Shanghai Jahwa United (600315.SS)- Earnings Review- Still a bumpy path ahead,yet worst likely behind;remain Buy with projecr此为英文文档

22August2022|10:37PMHKTShanghaiJahwaUnited(600315.SS)EarningsReview:Stillabumpypathahead,yetworstlikelybehind;remainBuywithprojected2Hacceleration;Buy600315.SS 12m□e□age:□Rb43.00 e:□Rb3286 psde:□30.9ShanghaiJahwareported1H22/2Q22resultsonAug19,withrevenuedownby24%yoyandnetlossofRmb42mnin2Q,draggedbymoresevereCovidheadwindsandcontinuousnegativeimpactfromtop-tierKOLissueandspecialchannel.ThecompanyalsoreviseddownESOPsalestargettoreflect1H22performance.Consequently,welower2022Erevenue/netprofitby2%/13%respectivelytoreflect2Qperformanceandslower-than-expectedskincaregrowthamidtherelativelysoftdemandbackdrop,andexpectthecompanytomeetthelowendESOPtargetforbothtoplineandbottomlinein2022/23E.WeremainBuyratedaswebelieveearningstroughisnowlargelybehindus,andexpectthecompanytoresumedoubledigitgrowthin2H22fueledbynewproductlaunches,highermarketinginvestmentandaneasieryoybase(i.e.specialchannelheadwindsstartedin3Q21).OurnewTPofRmb43suggests31%upside.Takeawaysfrommanagementcall2H22outlook:Jahwatargetsdoubledigitrevenuegrowthandfasternetgrowthin2H22.Bybrand,managementexpectsLiushen,hasbeendeliveringsolidperformanceYTDwithstrongnewproductsalesmomentumandpriceincrease,todeliverhighsingledigittodoubledigitrevenuegrowthin2H.islikelytofacecontinuedheadwindsfromtop-tierissue,yetmanagementbelievesmorediversifiedchannelcoverage(erest-basedE-commerceplatforms)couldhelprecoupthesaleslossesfromtoptierandaimsatreturningtopositiverevenuein2H22.ForHerborist,managementtargetsdoubledigitgrowthin2H22,andplanstolaunchtheupgradedXingserieslatethisMaybornbusiness,managementlookshighsingledigit

ChristineCho+852-2978-1255|christine.cho@GoldmanSachs(Asia)L.L.C.XinyuRuan+86(21)2401-8937|xinyu.x.ruan@BeijingGaoHuaSecuritiesCompanyLimitedDavidShang+852-2978-7463|david.shang@GoldmanSachs(Asia)L.L.C.NicolasYi+86(21)2401-8922|nicolas.yi@BeijingGaoHuaSecuritiesCompanyLimitedKeyData GSForecast Revenue(Rmbmn)Old7,646.17,666.98,722.99,509.3EBIDA(Rmbmn)739.8718.3815.41,020.6EPS(Rmb)Old0.960.941.261.53P/E(X)49.640.430.324.7P/B(X)4.63.02.82.5Dividendyield(%)1.2CROCI(%)12.612.213.815.0EPS(Rmb)0.29(0.06)0.190.39GSFactorProfile GrowthFinancialReturnsMultipleIntegrated600315.SSrelativetoAsiaex.JapanCoverage600315.SSrelativetoChinaCosmeticsSource:Companydata,GoldmanSachsResearchestimates.Seedisclosuresfordetails._Buy_BuyGoldmandoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.aresult,investorsshouldbeawarethatthefirmhaveaconflictofinterestthatcouldtheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.Forcertificationandotherimportantdisclosures,seetheDisclosureAppendix,orgoto/researh/hedge.html.Analystsemplyedbynon-USafiliatesarenotregistered/qualiedasresearhanalystswithFINRAintheGoldmanGoldmanSachsShanghaiJahwaUnited(600315.SS)2222August2022PAGE8Buy

ShanghaiJahwaUnited(600315.SS)RatingsinceFeb5,2021

