请选择您要上传的头像图片，完成后关闭此弹框即可。
&&&&您所提交的评论已被保存，登录后即可发表
&&&&您已经选择过了。
应用大小：14.3 MB
类别：游戏
当前版本：1.2.1
语言：英语
运行环境：需要 iOS 8.0 或更高版本。与 iPhone、iPad、iPod touch 兼容。
下载此APP的用户也下载
简介：Equate is a simple to learn brain game unlik...
Equate应用说明
Equate is a simple to learn brain game unlike any other. Keep your mind sharp with fresh and challenging gameplay based off century old verbal arithmetic.Equate challenges gamers with a simple math problem whose numbers have been replaced with letters. Your job is to decode the problem and figure out what digit each letter represents!Progress through a curated selection of our best puzzles, and grow from a ‘Whiz’ to a ‘Master’.Expand your collection with new downloadable packs and keep your brain sharp with a free puzzle every day!Cryptarithmnoun | cryp·ta·rithma mathematical problem in which letters have been substituted for numbers and which is solved by finding all possible pairings of numbers with letters that produce a numerically correct answer.RULES:Each letter represents a digit between 0 and 9No two letters can represent the same digitThe first digit in a number cannot be 0We hope you enjoy!The Nifty Team
| | | | | | |
| | | | | | | |
|||||||||||||||
iTunes分类排行榜
||||||||||||||||||
京公网安备98
苹果园为iOS用户提供和下载，最新的、、、等，分享最权威的资讯、、及解决办法，拥有最火爆的，苹果园一家专注解决iOS所求的网站。
20:45:13.544---- 20:45:13.575----31.2114网址导航[]Gome071123
发布机构：
报告类型：公司研究
发布日期：
报告评级：
撰写作者：
报告下载:312
文件类型：PDF文档
左键点击或右键另存为下载
November 23, 2007 November 23, 2007
Gome Electrical Appliances Holding (0493.HK)
COMPANY UPDATE
Gome Electrical Appliances Holding (0493.HK)
Bul raising earnings and target price
What's changed
Following two days with management visiting HK-based investors, we have stronger conviction in the company’s earnings growth potential next year. We have raised our 2008 and 2009 earnings estimates (already top of the market) by 3.3% and 2.1%, respectively, and still see more upside if the company executes well next year. We raise our price target by 20% to HK$20.6, offering 34% potential upside from the current level. We think it is not too late to get into this stock as we believe operational improvement has only just begun, with significant upside yet to be realized. Lingering market skepticism means valuation is still undemanding for a national franchise reaching uncommon dominance.
Investment Profile: Gome Electrical Appliances
Low Growth Returns * Multiple Volatility Percentile 0493.HK Asia Pacific Consumer Peer Group Average * Returns = Return on Capital For a complete description of the investment profile measures please refer to the disclosure section of this document. 20th 40th 60th 80th High Growth Returns * Multiple Volatility 100th
Implications
Continued gross margin pickup is a key component of the earnings growth story in 2008, and we think the market is under-appreciating how much the margin can improve just by picking some of the still low-hanging fruits. Key drivers are 1) improved category management in 3C 2) further penetration of exclusive and
3) enhanc 4) rollout of warranty extension services. Acceleration of same-store sales (management targets +3-5% comps next year vs. less than 1% this year) further improves the quality of earnings growth.
Key data Price (HK$) 12 month price target (HK$) Market cap (HK$ mn / US$ mn) Foreign ownership (%)
Current 15.40 20.60 50,186.9 / 6,449.9 --
EPS (HK$) New EPS revision (%) EPS growth (%) EPS (dil) (Rmb) New P/E (X) P/B (X) EV/EBITDA (X) Dividend yield (%) ROE (%)
12/06 0.37 0.0 27.4 0.25 41.9 8.7 13.9 0.5 24.6
12/07E 0.40 (2.3) 9.0 0.34 38.5 6.1 21.3 1.2 18.9
12/08E 0.79 6.8 96.8 0.65 19.5 5.1 15.3 1.7 26.7
12/09E 1.00 7.5 27.1 0.78 15.4 4.2 11.5 2.1 27.0
Gome is trading at 19.9X 2008E P/E (recurring & fully diluted), well below the average of 30.8X 2008E P/E for the leading Chinese national retail franchises. Our DCF-derived 12-month target price puts the stock at 26.6X 2008E P/E or PEG of 1.1X.
Price performance chart
18 16 14 12 10 8
15,500 14,500 13,500 12,500 11,500 10,500 9,500 8,500 Feb-07 Jun-07 Sep-07 MSCI Hong Kong (R)
Execution slippage and uncertainties surrounding Dazhong.
6 4 Nov-06
Gome Electrical Appliances Holding (L)
INVESTMENT LIST MEMBERSHIP Asia Pacific Buy List Coverage View: Attractive
China: Retail Joshua Lu +852- | joshua. Goldman Sachs (Asia) L.L.C. Larry Cho +852- | larry. Goldman Sachs (Asia) L.L.C.
Share price performance (%) Absolute Rel. to MSCI Hong Kong
3 month 35.1 11.0
6 month 12 month 21.6 139.9 1.2 77.8
Source: Company data, Goldman Sachs Research estimates, FactSet. Price as of 11/22/2007 close.
The Goldman Sachs Group, Inc. does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification, see the text preceding the disclosures. For other important disclosures go to /research/hedge.html. Analysts employed by non-US affiliates are not required to take the NASD/NYSE analyst exam.
The Goldman Sachs Group, Inc.
