External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>Both Anta and FILA’s performance in 1Q23 were inline with mgt. guidance.</li><li>While Mar-Apr 2023 retail sales growth accelerated, Anta did underperform FILA and other peers.</li><li>However, given the much healthier inventory and retail discounts, there is room for sales to catch up in 5-1 golden week. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Both Anta and FILA’s performance in 1Q23 were inline with mgt. guidance.While Mar-Apr 2023 retail sales growth accelerated, Anta did underperform FILA and other peers.However, given the much healthier inventory and retail discounts, there is room for sales to catch up in 5-1 golden week. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Anta Sports (2020 HK) – A soft 1Q23 but guidance was maintained

<ul><li>The sharp drop in inventory level for 2023 YTD is certainly a decent surprise, and we do think this is just the beginning of the turnaround.</li><li>Backed by better margin improvement and net profit growth, Anta remains as our sector top pick.</li><li>FY22 result slightly beat. Anta’s sales grew by 9% YoY to RMB53.7bn, inline with CMBI/ BBG est. and net profit decreased by 2% YoY to RMB 7.59bn, 5%/ 4% better than CMBI/ BBG est., mainly driven by higher than expected government grants and net finance income.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

The sharp drop in inventory level for 2023 YTD is certainly a decent surprise, and we do think this is just the beginning of the turnaround.Backed by better margin improvement and net profit growth, Anta remains as our sector top pick.FY22 result slightly beat. Anta’s sales grew by 9% YoY to RMB53.7bn, inline with CMBI/ BBG est. and net profit decreased by 2% YoY to RMB 7.59bn, 5%/ 4% better than CMBI/ BBG est., mainly driven by higher than expected government grants and net finance income.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Anta Sports (2020 HK) – Fair guidance but decent inventory and margin

Thematic (Sector/Industry)

<ul><li>Even though we are trimming our FY22E net profit forecasts, we believe the sector has already bottomed out in 1Q23E, supported by: 1) decent YTD retail sales growth, 2) turn around in inventory level and retail discounts.</li><li>While we expect a more conservative FY23E guidance by the brands, we do see decent upside surprises from GP margin improvements, helped by better retail discounts and cheaper input costs, etc.</li><li>Therefore, for brands with a higher DTC mix, we believe brands like Anta (2020 HK) and Topsports (6110 HK) are going to outperform.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Even though we are trimming our FY22E net profit forecasts, we believe the sector has already bottomed out in 1Q23E, supported by: 1) decent YTD retail sales growth, 2) turn around in inventory level and retail discounts.While we expect a more conservative FY23E guidance by the brands, we do see decent upside surprises from GP margin improvements, helped by better retail discounts and cheaper input costs, etc.Therefore, for brands with a higher DTC mix, we believe brands like Anta (2020 HK) and Topsports (6110 HK) are going to outperform.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Sportswear Sector – We expect prudent guidance but decent margins

<ul><li>Maintained OUTPERFORM after our Shenzhen Consumer Tour.</li><li>We visited a number of companies (catering, hotel and sportswear brands) and experts (catering &amp; shopping mall operators) during our trip to Shenzhen this week.</li><li>This channel check has strengthened our OUTPERFORM view on the Consumer discretionary sector, backed by 3 trends</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Maintained OUTPERFORM after our Shenzhen Consumer Tour.We visited a number of companies (catering, hotel and sportswear brands) and experts (catering &amp; shopping mall operators) during our trip to Shenzhen this week.This channel check has strengthened our OUTPERFORM view on the Consumer discretionary sector, backed by 3 trendsContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Consumer Sector – Shenzhen Trip: sustained growth in Feb 2023

<ul><li>Remarkable recovery vs 4Q22, improving spending power and excellent sustainability.</li><li>We believe the data points during the 2023 Chinese New Year are better than our expectation and meaningfully encouraging for the consumer sector, because: 1) the base was high in 2022, as the number of COVID-19 cases were very limited during Jan-Feb 2022 and the number of passenger journeys already grew by 31% YoY</li><li>2) the improvement is significant vs 4Q22, supported by the 89%/ 73% recovery rate of domestic tourism volume/ spending during this CNY, better than 61%/ 44% in the 10-1 holidays and any level in the entire 2022 year,</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Remarkable recovery vs 4Q22, improving spending power and excellent sustainability.We believe the data points during the 2023 Chinese New Year are better than our expectation and meaningfully encouraging for the consumer sector, because: 1) the base was high in 2022, as the number of COVID-19 cases were very limited during Jan-Feb 2022 and the number of passenger journeys already grew by 31% YoY2) the improvement is significant vs 4Q22, supported by the 89%/ 73% recovery rate of domestic tourism volume/ spending during this CNY, better than 61%/ 44% in the 10-1 holidays and any level in the entire 2022 year,Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Consumer Sector – Strong recovery and sustainability during CNY

China

ANTA Sports Products Limited designs, develops, manufactures, and markets sportswear, including sports footwear and apparel for professionals and the general public.

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Anta Sports Products (2020 HK)

Anta Sports (2020 HK) – A soft 1Q23 but guidance was maintained

Both Anta and FILA’s performance in 1Q23 were inline with mgt. guidance. While Mar-Apr 2023 retail sales growth accelerated, Anta did underperform...

CMB International

Anta Sports (2020 HK) – Fair guidance but decent inventory and margin

The sharp drop in inventory level for 2023 YTD is certainly a decent surprise, and we do think this is just the beginning of the turnaround.

CMB International

China Sportswear Sector – We expect prudent guidance but decent margins

While we expect a more conservative FY23E guidance by the brands, we do see decent upside surprises from GP margin improvements, helped by better...

CMB International

China Consumer Sector – Shenzhen Trip: sustained growth in Feb 2023

We visited a number of companies (catering, hotel and sportswear brands) and experts (catering & shopping mall operators) during our trip to...

CMB International

China Consumer Sector – Strong recovery and sustainability during CNY

We believe the data points during the 2023 Chinese New Year are better than our expectation and meaningfully encouraging for the consumer sector

CMB International

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