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Ntt,jstd .) () (,) (.)CashFlow(Rmbmn) Netincome649.38..D&Aadd-back332Minorityinterestadd-backNt(ic/cwrkigcaital203.4)36.3(74.5)Otheroperatingcashflow(33.9)84.966.774.2Cashflowfromoperations.0Capitalexpenditures)(.).))AcquisitionsDisttrsOthers(243.0))(82.9)6Cashflowfrominvesting()()()RepaymentofleaseliabilitiesDiisid(mmn&rf))(.).)(220.5)c/c)int(4.4)(200.0)(200.0)(200.0)Otherfinancingcashflows.).50.00.0hfowfomfnng()(.)()(.)Totlshflow5.7677.8Freecashflow852.5533.0855.27Source:Companydata,GoldmanSachsResearchestimates.__growth,isconsistentwiththe8%salesgrowthin1H22excludingforeignrateimpact.Bychannel,managementaimsat20%foronlinemainlydrivenbyinnon-Tmallplatforms(e.g.TikJD,VIPshop),andaimsatlowsingledigitdeclineormodestpositiveforthespecialchannel.Inofflinechannel,managementexpectssupermarkettodeliverhighsingledigittodoubledigitgrowthbyLiushenbrand,andlooksforgrowthforotherchannels,drivennewretail(munitygrouppurchase,Daojia)had70%-80%growthin1H22despitetheCovidimpact.Inthelongterm,managementtargets50%newretailcontributioninofflinechannel.Onthebottomline,managementiscommittedtofurthersavecost(inc.laborcosts)andoperationalefficiencyimprovement.Continueenhancingonlineoperation:Thecompanyhasadjusteditsonlineoperationstructurein1Henableshigheroperationefficiencyunderthemulti-brandstructure.Inadditiontoenhancingin-houselivestreamingcapacity,companyhasalsobeenexpandingitsKOLmatrixtoconcentrationrisk,andhaswith>200YTD.Sincelastthecompanyhasbeenexpandingintochannelsvs.majorityofsalescomingfromTmallpreviously,andmanagementhighlightedthatsalesfrominterest-basede-commerceplatformhasgrown6xyoyin1H22andcontributeddoubledigitonlinesales.Forecastrevisionslower2022-26Erevenueforecastby2%onmainlyonskincare,washitmostheavilyduringShanghailockdownandcontinueseeingnegativeimpactfromtop-tierissue.nowlook2021-26Egrowthforskincare,vs.priorand7%fortotalB2Ccosmeticssales.OurGPMforecastwasdown0.3-0.4ppduring2022-26Eaccordingly,duetolowersalescontributionfromhigh-marginskincarecategory.Ourestimateislagelyinlinewiththecompays2022-23Eevenue/netpofitatthewhilewethecompanytospendmoreonmarketingtomeetsalestargetgiventherelativelydemandbackdropandmarketcompetition.aresult,ournetforecastisdownonaveragein2022-26E.2H22E,weseeacovidbackdropforthecompanyandaneasierbase,andwelook0%/8%reenue/protgrowthrespectivel,vs.doubledigitgrowthpermanagementstarget,asweexpectthedemand/competitielandscaperemainsrelativelyhallengingin2H.Exhibit1:ShanghaiJahwa:forecastrevisions Exhibit2:Weexpectskincaretoaccountfor43%ofShanghaiJahwa’ssalesby2026Evs.44%priorRmbmn 2022E 2023E 2024E 2025E 2026ERevenue 7,506 8,603 9,310 10,031 10,566yoygrowth -1.8% 14.6% 8.2% 7.7% 5.3%Revenue-prior 7,667 8,723 9,509 10,290 Change% -2% -1% -2% -3% Grossprofit 4,381 5,121 5,608 6,105 6,467Grossprofit-prior 4,497 5,219 5,764 6,308 6,685Change% -3% -2% -3% -3% Grossmargin-prior58.7%59.8%60.6%61.3%Grossmargin-prior58.7%59.8%60.6%61.3%61.6%20%36% 31% 35% 32% 36%Changeppt(0.3)(0.3)(0.4)(0.4)(0.4)10%0%Sellingexpenses2,8873,4553,7434,0374,2582019202020212022E2023E2024E2025E2026ESellingexpenses-prior2,9723,4113,7444,0614,285Change%-3%1%0%-1%-1%SkincarePersonalandhouseholdcareAdminexpenses747797778801824MomandbabyBranddistributionAdminexpenses-prior776807789812848Change%-4%-1%-1%-1%-3%R&Dexpenses 