Goldman Sachs Global Investment Research
Global Investment Research
November 23, 2007
Gome Electrical Appliances Holding (0493.HK)
Gome Electrical Appliances Holding: Summary financials
Profit model (Rmb mn) Total revenue Cost of goods sold SG&A R&D Other operating profit/(expense) EBITDA Depreciation & amortization EBIT Interest income Interest expense Income/(loss) from uncons. subs. Others Pretax profits Income tax Minorities Net income pre-preferred dividends Preferred dividends Net income (pre-exceptionals) Post-tax exceptionals Net income EPS (basic, pre-except) (Rmb) EPS (basic, post-except) (Rmb) EPS (diluted, post-except) (Rmb) DPS (HK$) Dividend payout ratio (%) Free cash flow yield (%) Growth & margins (%) Sales growth EBITDA growth EBIT growth Net income growth EPS growth Gross margin EBITDA margin EBIT margin 12/06 24,729.2 (22,369.4) (2,678.2) -1,250.8 1,050.1 (117.8) 932.3 126.2 (65.4) 0.0 75.1 1,068.2 (125.6) (123.5) 819.2 0.0 725.6 93.5 819.2 0.33 0.38 0.25 0.08 20.7 (2.8) 12/06 37.7 22.4 15.8 64.3 24.2 9.5 4.2 3.8 12/07E 42,001.6 (38,039.5) (4,540.4) -2,543.2 2,120.2 (155.3) 1,964.9 399.1 (226.0) 0.0 (545.3) 1,592.8 (320.7) (39.4) 1,232.6 0.0 1,863.5 (630.9) 1,232.6 0.59 0.39 0.34 0.18 44.1 1.4 12/07E 69.8 101.9 110.8 50.5 3.3 9.4 5.0 4.7 12/08E 51,012.3 (45,910.3) (5,647.4) -3,208.3 2,879.5 (216.6) 2,662.9 370.2 (226.1) 0.0 0.0 2,806.9 (449.1) (45.3) 2,312.5 0.0 2,492.5 (180.0) 2,312.5 0.76 0.71 0.65 0.25 32.3 3.8 12/08E 21.5 35.8 35.5 87.6 82.3 10.0 5.6 5.2 12/09E 61,279.5 (54,998.3) (6,943.9) -3,954.8 3,567.3 (275.1) 3,292.1 382.7 (229.3) 0.0 0.0 3,445.5 (585.7) (52.2) 2,807.6 0.0 2,990.8 (183.2) 2,807.6 0.92 0.86 0.78 0.32 32.0 6.7 12/09E 20.1 23.9 23.6 21.4 21.4 10.3 5.8 5.4 Balance sheet (Rmb mn) Cash & equivalents Accounts receivable Inventory Other current assets Total current assets Net PP&E Net intangibles Total investments Other long-term assets Total assets Accounts payable Short-term debt Other current liabilities Total current liabilities Long-term debt Other long-term liabilities Total long-term liabilities Total liabilities Common stock & premium Other common equity Total common equity Minority interest Total liabilities & equity BVPS (HK$) Ratios ROE (%) ROA (%) ROACE (%) Inventory days Receivables days Payable days Net debt/equity (%) Interest cover - EBIT (X) Valuation Cash flow statement (Rmb mn) Net income pre-preferred dividends D&A add-back Minorities interests add-back Net inc/(dec) working capital Other operating cash flow Cash flow from operations Capital expenditures Acquisitions Divestitures Others Cash flow from investments Dividends paid (common & pref) Inc/(dec) in debt Common stock issuance (repurchase) Other financing cash flows Cash flow from financing Total cash flow 12/06 819.2 117.8 123.5 (813.6) (51.9) 195.0 (278.0) (729.6) 3.8 0.0 (1,003.9) (417.1) 507.0 0.0 1,095.0 1,184.9 376.0 12/07E 1,232.6 155.3 39.4 (1,473.9) 176.9 130.3 (979.8) 0.0 0.0 0.0 (979.8) (559.0) 0.0 1,463.0 4,600.0 5,504.0 4,654.5 12/08E 2,312.5 216.6 45.3 (342.3) 180.0 2,412.1 (1,332.7) 0.0 0.0 0.0 (1,332.7) (747.7) 0.0 0.0 0.0 (747.7) 331.6 12/09E 2,807.6 275.1 52.2 (235.4) 183.2 3,082.7 (877.2) 0.0 0.0 0.0 (877.2) (897.2) 0.0 0.0 0.0 (897.2) 1,308.3 P/E (analyst) (X) P/B (X) EV/EBITDA (X) Dividend yield (%) 12/06 1,451.8 1,373.4 4,882.8 7,789.1 15,497.1 2,206.7 3,369.9 6.2 96.3 21,176.2 12,614.6 729.3 1,611.5 14,955.4 726.7 253.7 980.4 15,935.8 5,041.5 110.1 5,151.6 88.8 21,176.2 1.65 12/06 24.6 5.4 25.9 62.1 13.6 158.4 0.1 NM 12/06 41.9 8.7 13.9 0.5 12/07E 6,106.3 2,940.1 5,325.5 10,280.1 24,652.1 3,031.2 3,369.9 6.2 96.3 31,155.6 15,406.0 729.3 1,846.6 17,981.9 4,441.3 734.2 5,175.6 23,157.5 7,086.2 783.7 7,869.9 128.2 31,155.6 2.48 12/07E 18.9 4.7 27.7 49.0 18.7 134.4 (11.9) NM 12/07E 38.5 6.1 21.3 1.2 12/08E 6,437.9 3,749.4 6,363.2 11,509.0 28,059.5 4,147.3 3,369.9 6.2 96.3 35,679.3 17,824.7 729.3 2,161.4 20,715.5 4,621.3 734.2 5,355.6 26,071.0 7,086.2 2,348.4 9,434.7 173.6 35,679.3 3.21 12/08E 26.7 6.9 30.4 46.5 23.9 132.1 (11.5) NM 12/08E 19.5 5.1 15.3 1.7 12/09E 7,746.2 4,684.2 7,546.5 13,255.5 33,232.5 4,749.4 3,369.9 6.2 96.3 41,454.3 21,090.5 729.3 2,525.0 24,344.8 4,804.6 734.2 5,538.8 29,883.6 7,086.2 4,258.8 11,345.0 225.7 41,454.3 4.05 12/09E 27.0 7.3 32.0 46.2 25.1 129.1 (19.5) NM 12/09E 15.4 4.2 11.5 2.1
Note: Last actual year may include reported and estimated data. Source: Company data, Goldman Sachs Research estimates.
Analyst Contributors Joshua Lu joshua. Larry Cho larry.
Goldman Sachs Global Investment Research
November 23, 2007
Gome Electrical Appliances Holding (0493.HK)
Stronger conviction in the margin raising earnings, target price
We spent the past two days with Gome management visiting HK-based investors following the company’s 3Q earnings release. Overall, our meetings have given us stronger conviction in the company’s earnings growth potential in 2008/09. We have raised our earnings estimates (already top of the market) by 3.3% for 2008 and 2.1% for 2009. Our price target increases to HK$20.6 from HK$17.2 (a result of earnings revision, rolling forward to end-2008, and higher RMB assumption), offering 34% potential upside in the next 12 months.
