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New entry level models driving faster than expected PSA market share gain:The strong

reception of entry level models such as compact sedan Peugeot 301 and Citroen Elysee and

sub-compact SUV Peugeot 2008 has driven DPCAs better than expected 24% YoY volume

growth in 1H14. We believe the above models, together with Peugeot 408 and 308 (compact

sedan) and Citroen C3-XR (compact SUV) to be launched in 2H14/2015, will drive volume

growth in 2H14/2015. We lift our DPCA sales volume forecast to 703k units (+28% YoY),

slightly higher than the companys revised target of 700k units.

Improving competitiveness of Nissans SUV portfolio, but sedan products face rising

competition:The better than expected reception of the X-trail has driven earnings revisions

for Dongfeng in 1H14. The new Qashqai, with a similar look to the successful new X-trail,

should be another boost to Nissan SUV sales in 2015. However, we believe Nissans sedan

products are in a weaker product cycle compared with its competitors and face rising

competition. Recent comments from Nissan CFO Joseph Peter on high inventory levels in

China (c2.7 months as at 1H14) lead us to expect greater pressure on sales volumes in 3Q14.

Upward earnings revisions to pause in 2H14: We raise our earnings by 9%/17% for 2014-

15e. 2014 consensus earnings have been lifted by 10% over the past three months, which we

believe mostly factors in the strong X-trail sales and DPCAs stronger than expected sales.

Since Nissan intends to reduce inventory at the dealer level in 3Q14 and the new model launchof DF Nissan/Honda will be concentrated on the year-end, we think upward earnings revisions

will pause in 2H14. We downgrade our rating to Neutral as we believe inventory

rationalisation by DF Nissan could drive lower volume growth and add pressure to the share

price in 3Q14, which could provide a better entry point to the stock.

Downgrade to N; raise target to HKD15.4 from HKD13.6: Our ROE-based target price is

based on 8.7x 2014e PE. While the market has become more positive on the sales performance

of DPCA and Nissan X-trail, we see pressure on Nissans sedan products. We expect 1H14

earnings to grow 9% YoY to RMB6,021m. We have not included the potential accounting

gain from the PSA investment in our forecast. Catalysts include monthly sales volumes and

interim results in late August.

Dongfeng Motor (489 HK)

Downgrade to N: Entering the pit lane

New entry level models driving PSA market share gain

High inventory level at Nissan could result in lower volume

growth in 3Q14

Downgrade to N from OW, but raise target price to HKD15.4

from HKD13.6, based on 8.7x PE (vs 8.2x previously)

Mid Cap

Autos

Equity China

Company report

Index^ HSCEIIndex level 11,119RIC 0489.HKBloomberg 489 HK

Source: HSBC

Neutral

Target price (HKD) 15.40Share price (HKD) 13.94Forecast dividend yield (%) 1.9

Potential return (%) 12.4

Note: Potential return equals the percentagedifference between the current share price andhe target price, plus the forecast dividend yield

Dec 2013 a 2014 e 2015 e

HSBC EPS 1.02 1.41 1.66HSBC PE 10.8 7.9 6.7

Performance 1M 3M 12M

Absolute (%) 0.4 34.8 31.0Relative^ (%) -6.7 18.6 13.9

Note: (V) = volatile (please see disclosure appendix)

Enterprise value (CNYm) 26711Free float (%) 33Market cap (USDm) 15,559Market cap (HKDm) 120,580

Source: HSBC

1 August 2014

Carson Ng*

Analyst

The Hongkong and Shanghai Banking

Corporation Limited

+852 2996 6625

[email protected]

View HSBC Global Research at:http://www.research.hsbc.com

*Employed by a non-US affiliate ofHSBC Securities (USA) Inc, and is notregistered/qualified pursuant to FINRAregulations

Issuer of report: The Hongkong andShanghai BankingCorporation Limited

Disclaimer &DisclosuresThis report must be readwith the disclosures andthe analyst certifications inthe Disclosure appendix,and with the Disclaimer,which forms part of it
http://www.research.hsbc.com/https://www.research.hsbc.com/R/25/m9pUXlhXtx/377650.PDFhttp://www.research.hsbc.com/

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New compact models driving DPCA market share gain

DPCA sales volumes increased 24% YoY to 343k units in 1H14. The strong sales growth was driven by

new compact models, including: 1) the launch of the new generation compact sedan Citroen Elysee in

October 2013 (+72% YoY); 2) the ramp-up of compact SUV Peugeot 3008 (+37% YoY); 3) the release

of the new compact sedan Peugeot 301 in November 2013; and 4) the release of the small SUV Peugeot

2008 in April 2014.