168192208224236R&Dexpenses-prior 171195212230242Change%-2%-1%-2%-3%-3%Operatingprofit5196108069661,067Operatingprofit-prior5187399451,1251,226Change%0%-17%-15%-14%-13%Operatingmargin6.9%7.1%8.7%9.6%10.1%Operatingmargin-prior6.8%8.5%9.9%10.9%11.3%Changeppt0.2(1.4)(1.3)(1.3)(1.2)Netprofit5527359031,0401,137Netprofit-prior6358541,0371,1961,263Change%-13%-14%-13%-13%-10%EPS(Rmb)0.811.081.331.531.68EPS-prior0.941.261.531.761.86Change%-13%-14%-13%-13%-10%

100%90%80%70%60%50%40%30%

5% 5% 5% 5% 4% 4% 4% 4%26%25%25%31%29%28%26%25%25%31%29%28%39%41%43%32% 34% 32% 34% 32%Source:Companydata,GoldmanSachsGlobalInvestmentResearch,GaoHuaSecuritiesResearch

Source:Companydata,GoldmanSachsGlobalInvestmentResearch,GaoHuaSecuritiesResearch__Exhibit3:WeexpectthecompanytomeetESOPtargetatthelowendin2022/23ESource:Companydata,GoldmanSachsGlobalInvestmentResearch,GaoHuaSecuritiesResearchValuationandkeyrisksWithourforecastrevisionsandrollingourvaluationtoend2023E,ourtargetpriceforShanghaiarrivesatRmb43(vs.Rmb45prior),basedon29x2026EP/Ediscountedto2023E(vs.mid-2023Eprior)using8.2%COE(unchanged).keepourBuyratingonthewith31%upsidepotential.__201920202021 2022E 2023E 2024E 2025E 2026EEPS(Rmb)0.830.640.96 0.81 1.08 1.33 1.53 1.68yoychangeTarget12m-fwdP/E(2026Eatend2025E)Impliedvaluepershare(Rmb)-23%50% -15% 33% 23% 15%29x499%Costofequity8.2%Valuepershare(Rmb)43.0ExhibitExhibit4:Ournew12mTPforShanghaiJahwaarrivesatRmb43Keyrisks:1)Lower-than-expectedrecoveryintheHerboristbrand;2)Lower-than-expectedsalesoutlookfor3)Weaker-than-expectedexecutionondigitalization;4)Managementturnover;5)ExtendedofflinestoreclosuresduetotheCovidpandemic;6)Lower-than-expectedinvestmentincome;and7)Longer-than-expectedCovidresurgenceandlockdowns.DisclosureAppendixRegACWe,ChristineCho,XinyuRuan,DavidShangandNicolasYi,herebycertifythatalloftheviewsexpressedinthisreportaccuratelyreflectourpersonalviewsaboutthesubjectcompanyorcompaniesanditsortheirsecurities.Wealsocertifythatnopartofourcompensationwas,isorwillbe,directlyorindirectly,relatedtothespecificrecommendationsorviewsexpressedinthisreport.Unlessotherwisestated,theindividualslistedonthecoverpageofthisreportareanalstsinGoldmanSah’GlobalInestmentResearhdivision.GSFactorProfileTheGoldmanSachsFactorProfileprovidesinvestmentcontextforastockbycomparingkeyattributestothemarket(i.e.ourcoverageuniverse)anditssectorpeers.Thefourkeyattributesdepictedare:Growth,FinancialReturns,Multiple(e.g.valuation)andIntegrated(acompositeofGrowth,FinancialReturnsandMultiple).Growth,FinancialReturnsandMultiplearecalculatedbyusingnormalizedranksforspecificmetricsforeachstock.Thenormalizedranksforthemetricsarethenaveragedandconvertedintopercentilesfortherelevantattribute.Theprecisecalculationofeachmetricmayvarydependingonthefiscalyear,industryandregion,butthestandardapproachisasfollows:Growthisbasedonastock’sforward-lookingsalesgrowth,EBITDAgrowthandEPSgrowth(forfinancialstocks,onlyEPSandsalesgrowth),withahigherpercentileindicatingahighergrowthcompany.