高盛-中远海控 Read-across from OOCL SITC results

25August2024|10:01PMHKT

COSCOSHIPPINGHoldings(601919.SS)

Sell

Read-acrossfromOOCL/SITCresultsandbriefingssuggestlimitedupsideforCOSCO;thoughmgmtsremainedpositiveondemand

601919.SS

1919.HK

12mPriceTarget:Rmb10.30

12mPriceTarget:HK$8.00

Price:Rmb12.37

Price:HK$10.48

Downside:16.7%

Downside:23.7%

HongKonglistedcontainershippinglinesSITC(1308.HK,not

covered)andOOCL(0316.HK,notcovered)released1H24resultsaftermarketcloseonAug21and22,andheldtheanalystbriefingsrespectivelyonAug22and23.Thekeytakeawaysinclude:1)

OOCL’snetprofitwasdown-26%YoYonhigherbusinessand

administrativeexpenses,andthiscouldsuggestamissed1H24

profitforCOSCO.2)OOCLmgmtattributedthepotentialcargo

volumedeclineinQ4toseasonalityandfrontloading,andtheyguidedastablegrowthof3-4%YoYforthedemandin2025E.3)

Mgmtbelievedthatthehighsupplygrowthremainsthe

biggestconcern,asthenewshipdelivery(4%/6%increaseduring2H24and2025)mayoutpacethedemandgrowth,especially

consideringtheefficientcapacitymayincreaseby8%iftheRedSeadisruptioncouldberesolved,whiletheybelievethedisruptionmaysustainintheshortterm.4)ThoughSITCexpressedahigherpossibilityofspecialdividendforthe2H24givenanoptimistic

outlookfor3Q24,OOCLmanagementdidn’tconsider

_

distributingspecialdividend,andtheyexplainedthatthecurrentnetcashwouldbeusedforthepaymentofnewships,investmentingreenerfleetandoperatingcapital.WebelieveOOCL1H24

resultsdeliveranegativeimplicationforCOSCO,andtherecentcontainershippingspotrate(SCFI)acceleratedtheretreatfromthepeakespeciallyonEuropeandUSroutes(Exhibit1),whichisinlinewithourpreviousanalysis(Jul15)whereweforecastthatmarginalsupplygrowthwouldoutpacethedemandgrowthinAugust.

OOCLearningsdownby26%YoYin1H24:COSCOShipping

holds71%stakeofOOCL,andOOCLreportedearningsof

US$833mn,down-26%YoY,duetohigher-than-expectedbusinessandadministrativeexpensesofUS$236mn(vs.onlyUS$68.9mnin

HerbertLu

+852-2978-0726|herbert.lu@GoldmanSachs(Asia)L.L.C.

SimonCheung,CFA

+852-2978-6102|simon.cheung@GoldmanSachs(Asia)L.L.C.

DorothyWong

+852-2978-1879|dorothy.wong@GoldmanSachs(Asia)L.L.C.

KeyData

Marketcap:Rmb198.1bn/$27.8bnEnterprisevalue:Rmb80.8bn/$11.3bn 3mADTV:Rmb2.1bn/$292.2mnchina

HKProperty&GreaterchinacongloM&ARank:3

Leasesincl.innetdebt&EV?:yes

GSForecast

Revenue(Rmbmn)EBITDA(Rmbmn)EPS(Rmb)

P/E(X)P/B(X)

Dividendyield(%)

Ndebt/EBITDA(exlease,X)CROCI(%)

FCFyield(%)

EPS(Rmb)

12/23

175,447.8

38,842.31.48 6.9 0.7 7.2(2.5)17.52.3

3/24

0.69

12/24E

238,453.4

77,672.32.74 4.5 0.711.1(1.5)25.415.8

6/24E

0.69

12/25E

162,967.68,149.6(0.08)

NM 0.8 0.0(12.4) 5.02.9

9/24E

0.69

12/26E

178,022.720,672.4

0.2843.7 0.7 1.1(5.5) 9.16.3

12/24E

0.69

GSFactorProfile

Growth

FinanciaIRetUrns

MUItipIe

Integrated

Percentile20th40th60th80th100th

601919.SSrelativetoAsiaex.JapanCoverage

601919.SSrelativetoHKProperty&GreaterChinaConglo

Source:Companydata,GoldmanSachsResearchestimates.Seedisclosuresfordetails.

GoldmanSachsdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,

investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthis

report.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ForRegACcertificationandotherimportantdisclosures,seetheDisclosureAppendix,orgoto

/research/hedge.html.Analystsemployedbynon-USaffiliatesarenotregistered/qualifiedasresearchanalystswithFINRAintheU.S.

GoldmanSachs

COSCOSHIPPINGHoldings(601919.SS)

SellRatingsinceDec2,2022

Ratios&Valuation

P/E(X)P/B(X)

FCFyield(%)

EV/EBITDAR(X)

EV/EBITDA(excl.leases)(X)CROCI(%)

ROE(%)

Netdebt/equity(%)

Netdebt/equity(excl.leases)(%)Interestcover(X)

Daysinventoryoutst,salesReceivabledays

DayspayableoutstandingDuPontROE(%)

Turnover(X)Leverage(X)

Grosscashinvested(excash)(Rmb)Averagecapitalemployed(Rmb)

BVPS(Rmb)

12/23

6.9 0.7 2.3 1.7 1.7 17.5 12.0(40.3)(40.3) 5.2 14.1 18.4242.4 9.8 0.41.9

,

237862.6

127,604.015.12

12/24E

4.5 0.7 15.8 1.0 1.0 25.4 20.6(41.4)(41.4) 22.2 10.6 15.3198.9 15.4 0.51.7

,

266843.3

,

155693.4

17.76

12/25E

NM 0.8 2.9 11.8 11.8 5.0 (0.6)(38.9)(38.9) (7.7) 16.5 24.6198.0 (0.5) 0.41.7

,

268478.5

,

162463.4

16.29

12/26E

43.7 0.7 6.3 4.1 4.1 9.1 2.2(42.8)(42.8) (3.2) 15.3 19.2196.1 1.7 0.41.6

270,904.3

,

155282.9

16.62

Growth&Margins(%)

12/2312/24E12/25E12/26E

Totalrevenuegrowth

EBITDAgrowthEPSgrowth

DPSgrowth

EBITmargin

EBITDAmargin

Netincomemargin

(55.1)(78.3)(78.3)(78.2) 11.0 22.113.6

35.9100.084.885.3 24.732.618.3

9.2153.7434.5NM (1.9) 11.62.5

(31.7) (89.5)(103.1)(100.0) (7.9) 5.0(0.8)

PricePerformance

601919.SS(Rmb)shanghai-shenzhen300

184,000

163,800

143,600

123,400

103,200

83,000

Oct-23Jan-24Apr-24Jul-24

3m6m12m

Absolute(12.5)%15.0%32.6%

Rel.totheShanghaihenzhen300-S(4.2)%20.6%47.3%

Source:FactSet.Priceasof23Aug2024close.

IncomeStatement(Rmbmn)

Totalrevenue

costofgoodssold

SG&AR&D

otheroperatinginc./(exp.)EBITDA

Depreciation&amortizationEBIT

Netinterestinc./(exp.)

lncome/(loss)fromassociatesPre-taxprofit

provisionfortaxesMinorityinterest

preferreddividends

Netinc.(pre-exceptionaIs)post-taxexceptionals

Netinc.(post-exceptionaIs)

EPS(basic,pre-except)(Rmb)

EPS(diIuted,pre-except)(Rmb)

EPS(basic,post-except)(Rmb)

EPS(diIuted,post-except)(Rmb)DpS(Rmb)

Div.payoutratio(%)

COSCOSHIPPINGHoldings(601919.SS)

12/23

175,447.8(147,860.5)

(8,231.6)

--

38,842.3(19,486.6) 19,355.7 5,657.2 4,697.833,076.7 (4,681.0)(4,535.4)

