BOCOM Int'l Research

Morning Express 11 May 2020

Focus of the Day

Q Tech Group 1478 HK Click here to view our Research Solid product mix upgrade continued Rating: Neutral Team profile. CP: HK$ 10.54 TP: HK$ 12.00 Upside: +13.9% Chris Yim [email protected] Global Stock Indices Close 1D% YTD% Product mix upgrade remained the highlight in Q Tech’s April monthly shipments, HSI 24,230 0.86 -12.19 with >10M/>32MP accounting for 76%/33% of total shipments. HSCEI 9,868 1.07 -11.64 SH A 3,035 0.83 -5.05 4M20 camera module shipments remained largely flat. An India smartphone SH B 216 0.81 -16.03 shipment slowdown could have an adverse impact in the near term. SZ A 1,893 1.17 5.04 SZ B 844 1.02 -12.26 We expect some delays in the production ramp-up for the Korean handset DJIA 24,331 1.91 -14.74 customer, but shipment could still begin by 2H20. We expect ToF revenue S&P 500 2,930 1.69 -9.32 Nasdaq 9,121 1.58 1.66 contribution to rise for the full year. FTSE 5,936 0.00 -21.30 CAC 4,550 1.07 -23.89 Maintain Neutral with TP of HK$12.00, based on 18x 2020E P/E. DAX 10,904 1.35 -17.70 Source: FactSet

Key Commodity/Forex Indicators Fintech Sector Close 3M% YTD% More supportive policy guidelines on online Brent 29.40 -46.06 -55.48 lending Gold 1,709.90 9.01 12.53 Silver 14.98 -15.70 -16.99 Hannah Han [email protected] Copper 5,227.50 -7.53 -15.08 The CBIRC issued the consultation draft of guidelines for commercial banks’ JPY 106.43 3.14 2.11 GBP 1.25 -3.75 -6.00 online lending business on 9 May. Compared to the previous version, it sets out EUR 1.09 -0.83 -3.14 only the principles for further requirements, rather than specific limits and rules. We believe the regulators’ concern about banks’ cooperation with third-party bps change 3M 6M HIBOR 1.31 -40.93 -40.92 institutions will be eased. US 10yr yield 0.68 -57.08 -64.82 Source: FactSet We prefer top online lenders with lower APR. The latest guidelines show regulators’ supportive attitude by putting new co-lending business model into its HSI Technical regulatory framework. Currently, we believe institutional funding partners are HSI 24,230.17 more cautious on online lenders’ risk management ability and prefer the loan 50D MA 23,759.54 guarantee model to decrease their credit risks. Given supportive regulations and 200D MA 26,228.53 a looser liquidity environment, we expect top online lenders with lower APR such 14D RSI 41.79 Short sell (HK$m) 13,066 as Lexin (LX US/Buy) will benefit from increasing institutional funding in the Source: FactSet future. Hao Hong, CFA Head of Research [email protected]

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Internet Sector Weekly As of 8 May 2020 Rating: Outperform Connie Gu, CPA [email protected] During the Labor Day holiday (1-5 May), the holiday factor and issuance of coupons stimulated recovery of online and offline consumption: (1) Total offline spending on WeChat Pay increased by 30% compared with March, and exceeded that of December 2019; (2) Alipay’s total transaction volume and amount of small merchants grew 86% and 32%, respectively, vs. the beginning of March; (3) Meituan’s restaurant consumption index rose 47% over the week before the holiday; (4) JD.com’s online GMV grew 45% YoY.

During the holiday, the total number of delivered parcels increased by 39% YoY, of which JD Logistics’ surged ~70%, almost double the industry average.

The total number of domestic trips reached 115m during the holiday, contributing a tourism revenue of RMB47.56bn. The average daily trips/related revenue were half/one-third of last year’s.

The epidemic hit the film and television industry. Over 6,600 film and television companies were closed in 1Q20. The production of TV dramas may drop by 30% YoY in 2020.

Recommendation: Maintain Outperform sector rating and Alibaba (BABA US), (700 HK), Meituan (3690 HK) and Pinduoduo (PDD US) as top Buys.

Consumer Sector Weekly As of 8 May 2020 Rating: Outperform Edward Lui [email protected] HK restaurant sales shrank 31% YoY in 1Q20, the biggest YoY decline on record.

Budweiser APAC’s 1Q20 sales fell 39% YoY, driven by a 42% decline in volume.