FinancialReturnsisbasedonastock’sforward-lookingROE,ROCEandCROCI(forfinancialstocks,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,FinancialReturnspercentileand(100%-Multiplepercentile).FinancialReturnsandMultipleusetheGoldmananalystforecastsatthefiscalatleastthreequartersinthefuture.Growthusesinputsforthefiscalyearatleastsevenquartersinthefuturecomparedwiththeyearatleastthreequartersinthefuture(onabasisforallmetrics).ForamoredetaileddescriptionofhowwecalculatetheGSFactorProfile,pleasecontactyourGSrepresentative.M&ARankAcrossourglobalcoverage,weexaminestocksusinganM&Aframework,consideringbothqualitativefactorsandquantitativefactors(whichmayvaryacrosssectorsandregions)toincorporatethepotentialthatcertaincompaniescouldbeacquired.WethenassignaM&Arankasameansofscoringcompaniesunderourratedcoveragefrom1to3,with1representinghigh(30%-50%)probabilityofthecompanybecominganacquisitiontarget,2representingmedium(15%-30%)probabilityand3representinglow(0%-15%)probability.Forcompaniesranked1or2,inlinewithourstandarddepartmentalguidelinesweincorporateanM&Acomponentintoourtargetprice.M&Arankof3isconsideredimmaterialandthereforedoesnotfactorintoourpricetarget,andmayormaynotbediscussedinresearch.QuantumQuantumisGoldmanSachs’proprietarydatabaseprovidingaccesstodetailedfinancialstatementhistories,forecastsandratios.Itcanbeusedforin-depthanalysisofasinglecompany,ortomakecomparisonsbetweencompaniesindifferentsectorsandmarkets.DisclosuresTherating(s)forShanghaiJahwaUnitedrelativetheothercompaniesinits/theircoverageuniverse:BotaneeBiotech,ProyaCosmetics,ShanghaiJahwaUnitedCompany-specificregulatorydisclosuresThefollowingdisclosuresrelatetorelationshipsbetweenTheGoldmanSachsGroup,Inc.(withitsaffiliates,“GoldmanSachs”)andcompaniescoveredbytheGlobalInvestmentResearchDivisionofGoldmanSachsandreferredtointhisresearch.GoldmanSachsexpectstoreceiveorintendstoseekcompensationforinvestmentbankingservicesinthenext3months:ShanghaiJahwaUnited(Rmb32.86)Distributionofratings/investmentbankingrelationshipsGoldmanSachsInvestmentResearchglobalEquitycoverageuniverseRatingDistribution InvestmentBankingRelationshipsBuy Hold Sell Buy Hold SellGlobal 50% 35%

15%

65% 58% 45%__AsofJuly1,2022,GoldmanSachsGlobalInvestmentResearchhadinvestmentratingson3,132equitysecurities.GoldmanSachsassignsstocksasBuysandSellsonvariousregionalInvestmentLists;stocksnotsoassignedaredeemedNeutral.SuchassignmentsequatetoBuy,HoldandSellforthepurposesoftheabovedisclosurerequiredbytheFINRARules.See‘Ratings,Coverageuniverseandrelateddefinitions’below.TheInvestmentBankingRelationshipschartreflectsthepercentageofsubjectcompanieswithineachratingcategoryforwhomGoldmanSachshasprovidedinvestmentbankingserviceswithintheprevioustwelvemonths.