--

23,860.3(3,948.8)19,911.5 1.48 1.48 1.24 1.24 0.7449.9

12/24E

238,453.4(165,349.3)

(14,307.2)

--

77,672.3(18,875.3)58,796.9 2,461.4 4,999.467,763.4(15,691.0)(8,317.1)

--

43,755.3(1,088.5)42,666.9 2.74 2.74 2.67 2.67 1.3750.0

12/25E

162,967.6(166,133.3)

(9,778.1)

--

8,149.6(21,093.3)

(12,943.8)2,905.7

4,791.0(3,741.4)

2,133.1256.9

--

(1,351.4)(1,129.2)

(2,480.7)(0.08)(0.08)(0.16)(0.16)

--

0.0

12/26E

178,022.7(170,720.6)

(10,681.4)

--

20,672.4 (24,051.7)(3,379.3)

2,481.64,923.4

5,531.4(152.0)(859.2)

--

4,520.2(1,129.2)

3,391.00.280.280.210.21

0.1450.0

BalanceSheet(Rmbmn)

12/2312/24E12/25E12/26E

cash&cashequivalentsAccountsreceivable

lnventory

othercurrentassets

Totalcurrentassets

NetPP&E

Netintangibles

Totalinvestments

otherlong-termassets

Totalassets

Accountspayableshort-termdebt

short-termleaseliabilitiesothercurrentliabilities

Totalcurrentliabilities

Long-termdebt

Long-termleaseliabilitiesotherlong-termliabilities

Totallong-termliabilitiesTotalliabilities

Preferredshares

Totalcommonequity

Minorityinterest

Totalliabilities&equity

Netdebt,adjusted

182,304.06,910.56,561.46,705.5

202,481.4

171,015.014,415.670,137.74,379.7

462,429.4

90,410.819,802.8

--

17,135.2

127,348.8

64,578.7

--

27,282.4

91,861.1

219,209.9

196,115.3

47,104.2462,429.4

(97,922.5)

176,745.513,065.97,325.58,832.4

205,969.4

179,316.114,144.075,137.14,379.7

478,946.3

89,779.314,802.8

--

19,049.3

123,631.4

44,633.1

--

27,282.4

71,915.5

195,546.9

227,978.0

55,421.3478,946.2

(117,309.5)

135,512.38,929.77,381.87,729.1

159,552.9

173,561.813,868.979,928.14,379.7

431,291.4

90,469.49,802.8

--

19,190.4

119,462.6

24,633.1

--

27,282.4

51,915.5

171,378.1

204,748.9

55,164.4431,291.4

(101,076.3)

136,999.99,754.77,582.78,477.1

162,814.4

162,999.613,590.484,851.54,379.7

428,635.7

92,931.17,802.8

--

19,693.5

120,427.4

15,633.1

--

27,282.4

42,915.5

163,342.9

209,269.1

56,023.6428,635.6

(113,564.0)

CashFlow(Rmbmn)

12/2312/24E12/25E12/26E

Netincome

28,395.7

52,072.4

(1,608.3)

5,379.4

D&Aadd-back

19,486.6

18,875.3

21,093.3

24,051.7

Minorityinterestadd-back

--

--

--

--

Net(inc)/decworkingcapital

(23,396.2)

(7,763.9)

6,014.5

1,190.9

Otheroperatingcashflow

(5,294.6)

(4,999.4)

(4,791.0)

(4,923.4)

Cashflowfromoperations

19,191.5

58,184.5

20,708.5

25,698.6

Capitalexpenditures

(15,320.7)

(26,904.8)

(15,064.0)

(13,210.9)

Acquisitions

--

--

--

--

Divestitures

375.1

--

--

--

Others

(10,874.6)

--

--

--

Cashflowfrominvesting

(25,820.1)

(26,904.8)

(15,064.0)

(13,210.9)

Repaymentofleaseliabilities

Dividendspaid(common&pref)

(30,618.7)

(11,892.6)

(21,877.7)

Inc/(dec)indebt

(324.8)

(24,945.6)

(25,000.0)

(11,000.0)

Otherfinancingcashflows

(17,000.4)

0.0

0.0

0.0

Cashflowfromfinancing

(47,943.9)

(36,838.2)

(46,877.7)

(11,000.0)

Totalcashflow

(54,572.6)

(5,558.5)

(41,233.2)

1,487.7

Freecashflow

3,870.8

31,279.7

5,644.5

12,487.7

Source:Companydata,GoldmanSachsResearchestimates.