We believe the new model line-up in 2H14 should be an additional growth driver for DPCA. New models

include the new generation of Peugeot 408 and 308 compact sedans to be released in August 2014 and late

2014, respectively, and the new compact SUV Citroen C3-XR to be launched in late 2014/ early 2015.

DPCAs market share increased from 3.2% in 1H13 to 3.6% in 1H14. We expect DPCAs sales volume

to continue to grow at 32% YoY in 2H14 and total sales in FY14 to be 703k (+28% YoY) compared with

the company's target of 700k units.

Sales volume ramp-up of Peugeot 301 Sales volume ramp-up of Citroen Elysee

Source: Company data, CAAM, HSBC Source: Company data, CAAM, HSBC

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Sep-13 Nov-13 Jan-14 Mar-14 May-14

Units

Peugeot 301

0

2,000

4,000

6,000

8,000

10,000

12,000

Jan-12 May-12Sep-12 Jan-13 May-13Sep-13 Jan-14May-14

Units

Citron Elyse

Entering the pit

New entry level models driving PSA market share gain

High inventory level at Nissan could result in lower volume growth

in 2H14; we expect upward earnings revisions to pause in 2H14

Downgrade to Neutral from OW, but raise target price to HKD15.4

from HKD13.6 based on 8.7x PE (vs 8.2x previously)

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Sales volume ramp-up of Peugeot 2008 Rising sales volume of Peugeot 3008


Sales volume growth of DPCA

Source: Company data, CAAM, HSBC

Not an outright positive on DF Nissan

Dongfeng Nissans sales volumes increased 21% YoY to 477k units in 1H14, driven by: 1) strong sales of

the new X-trail launched in March 2014 (+512% YoY); 2) the ramp-up of Sylphy (+29% YoY); and

3) the low base of Teana in 1H13 as there was almost no production of this model in 1Q13 (+34% YoY).

At Nissans 1QFY14 results announcement on 28 July 2014, CFO Joseph Peter said that Nissans

inventory levels in China as of June 14 were definitely higher than where we would like them to be. He

said that Nissan inventories were 880k units globally, excluding China, and would increase to about 1.06-

1.07m with China included. This suggests that Nissans inventories in China (dealer+OEM level) were

around 180-190k units at June 2014, representing 2.6-2.7 months of average sales in 1H14.

Mr Peter said the company had already started to take action to bring inventories down and said the

company did not want to get into a situation where it had to compete on price to achieve this, but would

manage this in a structured way. He also said that July sales volumes would reflect the aim of cutting

inventory levels in China.

0

1,000

2,000

3,000

4,000

5,000

6,000

Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14

Units

Peugeot 2008

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-1

Units

Peugeot 3008

-50%

-25%

0%

25%

50%

75%

100%

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14

DPCA YoY growth %

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In terms of models, X-trail had low inventory, while Teana LWB and Sylphy were at the high end of the

appropriate range.

Weekly delivery data showed that, during the period 1-18 July, Dongfeng Nissan declined 34% YoY and

48% MoM after adjusting for working days. We believe the JV has started clearing the inventory at the

dealer level and we may see pressure on sales volumes in 3Q14.

We lift our sales volume forecast for Dongfeng Nissan in FY14 by 2% to 1.07m (+16% YoY), slightly

lower than the companys sales target of 1.08m, and expect growth in 2H14 to slow to 13% YoY.

Sales volume ramp-up of Nissan X-Trail Sales volume ramp-up of Nissan Sylphy


Sales volume growth of Dongfeng Nissan


0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Jan-12May-12Sep-12 Jan-13May-13Sep-13 Jan-14May-14

Units

Nissan X-Trail

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Jan-12May-12Sep-12 Jan-13 May-13Sep-13 Jan-14 May-14

Units

Nissan SlyphyNissan Sylphy

-50%

-25%

0%

25%

50%

75%

100%

0

20,000

40,000

60,000

80,000

100,000

120,000


Dongfeng Nissan YoY grow th %

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Brand new models to drive DF Honda growth in 2015eDongfeng Honda sales volumes increased 23% YoY to 172k units in 1H14, driven by the launch of

Honda Jade in September 2013 and the solid performance of Honda CR-V (+11% YoY).