Samsonite expects 1Q20 sales to fall c.26% YoY. Samsonite completed the syndication and allocation of a new term loan and amended its credit agreement to provide financial covenant relief.

Yili Group has started construction of a high-end organic production base in .

China PMI: Caixin China manufacturing PMI contracted to 49.4 in April from 50.1 in March, while China's official mfg PMI eased to 50.8 from 52.

US Trade Representative Office said it is considering a possible exclusion extension for up to 12 months for some products that would otherwise be part of US$200bn tariffs imposed in 2018.

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Neiman Marcus filed for Chapter 11 bankruptcy to put US$4bn of its existing US$5.1bn debt behind.

US jobs report: 3.2m jobless claims were filed in the US last week, adding to more than 30m since March.

Global sports industry is slowly restarting as countries ease COVID-19 lockdowns.

Investment implications: Both Anta (2020 HK/Buy) with its Amer sales in US/EU and Shenzhou (2313 HK/Neutral) with Nike/Adidas exposure have lagged Li Ning (2331 HK/Buy).

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Economic data releases for this week – US Economic data releases for this week – China Date Event Survey Prior Date Event Survey Prior 12 May CPI (MoM%) -0.70% -0.40% 10 May Money Supply - M2 (YoY%) 10.30% 10.10% 12 May CPI ex food & energy (MoM%) -0.20% -0.10% 10 May New Yuan Loans (RMB bn) 1,300.0b 2,850.0b 13 May MBA mortgage applications (%) -- 0.10% 12 May PPI (YoY%) -2.60% -1.50% 13 May PPI ex food & energy (MoM%) -0.10% 0.20% 12 May CPI (YoY%) 3.70% 4.30% 14 May Import price index (MoM%) -3.10% -2.30% 15 May Industrial production (YoY%) 1.50% -1.10% 14 May Initial jobless claims (k) -- 3,169k 15 May Industrial Production (MoM%) -11.40% -5.40% Source: Bloomberg Source: Bloomberg

BOCOM Research latest reports 8 May Power Sector - IPPs show 1Q20 divergence, outlook a mixed bag Spencer Luo, Wallace Cheng 8 May CIMC Enric (3899 HK) - On track to recovery; potential benefits from STAR listing relaxation Wallace Cheng, Spencer Luo 8 May Property Sector Weekly - As of 7 May 2020 Philip Tse, CFA, FRM, Steve Liu, Evangeline Luo 7 May Healthcare Sector - Antiviral drugs & diagnostic reagents in focus amid COVID-19; favor Livzon Li Zhao, PhD, Aiwei Li, PhD, Kent Lin, Mengmeng Xi 7 May Ju Teng International (3336 HK) - Near-term outlook solid, maintain Buy Chris Yim 7 May Renewable Energy Sector Weekly - As of 6 May 2020 Louis Sun, Bob Wen, CPA 6 May Healthcare Sector Weekly - As of 5 May 2020 Li Zhao, PhD, Aiwei Li, PhD, Kent Lin, Mengmeng Xi 6 May China Southern Airlines (1055 HK) - Lack of alliance ties may aid global expansion amid COVID-19 Luya You, Maggie Wang upheaval 6 May China Property Sector - April sales stabilized YoY, back on track Philip Tse, CFA, FRM, Steve Liu 5 May Jingneng Clean Energy (579 HK) - 1Q20 performance were better than our expectations, and the full Louis Sun, Bob Wen, CPA year performance should be the same as 2019 5 May Datang Renewable (1798 HK) - The profit in 1Q20 fell and should increase slightly throughout the Louis Sun, Bob Wen, CPA year; downgrade to neutral 5 May Technology Sector - 4G smartphones fading fast before 5G fully arrives Chris Yim 5 May China Macro Review - Quantitative strategy (1): Macro timing Karen Tan, Hanna Cai , Fei Peng 5 May Internet Sector Weekly - As of 1 May 2020 Connie Gu, CPA, Brandy Sun, Gigi Zhou, Li Zhao, CFA 5 May Transportation & Infrastructure Sector Weekly - As of 1 May 2020 Fay Zhou, Luya You, Maggie Wang 5 May China Eastern Airlines (670 HK) - Expect ST boost from pent-up domestic demand by 2H20 Luya You, Maggie Wang 5 May Fosun Pharmaceutical (2196 HK) - COVID-19 hurts 1Q20 results, but innovative transition Li Zhao, PhD, Aiwei Li, PhD, Mengmeng Xi, Kent Lin progresses well 5 May PICC Property & Casualty (2328 HK) - Earnings growth beat; combined ratio improved Li Wan, CFA, FRM 5 May China Railway Group (390 HK) - 1Q20 results beat; margin improvement continues Fay Zhou 5 May Huadian Fuxin (816 HK) - 1Q20 profit dropped slightly; epidemic impact to continue Louis Sun, Bob Wen, CPA Source: BOCOM Int'l

