11 December 2013 GEM Equity Strategy Outlook 2014 Figure 30: US and EM Absolute PIBV since 1996 (x) (Figure 31: P/BV of US relative to EM (x) ••••••416.0 US @UA501 ti 00 SS 50 45 40 4 36 26 20 14 ,0:— r r v —r v —r 1 1 1 1 1 1 1 1 1 ;iii Safer Pate.

USDm 190,720 Weighted average shares (m) Average market cap (CNYm) Enterprise value (CNYm) Valuation Metrics P/E (DB) (x) P/E (Reported) (x) P/BV (x) FCF Yield (%) Dividend Yield (%) EV/Sales (x) EV/EBITDA (x) EV/EBIT (x) Income Statement (CNYm) Sales revenue Gross profit EBITDA Depre

Valuation Metrics Price/Sales (x) Bloomberg: RTRX US USD 26.87 USD 52.00 USD 8.09 - 26.98 USDm 949 EURm 871 P/E (DB) (x) P/E (Reported) (x) P/BV (x) FCF yield (%) Dividend yield (%) EV/Sales EV/EBITDA EV/EBIT Income Statement (USDm) Sales EBITDA EBIT Pre-tax profit Net income Cash

g accounting data into real economic data Economic P/E correlations are much higher than for accounting PIE Accounting inputs Price-to-book value (P/BV) Return on equity (E/BV) 0 Accounting P/E: P/BV vs. ROE' 40 35 30 25 20 15 10 5 0 -200% • •• R2 = 0.3295) • -100% 0% 100% Econom

aversion towards those sectors which face the most severe structural challenges, and nothing has changed in the past twelve months. Figure 2: EM — P/BV (x) versus RoE (%) 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Healthcare Consumer Staples Consumer Discretionary Industrials Financials