Asia Pacific Equity Research

25 August 2010

China Minzhong Food

Overweight
Corporation Limited CMFC.SI, MINZ SP
Price: S$1.27
FY10 results: higher ASP drives revenue growth
▲ Price Target: S$1.60
Previous: S$1.45

• Earnings ahead of expectations: Excluding fair value losses of Rmb15 Singapore

million, core net profit of Rmb383 million (+37% Y/Y) was 13%/5% ahead Food & Food Manufacture
of JPM/consensus estimates. GP margin remained steady at 40.4%. Cash AC
Ying-Jian Chan
conversion cycle improved from 75 days in FY09 to 61 days in FY10 (65) 6882-2378
largely attributed to shortening of inventory turnover days. Champignon ying.jian.yj.chan@jpmorgan.com
mushrooms, capsicums and German chives remain the top 3 products J.P. Morgan Securities Singapore Private
contributing 34%/12%/9% of group sales. The strong result was driven by Limited
both strong volume and higher ASP. Yield per mu continued its uptrend, Jasmine Bai
which we estimate increased by 48% to c.Rmb17,618 due to continual shift (852) 2800-8559
in product mix to higher value product e.g. king oyster mushroom. jasmine.d.bai@jpmorgan.com

• Processed vegetables – higher ASP but weaker margin: Processed J.P. Morgan Securities (Asia Pacific) Limited

vegetables revenue/GP was +33%/+17.4% Y/Y on the back of 35.4%

Price Performance
increase in ASP. However, sales volume declined 2% due to changes in
product mix which saw lower fresh-packed vegetables volume. Higher 1.35

volumes of brined products led to GP margin declining from 37.3% to S$ 1.20

32.9%. Processed vegetables account for 68%/55% of FY10 revenue/GP.
1.05
• Fresh vegetables – Stronger volume and margins: Fresh vegetables Aug-09 Nov-09 Feb-10 May-10 Aug-10
revenue/GP was +37.7%/+67.5% Y/Y driven by 24.8% volume increase CMFC.SI share price (S$)
and 10.4% increase in ASP. GP margin improved from 46.1% to 56%. FTSTI (rebased)

Fresh vegetables account for 32%/45% of FY10 revenue/GP. Its plantations YTD 1m 3m 12m
were unaffected during the recent floods in China due to their locations, Abs 5.8% -2.3% 12.4% 5.8%
which allowed Minzhong to partly benefit from the higher vegetable spot Rel 4.9% -0.8% 5.1% -6.1%
prices for it non-contracted production volume (~20% of total production).
• Planting to accelerate in FY11E: Total planted area was only 1,850mu
higher than FY09 due to deliberate slowdown during the downturn.
Management maintains its planting target of 90,000mu over the next 3 years.
• Raised PT and earnings estimates: We believe Minzhong will be able to
continue delivering ASP and volume growth with its organic/GAP certified
produce favored by its export customers as well as domestic consumers who
place great importance on food safety. We raise our FY11E/FY12E earnings
estimate by 13%/12% and raise Jun-11 PT to S$1.60.
China Minzhong Food Corporation Limited (Reuters: CMFC.SI, Bloomberg: MINZ SP)
Rmb in , year-end Jun FY08A FY09A FY10A FY11E FY12E
Revenue (Rmb mn) 634 1,058 1,423 1,846 2,397 52-week Range (S$) 1.35 - 1.09
Net Profit (Rmb mn) 217.4 288.1 367.5 483.0 634.2 Mkt Cap (S$ mn) 697.33
EPS (Rmb) 0.40 0.52 0.67 0.88 1.16 Mkt Cap ($ bn) 0.50
EPS (Recurring) (Rmb) 0.33 0.51 0.70 0.88 1.16 Price (S$) 1.27
DPS (Rmb) 0.00 0.00 0.00 0.00 0.00 Date Of Price 24 Aug 10
Revenue growth (%) 42.4% 66.9% 34.5% 29.7% 29.9% Free float (%) 56.4%
EPS growth (%) 82.9% 32.5% 27.6% 31.4% 31.3% 3-mth trading volume (mn) 1.07
EPS (Recurring) Growth 101.9% 53.9% 37.1% 26.2% 31.3% 3-mth trading value (S$ mn) 1.30
ROE 36.8% 33.8% 22.4% 19.1% 20.5% 3-mth trading value ($ mn) 0.19
P/E (x) 16.0 12.1 9.5 7.2 5.5 FTSTI 2,923
P/BV (x) 4.9 3.5 1.5 1.3 1.0 Exchange Rate 1.36
Dividend Yield 0.0% 0.0% 0.0% 0.0% 0.0% Fiscal Year End Jun
Source: Company data, Bloomberg, J.P. Morgan estimates.

