Longer Term Investments

HealthTech - update
Chief Investment Office GWM | 09 November 2020 5:43 pm GMT
Lachlan Towart, Analyst, lachlan.towart@ubs.com; Sundeep Gantori, CFA, CAIA, Analyst, sundeep.gantori@ubs.com; Eric Potoker, Healthcare Analyst
Americas

• The HealthTech theme identifies a number of related

technologies and markets linked by the aim of making
healthcare more efficient. At its core are developments in
data analysis and connectivity.
• The COVID-19 pandemic has accelerated change in the
healthcare system, exemplified by the telemedicine boom.
These changes are here to stay, but are likely not the whole
story.
• The long-term demographic and budgetary trends driving
the need for HealthTech remain in place. Meanwhile,
technology developments enable its adoption.
Source: Getty Images
• We recommend a diversified portfolio approach to investing
in HealthTech. Long-term investors could consider direct
investments through private equity to capture an illiquidity
premium. Introduction to the Longer
Term Investments (LTI) series
Our view - a big year for HealthTech - The Longer Term Invest ment s (LTI) series
The COVID-19 pandemic has accelerated the digitization of contains thematic investment ideas based on
healthcare. The pace of change in 2020 has been faster than long term structural developments.
we imagined, with telemedicine booming and growing interest
in wearable devices and digital health tracking. These changes - Secular trends such as population growth,
are here to stay, but are likely just the start. Over time, we see ageing, and increased urbanization create a
patients increasingly becoming "health consumers", taking more variety of longer term investment opportunities.
responsibility for their own health, while technology allows more
- These investment opportunities are influenced by
care to take place outside the hospital setting. the interplay of technological advancement,
The long-term need for a more efficient, data-driven healthcare resource scarcity, and the societal changes.
system remains, as healthcare demand will continue to grow
- Investors willing to invest over multiple business
with the aging population, pressuring government and commercial cycles can benefit from potential mispricings
payers' budgets. The rapid growth of processing power and better created by the typically shorter term focus of
communications technology act as enablers of the HealthTech stock markets.
theme.
In China, AI-driven telemedicine companies are providing primary
care capacity, helping to modernize the country's healthcare
system. Government policy is supportive, and we expect China's
telemedicine market to exceed that of the US by 2023.
Current markets linked to the theme exceed USD 100bn, we
estimate, and newer opportunities have potentially large, albeit
still uncertain, addressable markets. The theme's growth rate could
reach the upper single digits or even higher over the next decade.
Given the diversity of the theme and the uncertain size of its end-
markets at present, we advise against trying to pick winners at this
stage, preferring a diversified approach to investing in the theme.

This report has been prepared by UBS AG London Branch and UBS AG Singapore Branch and UBS Financial Services Inc. (UBS FS). Please see important disclaimers, disclosures
and names of competent authorities that begin on page 8.
Longer Term Investments

COVID-19 has accelerated the digitalization of healthcare Fig. 1: Healthcare is one of the least digitized
At the start of 2020, the healthcare industry was a clear laggard industries
in adoption of digitalization (Fig. 1). The pace of change this year Level of
digit alisat ion Media
ICT

has been faster than we imagined. Necessity saw the regulatory and
reimbursement barriers to wider US telemedicine adoption tumble Finance & Insurance

in the early stages of the pandemic. Patients and doctors responded Healthcare
Oil & Gas
Retail

favorably, and we think that telemedicine is here to stay. But the Food & Beverages
Automotive / Discrete
Mining & Metals
explosion of telemedicine is only the most visible manifestation of Utilities
a trend that was in place before the pandemic:the adoption of Agriculture
Buildings Chemicals