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HSI constituents Company Stock Current Mkt 5D YTD ------52-week------P/E------Yield P/B name code price cap chg chg High Low 2019 2020E 2021E 2020E 2020E (HK$) (HK$ m) (%) (%) (HK$) (HK$) (x) (x) (x) (%) (x) CKH 1 HK 56.80 219,034 -1.05 -23.55 79.75 45.55 5.42 6.16 N/A 5.67 0.44 CLP 2 HK 80.00 202,116 -3.38 -2.32 92.70 65.00 43.45 17.23 16.37 3.98 1.84 HK & CHINA GAS 3 HK 13.78 233,227 -0.58 -9.46 17.98 11.96 33.30 31.18 28.58 2.68 3.54 HSBC 5 HK 39.55 805,442 -1.74 -35.00 66.90 37.90 7.03 14.49 9.58 4.09 0.60 POWER ASSETS 6 HK 50.40 107,567 -2.80 -11.58 58.50 41.85 15.00 15.54 15.25 5.59 1.24 HANG SENG 11 HK 135.20 258,481 -0.95 -16.02 205.40 125.10 10.49 12.32 12.56 5.91 1.45 HENDERSON 12 HK 30.50 147,662 -3.79 -20.26 44.73 28.35 10.02 8.77 9.68 5.95 0.45 SHKP 16 HK 102.40 296,733 -3.76 -14.17 136.60 91.50 9.17 9.33 8.72 4.83 0.51 NEW WORLD 17 HK 9.11 92,739 -0.44 -14.70 12.68 7.61 10.51 11.37 10.16 5.64 0.41 SWIRE PACIFIC 19 HK 49.85 45,125 -2.06 -31.15 98.75 45.00 10.14 13.97 9.18 6.17 0.27 GEG 27 HK 53.70 232,814 6.44 -6.45 62.45 38.60 16.97 54.05 N/A 0.76 2.95 MTRC 66 HK 42.70 263,012 -0.81 -7.27 55.70 38.20 24.91 30.58 22.47 2.92 1.41 SINO 83 HK 10.90 76,792 0.55 -3.71 13.62 8.18 15.51 15.74 N/A 5.23 0.49 HLP 101 HK 16.62 74,752 0.00 -2.81 19.44 13.82 16.28 16.01 N/A 4.78 0.52 WANT WANT 151 HK 5.55 68,904 -0.18 -23.76 7.37 4.93 17.08 N/A N/A N/A N/A GEELY 175 HK 12.96 119,392 6.93 -14.96 16.34 10.08 12.97 12.70 10.02 1.99 1.78 CITIC LTD 267 HK 7.82 227,486 -3.10 -24.95 11.34 7.31 4.12 4.52 3.90 5.87 0.35 WH GROUP 288 HK 7.13 105,014 -4.68 -11.43 8.78 5.96 9.86 9.13 8.95 4.33 1.42 386 HK 3.70 94,400 -5.61 -21.11 5.76 3.20 7.07 17.74 10.97 3.85 0.55 HKEX 388 HK 242.80 307,832 -3.65 -4.03 280.20 211.40 32.90 30.68 28.00 2.96 6.70 COLI 688 HK 25.80 282,670 -9.31 -14.99 30.70 22.00 6.18 6.46 5.48 4.60 0.83 TENCENT 700 HK 418.20 3,995,140 0.29 11.34 418.20 316.20 38.63 33.84 26.83 0.31 6.61 UNICOM 762 HK 4.98 152,379 -0.60 -32.15 8.84 3.90 12.09 11.09 9.73 3.58 0.42 LINK 823 HK 68.45 140,863 -1.65 -17.03 99.25 63.45 25.22 23.98 22.84 4.20 0.76 CR POWER 836 HK 9.00 43,294 -2.07 -17.73 11.60 6.58 6.55 5.04 4.60 7.94 0.54 PETROCHINA 857 HK 2.70 56,967 -3.23 -30.95 4.64 2.23 9.73 74.96 23.11 1.38 0.36 CNOOC 883 HK 8.73 389,772 -0.68 -32.64 13.74 6.40 5.72 26.79 11.85 3.61 0.78 CCB 939 HK 6.16 1,547,558 -2.53 -8.47 6.80 5.64 5.30 5.05 4.79 6.02 0.61 941 HK 59.10 1,210,101 -5.36 -9.77 73.50 48.25 10.44 10.34 10.15 5.41 0.96 CK INFRA 1038 HK 45.40 120,341 -1.73 -18.12 64.75 35.65 10.86 11.80 11.67 5.49 0.94 HENGAN 1044 HK 64.95 77,270 -6.07 17.03 69.15 49.20 18.03 16.23 N/A 4.20 3.62 SHENHUA 1088 HK 13.50 45,881 -2.60 -17.08 17.42 12.60 5.85 6.24 6.16 8.32 0.66 CSPC 1093 HK 15.76 98,285 2.34 -15.18 21.40 11.44 23.77 19.97 16.30 1.29 4.05 CR LAND 1109 HK 31.00 221,059 -2.52 -20.10 39.40 28.00 9.00 8.11 7.01 4.32 1.04 CKA 1113 HK 48.70 179,869 -0.61 -13.42 62.80 34.40 6.19 8.11 N/A 4.53 0.49 SBP 1177 HK 11.88 149,471 4.76 8.99 12.34 6.90 43.23 40.28 33.74 0.59 3.99 AIA 1299 HK 69.65 841,996 -3.20 -14.85 88.50 60.70 16.17 19.15 14.47 2.01 1.75 ICBC 1398 HK 5.11 1,946,454 -3.04 -14.83 6.05 4.87 5.39 5.17 4.93 5.82 0.61 SANDS 1928 HK 31.10 251,564 -2.51 -25.33 45.00 26.15 15.76 99.02 N/A 6.41 9.00 WHARF REIC 1997 HK 33.60 102,017 2.60 -29.34 58.25 28.65 10.22 11.81 11.08 5.45 0.46 2007 HK 10.00 218,731 0.10 -19.87 12.88 7.88 5.00 4.27 3.79 7.06 1.06 AAC TECH 2018 HK 39.05 47,192 2.90 -42.57 70.00 33.55 18.67 17.59 13.35 2.06 1.98 SHENZHOU 2313 HK 91.35 137,319 1.11 -19.80 117.30 73.15 24.67 24.02 20.45 2.13 4.52 PING AN 2318 HK 78.60 1,449,374 -1.38 -14.66 99.55 70.90 8.62 9.24 7.74 3.21 1.71 MENGNIU 2319 HK 27.60 108,626 -0.18 -12.38 33.45 25.00 23.98 28.91 20.79 0.79 3.11 SUNNY OPTICAL 2382 HK 115.70 126,906 5.09 -14.23 146.10 66.85 28.34 24.38 18.76 0.83 6.93 BOCHK 2388 HK 24.05 254,275 0.84 -11.09 32.95 20.40 7.87 9.19 8.69 5.80 0.86 CHINA LIFE 2628 HK 15.60 752,016 -5.68 -27.94 22.75 12.86 6.95 8.80 7.25 4.00 0.94 BOCOM 3328 HK 4.86 170,158 -1.22 -12.27 6.52 4.29 4.37 4.19 4.01 7.32 0.43 BOC 3988 HK 2.91 1,040,429 -2.02 -12.61 3.58 2.73 4.33 4.13 4.06 7.45 0.44