See page 5 for analyst certification and important disclosures, including non-US analyst disclosures.
J.P. Morgan 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.
Ying-Jian Chan Asia Pacific Equity Research
(65) 6882-2378 25 August 2010
ying.jian.yj.chan@jpmorgan.com

Company Description P&L sensitivity metrics EBITDA EPS

impact (%) impact (%)
China Minzhong is an integrated vegetable Processed vegetables volume growth assumption FY11E: 10%
processor in China. Its operations are Impact of each 5 ppt increase 2.2 2.4
strategically located across various Processed vegetables GP margin assumption FY11E: 32%
provinces. As part of its integrated Impact of each 1 ppt increase 2.0 2.1
operations, it possesses cultivation Fresh produce volume growth assumption FY11E: 30%
capabilities which allow the company to Impact of each 5 ppt increase 1.7 1.8
manage the supply of fresh vegetables and Fresh produce GP margin assumption FY11E: 50%
supply raw material for the processing Impact of each 1 ppt increase 1.0 1.1
operation. Source: J.P. Morgan estimates.

Price target and valuation analysis

Our PT of S$1.60 is based on 10% discount to our DCF-derived fair value using a
Revenue breakdown WACC of 12.7% and long-term growth rate of 2%. 10% discount accounts for the
lower trading liquidity and the potential valuation discount accorded to Singapore-
listed China companies.

Risk free rate: 4.0%

Market risk premium: 8.0%
Beta: 1.2
Cost of debt: 6.0%
Terminal “g”: 2.0%
WACC: 13%

Our Jun-2011 PT implies 9x/7x FY11E/FY12E P/E. Key downside risks to our price
Source: Company reports targets include: (1) upward pressure on land costs in China; (2) decline in vegetable
Net income: J.P. Morgan vs consensus prices; (3) negative impact on export sales if any food safety issue is reported in
RMB MM J. P. Morgan Consensus China; while we see upside risks from stronger food inflation trend in China.
FY11E 483 494
FY12E 634 695
FY13E 834 853
Source: J.P. Morgan estimates, Bloomberg.