wearables and digital health tracking is also increasing, and these Marine
Rail & Road Logistics
Industrial end markets
Other industries Time
devices' medical capabilities are expanding. As technology opens
Source: Based on ABB, slightly adjusted by UBS. As of May 2017. Note:
up new ways to manage health, we see more of healthcare moving ICT = Information and Communications Technology
outside of the traditional hospital setting. Technological changes
will also drive a change in how patients, increasing acting as "health
consumers", interact with healthcare systems, placing a greater
focus on preventive care, and patients will take more behavioral
and financial responsibility for their own health. These themes are
explored in more detail in our report Future of Humans - Changing
Lifestyles, Rising Opportunities, published 16 September 2020.
Long-term drivers remain unchanged
The long-term need for a more efficient, data-driven healthcare
system is driven by demographics and budget constraints. Global
healthcare spend is already 10% of GDP, or USD 7.8 trillion in 2017,
according to the WHO. The over-65 population, which accounts
for two-thirds of healthcare spending, will grow 60% to 1 billion
by 2030, while urbanization in the emerging world increases the
prevalence of "lifestyle diseases" like obesity and diabetes. And
healthcare systems are wasteful, with between USD 760 billion to
USD 935 billion wasted on unnecessary or low-value care in the US
alone, according to a 2019 study.* These facts alone point to the
need for change. The rapid growth of processing power and better
communications technology act as enablers of the HealthTech
theme. Telemedicine requires highly reliable and high-quality video,
and the low latency of 5G will permit remote or robot-assisted surg- * Source: Shrank et al, "Waste in the US
eries. Healthcare data, currently accounting for around 5% of all Healthcare System", JAMA 2019
data generated globally, could grow tenfold to 23 zettabytes by
2030, we estimate.
The HealthTech industry is maturing
HealthTech continues to develop as an industry trend and as an
investable theme. More new and innovative healthcare IT com-
panies have joined the public markets since our last update, and
the level of innovation among private companies remains high.
Startups are using technology to disrupt both the managed care
market and primary care provision in the US, putting more emphasis
on preventive care and shifting treatment to cheaper locations.
Big software and consumer technology companies continue to
explore the healthcare market. The merger of Teladoc and Livongo,
leading players in the US telemedicine and digital disease man-
agement markets, respectively, illustrates how telemedicine com-
panies can move beyond low-acuity acute care to tackle chronic
disease treatment.

UBS CIO GWM 9 November 2020 2

Longer Term Investments

China's healthcare modernization depends on internet For further reading:

healthcare • "Future of Humans - Changing Lifestyles,
China has invested in coverage expansion and an impressive mod- Rising Opportunities," - 16 September
ernization of its healthcare system over the past decade, but still 2020
lacks an effective, national primary care system. As a result, AI- • "Longer Term Investments – HealthTech,"
driven telemedicine companies are stepping in to provide primary 26 March 2020
care capacity, as well as shortening the often long distances that • "Corporate Health – UBS Wealth Man-
patients in rural communities have needed to travel to obtain care. agement White Paper," 2 November 2017
Recent government policies are supportive of digital medicine.
In August 2019 the National Healthcare Security Administration
approved reimbursement of online medical consultations at
provincial and municipal level on the condition that these were
comparable with offline consultations. On 2 March this year, as
a measure linked to controlling the COVID-19 outbreak, author-
ities issued new guidelines for reimbursement of qualified online
medical consulting services and e-prescription filings for patients
already taking drugs on a recurring basis. More recently on 2
November 2020 the central government requested local govern-
ments to prepare reimbursement plans for internet healthcare by
the end of this year. We view these developments as indicative of
central government support for internet healthcare development,
including online prescription drug sales. We expect the Chinese
telemedicine market to exceed the US market by 2023. The Chinese
online prescription drug market is forecast to grow nearly 40%
annually until 2025, when it could represent around 4% of the
Chinese drug market, according to UBS Securities estimates.

Conclusion
The underlying demographic trends driving healthcare demand are
strong and long-lasting. In our view, technology will be critical to
improving outcomes and controlling costs. This is becoming clear
to companies, investors, and policymakers. We expect healthcare
digitization to increase and foresee more partnerships between
healthcare and technology companies, with further encroachment
into the healthcare arena by both consumer and technology players.
Given the diversity of the theme and the uncertain size of its end-
markets at present, we advise against trying to pick winners at this
stage, preferring a diversified approach to investing in the theme.