HANG SENG INDEX 24,230.17 17,921,088 -1.68 -14.05 29,056.42 21,696.13 16.27 16.72 13.24 3.85 2.34 Source: FactSet

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HSCEI constituents Company Stock Closing Mkt 5D YTD ------52-week------P/E------Yield P/B name code price cap chg chg High Low 2019 2020E 2021E 2020E 2020E (HK$) (HK$ m) (%) (%) (HK$) (HK$) (x) (x) (x) (%) (x) CITIC LTD 267 HK 7.82 227,486 -3.10 -24.95 11.34 7.31 4.12 4.52 3.90 5.87 0.35 GDI 270 HK 15.78 103,167 -2.11 -3.19 17.30 12.22 20.30 19.58 16.84 3.90 2.39 CGH 384 HK 27.95 145,859 -2.44 -4.28 34.75 22.85 17.30 15.80 13.15 1.75 3.48 SINOPEC 386 HK 3.70 94,400 -5.61 -21.11 5.76 3.20 7.07 17.74 10.97 3.85 0.55 CRG 390 HK 4.59 147,963 -1.50 -4.57 6.39 3.47 4.40 4.31 3.91 4.05 0.43 DONGFENG 489 HK 5.37 15,335 4.27 -26.74 8.47 4.42 3.13 3.67 3.05 5.40 0.29 TENCENT 700 HK 418.20 3,995,140 0.29 11.34 418.20 316.20 38.63 33.84 26.83 0.31 6.61 728 HK 2.59 35,942 -3.00 -19.31 4.05 2.06 9.48 9.31 8.78 4.73 0.53 753 HK 5.11 99,102 -8.26 -35.40 8.32 4.80 9.90 N/A 8.12 0.00 0.73 788 HK 1.74 81,195 0.00 1.16 2.19 1.56 52.07 38.95 29.45 1.28 1.47 PETROCHINA 857 HK 2.70 56,967 -3.23 -30.95 4.64 2.23 9.73 74.96 23.11 1.38 0.36 CNOOC 883 HK 8.73 389,772 -0.68 -32.64 13.74 6.40 5.72 26.79 11.85 3.61 0.78 HUANENG 902 HK 2.71 64,548 -7.19 -31.22 5.08 2.24 249.77 6.84 6.00 9.91 0.39 CONCH 914 HK 59.55 77,391 -2.38 4.84 61.00 42.55 8.72 8.28 8.11 3.87 1.76 CCB 939 HK 6.16 1,547,558 -2.53 -8.47 6.80 5.64 5.30 5.05 4.79 6.02 0.61 CHINA MOBILE 941 HK 59.10 1,210,101 -5.36 -9.77 73.50 48.25 10.44 10.34 10.15 5.41 0.96 CNCB 998 HK 3.78 247,940 -0.26 -19.06 4.77 3.46 3.80 3.29 3.09 7.68 0.34 HENGAN 1044 HK 64.95 77,270 -6.07 17.03 69.15 49.20 18.03 16.23 N/A 4.20 3.62 SHENHUA 1088 HK 13.50 45,881 -2.60 -17.08 17.42 12.60 5.85 6.24 6.16 8.32 0.66 CSPC 1093 HK 15.76 98,285 2.34 -15.18 21.40 11.44 23.77 19.97 16.30 1.29 4.05 SINOPHARM 1099 HK 20.85 27,977 -0.71 -26.71 30.40 14.86 9.00 8.27 7.43 3.50 1.07 CR LAND 1109 HK 31.00 221,059 -2.52 -20.10 39.40 28.00 9.00 8.11 7.01 4.32 1.04 BYD 1211 HK 46.80 42,822 -4.10 20.46 