美银-2026年中国大会第二天：会议核心要点-2026 China Conference(HA)Day 2：Key conference takeaways-20260513

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BofAGOBALRESEARCHBofASE

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2026ChinaConference(H/A)

Day2:Keyconferencetakeaways

Event

Highlights

ElizabethEconomy;Leadershipsummit:SettingthetoneforaUS-Chinarelationshipcomeback|HelenQiao,BensonWu,XiaoqingPi

HuangYipingsession:Economicrebalancingamiduncertaintiesfromtheenergyshock|HelenQiao,BensonWu,XiaoqingPi

BYD(1211HK/BYDDF)|Buy|MingLee,JoeyYang,FionaLiang,JessieLoBusyMingGroup(1768HK/XYBMF)|Buy|JackChen,ChenLuo

J&TGlobalExpressLimited(1519HK/JTGLF)|Buy|FanTso,KarlChoi

Takeaways

BankOfChinaLtd(3988HK/BACHF)(601988CH/BACZF)|Neutral|WinnieWu,EmmaXu,WenqingHan

BeijingCapitalAirport(694HK/BJCHF)|Buy|AmyHan,NathanGee

BeijingRoborockTechnologyCoLtd(688169CH/XBTLF)|Buy|YoyoPang

BlackSesameIntlHolding(2533HK/BSIHF)|Neutral|DaleyLi,OwenWang,HarryZhuang

ChinaConstructionBank(939HK/CICHF)(601939CH/XCTBF)|Buy|WinnieWu,EmmaXu,WenqingHan

ChinaEverbrightEnvironmentGroupLimited(257HK/CHFFF)|Buy|CissyGuan,GaryTsang

ChinaMerchantsBank(3968HK/CIHHF)(600036CH/CIHKF)|Underperform|WinnieWu,EmmaXu,WenqingHan

ChinaResourcesGasGroupLimited(1193HK/CRGGF)|Neutral|CissyGuan,GaryTsang

ChinasoftInternational(354HK/CFTLF)|Neutral|DaleyLi,HarryZhuang,OwenWangCOSCOShippingHoldingsCo.Ltd.(1919HK/CICOF)(601919CH/XCHDF)|

Underperform|NathanGee,AmyHan

CRMixcLifestyle(1209HK/CXRMF)|Buy|EricDu,KarlChoi

CSPCPharmaceuticalGroupLimited(1093HK/CHJTF)|Underperform|EthanCui,DavidLi,SandraSun

FoshanHaitianFlavouring&FoodCoLtd(603288CH/XCMJF)|Neutral|JackChen,ChenLuo

HisenseHomeAppliance(921HK/HISEF)(000921CH/XMBQF)|Neutral|LucyYu,ChenLuo

HuamingEquipment(002270CH/XKTIF)|Buy|MattyZhao,PeterWang(Continued)

>>Employedbyanon-USaffiliateofBofASandisnotregistered/qualifiedasaresearchanalystundertheFINRArules.

Referto"OtherImportantDisclosures"forinformationoncertainBofASecuritiesentitiesthattakeresponsibilityfortheinformationhereininparticularjurisdictions.

BofASecuritiesdoesandseekstodobusinesswithissuerscoveredinitsresearch

reports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictof

interestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.

Refertoimportantdisclosuresonpage59to63.AnalystCertificationonpage43.Price

ObjectiveBasis/Riskonpage35.12972718

13May2026

EquityChina

GreaterChinaResearchTeam

MerrillLynch(HongKong)

JackChen>>

ResearchAnalyst

MerrillLynch(HongKong)

ruofan.chen@

KarlChoi,CFA>>ResearchAnalyst

MerrillLynch(HongKong)

karl.choi@

EthanCui>>

ResearchAnalyst

MerrillLynch(HongKong)

ethan.cui@

NathanGee,CFA>>

ResearchAnalyst

MerrillLynch(Singapore)

nathan.gee@

CissyGuan>>ResearchAnalyst

MerrillLynch(HongKong)

cissy.guan@

MingHsunLee,CFA>>ResearchAnalyst

MerrillLynch(HongKong)

minghsun.lee@

RonaldLeung,CFA>>ResearchAnalyst

MerrillLynch(HongKong)