Peer valuation comparable

Last Market P/E (x) P/B (x) EPS Growth Div Yield ROE
Company Ticker Price (LC) Cap (US$ mil) 2010E 2011E 2010E 2011E 2010E 2011E 2010E 2011E 2010E
Chaoda Modern Agriculture 682 HK 6.71 2,753 4.5 4.0 1.0 0.8 -5.1% 11.3% 1.8 2.3 20.6
China Green (Holdings) Ltd 904 HK 8.65 984 11.4 9.1 2.4 2.0 18.1% 25.8% 2.4 3.0 20.2
China Foods 506 HK 5.55 1,993 26.2 20.6 2.8 2.5 3.9% 27.4% 1.3 1.7 9.5
China Agri-Industries 606 HK 9.97 5,179 14.3 11.8 2.4 2.1 35.2% 21.0% 1.8 2.2 15.5
China Huiyun Juice 1886 HK 5.66 1,069 28.1 22.8 1.5 1.5 -334.7% 23.3% 0.8 1.1 5.3
China Mengniu Dairy 2319 HK 21.95 4,905 23.4 18.8 3.9 3.7 20.1% 24.9% 0.9 1.2 16.2
China Yurun Food 1068 HK 26.95 6,114 21.6 18.3 5.4 4.2 14.4% 18.2% 1.3 1.6 22.5
Uni-President China 220 HK 4.42 2,046 21.4 17.2 2.2 2.3 -8.2% 24.4% 2.3 2.7 9.5
Tingyi 322 HK 19.16 13,769 31.6 25.9 9.4 8.1 13.0% 21.8% 1.6 1.9 26.8
Want Want China 151 HK 6.03 10,247 26.7 21.0 10.4 9.3 20.8% 27.6% 2.6 3.4 36.9
China Minzhong Food MINZ SP 1.26 500 8.1 6.2 2.1 1.4 30.2% 31.3% 0.0 0.0 16.7
Average 18.9 15.3 4.2 3.6 14% 23% 1.6 2.0 19.4
Source: J.P. Morgan estimates, Bloomberg.Priced as at 24 August 2010.

2
 Ying-Jian Chan Asia Pacific Equity Research
(65) 6882-2378 25 August 2010
ying.jian.yj.chan@jpmorgan.com

Table 1: China Minzhong key financial and operational data

Rmb in millions (unless otherwise stated)
FY10 FY09 Y/Y
Revenue 1,422.6 1,057.8 34.5%
- Processed 962.5 723.9 33.0%
- Fresh 460.0 334.0 37.7%
% Revenue 100% 100%
- Processed 68% 68% -0.8ppt
- Fresh 32% 32% 0.8ppt
Gross profit 574.3 423.6 35.6%
- Processed 316.6 269.8 17.4%
- Fresh 257.7 153.8 67.5%
% Gross profit 100% 100%
- Processed 55% 64% -8.6ppt
- Fresh 45% 36% 8.6ppt
Net profit (reported) 367.5 288.1 27.6%
Net profit (core) 382.7 279.1 37.1%
Total planted area (mu) 52,131 53,981 -3.4%
- Vegetables 26,111 27,961 -6.6%
- Bamboo 26,020 26,020 0.0%
Volume (tonnes) 227,065 201,492 12.7%
- Processed 89,965 91,679 -1.9%
- Fresh 137,100 109,813 24.8%
% Volume 100% 100%
- Processed 40% 46% -5.9ppt
- Fresh 60% 55% 5.9ppt
Yield per mu (Rmb) 17,618 11,944 47.5%
Source: Company data.

Table 2: Update on use of IPO proceeds

Management guided that capex
of FY11E will be c.Rmb700 Item Proposed (S$MM) Utilized (S$MM)
million (c.S$140 million). Capex Increase of production and processing capacity 56.9 11.0
Increase cultivation capacity by acquiring or leasing new farmlands and 51.5 14.3
amount not fulfilled by remaining for the related land improvement costs
IPO proceeds will be funded by General working capital 27.1 27.1
internally generated cash and Total 135.5 52.4
bank borrowings. Net IPO proceeds raised 135.5
Remaining 82.8
Source: Company reports.

3
Ying-Jian Chan Asia Pacific Equity Research
(65) 6882-2378 25 August 2010
ying.jian.yj.chan@jpmorgan.com

China Minzhong Food Corporation Limited: Summary of Financials

Income Statement Cash flow statement
Rmb in millions, year end Jun FY09 FY10 FY11E FY12E FY13E Rmb in millions, year end Jun FY09 FY10 FY11E FY12E FY13E

