Morning Express 15 June 2021

Home , Bank of Communications, China Gas, Sunny Optical, WH Group

BOCOM Int'l Research

Focus of the Day

China Macro Review Kindly vote for BOCOM Int’l sales & research teams in the 2021 Data monitor: liquidity stable; CPI up, PPI Macro Strategy Asiamoney Brokers Poll at: rebounds further https://euromoney.com/brokers Hanna Cai [email protected] CPI rose moderately. Pork prices dropped further due to the recovering hog Global Stock Indices supply, dragging food prices. Consumption continued to pick up, and the rise of Close 1D% YTD% non-food prices was the main driver for CPI. HSI 28,842 0.00 3.41 HSCEI 10,751 0.00 0.12 Rising commodity prices continued to push up PPI. The YoY increase of PPI in SH A 3,763 0.00 3.36 May reached the highest level since September 2008. We expect it to remain SH B 257 0.00 5.38 high in 3Q21. SZ A 2,520 0.00 3.37 SZ B 1,169 0.00 7.57 Interbank liquidity was stable, and the PBoC continued to carry out fixed- DJIA 34,394 -0.25 12.37 S&P 500 4,255 0.18 13.29 frequency reverse repos in small amounts. Overnight SHIBOR slipped, while the Nasdaq 14,174 0.74 9.98 longer-term rates were stable. We expect the overall liquidity to marginally FTSE 7,147 0.18 10.62 tighten in June due to the impact of local government special bonds and taxation. CAC 6,601 0.00 18.90 The PBoC may increase fund injection. DAX 15,674 -0.13 14.25 Source: FactSet

Key Commodity/Forex Indicators Close 3M% YTD% Internet Sector Monthly Brent 72.69 5.01 40.33 Tencent/NetEase’s mobile games in line in 2Q21; Rating: Outperform Gold 1,877.40 9.18 -0.83 new games strong Silver 28.14 10.46 6.25 Connie Gu, CPA [email protected] Copper 10,029.00 10.79 29.55 JPY 109.99 -0.91 -6.13 In May, domestic mobile game market increased ~4% MoM/5% YoY. Tencent's GBP 1.41 1.62 3.29 gross billing was flattish MoM/up 5%+ YoY, while NetEase's was flattish MoM/ EUR 1.21 1.56 -0.91 down ~10% YoY. Gross billing of Alibaba's Three Kingdoms: Strategic Edition grew bps change 3M 6M 15%+ MoM driven by new season; that of Bilibili's Guardian Tales was HIBOR 0.17 -27.70 -53.20 ~RMB230m in May. US 10yr yield 1.50 -7.83 68.26 Source: FactSet Overseas mobile games in May: Tencent's gross billing climbed ~15% MoM, mainly from the incremental contributions of PUBG and League of Legends. HSI Technical NetEase’s grew 25%+ MoM, driven by Knives Out and Identity V. For Alibaba's HSI 28,842.13 50D MA 28,714.08 Three Kingdoms: Strategic Edition, the share of overseas gross billing rose to 200D MA 28,502.57 18%. 14D RSI 55.04 Short sell (HK$m) 16,222 New games in Jun: Mole's World, a mobile game adapted from web game IP, was Source: FactSet launched on 1 Jun. It has been a top new game featuring emotional linkage and strong social interaction, with 45m cumulative downloads and an estimated first- Hao Hong, CFA month gross billing of >RMB600m. Head of Research [email protected]

Analyst certifications, disclosures and disclaimer at the back forms part of this report and must be read. Download our reports from Bloomberg: BOCM or https://research.bocomgroup.com 15 June 2021 Morning Express

Recommendation: We estimate Tencent's (700 HK/Buy) mobile game gross billing to be flattish QoQ/up ~20% YoY in 2Q21, and NetEase's (NTES US; 9999 HK/Buy) to be down ~5% QoQ/flattish YoY. Maintain Outperform sector rating.

Internet Sector Weekly Tencent makes full online video layout; fresh Rating: Outperform food e-commerce plays to kick off IPO Connie Gu, CPA [email protected] Delivery business maintained steady growth. In May, the business volume of delivery enterprises nationwide was 9.2bn, up 25% YoY/8% MoM. We estimate Alibaba’s 2Q21 GMV to increase 33% YoY (Tmall/Taobao up 17%/60%), and Pinduoduo’s GMV to increase 59% YoY.

Tencent Online Video unveiled strategies regarding long, medium and short videos. It will increase the proportion of revenue-sharing for online dramas, create new micro-theaters, and support four key categories (i.e. entertainment, games, knowledge, and integrated media). We believe the integration of long and short videos can attract users, while leveraging WeSee in “second creation” and interactive content to lift user engagement and retention.