ronald.leung@

DaleyLi,CFA>>ResearchAnalyst

MerrillLynch(HongKong)

daley.li2@

ChenLuo,CFA>>ResearchAnalyst

MerrillLynch(HongKong)

chen.luo@

HelenQiao

China&AsiaEconomistMerrillLynch(HongKong)

helen.qiao@

GaryTsang>>ResearchAnalyst

MerrillLynch(HongKong)

gary.tsang@

FanTso,CFA>>ResearchAnalyst

MerrillLynch(HongKong)

fan.tso@

WinnieWu>>ResearchAnalyst

MerrillLynch(HongKong)

winnie.wu@

LucyYu>>

ResearchAnalyst

MerrillLynch(Singapore)

lucy.yu@

MattyZhao>>ResearchAnalyst

MerrillLynch(HongKong)

matty.zhao@

SeeTeamPageforListofAnalysts

22026ChinaConference(H/A)|13May2026

BofAGLOBALRESEARCH

HuanengPowerInternational,Inc.(902HK/HUNGF)(600011CH/HUNWF)|Underperform|GaryTsang,CharlotteXia

JASolarTechnologyCo.,Ltd.(002459CH/XJSTF)|Underperform|GaryTsang,CharlotteXia

KerryProperties(683HK/KRYPF)|Buy|FanTso,KarlChoiLaopuGold(6181HK/XLGBF)|Neutral|RonaldLeung

PostalSavingsBankofChina(1658HK/PSBKF)(601658CH/XPSSF)|Underperform|WinnieWu,EmmaXu,WenqingHan

S.F.HoldingCo.,Ltd(002352CH/XSLRF)|Buy|FanTso,KarlChoi

ShenzhouInternationalGroupHoldingsLimited(2313HK/SZHIF)|Buy|ChenLuo,LucyYu,JonasYang

Sinotrans(598HK/SNOTF)|Buy|KarlChoi,FanTso

Yadea(1585HK/YADGF)|Buy|JoeyYang,MingLee,FionaLiang,JessieLoYiliIndustrialGroup(600887CH/XIDRF)|Buy|ChenLuo,JackChen

ZoomlionHeavyIndustry(000157CH/XLRYF)|Buy|MingLee,SummerWang,YikaiLiu,FionaLiang

2026ChinaConference(H/A)|13May20263

BofAGLOBALRESEARCH

Highlights

ElizabethEconomy;Leadershipsummit:SettingthetoneforaUS-Chinarelationshipcomeback

HelenQiao

MerrillLynch(HongKong)

helen.qiao@

BensonWu,CFA

MerrillLynch(HongKong)

benson.wu@

XiaoqingPi

MerrillLynch(HongKong)

xiaoqing.pi@

WehavetheplenarysessionwithDr.ElizabethEconomy,HargroveSeniorFellowattheHooverInstitution,discussingtheexpectationsfortheupcomingXi-TrumpmeetinginBeijingthisweek.

•Expertseesstabilityinsteadofbreakthroughs.Shebelievestheprimaryobjectiveofthesummitistoestablishastabilitymechanismratherthanresolvefundamental

disputes.A“boardoftrade”islikelytobeannounced–aprotectedchannelfornon-sensitive,positivetrade(e.g.,agriculture,Boeingaircraft,energy)thatwouldisolatefrictionsliketariffsandexportcontrols.However,the“boardofinvestment”

remainsprematureduetoU.S.politicalresistance(concernsovertechnologytransfer,sensitivesectors).

•Short-termdeliverableswillincludeChinesepurchasecommitments(soybeans,

planes),whiletheU.S.mayofferselectivetariffrelief–e.g.,reducingmetaltariffsoradjustingsome301tariffs.However,exportcontrolsonadvancedchipsare

unlikelytobelifted.TheU.S.mayalsopressforrareearthsupplyguaranteesandcooperationonIran,butChinaisseenasunresponsive.

•TheexpertstronglybelievesTrumpcannotreturnempty-handed;tangibleoutcomeswillmaterialize,evenifnottransformative.Thesummitlikelyyieldsamodestde-

escalationinbilateraltradefrictionbutnoresolutionontechdecoupling,inherview.