Revenues 1,058 1,423 1,846 2,397 3,118 Profit before tax 344 433 569 747 982
% change Y/Y 66.9% 34.5% 29.7% 29.9% 30.1% Depreciation & amortization 20 28 43 85 115
Gross Margin 40.0% 40.4% 38.1% 38.4% 38.8% Change in working capital -139 117 -156 -104 -136
EBITDA 386 486 615 836 1,102 Other non-cash items 56 88 2 2 2
% change Y/Y 63.8% 26.1% 26.6% 35.9% 31.8% Cash flow from operations 214 611 370 616 814
EBITDA Margin 36.5% 34.2% 33.4% 34.9% 35.3% Capex -124 -15 -700 -500 -300
EBIT 365 458 573 751 987 Disposal/(purchase) 0 0 0 0 0
% change Y/Y 65.4% 25.4% 25.0% 31.2% 31.4% Cash flow from investing -186 -189 -700 -500 -300
EBIT Margin 34.5% 32.2% 31.0% 31.3% 31.7% Equity raised/(repaid) 0 716 0 0 0
Net Interest -19 -24 -2 -2 -2 Debt raised/(repaid) 79 -153 0 0 0
Earnings before tax 344 433 569 747 982 Other -5 -19 0 0 0
% change Y/Y 52.2% 25.9% 31.4% 31.3% 31.5% Dividends paid 0 0 0 0 0
Tax -56 -65 -86 -112 -148 Cash flow from financing 74 545 0 0 0
as % of EBT 16.2% 15.1% 15.1% 15.1% 15.1% Net change in cash 102 967 -330 116 514
Minority Interest 0 0 0 0 0 Beginning cash 106 209 1,170 840 956
Net income (reported) 288 368 483 634 834 Ending cash 209 1,175 840 956 1,469
% change Y/Y 32.5% 27.6% 31.4% 31.3% 31.5%
Shares outstanding 549 549 549 549 549 Free cash flow 90 596 -330 116 514
EPS (reported) 0.52 0.67 0.88 1.16 1.52 DPS 0.00 0.00 0.00 0.00 0.00

Balance sheet Ratio Analysis

Rmb in millions, year end Jun FY09 FY10 FY11E FY12E FY13E Rmb in millions, year end Jun FY09 FY10 FY11E FY12E FY13E

Cash 209 1,170 840 956 1,469 EBITDA margin 36.5% 34.2% 33.4% 34.9% 35.3%
Accounts receivable 205 176 308 400 520 EBIT margin 34.5% 32.2% 31.0% 31.3% 31.7%
Inventories 29 23 50 65 84 Net profit margin 27.2% 25.8% 26.2% 26.5% 26.7%
Others 177 235 235 235 235 SG&A/Sales -6.4% -7.1% -7.1% -7.1% -7.1%
Current assets 619 1,604 1,433 1,655 2,308
LT investments 0 0 0 0 0 Sales growth 66.9% 34.5% 29.7% 29.9% 30.1%
Net fixed assets 353 366 1,023 1,438 1,623 EBIT growth 65.4% 25.4% 25.0% 31.2% 31.4%
Total Assets 1,424 2,384 2,870 3,508 4,346 Net profit growth 32.5% 27.6% 31.4% 31.3% 31.5%
EPS growth 32.5% 27.6% 31.4% 31.3% 31.5%
Short-term loans 368 10 10 10 10
Payables 6 8 11 14 18 Interest coverage (x) 20.16 20.31 306.43 416.33 548.71
Others 238 62 62 62 62 Net debt to equity 16.6% -50.5% -29.7% -27.6% -34.3%
Total current liabilities 407 80 83 86 90
Long-term debt 6 6 6 6 6 Sales/assets 0.85 0.75 0.70 0.75 0.79
Other liabilities 11 11 11 11 11 Assets/equity 1.42 1.04 1.04 1.03 1.03
Total Liabilities 424 98 100 103 108 ROCE 30.9% 24.9% 22.5% 24.2% 25.7%
Shareholders' equity 999 2,287 2,770 3,404 4,238 ROE 33.8% 22.4% 19.1% 20.5% 21.8%
Total Liabilities & equity 1,424 2,384 2,870 3,508 4,346
BVPS 1.82 4.16 5.04 6.20 7.72
Source: Company reports and J.P. Morgan estimates.

