China / Hong Kong Company Guide

Beijing Capital Intl Airport

Version 4 | Bloomberg: 694 HK EQUITY | Reuters: 0694.HK
Refer to important disclosures at the end of this report

DBS Group Research . Equity 22 Mar 2017

BUY Growing from strength to strength

Last Traded Price ( 22 Mar 2017):HK$9.49 (HSI : 24,320)
Price Target 12-mth: HK$10.70 (13% upside) (Prev HK$10.60)
Potential Catalyst: Stronger-than-expected non-aeronautical revenues
Where we differ: We are upbeat on BCIA's long-term prospects
Analyst
Paul YONG CFA +65 6682 3712
paulyong@dbs.com
BUY BCIA for steady growth in earnings and cash flow.
We rate Beijing Capital Intl Airport (BCIA) a BUY, with a 12-
month target price of HK$10.70, for its strong and steadily
growing cash flows. With a moderate amount of capital
expenditure planned in the near term, we expect BCIAs balance
sheet to improve substantially on strong free cash flow over the
next few years.

Whats New Subdued 2017 outlook but reverting to steady growth in 2018.
FY16 net profit up 8.5% y-o-y to Rmb1,781m, BCIA plans to invest modestly these few years to further
marginally below our expectations upgrade its infrastructure and facilities, including the shutdown
of the central runway for four weeks in April for repair, which
Steady earnings growth and strong cash flows may cause a drag on revenue in 2017 but allows the group to
over the next few years resume a steady growth path in 2018. We project BCIAs
Final dividend of Rmb 10.18 cts earnings to grow 5% in 2017F and 11% in 2018F.

Maintain BUY; TP adjusted to HK$10.70 Firm cash flows to strengthen balance sheet to better meet
longer-term challenges. Driven by strong cash flows, we project
Price Relative BCIAs net gearing to improve to 0.1x by end-2018F and near
HK$ Relative Index

217
net cash by 2019F, which will put the group in a strong position
10.0
197 to face the challenge of Beijing Daxing International Airports
9.0

8.0
177
opening in 2019F, and to capitalize on investment opportunities
157
7.0
137
including any potential acquisition of interests in the new airport.
6.0 117
5.0 97
Valuation:
4.0 77
Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 DCF-based target price of HK$10.70. Our target price for BCIA
Beijing Capital Intl Airport (LHS) Relative HSI (RHS)
is based on discounted cash flows, and assumes WACC of
7.4% and terminal growth rate of 1%.
Forecasts and Valuation
FY Dec (RMB m) 2015A 2016A 2017F 2018F
Turnover 8,387 8,678 8,919 9,369 Key Risks to Our View:
EBITDA 4,400 4,450 4,526 4,745 Growth could be more sluggish than expected. BCIA's revenue
Pre-tax Profit 2,193 2,377 2,503 2,771 growth could be restrained by its capacity bottleneck and/or
Net Profit 1,642 1,781 1,876 2,076 airspace restrictions. Also, a slower-than-expected economy
EPS Gth (%) 18.0 8.5 5.3 10.7
Diluted EPS (HK$) 0.43 0.46 0.49 0.54 could also hurt passenger growth.
Diluted EPS (RMB) 0.38 0.41 0.43 0.48
DPS (HK$) 0.17 0.19 0.20 0.22 At A Glance
BV Per Share (HK$) 4.76 5.04 5.34 5.66 Issued Capital - H shares (m shs) 1,879
PE (X) 22.2 20.5 19.4 17.6 - Non H shares (m shs) 2,452
P/Free CF (X) 20.8 8.8 16.1 13.3 H shs as a % of Total 43
EV/EBITDA (X) 10.5 9.6 9.1 8.3 Total Mkt. Cap (HK$m/US$m) 41,100 / 5,292
Net Div Yield (%) 1.8 2.0 2.1 2.3 Major Shareholders
P/Book Value (X) 2.0 1.9 1.8 1.7 Capital Airports Holding (%) 56.6
Net Debt/Equity (X) 0.5 0.3 0.2 0.1 Major H Shareholders
ROAE (%) 9.3 9.5 9.4 9.8 Chow Tai Fook Capital Ltd. (%) 23.9
Artio Global Management LLC (%) 9.0
Earnings Rev (%): (7) New
BlackRock, Inc. (%) 5.1
Consensus EPS (RMB) 0.47 0.52
H Shares-Free Float (%) 62.1
Other Broker Recs: B: 7 S: 1 H: 6
3m Avg. Daily Val. (US$m) 6.1
Source of all data on this page: Company, DBSV, Thomson Reuters, ICB Industry : Industrials / Industrial Transportation
HKEX

