Contract Research Organization Market: Primary beneficiary of pharma technology upgrade    As outsourcing partners for both pharmaceutical and biotech companies, contract researchorganizations in China are seeing rapid growth, with a market size currently less than one-tenth thatof their US counterparts. Proposed healthcare reform should accelerate industry transformation andlead to higher market growth, while the high degree of fragmentation in the industry means there areopportunities for consolidators. Biologics service providers are growing faster with higher margins.We have initiated coverage of WuXi Biologics (2269HK) with a Buy rating given its competitiveadvantage as a full-service provider.    WuXi Biologics (2269HK, Buy): Biologic CRO market leader in China with full-serviceoffering; initiate at Buy    WuXi Biologics was China’s largest biologics outsourcing services provider in 2016with a marketshare of 48%. There is favorable government support for the biologics industry, and the company isexpanding its production capacity to ensure sustainable growth. We believe a valuation premium isjustified. We initiate coverage with a Buy rating and TP of HK$50.10, based on 1.0x PEG on 80.5%EPS CAGR during FY17-19, to account for the near-term benefits from expanding its addressablemarket in late-stage and commercial manufacturing and the competitive advantage in its broadservice offering.    E-Commerce: 2017Singles’ Day online sales preview – offline channels increasingly involvedin online shopping spree; consumption upgrade a major trend    We expect the transaction value of this year’s Singles’ Day online shopping spree to achieve highdouble-digit growth, with furniture, sports/outdoor and maternity/juvenile demonstrating stronggrowth potential. In preparation for the annual shopping spree, both Tmall and JD have strengthenedonline-offline integration and enhanced their sales networks by penetrating to lower-tier cities andexpanding to overseas markets. In addition, there have been early signs of smart operations in bothonline shopping and logistics services. We are positive on consumption upgrade and the use of newtechnology in online-offline integration.    China Property Sector: Oct contract sales update    Vanke’s contract sales dropped 25% YoY in Oct, but are up 39% YoY in 10M17, COLI’s contractsales declined 18% MoM in Oct, and are up 2% YoY in 10M17, while Country Garden’s Oct contractsales rose 23% YoY, 79% YoY in 10M17. Our top picks are Gemdale P&I and Yuexiu Property –management at both companies believe their 2018earnings growth outlooks have beenunderestimated. Gemdale P&I’s Oct contract sales were flat, but are up 1.3x YoY in 10M17, whileYuexiu’s Oct contract sales rose 35% YoY, 28% YoY in 10M17. We expect both developers to doubletheir contract sales in the next four years.

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