Four pillars of continued gross margin expansion in 2008
When comparing Gome with global peers, one clear disparity is that Gome (and other Chinese CE retailers) earn a combined gross margin well below that of peers (Exhibit 1). While management believes that over the longer term Gome’s gross margin should catch up with peers, we believe the market remains unconvinced. In particular, the market remains concerned that expanding GP margin from squeezing suppliers or raising prices cannot be sustained. In our view, this concern is misplaced. During the past 2 days management elaborated how there are still a number of low-hanging fruits that can drive continued GP margin expansion without hurting the company’s competitiveness (or squeezing the suppliers). We see four key components to the story: Exhibit 1: Gome adjusted gross margin remains well below peers
Gross margin comparison of Int’l peers vs. Gome, 2006
20% 15.2%*
0% Best Buy Circuit City Yamada Denki Gome
Source: Company data, Bloomberg, Goldman Sachs Research. *denotes adjusted gross margin for 9M07.
1) Intensify category management of “3C” products. 3C products refer to communication (mobile phones), consumer electronics (mainly digital cameras and MP3 players) and computers. These three categories account for close to 30% of Gome’s total sales, but earn an adjusted GP margin around 3ppt below the group average. Management believes the margin differential is ultimately the result of a lack of focused category management, as Gome already enjoys the lowest procurement cost thanks to its status as China’s single largest distributor for most brands. Given the appliances market is now reasonably stable, management’s focus next year will be to improve its category management of the 3C products. The company has carved out a separate team to tackle
Goldman Sachs Global Investment Research 3
November 23, 2007
Gome Electrical Appliances Holding (0493.HK)
mobile products, and the recent tie-ups with Microsoft and Dell are also part of this initiative. It is also tweaking the contract terms with other PC makers to expand the product offering range (one of the key issues in the past is its lack of complete product range). Gome believes that it is possible that these efforts could lift the GP margin of these products next year to the group average, and this alone can translate into 1ppt expansion in the GP margin. 2) Further increase the sales penetration of exclusive and proprietary products. These products earn a GP margin 30% higher than the commodity products. For 2007 these high margin products represent around 15% of total sales, and management aims to boost that to 25-30% of total sales. This could add another 40-50bps to the GP margin. 3) Enhancement in procurement scale. This should allow the company to get better terms from suppliers, and could boost GP margin by another 10-20bps. 4) Rollout of warranty services. A wildcard as the service has just been launched in 2007, but it has proved to be one of the key profit contributors to the CE retailers in US/Europe. GP margin of the insurance premium is around 40%, which means that if insurance premium can reach 1% of total revenue for Gome (insurance premium can amount to 3-4% of revenue for some global CE retailers), it can boost GP margin by 40bps. Gome’s management feels that it is not unreasonable to expect the premium to reach a quarter to half a percentage of sales in 2008, which would translate into a lift of GP margin of 0.1-0.2ppt life to the GP margin. So in a nutshell, we now have stronger conviction that GP margin can continue to expand in 2008 without eroding the company’s competitiveness or adding undue pressure to the suppliers. As shown in Exhibit 2, we have factored in just 0.8ppt expansion in the GP margin, which could prove to be conservative if all the initiatives mentioned above come through in the next year. Exhibit 2: Our '08E GP margin assumption could still be conservative
Components of GP margin drivers, 2008E
1. 2. 3. 4.
Better category management of 3C products Further penetration of exclusive/proprietary products Enhancement in scale Rollout of warranty services Total Our 2008E adjusted GP margin Pickup vs. 2007E
+0.5-1.0 +0.4-0.5 +0.1-0.2 +0.1-0.2 +1.1 - 1.9
ppt ppt ppt ppt ppt
16.3% +0.8 ppt
Source: Company data, Goldman Sachs Research estimates.
Goldman Sachs Global Investment Research
November 23, 2007
Gome Electrical Appliances Holding (0493.HK)
Same-store sales to accelerate - the end of “negative productivity loop”
Management has set a target of 3-5% same-store sales for 2008 (vs. 0.76% YTD in 2007), signifying that operating leverage and organic earnings growth will pick up next year. One of our key concerns in the past about Gome is what we called the “negative productivity loop”, whereby the company grew profit by opening stores to gain scale, allowing GP margin to expand but at the expense of deteriorating same-store sales. It is therefore encouraging to see continued growth in same store sales in 3Q (+1.1% vs. +0.59% in 1H).
Exhibit 3: We believe Gome has ended its “negative productivity loop”
Negative Productivity Loop
Lower Procurement Cost Higher Operating Leverage
What Gome achieved before
New Store Openings
Rising Sales
Lower Cost Structure
Same Store Sales
Lower Prices
Full Productivity Loop
Rising Sales
Lower Cost Structure
Lower Prices
Source: Goldman Sachs Research.
In a way, we believe it is simply a law of physics that as Gome slows down its square footage expansion to 10-15% and continues to gain market share, same-store sales growth should pick up with overall spending on CE products still growing in the mid-teens. While the 3-5% comps the company is targeting now are still a far cry from the 15-20% comps that the listed department stores are earning, we believe it represents an even better investment case to buy a company with accelerating comps, as is the case with Gome today.
Goldman Sachs Global Investment Research
November 23, 2007
Gome Electrical Appliances Holding (0493.HK)
Valuation remains reasonable C Cheapest “national champion”
We believe Gome’s valuation still remains attractive, despite improving fundamentals and the fact that it is the most dominant in its field among all Chinese retailers (with the possible exception with Belle). However, it is still trading at 19.9X 2008E P/E (Recurring & fully diluted), well below that of the average of 30.8X 2008E P/E for the Chinese retail champions (chains/brands with a true national franchise). Our new price target of HK$20.6 would put the stock at 26.6X 2008E P/E, or PEG of 1.1X (E EPS CAGR vs. 2007E P/E).