UBS CIO GWM 9 November 2020 3

Longer Term Investments

Table 1: HealthTech reference list – part 1

This is not a list of recommendations nor is it comprehensive

Market cap Share price Sales

Company name ISIN Country Price
(USDm) currency exposure
Healthcare IT - EMRs and population health
Veeva Systems Inc Class A US9224751084 UNITED STATES 40,865 U.S. Dollar 270.9 100%
Cerner Corporation US1567821046 UNITED STATES 22,212 U.S. Dollar 72.5 100%
Winning Health Technology Group Co.,Ltd. Class A CNE1000016F5 CHINA 5,979 China Renminbi 18.6 100%
CompuGroup Medical SE & Co. KGaA DE000A288904 GERMANY 4,781 Euro 76.9 100%
Change Healthcare, Inc. US15912K1007 UNITED STATES 4,446 U.S. Dollar 14.6 100%
HealthEquity Inc US42226A1079 UNITED STATES 4,278 U.S. Dollar 55.7 100%
Premier Inc. Class A US74051N1028 UNITED STATES 4,184 U.S. Dollar 34.3 25%
Omnicell, Inc. US68213N1090 UNITED STATES 3,787 U.S. Dollar 89.5 100%
1Life Healthcare, Inc. US68269G1076 UNITED STATES 3,695 U.S. Dollar 29.3 100%
GoHealth Inc Class A US38046W1053 UNITED STATES 3,606 U.S. Dollar 11.5 100%
Schrodinger, Inc. US80810D1037 UNITED STATES 3,295 U.S. Dollar 48.1 100%
Inovalon Holdings, Inc. Class A US45781D1019 UNITED STATES 3,078 U.S. Dollar 19.8 100%
SelectQuote Inc US8163073005 UNITED STATES 2,930 U.S. Dollar 18.0 100%
HMS Holdings Corp. US40425J1016 UNITED STATES 2,487 U.S. Dollar 28.1 100%
B-Soft Co., Ltd. Class A CNE100001ZG7 CHINA 2,461 China Renminbi 13.8 100%
R1 RCM Inc US7493971052 UNITED STATES 2,082 U.S. Dollar 18.0 100%
Accolade, Inc. US00437E1029 UNITED STATES 1,900 U.S. Dollar 35.0 100%
eHealth, Inc. US28238P1093 UNITED STATES 1,779 U.S. Dollar 69.1 100%
Phreesia, Inc. US71944F1066 UNITED STATES 1,644 U.S. Dollar 38.3 100%
Allscripts Healthcare Solutions, Inc. US01988P1084 UNITED STATES 1,637 U.S. Dollar 10.4 100%
Health Catalyst, Inc. US42225T1079 UNITED STATES 1,414 U.S. Dollar 35.6 100%
Simulations Plus, Inc. US8292141053 UNITED STATES 1,311 U.S. Dollar 66.8 100%
BioXcel Therapeutics, Inc. US09075P1057 UNITED STATES 1,134 U.S. Dollar 50.7 100%
Suzhou MedicalSystem Technology Co., Ltd. Class A 603990-CN CHINA 1,067 China Renminbi 50.5 100%
NextGen Healthcare, Inc. US65343C1027 UNITED STATES 968 U.S. Dollar 14.5 100%
NEXUS AG DE0005220909 GERMANY 953 Euro 52.2 100%
Evolent Health Inc Class A US30050B1017 UNITED STATES 939 U.S. Dollar 11.0 100%
Medical Data Vision Co.Ltd. JP3921250001 JAPAN 905 Japanese Yen 2,602.0 100%
Tabula Rasa Healthcare, Inc. US8733791011 UNITED STATES 852 U.S. Dollar 37.1 100%
EMIS Group plc GB00B61D1Y04 UNITED KINGDOM 812 British Pounds 9.8 90%
Heren Health Co., Ltd. Class A CNE100002D53 CHINA 651 China Renminbi 22.6 100%
Software Service, Inc. JP3436020006 JAPAN 588 Japanese Yen 10,970.0 100%
EM Systems Co., Ltd. JP3130200003 JAPAN 559 Japanese Yen 784.0 100%
NNIT A/S DK0060580512 DENMARK 418 Danish Krone 109.0 50%
Computer Programs and Systems, Inc. US2053061030 UNITED STATES 406 U.S. Dollar 28.0 100%
Cegedim SA FR0000053506 FRANCE 389 Euro 23.7 100%
Kanamic Network Co., LTD. JP3215100003 JAPAN 359 Japanese Yen 798.0 100%

Software, big data and AI companies with healthcare exposure

Cognizant Technology Solutions Corporation Class A US1924461023 UNITED STATES 38,462 U.S. Dollar 71.9 30%
Alibaba Health Information Technology Ltd. BMG0171K1018 HONG KONG 35,926 Hong Kong Dollar 20.8 80%
iflytek Co., Ltd. Class A CNE100000B81 CHINA 13,211 China Renminbi 40.0 20%
Nuance Communications, Inc. US67020Y1001 UNITED STATES 9,195 U.S. Dollar 32.6 50%
Hexaware Technologies Limited INE093A01033 INDIA 1,899 Indian Rupee 470.8 20%

Source: FactSet, UBS. Market data as of 3 November 2020.

Important note: This is a reference list containing companies with market capitalization of at least USD 250m and a
minimum 20% estimated sales exposure to our preferred investment areas within the HealthTech theme. Please note
that this list is only for reference, and is not a recommendation list.