Dingdong and Missfresh submitted prospectuses. In 2020, Dingdong’s GMV was RMB13bn, and its order volume was 198.5m, with ASP of RMB65; Missfresh’s GMV was RMB7.6bn, with order volume of 65.06m and ASP of RMB117.

Investment recommendation: Maintain Outperform sector rating, with Alibaba (BABA US/9988 HK) and Tencent (700 HK) as top Buys in 2H21. We remain long- term optimistic on Meituan (3690 HK) and iQIYI (IQ US).

Consumer Sector Weekly Pou Sheng, Yue Yuen, Texhong, Feihe, Chow Tai Rating: Outperform Fook, Shenzhou, CPI, PPI Edward Lui [email protected] Sportswear: Pou Sheng’s (3813 HK/Buy) May 2021 sales declined 21.0% YoY to RMB1,888m (vs. April: -11.4%). Compared to 2019 (pre-pandemic) level, May sales decline narrowed to -14.6% (vs. April: -21.3%).

Apparel/OEM: Yue Yuen (551 HK/NR) reported May operating revenue of US$736.96m, representing 6.4% YoY growth.

Textile: Texhong (2678 HK/NR) announced its net profit after tax for 5M21 exceeded RMB1bn.

Download our reports from Bloomberg: BOCM or https://research.bocomgroup.com 2 15 June 2021 Morning Express

Dairy: Feihe (6186 HK/NR) announced to use up to US$2bn to repurchase shares, accounting for no more than 10% of its total outstanding shares.

Jewelry: Chow Tai Fook’s (1929 HK/NR) FY21 revenue was up 23.6% to HK$70.2bn. Net profit grew 108% YoY to HK$6bn.

China CPI/PPI: China CPI rose 1.3% YoY in May (vs. 0.9% in Apr), and PPI increased 9% YoY (vs. 6.8% in Apr). The rise in PPI was mainly driven by ferrous metals.

Maintain Outperform sector rating: We raised TP on Shenzhou (2313 HK/Buy), our top pick for 2H21, as we see strong order and capacity growth in the medium term.

Download our reports from Bloomberg: BOCM or https://research.bocomgroup.com 3 15 June 2021 Morning Express

Economic data releases for this week – US Economic data releases for this week – China Date Event Survey Prior Date Event Survey Prior 15 Jun PPI (MoM%) 0.5 0.6 15 Jun Industrial production (YoY%) 8.9 9.8 15 Jun Industrial Production (MoM%) 0.7 0.5 16 Jun Housing Starts (m) 1.630 1.569 16 Jun Import price index (MoM%) 0.7 0.7 Source: Bloomberg Source: Bloomberg

