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>ZTE released its 3Q23 results. Quarterly revenue of RMB28.7bn (-12.4% YoY and -9.1% QoQ) was below market expectation, largely due to lower-thanexpected telecom revenue.</li><li>3Q net profit was RMB2.4bn, with 5.1% YoY and - 16.3% QoQ. GPM was resilient at 44.6% in 3Q23 (vs. 38.1%/42.0% in 3Q22/ 2Q23), showing Company’s competitiveness in the telecom market.</li><li>We revised down our EPS forecast for 2023-25E by 5%/7%/9%, reflecting a slowdown in growth in 3Q23.</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.

ZTE released its 3Q23 results. Quarterly revenue of RMB28.7bn (-12.4% YoY and -9.1% QoQ) was below market expectation, largely due to lower-thanexpected telecom revenue.3Q net profit was RMB2.4bn, with 5.1% YoY and - 16.3% QoQ. GPM was resilient at 44.6% in 3Q23 (vs. 38.1%/42.0% in 3Q22/ 2Q23), showing Company’s competitiveness in the telecom market.We revised down our EPS forecast for 2023-25E by 5%/7%/9%, reflecting a slowdown in growth in 3Q23.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.

<ul><li>ZTE’s recent update on AI-related development: At a recent investor relations event, the Company shed light on its progress in AI development for the B2B sector.</li><li>The Company featured a foundational AI model, a R&amp;D model (AI-assisted programming), a telecom model (streamline telecom carriers’ operations), and an industry-specific model (focusing on urban governance) aimed to be rolled out between year-end and early 2024.</li><li>Capitalizing on the AI momentum spurred by ChatGPT in 1H23, the Company is set to debut new computational products and is on track to launch an AI server, specifically engineered for intensive model training. </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.

ZTE’s recent update on AI-related development: At a recent investor relations event, the Company shed light on its progress in AI development for the B2B sector.The Company featured a foundational AI model, a R&amp;D model (AI-assisted programming), a telecom model (streamline telecom carriers’ operations), and an industry-specific model (focusing on urban governance) aimed to be rolled out between year-end and early 2024.Capitalizing on the AI momentum spurred by ChatGPT in 1H23, the Company is set to debut new computational products and is on track to launch an AI server, specifically engineered for intensive model training. 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.

ZTE (000063 CH) – A Defensive Play with Long Runway for Growth

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 26th.</li>
<li>We estimate the weekly outflows to be US$1,578.2 million, led by consumer staples, information technology, financials, and offset by consumer discretionary, health care, utilities.</li>
<li>We highlight flows for Zijin Mining, Moutai, CATL, Zhongji Innolight, Wuliangye, Boe Technology.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 26th.
We estimate the weekly outflows to be US$1,578.2 million, led by consumer staples, information technology, financials, and offset by consumer discretionary, health care, utilities.
We highlight flows for Zijin Mining, Moutai, CATL, Zhongji Innolight, Wuliangye, Boe Technology.


Northbound Flows (Jul 26th): Zijin Mining, Moutai, Zhongji Innolight, Wuliangye, Boe Technology

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>A month out from cutoff for the September rebalance, we see one potential change for the <a href="https://www.smartkarma.com/entities/ishares-china-large-cap-etf" target="_blank" data-smartkarma-citation="entities:766:1" rel="noopener">iShares China Large-Cap (FXI) (FXI US)</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/china-tower-corp-ltd" target="_blank" data-smartkarma-citation="entities:27037:1" rel="noopener">China Tower (788 HK)</a> is a potential inclusion while <a href="https://www.smartkarma.com/entities/china-international-capital-corporation-ltd" target="_blank" data-smartkarma-citation="entities:1071:1" rel="noopener">China International Capital Corporation (3908 HK)</a> should be deleted from the ETF.</li>
<li>Shorts have been dropping in <a href="https://www.smartkarma.com/entities/china-tower-corp-ltd" target="_blank" data-smartkarma-citation="entities:27037:1" rel="noopener">China Tower (788 HK)</a> and are near their lows while increasing in <a href="https://www.smartkarma.com/entities/china-international-capital-corporation-ltd" target="_blank" data-smartkarma-citation="entities:1071:1" rel="noopener">China International Capital Corporation (3908 HK)</a>. </li>
</ul>


A month out from cutoff for the September rebalance, we see one potential change for the iShares China Large-Cap (FXI) (FXI US). 

China Tower (788 HK) is a potential inclusion while China International Capital Corporation (3908 HK) should be deleted from the ETF.
Shorts have been dropping in China Tower (788 HK) and are near their lows while increasing in China International Capital Corporation (3908 HK). 


FXI Rebalance Preview: One High Probability Change; One More Possible

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 12th.</li>
<li>We estimate the weekly inflows to be US$2,168.8 million, led by financials, information technology, utilities sectors, and offset by health care, communication services, energy.</li>
<li>We highlight flows for Moutai, Yangtze Power, Ping An Insurance, Cosco Shipping, CNNP.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 12th.
We estimate the weekly inflows to be US$2,168.8 million, led by financials, information technology, utilities sectors, and offset by health care, communication services, energy.
We highlight flows for Moutai, Yangtze Power, Ping An Insurance, Cosco Shipping, CNNP.


Northbound Flows (Jul 12th): Moutai, Yangtze Power, Ping An Insurance, Cosco Shipping, CNNP

China

ZTE Corporation develops and markets switches, access servers, videoconferencing systems, mobile communication systems, data communication devices, and optical communication devices.  The Company also offers networking solutions for setup, refurbishment and optimization of networks.

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ZTE Corp H (763 HK)

ZTE (000063 CH) – Mixed 3Q Results

ZTE released its 3Q23 results. Quarterly revenue of RMB28.7bn (-12.4% YoY and -9.1% QoQ) was below market expectation, largely due to lower...

CMB International

ZTE (000063 CH) – A Defensive Play with Long Runway for Growth

ZTE’s recent update on AI-related development: At a recent investor relations event, the Company shed light on its progress in AI development for...

CMB International

Northbound Flows (Jul 26th): Zijin Mining, Moutai, Zhongji Innolight, Wuliangye, Boe Technology

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Zijin Mining, Moutai, CATL, Zhongji Innolight,...

Ke Yan, CFA, FRM

FXI Rebalance Preview: One High Probability Change; One More Possible

There should be 1 change for the FXI ETF in Sep. There could be another change if Wuxi Apptec underperforms some of the other stocks by 3% over the...

Brian Freitas

Northbound Flows (Jul 12th): Moutai, Yangtze Power, Ping An Insurance, Cosco Shipping, CNNP

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Moutai, Yangtze Power, Ping An Insurance, Cosco...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

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