ASIAN INSIGHTS VICKERS SECURITIES

ed-TH / sa- AH
Company Guide
Beijing Capital Intl Airport

WHATS NEW
FY16 results largely in line
Strong and growing cash flows; well positioned to meet the
Steady earnings growth and dividends. BCIA reported net
challenge of Beijing Daxing International Airport.
earnings growth of 8.5% y-o-y to Rmb1,781m on revenue
We continue to like BCIA for its strong cash flows, though
growth of 2.6% y-o-y to Rmb8,729m, which were marginally
there will be some uncertainty with regards to the situation
below our expectations of 11.5% growth and 2.8% growth
involving Beijings second airport Daxing International
respectively. While operating margins remained largely the
Airport, which is slated for completion by end-2019, until
same at 33.7% vs 33.2% a year ago, lower finance costs (-
more clarity can be provided on the situation.
15% y-o-y) helped lift PBT margins by 2.2ppt to 28.3%.
BCIA is moving towards a near net cash position by the time
A final dividend of Rmb 10.18 cts has been declared, bringing
Daxing International Airport is completed (in 2019) and will
total dividends for the year to Rmb 16.45 cts, translating to a
be in a strong position to invest in it. While BCIAs short-term
40% payout, which is the same as before.
earnings post the new airports opening are bound to be
impacted from cannibalisation traffic, we believe that it would
Due to strong cash flows, the groups net gearing improved
be in BCIAs long-term interest to participate in the new
from c. 0.5x to 0.3x, and is well poised to move into a near
airport for its long-term growth. How that would be
net cash position by 2019, even as capital expenditures are
structured though, remains to be seen.
likely to rise to a moderate Rmb1.0-1.2bn as BCIA embarks
on an upgrading programme of its infrastructure and facilities
over 2017F-2019F.

Interim Income Statement (RMBm)

FY Dec 2H2015 1H2016 2H2016 % chg yoy % chg hoh

Revenue 4,293 4,197 4,481 4.4 6.7

Cost of Goods Sold (2,853) (2,752) (3,035) 6.4 10.3
Gross Profit 1,439 1,446 1,446 0.5 0.0
Other Oper. (Exp)/Inc 0.0 0.0 0.0 nm nm
Operating Profit 1,439 1,446 1,446 0.5 0.0
Other Non Opg (Exp)/Inc 5.76 1.92 0.78 (86.4) (59.3)
Associates & JV Inc 5.26 2.88 2.74 (47.8) (4.9)
Net Interest (Exp)/Inc (227) (195) (174) 23.5 11.0
Forex Gain/(Loss) (136) (47.3) (106) 21.7 (124.9)
Pre-tax Profit 1,087 1,208 1,169 7.6 (3.2)
Tax (272) (303) (293) 7.9 (3.1)
Minority Interest 0.0 0.0 0.0 nm nm
Net Profit 815 905 876 7.5 (3.3)
Net profit bef Except. 917 941 955 4.2 1.6
EBITDA 2,246 2,251 2,199 (2.1) (2.3)
Margins (%)
Gross Margins 33.5 34.4 32.3
Opg Profit Margins 33.5 34.4 32.3
Net Profit Margins 19.0 21.6 19.5

Source of all data: Company, DBS Vickers

ASIAN INSIGHTS VICKERS SECURITIES

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 Company Guide
Beijing Capital Intl Airport

CRITICAL DATA POINTS TO WATCH Aircraft movement growth (%)

