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

PICC Property & Casualty H / Equity Bottom-Up

<ul><li>We expect PICC P&amp;C, the P&amp;C forerunner, to meet both auto and non-auto combined ratio (CoR) guidance of 97%/100%, to land at 96.9%/99.8%, based on our forecast.</li><li>With a benign competitive landscape under tightened regulatory scrutiny and the industry self-discipline convention led by 8 top P&amp;C insurers in Nov 2023, we expect the insurer’s auto expense ratio to drop in 2H23, primarily in 4Q23, to 27.5%, flat vs FY22, whereas the loss ratio to rise to 69.4% (vs 68.1% in FY22), affected by increasing natural catastrophic (NAT CAT) claims in 3Q23.</li><li>In 2024E, we estimate the underwriting profit to rise ~12% YoY, driven by 7% total premium growth and a slight CoR improvement to 98.0% (-0.1pct from FY23E’s 98.1%), thanks to an optimized non-auto structure with risk clearance in some loss-making lines, i.e. liability and commercial property. </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.

We expect PICC P&amp;C, the P&amp;C forerunner, to meet both auto and non-auto combined ratio (CoR) guidance of 97%/100%, to land at 96.9%/99.8%, based on our forecast.With a benign competitive landscape under tightened regulatory scrutiny and the industry self-discipline convention led by 8 top P&amp;C insurers in Nov 2023, we expect the insurer’s auto expense ratio to drop in 2H23, primarily in 4Q23, to 27.5%, flat vs FY22, whereas the loss ratio to rise to 69.4% (vs 68.1% in FY22), affected by increasing natural catastrophic (NAT CAT) claims in 3Q23.In 2024E, we estimate the underwriting profit to rise ~12% YoY, driven by 7% total premium growth and a slight CoR improvement to 98.0% (-0.1pct from FY23E’s 98.1%), thanks to an optimized non-auto structure with risk clearance in some loss-making lines, i.e. liability and commercial property. 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.

PICC P&C (2328 HK) - Expect FY23E CoR Guidance Met

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>Hong Kong market quietly broke its downward trend channel last week, however the HSI met strong resistance at 18200 (100 Week Moving Average).</li>
<li>
<a href="https://www.smartkarma.com/entities/picc-property-casualty-h" target="_blank" data-smartkarma-citation="entities:350:1" rel="noopener">PICC Property &amp; Casualty H (2328 HK)</a> and <a href="https://www.smartkarma.com/entities/china-petroleum-chemical-h" target="_blank" data-smartkarma-citation="entities:369:1" rel="noopener">China Petroleum &amp; Chemical (386 HK)</a> broke to new highs relative to MSCI indices.  Sinopec may benefit from stronger RMB in 2H24.
</li>
<li><a href="https://www.smartkarma.com/entities/shenzhou-intl-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10415:1" rel="noopener">Shenzhou Intl Group Holdings (2313 HK)</a> had a short-term turnaround from its downtrend.  The company reported growth in sales and better margins in 2Q24.</li>
</ul>


Hong Kong market quietly broke its downward trend channel last week, however the HSI met strong resistance at 18200 (100 Week Moving Average).

PICC Property &amp; Casualty H (2328 HK) and China Petroleum &amp; Chemical (386 HK) broke to new highs relative to MSCI indices.  Sinopec may benefit from stronger RMB in 2H24.

Shenzhou Intl Group Holdings (2313 HK) had a short-term turnaround from its downtrend.  The company reported growth in sales and better margins in 2Q24.


Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 3)

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

<ul>
<li>Industrials and Consumer Staples Remain Top Overweights, Though Sentiment Fragile for Both.</li>
<li>Energy sector shows signs of a turnaround from long-term decline, whilst Financials remain unloved by China investors.</li>
<li>Real Estate allocations have hit record lows, with average holdings at just 2.93%, while Consumer Discretionary sector approaches all-time highs.</li>
</ul>


Industrials and Consumer Staples Remain Top Overweights, Though Sentiment Fragile for Both.
Energy sector shows signs of a turnaround from long-term decline, whilst Financials remain unloved by China investors.
Real Estate allocations have hit record lows, with average holdings at just 2.93%, while Consumer Discretionary sector approaches all-time highs.


Fintech & EM-focused Analyst, KT Capital Group

Alec Tseung

Fintech & EM-focused Analyst

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

<ul>
<li>Given Pru's demerger in 2021, it now offers investors a good alternative to AIA to tap into the development and the growth potential of the life insurance sector in Pan-Asia.</li>
<li>AIA has a more balanced business across so many markets in APAC, while Pru skews toward Southeast Asia.</li>
<li>Pru's P/BV is currently at a 30% discount to AIA's and is trading at the same level as the year-end when China just announced the re-opening of its borders.</li>
</ul>


Given Pru's demerger in 2021, it now offers investors a good alternative to AIA to tap into the development and the growth potential of the life insurance sector in Pan-Asia.
AIA has a more balanced business across so many markets in APAC, while Pru skews toward Southeast Asia.
Pru's P/BV is currently at a 30% discount to AIA's and is trading at the same level as the year-end when China just announced the re-opening of its borders.


APAC Insurers Series (#2): AIA or Prudential?

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>The HSCEI serves as a benchmark to reflect the overall performance of the top 50 "Mainland China" securities listed in Hong Kong.</li>
<li>In this insight, we take a look at the final rankings for the HSCEI potential ADDs and potential DELs for the index rebal event in December 2024.</li>
<li>We see two ADDs/DELs - the same names we had in our last insight. At present, we expect US$474mn capping flows one-way but this can change by early-December 2024.</li>
</ul>


The HSCEI serves as a benchmark to reflect the overall performance of the top 50 "Mainland China" securities listed in Hong Kong.
In this insight, we take a look at the final rankings for the HSCEI potential ADDs and potential DELs for the index rebal event in December 2024.
We see two ADDs/DELs - the same names we had in our last insight. At present, we expect US$474mn capping flows one-way but this can change by early-December 2024.


Quiddity Leaderboard HSCEI Dec 24: Two Changes Likely; US$474mn Capping Flows One-Way

China

PICC Property and Casualty Company Limited provides insurance services. The Company provides property loss insurances, liability insurances, credit insurances, accidental injury insurances, short term health insurances, guarantee insurances, and other insurance products. PICC Property and Casualty also operates investment businesses.

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PICC Property & Casualty H (2328 HK)

PICC P&C (2328 HK) - Expect FY23E CoR Guidance Met

We expect PICC P&C, the P&C forerunner, to meet both auto and non-auto combined ratio (CoR) guidance of 97%/100%, to land at 96.9%/99.8%, based on...

CMB International

Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 3)

Hong Kong market broke its downtrend however it met strong resistance just above 18k. PICC and Sinopec broke to new highs relative to MSCI...

David Mudd

China Macro: Sector Positioning Update

Sector positioning among active China Funds. Industrials and Consumer Staples Remain Top Overweights, Energy shows signs of a turnaround, whilst...

Steven Holden

APAC Insurers Series (#2): AIA or Prudential?

Pru’s recent correction offers investors an opportune window to buy into its premium franchise (vs. AIA), although both stocks provide investors...

Alec Tseung

Quiddity Leaderboard HSCEI Dec 24: Two Changes Likely; US$474mn Capping Flows One-Way

The one-way flow estimate for US$474mn translates to a turnover of roughly 4.2%. The final capping flows will be decided on 3rd December 2024.

Janaghan Jeyakumar, CFA

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