UBS CIO GWM 9 November 2020 4

Longer Term Investments

Table 1: HealthTech reference list – part 2

This is not a list of recommendations nor is it comprehensive

Market cap Share price Sales

Company name ISIN Country Price
(USDm) currency exposure
Telemedicine, remote monitoring and wearables
M3, Inc. JP3435750009 JAPAN 46,617 Japanese Yen 7,595.0 30%
Teladoc Health, Inc. US87918A1051 UNITED STATES 28,243 U.S. Dollar 195.2 100%
Garmin Ltd. CH0114405324 UNITED STATES 21,155 U.S. Dollar 110.6 25%
GoodRx Holdings, Inc. Class A US38246G1085 UNITED STATES 18,450 U.S. Dollar 47.5 100%
Ping An Healthcare and Technology Company LimitedKYG711391022 HONG KONG 15,024 Hong Kong Dollar 103.8 70%
Oak Street Health, Inc. US67181A1079 UNITED STATES 11,700 U.S. Dollar 48.6 100%
iRhythm Technologies, Inc. US4500561067 UNITED STATES 6,377 U.S. Dollar 221.0 100%
American Well Corporation Class A US03044L1052 UNITED STATES 5,977 U.S. Dollar 26.0 100%
Fitbit, Inc. Class A US33812L1026 UNITED STATES 1,911 U.S. Dollar 7.0 100%
Vocera Communications, Inc. US92857F1075 UNITED STATES 1,053 U.S. Dollar 32.5 60%

Imaging and IGT

Siemens Healthineers AG DE000SHL1006 GERMANY 47,005 Euro 37.7 70%
Koninklijke Philips N.V. NL0000009538 NETHERLANDS 44,122 Euro 41.5 55%
Varian Medical Systems, Inc. US92220P1057 UNITED STATES 15,759 U.S. Dollar 172.9 100%
Elekta AB Class B SE0000163628 SWEDEN 4,567 Swedish Krona 106.5 100%
NANO-X IMAGING LTD IL0011681371 UNITED STATES 1,304 U.S. Dollar 29.1 100%
Agfa-Gevaert NV BE0003755692 BELGIUM 657 Euro 3.2 45%
ViewRay, Inc. US92672L1070 UNITED STATES 445 U.S. Dollar 3.0 100%
Ion Beam Applications SA BE0003766806 BELGIUM 421 Euro 12.1 100%
Accuray Incorporated US0043971052 UNITED STATES 303 U.S. Dollar 3.3 100%

Robotic surgery, 3D printing & digital production

Intuitive Surgical, Inc. US46120E6023 UNITED STATES 80,173 U.S. Dollar 682.0 100%
CYBERDYNE Inc. JP3311530004 JAPAN 1,438 Japanese Yen 697.0 35%
3D Systems Corporation US88554D2053 UNITED STATES 756 U.S. Dollar 6.2 25%
Stratasys Ltd. IL0011267213 UNITED STATES 731 U.S. Dollar 13.3 20%

Drug development and CROs

WuXi AppTec Co., Ltd. Class A 603259-CN HONG KONG 41,375 China Renminbi 115.1 100%
Wuxi Biologics (Cayman) Inc. KYG970081090 HONG KONG 37,878 Hong Kong Dollar 221.8 75%
IQVIA Holdings Inc US46266C1053 UNITED STATES 30,703 U.S. Dollar 160.1 100%
Laboratory Corporation of America Holdings US50540R4092 UNITED STATES 20,502 U.S. Dollar 210.5 30%
Hangzhou Tigermed Consulting Co., Ltd. Class A 300347-CN HONG KONG 15,788 China Renminbi 125.5 100%
PPD, Inc. US69355F1021 UNITED STATES 11,759 U.S. Dollar 33.6 80%
ICON Plc IE0005711209 UNITED STATES 10,047 U.S. Dollar 190.4 100%
PRA Health Sciences, Inc. US69354M1080 UNITED STATES 6,596 U.S. Dollar 103.1 100%

Source: FactSet, UBS. Market data as of 3 November 2020.

Important note: This is a reference list containing companies with market capitalization of at least USD 250m and a
minimum 20% estimated sales exposure to our preferred investment areas within the HealthTech theme. Please note
that this list is only for reference, and is not a recommendation list.

UBS CIO GWM 9 November 2020 5

Longer Term Investments

Sustainable performance profile

UBS s sustainable performance assessment methodology identifies six topics that encompass all the major sustainable development
challenges facing both corporations and governments. The process draws on more than 500 indicators published by several best-in-
class environmental, social, and governance (ESG) data providers, and aggregates them into sustainability scores ranging from 0
(lagging) to 10 (leading) for each of the six topics for every issuer. The six topic scores are further aggregated into a final headline
rating.

The table below identifies the stocks in our thematic reference list that have the highest sustainability performance in each of the six
topics and overall. It is intended to help clients align their investment choices with their values and sustainability objectives. The
scores themselves are not a factor directly in our selection of the thematic reference stocks.