BOCOM Research latest reports In-depth reports 8 Jun BOCOM Int’l Research – Outlook 2H21 BOCOM Int'l Research Team 7 Jun China Market Strategy - Outlook 2H21: Value Still Striking Back Hao Hong, CFA, Karen Tan, Hanna Cai 25 May China Market Strategy - The Long Waves in Commodities: Three Centuries of Evidence Hao Hong, CFA, Karen Tan 18 May Insurance/Healthcare Cross-sector Insights – Leading insurers to drive LT growth via healthcare forays Li Wan, CFA, Li Zhao, PhD, John Nie 5 May China Macro Review – Quantitative Strategy XIII – Huddling in the Most Crowded Place Karen Tan, Hao Hong, CFA, Hanna Cai 15 Apr China Market Strategy – Why Chinese Stocks Underperforming in a Recovery? Cues from Bonds Hao Hong, CFA 29 Mar China Market Strategy – Value Striking Back Hao Hong, CFA 15 Mar Jiumaojiu International (9922 HK) - Initiate with Buy as momentum abounds for Tai Er sauerkraut fish Yoyo Pang, Edward Lui 10 Mar Fintech Sector Insights – Risk control separates wheat from chaff; Top Buy 360 Digitech Hannah Han, Jaclyn Wang 3 Mar Renewable Energy Sector Insights - Insights series (1) — PV power industry riding on tailwinds of carbon Bob Wen, CPA, Louis Sun neutrality 22 Feb Banking Sector Insights – Digital bank series #1 – Internet banks niche and highly profitable Jaclyn Wang, Hannah Han 8 Feb Internet Sector Insights – Community group-buy: sales model reshaped, logistics input to lift LT efficiency Connie Gu, CPA, Brandy Sun, Li Zhao, CFA 26 Jan Gas Utilities/Auto Sector Insights – Vision series #2: When fuel cell vehicles hit the gas Wallace Cheng, Angus Chan Daily reports 10 Jun Akeso Inc (9926 HK) - The clinical data eye-catching, the advantages of bispecific outstanding, maintain Buy Li Zhao, PhD, John Nie 9 Jun Momo Inc (MOMO US) - Momo core on recovery track, Tantan shifts strategy to sustainable growth Connie Gu, CPA, Brandy Sun, Li Zhao, CFA 9 Jun Tian Lun Gas (1600 HK) - New strategic investor to drive synergies Wallace Cheng 7 Jun Baidu Inc (BIDU US) - Technology empowerment, large monetization potential upside in the mid- to long-term Connie Gu, CPA, Brandy Sun, Li Zhao, CFA 7 Jun Alibaba Group (BABA US) - The new strategic investment exceeds RMB30bn, which may correspond to a Connie Gu, CPA, Brandy Sun, Li Zhao, CFA broader TAM 7 Jun Kingsoft Corp (3888 HK) - Lift WPS long-term growth forecasts and TP, maintain Neutral Brandy Sun, Connie Gu, CPA, Li Zhao, CFA 7 Jun Link REIT (823 HK) - Growing appetite for acquisition Philip Tse, CFA, FRM 7 Jun China Macro Review - May PMI steady; funding pressure likely in June Hanna Cai, Karen Tan 4 Jun China Property Sector - Large players cement leadership further Philip Tse, CFA, FRM, Spencer Luo 3 Jun LexinFintech Holdings (LX US) - Back on track to profitability Hannah Han, Jaclyn Wang 3 Jun Kunlun Energy (135 HK) - Upgrade to Buy; solid start on a new journey Wallace Cheng 2 Jun JOYY Inc (YY US) - Content & social enhancement to beef up monetization; maintain Buy Connie Gu, CPA, Brandy Sun, Li Zhao, CFA 1 Jun Pinduoduo Inc (PDD US) - Grocery business enjoys synergies with main site; UE has upside in long term Brandy Sun, Connie Gu, CPA, Li Zhao, CFA 1 Jun GCL-Poly Energy (3800 HK) - Granular silicon production ramping up, but awaits wider adoption Louis Sun, Bob Wen, CPA 31 May Meituan Dianping (3690 HK) - Strong new initiatives revenue; half of new users from community group-buy Connie Gu, CPA, Brandy Sun, Li Zhao, CFA, Qibo Chen 31 May China Macro Review - Data monitor: market liquidity slightly tighter, PBoC puts stability first Hanna Cai , Karen Tan 31 May 360 DigiTech Inc (QFIN US) - Strong earnings and recovery momentum Hannah Han, Jaclyn Wang 28 May JOYY Inc (YY US) - Content/social ecosystem development to be the focus ahead Connie Gu, CPA, Brandy Sun, Li Zhao, CFA 27 May Lenovo Group (992 HK) - PC still strong as smartphones start to kick in; raise TP, maintain Buy Chris Yim 27 May Pinduoduo Inc (PDD US) - 1Q21 beats on take rate; Duoduo Grocery engagement improves Brandy Sun, Connie Gu, CPA, Li Zhao, CFA Source: BOCOM Int'l

Download our reports from Bloomberg: BOCM or https://research.bocomgroup.com 4 15 June 2021 Morning Express