We expect the new product launches to support the growth of Dongfeng Honda in 2015. New products

include: 1) the sub-compact SUV model expected in December 2014; 2) the new generation of mid-size

sedan Spirior to be launched in December 2014; and 3) a sub-compact sedan model expected in 2015.

Sales volume ramp-up of Honda CR-V Sales volume ramp-up of Honda Jade


Sales volume growth of Dongfeng Honda


0

5,000

10,000

15,000

20,000

25,000

Jan-12 May-12Sep-12 Jan-13 May-13Sep-13 Jan-14 May-14

Units

Honda CR-V

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Aug-13 Dec-13 Apr-14

Units

Honda Jade

-50%

-25%

0%

25%

50%

75%

100%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000


Dongfeng Honda YoY growth %

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Sales volume and YoY growth of Dongfengs major entities


Discount level of DF Honda, DF Nissan and DPCA

Source: CPCA, HSBC

395,338

276,896

139,388

88,198

41,564

476,803

343,170

171,859

118,398

40,377

20.6%

23.9% 23.3%

34.2%

-2.9%

0

100,000

200,000

300,000

400,000

500,000

600,000

Dongfeng Nissan DPCA Dongfeng Honda Dongfeng Liuzhou Dongfeng PV

1H13 1H14 Yoy growth

-18%

-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14

Dongfeng Honda Dongfeng Nissan DPCA

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Key entities product portfolio (upcoming models highlighted in red)

DF Nissan DF Honda DF Peugeot DF Citroen

Sub-compact March, N/3Q10 TBC, N/2015 207 Hatchback, N/1Q09 C2, N/4Q06Venucia R30, N/3Q14 207 sedan, N/4Q08

Compact Livina, S/2Q13 Civic, S/4Q11 307 Hatchback, N/4Q04 Elysee, S/3Q13Sylphy, S/2Q12 Ciimo, N/2Q12 307 sedan, N/3Q07 C4L, N/4Q12Tiida, S/2Q11 308, N/4Q11 C-Quatre, S/1Q12Sunny, S/1Q11 301, N/4Q13

Venucia D50, N/2Q12 408, N/1Q10 Venucia R50, N/3Q12 308, S/late 2014 Venucia R50X, N/3Q13 408, S/Aug-14Mid-size Teana, S/1Q13 Spirior, N/4Q09 508, N/3Q11 C5, N/2012 Infiniti Q50L, N /Nov-14 Spirior, S/late14 508, F/1Q15Sub-compact SUV Concept V, N/late 14 2008, N/Apr-14Compact SUV Qashqai, N/1Q08 CR-V, S/1Q12 3008, N/1Q13 C3-XR, N/late 2014

Venucia SUV, N/2015Qashqai, S/1Q15

Mid-size SUV X Trail, S/Mar-14Murano, N/3Q11Murano, S/2015Infiniti QX50L, N/2015

MPV Elysion, N/2Q12 Jade, N/3Q13

Source: Company data, HSBC

Note: N-brand new model, S-successor model, F-mid-cycle facelift

Sales volume revision

Sales volume revision of PV

_____________________ Revised______________________ ____ Old / Revision % ____2013 2014e 2015e 2016e 2014e 2015e

Dongfeng Nissan 926,229 1,074,763 1,194,532 1,258,374 1,049,139 1,147,844YoY% 16.0% 11.1% 5.3% 2.4% 4.1%

Dongfeng Honda 321,409 366,026 423,894 445,428 359,770 410,686YoY% 13.9% 15.8% 5.1% 1.7% 3.2%

DPCA 550,007 702,841 826,690 853,260 620,402 665,880YoY% 27.8% 17.6% 3.2% 13.3% 24.1%

Dongfeng PV 80,077 84,571 168,698 168,698 87,153 108,868YoY% 5.6% 99.5% 0.0% -3.0% 55.0%

Dongfeng Liuzhou 180,189 238,242 252,849 252,849 186,388 199,453YoY% 32.2% 6.1% 0.0% 27.8% 26.8%

Zhengzhou Nissan 55,291 59,884 62,222 64,497 60,540 61,583YoY% 8.3% 3.9% 3.7% -1.1% 1.0%

Total passenger vehicles 2,113,202 2,526,326 2,928,886 3,043,106 2,363,392 2,594,314

YoY% 19.5% 15.9% 3.9% 6.9% 12.9%

Source: Company data, HSBC

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Weakness in domestic peers driving change in valuationForward PE chart of OEMs

Source: Bloomberg, Company data, HSBC Research

Dongfeng valuation as measured by forward PE used to be in line with the market capitalisation

weighted average of the auto sector from 2010 to 3Q12.

