – coveringboth B2C and B2B markets• Mobile and social games developers• Children’s website• Cloud services company• Next generation LBAS based local• Mobile app distribution platforms• Distance learning• Next generation LBAS-based locallifestyle search and group buyingplatformDeutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 20134/24/2013 2010 DB Blue template23
    • those with challenges…those with challengesDeutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 132424/04/2013 15:59:21 2010 DB Blue template
    • Too much of a good thing going bad: China’s Group-buyingg g g g p y gAccording to Tuan800, the number of group buy sites in China peaked inSeptember 2011 at 5,058, then continued to drop sequentially since then. As ofNovember 2012 there were 2 857 group buy sites in China down 56% comparedNovember 2012, there were 2,857 group buy sites in China, down 56% comparedto September 2011.2000250050006000RMBmThe No. of group buy sites peaked at5,058 in September, 201158tuan, 1.4%Qianpin, 1.6% Others,4.3%Top 10 players as of Dec 201210001500200030004000Dianping,16.4%Dida, 1.7%Gaopeng,3.7%N i 12 2%55tuan,12.6%05000100020001111111111111111111111121212121212121212121212Lashou,11.3%Manzuo, 1.8%Meituan,32.8%Nuomi, 12.2%Feb-Mar-Apr-May-Jun-Jul-Aug-Sep-Oct-Nov-Dec-Jan-Feb-Mar-Apr-May-Jun-Jul-Aug-Sep-Oct-Nov-Dec-Number of group buy sites Total GMV (RMBm)Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 201325Source: Deutsche Bank, Tuan800
    • Internet stocks with challenged business modelsg607080USDYouku Tudou101214USDShanda Games10203040502468100Youku TudouUSDM LUSDJi02Shanda Games6080100USDMecox Lane810121416USDJiayuan.com0204002468Youku Tudou Jiayuan.com Mecox Lane Shanda GamesMecox Lane Jiayuan.comPrice changes (As of 19 April)ou u udou J ayua .co eco a e S a da Ga esYOKU.N DATE.OQ MECO.OQ GAME.OQFrom IPO price -48.5% -51.5% -93.4% -74.5%From highest price -74.4% -66.5% -93.4% -76.6%Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 132624/04/2013 15:59:21 2010 DB Blue templateFrom highest price 74.4% 66.5% 93.4% 76.6%Source: Bloomberg
    • Challenged business models: Youku TudougYo k T do80USDYouku Tudou• Youku Tudou• Youtube-like Online video company.• The merger of two major platforms, Youkuand Tudou both being leading online506070and Tudou, both being leading onlinevideo sites in China. Revenues largelyads-based• Primary reasons203040y• Lack of awareness of commoditization ofvideo industry• Lack of barriers to entry for those with01012/8/20101/8/20112/8/20113/8/20114/8/20115/8/20116/8/20117/8/20118/8/20119/8/201110/8/201111/8/201112/8/20111/8/20122/8/20123/8/20124/8/20125/8/20126/8/20127/8/20128/8/20129/8/201210/8/201211/8/201212/8/20121/8/20132/8/20133/8/20134/8/2013captive traffic and strong balance sheets• Continued “arms race” in contentprocurementYouku TudouPrice changes (As of 19 April)Youku TudouYOKU.NFrom IPO price 48 5%From IPO price -48.5%From highest price -74.4%Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 132724/04/2013 15:59:21 2010 DB Blue templateSource: Bloomberg
    • Challenged business models: Jiayuang yJia an com16USDJiayuan.com• Jiayuan.com• Online dating platform offering informationon single adults seeking long-termrelationships/marriage.101214p g• Generating revenue primarily from onlineservices (fee-based VAS) and offlineevents/VIP services468• Primary reasons• User churn (unable to generate long-termuser loyalty due to relationship/marriageorientation) thus incurring recurring025/11/20116/11/20117/11/20118/11/20119/11/201110/11/201111/11/201112/11/20111/11/20122/11/20123/11/20124/11/20125/11/20126/11/20127/11/20128/11/20129/11/201210/11/201211/11/201212/11/20121/11/20132/11/20133/11/20134/11/2013orientation), thus incurring recurringmarketing expenses• Increasing competition from othermarriage-oriented online dating platforms111111Jiayuan.come.g. Baihe.com and Zhenai.com.• Advent of “free” dating platforms.• Impact from general social-orientedl tf ( W ib d W i i ) hi hPrice changes (As of 19 April)Jiayuan.comDATE.OQFrom IPO price 51 5% platforms (e.g.Weibo and Weixin), whichare usually free and associated withhigher user stickiness.From IPO price -51.5%From highest price -66.5%Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 132824/04/2013 15:59:21 2010 DB Blue templateSource: Bloomberg
    • Challenged business models: Mecox LanegMeco Lane100USDMecox Lane• Mecox Lane• E-commerce site with a specific focus onapparel.• Primary reasons60708090• Primary reasons• E-commerce market in China currently stillinvolves significant investment• Unfavorable competitive environment20304050• Unfavorable competitive environmentwithin China’s e-commerce space.• Unclear market positioning, deployment ofoffline stores on large scale010• Large e-commerce platforms buildingformidable scale which threaten thesurvival of small e-commerce players.• Lack of unique business model or productMecox Lane• Lack of unique business model or productcategories compared to e-commercegiantsPrice changes (As of 19 April)Mecox LaneMECO.OQFrom IPO price 93 4%From IPO price -93.4%From highest price -93.4%Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 132924/04/2013 15:59:21 2010 DB Blue templateSource: Bloomberg