2.7 2.71
2.74
2.5
Earnings Drivers:
2.35
Modest aircraft movements and passenger throughput
1.96
growth underpin aeronautical revenues. Aeronautical
1.57
revenue made up c. 55% of total net revenue in FY16, and 1.41

consisted of 1) passenger charges, 2) aircraft movements and 1.17

0.92

related charges, and 3) airport fees. These components made 0.78

up 39%, 36% and 25% of total aeronautical revenue 0.39

respectively. We project aeronautical revenue growth of 2- 0.00

2014A 2015A 2016A 2017F 2018F
4% p.a. over FY16-18F, driven by c. 1-3% growth in aircraft
movements and c. 2-3% growth in passenger throughput at Passenger throughput growth (%)
BCIA.
5.05 5.0
4.4
Meanwhile, BCIA is expected to continue with its strategy of 4.04
3.4
improving the passenger throughput mix towards
3.03 2.9
international travellers, which generate higher aeronautical
and non-aeronautical revenue per pax. 2.02 1.7

1.01
Non-aeronautical revenues have the potential to grow faster.
Non-aeronautical revenue includes revenue from 1) 0.00
2014A 2015A 2016A 2017F 2018F
concessions (from retailing, advertising, restaurants and food
shops, ground handling, VIP service and others), 2) rentals, 3)
Aeronautical revenue
car park charges and others. Among these, the larger revenue
5,147.9
contributors are retailing, advertising, and rentals, which each 5,251
4,585.9
4,829.2 4,942.8

made up over a quarter of total non-aeronautical revenue in 4,201

4,360.2

2016. Driven by steady passenger throughput growth, and a

higher spend per passenger (boosted partly by an increasing 3,151

mix of international passengers), as well as higher concession 2,100

and rental rates, we project non-aeronautical revenue to
grow at 3-6% p.a. in 2017 and 2018. 1,050

0
EBIT growth of 1.4% in FY17F and 6% in FY18F. BCIA is 2014A 2015A 2016A 2017F 2018F

planning to shut down its central runway for repair for four
Non-Aeronautical revenue
weeks in April and along with other planned upgrades for
4,221
infrastructure and facilities in 2017F, could lead to subdued 4,263
3,801 3,849 3,976

growth in 2017F. However, we project steady growth to 3,410 3,196

resume in 2018F.
2,558

Lower interest costs to further boost profits. We expect 1,705

BCIAs interest costs to continue declining as it pays down
853
loans using internally generated cash. This is projected to help
net earnings growth to reach 5.3% in 2017F and 10.7% in 0

2018F. 2014A 2015A 2016A 2017F 2018F

Source: Company, DBS Vickers

ASIAN INSIGHTS VICKERS SECURITIES

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Company Guide
Beijing Capital Intl Airport

Leverage & Asset Turnover (x)

0.3
Balance Sheet: 0.80
Net gearing to improve on positive free cash flow generation. 0.70 0.3
Taking into account a modest capital expenditure programme of 0.60

Rmb1.0-1.2bn in the next few years, and coupled with steadily 0.50 0.3

growing earnings and cash flow, we project BCIAs net gearing 0.40
0.2
to improve from 0.3x in 2016 (from 0.5x in 2015) to 0.1x by 0.30

0.20
end-2018F. 0.2
0.10

0.00 0.2
Share Price Drivers: 2014A 2015A 2016A 2017F 2018F

DCF-based target price of HK$10.70. Our target price for BCIA Gross Debt to Equity (LHS) Asset Turnover (RHS)

Capital Expenditure
is based on discounted cash flows, and assumes WACC of 7.4% RMBm
and terminal growth rate of 1%. 3,000.0

2,500.0

Improving earnings and ROE to re-rate share price. We see 2,000.0

BCIAs share price re-rating towards our target price of 1,500.0

HK$10.70 as the company continues to deliver on its earnings, 1,000.0
and generates steady cash flow.
500.0

