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.

Thematic (Sector/Industry)

<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

Equity Bottom-Up

<ul><li>Maintain BUY and raise our TP to HK$ 128.94, based on 31x FY23E P/E (based on 1 s.d. above the 5-year average, up from 25x).</li><li>We still believe the sector can continue to re-rate as turnaround is likely in FY23E, even though the valuation is not too cheap and base was high in 1Q22.</li><li>Current valuation of 26x FY23E P/E is not too demanding, vs 5-year average of 26x and int’l peers’ average of 20x.</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.

Maintain BUY and raise our TP to HK$ 128.94, based on 31x FY23E P/E (based on 1 s.d. above the 5-year average, up from 25x).We still believe the sector can continue to re-rate as turnaround is likely in FY23E, even though the valuation is not too cheap and base was high in 1Q22.Current valuation of 26x FY23E P/E is not too demanding, vs 5-year average of 26x and int’l peers’ average of 20x.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) – Turnaround is in sight in 2Q23E

<ul><li>Resilient online sales growth during double 11, where Tik Tok, PDD and JD platforms continued to outperform.</li><li>Based on our channel check and CMBI est., the online GMV growth during 2022’s double 11 was at ~14% YoY, inline with CMBI est. and beat market expectation, similar to online sales growth in Sep 2022 and had picked up vs Oct 2022.</li><li>In terms of platforms, YoY growth for Alibaba (Tmall + Tao Bao)/ JD/ PDD/ TikTok increased by ~flattish/ ~teens/ 27%/ 38%.</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.

Resilient online sales growth during double 11, where Tik Tok, PDD and JD platforms continued to outperform.Based on our channel check and CMBI est., the online GMV growth during 2022’s double 11 was at ~14% YoY, inline with CMBI est. and beat market expectation, similar to online sales growth in Sep 2022 and had picked up vs Oct 2022.In terms of platforms, YoY growth for Alibaba (Tmall + Tao Bao)/ JD/ PDD/ TikTok increased by ~flattish/ ~teens/ 27%/ 38%.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 – Sequential improvements during double 11

<ul><li>Maintain BUY but cut our TP to HK$ 113.30, based on 25x FY23E P/E (unchanged).</li><li>We are now more cautious about 4Q22E and FY23E but we stay relatively positive for Anta over Li Ning.</li><li>Current valuation of 18x FY23E P/E is not too demanding, vs 5-year average of 21x and int’l peers’ average of 18x.</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.

Maintain BUY but cut our TP to HK$ 113.30, based on 25x FY23E P/E (unchanged).We are now more cautious about 4Q22E and FY23E but we stay relatively positive for Anta over Li Ning.Current valuation of 18x FY23E P/E is not too demanding, vs 5-year average of 21x and int’l peers’ average of 18x.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 more cautious but relatively better outlook

<div><ul><li>Maintain BUY but raise our TP to HK$ 122.05, based on 25x FY23E P/E (unchanged).</li><li>We are impressed by Anta’s resilient OP margin in 1H22 and believed the worst has gone.</li><li>Current valuation of 19x FY23E P/E is not demanding at all, vs 5-year average of 21x and int’l peers’ average of 16x.</li></ul></div>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.

Maintain BUY but raise our TP to HK$ 122.05, based on 25x FY23E P/E (unchanged).We are impressed by Anta’s resilient OP margin in 1H22 and believed the worst has gone.Current valuation of 19x FY23E P/E is not demanding at all, vs 5-year average of 21x and int’l peers’ average of 16x.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) – Anta/ FILA to Turn Around & Amer to Break Even

China

Shenzhou International Group Holdings Ltd manufactures and processes textiles.  The Company produces, dyes, finishes, prints, embroiders, cuts, and sews knitwear.

HLA CORP., Ltd. manufactures and markets apparel, woolen fabrics, woolen yarns, and textile raw materials, as well as provides dyeing and processing services. Heilan Home distributes their product globally.

Li Ning Company Limited researches, designs, manufactures, distributes, and retails sports footwear, apparel and accessories for sport and leisure use.

Fujian Funeng Co., Ltd. manufactures a variety of textile including flannelette, cotton yarn, polyurethane synthetic leather, needling fabric, and water-jet bonding fabric.

