Morning Express. Focus of the Day. Geely (175.HK)

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1 Focus of the Day Polling for the 2017 All-China Research survey has begun. This year, Institutional Investor partners with Caixin Media. Ballot invitation and reminders have been sent from Please click on the URL provided in the to proceed for voting. BOCOM international strives to provide value-added research and corporate access, and your vote for the BOCOM International sales and research teams is gratefully appreciated. In case you have not received the ballot, please apply at the following address: Geely (175.HK) Buoyant August sales figures Angus CHAN Last Closing: HK$ Upside: +24.2% Target Price: HK$ SELL NEUTRAL Geely reported August sales volume data after market close on September 6. Total shipment increased 79.9% YoY/5.9% MoM to 96,505 units in August. 8M17 total sales volume rose 87.8% YoY (excluding export sales, total sales volume in China surged 93.8% YoY) to 718,236 units and achieved 65% of the full -year target of 1.1m units. Looking ahead, Lynk & Co remains the near-term catalyst in 4Q17. Geely will have a strong new model pipeline in 2018, including several sedans, SUVs and its first MPV model. We remain confident on Lynk & Co s contribution and Geely s volume growth in We maintain our Buy rating on this counter. Renewable Energy Sector Highlights: 2017 global installed capacity of PV to surpass nuclear; only a few regions in China are considered with low investment risk in PV plants; polysilicon and silicon prices continued to gain this week Louis SUN louis.sun@bocomgroup.com UP MP OP Indices Close 1d % Ytd % HSI 27, H Shares 11, SH A 3, SH B SZ A 2, SZ B 1, DJIA 21, S&P 500 2, Nasdaq 6, FTSE 7, CAC 5, DAX 12, Indicators Close 3m % Ytd % Brent Gold 1, Silv er Copper 6, JPY GBP EURO bps change 3 m 6 m HIBOR US 10 y ield HSI Technical HSI 27, d MA 26, d MA 24, d RSI 54 Short Sell (HK$ m) 8,913 Global installed capacity of PV power will surpass that of nuclear power in 2017 and continue with robust growth in the next few years. According to the monitoring and assessment system for PV power plants, China only has a few regions that are considered

2 with low investment risks. Upstream product prices continued to gain while downstream product prices steadied this week. Renewable stocks released interim results in August, among which, those under our coverage delivered better results in general. Wind power plays reduced investments in 1H17 but saw improvement in profitability as curtailment alleviated. We expec t these companies to grow steadily in the next 2-3 years. We give a Buy rating for Longyuan Power, Huaneng Renewables and Datang Renewables, as the negative factors previously causing their underperformance have been digested. For PV power plays, we project GCL-Poly to achieve strong YoY growth in 2H17 despite performance decline in 1H17. Coupled with a clearer corporate strategy plan, we upgrade the counter to Buy. We maintain Neutral on JNCEC given the uncertainties still clouding its business operation. Hang Seng Index (1 year) 29,000 28,000 27,000 26,000 25,000 24,000 23,000 22,000 21,000 20,000 Source: Company data, Bloomberg HS China Enterprise Index (1 year) 12,000 11,000 10,000 9,000 8,000 Source: Company data, Bloomberg Shanghai A-shares (1 year) 3,600 3,400 3,200 3,000 2,800 Source: Company data, Bloomberg Shenzhen A-shares (1 year) 2,300 2,100 1,900 1,700 Source: Company data, Bloomberg