4
Ying-Jian Chan Asia Pacific Equity Research
(65) 6882-2378 25 August 2010
ying.jian.yj.chan@jpmorgan.com

Analyst Certification:
The research analyst(s) denoted by an “AC” on the cover of this report certifies (or, where multiple research analysts are primarily
responsible for this report, the research analyst denoted by an “AC” on the cover or within the document individually certifies, with
respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views expressed in this report
accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part of any of the research
analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the
research analyst(s) in this report.
Important Disclosures

• Lead or Co-manager: JPMSI or its affiliates acted as lead or co-manager in a public offering of equity and/or debt securities for
China Minzhong Food Corporation Limited within the past 12 months.
• Client of the Firm: China Minzhong Food Corporation Limited is or was in the past 12 months a client of JPMSI; during the past 12
months, JPMSI provided to the company investment banking services.
• Investment Banking (past 12 months): JPMSI or its affiliates received in the past 12 months compensation for investment banking
services from China Minzhong Food Corporation Limited.
• Investment Banking (next 3 months): JPMSI or its affiliates expect to receive, or intend to seek, compensation for investment
banking services in the next three months from China Minzhong Food Corporation Limited.

China Minzhong Food Corporation Limited (CMFC.SI) Price Chart

2
Date Rating Share Price Price Target
(S$) (S$)
26-May-10 OW 1.13 1.45
1.5
OW S$1.45

Price(S$) 1

0.5

0
Apr Apr May Jun Jul Aug
10 10 10 10 10 10

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.
Initiated coverage May 26, 2010. This chart shows J.P. Morgan's continuing coverage of this stock; the current analyst
may or may not have covered it over the entire period.
J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.

Explanation of Equity Research Ratings and Analyst(s) Coverage Universe:

J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the
average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Neutral [Over the next six to twelve
months, we expect this stock will perform in line with the average total return of the stocks in the analyst’s (or the analyst’s team’s)
coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of
the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] J.P. Morgan Cazenove’s UK Small/Mid-Cap dedicated research
analysts use the same rating categories; however, each stock’s expected total return is compared to the expected total return of the FTSE
All Share Index, not to those analysts’ coverage universe. A list of these analysts is available on request. The analyst or analyst’s team’s
coverage universe is the sector and/or country shown on the cover of each publication. See below for the specific stocks in the certifying
analyst(s) coverage universe.

Coverage Universe: Ying-Jian Chan: China Minzhong Food Corporation Limited (CMFC.SI), ComfortDelgro
(CMDG.SI), First Resources Limited (FRLD.SI), Golden Agri-Resources Ltd (GAGR.SI), Hyflux Limited (HYFL.SI),
Indofood Agri Resources Ltd (IFAR.SI), SMRT (SMRT.SI), ST Engineering (STEG.SI), SingPost (SPOS.SI), Wilmar
International Limited (WLIL.SI)

5
Ying-Jian Chan Asia Pacific Equity Research
(65) 6882-2378 25 August 2010
ying.jian.yj.chan@jpmorgan.com

J.P. Morgan Equity Research Ratings Distribution, as of June 30, 2010

Overweight Neutral Underweight
(buy) (hold) (sell)
JPM Global Equity Research Coverage 46% 42% 12%
IB clients* 49% 46% 31%
JPMSI Equity Research Coverage 44% 48% 9%
IB clients* 68% 61% 53%
*Percentage of investment banking clients in each rating category.
For purposes only of NASD/NYSE ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold
rating category; and our Underweight rating falls into a sell rating category.

Valuation and Risks: Please see the most recent company-specific research report for an analysis of valuation methodology and risks on
any securities recommended herein. Research is available at http://www.morganmarkets.com , or you can contact the analyst named on
the front of this note or your J.P. Morgan representative.