    • Challenged business models: Shanda GamesgShanda Games14USDShanda Games• Shanda Games• Chinese online gaming company• Primary reasons81012• Intensifying competition among majorgame operators due to a growth slowdownin the overall online gaming market• Turbulence in company management and246• Turbulence in company management andstructure• Advent in rapid succession of new gamesmodels: social games, web games, mobile029/25/200911/25/20091/25/20103/25/20105/25/20107/25/20109/25/201011/25/20101/25/20113/25/20115/25/20117/25/20119/25/201111/25/20111/25/20123/25/20125/25/20127/25/20129/25/201211/25/20121/25/20133/25/2013games• Excessive expansion across multiplefields, however, with no core business.• Lack of unique features compared to other1111Shanda Games• Lack of unique features compared to otheronline gaming giantsPrice changes (As of 19 April)Shanda GamesGAME.OQFrom IPO price 74 5%From IPO price -74.5%From highest price -76.6%Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 133024/04/2013 15:59:21 2010 DB Blue templateSource: Bloomberg
    • and what’s next…and what s nextDeutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 133124/04/2013 15:59:21 2010 DB Blue template
    • What’s next: China e-commerceCECRC releases 2012 China e-commerce reportCECRC releases 2012 China e-commerce reportThere were roughly 24,875 e-commerce-related enterprises (including B2C, C2C and other types) in Chinaas of 2012, up ~20% YoY.CECRC identified roughly 45 e-commerce investments in 2012, including 1) Belle investing USD200m inCECRC identified roughly 45 e commerce investments in 2012, including 1) Belle investing USD200m inshoe-focused B2C, 2) 360Buy obtaining USD400m in funding, etc.B2C e-commerceIn terms of transactions, Taobao remained No. 1, with a 52% market share, followed by 360Buy (22%),y y ( )Suning Yigou (3.6%), Tencent’s B2C (3.3%), Vancl (2.7%), Amazon China (2.3%).The mobile commerce marketMobile commerce transaction volumes in China reached RMB96.5b in 2012, up 135% YoY. CECRC expectsit to reach RMB130b (up 35% YoY) in 2013.The mobile commerce population reached 250m in 2012, up 67% YoY. Likely to reach 373m by 2013.LogisticsThe courier industry had seen a CAGR of 27% in the past five years in terms of revenue. Roughly 50% ofthe revenues that couriers earned last year came from e-commerce.Self owned and operated logistics has become an important feature. E.g. 360Buy on average processes800K orders per day 80% of them being distributed through its own logistics infrastructure800K orders per day, 80% of them being distributed through its own logistics infrastructure.Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 201332
    • The China e-commerce marketE-commerce market trading value reached RMB2.4tn in4Q12, up 27.5% YoY.A f 4Q12 t t l B2B f SME h d RMBThe China e commerce marketE-commerce gross merchandise value40%3 00As of 4Q12, total B2B revenue from SMEs reached RMB4.45bn. Largest player took 40.7% of the B2B market,followed by Global Sources with 8.7% market share.As of 4Q12, Taobao accounted 95% of China C2C and35.0%33.6% 34.2%28.1% 26.3% 25.0%22.6%27.5%20%25%30%35%40%1 502.002.503.00T-Mall represented 57% of the China B2C market.As of 4Q12, 360Buy took a 49% share in theindependently-operated B2C market, followed by Suning(13.6%) and Amazon.cn (6.8%).1.381.51.631.82 1.75 1.88 2.002.400%5%10%15%20%0 000.501.001.500%0.001Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12e-commerce market GMV (RMBt) YoY4Q12 China B2B market share 4Q12 China B2C market share 4Q12 China C2C market sharePaipai5.46%eachnet0.01%AlibabaSuning5.5%others13.5%Alibaba.com40.7%Other41.7%Tmall56.7%TencentB2C4.7%Taobao94.53%GlobalSources8.7%mysteel5.6%hc360.com3.3%360buy19.6%Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 20134/24/2013 2010 DB Blue template33Source: Deutsche Bank, iResearch
    • Thank you!Thank you!Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 2013April 133424/04/2013 15:59:21 2010 DB Blue template