Exhibit 4: Gome valuation remains one of the cheapest among the national champions
As of November 22, 2007
Company Food retailer Wumart Stores Inc. Lianhua Supermarket Holdings Co. Ltd. Times Ltd. Beijing Jingkelong Co. Ltd. Convenience Retail Asia Ltd. Broadline retailer Parkson Retail Group New World Department Store China Ltd. Golden Eagle Retail Group Intime Department Store (Group) Co. Ltd. Peace Mark (Holdings) Ltd. Xinyu Hengdeli Holdings Ltd. Branded retailer Belle International Holdings Ltd. Li Ning Co. Ltd. Anta Sports Products Ltd. Ports Design Ltd. China Hongxing Sports Ltd. Prime Success International Group Ltd. Ticker Currency Price 11/22/ 11.54 3.99 6.29 3.30 Mkt cap (US$ mn) 1,137 923 448 333 309 Median 5,185 1,864 1,656 1,608 1,554 1,220 Median 06 42.7 30.4 32.5 24.9 29.8 30.4 89.1 66.4 54.9 46.6 41.8 48.8 51.9 66.9 84.6 151.9 55.3 43.2 31.1 61.1 66.4 64.7 120.2 P/E X 07E 29.7 25.8 31.2 20.9 21.7 25.8 59.3 44.7 33.4 33.9 30.3 28.7 33.6 39.5 54.0 43.4 38.9 28.7 23.4 39.2 39.5 28.8 62.9 08E 21.1 19.7 21.8 12.8 15.2 19.7 40.5 34.7 24.4 24.4 21.8 21.3 24.4 33.2 37.3 29.7 30.8 20.2 18.3 30.3 30.8 19.9 42.3 09E 16.1 15.7 16.0 11.3 14.3 15.7 30.9 26.2 20.2 17.3 17.3 15.6 18.7 24.2 27.7 18.3 21.9 14.6 14.7 20.1 21.9 15.9 31.4 EPS CAGR 07-09E 35.7% 28.4% 39.8% 35.7% 23.0% 35.7% 38.5% 30.5% 28.7% 39.8% 32.5% 35.7% 34.1% 27.6% 39.6% 53.9% 33.3% 40.2% 26.1% 36.4% 33.3% 34.7% 41.6% PEG X Dividend yield EV/EBITDA 07E 08E 07E NA 4.6 29.0 NA NA 16.8 33.3 26.6 20.2 23.7 20.1 18.6 22.0 35.4 35.2 42.7 31.0 20.6 15.5 33.1 31.0 21.3 39.1 NA 4.1 22.2 NA NA 13.2 23.4 19.5 15.0 14.7 14.7 13.7 14.9 24.8 25.1 26.4 23.3 14.1 12.2 24.1 23.3 14.3 26.7 1.2% 1.3% 0.8% 2.3% 3.0% 1.3% 0.9% 0.5% 1.3% 0.9% NA 1.1% 0.9% 0.7% 0.7% 0.6% 1.5% 0.9% 1.1% 0.8% 0.9% 1.2% 0.0% P/B X 06 NA 3.3 52.9 2.3 19.8 11.5 18.0 74.2 13.6 9.8 6.4 5.9 11.7 23.5 15.1 NA 14.3 14.3 9.2 14.3 14.7 9.1 28.1 ROE 06 13.4% 12.3% NM 14.8% 14.8% 14.1% 23.0% 57.9% 35.1% 34.1% 17.8% 18.4% 28.6% 56.4% 23.0% 84.5% 30.4% 38.1% 33.8% 35.9% 30.4% 24.6% 33.9%
8277 HK 980 HK 1832 HK 8245 HK 8052 HK
HKD HKD HKD HKD HKD
0.8 0.9 0.8 0.6 0.9 0.8 1.5 1.5 1.2 0.9 0.9 0.8 1.0 1.4 1.4 0.8 1.2 0.7 0.9 1.0 1.2 0.8 1.5
3368 HK 825 HK 3308 HK 1833 HK 304 HK 3389 HK
HKD HKD HKD HKD HKD HKD
72.45 8.60 7.09 6.95 11.60 3.82
1880 HK 2331 HK 2020 HK 589 HK CHHS SP 210 HK
HKD HKD HKD HKD SGD HKD
Gome Electrical Appliances Holding* Suning Appliance Co.
493 HK 002024 CH
10,156 3,145 2,810 1,794 1,357 1,164 Median National Leaders Median 15.40 6,571 60.05 11,679
9.36 23.60 8.78 25.00 0.92 5.53
National leaders include: Lianhua, Parkson, New World Department Store, Xinyu Hengdeli, Belle, Li Ning, Anta, Prime Success and Ports Design * Recurring fully diluted EPS
Source: Company data, Bloomberg, Factset, Goldman Sachs Research estimates.
Our PT is based on DCF, and the increase in our PT is based on the following factors: 1) upward earnings revision (3.3% for 2008 and 2.1% for 2009) 2) rolling forward valuation to end-2008 from end-2007 3) higher RMB appreciation assumption as per our economic team’s forecast Key assumptions and sensitivity analysis of our DCF is shown in Exhibit 5. Our earnings revisions are shown in Exhibit 6.