42026ChinaConference(H/A)|13May2026

BofAGLOBALRESEARCH

HuangYipingsession:Economicrebalancingamid

uncertaintiesfromtheenergyshock

HelenQiao

MerrillLynch(HongKong)

helen.qiao@

BensonWu,CFA

MerrillLynch(HongKong)

benson.wu@

XiaoqingPi

MerrillLynch(HongKong)

xiaoqing.pi@

•ProfessorHuangYipingarguedthattheeconomicfalloutfromMiddleEasttensionsforChinashouldbelimitedandcouldevenbemildlypositiveintermsofspilllover.Higherenergypricesmayhelptheeconomyexititsprolongeddisinflationaryand

deflationarypressures,whileconcernsoverenergysecurityareaccelerating

investmentincleanenergysupplychains.Inhisview,thesedynamicsmakethe

geopoliticalshockmoremanageableandpotentiallysupportiveofChina’smediumtermrebalancingratherthanamajordrag.

•Onthedomesticeconomy,ProfessorHuangemphasizedthatconsumptionrecoverywillbeslowandpolicydependent.Heseescurrentmeasuresasinsufficiently

aggressivetomeaningfullylifthouseholdincomegrowthorconfidence.Fixedassetinvestmentappearsweakinaggregate,butlooksmoreresilientoncepropertyis

excluded,withinfrastructurespendingandplannedhightechinvestmentunderthefiveyearplanprovidingsupport.Hehighlightedthepersistentdivergencebetweenthetraditionalandneweconomies,notingthattheoldgrowthmodelislikelyto

persistlongerthanexpectedbeforegivingwaymoreabruptly.Ontrade,he

cautionedthatrecentexportstrengthisunlikelytobesustained,reinforcingthepolicyimperativetoboostdomesticdemand,ascontinuedexportledgrowthinalargeeconomyinevitablyraisesexternalfrictions.

•Onpolicymatters,ProfessorHuangstressedthatmonetaryeasinghasbecomeanineffectivemacrotoolduetostructurallyweaklongtermcreditdemand,and

policymakersremainwarythataggressiveratecutswouldmainlyfuelsupplyratherthandemand.HedoesnotexpectChinatopursueFXdepreciationasa

competitivenessstrategy,insteadfavoringgreaterexchangerateflexibilityas

capitalflowsplayagrowingroleinRMBvaluationrelativetothetradebalance.Healsoflaggedartificialintelligenceasamediumtermmacrorisk,warningthat

productivitygainscouldoutpacejobcreation,potentiallysuppressinglaborincomeandweakeningdemand.

2026ChinaConference(H/A)|13May20265

BofAGLOBALRESEARCH

BYD(1211HK/BYDDF)|Buy

MingHsunLee,CFA>>MerrillLynch(HongKong)

minghsun.lee@

JoeyYang,CFA>>

MerrillLynch(HongKong)

joey.z.yang@

FionaLiang>>

MerrillLynch(HongKong)

fiona.liang3@

JessieLo>>

MerrillLynch(Singapore)

jessie.lo@

Overseasexpansion:shiftingtowardshigher-endandlocalizationimprovemargins

BYD‘soverseassalesareguidedat1.5mnunitsin2026,withupsidepotential.BYD

seesstrongdemandintheoverseasmarket,evidencedbylengtheningdeliverylead

times.Meanwhile,BYDhasanincreasinglydiversifiedproductmatrixthatisshifting

frommass-markettowardhigher-endpositioningintheoverseasmarket,including

Yangwang,DenzaandFangchengbao.Localizationisexpectedtostructurallyimprove

overseasmargins,too:theHungaryplantwillstartproductioninafewmonths,whiletheIndonesiaplantisscheduledtostartproductioninmid-2026.Byregion,APACand

Europeremainthetwolargestoverseasmarkets,whileincrementalcontributionfromtheAmericasislikelymorelimiteddespiteeasingEV(electricvehicle)importrulesinCanadarecently.