HSI constituents Company Stock Current Mkt 5D YTD ------52-week------P/E------Yield P/B name code price cap chg chg High Low 2020 2021E 2022E 2021E 2021E (HK$) (HK$ m) (%) (%) (HK$) (HK$) (x) (x) (x) (%) (x) CKH 1 HK 59.80 230,591 -0.50 10.54 65.75 46.05 7.91 6.64 6.23 4.63 0.44 CLP 2 HK 78.65 198,705 0.51 9.69 80.35 70.50 17.36 16.69 16.06 4.02 1.74 HK & CHINA GAS 3 HK 12.32 229,889 -0.81 11.71 13.01 10.34 38.27 30.54 27.69 2.85 3.37 HSBC 5 HK 47.60 972,278 -1.96 16.81 50.80 4.24 17.03 10.75 10.04 3.75 0.69 POWER ASSETS 6 HK 48.65 103,832 2.21 15.83 50.50 39.50 16.95 16.00 15.74 5.78 1.21 HANG SENG 11 HK 159.20 304,365 -0.06 19.07 165.20 111.10 19.04 20.41 18.67 3.61 N/A HENDERSON 12 HK 38.30 185,425 2.68 26.61 38.55 27.35 12.44 12.77 12.43 4.70 0.56 SHKP 16 HK 122.00 353,529 3.39 22.00 125.00 91.65 12.04 11.47 11.07 4.06 0.61 NEW WORLD 17 HK 42.20 107,415 3.18 16.90 42.75 34.90 16.36 14.60 14.91 4.83 0.49 GEG 27 HK 62.45 271,666 -1.96 3.65 78.25 50.05 N/A 66.44 21.53 0.17 3.87 MTRC 66 HK 43.40 268,096 0.23 0.12 49.00 37.90 61.13 32.88 17.15 2.85 1.53 HLP 101 HK 19.76 88,902 1.86 -3.37 22.30 17.20 21.25 18.30 16.20 3.95 0.62 GEELY 175 HK 22.05 216,535 -0.90 -16.79 33.80 11.60 32.42 21.18 16.97 1.27 2.53 ALI HEALTH 241 HK 17.90 241,373 -8.95 -21.83 29.90 17.40 309.58 289.02 217.51 0.00 13.49 CITIC LTD 267 HK 8.79 255,704 -4.77 60.11 9.24 5.22 4.51 4.04 3.76 6.14 0.35 WH GROUP 288 HK 7.17 105,727 3.46 10.31 7.45 5.95 14.00 9.96 8.97 4.28 1.26 SINOPEC 386 HK 4.23 107,922 -1.17 21.90 4.55 2.97 12.81 7.11 6.70 8.33 0.55 HKEX 388 HK 468.20 592,676 -2.13 10.16 567.00 287.40 51.51 40.22 34.60 2.24 11.46 TECHTRONIC 669 HK 140.70 257,477 3.76 27.22 150.10 70.35 41.56 33.85 28.33 1.17 7.32 COLI 688 HK 19.74 216,033 7.28 17.08 26.95 15.20 4.68 4.30 3.92 7.01 0.52 TENCENT 700 HK 596.00 5,656,171 -2.53 5.67 766.50 433.60 29.70 32.38 27.28 0.31 5.50 UNICOM 762 HK 4.25 130,042 0.95 -4.49 6.53 4.17 8.54 7.61 6.73 5.31 0.32 LINK 823 HK 76.85 159,991 3.71 8.85 76.85 58.20 26.76 27.14 25.67 3.78 1.03 PETROCHINA 857 HK 3.57 75,323 5.62 48.75 3.57 2.16 29.40 8.17 8.71 6.13 0.43 CNOOC 883 HK 9.14 408,078 7.28 27.30 10.40 6.55 13.44 5.45 5.13 7.84 0.72 CCB 939 HK 6.26 1,583,767 0.48 6.28 6.68 4.98 4.86 4.52 4.25 6.68 0.52 CHINA MOBILE 941 HK 48.60 995,109 0.41 9.95 59.85 41.50 7.59 7.37 7.05 7.20 0.68 LONGFOR 960 HK 46.10 271,404 1.65 1.54 53.45 35.65 11.37 10.25 8.63 4.39 1.86 CK INFRA 1038 HK 