53.60 33.55 86.91 58.73 N/A 0.23 2.04 ABC 1288 HK 3.20 1,291,748 -1.84 -6.71 3.47 2.74 4.87 4.63 4.45 6.61 0.53 NCI 1336 HK 27.05 130,821 0.56 -19.25 39.55 20.65 5.23 6.08 5.40 4.35 0.82 PICC 1339 HK 2.54 22,165 0.00 -21.60 3.38 2.11 4.59 5.54 N/A 4.36 0.51 CINDA 1359 HK 1.50 20,351 -0.66 -15.25 1.93 1.36 4.34 3.74 3.45 8.18 0.34 ICBC 1398 HK 5.11 1,946,454 -3.04 -14.83 6.05 4.87 5.39 5.17 4.93 5.82 0.61 PSBC 1658 HK 4.54 90,147 -2.37 -14.34 5.39 4.26 5.68 5.45 4.87 5.62 0.65 CRRC 1766 HK 4.04 182,523 -1.70 -28.87 6.88 3.65 8.86 8.25 7.65 4.13 0.72 GF SEC 1776 HK 8.24 14,023 -2.72 -13.17 10.24 7.49 7.52 7.03 6.77 4.57 0.59 CCC 1800 HK 5.05 127,647 -2.70 -20.47 7.44 4.86 3.93 3.62 3.29 5.27 0.30 CGN POWER 1816 HK 1.82 145,861 -6.19 -12.50 2.27 1.52 8.24 8.72 8.28 4.76 0.87 MSB 1988 HK 5.64 273,291 -2.76 -4.24 5.99 5.03 4.24 4.06 3.82 7.32 0.46 2202 HK 25.20 39,764 -2.33 -24.21 34.35 23.20 6.48 5.69 4.94 5.25 1.16 GAC 2238 HK 7.35 104,475 5.15 -24.23 9.97 6.23 10.12 8.87 7.14 3.40 0.77 SHENZHOU 2313 HK 91.35 137,319 1.11 -19.80 117.30 73.15 24.67 24.02 20.45 2.13 4.52 PING AN 2318 HK 78.60 1,449,374 -1.38 -14.66 99.55 70.90 8.62 9.24 7.74 3.21 1.71 PICC P&C 2328 HK 7.24 49,951 -2.56 -22.90 10.16 6.13 6.01 6.56 5.78 6.34 0.80 GWM 2333 HK 5.46 72,201 5.41 -5.21 6.84 3.85 9.78 10.90 8.63 3.66 0.76 CPIC 2601 HK 24.50 272,011 -4.67 -20.20 34.30 18.16 7.34 7.99 7.09 5.79 1.04 CHINA LIFE 2628 HK 15.60 752,016 -5.68 -27.94 22.75 12.86 6.95 8.80 7.25 4.00 0.94 HUARONG 2799 HK 0.86 21,538 -1.15 -30.08 1.46 0.82 19.21 3.89 2.74 7.83 0.24 BOCOM 3328 HK 4.86 170,158 -1.22 -12.27 6.52 4.29 4.37 4.19 4.01 7.32 0.43 CMB 3968 HK 36.65 956,760 -1.35 -8.49 42.55 31.45 9.19 8.15 7.22 3.99 1.29 BOC 3988 HK 2.91 1,040,429 -2.02 -12.61 3.58 2.73 4.33 4.13 4.06 7.45 0.44 CITIC SEC 6030 HK 14.48 32,990 -3.21 -18.56 18.42 13.00 12.90 11.38 9.81 4.06 0.93 ZA ONLINE 6060 HK 28.50 13,390 6.34 1.42 35.30 16.76 N/A N/A 72.58 0.00 2.45 HAITONG SEC 6837 HK 6.69 22,810 -5.37 -27.36 9.43 6.49 7.28 6.90 6.02 4.50 0.51 HTSC 6886 HK 12.64 21,729 -2.17 -8.27 14.54 10.40 11.23 10.79 9.56 3.22 0.80