Domesticmarket:healthyinventory;premiumbrandsdriveincrementalgrowth

BYDmentionedChinadomesticmarkethasbeenrelativelyweakin4M26buthasa

potentialnear-termrebound.BYD’sinventorylevelindomesticmarketremainshealthyat<400kunits,withactivedestockinginrecentmonths.BYD’spremium-brandvolumesaleswas400kunitsin2025,whileBYDexpectsanincrementalseveralhundred

thousandunitsin2026,whichwillalsosupportBYD’sper-vehicleprofitabilitytotrendsteadilyupwardin2026.Fangchengbaoisexpectedtobethekeygrowthdriver,withTitanium7launchedin2025,followedbyalargerSUVmodelandnewsedanseriesin2026.Denzaisinatransitionphasebuthasnewproductsinthepipeline.

Technologyleadershipinfast-chargingandbattery;rawmaterialcosthikeimpacts

BYDhighlighteditsadvantagesinfast-chargingandbatterytechnologyremainakey

differentiator.Thecompanyplans20kfast-chargingstationsbyend-2026,mostlyco-

builtwithpartnersandseveralthousandownedbyBYD,upfrom6kcurrently,including1kalonghighways.BYD’ssecond-generationbladebatteryhasreached50kunits/monthcapacityinApril,withdeliverycapabilityincreasingby30-50kunitssequentially,andhasattractedstrongoverseasinterestdespitenear-termcapacityconstraints.InESS

(energystoragesystem),BYDrankedNo.1globallyinsystemESSshipmentsin2025

(60GWh)andtargets80-90GWhin2026.Onrawmaterialcosthikeimpacts,BYDdidnotquantifythenumbersbutcommentedthathigherdepreciationandamortization

expensesratherthaninputcosthikeswerethelargestdragonmarginsin1Q26.

62026ChinaConference(H/A)|13May2026

BofAGLOBALRESEARCH

BusyMingGroup(1768HK/XYBMF)|Buy

JackChen>>

MerrillLynch(HongKong)

ruofan.chen@

ChenLuo,CFA>>

MerrillLynch(HongKong)

chen.luo@

Whatwelearned

•BusyMingremainsconfidentinlongtermexpansionpotential,withaclearpathwaytowarditstarget40-50kstores.Expansionwillstayselective,withstrongregionalclusteringcreatingmeaningfulbarrierstoentry.Storeeconomicsremainattractive(RMB5mn+GMV,8-10%EBITDAmargin,~2-yearpayback),althoughnewerstoresmayinitiallylagmatureones.Thecompanyhastightenedfranchiseeselection

(c.20%approvalrate)andisimplementingregionalprotectiontoensurenetworkqualityandavoidcannibalization.

•Operationalfocusisonefficiency,SKUmanagement,andsupplychainexecution,tosustainhighturnoverandprofits.Themodelbenefitsfromhightraffic,strong

repeatcustomers,andpricecompetitivenessvs.supermarkets/e-commerceinsnacks.Managementhighlightedimprovedmerchandisingdisciplineandrapidassortmentrefresh,alongsideincreasinglocalizationandcold-chainexpansion.Despitedisciplinedproductstrategy(limitedpushintofreshsnacks/PB/new

categories),recentsame-storeperformanceremainedresilient.

Implicationsforthecompany/industry

•WereiterateourBuyforBusyMing.AsthemarketleaderwithunmatchedscaleinChina’sstill-penetratingsnackdiscountindustry,weexpectBusyMingtodeliversustainedgrowth,supportedbystructuraladvantagesincost,scale,supplychainintegration,andbrandequitythatenablecontinuedgeographicandcategory

expansion.Beyondtoplinegrowth,economiesofscale,acontinuouslyimprovingproductmix,andongoingsupplychainefficiencygainsshoulddrivesteadymarginexpansionandenhanceearningsvisibilityinto2026.

2026ChinaConference(H/A)|13May20267

BofAGLOBALRESEARCH

J&TGlobalExpressLimited(1519HK/JTGLF)|Buy

FanTso,CFA>>

MerrillLynch(HongKong)

fan.tso@

KarlChoi,CFA>>

MerrillLynch(HongKong)

karl.choi@

Whatwelearned

•J&TnotedtheAprvolumegrowthinSoutheastAsiaiswithinitsfull-yearguidance(50%YoYgrowth).Itnegotiatedwithitse-commerceplatformclientstopass

throughpartofthefuelcostimpact.Ittargetsmarketshareof40-50%beforeturningmorefocusonprofitabilityimprovement.