For more information on the six sustainability topics please refer to our Sustainable investing topics publication (published on 20
September 2019). For more information on UBS's sustainable performance assessment methodology please refer to our CIO
corporate and country sustainability scores publication (published on 15 January 2020).

Melissa Spinoso, Sustainable Investing Strategist, melissa.spinoso@ubs.com

Rachel Whittaker, Sustainable Investing Strategist, rachel.whittaker@ubs.com

Sustainability topics Leaders are

Companies that manage their carbon footprint and their energy use effectively; and governments that
Climate change
manage energy resources effectively.

Water Companies and countries that manage their water consumption and resources efficiently and transparently.

Companies that have good environment management policies and systems; reduce packaging, recycle
Pollution
materials, manage hazardous waste, limit toxic emissions, and governments that manage their air and land
& Waste
resources well.

Companies that retain, develop and promote wellbeing among their employees, encourage diversity and
People
protect human rights throughout their operations; and governments that invest in education and health.

Companies that have sourced raw materials responsibly, with strong social and environmental supplier
Products
standards, and policies to promote safe and sustainable products; governments who facilitate this through
& Services
regulation and infrastructure.

Companies that are fair and transparent on issues such as executive pay, board independence, tax and anti-
Governance corruption; and governments that promote strong institutions and rule of law and commit to international
treaties on environmental and social issues.
Companies and countries with superior performance across all sustainability topics. Headline score for a
corporate issuer is calculated by weighting each of the six topic scores according to the financial materiality, or
Headline likelihood that the topic impacts the financial or operating performance of that company and its industry. For
countries, the six topics are weighted by financial materiality to a country's long-term prosperity and economic
development.
Source: UBS methodology based on data from SASB, Sustainalytics and Trucost

UBS CIO GWM 9 November 2020 6

Longer Term Investments

Health Tech LTI reference list Sustainable performance profile

On a scale of 0 (lagging) to 10 (leading)

Sustainability topics Top Three Leading Companies Company Industry Average** World Average***
from CIO Reference List Score* Benchmark: MSCI ACWI Benchmark: MSCI ACWI

Phreesia, Inc. 9.4 Software & IT Services 6.8

Climate
Health Catalyst, Inc. 8.8 Software & IT Services 6.8 6.5
change
Medical Data Vision Co.Ltd. 8.0 Software & IT Services 6.8

HealthEquity Inc 10.0 Software & IT Services 8.2

CompuGroup Medical SE & Co.
Water 8.9 Software & IT Services 8.2 5.9
KGaA
Allscripts Healthcare Solutions, Inc. 8.6 Software & IT Services 8.2

CompuGroup Medical SE & Co.

9.6 Software & IT Services 6.3
KGaA
Pollution
Omnicell, Inc. 7.6 Software & IT Services 6.3 6.0
and waste
EMIS Group plc 7.2 Professional & Commercial Services 5.3

Veeva Systems Inc Class A 6.9 Software & IT Services 6.0

People Cerner Corporation 5.3 Software & IT Services 6.0 5.1

Premier Inc. Class A 5.1 Health Care Distributors 5.8

Allscripts Healthcare Solutions, Inc. 8.5 Software & IT Services 3.2

Products CompuGroup Medical SE & Co.
7.5 Software & IT Services 3.2 3.2
and services KGaA
EMIS Group plc 6.0 Professional & Commercial Services 2.7

Premier Inc. Class A 7.4 Health Care Distributors 6.0

Governance Cerner Corporation 7.3 Software & IT Services 6.8 6.4

Change Healthcare, Inc. 7.1 Software & IT Services 6.8

NEXUS AG 6.7 Software & IT Services 6.2

CompuGroup Medical SE & Co.
Headline 6.7 Software & IT Services 6.2 5.1
KGaA
Software Service, Inc. 6.5 Software & IT Services 6.2

Below World Average In line with World Average (+/-0.3) Above World Average

* The Sustainable performance profile can help you identify companies which align to your values and sustainability objectives. The profile is produced independently of any
investment rating that may be assigned to the issuer and may not be aligned with the views of UBS' economists, equity analysts or strategists. The profile is for information
purposes only. It is not an investment recommendation. Accordingly it should not be relied upon to make an investment decision or for any other purpose.
** Industry average score is the weighted average using the MSCI All Country World Index constituent weights for each SASB SICS Industry. Average scores are considered non-
representative if there are 5 or less companies of that classification in the benchmark (expressed as N/R).
*** World Average score is calculated using global benchmark (MSCI ACWI) composite weights
Source: UBS methodology based on data from SASB, Sustainalytics and Trucost. Data as of 4.9.2020.

