Equity Research

Market Report
EXPRESS DAILY 3 August 2022

ICBCI Research
Sector Update (852) 2683 3888
Financials research@icbci.icbc.com.cn

CSRC Chairman: Sound capital market endogenous stability mechanism, expand

the high level of two-way opening
Yi Huiman recently published an article in the "Qiushi", said the stock market has a
rise and fall is the law, the normal fluctuations in government should not and should
not intervene, cannot spend money to buy the index, but not to intervene is not
laissez-faire, must always adhere to the bottom-line thinking, firmly prevent "market
failure" caused by abnormal fluctuations. The CSRC will continue to maintain the
smooth operation of the market as a top priority, strengthen the monitoring and
analysis of marginal changes in market capital flows, investor behavior and the
performance of listed companies, improve the endogenous stability mechanism of the
capital market, and improve the risk response plan in extreme situations.
Source: Sina
Link: https://finance.sina.cn/2022-08-02/detail-imizirav6352394.d.html
Comment: Regarding the connotation and characteristics of the basic system of the
capital market, Yi Huiman said that it should include at least four aspects: First, the
basic system is extensive, systematic and comprehensive. Second, the core of the basic
system is to promote the market parties to return to their positions and responsibilities.
Third, the basic system must be continuous, stable and predictable. Fourth, the basic
system should reflect the organic combination of starting from the actual situation and
drawing on international best practices. We believe that improving the basic system of
the capital market is of great significance to the reform of the capital market and the
promotion of the full registration system, which will benefit the long-term
development of the securities industry.
Analyst: Kenneth Wu
Healthcare
NMPA’s response to the R&D of COVID-19 drugs
Currently, there are drug applications such as nasal and pharyngeal sprays that are
intended to be used for the treatment or prevention of COVID-19. For such cases,
according to NMPA, it is believed that this route of administration should be used with
caution in the R&D of antiviral therapy. For such species, in addition to in vitro
pharmacodynamic tests, pharmacodynamic studies in animals should be used to
investigate the preventive effectiveness under the proposed route of administration.
Source: sina
Link: https://finance.sina.com.cn/chanjing/cyxw/2022-08-01/doc-imizirav6337391.shtml
Comment: NMPA’s response has formulated clearer clinical research requirements for
COVID-19 drugs in the form of nasal and pharyngeal sprays. Besides, with the
emergence of the Omicron variant, given the fact that the pathogenicity of Omicron
has been weakened and the proportion of patients developing severe/critical illness or
death is low, it is difficult to observe the improvement of severity and mortality in
clinical studies. Thus, NMPA recommends that clinical efficacy measures (i.e. time to
sustained clinical recovery as assessed in an appropriate time frame) may be
considered as the primary endpoint of clinical studies in mild/moderate COVID-19
patients. This may speed up the development of COVID-19 drugs.
Analyst: Fiona Wang

For further product information please contact ICBC International Research Limited at (852) 2683 3888
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 Equity Research

Reports
Xinyi Energy (3868.HK) - Project acquisition may slightly fall short of previous Nelson Lee, CFA, FRM
guidance, but yield remains attractive with high earnings visibility, (852) 2206 8357
OUTPERFORM, TP HKD 4.4 nelson.lee@icbci.icbc.com.cn
Summary: Xinyi Energy (“XYE”)'s 1H22 earnings was basically flat due to higher Anson Tang
effective tax rate as more projects exited tax holiday on the back of slow new project (852) 2683 3225
acquisition in 1H22. The company acquired only 40MW of new solar projects in 1H22 anson.tang@icbci.icbc.com.cn
as pandemic resurgence in 2Q22 slowed down the acquisition progress. Mgmt.
maintained the 1GW new capacity addition target in 2022E but expect potential
10-20% downside due to uncertainty of pandemic and high module costs. We trimmed
our 2022-2024E earnings by 4-6% to reflect higher-than-expected effective tax rate,
depreciation of RMB, as well as new share placement that diluted EPS. We remain
positive on XYE given current market price implies over 5% dividend yield which is
attractive with high earnings visibility. We maintain OUTPERFORM rating with
DDM-TP accordingly reduced to HKD 4.4/shr based on our latest earnings forecast,
equivalent to a 25x 2022E P/E and 2.5x P/B.