0.0
Second Beijing airport a longer-term catalyst. With Beijings 2014A 2015A 2016A 2017F 2018F

second airport slated to be opened in 2019, which would cater Capital Expenditure (-)

for longer-term air traffic growth in Beijing, a subsequent ROE

potential asset injection of the second airport by BCIAs parent 9.0%
company could prove beneficial to BCIA, at the right price. 8.0%

However, there will be some impact to BCIAs existing 7.0%

operations initially when the new airport opens, as some traffic 6.0%
5.0%
will shift away from the current airport. 4.0%
3.0%
Key Risks 2.0%

Capacity bottleneck restraints growth. Beijing Airport has 1.0%

0.0%
already reached/exceeded its design capacity (over 94m 2014A 2015A 2016A 2017F 2018F

passengers handled in 2016 vs capacity of c. 80m) and is Forward PE Band

currently facing constraints in growing its passenger throughput, (x)
which would limit its revenue growth potential over the next few 19.8

years. Additionally, the airspace around Beijing is tightly 17.8 +2sd:17.6x

controlled and BCIA's growth could be limited if airspace
+1sd:16x
restrictions are not relaxed when there is demand. 15.8

Avg:14.3x
13.8

Overpaying for acquisitions. There is a risk that BCIA will overpay 1sd:12.6x
for any acquisition and lead to lower returns for shareholders. 11.8
2sd:10.9x
9.8
Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
Company Background:
Beijing Capital International Airport (BCIA) owns and operates PB Band
(x)
Beijing Capital Airport, which is the busiest airport in Asia in
2.0
terms of passenger throughput, and the second busiest in the +2sd:1.88x
1.8
world. Its revenue streams are segmented into aeronautical
+1sd:1.64x
revenues (passenger charges, airport movement fees and airport 1.6

fees) and non-aeronautical (concessions, rentals and car park) 1.4 Avg:1.4x
revenues. It is over 56% owned by the government. 1.2
1sd:1.17x
1.0
2sd:0.93x
0.8
Mar-13 Mar-14 Mar-15 Mar-16 Mar-17

Source: Company, DBS Vickers

ASIAN INSIGHTS VICKERS SECURITIES

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 Company Guide
Beijing Capital Intl Airport

Key Assumptions
FY Dec 2014A 2015A 2016A 2017F 2018F
Aircraft movement growth (%) 2.5 1.4 2.7 0.9 2.7
Passenger throughput growth (%) 2.9 4.4 5.0 1.7 3.4
Aeronautical revenue 4,360.2 4,585.9 4,829.2 4,942.8 5,147.9
Non-Aeronautical revenue 3,196.4 3,801.3 3,848.6 3,975.9 4,220.6

Source: Company, DBS Vickers

Segmental Breakdown (RMB m)

FY Dec 2014A 2015A 2016A 2017F 2018F
Revenues (RMB m)
Aeronautical 4,360 4,586 4,829 4,943 5,148
Non-Aeronautical 3,196 3,801 3,849 3,976 4,221
Total 7,557 8,387 8,678 8,919 9,369
Source: Company, DBS Vickers

Income Statement (RMB m)

FY Dec 2014A 2015A 2016A 2017F 2018F
Revenue 7,557 8,387 8,678 8,919 9,369
Cost of Goods Sold (5,171) (5,603) (5,786) (5,986) (6,248)
Gross Profit 2,385 2,784 2,891 2,932 3,120
Other Opng (Exp)/Inc 0 0 0 0 0
Operating Profit 2,385 2,784 2,891 2,932 3,120
Other Non Opg (Exp)/Inc 8 15 3 3 3
Associates & JV Inc 5 8 6 6 7
Net Interest (Exp)/Inc (539) (479) (369) (338) (260)
Dividend Income 0 0 0 0 0
Exceptional Gain/(Loss) 0 (135) (154) (100) (100)
Pre-tax Profit 1,859 2,193 2,377 2,503 2,771
Tax (468) (551) (596) (627) (694)
Minority Interest 0 0 0 0 0
Preference Dividend 0 0 0 0 0
Net Profit 1,391 1,642 1,781 1,876 2,076
Net Profit before Except. 1,391 1,777 1,935 1,976 2,176
EBITDA 3,852 4,400 4,450 4,526 4,745
Growth
Revenue Gth (%) 6.0 11.0 3.5 2.8 5.0
EBITDA Gth (%) 0.7 14.2 1.1 1.7 4.8
Opg Profit Gth (%) 4.5 16.7 3.9 1.4 6.4
Net Profit Gth (%) 4.7 18.0 8.5 5.3 10.7
Margins & Ratio
Gross Margins (%) 31.6 33.2 33.3 32.9 33.3
Opg Profit Margin (%) 31.6 33.2 33.3 32.9 33.3
Net Profit Margin (%) 18.4 19.6 20.5 21.0 22.2
ROAE (%) 8.3 9.3 9.5 9.4 9.8
ROA (%) 4.3 5.1 5.3 5.6 6.5
ROCE (%) 6.0 7.0 7.2 7.4 8.2
Div Payout Ratio (%) 40.0 40.0 40.0 40.0 40.0
Net Interest Cover (x) 4.4 5.8 7.8 8.7 12.0
Source: Company, DBS Vickers