UBS CIO GWM 9 November 2020 7

Longer Term Investments

Appendix

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Frequency of updates
Equity recommendation lists can be updated on a daily basis, and are refreshed at least every two weeks. Risk views
on bond issuers and instruments are affirmed sporadically and changed ad hoc, subject to market developments.
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UBS CIO GWM 9 November 2020 8

Longer Term Investments

Appendix

Disclosures (9 November 2020)

Within the past 12 months UBS AG, its affiliates or subsidiaries may have received or provided investment services
and activities or ancillary services as per MiFID II which may have given rise to a payment or promise of a payment in
relation to these services from or to each company mentioned in the publication.
3D System 9, Accuray Incorporated 4, 9, Agfa-Gevaert NV 6, Alibaba Health Information:Technology Ltd 3, Allscripts
Health 9, American Well Corp 6, 8, 9, 10, Bioxcel Therapeutics Inc 2, 4, 9, 11, Cerner Corp. 9, Change Healthcare, Inc.
9, Cognizant Technology 9, 12, 13, Computer Programs and Systems, Inc. 9, eHealth, Inc. 9, Evolent Health Inc Class
A 9, Fitbit Inc 4, 9, Garmin Ltd 2, 9, GoodRx Holdings Inc 1, 2, 6, 9, 11, Hangzhou Tigermed Consulting 1, 2, 4, 6, 7,
HealthEquity Inc 4, 9, HMS Holdings Corp. 9, Icon PLC 5, 9, Inovalon Holdings, Inc. Class A 9, Intuitive Surgical 9, 12,
13, IQVIA Holdings Inc 5, 9, 14, iRhythm Technologies 9, Laboratory Corporation of America Hldg 9, M3 5, NextGen
Healthcare, Inc. 9, Nuance Communications, Inc. 9, Omnicell, Inc. 9, Ping An Healthcare and Technology Company
Limited 1, 2, 3, 4, PPD INC 1, 2, 5, 6, 8, 9, PRA Health Sciences Inc 5, 9, Premier-A 9, R1 RCM Inc 9, Royal Philips
9, 14, 15, Siemens Healthineers 1, 2, 6, 14, 16, 17, 18; Simulations Plus, Inc. 9, Stratasys 9, Tabula Rasa HealthCare
Inc 9, Teladoc Inc 5, 9, Varian Medical Systems, Inc. 4, 9, 12, 13, 18; Veeva Systems Inc Class A 9, ViewRay, Inc. 9,
Vocera Communications, Inc. 9, WuXi AppTec Co., Ltd. Class A 4, 7, Wuxi Biologics 3,
1. UBS AG, its affiliates or subsidiaries has acted as manager/co-manager in the underwriting or placement of securities
of this company/entity or one of its affiliates within the past 12 months.
2. UBS AG, its affiliates or subsidiaries expect to receive or intend to seek compensation for investment banking
services from this company/entity within the next three months.
3. UBS Securities Hong Kong Limited is a market maker in the Hong Kong-listed securities of this company.
4. UBS AG, its affiliates or subsidiaries beneficially owned 1% or more of a class of this company's common equity
securities as of last month's end (or the prior month's end if this report is dated less than 10 days after the most
recent month's end).
5. Because this security exhibits higher-than-average volatility, the FSR has been set at 15% above the MRA for a Buy
rating, and at -15% below the MRA for a Sell rating (compared with 6/-6% under the normal rating system).
6. Within the past 12 months, UBS AG, its affiliates or subsidiaries has received compensation for investment banking
services from this company/entity or one of its affiliates.
7. Market capitalisation is calculated by multiplying the current share price by the sum of A and H shares.
8. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment
banking services are being, or have been, provided.
9. UBS Securities LLC makes a market in the securities and/or ADRs of this company.
10. Because this security exhibits higher-than-average volatility, the FSR has been set at 25% above the MRA for a
Buy rating, and at -25% below the MRA for a Sell rating (compared with 6/-6% under the normal rating system).
11. UBS Securities LLC is acting as manager/co-manager, underwriter, placement or sales agent in regard to an offering
of securities of this company/entity or one of its affiliates.
12. This company/entity is, or within the past 12 months has been, a client of UBS Financial Services Inc, and non-
investment banking securities-related services are being, or have been, provided.
13. Within the past 12 months, UBS Financial Services Inc has received compensation for products and services other
than investment banking services from this company.
14. Within the past 12 months, UBS Securities LLC and/or its affiliates have received compensation for products and
services other than investment banking services from this company/entity.
15. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities
services are being, or have been, provided.
16. UBS AG London branch or affiliates acts as liquidity provider or market maker in the financial instruments of
this company.
17. UBS Europe SE is acting as manager/co-manager, underwriter, placement or sales agent in regard to an offering
of securities of this company/entity or one of its affiliates.
18. UBS Europe SE is acting as financial co-advisor to listed Siemens Healthineers AG (currently 85% owned by
Siemens AG), on the proposed acquisition of Varian Medical Systems Inc.