Xinyi Solar (968.HK) - Lacklustre solar glass segment dragged down earnings as Nelson Lee, CFA, FRM
expected, pressure persists in 2H22E, NEUTRAL, TP HKD 14.0 (852) 2206 8357
nelson.lee@icbci.icbc.com.cn
Summary: XYS's solar glass segment only registered a gross margin of 27% in 1H22,
which narrowed by 25ppts due to lower solar glass ASP and higher production costs. Anson Tang
We expect gross margin pressure to persist in 2H22 given the cost remains high, and (852) 2683 3225
the large-scale new capacity ramp-up could lead to more ASP pressure, including anson.tang@icbci.icbc.com.cn
XYS’s six new lines that are scheduled to come on stream in 2H22. We revised down
our earnings estimate for 2022-2024E by 5-7% to reflect higher production costs
assumptions. XYS also announced the potential A-share listing in the future, but we
expect limited positive impact to share price as the market is likely to slash earnings
estimates considering the current market consensus seems too aggressive, as
mentioned in our preview report. XYS is now trading at ~29x 2022E P/E based on our
latest earnings estimates. We think the current valuation is demanding vs. its 3-yr
average of 17x. We maintain NEUTRAL rating with TP of HKD 14.0/shr.

Bilibili (BILI.US/9626.HK) - Margin improvement takes time, NEUTRAL, TP Zeping Zhao, CFA
USD 25.8/HKD 202.0 (852) 2683 3212
zeping.zhao@icbci.icbc.com.cn
Summary: We maintain our previous forecasts on BILI's 2Q22 financial performances
with total revenue and adj. net loss of RMB 4.9bn (+9.5% YoY) and RMB 1.8bn (adj. Jason Zhang
NPM -36.9%). Our estimations are based on the 1. Game product cycle and nature of (852) 2683 3360
game releases; 2. New anime and OGC releases increasing membership subscriptions; jason.zhang1@icbci.icbc.com.cn
3. Advertising business and E-commerce businesses to be affected by the macro
uncertainties and pandemic resurgence. For 3Q22, while the limited newly released Kenneth Zhang
shows present challenges on the growth of membership revenue, the resilient (852) 2683 3965
performance on advertisement segment deem to support the overall quarterly revenue kenneth.zhang@icbci.icbc.com.cn
growth. Maintain NEUTRAL and trim TP to USD 25.80/HKD 202.20, implying 3.0x
FY2022 P/S.