3 Market Review Hong Kong stocks fell on Wednesday. The Hang Seng Index dropped 127 points, or 0.5%, to close at 27,613. Wharf (4.HK) fell 3.7% as the worst blue-chip performer. Smartphone component makers retreated. AAC Tech (2018.HK) declined 3.3%. Cowell (1415.HK) dropped 2.7%. Q Tech (1478.HK) lost 1.9%. Sunny Optical (2382.HK) declined 1.7%. F&B names finished mixed. Mengniu (2319.HK) dropped 2%. Want Want (151.HK) slipped 1%. Uni-President (220.HK) gained 1.5%. Tingyi (322.HK) rose 2.8%. Kunlun (135.HK) rose 2.8% as the best blue-chip performer. Mainland developers advanced. Agile (3383.HK) gained 3.5%. Shimao (813.HK) rose 3.3% KWG (1813.HK) added 2.7%. Sunac (1918.HK) added 2.4%. Vanke (2202.HK) edged up 0.6%. Railway construction names diverged. CRG (390.HK) rose 1.3%. CRCC (1186.HK) dropped 1.4%. CRRC (1766.HK) increased 1.2%. US stocks posted modest gains. The S&P 500 rose 7.69 points, or 0.3%, to 2, The DJIA rose points, or 0.3%, to 21, The Nasdaq Composite Index rose points, or 0.3%, to end at 6, European stocks finished largely unchanged. Stoxx Europe 600 rose less than 0.1 point to cl ose at News Reaction NBS expects China s economy to maintain high growth with risks under control. With stepped up efforts on reforms and innovations, structural adjustments, and transformation of growth drivers, China's economy is expected to continue with high growth. Fiscal revenue and corporate profits will also expand accordingly, providing key support for debt repayment and thereby strengthening risk control of debts in the long run, according to an article under the byline of Guo Tongxin from the National Bureau of Statistics. PBOC launched RMB40bn reverse repos at flat interest rates. The PBOC conducted 7-day RMB20bn and 28-day RMB20bn of reverse repos in the open market on 6 September. The interest rate for the 7-day and 28-day reverse repos stayed flat at 2.45% and 2.75% respectively. Based on this, there was a net return of RMB120bn on the day. PBOC s Sheng Songcheng sees slim chance of RRR cut now. PBOC advisor Sheng Songcheng said earlier at a forum that he sees slim chance of RRR cut now, as the easing effec t of such goes against the moderate and neutral stance of the present monetary policy and financial de-leverage. China s economy stays at the L-shape for an extended period of time and has yet to enter a RRR cut cycle. Industry sources said China s natural gas price may raise. Although the price of natural gas will be lowered by RMB0.1 per cubic meter effective from 1 September, price downtrend is likely to last, news reported. Consumption of natural gas has been increasing this year, yet supply remains insufficient to cater market needs. The current round of price cut further boosts demand from downstream. Meanwhile, natural gas consumption may surge in 2H17 bolstered by the promotion of coal -to-gas conversion. Great Wall Motor (2333.HK) Aug vehicles production down 1.66% and sales up 0.8% YoY. Great Wall Motor announced that vehicles production volume faded 1.66% YoY to

4 71,646 in August. Sales rose 0.8% YoY to 73,663. In 8M17, vehicles production volume was down 3.74% YoY to 585,989 and sales was up 1.88% YoY to 603,469.

5 Economic releases for this week - USA Date Time Event Survey Prior 5-Sep Factory orders (%) Sep Durable goods order (%) Sep MBA mortgage applications (%) Sep Trade balance (US$ bn) Sep Initial jobless claims (k) Sep Consumer Credit(US$ bn) Economic releases for this week - China Date Time Event Survey Prior 8-Sep New Yuan Loans (RMB bn) Sep CPI (YoY%) Sep PPI (YoY%) Sep Money Supply - M2(YoY%) Sep New Yuan Loans (RMB bn) BOCOM Research Latest Reports Date Report Analyst 6 Sep Commodities:Energy - Policy support accelerates coal-to-gas conversion /09/04 Grace Hua, CFA 6 Sep Healthcare Sector - Healthcare Weekly Grace Zhao, Zhao Li 6 Sep Great Wall Motor (2333.HK) - August sales volume edged up 0.8% YoY; vv7 delivered 7.2K units Angus Chan 5 Sep Transportation and Infrastructure Sector - Weekly transportation and infrastructure news wrap Geoffrey Cheng, CFA, Fay Zhou, Luya You 5 Sep Guangzhou Automobile (2238.HK) - August sales volume rose 23.5% YoY, a solid figure despite weak season Angus Chan 4 Sep Banking Sector - Forecast and rating changes for four banks Shanshan Li, CFA, Li Wan, CFA, FRM, Hannah Han 4 Sep Insurance Sector - Health insurance premium income further diverged; near-term focus of life insurance sector falls on Document No.134 Li Wan, CFA, FRM, Shanshan Li, CFA, Yufan Zhang 4 Sep Liquidity - Unoptimistic on liquidity in Sept; regulatory stance tightened further 2017/09/01 Karen Tan 4 Sep Cement Sector - Cement prices extended gains Angus Chan, Stev e Liu 4 Sep Internet Sector - Internet Weekly (28 August 1 September) Internet Innov ation Center: Gu Xinyu (Connie), CPA, Sun Mengqi (Brandy), Zhou Zhe (Gigi), Shan Ying 4 Sep COSCO SHIPPING Holdings (1919.HK) - A long-drawn path to recovery Geoffrey Cheng, CFA 1 Sep Mengniu (2319 HK) - Upgrade on v isible improvement in operational efficiency Summer Wang, CFA 1 Sep Env ironmental Sector - Monthly Insights: Stay selective on environmental plays after 1H17 results Wallace Cheng, Spencer Luo 1 Sep Property Sector - HK/China property weekly Carmen Wong, Alfred Lau, CFA, FRM, Philip Tse, CFA, FRM 1 Sep Kerry Logistics Network (636.HK) - 1H17 results review margin pressure remained; decline in contribution Fay Zhou, Geoffrey Cheng, CFA from associates dragged earnings growth 1 Sep GCL-Poly (3800.HK) - Positives indicated in interim results report; lift earnings estimates and investment rating Louis Sun 1 Sep Galax y Entertainment Group (27.HK) - Lack of surprises Alfred Lau, CFA, FRM 31 Aug BOC (3988.HK) - Enjoy s edges in overseas businesses with decent fundamentals Shanshan Li, CFA, Li Wan, CFA, FRM, Hannah Han 31 Aug Jiangsu Hengrui Medicine ( SH) Core products delivered strong growth; R&D to support long-term Grace Zhao performance 31 Aug Shengmu Organic Milk (1432.HK) - Strategic value untouched despite lukewarm 1H17 results Summer Wang, CFA Source: Company data, BOCOM International