Goldman Sachs Global Investment Research
November 23, 2007
Gome Electrical Appliances Holding (0493.HK)
Exhibit 5: DCF
Rmb mn Sales EBIT Depreciation & amortisation Minority interest Tax Capex & acquisitions Change in net working capital Free cash flow to the firm % chg
805 52 (279) (85) (797) (62) (365)
932 118 (123) (120) (1,008) (814) (1,015)
1,965 155 (39) (295) (980) (1,474) (668)
2,663 217 (45) (426) (1,333) (342) 733
3,292 275 (52) (560) (877) (235) 1,843
3,827 325 (60) (689) (756) (206) 2,441
4,534 372 (69) (861) (710) (153) 3,112 4 5,200 420 (77) (1,040) (729) (277) 3,496 7 5,918 471 (87) (1,243) (759) (291) 4,009 9 6,676 526 (96) (1,469) (820) (304) 4,513 3 7,467 588 (107) (1,717) (892) (317) 5,022 5 8,260 656 (117) (1,982) (965) (311) 5,541 1 9,045 732 (129) (2,261) (1,040) (303) 6,044 1 9,810 815 (142) (2,453) (1,118) (292) 6,620 8 10,548 906 (156) (2,637) (1,198) (281) 7,182 9 11,253 1,005 (172) (2,813) (1,280) (269) 7,724 5 11,919 1,114 (189) (2,980) (1,365) (257) 8,243
Discount factor PV of cash flows Key assumptions Sales growth EBIT margin VALUATION Total PV of cash flows Perpetual growth rate % Terminal value PV of terminal value Total firm value End-08E Net debt / (cash) Equity value (Rmb) Equity value (HK$) Diluted shares in issue (m) Equity value per share (HK$)
0.90 1,663
0.81 1,987
0.73 2,286
0.66 2,317
0.60 2,398
0.54 2,435
0.49 2,445
0.44 2,434
0.40 2,395
0.36 2,367
0.32 2,317
0.29 2,248
0.26 2,165
42.0% 4.48%
37.7% 3.77%
69.8% 4.68%
21.5% 5.22%
20.1% 5.37%
19.1% 5.24%
18.1% 5.26%
16.0% 5.20%
15.0% 5.14%
14.1% 5.09%
13.2% 5.03%
11.9% 4.97%
10.7% 4.92%
9.6% 4.87%
8.6% 4.82%
7.7% 4.77%
6.9% 4.73%
30,189 3.5% 116,356 30,559 60,748 (5,709) 66,456 73,788 3,579 20.6
WACC CALCULATION Risk free rate Beta Equity risk premium Cost of equity Cost of debt Effective tax rate After tax cost of debt Target capital structure Debt Equity WACC
5.0% 1.15 6.0% 11.9% 8.0% 18.0% 6.6% 20.0% 80.0% 10.8%
SENSITIVITY ANALYSIS LT Growth 20.61 9.8% 2.5% 22.3 3.0% 23.1 3.5% 24.1 4.0% 25.2 4.5% 26.6
10.3% 20.8 21.4 22.2 23.1 24.2
WACC 10.8% 19.4 20.0 20.6 21.4 22.2
11.3% 18.2 18.7 19.2 19.8 20.5
11.8% 17.1 17.5 18.0 18.5 19.1
Source: Company data, Goldman Sachs Research estimates.
Exhibit 6: Earnings revision summary
Rmb mn Revenue Cost of goods sold Gross profit Other operating income Operating expenses Operating income Net interest income (expenses) Share of profit of associated company Other non-operating income/expenses Income before exceptional item Exceptional item Income before tax Provision for income tax Income before minority interest Minority interest Net income Net income excl. CB mark-to-market Net income excl. CB mark-to-market & notional interest (Recurring) EPS - Reported (Rmb) EPS - Recurring & Fully diluted (Rmb) 2007E old 2007E new 43,287 42,002 (39,163) (38,039) 4,124 2,461 (4,610) 1,975 65 0 (450) 1,590 0 1,590 (306) 1,284 (17) 1,267 1,678 1,861 3,962 2,543 (4,540) 1,965 173 0 (545) 1,593 0 1,593 (321) 1,272 (39) 1,233 1,687 1,863 Chg % -3.0% -2.9% -3.9% 3.3% -1.5% -0.5% 167.0% NM 21.1% 0.2% NM 0.2% 4.8% -0.9% 136.3% -2.7% 0.5% 0.1% 2008E old 2008E new 54,319 51,012 (48,909) (45,910) 5,410 3,019 (5,839) 2,590 84 0 0 2,674 0 2,674 (428) 2,246 (19) 2,227 2,227 2,414 5,102 3,208 (5,647) 2,663 144 0 0 2,807 0 2,807 (449) 2,358 (45) 2,312 2,312 2,492 Chg % -6.1% -6.1% -5.7% 6.3% -3.3% 2.8% 71.8% NM NM 5.0% NM 5.0% 5.0% 5.0% 136.3% 3.9% 3.9% 3.3% 2009E old 2009E new 66,381 61,279 (59,582) (54,998) 6,798 3,630 (7,202) 3,227 100 0 0 3,327 0 3,327 (566) 2,761 (22) 2,739 2,739 2,929 6,281 3,955 (6,944) 3,292 153 0 0 3,445 0 3,445 (586) 2,860 (52) 2,808 2,808 2,991 Chg % -7.7% -7.7% -7.6% 8.9% -3.6% 2.0% 53.3% NM NM 3.6% NM 3.6% 3.6% 3.6% 136.3% 2.5% 2.5% 2.1%
-2.7% 0.1%
Source: Company data, Goldman Sachs Research estimates.
A closer look at 3Q07 review: better margins offset slower topline growth
Gome reported 3Q net profit of Rmb358mn, up 66% yoy. Excluding mark-to-market P&L for the CB, net profit came in at Rmb401mn, up 113% yoy and about 5% above our forecast of Rmb382mn, helped by higher than expected margin expansion and interest income. Sales were up 63% yoy to Rmb9.2bn in 3Q07. We believe the lower than expected sales were attributed to the slowdown in store openings as well as accelerated store
Goldman Sachs Global Investment Research 7
November 23, 2007
Gome Electrical Appliances Holding (0493.HK)
restructuring implemented during the period. According to management, a sizable number of stores were opened during the Golden week (1ST Oct 07), leading to a shift of new stores to 4Q07 and have resulted to a historical low of 18 net openings in 3Q07, compared to a net increase of 36 and 31 stores in 1Q07 and 2Q07, respectively. Nevertheless, same store sales trend continued to improve as witnessed in 1H07, reaching 1.12% in 3Q07 from 0.59% in 1H07 and 0.16% in 1Q07. Sales productivity also continued to stabilize, with the pace of decline in sales per sqm improving further to -8%yoy in 3Q07 from -12%yoy in 1H07 and -30%yoy in 2006.
Exhibit 7: Same store sales continued to turn positive as witnessed in 1H07
Exhibit 8: Stabilizing sales productivity
0% -5% -10% -15% -20% -25% -30% -35% -40% 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 Sales per sqm - LHS YoY chg - RHS %
1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% -2.5% -3.0% 1Q06 1H06 9M06 FY06 1Q07
Same store sales
21,000 19,000 17,000 15,000 13,000 11,000 9,000 7,000 5,000
Source: Company data.
Source: Company data, Goldman Sachs Research estimates.
Improving competitive dynamics and changes in contracts with suppliers are driving margin expansion further, with adjusted gross margin (gross profit + other operating income / sales) up 0.8%ppt to 15.8% in 3Q07, above our estimate of 15.4%. Despite weaker sales, SG&A to sales remained flat at 10.9% of sales in 3Q07, as synergies effect from the CP acquisition continued to materialize. Cost saving was more apparent on a per sqm basis, with SG&A per sqm decreasing by 10.8%yoy in 3Q07, following a 7%yoy drop in 1H07. After taking into account the Rmb43mn FX loss in 3Q07, operating margin of 4.9% in 3Q07 was higher than our est. of 4.6%.
