CHINA/HK FIRST TO MARKET

研报英文原文证据摘录

CHINA/HK FIRST TO MARKET

Asia Pacific Equity Research AC Asia Pacific Equity Research

22 June 2026 J P M O R G A N

aprr.publications@jpmorgan.com

pushing the issue from isolated company allegations toward economy-wide pressure that can raise

compliance costs and policy volatility for exporters. At the same time, company risk profiles are changing as

Chinese automakers scale manufacturing in Europe, widening the stakeholder set and raising political

scrutiny precisely when ramp-ups are most prone to teething issues. We provide case studies on BYD and

Fuyao Glass to walk through how these issues can impact investment decision making.

SSC-H/A, China (Lei Mu)

Model Update: Revise down FY26 workload but profitability may improve in 2027 – roll forward PT;

stay OW

We lower our FY26 workload estimates for Sinopec Oilfield Service (SSC), as upstream capital expenditure

adjustments drag on service activity in FY26. We expect the gross margin to stabilize and show an upward

recovery trend in 2027 alongside consistent improvement in cost controls. Our new Jun-27 H/A price targets

are HK$0.83/Rmb2.43 (rolled forward from Sep-26 HK$1/Rmb2.92) and we retain an OW rating as we

expect steady top-line growth and stable gross margin performance with modest profit contribution from

overseas projects. Entering 2Q/3Q26, the overall workload has faced downward pressure amid slightly

weaker upstream development activities, coupled with rising material and logistical costs squeezing short-

term profit. Looking forward, we think China state oil majors’ energy security and expansion of overseas new

orders will support both workload and profitability, and we expect SSC’s gross margin to stablilize in FY26

and edge higher in FY27.