EXPRESS DAILY - 3 August 2022 2

 Equity Research

ICBCI Recent Research Report List

Date Reports
2-Aug-22 Bilibili (BILI.US/9626.HK) - Margin improvement takes time, NEUTRAL, TP USD 25.8/HKD 202.0
2-Aug-22 策略报告 - 美股短期或跑赢港股
2-Aug-22 Xinyi Solar (968.HK) - Lacklustre solar glass segment dragged down earnings as expected, pressure persists in 2H22E, NEUTRAL, TP
HKD 14.0
2-Aug-22 Xinyi Energy (3868.HK) - Project acquisition may slightly fall short of previous guidance, but yield remains attractive with high earnings
visibility, OUTPERFORM, TP HKD 4.4
1-Aug-22 工银国际研究周报 - 2022 年 8 月 1 日
1-Aug-22 固定收益周报 - 美联储加息步伐或放慢 支持高评级债券
1-Aug-22 港股策略月报 - 流动性预期改善带动股市反弹
1-Aug-22 每周市场观察 - 加速加息预期趋缓，美股直接受益
1-Aug-22 宏观经济周报 - 2022 年第三十二周
1-Aug-22 Wuxi AppTec (603259.CH/2359.HK) - Strong growth momentum maintained, OUTPERFORM, TP RMB 125.8/HKD 131.3
29-Jul-22 Budweiser APAC (1876.HK) - Declining 1H22 volume as expected, growth ahead in both China and Overseas markets, NEUTRAL, TP
HKD 27
28-Jul-22 宏观经济深度研究 - 强势加息如期落地，9 月加息或放缓
27-Jul-22 China Property Monitor - Housing affordability continued to improve
26-Jul-22 XD Inc. (2400.HK) - Game revenue to ramp up towards 2H22, NEUTRAL, TP HKD 20.1
26-Jul-22 Renewable Power Sector - 1H22E earnings preview – Polysilicon makers to register robust growth, while wind farm operators may miss
consensus
25-Jul-22 工银国际研究周报 - 2022 年 7 月 25 日
25-Jul-22 固定收益周报 - 衰退担忧再度大幅推低美债收益率
25-Jul-22 Baidu (BIDU.US/9888.HK) - Takeaways from 2022 Baidu World, OUTPERFORM, TP USD 170.0/HKD 173.2
25-Jul-22 每周市场观察 - 流动性预期边际改善带来反弹
25-Jul-22 宏观经济周报 - 2022 年第三十一周
22-Jul-22 China Insurance Sector - June life premium growth edged up, P&C premium growth remained solid
20-Jul-22 宏观经济深度研究 - 欧元区会再次出现“末日循环”吗
19-Jul-22 Meituan (3690.HK) - On track recovery as pandemic situation stabilized, OUTPERFORM, TP HKD 220.0
19-Jul-22 Kingdee (268.HK) - 1H22 margin performance under pressure, OUTPERFORM, TP HKD 20.9
18-Jul-22 工银国际研究周报 - 2022 年 7 月 18 日
18-Jul-22 固定收益周报 - 衰退担忧加深美债收益率曲线倒挂
18-Jul-22 每周市场观察 - 高通胀持续再次带来流动性担忧
18-Jul-22 宏观经济深度研究 - 经济探底后的增长路径——上半年中国经济发展和下半年经济展望
18-Jul-22 宏观经济周报 - 2022 年第三十周
15-Jul-22 宏观经济快评 - 压力已现，韧性彰显——中国半年度经济数据快评
15-Jul-22 宏观经济深度研究 - 香港增长重心由外向内转变
14-Jul-22 China Healthcare Sector - Proposed results of 7th batch VBP
14-Jul-22 Xtep (1368.HK) - 2Q22 RSV data outperformed peers, 1H22 earnings expected to grow over 35% YoY, OUTPERFORM, TP HKD 17.0
13-Jul-22 Topsports (6110.HK) - Slow recovery from 1QFY23, while online sales maintains positive growth, NEUTRAL, TP HKD 8.0
12-Jul-22 JD.com (JD.US/9618.HK) - Scaled down new initiatives to drive margin improvement, OUTPERFORM, TP USD 70.6/HKD 277.1
12-Jul-22 China Property Monitor - Market sentiment remained low
12-Jul-22 Anta Sports (2020.HK) - 2Q22 RSV recorded mild YoY decline, expecting 1H22E earnings to fall 17% YoY, OUTPERFORM, TP HKD
118.5
11-Jul-22 工银国际研究周报 - 2022 年 7 月 11 日
11-Jul-22 固定收益周报 - 强劲的非农数据推动美债收益率低位反弹
11-Jul-22 Chinese Credit Monthly - Staying defensive on Chinese USD bonds
11-Jul-22 每周市场观察 - 强非农缓解衰退担忧
11-Jul-22 宏观经济深度研究 - 中国数字经济的务实之路
11-Jul-22 宏观经济周报 - 2022 年第二十九周
8-Jul-22 Consumer Sector - Major takeaways from ICBCI 2022 Consumer Investment Conference
6-Jul-22 港股通 ETF 带来长期稳定资金
6-Jul-22 宏观经济深度研究 - 美国衰退，概率几何？
5-Jul-22 Alibaba (BABA.US/9988.HK) - Online retail demand gradually picks up, OUTPERFORM, TP USD 138.0/HKD 135.4
4-Jul-22 工银国际研究周报 - 2022 年 7 月 4 日
4-Jul-22 固定收益周报 - 衰退担忧加大推动美债利率大幅回落
4-Jul-22 港股策略月报 - 港股持续估值修复空间仍在
4-Jul-22 每周市场观察 - 经济 V 型反弹，估值继续修复
4-Jul-22 宏观经济周报 - 2022 年第二十八周