As both Geely (175 HK, N, HKD3.08) and Great Wall Motors (2333 HK, N(V), HKD32.20)

experienced strong volume growth post 3Q12, both stocks saw a re-rating from the trough of 4.3-5.2x

forward PE in 2011 to the peak of 12.8-13.2x forward PE in 2013. Dongfeng then traded at a discount

to the market-capital weighted average.

As Great Wall and Geely are facing company-specific issues with structural challenges from both the

SOEs domestic brands and lower end models of JVs, both of the stocks started to de-rate to the

current level of 8x.

In 4Q13, the valuation discount of Dongfeng was as much as 37% to the industry average. We believe

Dongfengs valuation discount to the industry average will narrow again in the coming six months.

Our valuation target implies 7.7x rolling forward PE, versus the current industry average of 8.5x.

Potential gain on PSA investment

Dongfeng invested EUR800m in the PSA reserved capital increase and rights issue in 1H14. The

transaction was completed on 23 May 2014.

The consideration paid by Dongfeng is below its share of net assets of PSA following the transaction.

Depending on the final fair value adjustment for the acquisition, we believe Dongfeng could book a

one-off accounting gain on negative goodwill of RMB6,010m, as illustrated in the table below.

We have not included the potential accounting gain from PSA investment in our forecasts.

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14

Brilliance Dongfeng GAC Geely Great Wall Mkt cap weight PE

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Potential gain on negative goodwill from PSA investment

No. of shares acquired Price per share (EUR) Total consideration (EURm)

PSA Reserved Capital Increase 69,866,666 7.5 524PSA Rights Issues 40,755,555 6.77 276

110,622,221 7.23 800

Consideration in HKD m 8,575Consideration in RMB m 6,860

Potential gain on negative goodwill UnitsPSA net asset @ 31 Dec 2013 EUR m 7,791Equity increase from Reserved Capital Increase EUR m 1,048Total net asset EUR m 8,83914.1% shareholding EUR m 1,246

Consideration EUR m 524

Potential gain on negative goodwill EUR m 722Potential gain on negative goodwill RMB m 6,010

Source: Company data, HSBC estimates

Note: Assumptions based on spot rate of RMB8.32/EUR

Earnings revisions

Earnings revisions in equity accounting

________ Equity accounting Revised _________ Proportionate consolidation Old

RMBm 2014e 2015e 2016e 2014e 2015e

Revenue 63,523 71,822 74,044 194,194 213,124Cost of sales (54,571) (61,886) (63,694) (158,257) (173,947)Gross Profit 8,952 9,935 10,350 35,937 39,177Gross Profit margin % 14.1% 13.8% 14.0% 18.5% 18.4%

Other income/other gains and losses 559 599 618 1,822 1,822Selling and distribution expenses (3,839) (4,144) (4,186) (10,412) (11,413)

Administrative expenses (3,688) (3,981) (4,021) (6,104) (6,690)Other expenses (2,131) (2,410) (2,484) (5,960) (6,560)EBIT (147) (1) 276 15,284 16,336EBIT Margin % -0.2% 0.0% 0.4% 7.9% 7.7%

Interest income 543 835 1,063 833 820

Finance costs (368) (501) (501) (276) (276)

Share of profit of JVs 12,238 13,481 14,079 - -Share of profit of associates 60 930 1,080 513 1,287

Profit before tax 12,327 14,744 15,998 16,353 18,166Income tax (120) (132) (145) (3,960) (4,220)Net profit after tax 12,207 14,612 15,852 12,393 13,946

Attributable toOwner of company 12,118 14,319 15,598 11,154 12,273Non-controlling interests 89 292 255 1,239 1,674

Revision in earnings attributable toshareholders

8.6% 16.7%

Source: Company data, HSBC estimates

We adopt equity accounting to align with Dongfengs disclosure format as from 2013.

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Valuation and risksAs the auto industry is cyclical and it is difficult to predict cash flows through cycles, we do not think

DCF is the best metric by which to value auto makers. We use the following formula to derive our fair

valuation of the company:

Target PE = (ROE g) (ROE [COE-g])

ROE 2014e 16.5%

Cost of equity 12.1%Rf 3.5%Equity risk premium 6.5%Equity beta 1.33g 2.0%

Source: HSBC estimates

We raise our 2014 ROE forecast to 16.5% from 15.8% previously. We raised our long-term growth

assumption from 1.5% to 2.0% to factor in the higher potential growth driven by the strong

performance of DPCA. We cut beta from 1.4 to 1.33 and our COE assumption decreases from 12.5%

to 12.1%.