Goldman Sachs Global Investment Research
November 23, 2007
Gome Electrical Appliances Holding (0493.HK)
Exhibit 9: Continued margin expansion in 3Q07
18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 Operating margin Operating margin SG&A to sales Gross margin Adjusted gross margin
Adjusted gross margin
SG&A to sales
Gross margin
Source: Company data, Goldman Sachs Research estimates.
Goldman Sachs Global Investment Research
November 23, 2007
Gome Electrical Appliances Holding (0493.HK)
Exhibit 10: Quarterly income statement summary
Rmb mn Revenue Cost of goods sold Gross profit Other operating income Operating expenses Operating income Net interest income (expenses) Share of profit of associated company Other non-operating income/expenses Income before exceptional item Exceptional item Income before tax Provision for income tax Income before minority interest Minority interest Net income Net income excl. CB mark-to-market Net income excl. CB mark-to-market & notional interest (Recurring) 1Q07 10,088 (9,169) 918 422 (1,010) 330 38 0 (151) 217 0 217 (40) 176 (7) 169 321 337 2Q07 11,070 (10,046) 1,024 792 (1,212) 604 40 0 (299) 344 0 344 (111) 233 (7) 226 485 525 3Q07 9,162 (8,311) 851 596 (1,002) 444 73 0 (95) 423 0 423 (55) 368 (10) 358 401 451 4Q07E 11,682 (10,513) 1,170 733 (1,316) 587 22 0 (0) 609 0 609 (114) 495 (15) 479 479 550
YoY chg % Sales COGS Gross profit Other operating income SG&A Operating income Pretax income Income before MI Net income Margins % Gross margin Other opt income / Sales Total return margin SG&A / Sales Operating income Pretax income Income before MI Net margin - reported Net margin - recurring
Source: Company data, Goldman Sachs Research estimates.
80.0% 80.1% 79.4% 100.0% 79.1% 107.9% 25.4% 14.8% 75.0%
68.6% 69.7% 59.0% 186.6% 88.3% 118.2% -2.5% -25.6% -8.7%
63.1% 62.7% 66.5% 80.2% 58.3% 113.0% 74.0% 70.5% 65.8%
68.3% 68.2% 68.8% 69.4% 57.2% 103.5% 103.2% 90.3% 85.3%
9.1% 4.2% 13.3% 10.0% 3.3% 2.1% 1.7% 1.7% 3.3%
9.2% 7.2% 16.4% 11.0% 5.5% 3.1% 2.1% 2.0% 4.7%
9.3% 6.5% 15.8% 10.9% 4.9% 4.6% 4.0% 3.9% 4.9%
10.0% 6.3% 16.3% 11.3% 5.0% 5.2% 4.2% 4.1% 4.7%
Goldman Sachs Global Investment Research
November 23, 2007
Gome Electrical Appliances Holding (0493.HK)
I, Joshua Lu, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Investment profile
The Goldman Sachs Investment Profile provides investment context for a security by comparing key attributes of that security to its peer group and market. The four key attributes depicted are: growth, returns, multiple and volatility. Growth, returns and multiple are indexed based on composites of several methodologies to determine the stocks percentile ranking within the region's coverage universe. The precise calculation of each metric may vary depending on the fiscal year, industry and region but the standard approach is as follows:
Growth is a composite of next year's estimate over current year's estimate, e.g. EPS, EBITDA, Revenue. Return is a year one prospective aggregate of various return on capital measures, e.g. CROCI, ROACE, and ROE. Multiple is a composite of one-year forward valuation ratios, e.g. P/E, dividend yield, EV/FCF, EV/EBITDA, EV/DACF, Price/Book. Volatility is measured as trailing twelve-month volatility adjusted for dividends.
Quantum is Goldman Sachs' proprietary database providing access to detailed financial statement histories, forecasts and ratios. It can be used for in-depth analysis of a single company, or to make comparisons between companies in different sectors and markets.
Goldman Sachs Disclosures
Coverage group(s) of stocks by primary analyst(s)
Joshua Lu: Asia Pacific Consumer and Retail, Hong Kong/China Consumer. Asia Pacific Consumer and Retail: CJ CheilJedang, CJ Home Shopping, GS Home Shopping, Hana Tour Service, Hite Brewery, Hyundai Department Store, Kangwon Land, KT&G, Lotte Shopping, Modetour Network, Nong Shim, Orion, President Chain Store, Ruentex Industries, Shinsegae, Stella International Holdings, Uni-President Enterprise. Hong Kong/China Consumer: Bosideng International Holdings, Esprit Holdings, Golden Eagle Retail Group, Gome Electrical Appliances Holding, Li & Fung, Parkson Retail Group, Suning Appliance Co..
Company-specific regulatory disclosures
The following disclosures relate to relationships between The Goldman Sachs Group, Inc. (with its affiliates, &Goldman Sachs&) and companies covered by the Global Investment Research Division of Goldman Sachs and referred to in this research. Goldman Sachs has received compensation for investment banking services in the past 12 months: Gome Electrical Appliances Holding (HK$15.40) Goldman Sachs expects to receive or intends to seek compensation for investment banking services in the next 3 months: Gome Electrical Appliances Holding (HK$15.40) Goldman Sachs had an investment banking services client relationship during the past 12 months with: Gome Electrical Appliances Holding (HK$15.40) Goldman Sachs had a non-investment banking securities-related services client relationship during the past 12 months with: Gome Electrical Appliances Holding (HK$15.40) Goldman Sachs has managed or co-managed a public or Rule 144A offering in the past 12 months: Gome Electrical Appliances Holding (HK$15.40)
Distribution of ratings/investment banking relationships
Goldman Sachs Investment Research global coverage universe
Rating Distribution Investment Banking Relationships
Global 29% 59% 12% 39% 32% 29% As of Oct 1, 2007, Goldman Sachs Global Investment Research had investment ratings on 2,770 equity securities. Goldman Sachs assigns stocks as Buys and Sells on various regional Investment L stocks not so assigned are deemed Neutral. Such assignments equate to Buy, Hold and Sell for the purposes of the above disclosure required by NASD/NYSE rules. See 'Ratings, Coverage groups and views and related definitions' below.