EXPRESS DAILY - 3 August 2022 3

 Equity Research

Research Team
Sector Tel Email
Cheng Shi, PhD Head of Research, Chief Economist 2683 3231 shi.cheng@icbci.icbc.com.cn
Jack Wang, PhD Principal Economist 2206 8252 jack.wang@icbci.icbc.com.cn
Andy Zhang, PhD Principal Economist 2206 8351 andy.zhang1@icbci.icbc.com.cn
Happy Gao Macro-Economics & Fintech 2683 3233 happy.gao@icbci.icbc.com.cn
Angus To, CFA Deputy Head of Research, Fixed Income 2683 3227 angus.to@icbci.icbc.com.cn
Li Yue Fixed Income 2683 3708 yue.li@icbci.icbc.com.cn
Grace Zhou Financials 2683 3790 grace.zhou@icbci.icbc.com.cn
Qiu Zhicheng, CFA Financials 2683 3216 zhicheng.qiu@icbci.icbc.com.cn
Kenneth Wu Financials 2683 3782 kenneth.wu@icbci.icbc.com.cn
Li Xingwen Real Estate 2683 3226 xingwen.li@icbci.icbc.com.cn
Zhao Zeping, CFA TMT & Education 2683 3212 zeping.zhao@icbci.icbc.com.cn
Dongchen Zhao Raw Materials 2683 3766 dongchen.zhao@icbci.icbc.com.cn
Nelson Lee, CFA, FRM Renewable Energy, Power & Power Equipment & Consumer 2206 8357 nelson.lee@icbci.icbc.com.cn
Anson Tang Renewable Energy, Power & Power Equipment & Consumer 2683 3225 anson.tang@icbci.icbc.com.cn
Anna Yu Oil, Gas & Manufacture 2683 3620 anna.yu@icbci.icbc.com.cn
Laurence Zhu Industrials & Auto 2683 3803 laurence.zhu@icbci.icbc.com.cn

EXPRESS DAILY - 3 August 2022 4

Sales Research
Telephone: (852) 2683 3888 Fax: (852) 2683 3881 Telephone: (852) 2683 3888 Fax: (852) 2683 3222

Important Disclosures
ICBCI Ratings
OUTPERFORM : Total stock return (including dividends) expected to exceed relevant market index by more than 20% over next 12 months
NEUTRAL : Total stock return (including dividends) expected to perform in line with relevant market index to within +/-20% over next 12
months
UNDERPERFORM : Total stock return (including dividends) expected to trail relevant market index by more than 20% over next 12 months
UNDER REVIEW : Analyst currently does not have adequate conviction about total stock return (including dividends) relative to relevant market index
over next 12 months

ICBCI is the wholly owned subsidiary of Industrial and Commercial Bank of China
Additional information is available upon request.
The views expressed in this report accurately reflect the personal views of the analyst(s) about the subject securities or issuers; and no part of the compensation of the analyst(s) was,
is, or will be, directly or indirectly, related to the inclusion of specific recommendations or views in this report.

ICBC International Research Limited

Address: 37/F., ICBC Tower, 3 Garden Road, Central, Hong Kong Tel: (852) 2683 3888 Fax: (852) 2683 3900

