China Oilfield Services Limited Class H

Operational/financial tone: profitability steady to slightly better; technical services remain strong - Management said overall Q3 operational performance was “normal” and profitability was better than the same period (and compared with the first half/second quarter). - Technical services operating profit margin: ~17–18% (stated as 17.1% H1 and 17.2% for first 9 months; Q3 “sustained steady at a high level”). - Drilling services operating profit margin: ~16% in Q3 (vs ~15.5% H1), described as steady with slight increase. - Implication: Investors should view margins as stable, not deteriorating—especially in technical services.

Demand outlook & revenue growth: slight full-year growth expected; 15th Five-Year Plan raises intensity - Revenue growth in Q3: ~+3% YoY, similar to H1 growth rate (slower vs the more dramatic growth seen over the last ~2 years). - Management argued recent rapid revenue expansion came from execution of reserve/production growth by domestic operators and milestones/capability progress. - Near-term expectation: management expects “slight growth” in 2026 revenue, with overseas revenue expected to grow, potentially offsetting Middle East impacts. - 15th Five-Year Plan (2026–2030) dynamic: only 4 years left, with a plan described as slow start then accelerating, making execution “tougher” and requiring faster delivery than earlier plans. - Forecast signal: despite high utilization today, the company expects higher workload intensity during the 15th plan period.

Equipment utilization & CapEx: high utilization now; CapEx timing a potential concern; utilization supports earnings - Management emphasized overall workload and utilization rates remain high; equipment supply is steadily increasing and operational efficiency continues to improve. - CapEx (cash flow vs guidance) is a negative/uncertainty point: - CapEx first 3 quarters: < RMB 3 billion. - Initial year guidance: RMB 8.4 billion. - Management admitted they were “slow” to fulfill guidance and some projects were rolled into future vessel-building plans and/or adjusted/cut back. - Now expects CapEx to be slightly on par with last year but likely slightly less than the original guidance (i.e., not a clean “catch-up to full guidance” story). - Implication: investors should watch for lumpy project deliveries and funding/timing risk into 4Q and beyond.