Zhejiang Weixing Industrial Development Co., Ltd. manufactures buttons, zips, and other apparel accessories. The Company also provides electroplating services.

Lao Feng Xiang Co., Ltd. processes and sells gold and jewelry products.  Through its subsidiaries, the Company manufactures and sells wooden, mechanical and cosmetic pencils, as well as manufactures and sells pencil making machinery and paints, and general trading.

Zhejiang Semir Garment Company Limited designs, develops, outsources production, markets and distributes apparels.  The Company's main operation is casual wear and children's apparels.

Xtep International Holdings Ltd. designs, manufactures, and markets sportwear. The Company produces footwear, apparel, and accessories.

Sichuan Zhenjing Corporation Limited manufactures and distributes leather products. The Company produces and sells leather cases, leather car seats, decoration leather, and other products. Sichuan Zhenjing markets its products throughout China.

Biem.L.Fdlkk Garment Co., Ltd. is an apparel designer. The Company designs, markets, and distributes a variety of golf apparels. Biem.L.Fdlkk Garment serves customers throughout China.

Prada S.p.A. is an Italian fashion company that designs, manufactures, promotes and sells high-end leather goods, ready-to-wear and footwear through various brands.

Skechers U.S.A., Inc. designs and markets branded contemporary casual, active, rugged, and lifestyle footwear for men, women, and children.  The Company sells its products to department stores and specialty retailers.  Skechers also sells its products internationally through distributors and directly to consumers through its own retail stores.

Deckers Outdoor Corporation designs and markets footwear and accessories.  The Company offers footwear for men, women and children. Deckers sells its products including accessories such as handbags, headwear, and outerwear, through domestic retailers and international distributors and directly to end-user consumers, through call centers, retail concept stores and retail outlet stores.

SRF Limited is a multi-business Indian multinational engaging in the manufacture of chemical based industrial intermediates. The Company has a business portfolio that encompasses technical textiles, chemicals, packaging films and engineering plastics.

Ralph Lauren Corporation designs, markets, and distributes men's, women's and children's apparel, accessories, fragrances, and home furnishings. The Company's products are sold under a wide range of brands. Ralph Lauren's operations include wholesale, retail, and licensing.

lululemon athletica Inc. designs and retails athletic clothing.  The Company produces fitness pants, shorts, tops and jackets for yoga, dance, running, and general fitness. lululemon serves customers throughout the world.

Crocs, Inc. designs and manufactures shoes.  The Company produces soft, lightweight, non-marking, slip- and odor-resistant shoes made of closed-cell resin material.  Crocs manufactures men's, women's, and children's shoes and markets them to retail chains.

Titan Co. Ltd. manufactures and retails jewelry and watches. The Company also produces perfume for men and women.

Tapestry, Inc. designs and markets clothes and accessories. The Company offers handbags, leather goods, footwear, fragrance, jewelry, outer wear, ready-to-wear, scarves, sunwear, travel accessories, and watches. Tapestry serves customers in the United States.

ASICS CORPORATION manufactures general sporting goods and equipment.  The Company's products, such as athletic shoes and sportswear, are distributed in the United States, Europe, Australia, and Asia.

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)

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

Anta Sports (2020 HK) – Turnaround is in sight in 2Q23E

Maintain BUY and raise our TP to HK$ 128.94, based on 31x FY23E P/E (based on 1 s.d. above the 5-year average, up from 25x).

CMB International

China Sportswear Sector – Sequential improvements during double 11

Based on our channel check and CMBI est., the online GMV growth during 2022’s double 11 was at ~14% YoY, inline with CMBI est. and beat market...

CMB International

Anta Sports (2020 HK) – A more cautious but relatively better outlook

Maintain BUY but cut our TP to HK$ 113.30, based on 25x FY23E P/E (unchanged). We are now more cautious about 4Q22E and FY23E but we stay...

CMB International

Anta Sports (2020 HK) – Anta/ FILA to Turn Around & Amer to Break Even

Maintain BUY but raise our TP to HK$ 122.05, based on 25x FY23E P/E (unchanged). We are impressed by Anta’s resilient OP margin in 1H22 and...

CMB International

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