ASIAN INSIGHTS VICKERS SECURITIES

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Company Guide
Beijing Capital Intl Airport

Interim Income Statement (RMB m)

FY Dec 2H2014 1H2015 2H2015 1H2016 2H2016

Revenue 3,908 4,095 4,293 4,197 4,481

Cost of Goods Sold (2,718) (2,750) (2,853) (2,752) (3,035)
Gross Profit 1,189 1,345 1,439 1,446 1,446
Other Oper. (Exp)/Inc 0 0 0 0 0
Operating Profit 1,189 1,345 1,439 1,446 1,446
Other Non Opg (Exp)/Inc 8 9 6 2 1
Associates & JV Inc 1 3 5 3 3
Net Interest (Exp)/Inc (242) (251) (227) (195) (174)
Exceptional Gain/(Loss) 0 1 (136) (47) (106)
Pre-tax Profit 957 1,106 1,087 1,208 1,169
Tax (243) (279) (272) (303) (293)
Minority Interest 0 0 0 0 0
Net Profit 714 827 815 905 876
Net profit bef Except. 714 826 917 941 955

Growth
Revenue Gth (%) 7.1 12.2 9.8 2.5 4.4
Opg Profit Gth (%) 4.5 12.5 21.0 7.5 0.5
Net Profit Gth (%) 8.8 22.0 14.2 9.5 7.5

Margins
Gross Margins (%) 30.4 32.8 33.5 34.4 32.3
Opg Profit Margins (%) 30.4 32.8 33.5 34.4 32.3
Net Profit Margins (%) 18.3 20.2 19.0 21.6 19.5
Source: Company, DBS Vickers

Balance Sheet (RMB m)

FY Dec 2014A 2015A 2016A 2017F 2018F

Net Fixed Assets 27,299 27,750 26,629 26,320 25,757

Invts in Associates & JVs 56 53 53 59 66
Other LT Assets 862 1,384 1,403 1,342 1,305
Cash & ST Invts 2,184 2,113 4,530 3,539 2,959
Inventory 0 0 0 0 0
Debtors 1,392 1,266 1,139 1,121 1,178
Other Current Assets 118 126 150 150 150
Total Assets 31,911 32,691 33,904 32,532 31,415

ST Debt 4,310 4,645 5,670 4,670 3,670

Creditors 1,927 2,216 3,149 3,151 3,288
Other Current Liab 443 391 387 387 387
LT Debt 7,902 7,038 5,133 3,633 2,133
Other LT Liabilities 127 132 187 187 187
Shareholders Equity 17,202 18,269 19,378 20,504 21,749
Minority Interests 0 0 0 0 0
Total Cap. & Liab. 31,911 32,691 33,904 32,532 31,415

Non-Cash Wkg. Capital (860) (1,216) (2,247) (2,266) (2,347)