_

25August20242

GoldmanSachsCOSCOSHIPPINGHoldings(601919.SS)

1H23)incl.staffcostsandselling&marketingcosts,despiteaflattishrevenue.ThoughOOCLhascapacitydeploymentdifferencee.g.moreexposuretoTrans-Atlanticroutesofwhichtheaverageratewasdown-31%YoYin1H24,OOCL’snetprofitaccountedfor~34-48%ofCOSCO’sinthepastthreeyears(except17%in2H23duringdowncycle).Andwebelievethiscouldalsosuggestamissed1H24profitforCOSCO.

Guidedastablegrowthof3-4%growthfor2025demand,followingaseasonal

retreat:Regardingthedemandside,OOCLmanagementattributedthepotentialcargovolumedeclineinQ4toseasonalityandfrontloading,andtheyguidedastablegrowthof3-4%YoYforthedemandin2025E.Forgeographicalbreakdown,management

believedUScargovolumemayremainstableassumingalowpossibilityofrecession,whileEuropemayslightlypickup;theemergingmarketsincludingLatinAmerica,

SoutheastAsiaandSouthAsiawouldsteadilyincreasein2H24-1H25.

Supplyremainsthebiggestconcern:OOCLmanagement’sbiggestconcernisstillonthesupplyside.Managementbelievedthehighnewshipdelivery(4%/6%increase

during2H24and2025,accordingtoAlphalinerandClarkson)mayoutpacethedemandgrowth.Ontheotherhand,theyestimatedthattheRedSeadisruptionhasabsorbed

8%ofthetotalindustrycapacity,soifthedisruptioncouldberesolved,the8%increaseinefficientcapacitywouldfurtherputtheindustrytooversupply,thoughtheybelieved

thedisruptionmaysustainintheshortterm.

Divergentguidanceondividendpayout:SITC’sdividendpayoutratiois70.1%for

1H24,andmanagementseeahigherpossibilityofspecialdividendforthe2H24givenanoptimisticoutlookfor3Q24.AsforOOCL,thoughtheyalsodistributed50%of1H24earnings,managementdidn’tconsiderdistributingspecialdividend,andtheyexplainedthatthecurrentnetcashofUS$5.4bnwouldbeusedforthepaymentofaround

US$2.5bnfortheremaining18shipsontheorderbook,investmentingreenerfleetandoperatingcapital.ForCOSCO,weassumetheymayalsomaintainthe50%payoutratiounchangedwithoutspecialdividendinourmodel,giventhesetwocompanieshavethesamemajorityofmanagementteam.

_

25August20243

GoldmanSachsCOSCOSHIPPINGHoldings(601919.SS)

Exhibit1:SCFIrecordedadeclineby-6%WoWlastFriday,-17%vs.peakinJul-24

ShanghaiContainerizedFreightIndex(SCFI)

Freightrate

23-Aug-241Week

vsPeakon5-Jul-24

2024YTD

vs2019

Sincemid-Dec2023

Spotrate($/TEU)

SCFIComprehensive

3,098

-6%

-17%

+76%

+285%

+183%

Europe

4,400

-5%

-9%

+63%

+442%

+328%

Med

4,523

-3%

-17%

+30%

+345%

+188%

USWestCoast($/FEU)

5,955

-10%

-27%

+133%

+335%

+227%

USEastCoast($/FEU)