Goldman Sachs Global Investment Research
November 23, 2007
Gome Electrical Appliances Holding (0493.HK)
Price target and rating history chart(s)
Gome Electrical Appliances Holding (0493.HK)
Goldman Sachs rating and stock price target history
18 16 14 12 10 8 6 14,000
Currency: Hong Kong Dollar
17.80 10.50 9 16.35
12,000 10,000 8,000 6,000
Stock Price
May 10 B S
N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A 06 2007 Source: Goldman Sachs Investment Research for ratin Reuters for daily closing prices as of 10/02/07.
Rating Price target Price target at removal MSCI Hong K pricing by FactSet
Covered by Joshua Lu, as of Feb 11, 2007 Not covered by current analyst New rating system as of 6/26/06
The price targets shown should be considered in the context of all prior published Goldman Sachs research, which may or may not have included price targets, as well as developments relating to the company, its industry and financial markets.
Regulatory disclosures Disclosures required by United States laws and regulations
See company-specific regulatory disclosures above for any of the following disclosures required as to companies referred to in this report: manager or co-manager in a 1% compensation
managed/comanaged public offeri market making and/or specialist role. The following are additional required disclosures: Ownership and material conflicts of interest: Goldman Sachs policy prohibits its analysts, professionals reporting to analysts and members of their households from owning securities of any company in the analyst's area of coverage. Analyst compensation: Analysts are paid in part based on the profitability of Goldman Sachs, which includes investment banking revenues. Analyst as officer or director: Goldman Sachs policy prohibits its analysts, persons reporting to analysts or members of their households from serving as an officer, director, advisory board member or employee of any company in the analyst's area of coverage. Distribution of ratings: See the distribution of ratings disclosure above. Price chart: See the price chart, with changes of ratings and price targets in prior periods, above, or, if electronic format or if with respect to multiple companies which are the subject of this report, on the Goldman Sachs website at /research/hedge.html. Goldman, Sachs & Co. is a member of SIPC.
Additional disclosures required under the laws and regulations of jurisdictions other than the United States
The following disclosures are those required by the jurisdiction indicated, except to the extent already made above pursuant to United States laws and regulations. Australia: This research, and any access to it, is intended only for &wholesale clients& within the meaning of the Australian Corporations Act. Canada: Goldman Sachs Canada Inc. has approved of, and agreed to take responsibility for, this research in Canada if and to the extent it relates to equity securities of Canadian issuers. Analysts may conduct site visits but are prohibited from accepting payment or reimbursement by the company of travel expenses for such visits. Hong Kong: Further information on the securities of covered companies referred to in this research may be obtained on request from Goldman Sachs (Asia) L.L.C. India: Further information on the subject company or companies referred to in this research may be obtained from Goldman Sachs (India) Securities Private L Japan: See below. Korea: Further information on the subject company or companies referred to in this research may be obtained from Goldman Sachs (Asia) L.L.C., Seoul Branch. Russia: Research reports distributed in the Russian Federation are not advertising as defined in Russian law, but are information and analysis not having product promotion as their main purpose and do not provide appraisal within the meaning of the Russian Law on Appraisal. Singapore: Further information on the covered companies referred to in this research may be obtained from Goldman Sachs (Singapore) Pte. (Company Number: W). United Kingdom: Persons who would be categorized as retail clients in the United Kingdom, as such term is defined in the rules of the Financial Services Authority, should read this research in conjunction with prior Goldman Sachs research on the covered companies referred to herein and should refer to the risk warnings that have been sent to them by Goldman Sachs International. A copy of these risks warnings, and a glossary of certain financial terms used in this report, are available from Goldman Sachs International on request.
European Union: Disclosure information in relation to Article 4 (1) (d) and Article 6 (2) of the European Commission Directive /EC is available at /client_services/global_investment_research/europeanpolicy.html Japan: Goldman Sachs Japan Co., Ltd. Is a Financial Instrument Dealer under the Financial Instrument and Exchange Law, registered
with the Kanto Financial Bureau (Registration No. 69), and is a member of Japan Securities Dealers Association (JSDA) and Financial Futures Association of Japan (FFJAJ). Sales and purchase of equities are subject to commission pre-determined with clients plus consumption tax. See company-specific disclosures as to any applicable disclosures required by Japanese stock exchanges, the Japanese Securities Dealers Association or the Japanese Securities Finance Company.
Ratings, coverage groups and views and related definitions
Buy (B), Neutral (N), Sell (S) -Analysts recommend stocks as Buys or Sells for inclusion on various regional Investment Lists. Being assigned a Buy
or Sell on an Investment List is determined by a stock's return potential relative to its coverage group as described below. Any stock not assigned as a Buy or a Sell on an Investment List is deemed Neutral. Each regional Investment Review Committee manages various regional Investment Lists to a global guideline of 25%-35% of stocks as Buy and 10%-15% of stocks as S however, the distribution of Buys and Sells in any particular coverage group may vary as determined by the regional Investment Review Committee. Regional Conviction Buy and Sell lists represent investment recommendations focused on either the size of the potential return or the likelihood of the realization of the return.
Return potential represents the price differential between the current share price and the price target expected during the time horizon associated with the price target. Price targets are required for all covered stocks. The return potential, price target and associated time horizon are stated in each report adding or reiterating an Investment List membership.
Goldman Sachs Global Investment Research
Index Price
November 23, 2007
Gome Electrical Appliances Holding (0493.HK)
Coverage groups and views: A list of all stocks in each coverage group is available by primary analyst, stock and coverage group at /research/hedge.html. The analyst assigns one of the following coverage views which represents the analyst's investment outlook on the coverage group relative to the group's historical fundamentals and/or valuation. Attractive (A). The investment outlook over the following 12 months is favorable relative to the coverage group's historical fundamentals and/or valuation. Neutral (N). The investment outlook over the following 12 months is neutral relative to the coverage group's historical fundamentals and/or valuation. Cautious (C). The investment outlook over the following 12 months is unfavorable relative to the coverage group's historical fundamentals and/or valuation. Not Rated (NR). The investment rating and target price, if any, have been removed pursuant to Goldman Sachs policy when Goldman Sachs is acting in an advisory capacity in a merger or strategic transaction involving this company and in certain other circumstances. Rating Suspended (RS). Goldman Sachs Research has suspended the investment rating and price target, if any, for this stock, because there is not a sufficient
fundamental basis for determining an investment rating or target. The previous investment rating and price target, if any, are no longer in effect for this stock and should not be relied upon. Coverage Suspended (CS). Goldman Sachs has suspended coverage of this company. Not Covered (NC). Goldman Sachs does not cover this company. Not Available or Not Applicable (NA). The information is not available for display or is not applicable. Not Meaningful (NM). The information is not meaningful and is therefore excluded.