UBS CIO GWM 9 November 2020 9

Longer Term Investments

Appendix

UBS CIO GWM equity selection system

We provide two equity selections: Most Preferred (MP) and Least Preferred (LP).

Most preferred
We expect the stock to outperform the benchmark in the next 12 months.
Least preferred
We expect the stock to underperform the benchmark in the next 12 months.
Suspended
Sometimes legal, regulatory, contractual or best-business-practice obligations restrict us from issuing research on a
company. This situation normally stems from UBS Investment Bank's involvement in an investment banking transaction
associated with that company.
Equity selection: An assessment relative to a benchmark
Equity selections in Equity Preferences lists (EPLs) are assessments made relative to a sector/industry, country/regional
or thematic benchmark. The chosen benchmark is disclosed on the front page of each EPL. It is also used to measure
the performance of the individual analyst. Including a stock in the EPL constitutes neither a view on its expected,
standalone absolute performance nor a price target. Rather, EPLs are meant to support the UBS House View, with the
stocks included in them selected for their superior risk/return profiles.
Our selection is based on an assessment of the company's fundamental outlook and valuation, the risks owning the
stock entails and the diversification benefits it provides in an investment portfolio, among many other factors. UBS
GWM CIO‘s selection methodology enables wealth management clients to invest in a specific investment theme or
focus on a sector/industry or country/region.
Stocks can be selected for multiple EPLs. For consistency's sake, a stock can only be selected as either Most Preferred
or Least Preferred, not both simultaneously. As EPL benchmarks differ, stocks do not need to be included on every list
to which they could theoretically be added.
Only stock views prepared by UBS Financial Services Inc. (UBS FS) which are compatible with the above equity selection
system are provided. A stock cannot be selected as Most Preferred if it is rated Sell by UBS Investment Bank, while a
Buy-rated stock by UBS Investment Bank cannot be selected as Least Preferred.
For more information about our present and past recommendations, please contact ubs-cio-wm@ubs.com
Current UBS CIO global rating distribution (as of last month-end)
Least Preferred 5% .. . .
Most Preferred 95% .. . .

Terms and Abbreviations

Term / Abbreviation Description / Definition Term / Abbreviation Description / Definition
A actual i.e. 2010A COM Common shares
E expected i.e. 2011E GDP Gross domestic product
H half year MP Marketperform: The stocks expected
performance is in line with the sector
benchmark
NAV Net asset value Shares o/s Shares outstanding
UP Underperform: The stock is expected to CIO UBS WM Chief Investment Office
underperform the sector benchmark

Disclaimer

UBS Chief Investment Office's ("CIO") investment views are prepared and published by the Global Wealth Management business of UBS Switzerland AG (regulated
by FINMA in Switzerland) or its affiliates ("UBS").
The investment views have been prepared in accordance with legal requirements designed to promote the independence of investment research.
Instrument/issuer-specific investment research – Risk information:
This publication is for your information only and is not intended as an offer, or a solicitation of an offer, to buy or sell any investment or other specific product.
The analysis contained herein does not constitute a personal recommendation or take into account the particular investment objectives, investment strategies, financial
situation and needs of any specific recipient. It is based on numerous assumptions. Different assumptions could result in materially different results. Certain services and
products are subject to legal restrictions and cannot be offered worldwide on an unrestricted basis and/or may not be eligible for sale to all investors. All information
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is made as to its accuracy or completeness (other than disclosures relating to UBS). All information and opinions as well as any forecasts, estimates and market prices
indicated are current as of the date of this report, and are subject to change without notice. This publication is not intended to be a complete statement or summary
of the securities, markets or developments referred to in the report. Opinions expressed herein may differ or be contrary to those expressed by other business areas or
divisions of UBS as a result of using different assumptions and/or criteria.
In no circumstances may this document or any of the information (including any forecast, value, index or other calculated amount ("Values")) be used for any of the
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contract; or (iii) to measure the performance of any financial instrument including, without limitation, for the purpose of tracking the return or performance of any Value
or of defining the asset allocation of portfolio or of computing performance fees. By receiving this document and the information you will be deemed to represent and
warrant to UBS that you will not use this document or otherwise rely on any of the information for any of the above purposes. UBS and any of its directors or employees