48.10 121,193 0.31 15.49 49.90 36.15 16.53 13.63 13.32 5.20 1.05 HENGAN 1044 HK 52.90 62,292 1.24 -3.64 71.00 49.35 11.27 11.21 10.76 5.83 2.47 CSPC 1093 HK 12.46 148,954 3.66 57.12 12.46 7.16 23.77 23.32 19.73 1.27 4.66 CR LAND 1109 HK 36.40 259,566 2.68 13.75 40.80 29.35 8.87 7.92 7.09 4.65 0.96 CKA 1113 HK 52.55 191,636 3.14 32.04 52.80 35.90 10.03 9.24 8.23 3.81 0.52 SBP 1177 HK 8.30 155,882 -3.49 10.67 10.88 6.65 41.25 27.77 26.80 0.98 5.92 BYD 1211 HK 214.40 724,555 11.72 5.51 278.40 51.50 120.10 98.63 68.67 0.09 5.88 AIA 1299 HK 95.60 1,153,677 -2.40 0.63 108.90 69.20 25.66 22.10 19.71 1.54 2.19 ICBC 1398 HK 5.04 2,136,713 0.00 0.20 5.60 3.99 4.83 4.54 4.28 6.75 0.51 XIAOMI 1810 HK 28.15 574,657 -4.74 -15.21 35.30 12.46 27.30 28.13 24.40 0.00 4.05 BUDWEISER APAC 1876 HK 26.25 347,639 1.94 2.54 29.15 21.85 80.35 44.59 37.58 0.86 3.97 SANDS 1928 HK 33.95 274,759 -1.16 -0.29 40.20 27.00 N/A 110.33 19.32 0.00 17.87 WHARF REIC 1997 HK 45.20 137,238 1.57 12.02 48.85 27.30 18.37 17.45 15.78 3.62 0.66 COUNTRY GARDEN 2007 HK 9.59 208,737 2.13 -10.54 11.26 9.00 5.03 4.65 4.19 6.58 0.86 AAC TECH 2018 HK 54.95 66,407 6.08 26.61 62.95 38.40 36.20 22.49 18.60 0.96 2.36 ANTA 2020 HK 158.40 426,969 0.57 28.89 162.00 67.85 67.96 44.67 34.58 0.73 11.86 WUXI BIO 2269 HK 124.80 520,837 3.06 21.40 124.80 42.33 256.92 170.35 120.62 0.00 18.43 SHENZHOU 2313 HK 191.60 288,017 1.05 26.05 207.60 90.85 46.40 36.69 30.97 1.41 7.66 PING AN 2318 HK 80.90 1,509,570 -1.10 -14.84 103.10 77.50 8.23 7.91 6.80 3.63 1.39 MENGNIU 2319 HK 45.20 177,980 1.46 -3.42 52.00 29.15 41.49 28.52 23.63 0.94 3.94 SUNNY OPTICAL 2382 HK 191.40 209,405 -4.20 12.79 236.80 107.00 35.36 29.46 23.81 0.66 7.99 BOCHK 2388 HK 27.70 292,867 -1.60 17.87 29.55 20.30 11.06 10.53 9.58 4.80 0.96 CHINA LIFE 2628 HK 15.72 959,057 -1.01 -8.07 20.90 15.42 7.31 6.53 5.73 5.45 0.74 BOCOM 3328 HK 5.22 182,762 -0.57 27.32 5.25 3.66 4.34 4.10 3.84 7.70 0.40 MEITUAN 3690 HK 307.20 1,572,253 1.65 4.28 451.40 159.50 324.32 N/A 1,632.05 0.00 16.37 BOC 3988 HK 2.83 1,024,915 -1.39 6.79 3.16 2.37 3.82 3.58 3.28 8.84 0.36 CG SERVICES 6098 HK 79.55 255,856 4.05 51.67 82.20 34.70 67.10 47.40 32.14 0.51 10.60 HAIDILAO 6862 HK 39.80 210,940 -5.58 -33.33 83.55 32.70 N/A N/A N/A N/A N/A XINYI SOLAR 968 HK 15.06 132,689 14.96 -25.63 22.10 6.39 27.22 23.12 23.35 2.03 4.43 ALIBABA 9988 HK 205.20 4,447,792 -2.38 -11.78 307.40 204.60 20.94 21.59 17.40 0.00 3.31