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The information herein is prepared and published by ICBC International Research Limited. This research report is not directed at, or intended for distribution to, or use by, any
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Research Limited, its group members and/or its affiliates (collectively, “ICBCI” or “we”) to any registration or licensing requirement in such jurisdiction which we do not hold
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offer or solicitation would be illegal; and (iii) based upon information from sources that we consider reliable, but has not been independently verified by ICBCI. This research
report provides general information only. It is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial
situation and the particular needs of any specific person. In preparing this r esearch report, ICBCI has not taken any steps to ensure that the securities referred to in this research
report are suitable for any particular investor. You shall make your own decision with respect to all transactions involving securities referred to in this research report and assess
whether each transaction is suitable for you in light of your financial situation, investment experience and investment objectives.
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for investment purposes, and should not be relied on as investment advice of the third party content providers.
Figures presented herein may refer to past performance or simulations based on past performance which are not reliable indicators of future performance. Where the information
contains an indication of future performance, such forecasts may not be reliable indicator of future performance. Moreover, simulations are based on models and simplifying
assumptions which may oversimplify and not reflect the future distribution of returns.
The facts described in this research report, as well as the views, estimates, forecasts and projections expressed in it are as of the date hereof and are subject to change without
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The information herein is prepared and published by ICBC International Research Limited. This research report is not directed at, or intended for distribution to, or use by, any
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described herein.
This research report is (i) for your private information; (ii) not to be construed as an offer to sell or a solicitation of an offer to buy any security in any jurisdiction where such
offer or solicitation would be illegal; and (iii) based upon information from sources that we consider reliable, but has not been independently verified by ICBCI. This research
report provides general information only. It is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial
situation and the particular needs of any specific person. In preparing this research report, ICBCI has not taken any steps to ensure that the securities referred to in this research
report are suitable for any particular investor. You shall make your own decision with respect to all transactions involving securities referred to in this research report and assess
whether each transaction is suitable for you in light of your financial situation, investment experience and investment objectives.
This research report may contain information obtained from third parties, including ratings from credit ratings agencies and the distribution of third party content in any form is
prohibited except with the prior written permission of the related third party. Third party content providers do not guarantee the accuracy, completeness, timeliness or availability
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of such content. Third party content providers give no express or implied warranties, including, but not limited to, any warranties of merchantability of fitness for a particular
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of opinions and are not statements of fact or recommendations to purchase, hold or sell securities. They do not address the suitability of securities or the suitability of securities
for investment purposes, and should not be relied on as investment advice of the third party content providers.
Figures presented herein may refer to past performance or simulations based on past performance which are not reliable indicators of future performance. Where the information
contains an indication of future performance, such forecasts may not be reliable indicator of future performance. Moreover, simulations are based on models and simplifying
assumptions which may oversimplify and not reflect the future distribution of returns.
The facts described in this research report, as well as the views, estimates, forecasts and projections expressed in it are as of the date hereof and are subject to change without
notice. No representation or warranty, express or implied, is made as to and unless otherwise agreed by ICBCI no reliance should be placed on information contained in this
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research report or its contents to the extent that it is not inconsistent with the obligations applicable to ICBCI that it may otherwise be subject to under the Code of Conduct for
Persons Licensed by or Registered with the Securities and Futures Commission as may be amended, varied or replaced from time to time. This research report is not intended to
provide, and should not be relied upon as personal professional advice (including without limitation, accounting, legal or tax advice or investment recommendations) and is not to
be taken in substitution for your exercise of judgment. Unless otherwise agreed by ICBCI, ICBCI does not act as your adviser and assumes no fiduciary responsibility or liability
for any consequences, financial or otherwise. Investors shall consider whether any information or views in this research report is suitable for their particular circumstances and, if
appropriate, seek professional advice, including tax advice.
The report should not be viewed as identifying or suggesting all risks, direct or indirect, that may be associated with any investment decision. ICBCI produces a number of
different types of research products including, among others, fundamental analysis, quantitative analysis and short term trading ideas; views contained in one type of research
product may differ from views contained in other types of research product, whether as a result of differing time horizons, methodologies or otherwise.
The compensation of analysts who prepared this research report is determined solely by the management of research department and senior management of ICBCI.
Analysts’ compensation is not decided based on revenue of ICBCI’s corporate finance business but may be linked with overall revenue of its corporate finance business as a
whole, of which corporate finance, sales and trading are a part.
If this research report is distributed by a financial institution or an entity, including without limitation any information provider, other than ICBCI, that financial institution or
entity is solely responsible for its distribution. Clients of the distributing financial institution should contact that institution if they decide to effect a transaction in the relevant
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