Net Cash/(Debt) (10,028) (9,570) (6,273) (4,764) (2,844)
Debtors Turn (avg days) 61.8 57.8 50.6 46.2 44.8
Creditors Turn (avg days) 199.3 188.6 231.1 261.2 253.6
Inventory Turn (avg days) N/A N/A N/A N/A N/A
Asset Turnover (x) 0.2 0.3 0.3 0.3 0.3
Current Ratio (x) 0.6 0.5 0.6 0.6 0.6
Quick Ratio (x) 0.5 0.5 0.6 0.6 0.6
Net Debt/Equity (X) 0.6 0.5 0.3 0.2 0.1
Net Debt/Equity ex MI (X) 0.6 0.5 0.3 0.2 0.1
Capex to Debt (%) 4.5 20.6 4.3 14.6 17.5
Z-Score (X) 1.9 2.0 2.3 2.5 2.5
Source: Company, DBS Vickers

ASIAN INSIGHTS VICKERS SECURITIES

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 Company Guide
Beijing Capital Intl Airport

Cash Flow Statement (RMB m)

FY Dec 2014A 2015A 2016A 2017F 2018F

Pre-Tax Profit 1,859 2,193 2,377 2,503 2,771

Dep. & Amort. 1,454 1,593 1,550 1,585 1,615
Tax Paid (460) (551) (596) (627) (694)
Assoc. & JV Inc/(loss) (5) (8) (6) (6) (7)
(Pft)/ Loss on disposal of FAs 0 0 0 0 0
Chg in Wkg.Cap. (138) 356 1,030 19 81
Other Operating CF 554 574 255 0 0
Net Operating CF 3,265 4,157 4,610 3,473 3,765
Capital Exp.(net) (548) (2,406) (463) (1,215) (1,015)
Other Invts.(net) (17) 0 0 0 0
Invts in Assoc. & JV 0 0 0 0 0
Div from Assoc & JV 0 0 0 0 0
Other Investing CF 23 0 324 0 0
Net Investing CF (543) (2,406) (139) (1,215) (1,015)
Div Paid (533) (602) (712) (750) (830)
Chg in Gross Debt (1,663) (529) (880) (2,500) (2,500)
Capital Issues 154 0 0 0 0
Other Financing CF (549) (696) 1 0 0
Net Financing CF (2,591) (1,827) (2,052) (3,250) (3,330)
Currency Adjustments 1 4 (1) 0 0
Chg in Cash 132 (71) 2,418 (992) (580)
Opg CFPS (RMB) 0.79 0.88 0.83 0.80 0.85
Free CFPS (RMB) 0.63 0.40 0.96 0.52 0.64

Source: Company, DBS Vickers

Target Price & Ratings History

S.No. Dat e Closing 12- mt h Rat ing

HK$
Pric e T arget
10.0 1
Pric e
9.5 1: 23-Mar-16 HK$7.96 HK$10.10 Buy
2 2: 29-Aug-16 HK$9.42 HK$10.60 Buy
9.0 3:

8.5

8.0

7.5

7.0
Mar-16

Mar-17
Sep-16

Jan-17
Dec-16
Jun-16
May-16

Jul-16

Nov-16
Oct-16

Feb-17
Apr-16

Aug-16

Source: DBS Vickers

Analyst: Paul YONG CFA

ASIAN INSIGHTS VICKERS SECURITIES

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 Company Guide
Beijing Capital Intl Airport

DBSVHK recommendations are based an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps)
FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)

Share price appreciation + dividends

Completed Date: 22 Mar 2017 18:21:05 (HKT)

Dissemination Date: 22 Mar 2017 18:22:22 (HKT)

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commodity referred to in this report.

DBSVUSA, a US-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering
of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-
making.

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 Company Guide
Beijing Capital Intl Airport

ANALYST CERTIFICATION
The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the
companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her
compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s)
1
primarily responsible for the content of this research report, in part or in whole, certifies that he or his associate does not serve as an officer of the
issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real
estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the
management of the issuer or the new listing applicant) and the research analyst(s) primarily responsible for the content of this research report or
2
his associate does not have financial interests in relation to an issuer or a new listing applicant that the analyst reviews. DBS Group has
procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of
research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment
banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment
banking function is handled appropriately. There is no direct link of DBS Group's compensation to any specific investment banking function of the
DBS Group.