Analysts’ Compensation: The equity research analysts responsible for the preparation of this report receive compensation based upon
various factors, including the quality and accuracy of research, client feedback, competitive factors, and overall firm revenues, which
include revenues from, among other business units, Institutional Equities and Investment Banking.

Registration of non-US Analysts: Unless otherwise noted, the non-US analysts listed on the front of this report are employees of non-US
affiliates of JPMSI, are not registered/qualified as research analysts under NASD/NYSE rules, may not be associated persons of JPMSI,
and may not be subject to NASD Rule 2711 and NYSE Rule 472 restrictions on communications with covered companies, public
appearances, and trading securities held by a research analyst account.

Other Disclosures

J.P. Morgan is the global brand name for J.P. Morgan Securities Inc. (JPMSI) and its non-US affiliates worldwide. J.P. Morgan Cazenove is a
brand name for equity research produced by J.P. Morgan Securities Ltd.; J.P. Morgan Equities Limited; JPMorgan Chase Bank, N.A., Dubai
Branch; and J.P. Morgan Bank International LLC.
Options related research: If the information contained herein regards options related research, such information is available only to persons who
have received the proper option risk disclosure documents. For a copy of the Option Clearing Corporation’s Characteristics and Risks of
Standardized Options, please contact your J.P. Morgan Representative or visit the OCC’s website at
http://www.optionsclearing.com/publications/risks/riskstoc.pdf.
Legal Entities Disclosures
U.S.: JPMSI is a member of NYSE, FINRA and SIPC. J.P. Morgan Futures Inc. is a member of the NFA. JPMorgan Chase Bank, N.A. is a
member of FDIC and is authorized and regulated in the UK by the Financial Services Authority. U.K.: J.P. Morgan Securities Ltd. (JPMSL) is a
member of the London Stock Exchange and is authorised and regulated by the Financial Services Authority. Registered in England & Wales No.
2711006. Registered Office 125 London Wall, London EC2Y 5AJ. South Africa: J.P. Morgan Equities Limited is a member of the Johannesburg
Securities Exchange and is regulated by the FSB. Hong Kong: J.P. Morgan Securities (Asia Pacific) Limited (CE number AAJ321) is regulated
by the Hong Kong Monetary Authority and the Securities and Futures Commission in Hong Kong. Korea: J.P. Morgan Securities (Far East) Ltd,
Seoul Branch, is regulated by the Korea Financial Supervisory Service. Australia: J.P. Morgan Australia Limited (ABN 52 002 888 011/AFS
Licence No: 238188) is regulated by ASIC and J.P. Morgan Securities Australia Limited (ABN 61 003 245 234/AFS Licence No: 238066) is a
Market Participant with the ASX and regulated by ASIC. Taiwan: J.P.Morgan Securities (Taiwan) Limited is a participant of the Taiwan Stock
Exchange (company-type) and regulated by the Taiwan Securities and Futures Bureau. India: J.P. Morgan India Private Limited is a member of
the National Stock Exchange of India Limited and Bombay Stock Exchange Limited and is regulated by the Securities and Exchange Board of
India. Thailand: JPMorgan Securities (Thailand) Limited is a member of the Stock Exchange of Thailand and is regulated by the Ministry of
Finance and the Securities and Exchange Commission. Indonesia: PT J.P. Morgan Securities Indonesia is a member of the Indonesia Stock
Exchange and is regulated by the BAPEPAM LK. Philippines: J.P. Morgan Securities Philippines Inc. is a member of the Philippine Stock
Exchange and is regulated by the Securities and Exchange Commission. Brazil: Banco J.P. Morgan S.A. is regulated by the Comissao de Valores
Mobiliarios (CVM) and by the Central Bank of Brazil. Mexico: J.P. Morgan Casa de Bolsa, S.A. de C.V., J.P. Morgan Grupo Financiero is a
member of the Mexican Stock Exchange and authorized to act as a broker dealer by the National Banking and Securities Exchange Commission.
Singapore: This material is issued and distributed in Singapore by J.P. Morgan Securities Singapore Private Limited (JPMSS) [MICA (P)
020/01/2010 and Co. Reg. No.: 199405335R] which is a member of the Singapore Exchange Securities Trading Limited and is regulated by the
Monetary Authority of Singapore (MAS) and/or JPMorgan Chase Bank, N.A., Singapore branch (JPMCB Singapore) which is regulated by the
MAS. Malaysia: This material is issued and distributed in Malaysia by JPMorgan Securities (Malaysia) Sdn Bhd (18146-X) which is a
Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets Services License issued by the Securities Commission in
Malaysia. Pakistan: J. P. Morgan Pakistan Broking (Pvt.) Ltd is a member of the Karachi Stock Exchange and regulated by the Securities and
Exchange Commission of Pakistan. Saudi Arabia: J.P. Morgan Saudi Arabia Ltd. is authorised by the Capital Market Authority of the Kingdom
of Saudi Arabia (CMA) to carry out dealing as an agent, arranging, advising and custody, with respect to securities business under licence number