Ratings, coverage views and related definitions prior to June 26, 2006
Our rating system requires that analysts rank order the stocks in their coverage groups and assign one of three investment ratings (see definitions below) within a ratings distribution guideline of no more than 25% of the stocks should be rated Outperform and no fewer than 10% rated Underperform. The analyst assigns one of three coverage views (see definitions below), which represents the analyst's investment outlook on the coverage group relative to the group's historical fundamentals and valuation. Each coverage group, listing all stocks covered in that group, is available by primary analyst, stock and coverage group at /research/hedge.html.
Definitions
Outperform (OP). We expect this stock to outperform the median total return for the analyst's coverage universe over the next 12 months. In-Line (IL). We expect this stock to perform in line with the median total return for the analyst's coverage universe over the next 12 months. Underperform (U). We expect this stock to underperform the median total return for the analyst's coverage universe over the next 12 months. Coverage views: Attractive (A). The investment outlook over the following 12 months is favorable relative to the coverage group's historical fundamentals and/or valuation. Neutral (N). The investment outlook over the following 12 months is neutral relative to the coverage group's historical fundamentals and/or valuation. Cautious (C). The investment outlook over the following 12 months is unfavorable relative to the coverage
group's historical fundamentals and/or valuation.
Current Investment List (CIL). We expect stocks on this list to provide an absolute total return of approximately 15%-20% over the next 12 months.
We only assign this designation to stocks rated Outperform. We require a 12-month price target for stocks with this designation. Each stock on the CIL will automatically come off the list after 90 days unless renewed by the covering analyst and the relevant Regional Investment Review Committee.
G distributing entities
The Global Investment Research Division of Goldman Sachs produces and distributes research products for clients of Goldman Sachs, and pursuant to certain contractual arrangements, on a global basis. Analysts based in Goldman Sachs offices around the world produce equity research on industries and companies, and research on macroeconomics, currencies, commodities and portfolio strategy. This research is disseminated in Australia by Goldman Sachs JBWere Pty Ltd (ABN 21 006 797 897) on behalf of Goldman S in Canada by Goldman Sachs Canada Inc. regarding Canadian equities and by Goldman Sachs & Co. (all other research); in Germany by Goldman Sachs & Co. oHG; in Hong Kong by Goldman Sachs (Asia) L.L.C.; in India by Goldman Sachs (India) Securities Private Ltd.; in Japan by Goldman Sachs Japan Co., Ltd.; in the Republic of Korea by Goldman Sachs (Asia) L.L.C., Seoul B in New Zealand by Goldman Sachs JBWere (NZ) Limited on behalf of Goldman S in Singapore by Goldman Sachs (Singapore) Pte. (Company Number: W); and in the United States of America by Goldman, Sachs & Co. Goldman Sachs International has approved this research in connection with its distribution in the United Kingdom and European Union.
European Union: Goldman Sachs International, authorised and regulated by the Financial Services Authority, has approved this research in connection with its distribution in the European Union and United K Goldman, Sachs & Co. oHG, regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht, may also be distributing research in Germany.
General disclosures in addition to specific disclosures required by certain jurisdictions
This research is for our clients only. Other than disclosures relating to Goldman Sachs, this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. We seek to update our research as appropriate, but various regulations may prevent us from doing so. Other than certain industry reports published on a periodic basis, the large majority of reports are published at irregular intervals as appropriate in the analyst's judgment. Goldman Sachs conducts a global full-service, integrated investment banking, investment management, and brokerage business. We have investment banking and other business relationships with a substantial percentage of the companies covered by our Global Investment Research Division. Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and our proprietary trading desks that reflect opinions that are contrary to the opinions expressed in this research. Our asset management area, our proprietary trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this research. We and our affiliates, officers, directors, and employees, excluding equity analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research. This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. The price and value of the investments referred to in this research and the income from Goldman Sachs Global Investment Research 13
November 23, 2007
Gome Electrical Appliances Holding (0493.HK)
them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors. Current options disclosure documents are available from Goldman Sachs sales representatives or at /publications/risks/riskchap1.jsp. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. Our research is disseminated primarily electronically, and, in some cases, in printed form. Electronic research is simultaneously available to all clients. Disclosure information is also available at /research/hedge.html or from Research Compliance, One New York Plaza, New York, NY 10004. Copyright 2007 The Goldman Sachs Group, Inc. No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of The Goldman Sachs Group, Inc.
Gao Hua Securities Disclosures
Company-specific regulatory disclosures
The following disclosures relate to relationships between Goldman Sachs Gao Hua Securities Company Limited (&Goldman Sachs Gao Hua&) and companies covered by the Investment Research Division of Beijing Gao Hua Securities Company Limited (&Gao Hua Securities&) and referred to in this research. There are no company-specific disclosures for: Gome Electrical Appliances Holding (HK$15.40)
General disclosures
This research is disseminated in China by Gao Hua Securities. This research is for our clients only. This research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. We seek to update our research as appropriate, but various regulations may prevent us from doing so. Other than certain industry reports published on a periodic basis, the large majority of reports are published at irregular intervals as appropriate in the analyst's judgment. Goldman Sachs Gao Hua, an affiliate of Gao Hua Securities, conducts an investment banking business. Gao Hua Securities, Goldman Sachs Gao Hua and their affiliates have investment banking and other business relationships with a substantial percentage of the companies referred to in this document. Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and our proprietary trading desks that reflect opinions that are contrary to the opinions expressed in this research. Our proprietary trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this research. Gao Hua Securities and its affiliates, officers, directors, and employees, excluding equity analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research. This research is not an offer to sell or the solicitation of an offer to buy any security where such an offer or solicitation would be illegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. The price and value of the investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. Copyright 2007 Beijing Gao Hua Securities Company Limited No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of Beijing Gao Hua Securities Company Limited.
Goldman Sachs Global Investment Research