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>Reuters reported that the U.S. may publish new regulations next month to broaden curbs on 1) AI chips, 2) chipmaking equipment and 3) products that contain targeted chips exports to China. </li><li>This could cover more U.S. companies and will disallow export of servers containing advanced GPU. </li><li>Under the new rules, China can still design sub-14nm (not sub-3nm) AI chips but the production has to be taken place outside of China. </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.

Reuters reported that the U.S. may publish new regulations next month to broaden curbs on 1) AI chips, 2) chipmaking equipment and 3) products that contain targeted chips exports to China. This could cover more U.S. companies and will disallow export of servers containing advanced GPU. Under the new rules, China can still design sub-14nm (not sub-3nm) AI chips but the production has to be taken place outside of China. 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 AI – U.S. May Broaden AI Chips Export Restrictions

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

<ul><li>New U.S. export restrictions on certain microchips used for machine learning could distrupt China’s development of autonomous driving technology and data centers, market insiders fear</li><li>The export restrictions on Nvidia’s A100 and forthcoming H100 graphics processing units (GPU) will affect Chinese carmakers’ research into autonomous driving</li><li>The Nvidia A100 is a GPU chip with 7-nanometer nodes while the H100 is a model with 4-nanometer nodes that is expected to hit the market this quarter</li></ul>

New U.S. export restrictions on certain microchips used for machine learning could distrupt China’s development of autonomous driving technology and data centers, market insiders fearThe export restrictions on Nvidia’s A100 and forthcoming H100 graphics processing units (GPU) will affect Chinese carmakers’ research into autonomous drivingThe Nvidia A100 is a GPU chip with 7-nanometer nodes while the H100 is a model with 4-nanometer nodes that is expected to hit the market this quarter

How New U.S. Chip Restrictions Could Hit China’s Smart Car and Cloud Firms

<div><div><div><ul><li>On 31 Aug, Nvidia said in a regulatory filing that the U.S. has imposed new licensing requirements on shipments of certain advanced server GPU (A100 and H100) to China (including Hong Kong) and Russia. </li><li>Nvidia may lose as much as US$400mn sales to China in FY3Q22 as a result. </li><li>Nvidia’s GPU dominates the AI processor market with 80.6% market share in 2020, according to Omdia. </li></ul></div></div></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.

On 31 Aug, Nvidia said in a regulatory filing that the U.S. has imposed new licensing requirements on shipments of certain advanced server GPU (A100 and H100) to China (including Hong Kong) and Russia. Nvidia may lose as much as US$400mn sales to China in FY3Q22 as a result. Nvidia’s GPU dominates the AI processor market with 80.6% market share in 2020, according to Omdia. 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 AI – U.S. is restricting advanced GPU sales to China

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

SenseTime Group  / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sensetime-group" target="_blank" data-smartkarma-citation="entities:34319:1" rel="noopener">SenseTime Group (1475539D HK)</a> is the largest AI software company in Asia as measured by revenue in 2020. It has launched an HKEx IPO to raise up to US$767 million.  </li>
<li>In <a href="https://www.smartkarma.com/insights/sensetime-ipo-initiation-big-brother" target="_blank" data-smartkarma-citation="insights:62104" rel="noopener">SenseTime IPO Initiation: Big Brother</a>, we stated that the negatives outweigh the positives and we would give the IPO a pass. </li>
<li>Our valuation analysis suggests that the IPO price is unattractive. We would give the IPO a pass. Pricing is expected on 10 December with a listing on 17 December.</li>
</ul>



SenseTime Group (1475539D HK) is the largest AI software company in Asia as measured by revenue in 2020. It has launched an HKEx IPO to raise up to US$767 million.  
In SenseTime IPO Initiation: Big Brother, we stated that the negatives outweigh the positives and we would give the IPO a pass. 
Our valuation analysis suggests that the IPO price is unattractive. We would give the IPO a pass. Pricing is expected on 10 December with a listing on 17 December.


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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Shanghai Junshi Biosciences  / Event-Driven