__Pricetargetandratinghistorychart(s)RegulatorydisclosuresDisclosuresrequiredbyUnitedStateslawsandregulationsSeecompany-specificregulatorydisclosuresaboveforanyofthefollowingdisclosuresrequiredastocompaniesreferredtointhisreport:managerorco-managerinapendingtransaction;1%orotherownership;compensationforcertainservices;typesofclientrelationships;managed/co-managedpublicofferingsinpriorperiods;directorships;forequitysecurities,marketmakingand/orspecialistrole.GoldmanSachstradesormaytradeasaprincipalindebtsecurities(orinrelatedderivatives)ofissuersdiscussedinthisreport.Thefollowingareadditionalrequireddisclosures:Ownershipandmaterialconflictsofinterest:GoldmanSachspolicyprohibitsitsanalysts,professionalsreportingtoanalystsandmembersoftheirhouseholdsfromowningsecuritiesofanycompanyintheanalyst’sareaofcoverage.Analystcompensation:AnalystsarepaidinpartbasedontheprofitabilityofGoldmanSachs,whichincludesinvestmentbankingrevenues.Analystasofficerordirector:GoldmanSachspolicygenerallyprohibitsitsanalysts,personsreportingtoanalystsormembersoftheirhouseholdsfromservingasanofficer,directororadvisorofanycompanyintheanalyst’sareaofcoverage.Non-U.S.Analysts:Non-U.S.analystsmaynotbeassociatedpersonsofGoldmanSachs&Co.LLCandthereforemaynotbesubjecttoFINRARule2241orFINRARule2242restrictionsoncommunicationswithsubjectcompany,publicappearancesandtradingsecuritiesheldbytheanalysts.Distributionofratings:Seethedistributionofratingsdisclosureabove.Pricechart:Seethepricechart,withchangesofratingsandpricetargetsinpriorperiods,above,or,ifelectronicformatorifwithrespecttomultiplecompanieswhicharethesubjectofthisreport,ontheGoldmanSachswebsiteathttps:///research/hedge.html.AdditionaldisclosuresrequiredunderthelawsandregulationsofjurisdictionsotherthantheUnitedStatesThefollowingdisclosuresarethoserequiredthejurisdictionindicated,excepttotheextentalreadymadeabovepursuanttoUnitedStateslawsandregulations.Australia:GoldmanAustraliaPtyLtdanditsaffiliatesarenotauthoriseddeposit-takinginstitutions(asthattermisdefinedintheBankingAct(Cth))inAustraliaanddonotprovidebankingservices,norcarryonabankingbusiness,inAustralia.Thisresearch,andanyaccesstoit,isintendedonlyfor“wholesaleclients”withinthemeaningoftheustralianCorporationsct,unlessotherwiseagreedyGoldmanSahs.Inproducingresearchreports,membersoftheGlobalInvestmentResearchDivisionofGoldmanAustraliasitevisitsandothermeetingshostedbythecompaniesandotherentitiesarethesubjectofitsresearchreports.InsomeinstancesthecostsofsuchsitevisitsormeetingsmaybemetinpartorinwholetheissuersconcernedifGoldmanAustraliaconsidersitisappropriateandreasonableinthespecificcircumstancesrelatingtothesitevisitormeeting.theextentthatthecontentsofthisdocumentcontainsanyfinancialproductadvice,itisgeneraladviceonlyandhasbeenpreparedbyGoldmanSahswithouttakingintoaccountaclientsobjectives,financialsituationorneeds.Aclientshould,beforeactingonaysuhadvice,considertheappropriatenessoftheadvicehavingregardtotheclientsownobjectives,financialsiuationandneeds.AcopyofcertainGoldmanSahsAustraliaandNwZealanddisclosureofinterestsandacopyofGoldmanSahs’AustralianSell-SideResearhIndependenceolicyStatementareaailableat:htps:///disclosures/australia-n-zealand/indx.html.Brazil:DisclosureinformationinrelationtoCVMesolutionn.20isaailableathtps:///worldwide/brazil/area/gir/index.html.Whereapplicable,theBrazil-registeredanalystprimarilyresponsibleforthecontentofthisresearchreport,asdefinedinArticle20ofCVMResolutionn.20,