As a result, our ROE-based target PE increases to 8.7x from previously 8.2x.

Based on our adjusted 2014e diluted EPS of RMB1.41 (previously RMB1.29), we derive a fair valuation

of HKD15.4 (previously HKD13.6 with embedded RMB/HKD exchange rate spot rate of 1.26).

Under our research model, for stocks without a volatility indicator, the Neutral band is 5ppts above and

below the hurdle rate of 9.5% for China stocks. Our target price implies a potential return of 12%

(including the forecast dividend yield), within the Neutral band; therefore, we downgrade our rating to

Neutral from Overweight. Potential return equals the percentage difference between the current share

price and the target price, including the forecast dividend yield when indicated.

Key upside risks

Better than expected sales volume growth of DF Nissan:We expect DF Nissan to see lower YoY

growth in 3Q14 driven by the de-stocking exercise. If inventory at the dealership level is cleared more

rapidly than expected, DF Nissan sales volume growth could be stronger than we forecast.

Higher than expected operating leverage: All major JVs have seen decent volume growth YTD;

operating leverage from the increasing volume, utilisation and procurement levels could provide upside

risks to our forecasts.

Key downside risks

CV business:Following the re-structuring of the CV business, earnings disclosure was distorted by the

change in percentage of ownership. Given the industry growth in the commercial vehicle market is still

under pressure, there is a risk that CV business profitability is lower than expected.

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Dongfeng forward PE band chart

Source: Thomson Reuters Datastream, Company data, HSBC estimates

4

6

8

10

12

14

16

18

20

Jan/10

Apr/10

Jul/10

Oct/10

Jan/11

Apr/11

Jul/11

Oct/11

Jan/12

Apr/12

Jul/12

Oct/12

Jan/13

Apr/13

Jul/13

Oct/13

Jan/14

Apr/14

Jul/14

11.4x 9.8x

8.2x

6.6x

5.1x

Price (HKD)

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Disclosure appendix

Analyst Certification

The following analyst(s), economist(s), and/or strategist(s) who is(are) primarily responsible for this report, certifies(y) that the

opinion(s) on the subject security(ies) or issuer(s) and/or any other views or forecasts expressed herein accurately reflect their

personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific

recommendation(s) or views contained in this research report: Carson Ng.

Important disclosuresEquities: Stock ratings and basis for financial analysis

HSBC believes that investors utilise various disciplines and investment horizons when making investment decisions, which

depend largely on individual circumstances such as the investor's existing holdings, risk tolerance and other considerations.

Given these differences, HSBC has two principal aims in its equity research: 1) to identify long-term investment opportunities

based on particular themes or ideas that may affect the future earnings or cash flows of companies on a 12 month time horizon;

and 2) from time to time to identify short-term investment opportunities that are derived from fundamental, quantitative,

technical or event-driven techniques on a 0-3 month time horizon and which may differ from our long-term investment rating.

HSBC has assigned ratings for its long-term investment opportunities as described below.

This report addresses only the long-term investment opportunities of the companies referred to in the report. As and when

HSBC publishes a short-term trading idea the stocks to which these relate are identified on the website at

www.hsbcnet.com/research. Details of these short-term investment opportunities can be found under the Reports section of thiswebsite.

HSBC believes an investor's decision to buy or sell a stock should depend on individual circumstances such as the investor's

existing holdings and other considerations. Different securities firms use a variety of ratings terms as well as different rating

systems to describe their recommendations. Investors should carefully read the definitions of the ratings used in each research

report. In addition, because research reports contain more complete information concerning the analysts' views, investors

should carefully read the entire research report and should not infer its contents from the rating. In any case, ratings should not

be used or relied on in isolation as investment advice.

Rating definitions for long-term investment opportunities

Stock ratings

HSBC assigns ratings to its stocks in this sector on the following basis:

For each stock we set a required rate of return calculated from the cost of equity for that stocks domestic or, as appropriate,

regional market established by our strategy team. The price target for a stock represents the value the analyst expects the stock

to reach over our performance horizon. The performance horizon is 12 months. For a stock to be classified as Overweight, the

potential return, which equals the percentage difference between the current share price and the target price, including the

forecast dividend yield when indicated, must exceed the required return by at least 5 percentage points over the next 12 months

(or 10 percentage points for a stock classified as Volatile*). For a stock to be classified as Underweight, the stock must be

expected to underperform its required return by at least 5 percentage points over the next 12 months (or 10 percentage points

for a stock classified as Volatile*). Stocks between these bands are classified as Neutral.