6
Ying-Jian Chan Asia Pacific Equity Research
(65) 6882-2378 25 August 2010
ying.jian.yj.chan@jpmorgan.com

35-07079 and its registered address is at 8th Floor, Al-Faisaliyah Tower, King Fahad Road, P.O. Box 51907, Riyadh 11553, Kingdom of Saudi
Arabia. Dubai: JPMorgan Chase Bank, N.A., Dubai Branch is regulated by the Dubai Financial Services Authority (DFSA) and its registered
address is Dubai International Financial Centre - Building 3, Level 7, PO Box 506551, Dubai, UAE.
Country and Region Specific Disclosures
U.K. and European Economic Area (EEA): Unless specified to the contrary, issued and approved for distribution in the U.K. and the EEA by
JPMSL. Investment research issued by JPMSL has been prepared in accordance with JPMSL's policies for managing conflicts of interest arising
as a result of publication and distribution of investment research. Many European regulators require that a firm to establish, implement and
maintain such a policy. This report has been issued in the U.K. only to persons of a kind described in Article 19 (5), 38, 47 and 49 of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (all such persons being referred to as "relevant persons"). This document must
not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is only
available to relevant persons and will be engaged in only with relevant persons. In other EEA countries, the report has been issued to persons
regarded as professional investors (or equivalent) in their home jurisdiction. Australia: This material is issued and distributed by JPMSAL in
Australia to “wholesale clients” only. JPMSAL does not issue or distribute this material to “retail clients.” The recipient of this material must not
distribute it to any third party or outside Australia without the prior written consent of JPMSAL. For the purposes of this paragraph the terms
“wholesale client” and “retail client” have the meanings given to them in section 761G of the Corporations Act 2001. Germany: This material is
distributed in Germany by J.P. Morgan Securities Ltd., Frankfurt Branch and J.P.Morgan Chase Bank, N.A., Frankfurt Branch which are
regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht. Hong Kong: The 1% ownership disclosure as of the previous month end
satisfies the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities
and Futures Commission. (For research published within the first ten days of the month, the disclosure may be based on the month end data from
two months’ prior.) J.P. Morgan Broking (Hong Kong) Limited is the liquidity provider for derivative warrants issued by J.P. Morgan Structured
Products B.V. and listed on the Stock Exchange of Hong Kong Limited. An updated list can be found on HKEx website:
http://www.hkex.com.hk/prod/dw/Lp.htm. Japan: There is a risk that a loss may occur due to a change in the price of the shares in the case of
share trading, and that a loss may occur due to the exchange rate in the case of foreign share trading. In the case of share trading, JPMorgan
Securities Japan Co., Ltd., will be receiving a brokerage fee and consumption tax (shouhizei) calculated by multiplying the executed price by the
commission rate which was individually agreed between JPMorgan Securities Japan Co., Ltd., and the customer in advance. Financial Instruments
Firms: JPMorgan Securities Japan Co., Ltd., Kanto Local Finance Bureau (kinsho) No. 82 Participating Association / Japan Securities Dealers
Association, The Financial Futures Association of Japan. Korea: This report may have been edited or contributed to from time to time by
affiliates of J.P. Morgan Securities (Far East) Ltd, Seoul Branch. Singapore: JPMSS and/or its affiliates may have a holding in any of the
securities discussed in this report; for securities where the holding is 1% or greater, the specific holding is disclosed in the Important Disclosures
section above. India: For private circulation only, not for sale. Pakistan: For private circulation only, not for sale. New Zealand: This