•TheinitialvolumeissmallatPeruandColumbia.Theassetlightinvestmentmodelisunlikelytodragonprofitabilitythisyear.

•J&TwillprioritiseEuropeoverUSthisyearintermsofnewmarkets.

Implicationsforthecompany/industry

•WemaintainBuyonJ&TandwelikeitsstructuralgrowthstoryinSoutheastAsiaandothermarkets.Thesustainedanti-involutionpolicyinMainlandChinaalsohelpsupportitsoverallprofitability.

82026ChinaConference(H/A)|13May2026

BofAGLOBALRESEARCH

Takeaways

BankOfChinaLtd(3988HK/BACHF)(601988CH/

BACZF)|Neutral

WinnieWu>>

MerrillLynch(HongKong)

winnie.wu@

EmmaXu>>

MerrillLynch(HongKong)

emma.xu@

WenqingHan,CFA>>MerrillLynch(HongKong)

wenqing.han@

•Fundingcostsarelikelytofall~20bpin2026asdepositsmatureandreprice,whichcouldsupportNIMby~7.5bpbeforefactoringinasset-yieldcompression.After

incorporatingasset-yieldpressure,management’sbase-caseisforNIMtobroadlystabilizein2026vs.2025.

•Feeincomegrowthwassolidin1Q26,ledbywealthmanagement,settlement-

relatedfees,andbankcards,partlyoffsetbysofterguarantee&commitmentandFX-relatedfees.BOCsawnoone-offfeedistortionsin2025,asthelegacyissuehadlargelybeenresolvedinearlieryears.

•BOC’sMiddleEastexposureislimited(~2%oftotalassets),withactivityconcentratedincorporatelendingandinterbankbusiness.

2026ChinaConference(H/A)|13May20269

BofAGLOBALRESEARCH

BeijingCapitalAirport(694HK/BJCHF)|Buy

AmyHan>>

MerrillLynch(HongKong)

amy.han@

NathanGee,CFA>>

MerrillLynch(Singapore)

nathan.gee@

Whatwelearned

•RecentairlinecapacitycutspostLaborDayhaveweighedonaircraftmovementsandpassengerthroughput,particularlyondomesticroutes,whileinternationalandregionaltrafficcontinuedtogrow.Thetransittrafficfrom/toEuropehasseen

increase.Despitesomeimpactfromsupplyconstraints,slotadditionsarestillexpectedtocomeonstreamaheadofthesummerpeak,andthefullyeartrafficgrowthforecastofmidsingledigitYoYbymanagementremainsintact.

•Thedutyfreebusinessremainsintherampupphase,withstoreopeningratesat

60–80%acrossT2andT3.Perpassengerspendinghasbeenpressuredbyinventoryconstraintsfollowingcustomspolicychanges.Inresponse,dutyfreeoperatorsandBCIAarejointlyrollingoutpromotionsandintroducingnewbrandstoraisestore

entryratesandimproveperpassengerconsumption.Headwindsfrompolicy

changesandtherampupofnewoperatorsmaypressureonfullyearperpassengerspendingrecoveryin2026whileoveralldutyfreerevenueisstillexpectedtogrowatahighsingledigitrateYoYsupportedbyhigherbaserentalsunderthenew

contract

•Costreductionremainsontrack,withmanagementreiteratingitsguidanceof3–5%YoYcostreductionin2026E.

Implicationsforthecompany/industry

•WemaintainourBuyratingonBCIA,underpinnedbystablerevenuegrowthacrossbothaeronauticalandnonaeronauticalsegmentsandstrictcostcontrol,which

shouldsupportaturnaroundin2026E.Thestockiscurrentlytradingatan

undemanding0.6xP/B.1Q26returnedtoprofitabilitywithnetprofitofRMB9.3mn,fromaRMB125mnnetlossayearearlier,reinforcingourfullyearprofitmaking

expectation.