isthefirstauthornamedatthebeginningofthisreport,unlessindicatedotherwiseattheendofthetext.Canada:Thisinformationisbeingprovidedtoyouforinformationpurposesonlyandisnot,andundernocircumstancesshouldbeconstruedas,anadvertisement,offeringorsolicitationbyGoldman&Co.LLCforpurchasersofsecuritiesinCanadatotradeinanyCanadiansecurity.GoldmanSachs&Co.LLCisnotregisteredasadealerinanyjurisdictioninCanadaunderapplicableCanadiansecuritieslawsandgenerallyisnotpermittedtotradeinCanadiansecuritiesandmaybeprohibitedfromsellingcertainsecuritiesandproductsincertainjurisdictionsinCanada.IfyouwishtotradeinCanadiansecuritiesorotherproductsinCanadapleasecontactGoldmanSachsCanadaInc.,anaffiliateofTheGoldmanGroupInc.,oranotherregisteredCanadiandealer.HongKong:FurtherinformationonthesecuritiesofcoveredcompaniesreferredtointhisresearchmaybeobtainedonrequestfromGoldmanSachs(Asia)L.L.C.India:FurtherinformationonthesubjectcompanyorcompaniesreferredtointhisresearchmaybeobtainedfromGoldmanSachs(India)SecuritiesPrivateLimited,ResearchAnalyst-SEBIRegistrationNumberINH000001493,RationalHouse,AppasahebMaratheMarg,Prabhadevi,Mumbai400025,India,CorporateIdentityNumberU74140MH2006FTC160634,Phone+91229000,Fax+9122Goldmanmaybeneficiallyown1%ormoreofthesecurities(astermisdefinedinclause2(h)theIndianSecuritiesContracts(Regulation)Act,ofthesubjectcompanyorcompaniesreferredtointhisresearchreport.Japan:Seebelow.Korea:Thisresearch,andanyaccesstoit,isintendedonlyfor“proessionalinestors”withinthemeaningoftheFinancialServicesandCapitalMarketsAct,unlessotherwiseagreedbyGoldmanSahs.urtherinformationonthesubjectcompanyorcompaniesreferredtointhisresearchmaybeobtainedfromGoldmanSachs(Asia)L.L.C.,SeoulBranch.NewZealand:GoldmanSahsNewZealandLimitedanditsafiliatesareneither“registeredbanks”nor“deposittakers”(asdefinedintheReserveBankofNewZealandAct989)inNewZealand.Thisresearh,andanyaccesstoit,isintendedfor“wholesaleclients”(asdefinedinteFinancialAdvisersct2008)unlessotherwiseagreedbyGoldmanSachs.AofcertainGoldmanAustraliaandNewZealanddisclosureofinterestsisavailableat:htps:///disclosures/australia-ne-zealand/indx.html.Russia:esearhreportsdistributedintheRussianederationarenotadvertisingasdefinedintheRussianlegislation,butareinformationandanalysisnothavingproductpromotionastheirmainpurposeanddonotprovideappraisalwithinthemeaningoftheRussianlegislationonappraisalactivity.Researchreportsdonotconstituteapersonalizedinvestment__recommendationasdefinedinRussianlawsandregulations,arenotaddressedtoaspecificclient,andarepreparedwithoutanalyzingthefinancialcircumstances,investmentprofilesorriskprofilesofclients.Goldmanassumesnoresponsibilityforanyinvestmentdecisionsthatmaybetakenbyaclientorotherpersonbasedonthisresearchreport.Singapore:GoldmanSachs(Singapore)Pte.