HANG SENG INDEX 28,842.13 28,029,536 -0.26 5.92 31,084.94 23,235.42 42.64 25.61 95.18 2.73 4.03 Source: FactSet

Download our reports from Bloomberg: BOCM or https://research.bocomgroup.com 5 15 June 2021 Morning Express

HSCEI constituents Company Stock Closing Mkt 5D YTD ------52-week------P/E------Yield P/B name code price cap chg chg High Low 2020 2021E 2022E 2021E 2021E (HK$) (HK$ m) (%) (%) (HK$) (HK$) (x) (x) (x) (%) (x) N/A N/A 8.90 96,216 -2.20 -0.45 19.10 7.83 29.92 18.81 12.53 1.23 5.78 GEELY 175 HK 22.05 216,535 -0.90 -16.79 33.80 11.60 32.42 21.18 16.97 1.27 2.53 ALI HEALTH 241 HK 17.90 241,373 -8.95 -21.83 29.90 17.40 309.58 289.02 217.51 0.00 13.49 CITIC LTD 267 HK 8.79 255,704 -4.77 60.11 9.24 5.22 4.51 4.04 3.76 6.14 0.35 CR BEER 291 HK 71.30 231,310 0.42 -0.14 75.40 42.15 90.33 54.87 42.79 0.72 8.19 CGH 384 HK 29.60 165,889 3.32 -3.90 33.50 20.75 16.82 14.06 12.35 1.99 3.22 SINOPEC 386 HK 4.23 107,922 -1.17 21.90 4.55 2.97 12.81 7.11 6.70 8.33 0.55 COLI 688 HK 19.74 216,033 7.28 17.08 26.95 15.20 4.68 4.30 3.92 7.01 0.52 TENCENT 700 HK 596.00 5,656,171 -2.53 5.67 766.50 433.60 29.70 32.38 27.28 0.31 5.50 SHIMAO 813 HK 21.40 75,630 -3.82 -13.36 37.50 21.10 5.01 4.42 3.86 8.97 0.63 CNOOC 883 HK 9.14 408,078 7.28 27.30 10.40 6.55 13.44 5.45 5.13 7.84 0.72 CONCH 914 HK 42.95 55,818 -0.92 -11.53 61.05 42.60 5.65 5.22 5.17 6.13 1.01 CCB 939 HK 6.26 1,583,767 0.48 6.28 6.68 4.98 4.86 4.52 4.25 6.68 0.52 CHINA MOBILE 941 HK 48.60 995,109 0.41 9.95 59.85 41.50 7.59 7.37 7.05 7.20 0.68 LONGFOR 960 HK 46.10 271,404 1.65 1.54 53.45 35.65 11.37 10.25 8.63 4.39 1.86 SMIC 981 HK 23.80 141,896 1.28 7.69 41.95 17.28 27.88 34.08 36.61 0.00 1.52 KUAISHOU 1024 HK 208.80 708,396 1.16 -30.40 415.00 194.30 N/A N/A N/A N/A N/A CSPC 1093 HK 12.46 148,954 3.66 57.12 12.46 7.16 23.77 23.32 19.73 1.27 4.66 CR LAND 1109 HK 36.40 259,566 2.68 13.75 40.80 29.35 8.87 7.92 7.09 4.65 0.96 SBP 1177 HK 8.30 155,882 -3.49 10.67 10.88 6.65 41.25 27.77 26.80 0.98 5.92 BYD 1211 HK 214.40 724,555 11.72 5.51 278.40 51.50 120.10 98.63 68.67 0.09 5.88 ABC 1288 HK 2.81 1,373,490 -10.51 -1.06 3.25 2.40 3.92 3.67 3.45 8.57 0.40 ICBC 1398 HK 5.04 2,136,713 0.00 0.20 5.60 3.99 4.83 4.54 4.28 6.75 0.51 PSBC 1658 HK 5.39 571,189 -2.18 23.06 6.21 3.08 6.25 5.84 5.30 5.18 0.66 XIAOMI 1810 HK 28.15 574,657 -4.74 -15.21 35.30 12.46 27.30 28.13 24.40 0.00 4.05 SUNAC CHINA 1918 HK 29.10 135,749 0.87 1.57 40.80 26.95 3.61 3.30 3.00 7.14 0.73 COUNTRY GARDEN 2007 HK 9.59 208,737 2.13 -10.54 11.26 9.00 5.03 4.65 4.19 6.58 0.86 ANTA 2020 HK 158.40 426,969 0.57 28.89 162.00 67.85 67.96 44.67 34.58 0.73 11.86 SHENZHOU 2313 HK 191.60 288,017 1.05 26.05 207.60 90.85 46.40 36.69 30.97 1.41 7.66 PING AN 2318 HK 80.90 1,509,570 -1.10 -14.84 103.10 77.50 8.23 7.91 6.80 3.63 1.39 MENGNIU 2319 HK 45.20 177,980 1.46 -3.42 52.00 29.15 41.49 28.52 23.63 0.94 3.94 SUNNY OPTICAL 2382 HK 191.40 209,405 -4.20 12.79 236.80 107.00 35.36 29.46 23.81 0.66 7.99 CPIC 2601 HK 25.40 340,732 -6.10 -16.31 41.45 20.50 7.95 7.36 6.43 6.25 0.86 CHINA LIFE 2628 HK 15.72 959,057 -1.01 -8.07 20.90 15.42 7.31 6.53 5.73 5.45 0.74 ENN 2688 HK 147.60 166,294 4.16 29.70 147.60 80.65 21.82 18.95 16.59 1.85 3.86 BOCOM 3328 HK 5.22 182,762 -0.57 27.32 5.25 3.66 4.34 4.10 3.84 7.70 0.40 EVERGRANDE 3333 HK 11.22 148,620 -1.75 -24.70 28.00 11.18 15.15 5.39 4.95 4.39 0.72 MEITUAN 3690 HK 307.20 1,572,253 1.65 4.28 451.40 159.50 324.32 N/A 1,632.05 0.00 16.37 HANSOH PHARM 3692 HK 33.25 196,918 0.91 -11.57 45.45 28.95 62.23 49.60 39.68 0.40 8.12 CMB 3968 HK 68.40 1,725,166 -2.36 39.59 71.75 35.55 14.86 12.82 11.18 2.54 1.98 BOC 3988 HK 2.83 1,024,915 -1.39 6.79 3.16 2.37 3.82 3.58 3.28 8.84 0.36 CG SERVICES 6098 HK 79.55 255,856 4.05 51.67 82.20 34.70 67.10 47.40 32.14 0.51 10.60 CHINA FEIHE 6186 HK 19.40 173,307 -9.13 6.83 24.85 14.50 19.48 19.06 15.67 2.03 6.24 JD HEALTH 6618 HK 108.20 344,549 5.56 -27.87 195.00 98.30 N/A 297.00 184.44 0.00 7.08 HAIDILAO 6862 HK 39.80 210,940 -5.58 -33.33 83.55 32.70 N/A N/A N/A N/A N/A JD.COM 9618 HK 279.20 735,664 -5.48 -18.36 416.80 228.00 44.24 43.62 29.94 0.00 3.38 NONGFU SPRING 9633 HK 43.05 216,743 -0.46 -21.58 66.60 33.10 73.85 64.45 55.83 0.58 19.77 BAIDU 9888 HK 183.10 415,443 -0.81 -27.34 252.00 176.10 19.12 18.94 16.20 0.00 1.72 ALIBABA 9988 HK 205.20 4,447,792 -2.38 -11.78 307.40 204.60 20.94 21.59 17.40 0.00 3.31 NETEASE 9999 HK 175.40 553,522 -0.96 18.83 206.00 125.10 33.24 26.74 22.84 0.94 5.08