COMPANY-SPECIFIC / REGULATORY DISCLOSURES

1. DBSVHK and its subsidiaries do not have a proprietary position in the securities recommended/mentioned in this report as of 21 Mar
2017.

2. Neither DBS Bank Ltd, DBS HK nor DBSV HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this
Research Report.

3. Compensation for investment banking services:

DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities
as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to
obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security
discussed in this document should contact DBSVUSA exclusively.

4. Disclosure of previous investment recommendation produced:

DBS Bank Ltd, DBSVS, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA may have published other investment
recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12
months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations
published by DBS Bank Ltd, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA in the preceding 12 months.

1
An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the
trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or
discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the
analyst.
2
Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in
respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing
applicant and the firm or analysis. This term does not include commercial lending conducted at arm's length, or investments in
any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has
investments in securities in respect of an issuer or a new listing applicant.

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Company Guide
Beijing Capital Intl Airport

RESTRICTIONS ON DISTRIBUTION
General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or
located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be
contrary to law or regulation.
Australia This report is being distributed in Australia by DBS Bank Ltd. (DBS) or DBS Vickers Securities (Singapore) Pte Ltd (DBSVS)
or DBS Vickers (Hong Kong) Limited (DBSVHK), which are exempted from the requirement to hold an Australian Financial
Services Licence under the Corporation Act 2001 (CA) in respect of financial services provided to the recipients. Both DBS
and DBSVS are regulated by the Monetary Authority of Singapore under the laws of Singapore, and DBSVHK is regulated by
the Securities and Futures Commission of Hong Kong under the laws of Hong Kong, which differ from Australian laws.
Distribution of this report is intended only for wholesale investors within the meaning of the CA.
Hong Kong This report is being distributed in Hong Kong by DBSVHK which is licensed and regulated by the Hong Kong Securities and
Futures Commission.
Indonesia This report is being distributed in Indonesia by PT DBS Vickers Sekuritas Indonesia.
Malaysia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from
ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this
report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised
that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected
and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any
of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek
to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also
have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and
other services from the subject companies.

Wong Ming Tek, Executive Director, ADBSR

Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No.
198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the
Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign
entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial
Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert
Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons
only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from,
or in connection with the report.
Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd. Research reports distributed are only
intended for institutional clients only and no other person may act upon it.
United This report is produced by DBSVHK which is regulated by the Securities and Futures Commission of Hong Kong.
Kingdom
This report is disseminated in the United Kingdom by DBS Vickers Securities (UK) Ltd (DBSVUK). DBSVUK is authorised
and regulated by the Financial Conduct Authority in the United Kingdom.

In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and
associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any
form or by any means or (ii) redistributed without the prior written consent of DBSVUK. This communication is directed at
persons having professional experience in matters relating to investments. Any investment activity following from this
communication will only be engaged in with such persons. Persons who do not have professional experience in matters
relating to investments should not rely on this communication.
Dubai This research report is being distributed in The Dubai International Financial Centre (DIFC) by DBS Bank Ltd., (DIFC Branch)
rd
having its office at PO Box 506538, 3 Floor, Building 3, East Wing, Gate Precinct, Dubai International Financial Centre
(DIFC), Dubai, United Arab Emirates. DBS Bank Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority.
This research report is intended only for professional clients (as defined in the DFSA rulebook) and no other person may act
upon it.
United States This report was prepared by DBSVHK. DBSVUSA did not participate in its preparation. The research analyst(s) named on
this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research
analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company,
public appearances and trading securities held by a research analyst. This report is being distributed in the United States by
DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional
Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may
authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should
contact DBSVUSA directly and not its affiliate.
Other In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified,
jurisdictions professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.
DBS Vickers (Hong Kong) Limited
th
18 Floor Man Yee building, 68 Des Voeux Road Central, Central, Hong Kong
Tel: (852) 2820-4888, Fax: (852) 2868-1523
Company Regn. No. 31758

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