Our ratings are re-calibrated against these bands at the time of any 'material change' (initiation of coverage, change of volatility

status or change in price target). Notwithstanding this, and although ratings are subject to ongoing management review,

expected returns will be permitted to move outside the bands as a result of normal share price fluctuations without necessarilytriggering a rating change.

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*A stock will be classified as volatile if its historical volatility has exceeded 40%, if the stock has been listed for less than 12months (unless it is in an industry or sector where volatility is low) or if the analyst expects significant volatility. However,

stocks which we do not consider volatile may in fact also behave in such a way. Historical volatility is defined as the past

month's average of the daily 365-day moving average volatilities. In order to avoid misleadingly frequent changes in rating,

however, volatility has to move 2.5 percentage points past the 40% benchmark in either direction for a stock's status to change.

Rating distribution for long-term investment opportunities

As of 31 July 2014, the distribution of all ratings published is as follows:

Overweight (Buy) 44% (32% of these provided with Investment Banking Services)

Neutral (Hold) 37% (31% of these provided with Investment Banking Services)

Underweight (Sell) 19% (27% of these provided with Investment Banking Services)

Share price and rating changes for long-term investment opportunities

Dongfeng Motor (0489.HK) Share Price performance HKD Vs HSBC rating

history

Recommendation & price target history

From To Date

N/A Underweight (V) 17 February 2013Underweight (V) Neutral 21 August 2013Neutral Overweight 03 March 2014

Target Price Value Date

Price 1 11.10 17 February 2013Price 2 11.40 04 June 2013Price 3 13.60 03 March 2014

Source: HSBC

Source: HSBC

HSBC & Analyst disclosures

Disclosure checklist

Company Ticker Recent price Price Date Disclosure

DONGFENG MOTOR 0489.HK 13.88 31-Jul-2014 4, 5, 6, 7, 11

Source: HSBC

1 HSBC has managed or co-managed a public offering of securities for this company within the past 12 months.2 HSBC expects to receive or intends to seek compensation for investment banking services from this company in the next

3 months.3 At the time of publication of this report, HSBC Securities (USA) Inc. is a Market Maker in securities issued by this

company.4 As of 30 June 2014 HSBC beneficially owned 1% or more of a class of common equity securities of this company.

5 As of 30 June 2014, this company was a client of HSBC or had during the preceding 12 month period been a client ofand/or paid compensation to HSBC in respect of investment banking services.

6 As of 30 June 2014, this company was a client of HSBC or had during the preceding 12 month period been a client ofand/or paid compensation to HSBC in respect of non-investment banking securities-related services.

7 As of 30 June 2014, this company was a client of HSBC or had during the preceding 12 month period been a client ofand/or paid compensation to HSBC in respect of non-securities services.

8 A covering analyst/s has received compensation from this company in the past 12 months.9 A covering analyst/s or a member of his/her household has a financial interest in the securities of this company, as

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Disclaimer* Legal entities as at 30 May 2014UAE HSBC Bank Middle East Limited, Dubai; HK The Hongkong and Shanghai Banking Corporation

Limited, Hong Kong; TW HSBC Securities (Taiwan) Corporation Limited; 'CA' HSBC Bank Canada,

Toronto; HSBC Bank, Paris Branch; HSBC France; DE HSBC Trinkaus & Burkhardt AG, Dsseldorf; 000HSBC Bank (RR), Moscow; IN HSBC Securities and Capital Markets (India) Private Limited, Mumbai;

JP HSBC Securities (Japan) Limited, Tokyo; EG HSBC Securities Egypt SAE, Cairo; CN HSBC

Investment Bank Asia Limited, Beijing Representative Office; The Hongkong and Shanghai Banking

Corporation Limited, Singapore Branch; The Hongkong and Shanghai Banking Corporation Limited, SeoulSecurities Branch; The Hongkong and Shanghai Banking Corporation Limited, Seoul Branch; HSBC

Securities (South Africa) (Pty) Ltd, Johannesburg; HSBC Bank plc, London, Madrid, Milan, Stockholm, Tel

Aviv; US HSBC Securities (USA) Inc, New York; HSBC Yatirim Menkul Degerler AS, Istanbul; HSBCMxico, SA, Institucin de Banca Mltiple, Grupo Financiero HSBC; HSBC Bank Brasil SA Banco