8,546

-8%

-14%

+140%

+236%

+205%

PersianGulf/RedSea

1,969

-8%

-19%

-4%

+188%

+68%

ANZ

2,072

+8%

+51%

+97%

+240%

+126%

WestAfrica

5,004

-0%

-10%

+125%

+100%

+144%

SouthAfrica

4,836

+1%

-11%

+187%

+546%

+210%

SouthAmerica

7,562

-2%

-16%

+171%

+273%

+225%

WestJapan

293

0%

0%

-2%

+26%

-2%

EastJapan

299

0%

0%

-2%

+28%

-3%

SoutheastAsia

544

-6%

-25%

+162%

+353%

+169%

Korea

162

0%

-2%

+17%

+38%

+18%

Source:Clarksons

PriceTargetRisksandMethodology-COSCOShippingHoldings

Our12mpricetargetsforCSH-H/AofHK$8.0/Rmb10.3arebasedon0.6x/0.8xFY25EtargetP/BV,setat1S.D.belowits5-yearhistoricalaverage.Keyrisks:1)

Better-than-expectedglobaltrade;2)Greater-than-expectedcapacityreduction;3)Slowernewshipdelivery;4)Specialdividendpayout.

InvestmentThesis-COSCOShippingHoldings

COSCOShippingHoldings(1919.HK/601919.SS)hasthe4thlargestcontainerfleetin

theworld,with2.9mnTEUcapacity.WeareSellratedonCOSCOShippingHoldings-H/Agiven1)ourviewthattheglobalshippingsectorisheadingintoadowncycle,with

_

shippingratesheadingforpre-Covidlevels,draggingdowntheEBITmargin;2)high

sensitivitytoASP/volumeonEurope/Transpacificrouteswheredemandshouldbe

weakerduetoaweakmacroenvironmentandhighinventory;and3)cashtobemostlyusedfornewshipordersandinvestmentinshippingandportassets.WeseevaluationasstretchedgivenitstillpricesinapositiveROEwhileoverlookingapotentiallossin

thedowncycleahead.Wecouldturnmorepositiveifwesee1)Better-than-expected

globaltrade;2)Greater-than-expectedcapacityreduction;3)Slowernewshipdelivery;4)Portcongestionworsening;5)Specialdividendpayout.

25August20244

GoldmanSachsCOSCOSHIPPINGHoldings(601919.SS)

DisclosureAppendix

RegAC

I,HerbertLu,herebycertifythatalloftheviewsexpressedinthisreportaccuratelyreflectmypersonalviewsaboutthesubjectcompanyorcompaniesanditsortheirsecurities.Ialsocertifythatnopartofmycompensationwas,isorwillbe,directlyorindirectly,relatedtothespecificrecommendationsorviewsexpressedinthisreport.

Unlessotherwisestated,theindividualslistedonthecoverpageofthisreportareanalystsinGoldmanSachs’GlobalInvestmentResearchdivision.

GSFactorProfile

TheGoldmanSachsFactorProfileprovidesinvestmentcontextforastockbycomparingkeyattributestothemarket(i.e.ourcoverageuniverse)anditssectorpeers.Thefourkeyattributesdepictedare:Growth,FinancialReturns,Multiple(e.g.valuation)andIntegrated(acompositeofGrowth,FinancialReturnsandMultiple).Growth,FinancialReturnsandMultiplearecalculatedbyusingnormalizedranksforspecificmetricsforeachstock.The

normalizedranksforthemetricsarethenaveragedandconvertedintopercentilesfortherelevantattribute.Theprecisecalculationofeachmetricmayvarydependingonthefiscalyear,industryandregion,butthestandardapproachisasfollows:

Growthisbasedonastock’sforward-lookingsalesgrowth,EBITDAgrowthandEPSgrowth(forfinancialstocks,onlyEPSandsalesgrowth),withahigherpercentileindicatingahighergrowthcompany.FinancialReturnsisbasedonastock’sforward-lookingROE,ROCEandCROCI(forfinancial

stocks,onlyROE),withahigherpercentileindicatingacompanywithhigherfinancialreturns.Multipleisbasedonastock’sforward-lookingP/E,P/B,price/dividend(P/D),EV/EBITDA,EV/FCFandEV/DebtAdjustedCashFlow(DACF)(forfinancialstocks,onlyP/E,P/BandP/D),withahigherpercentileindicatingastocktradingatahighermultiple.TheIntegratedpercentileiscalculatedastheaverageoftheGrowthpercentile,FinancialReturns

percentileand(100%-Multiplepercentile).