UBS CIO GWM 9 November 2020 10

Longer Term Investments

Appendix

Disclaimer

may be entitled at any time to hold long or short positions in investment instruments referred to herein, carry out transactions involving relevant investment instruments
in the capacity of principal or agent, or provide any other services or have officers, who serve as directors, either to/for the issuer, the investment instrument itself or
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the market in the securities is illiquid and therefore valuing the investment and identifying the risk to which you are exposed may be difficult to quantify. UBS relies on
information barriers to control the flow of information contained in one or more areas within UBS, into other areas, units, divisions or affiliates of UBS. Futures and
options trading is not suitable for every investor as there is a substantial risk of loss, and losses in excess of an initial investment may occur. Past performance of an
investment is no guarantee for its future performance. Additional information will be made available upon request. Some investments may be subject to sudden and
large falls in value and on realization you may receive back less than you invested or may be required to pay more. Changes in foreign exchange rates may have an
adverse effect on the price, value or income of an investment. The analyst(s) responsible for the preparation of this report may interact with trading desk personnel,
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Research publications from CIO are written by UBS Global Wealth Management. UBS Global Research is written by UBS Investment Bank. Except for economic
forecasts, the research process of CIO is independent of UBS Global Research. As a consequence research methodologies applied and assumptions made by CIO and
UBS Global Research may differ, for example, in terms of investment horizon, model assumptions, and valuation methods. Therefore investment recommendations
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Tax treatment depends on the individual circumstances and may be subject to change in the future. UBS does not provide legal or tax advice and makes no representations
as to the tax treatment of assets or the investment returns thereon both in general or with reference to specific client's circumstances and needs. We are of necessity
unable to take into account the particular investment objectives, financial situation and needs of our individual clients and we would recommend that you take financial
and/or tax advice as to the implications (including tax) of investing in any of the products mentioned herein.
This material may not be reproduced or copies circulated without prior authority of UBS. Unless otherwise agreed in writing UBS expressly prohibits the distribution
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this topic; are available upon request from your client advisor.
Options and futures are not suitable for all investors, and trading in these instruments is considered risky and may be appropriate only for sophisticated investors. Prior
to buying or selling an option, and for the complete risks relating to options, you must receive a copy of "Characteristics and Risks of Standardized Options". You may
read the document at https://www.theocc.com/about/publications/character-risks.jsp or ask your financial advisor for a copy.
Investing in structured investments involves significant risks. For a detailed discussion of the risks involved in investing in any particular structured investment, you must
read the relevant offering materials for that investment. Structured investments are unsecured obligations of a particular issuer with returns linked to the performance
of an underlying asset. Depending on the terms of the investment, investors could lose all or a substantial portion of their investment based on the performance of the
underlying asset. Investors could also lose their entire investment if the issuer becomes insolvent. UBS Financial Services Inc. does not guarantee in any way the obligations
or the financial condition of any issuer or the accuracy of any financial information provided by any issuer. Structured investments are not traditional investments and
investing in a structured investment is not equivalent to investing directly in the underlying asset. Structured investments may have limited or no liquidity, and investors
should be prepared to hold their investment to maturity. The return of structured investments may be limited by a maximum gain, participation rate or other feature.
Structured investments may include call features and, if a structured investment is called early, investors would not earn any further return and may not be able to
reinvest in similar investments with similar terms. Structured investments include costs and fees which are generally embedded in the price of the investment. The tax
treatment of a structured investment may be complex and may differ from a direct investment in the underlying asset. UBS Financial Services Inc. and its employees do
not provide tax advice. Investors should consult their own tax advisor about their own tax situation before investing in any securities.
Important Information About Sustainable Investing Strategies: Sustainable investing strategies aim to consider and incorporate environmental, social and
governance (ESG) factors into investment process and portfolio construction. Strategies across geographies and styles approach ESG analysis and incorporate the findings
in a variety of ways. Incorporating ESG factors or Sustainable Investing considerations may inhibit the portfolio manager’s ability to participate in certain investment
opportunities that otherwise would be consistent with its investment objective and other principal investment strategies. The returns on a portfolio consisting primarily
of sustainable investments may be lower or higher than portfolios where ESG factors, exclusions, or other sustainability issues are not considered by the portfolio
manager, and the investment opportunities available to such portfolios may differ. Companies may not necessarily meet high performance standards on all aspects
of ESG or sustainable investing issues; there is also no guarantee that any company will meet expectations in connection with corporate responsibility, sustainability,
and/or impact performance.
Distributed to US persons by UBS Financial Services Inc. or UBS Securities LLC, subsidiaries of UBS AG. UBS Switzerland AG, UBS Europe SE, UBS Bank, S.A., UBS Brasil
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For country information, please visit ubs.com/cio-country-disclaimer-sr or ask your client advisor for the full disclaimer.
Version B/2020. CIO82652744
© UBS 2020. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved.

UBS CIO GWM 9 November 2020 11