HANG SENG CHINA ENT INDX 10,750.95 29,262,770 -0.51 0.12 12,228.63 9,281.52 38.16 25.95 93.48 2.74 3.84 Source: FactSet

Download our reports from Bloomberg: BOCM or https://research.bocomgroup.com 6 15 June 2021 Morning Express

BOCOM International 10/F, Man Yee Building, 68 Des Voeux Road Central, Central, Hong Kong Main: (852) 3766 1899 Fax: (852) 2107 4662

Rating System Analyst Stock Rating: Analyst Industry Views: Buy: The stock's total return is expected to exceed that of the Outperform: The analyst expects the industry coverage universe corresponding industry over the next 12 months. to be attractive relative to the relevant broad market benchmark over the next 12 months. Neutral: The stock's total return is expected to be in line with that of the corresponding industry over the next 12 months. Market perform: The analyst expects the industry coverage universe to be in line with the relevant broad market Sell: The stock's total return is expected to be below that of the benchmark over the next 12 months. corresponding industry over the next 12 months. Underperform: The analyst expects the industry coverage Not-Rated: The analyst does not have conviction regarding the universe to be unattractive relative to the relevant broad outlook of the stock's total return relative to that of the market benchmark over the next 12 months. corresponding industry over the next 12 months. Broad market benchmark for Hong Kong is the Hang Seng Composite Index, for China A-shares is the MSCI China A Index, for US-listed Chinese companies is S&P US Listed China 50 (USD) Index.

Download our reports from Bloomberg: BOCM or https://research.bocomgroup.com 7 15 June 2021 Morning Express

Analyst certification The authors of this report, hereby declare that: (i) all of the views expressed in this report accurately reflect their personal views about any and all of the subject securities or issuers; and (ii) no part of any of their compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in this report; (iii) no insider information/ non-public price-sensitive information in relation to the subject securities or issuers which may influence the recommendations were being received by the authors. The authors of this report further confirm that (i) neither they nor their respective associates (as defined in the Code of Conduct issued by the Hong Kong Securities and Futures Commission) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to the date of issue of the report; (ii)) neither they nor their respective associates serve as an officer of any of the Hong Kong listed companies covered in this report; and (iii) neither they nor their respective associates have any financial interests in the stock(s) covered in this report except for one coverage analyst who is holding shares of Shimao Property Holdings Limited.