6 Hang Seng Index Constituents Company BBG Share Mkt 5 d Ytd week PE Yield P/B name code price cap chg chg Hi Lo 2016A 2017E 2018E 2017E 2017E (HK$) (HK$ m) (%) (%) (HK$) (HK$) (X) (X) (X) (%) (X) CKH HOLDINGS 1 HK , HANG LUNG PPT 101 HK , CKI HOLDINGS 1038 HK , HENGAN INTL 1044 HK , CHINA SHENHUA-H 1088 HK , HANG SENG BANK 11 HK , CHINA RES LAND 1109 HK , CHEUNG KONG PROP 1113 HK , HENDERSON LAND D 12 HK , AIA 1299 HK , KUNLUN ENERGY 135 HK , ICBC-H 1398 HK ,405, CHINA MERCHANTS 144 HK , WANT WANT CHINA 151 HK , SHK PPT 16 HK , NEW WORLD DEV 17 HK , GEELY AUTOMOBILE 175 HK , SWIRE PACIFIC-A 19 HK , SANDS CHINA LTD 1928 HK , CLP HOLDINGS 2 HK , AAC TECHNOLOGIES 2018 HK , BANK EAST ASIA 23 HK , PING AN 2318 HK ,178, MENGNIU DAIRY 2319 HK , N/A BOC HONG KONG HO 2388 HK , CHINA LIFE-H 2628 HK , CITIC 267 HK , GALAXY ENTERTAIN 27 HK , WH GROUP LTD 288 HK , CATHAY PAC AIR 293 HK , N/A N/A HONG KG CHINA GS 3 HK , BANKCOMM-H 3328 HK , SINOPEC CORP-H 386 HK , HKEX 388 HK , BANK OF CHINA-H 3988 HK ,412, WHARF HLDG 4 HK , HSBC HOLDINGS PL 5 HK ,498, POWER ASSETS 6 HK , MTR CORP 66 HK , CHINA OVERSEAS 688 HK , TENCENT 700 HK ,079, CHINA UNICOM 762 HK , LINK REIT 823 HK , SINO LAND 83 HK , CHINA RES POWER 836 HK , PETROCHINA-H 857 HK ,686, CNOOC 883 HK , CCB-H 939 HK ,696, CHINA MOBILE 941 HK ,678, LENOVO GROUP 992 HK , HANG SENG INDEX 27,614 17,629, ,128 21,