(CompanyNumber:198602165W),isregulatedbytheMonetaryAuthorityofSingapore,acceptslegalresponsibilityforthisresearch,andshouldbecontactedwithrespecttoanymattersarisingfrom,orinconnectionwith,thisresearch.Thismaterialisforreferenceonlyandmustnotbereprintedwithoutpermission.Investorsshouldcarefullyconsidertheirowninvestmentrisk.InvestmentresultsaretheresponsibilityoftheindividualUnitedKingdom:PersonswhowouldbecategorizedasretailclientsintheUnitedKingdom,assuchtermisdefinedintheoftheFinancialConductAuthority,shouldreadthisresearchinconjunctionwithpriorGoldmanSachsresearchonthecoveredcompaniesreferredtohereinandshouldrefertotheriskwarningsthathavebeensenttothembyGoldmanInternational.Acopyoftheseriskswarnings,andaglossaryofcertainfinancialtermsusedinthisreport,areavailablefromGoldmanInternationalonrequest.EuropeanUnionandUnitedKingdom:DisclosureinformationinrelationtoArticle6(2)oftheEuropeanCommissionDelegatedRegulation(EU)(2016/958)supplementingRegulation(EU)No596/2014oftheEuropeanParliamentandoftheCouncil(includingasthatDelegatedRegulationisimplementedintoUnitedKingdomdomesticlawandregulationfollowingtheUnitedKingdom’sdeparturefromtheEuropeanUnionandtheEuropeanEconomicArea)withregardtoregulatorytechnicalstandardsforthetechnicalarrangementsforobjectivepresentationofinvestmentrecommendationsorotherinformationrecommendingorsuggestinganinvestmentstrategyandfordisclosureofparticularinterestsorindicationsofconflictsofinterestisavailableathttps:///disclosures/europeanpolicy.htmlwhichstatestheEuropeanPolicyforManagingConflictsofInterestinConnectionwithInvestmentResearch.Japan:GoldmanJapanCo.,Ltd.isaFinancialInstrumentDealerregisteredwiththeKantoFinancialBureauunderregistrationnumberKinsho69,andamemberofJapanSecuritiesDealersAssociation,FinancialFuturesAssociationofJapanandIIFinancialInstrumentsFirmsAssociation.Salesandpurchaseofequitiesaresubjecttocommissionpre-determinedwithclientsplusconsumptiontax.Seecompany-specificdisclosuresastoanyapplicabledisclosuresrequiredJapaneseexchanges,theJapaneseSecuritiesDealersAssociationortheJapaneseSecuritiesFinanceRatings,coverageuniverseandrelateddefinitionsBuy(B),Neutral(N),Sell(S)AnalystsrecommendstocksasBuysorSellsforinclusiononvariousregionalInvestmentLists.BeingassignedaBuyorSellonanInvestmentListisdeterminedbyastock’stotalreturnpotentialrelativetoitscoverageuniverse.AnystocknotassignedasaBuyoraSellonanInvestmentListwithanactiverating(i.e.,astockthatisnotRatingSuspended,NotRated,CoverageSuspendedorNotCovered),isdeemedNeutral.Eachregion’sInvestmentReviewCommitteemanagesRegionalConvictionlists,whichrepresentinvestmentrecommendationsfocusedonthesizeofthetotalreturnpotentialand/orthelikelihoodoftherealizationofthereturnacrosstheirrespectiveareasofcoverage.TheadditionorremovalofstocksfromsuchConvictionlistsdonotrepresentachangeintheanalysts’investmentratingforsuchstocks.Totalreturnpotentialrepresentstheupsideordownsidedifferentialbetweenthecurrentsharepriceandthepricetarget,includingallpaidoranticipateddividends,expectedduringthetimehorizonassociatedwiththepricetarget.Pricetargetsarerequiredforallcoveredstocks.Thetotalreturnpotential,pricetargetandassociatedtimehorizonarestatedineachreportaddingorreiteratinganInvestmentListmembership.CoverageUniverse:Alistofallstocksineachcoverageuniverseisavailablebyprimaryanalyst,stockandcoverageuniverseathttps:///research/hedge.html.NotRated(NR).Theinvestmentrating,targetpriceandearningses