Disclosure of relevant business relationships BOCOM International Securities Limited, and/or its associated companies, has investment banking relationship with Bank of Communications, Guolian Securities Co. Ltd., Luzhou Xinglu Water (Group) Co., Ltd., BOCOM International Holdings Company Limited, Sichuan Energy Investment Development Co., Ltd, Light Year Holdings Limited, Analogue Holdings Limited, Zhejiang New Century Hotel Management Co., Ltd, Tai Hing Group Holdings Limited, Shanghai Kindly Medical Instruments Co, Ltd, China Bright Culture Group, Jinchuan Group International Resources Co. Ltd, JiaXing Gas Group Co., Ltd, Honliv Healthcare Management Group Company Limited, Joy Spreader Interactive Technology. Ltd, JD.com, Inc, Qingdao Holdings International Limited, Immunotech Biopharm Ltd, Ganglong China Property Group Limited, Sino-Entertainment Technology Holdings Limited, Dashan Education Holdings Limited, Adtiger Corporations Limited, China Bohai Bank Co., Ltd., Fulu Holdings Limited, China Nature Energy Technology Holdings Limited, RemeGen Co., Ltd., Shinsun Holdings (Group) Co., Ltd., JD Health International Inc., Leading Group Holdings Limited, Datang Group Holdings Limited, Jiayuan Services Holdings Limited, Netjoy Holdings Limited, China Gas Industry Investment Holdings Co. Ltd., Raily Aesthetic Medicine International Holdings Limited, Legion Consortium Limited, Cheshi Holdings Limited, Deyun Holdings Ltd., Mediwelcome Healthcare Service and Technology Inc., Modern Chinese Medicine Group Co., Ltd., Roiserv Lifestyle Services Co., Ltd., Strawbear Entertainment Group, Oriental University City Holdings (H.K.) Limited, JOINN Laboratories (China) Co., Ltd., Morimatsu International Holdings Company Limited, Megain Holding (Cayman) Co., Ltd., Edding Group Company Limited, JD Logistics, Inc., Qiniu Ltd., Chief Financial Group Limited, and China Youran Dairy Group Limited within the preceding 12 months.

BOCOM International Global Investment Limited currently holds more than 1% of the equity securities of Orient Securities Company Limited. BOCOM International Global Investment Limited currently holds more than 1% of the equity securities of Everbright Securities Company Limited.

Disclaimer By accepting this report (which includes any attachment hereto), the recipient hereof represents and warrants that he is entitled to receive such report in accordance with the restrictions set forth below and agrees to be bound by the limitations contained herein. Any failure to comply with these limitations may constitute a violation of law. This report is strictly confidential and is for private circulation only to clients of BOCOM International Securities Ltd. This report is being supplied to you strictly on the basis that it will remain confidential. No part of this report may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of BOCOM International Securities Ltd. BOCOM International Securities Ltd, its affiliates and related companies, their directors, associates, connected parties and/or employees may own or have positions in securities of the company(ies) covered in this report or any securities related thereto and may from time to time add to or dispose of, or may be interested in, any such securities. Further, BOCOM International Securities Ltd, its affiliates and its related companies may do and seek to do business with the company(ies) covered in this report and may from time to time act as market maker or have assumed an underwriting commitment in securities of such company(ies), may sell them to or buy them from customers on a principal basis and may also perform or seek to perform investment banking, advisory, underwriting, financing or other services for or relating to such company(ies) as well as solicit such investment, advisory, financing or other services from any entity mentioned in this report. In reviewing this report, an investor should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest. The information contained in this report is prepared from data and sources believed to be correct and reliable at the time of issue of this report. This report does not purport to contain all the information that a prospective investor may require and may be subject to late delivery, interruption and interception. BOCOM International Securities Ltd does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information and opinion contained in this report and accordingly, neither BOCOM International Securities Ltd nor any of its affiliates nor its related persons shall be liable in any manner whatsoever for any consequences (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) of any reliance thereon or usage thereof. This report is general in nature and has been prepared for information purposes only. It is intended for circulation amongst BOCOM International Securities Ltd’s clients generally and does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. The information and opinions in this report are not and should not be construed or considered as an offer, recommendation or solicitation to buy or sell the subject securities, related investments or other financial instruments thereof. The views, recommendations, advice and opinions in this report may not necessarily reflect those of BOCOM International Securities Ltd or any of its affiliates, and are subject to change without notice. BOCOM International Securities Ltd has no obligation to update its opinion or the information in this report. Investors are advised to make their own independent evaluation of the information contained in this research report, consider their own individual investment objectives, financial situation and particular needs and consult their own professional and financial advisers as to the legal, business, financial, tax and other aspects before participating in any transaction in respect of the securities of company(ies) covered in this report. The securities of such company(ies) may not be eligible for sale in all jurisdictions or to all categories of investors.

This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to any law, regulation, rule or other registration or licensing requirement. BOCOM International Securities Ltd is a subsidiary of Bank of Communications Co Ltd.

Download our reports from Bloomberg: BOCM or https://research.bocomgroup.com 8