Mltiplo; HSBC Bank Australia Limited; HSBC Bank Argentina SA; HSBC Saudi Arabia Limited; The

Hongkong and Shanghai Banking Corporation Limited, New Zealand Branch incorporated in Hong KongSAR; The Hongkong and Shanghai Banking Corporation Limited, Bangkok Branch

Issuer of report

The Hongkong and Shanghai Banking

Corporation Limited

Level 19, 1 Queens Road Central

Hong Kong SAR

Telephone: +852 2843 9111

Telex: 75100 CAPEL HX

Fax: +852 2596 0200Website: www.research.hsbc.com

This document has been issued by The Hongkong and Shanghai Banking Corporation Limited (HSBC) in the conduct of its Hong Kong regulated businessfor the information of its institutional and professional investor (as defined by Securities and Future Ordinance (Chapter 571)) customers; it is not intended for

and should not be distributed to retail customers in Hong Kong. The Hongkong and Shanghai Banking Corporation Limited is regulated by the Hong Kong

Monetary Authority. All enquires by recipients in Hong Kong must be directed to your HSBC contact in Hong Kong. If it is received by a customer of anaffiliate of HSBC, its provision to the recipient is subject to the terms of business in place between the recipient and such affiliate. This document is not and

should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. HSBC has based this document on

information obtained from sources it believes to e reliable but which it has not independently verified; HSBC makes no guarantee, representation or warranty

and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the Research Division of HSBC only and are

subject to change without notice. HSBC and its affiliates and/or their officers, directors and employees may have positions in any securities mentioned in thisdocument (or in any related investment) and may from time to time add to or dispose of any such securities (or investment). HSBC and its affiliates may act as

market maker or have assumed an underwriting commitment in the securities of companies discussed in this document (or in related investments), may sellthem to or buy them from customers on a principal basis and may also perform or seek to perform investment banking or underwriting services for or relating to

those companies.

HSBC Securities (USA) Inc. accepts responsibility for the content of this research report prepared by its non-US foreign affiliate. All U.S. persons receivingand/or accessing this report and wishing to effect transactions in any security discussed herein should do so with HSBC Securities (USA) Inc. in the United

States and not with its non-US foreign affiliate, the issuer of this report.

In the UK this report may only be distributed to persons of a kind described in Article 19(5) of the Financial Services and Markets Act 2000 (Financial

Promotion) Order 2005. The protections afforded by the UK regulatory regime are available only to those dealing with a representative of HSBC Bank plc in

the UK. In Singapore, this publication is distributed by The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch for the generalinformation of institutional investors or other persons specified in Sections 274 and 304 of the Securities and Futures Act (Chapter 289) (SFA) and accredited

investors and other persons in accordance with the conditions specified in Sections 275 and 305 of the SFA. This publication is not a prospectus as defined in

the SFA. It may not be further distributed in whole or in part for any purpose. The Hongkong and Shanghai Banking Corporation Limited Singapore Branch isregulated by the Monetary Authority of Singapore. Recipients in Singapore should contact a "Hongkong and Shanghai Banking Corporation Limited, Singapore

Branch" representative in respect of any matters arising from, or in connection with this report. In Australia, this publication has been distributed by The

Hongkong and Shanghai Banking Corporation Limited (ABN 65 117 925 970, AFSL 301737) for the general information of its wholesale customers (asdefined in the Corporations Act 2001). Where distributed to retail customers, this research is distributed by HSBC Bank Australia Limited (AFSL No. 232595).

These respective entities make no representations that the products or services mentioned in this document are available to persons in Australia or arenecessarily suitable for any particular person or appropriate in accordance with local law. No consideration has been given to the particular investmentobjectives, financial situation or particular needs of any recipient. This publication is distributed in New Zealand by The Hongkong and Shanghai Banking

Corporation Limited, New Zealand Branch incorporated in Hong Kong SAR.