FinancialReturnsandMultipleusetheGoldmanSachsanalystforecastsatthefiscalyear-endatleastthreequartersinthefuture.Growthusesinputsforthefiscalyearatleastsevenquartersinthefuturecomparedwiththeyearatleastthreequartersinthefuture(onaper-sharebasisforallmetrics).

ForamoredetaileddescriptionofhowwecalculatetheGSFactorProfile,pleasecontactyourGSrepresentative.

M&ARank

Acrossourglobalcoverage,weexaminestocksusinganM&Aframework,consideringbothqualitativefactorsandquantitativefactors(whichmayvaryacrosssectorsandregions)toincorporatethepotentialthatcertaincompaniescouldbeacquired.WethenassignaM&Arankasameansofscoring

companiesunderourratedcoveragefrom1to3,with1representinghigh(30%-50%)probabilityofthecompanybecominganacquisitiontarget,2representingmedium(15%-30%)probabilityand3representinglow(0%-15%)probability.Forcompaniesranked1or2,inlinewithourstandard

departmentalguidelinesweincorporateanM&Acomponentintoourtargetprice.M&Arankof3isconsideredimmaterialandthereforedoesnotfactorintoourpricetarget,andmayormaynotbediscussedinresearch.

Quantum

QuantumisGoldmanSachs’proprietarydatabaseprovidingaccesstodetailedfinancialstatementhistories,forecastsandratios.Itcanbeusedforin-depthanalysisofasinglecompany,ortomakecomparisonsbetweencompaniesindifferentsectorsandmarkets.

Disclosures

Therating(s)forCOSCOSHIPPINGHoldings(A)andCOSCOSHIPPINGHoldings(H)is/arerelativetotheothercompaniesinits/their

coverageuniverse:CITICLtd.,CKHutchisonHoldings,COSCOSHIPPINGHoldings(A),COSCOSHIPPINGHoldings(H),COSCOShippingEnergy(A),COSCOShippingEnergy(H),COSCOShippingPortsLtd.,CheungKongInfrastructure,ChinaMerchantsPortHoldings,FosunInternational,HangLungProperties,HongkongLand,HutchisonPortHoldings,HysanDevelopment,JardineMatheson,LinkREIT,MTRCorp.,ShanghaiInternationalPort,SwirePacific,SwireProperties,WharfHoldings,WharfREIC

Company-specificregulatorydisclosures

_

ThefollowingdisclosuresrelatetorelationshipsbetweenTheGoldmanSachsGroup,Inc.(withitsaffiliates,“GoldmanSachs”)andcompaniescoveredbyGoldmanSachsGlobalInvestmentResearchandreferredtointhisresearch.

GoldmanSachshadanon-securitiesservicesclientrelationshipduringthepast12monthswith:COSCOSHIPPINGHoldings(A)(Rmb12.37)andCOSCOSHIPPINGHoldings(H)(HK$10.48)

GoldmanSachsmakesamarketinthesecuritiesorderivativesthereof:COSCOSHIPPINGHoldings(A)(Rmb12.37)andCOSCOSHIPPINGHoldings(H)(HK$10.48)

Distributionofratings/investmentbankingrelationships

GoldmanSachsInvestmentResearchglobalEquitycoverageuniverse

RatingDistributionInvestmentBankingRelationships

Buy64%

Sell17%

Sell41%

Hold35%

Hold57%

Global

Buy48%

AsofJuly1,2024,GoldmanSachsGlobalInvestmentResearchhadinvestmentratingson2,925equitysecurities.GoldmanSachsassignsstocksas

BuysandSellsonvariousregionalInvestmentLists;stocksnotsoassignedaredeemedNeutral.SuchassignmentsequatetoBuy,HoldandSellforthepurposesoftheabovedisclosurerequiredbytheFINRARules.See‘Ratings,Coverageuniverseandrelateddefinitions’below.TheInvestmentBankingRelationshipschartreflectsthepercentageofsubjectcompanieswithineachratingcategoryforwhomGoldmanSachshasprovided

investmentbankingserviceswithintheprevioustwelvemonths.