102026ChinaConference(H/A)|13May2026

BofAGLOBALRESEARCH

BeijingRoborockTechnologyCoLtd(688169CH/XBTLF)

|Buy

YoyoPang>>

MerrillLynch(HongKong)

yoyo.pang@

Whatwelearned

•Robotvacuumcleaner(RVC,72%revmix):Chinagrowthmoderatedtolow

singledigitYoY,pressuredbyreducedinnationalsubsidiesandreducedself-fundedpromotions.OverseasrevenueincreasedbyhighsingledigitYoY,drivenby~30%

YoYgrowthinNorthAmerica,supportedbyrisingofflinepenetration.RVCnet

marginremainedatlowteens,withChinalossesnarrowingandoverseasmarginsstayingabove15%.

•Wetanddryvacuum(low-20%revmix):Overseasmarkets(mainlyinEuropeandAPAC)delivered~200%YoYgrowthin1Q26.Chinarevenuegrew~100%YoYandaccountedfor~60%ofsegmentrevenue.Margin-wise,overseasprofitabilityheldupathighsingledigitlevels,whiletheChinamarketremainedlossmakingatsingledigitnegativemargins.

•Washersegmentandlawnmower:Thewashersegmentfurthernarrowedlossesto~RMB40mn.Managementguided1H26lawnmowershipmentsat40–60kunits(implying~RMB2mnrevenue).

Implicationsforthecompany/industry

•WemaintainourBuyratingonRoborock,supportedbyitscontinuedoverseasmarketsharegainsamidiRobot’sweaknessandanundemandingvaluation

reflectinglowmarketexpectations.Thekeynear-termcatalysttomonitorisperformanceduringthe618e-commercefestival.

2026ChinaConference(H/A)|13May202611

BofAGLOBALRESEARCH

BlackSesameIntlHolding(2533HK/BSIHF)|Neutral

DaleyLi,CFA>>

MerrillLynch(HongKong)

daley.li2@

OwenWang>>

MerrillLynch(HongKong)

owen.wang2@

HarryZhuang>>

MerrillLynch(HongKong)

harry.zhuang@

Whatwelearned

Productroadmapisexpandingfromautonomousdrivingtobroaderartificialintelligenceinferencecomputing.Managementhighlightedongoingexpansionfromautonomousdrivingintogeneralartificialintelligenceinference,leveragingitshigh-

performancechipcapabilities.Startingfromautonomousdriving,BlackSesameis

prioritizingembodiedartificialintelligence(e.g.,humanoidrobots)applicationsthroughits“SesameX”,whichisexpectedtodrivefurtherbusinessgrowthinthefuture.

Dualproductlinestoaddresskeyintelligentvehicletrendsofhighercomputingpowerandsystemintegration.ManagementreiteratedHuashanforhigh-

performanceautonomousdrivingchips,whileWudangfocusesonhighlyintegrated

system-on-chip(SoC)solutionssupportingcentralizedelectronic/electricalarchitecture.TheA2000serieshasobtainedexportclearanceunderUnitedStatesBureauofIndustryandSecurity(BIS)regulations,enablingglobalcommercialization,withaproductfamilycoveringdifferentcomputingpowertierstosupportbroadercustomeradoption.

Autonomousdrivingprogressionandlocalizationtrendssupportdemand

outlook.ManagementexpectsaccelerationinLevel3andLevel4autonomousdrivingdeploymentinChina,particularlyinrobotaxi,drivingdemandforhigher-performanceandlocallycompliantchips.BlackSesamewillcontinuetobuildanopenecosystemwithautooriginalequipmentmanufacturers(OEMs)andthird-partyalgorithmpartners,accordingtomanagement.

Implicationsfortheindustry/company

•WebelievetheopenplatformmodeladoptedbyBlackSesamecouldhelpthecompanygainfurthertractionasoriginalequipmentmanufacturers(OEMs)prioritizeflexibilityandcostcontrol.

•Beyond-autonomous-drivingexpansionremainskeytothevaluationupsideofBlackSesame,withroboticsandembodiedartificialintelligencestillatanearlystage.

•WemaintainourNeutralratinggivenlowvisibilityforbreakeveninnearterm.

