中国动向：新浪和中国动向联合收购麦考林至少29%的股份

Please see important notice on the last page. 1 of 8Company ReportCHINA DONGXIANG(03818.HK) Mecox Lane Ltd. (“Mecox Lane”), which operates one of China’s online platforms for apparel & accessories, today announced that SINA Co., (“SINA”) & a subsidiary of China Dongxiang (Group) Co., Ltd. (“China DX” or the “Company”) entered separate agreements to acquire an aggregate of 117,505,755 ordinary shares of Mecox Lane from two major shareholders of Mecox Lane, Maxpro Holdings Ltd. & Ever Keen Holdings Ltd., both wholly owned by Sequoia Capital (collectively “Sequoia”). Under the share purchase agreements, SINA & China DX will purchase 76,986,529 & 40,519,225 ordinary shares respectively, or approximately 19% & 10% of the issued & outstanding shares of Mecox Lane. The purchase price is USD0.85 per share. The selling shareholders also agreed to grant SINA & China DX options to purchase 48,254,173 ordinary shares & 18,306,117 ordinary shares of Mecox Lane, respectively. The options are exercisable during a two-year period starting from the closing date of the above share purchases and the exercise price is USD1.14 per ordinary share. Upon the closing of share purchases, a representative from SINA will be appointed as a director of Mecox Lane & Mr. Kelvin Yu, a vice president with Sequoia will resign from the board. Each of SINA & DX will be subject to a one-year lock-up with respect to the Sale Shares, starting from the closing date of the share purchases. Sequoia will also be subject to 180-day lock-ups starting from the closing date of the share purchases, for their respective remaining shares in Mecox Lane. Cross-over cooperation to innovate “Blue Ocean strategy” Mecox Lane believes this strategic partnership with SINA & China DX will help expedite the pace to become a leading online fashion shopping mall in China. Mecox Lane plans to work with SINA to explore new forms of online marketing & treat each other as most-favored business partner in the cooperation of online advertising products & services. For China DX, Mecox Lane intends to work together to launch the online platform sub-channel created solely for sportswear in m18.com as well as to develop a new line of basic style apparel and accessories. SINA believes the strategic investment in Mecox Lane will enhance the Company's online marketing capability & strengthen the Company’s e-commerce platform for apparel & accessories. China DX was more valued Mecox Lane’s ‘plug-and-play’ online platform. The Company believes it will create a solid foundation for the Company to tap into the growing online sportswear market in China. Both of China DX & Mecox will benefit from increased collaboration, cooperation and interaction in our business activities. However, we think this cooperation has little impact on the Company’s revenue growth and profitability. Hence we remain the previous estimation on the Company. Base on 9.4X2011P/E, we derive OUTPERFORM (prior：Neutral) TP：HK$ 3.55 Current price：HK$3.00 China Merchants Securities (HK) Ivy Zhao 25310166 zhaox@cmschina.com.cn 07 Feb 2011 Key data HSI Index 23396.42HSCEI Index 12620.31S/O（mn） 5666.40S/O (HK)（mn） 5666.40Mkt cap (HK) (mn) 16999BVPS（HKD） 1.30Major share holder Holding (％)Chen Yihong 49Free float 47Industry ApparelShare performance %1m 6m12mAbsolute return 1 -23-36Relative return -1 -32-46 -6 0-4 0-2 002040M ar-10Jul -10Nov-1 0(% )0 3818.HKHSI IndexSource：Bloomberg Related research 1. FY09 annual result announcement-2010/3/25 2.Retail sales improved, CFO resignation has little impact-2010/4/8 3.Growth sluggish, high-dividend yield play-2010/8/25 4. Realignment Year 2011 with revenue growth further slow down-2010/11/23 SINA & China Dongxiang Acquire Shares of Mecox Lane Please see important notice on the last page. 2 of 8Company Reportthe one year TP of HKD3.55, revised up the rating to “OUTPERFORM”. Risk We think sportswear sector would remain volatile & is likely to underperform the broad market in the mid-term. Financials RMB mn 2008 2009 2010E2011E2012ERevenue 3,322 3,970 4,6014,9845,694Growth(%) 94.2% 19.5% 15.9%8.3%14.2%Gross Profit 1,944 2,399 2,8563,0553,505Net Profit 1,368 1,460 1,7381,7981,914EPS(RMB) 0.24 0.26 0.31 0.32 0.34 DPS(RMB) 0.13 0.16 0.20 0.19 0.20 P/E(X)