7 China Ent Index Constituents Company BBG Share Mkt 5 d Ytd week PE Yield P/B name code price cap chg chg Hi Lo 2016A 2017E 2018E 2017E 2017E (HK$) (HK$ m) (%) (%) (HK$) (HK$) (X) (X) (X) (%) (X) CHINA SHENHUA-H 1088 HK , SINOPHARM-H 1099 HK , CHINA RAIL CN-H 1186 HK , BYD CO LTD-H 1211 HK , ABC-H 1288 HK ,467, NEW CHINA LIFE-H 1336 HK , PICC GROUP-H 1339 HK , CHINA CINDA-H 1359 HK , ICBC-H 1398 HK ,405, POSTAL SAVINGS-H 1658 HK , CRRC CORP LTD -H 1766 HK , GF SECURITIES-H 1776 HK , CHINA COM CONS-H 1800 HK , CGN POWER-H 1816 HK , MINSHENG BANK-H 1988 HK , CHINA VANKE-H 2202 HK , PING AN 2318 HK ,178, PICC P&C-H 2328 HK , GREAT WALL MOT-H 2333 HK , CHINA PACIFIC-H 2601 HK , CHINA LIFE-H 2628 HK , BANKCOMM-H 3328 HK , SINOPEC CORP-H 386 HK , ZHUZHOU CRRC T-H 3898 HK , CHINA RAIL GR-H 390 HK , CM BANK-H 3968 HK , BANK OF CHINA-H 3988 HK ,412, DONGFENG MOTOR-H 489 HK , CITIC SEC-H 6030 HK , HAITONG SECURI-H 6837 HK , CGS-H 6881 HK , HUATAI SECURIT-H 6886 HK , CHINA TELECOM-H 728 HK , AIR CHINA LTD-H 753 HK , PETROCHINA-H 857 HK ,686, HUANENG POWER-H 902 HK , CONCH CEMENT-H 914 HK , CHINA LONGYUAN-H 916 HK , CCB-H 939 HK ,696, CITIC BANK-H 998 HK , HANG SENG CHINA ENT INDX 11,129 5,052, , ,

8 BOCOM International Unit 1701, 17/F, Low Block, Grand Millennium Plaza, 181 Queen s Road Central, Hong Kong Main: Fax: Rating System Analyst Stock Ratings: Buy: The stock's total return is expected to exceed that of the corresponding industry 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. Sell: The stock's total return is expected to be below that of the corresponding industry over the next 12 months. Not-Rated: The analyst does not have conviction regarding the outlook of the stock's total return relative to that of the corresponding industry over the next 12 months. Trading Buy: The stock's absolute return is expected to be very attractive in the near term. This rating can be different from the rating with a view over the next 12 months. Analyst Industry Views: Outperform: The analyst expects the industry coverage universe to be attractive relative to the relevant broad market benchmark over the next 12 months. Market perform: The analyst expects the industry coverage universe to be in line with the relevant broad market benchmark over the next 12 months. Underperform: The analyst expects the industry coverage universe to be unattractive relative to the relevant broad market benchmark 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 Chi nese companies is S&P US Listed China 50 (USD) Index. Trading Sell: The stock's absolute return is expected to be very unattractive in the near term. This rating can be different from the rating with a view over the next 12 months. Research Team Head of Deputy Head of Hao HONG, CFA (852) hao.hong Geoffrey CHENG, CFA (852) geoffrey.cheng Macro-Strategy Internet Hao HONG, CFA (852) hao.hong Yuan MA, PhD (86) yuan.ma Karen TAN (852) karen.tan Connie GU, CPA (86) connie.gu Grace HUA, CFA (852) Grace.hua Mengqi SUN (86) mengqi.sun Zhe ZHOU (86) zhe.zhou Shan Ying (86) ying.shan Banks/ Non-Bank Financials Property Shanshan LI, CFA (86) lishanshan Alfred LAU, CFA, FRM (852) alfred.lau Li WAN, CFA, FRM (86) wanli Philip TSE, CFA, FRM (852) philip.tse Hannah HAN (852) hannah.han Carmen WONG (852) carmen.wong Jennifer ZHANG (852) yufan.zhang Consumer Renewable Energy Summer WANG, CFA (852) summer.wang Louis SUN (86) louis.sun Environmental Services Technology Wallace CHENG (852) wallace.cheng Chris YIM (852) christopher.yim Gaming & Leisure Transportation & Industrials Alfred LAU, CFA, FRM (852) alfred.lau Geoffrey CHENG, CFA (852) geoffrey.cheng Fay ZHOU (852) fay.zhou Healthcare Automobile & Defense Grace ZHAO (86) grace.zhao Angus CHAN (86) angus.chan

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