    • Appendix 1ppImportant DisclosuresAdditional information available upon requestFor disclosures pertaining to recommendations or estimates made on a security mentioned in this research, please see the most recentlypublished company report or visit our global disclosure look-up page on our website at http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr.Analyst CertificationThe views expressed in this report accurately reflect the personal views of the undersigned lead analyst about the subject issuers and the securities ofthose issuers. In addition, the undersigned lead analyst has not and will not receive any compensation for providing a specific recommendation or view inthis report. Alan Hellawell III.Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 201324/04/2013 15:59:21 2010 DB Blue template35
    • Equity Rating Key Equity Rating Dispersion and BankingBuy: Based on a current 12-month view of total shareholder return(TSR = percentage change in share price from current price toprojected target price plus projected dividend yield), we recommendthat investors buy the stock.RelationshipsySell: Based on a current 12-month view of total shareholder return, werecommend that investors sell the stock.Hold: We take a neutral view on the stock 12 months out and, basedon this time horizon, do not recommend either a Buy or Sell.55 %38 %200250300350400450Notes:1. Newly issued research recommendations and target prices alwayssupersede previously published research.2. Ratings definitions prior to 27 January, 2007 were:7 %17 % 16 % 12 %050100150Buy Hold SellBuy: Expected total return (including dividends) of 10% or moreover a 12-month periodHold: Expected total return (including dividends) between -10%and 10% over a 12-month periodAsia-Pacific UniverseCompaniesCovered Cos. w/ BankingRelationshipSell: Expected total return (including dividends) of -10% orworse over a 12-month periodDeutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 201324/04/2013 15:59:21 2010 DB Blue template36
    • Regulatory Disclosures1. Important Additional Conflict DisclosuresAside from within this report, important conflict disclosures can also be found at https://gm.db.com/equities under the “Disclosures Lookup” and “Legal” tabs.Investors are strongly encouraged to review this information before investing.2. Short-Term Trade IdeasDeutsche Bank equity research analysts sometimes have shorter-term trade ideas (known as SOLAR ideas) that are consistent or inconsistent with DeutscheBank’s existing longer term ratings. These trade ideas can be found at the SOLAR link at http://gm.db.com.3. Country-Specific DisclosuresAustralia and New Zealand : This research, and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act, y , y g pand New Zealand Financial Advisors Act respectively.Brazil: The views expressed above accurately reflect personal views of the authors about the subject company(ies) and its(their) securities, including in relation toDeutsche Bank. The compensation of the equity research analyst(s) is indirectly affected by revenues deriving from the business and financial transactions ofDeutsche Bank. In cases where at least one Brazil based analyst (identified by a phone number starting with +55 country code) has taken part in the preparationof this research report, the Brazil based analyst whose name appears first assumes primary responsibility for its content from a Brazilian regulatory perspectiveand for its compliance with CVM Instruction # 483.and for its compliance with CVM Instruction # 483.EU countries: Disclosures relating to our obligations under MiFiD can be found at http://globalmarkets.db.com/riskdisclosures.Japan: Disclosures under the Financial Instruments and Exchange Law: Company name - Deutsche Securities Inc. Registration number - Registered as afinancial instruments dealer by the Head of the Kanto Local Finance Bureau (Kinsho) No. 117. Member of associations: JSDA, Type II Financial Instruments FirmsAssociation, The Financial Futures Association of Japan, Japan Investment Advisers Association. Commissions and risks involved in stock transactions - for stocktransactions we charge stock commissions and consumption tax by multiplying the transaction amount by the commission rate agreed with each customer Stocktransactions, we charge stock commissions and consumption tax by multiplying the transaction amount by the commission rate agreed with each customer. Stocktransactions can lead to losses as a result of share price fluctuations and other factors. Transactions in foreign stocks can lead to additional losses stemming fromforeign exchange fluctuations. "Moodys", "Standard & Poors", and "Fitch" mentioned in this report are not registered credit rating agencies in Japan unless“Japan” or "Nippon" is specifically designated in the name of the entity.Russia: This information, interpretation and opinions submitted herein are not in the context of, and do not constitute, any appraisal or evaluation activity requiringa license in the Russian Federation.Deutsche Bank Alan Hellawell , alan.hellawell@db.com, (852) 2203 6240, April 201324/04/2013 15:59:21 2010 DB Blue template37
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