Post market close on 26 February, the Shanghai Stock Exchange and China Securities Index Company <a href="http://www.csindex.com.cn/en/indices/notices-and-announcements-detail/1606" target="_blank" rel="noopener">announced</a> the changes to the <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR 50 (STAR50 INDEX)</a>. The changes will be effective after the close of trading on 12 March.The inclusions are <a href="https://www.smartkarma.com/entities/shanghai-junshi-bioscience-a" target="_blank" data-smartkarma-citation="entities:31070:1" rel="noopener">Shanghai Junshi Bioscience (688180 CH)</a>, <a href="https://www.smartkarma.com/entities/cambricon-technologies-corp" target="_blank" data-smartkarma-citation="entities:31068:1" rel="noopener">Cambricon Technologies Corp (688256 CH)</a>, <a href="https://www.smartkarma.com/entities/qi-an-xin-technology-group-a" target="_blank" data-smartkarma-citation="entities:31069:1" rel="noopener">Qi An Xin Technology Group (688561 CH)</a>, <a href="https://www.smartkarma.com/entities/farasis-energy-gan-zhou-co-a" target="_blank" data-smartkarma-citation="entities:28385:1" rel="noopener">Farasis Energy Gan Zhou Co-A (688567 CH)</a> and <a href="https://www.smartkarma.com/entities/trina-solar-co-ltd" target="_blank" data-smartkarma-citation="entities:30404:1" rel="noopener">Trina Solar Co Ltd (688599 CH)</a>.The exclusions are <a href="https://www.smartkarma.com/entities/suzhou-tztek-technology-co-a" target="_blank" data-smartkarma-citation="entities:28232:1" rel="noopener">Suzhou Tztek Technology Co-A (688003 CH)</a>, <a href="https://www.smartkarma.com/entities/fujian-forecam-optics-co-ltd" target="_blank" data-smartkarma-citation="entities:30306:1" rel="noopener">Fujian Forecam Optics Co Ltd (688010 CH)</a>, <a href="https://www.smartkarma.com/entities/longyan-zhuoyue-new-energy-co" target="_blank" data-smartkarma-citation="entities:30364:1" rel="noopener">Longyan Zhuoyue New Energy Co (688196 CH)</a>, <a href="https://www.smartkarma.com/entities/tianjin-jiuri-new-material-a" target="_blank" data-smartkarma-citation="entities:30366:1" rel="noopener">Tianjin Jiuri New Material-A (688199 CH)</a> and <a href="https://www.smartkarma.com/entities/beijing-seeyon-internet-so-a" target="_blank" data-smartkarma-citation="entities:30393:1" rel="noopener">Beijing Seeyon Internet So-A (688369 CH)</a>.The launch of new ETFs on the index has kept the assets tracking the index steady even with the market dropping.All inclusions have at least 1 day of ADV to buy and the deletions have at least 2.4 days of ADV to sell. Estimated one-way turnover is 8.93% and there is quite a large impact as part of the funding trade.There is no excess volume on most of the stocks and similar to the December rebalance, the inclusions could outperform the exclusions from now till implementation date.

Post market close on 26 February, the Shanghai Stock Exchange and China Securities Index Company announced the changes to the SSE STAR 50 (STAR50 INDEX). The changes will be effective after the close of trading on 12 March.The inclusions are Shanghai Junshi Bioscience (688180 CH), Cambricon Technologies Corp (688256 CH), Qi An Xin Technology Group (688561 CH), Farasis Energy Gan Zhou Co-A (688567 CH) and Trina Solar Co Ltd (688599 CH).The exclusions are Suzhou Tztek Technology Co-A (688003 CH), Fujian Forecam Optics Co Ltd (688010 CH), Longyan Zhuoyue New Energy Co (688196 CH), Tianjin Jiuri New Material-A (688199 CH) and Beijing Seeyon Internet So-A (688369 CH).The launch of new ETFs on the index has kept the assets tracking the index steady even with the market dropping.All inclusions have at least 1 day of ADV to buy and the deletions have at least 2.4 days of ADV to sell. Estimated one-way turnover is 8.93% and there is quite a large impact as part of the funding trade.There is no excess volume on most of the stocks and similar to the December rebalance, the inclusions could outperform the exclusions from now till implementation date.

STAR Board - STAR50 Index Rebalance: Another BIG One

China

Cambricon Technologies Corporation Limited develops and distributes software products. The Company produces terminal intelligent processors, cloud intelligent chips, accelerator cards, intelligent computing cluster systems, and other products. Cambricon Technologies also produces computer peripheral products.

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Cambricon Technologies Lt (688256 CH)

China AI – U.S. May Broaden AI Chips Export Restrictions

Under the new rules, China can still design sub-14nm (not sub-3nm) AI chips but the production has to be taken place outside of China.

CMB International

How New U.S. Chip Restrictions Could Hit China’s Smart Car and Cloud Firms

New U.S. export restrictions on certain microchips used for machine learning could distrupt China’s development of autonomous driving technology...

Caixin Global

China AI – U.S. is restricting advanced GPU sales to China

Nvidia may lose as much as US$400mn sales to China in FY3Q22 as a result. Nvidia’s GPU dominates the AI processor market with 80.6% market share in...

CMB International

SenseTime IPO: Valuation Insights

Our valuation analysis suggests that the IPO price is unattractive. We would give the IPO a pass. Pricing is expected on 10 December with a listing...

Arun George

STAR Board - STAR50 Index Rebalance: Another BIG One

There are 5 changes to the STAR50 index as a part of the March review. Estimated one-way turnover is 8.93% and we expect the inclusions to...

Brian Freitas

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