In Japan, this publication has been distributed by HSBC Securities (Japan) Limited. It may not be further distributed in whole or in part for any purpose. In

Korea, this publication is distributed by The Hongkong and Shanghai Banking Corporation Limited, Seoul Securities Branch ("HBAP SLS") for the generalinformation of professional investors specified in Article 9 of the Financial Investment Services and Capital Markets Act (FSCMA). This publication is not a

prospectus as defined in the FSCMA. It may not be further distributed in whole or in part for any purpose. HBAP SLS is regulated by the Financial Services

Commission and the Financial Supervisory Service of Korea.In Canada, this document has been distributed by HSBC Bank Canada and/or its affiliates. Where this document contains market updates/overviews, or similar

materials (collectively deemed Commentary in Canada although other affiliate jurisdictions may term Commentary as either macro-research or

research), the Commentary is not an offer to sell, or a solicitation of an offer to sell or subscribe for, any financial product or instrument (including, withoutlimitation, any currencies, securities, commodities or other financial instruments).

Copyright 2014, The Hongkong and Shanghai Banking Corporation Limited, ALL RIGHTS RESERVED. No part of this publication may e reproduced,

stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior

written permission of The Hongkong and Shanghai Banking Corporation Limited. MICA (P) 157/06/2014, MICA (P) 171/04/2014 and MICA (P) 077/01/2014

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IndustrialsColin GibsonGlobal Sector Head, Industrials+44 20 7991 6592 [email protected]

Sean McLoughlinAnalyst+44 20 7991 3464 [email protected]

Michael HagmannAnalyst+44 20 7991 2405 [email protected]

Mark WebbAnalyst+852 2996 6574 [email protected]

Parash JainAnalyst+852 2996 6717 [email protected]

Shishir SinghAnalyst+852 2822 4292 [email protected]

Walden ShingAnalyst+852 2996 6751 [email protected]

Stephen WanAnalyst+852 2996 6566 [email protected]

Thomas Zhu, CFAAnalyst+852 2822 4325 [email protected]

Carrie LiuAnalyst+ 8862 6631 2864 [email protected]

Brian ChoHead of Research, Korea+822 3706 8750 [email protected]

Paul ChoiAnalyst+822 3706 8758 [email protected]

Yeon Lee

Analyst+822 3706 8778 [email protected]

Jena HanAnalyst+822 3706 8772 [email protected]

Sinyoung ParkAnalyst+822 3706 8770 [email protected]

Incheol YuAssociate+822 3706 8756 [email protected]

Thilan WickramasingheAnalyst+65 6658 0609 [email protected]

Kristy LeeAnalyst

+65 6658 0616 [email protected] Gulati

Analyst+91 22 2268 1235 [email protected]

Joerg-Andre FinkeAnalyst+ 49 211 910 3722 [email protected]

Richard SchrammAnalyst+ 49 211 910 2837 [email protected]

Juergen SiebrechtAnalyst+ 49 211 910 3350 [email protected]

AutosNiels Fehre

Analyst

+49 211 910 3426 [email protected] Schneider


Carson NgAnalyst+852 2822 4397 carsonksng@hsbc com hk

Yogesh AggarwalAnalyst+91 22 2268 1246 [email protected]

TransportationAndrew Lobbenberg


Joe ThomasAnalyst+44 20 7992 3618 [email protected]

Wei SimAnalyst+852 2996 6602 [email protected]

Shishir Singh+852 2822 4292 [email protected]

Achal KumarAnalyst+91 80 3001 3722 [email protected]

Rajani KhetanAnalyst+852 3941 0830 [email protected]

Jingyuan ZhaiAssociate

+852 3941 7009 [email protected] Hui

Associate+852 2822 3165 [email protected]

Construction & EngineeringNeel SinhaHead of Equity Research, South East Asia+65 6658 0606 [email protected]

Pierre BossetHead of French Research+33 1 56 52 43 10 [email protected]

Tarun BhatnagarAnalyst+65 6658 0614 [email protected]

John Fraser-AndrewsAnalyst+44 20 7991 6732 [email protected]

Jeffrey DavisAnalyst+44 207 991 6837 [email protected]

Ivan Enriquez+52 55 5721 2397 [email protected]

Claudia NavarreteAnalyst+52 55 5721 2422 [email protected]

Anderson ChowAnalyst+852 2996 6669 [email protected]

Lesley LiuAnalyst+852 2822 4524 [email protected]

Raj SinhaAnalyst

+ 971 4423 6932 [email protected]

Levent BayarAnalyst+90 212 376 46 17 [email protected]

Ashutosh NarkarAnalyst+91 22 2268 1474 [email protected]

Tobias LoskampAnalyst+49 211 910 2828 [email protected]

Specialist Sales

Rod Turnbull+44 20 7991 5363 [email protected]

Oliver Magis+49 21 1910 4402 [email protected]

Billal Ismail+44 20 7991 5362 [email protected]

Global Industrials Research Team
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]

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