material is issued and distributed by JPMSAL in New Zealand only to persons whose principal business is the investment of money or who, in the
course of and for the purposes of their business, habitually invest money. JPMSAL does not issue or distribute this material to members of "the
public" as determined in accordance with section 3 of the Securities Act 1978. The recipient of this material must not distribute it to any third
party or outside New Zealand without the prior written consent of JPMSAL. Canada: The information contained herein is not, and under no
circumstances is to be construed as, a prospectus, an advertisement, a public offering, an offer to sell securities described herein, or solicitation of
an offer to buy securities described herein, in Canada or any province or territory thereof. Any offer or sale of the securities described herein in
Canada will be made only under an exemption from the requirements to file a prospectus with the relevant Canadian securities regulators and only
by a dealer properly registered under applicable securities laws or, alternatively, pursuant to an exemption from the dealer registration requirement
in the relevant province or territory of Canada in which such offer or sale is made. The information contained herein is under no circumstances to
be construed as investment advice in any province or territory of Canada and is not tailored to the needs of the recipient. To the extent that the
information contained herein references securities of an issuer incorporated, formed or created under the laws of Canada or a province or territory
of Canada, any trades in such securities must be conducted through a dealer registered in Canada. No securities commission or similar regulatory
authority in Canada has reviewed or in any way passed judgment upon these materials, the information contained herein or the merits of the
securities described herein, and any representation to the contrary is an offence. Dubai: This report has been issued to persons regarded as
professional clients as defined under the DFSA rules.
General: Additional information is available upon request. Information has been obtained from sources believed to be reliable but JPMorgan
Chase & Co. or its affiliates and/or subsidiaries (collectively J.P. Morgan) do not warrant its completeness or accuracy except with respect to any
disclosures relative to JPMSI and/or its affiliates and the analyst’s involvement with the issuer that is the subject of the research. All pricing is as
of the close of market for the securities discussed, unless otherwise stated. Opinions and estimates constitute our judgment as of the date of this
material and are subject to change without notice. Past performance is not indicative of future results. This material is not intended as an offer or
solicitation for the purchase or sale of any financial instrument. The opinions and recommendations herein do not take into account individual
client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments or strategies to
particular clients. The recipient of this report must make its own independent decisions regarding any securities or financial instruments
mentioned herein. JPMSI distributes in the U.S. research published by non-U.S. affiliates and accepts responsibility for its contents. Periodic
updates may be provided on companies/industries based on company specific developments or announcements, market conditions or any other
publicly available information. Clients should contact analysts and execute transactions through a J.P. Morgan subsidiary or affiliate in their home
jurisdiction unless governing law permits otherwise.
“Other Disclosures” last revised March 1, 2010.

Copyright 2010 JPMorgan Chase & Co. All rights reserved. This report or any portion hereof may not be reprinted, sold or
redistributed without the written consent of J.P. Morgan.

7
Ying-Jian Chan Asia Pacific Equity Research
(65) 6882-2378 25 August 2010
ying.jian.yj.chan@jpmorgan.com