25August20245

GoldmanSachsCOSCOSHIPPINGHoldings(601919.SS)

Pricetargetandratinghistorychart(s)

Regulatorydisclosures

DisclosuresrequiredbyUnitedStateslawsandregulations

Seecompany-specificregulatorydisclosuresaboveforanyofthefollowingdisclosuresrequiredastocompaniesreferredtointhisreport:managerorco-managerinapendingtransaction;1%orotherownership;compensationforcertainservices;typesofclientrelationships;managed/co-managedpublicofferingsinpriorperiods;directorships;forequitysecurities,marketmakingand/orspecialistrole.GoldmanSachstradesormaytradeasa

principalindebtsecurities(orinrelatedderivatives)ofissuersdiscussedinthisreport.

Thefollowingareadditionalrequireddisclosures:Ownershipandmaterialconflictsofinterest:GoldmanSachspolicyprohibitsitsanalysts,professionalsreportingtoanalystsandmembersoftheirhouseholdsfromowningsecuritiesofanycompanyintheanalyst’sareaofcoverage.

Analystcompensation:AnalystsarepaidinpartbasedontheprofitabilityofGoldmanSachs,whichincludesinvestmentbankingrevenues.Analystasofficerordirector:GoldmanSachspolicygenerallyprohibitsitsanalysts,personsreportingtoanalystsormembersoftheirhouseholdsfrom

servingasanofficer,directororadvisorofanycompanyintheanalyst’sareaofcoverage.Non-U.S.Analysts:Non-U.S.analystsmaynotbeassociatedpersonsofGoldmanSachs&Co.LLCandthereforemaynotbesubjecttoFINRARule2241orFINRARule2242restrictionsoncommunicationswithsubjectcompany,publicappearancesandtradingsecuritiesheldbytheanalysts.

Distributionofratings:Seethedistributionofratingsdisclosureabove.Pricechart:Seethepricechart,withchangesofratingsandpricetargetsinpriorperiods,above,or,ifelectronicformatorifwithrespecttomultiplecompanieswhicharethesubjectofthisreport,ontheGoldmanSachs

websiteat

/research/hedge.html

.

AdditionaldisclosuresrequiredunderthelawsandregulationsofjurisdictionsotherthantheUnitedStates

Thefollowingdisclosuresarethoserequiredbythejurisdictionindicated,excepttotheextentalreadymadeabovepursuanttoUnitedStateslawsandregulations.Australia:GoldmanSachsAustraliaPtyLtdanditsaffiliatesarenotauthoriseddeposit-takinginstitutions(asthattermisdefinedinthe

BankingAct1959(Cth))inAustraliaanddonotprovidebankingservices,norcarryonabankingbusiness,inAustralia.Thisresearch,andanyaccesstoit,isintendedonlyfor“wholesaleclients”withinthemeaningoftheAustralianCorporationsAct,unlessotherwiseagreedbyGoldmanSachs.In

producingresearchreports,membersofGlobalInvestmentResearchofGoldmanSachsAustraliamayattendsitevisitsandothermeetingshostedbythecompaniesandotherentitieswhicharethesubjectofitsresearchreports.InsomeinstancesthecostsofsuchsitevisitsormeetingsmaybemetinpartorinwholebytheissuersconcernedifGoldmanSachsAustraliaconsidersitisappropriateandreasonableinthespecificcircumstancesrelatingtothesitevisitormeeting.Totheextentthatthecontentsofthisdocumentcontainsanyfinancialproductadvice,itisgeneraladviceonlyandhas

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beenpreparedbyGoldmanSachswithouttakingintoaccountaclient’sobjectives,financialsituationornee