HANG SENG CHINA ENT INDX 9,868.34 16,905,594 -1.72 -11.64 11,419.91 8,559.64 15.27 13.89 11.22 4.12 2.17 Source: FactSet

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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.

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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 , 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, Yincheng International Holding Co., Ltd, Tai Hing Group Holdings Limited, Shenwan Hongyuan Group Co., Ltd, Dexin China Holdings Company Limited, S.A.I. Leisure Group Company Limited, Haitong UniTrust International Leasing Co., Limited, CSSC (Hong Kong) Shipping Company Limited, JH Educational Technology Inc, Shanghai Kindly Medical Instruments Co, Ltd, Edvantage Group Holdings Limited, China Bright Culture Group, Xinyuan Property Management Service (Cayman) Ltd, Sinic Holdings (Group) Company Limited, Jinchuan Group International Resources Co. Ltd, China Tianbao Group Development Company Limited, JiaXing Gas Group Co., Ltd, Huali University Group Limited, Alibaba Group Holding Limited, Alphamab Oncology, Poly Property Development Co Ltd, Kwung's Holdings Limited, Honliv Healthcare Management Group Company Limited, Shanghai Gench Education Group Limited, Zhongguancun Science-tech Leasing Co., Ltd, Joy Spreader Interactive Technology. Ltd, Fu Shek Financial Holdings Limited, Bonjour Holdings Limited, Xingye Wulian Service Group Co Ltd, Jiu Zun Digital Interactive Entertainment Group Holdings Limited, Cirtek Holdings Limited, Kidztech Holdings Limited and Akeso, Inc. 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. BOCOM International Global Investment Limited currently holds more than 1% of the equity securities of Guolian Securities Co., Ltd. BOCOM International Global Investment Limited currently holds more than 1% of the equity securities of Co., Ltd.

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