122026ChinaConference(H/A)|13May2026

BofAGLOBALRESEARCH

ChinaConstructionBank(939HK/CICHF)(601939CH/

XCTBF)|Buy

WinnieWu>>

MerrillLynch(HongKong)

winnie.wu@

EmmaXu>>

MerrillLynch(HongKong)

emma.xu@

WenqingHan,CFA>>MerrillLynch(HongKong)

wenqing.han@

•2026issettoseetheheaviestdepositmaturitiesinrecentyears,with~35%maturingin1Q,~30%in2Q,andtheremaindersplitacross3Q/4Q.

•Aprilloangrowthsoftened,withbothcorporateandretailbalancesedgingdownMoM,partlyoffsetbystrongerbillfinancing.

•ManagementguidesforamodestNIMdeclineof~5bpin2026,anarrowercontractionthanin2025.

2026ChinaConference(H/A)|13May202613

BofAGLOBALRESEARCH

ChinaEverbrightEnvironmentGroupLimited(257HK/

CHFFF)|Buy

CissyGuan>>

MerrillLynch(HongKong)

cissy.guan@

GaryTsang>>

MerrillLynch(HongKong)

gary.tsang@

Whatwelearned

EverbrightEnvironment(CEE)targetstoachieve5%netprofitCAGRduring2026-30(the15thFiveYearPlan),through1)overseasexpansion;2)steamsalesgrowth;3)financecostsavings.InFY25,totalborrowingsdeclinedbyRMB5.1bn,andledto

HKD600mnfinancecostsavings.

CEEtargetstoliftpayoutratioto45-50%in3-5yearstoimproveshareholderreturns.CEEannouncedtopursueanA-sharelistinginresponsetothepolicyinitiativeoftheShenzhenStockExchangebackinNov2025.CEEneedtodisclose3-yeardividendplanduringlistingaccordingtoexchangerules.

CEEtargetsthatoverseasrevenuewillaccountfor5%totalrevenueby2027and10%totalrevenueby2030,includingbothoverseaprojects'constructionrevenue(non-cashbacked)andoperationrevenue.CEEhasestablishedlocalofficesinUzbekistan,

IndonesiaandVietnamtobidforlocalprojects.Thetwowaste-to-energyprojects

signedinUzbekistan,withtotalinvestmentofc.RMB2.3bn,startedconstructionsinceNov2025andtargetstocommenceoperationinmid-2027.

Implicationsforthecompany/industry

CEE'snetprofittargetandpayoutratiotargettranslatestoatleast6%DPSCAGRover2026-30.GivenhighdividendETFs(exchangetradedfund)oftenrequireatleast4%

dividendyieldforcomponentstocks,andthatSOEs(state-ownedenterprise)shareissuancemustbeover1xP/B,weexpectatleast20%DPSupsideinthenearterm.

In2025,wastetreatmentfee/wastewatertreatmentfeecollectionratiofromlocalgovernmentshaveimprovedto86%/81%,vs.82%/79%backin2024.

WeexpectCEEtobooklessimpairmentlossYoYinFY26,astheASPofhazardoussolidwastebusinessstabilizedin1Q26.

142026ChinaConference(H/A)|13May2026

BofAGLOBALRESEARCH

ChinaMerchantsBank(3968HK/CIHHF)(600036CH/

CIHKF)|Underperform

WinnieWu>>

MerrillLynch(HongKong)

winnie.wu@

EmmaXu>>

MerrillLynch(HongKong)

emma.xu@

WenqingHan,CFA>>MerrillLynch(HongKong)

wenqing.han@

•Managementguidedthatretailloanriskremainsmanageable.Oncorporateside,propertydeveloperexposureislimited,andloanlossreservecoverageisstrong-around~3xtheaveragelevelforcorporateloans.

•NIMheadwindsshouldeaseversusthe11bpdeclinein2025.Managementguidestoan“L-shaped”pathin2026:mostpressureconcentratedin1H,followedby

relativestabilizationin2H.

•Whilethenewpresident’sdetailedinitiativeshaveyettobeannounced,

managementindicatedthebank’scorestrategicdirectionshouldremainbroadlyunchanged.

2026ChinaConference(H/A)|13May202615

BofAGLOBALRESEARCH

ChinaResourcesGasGroupLimited(1193HK/CRGGF)|

Neutral

CissyGuan>>

MerrillLynch(HongKong)

ciss