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>CMGE delivered soft top line and profitability in FY23 for declining game grossing from existing games and rescheduling of several key titles.</li><li>We suggest looking to revenue acceleration and margin recovery in FY24E (forecast top line +32% YoY, with adj. NM at 11%), boosted by: 1) a strong pipeline in FY24E, including Soul Land: Space and Time Reversal (斗罗大 陆：逆转时空), Fights Break Firmament: Peak Confrontation (斗破苍穹：巅峰 对决) and Sword and Fair World (仙剑世界); 2) rising contribution from minigames; and 3) continued overseas expansion.</li><li>CMGE would pursue a ROIdriven R&amp;D and S&amp;M strategy ahead, to enhance its margin. </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.

CMGE delivered soft top line and profitability in FY23 for declining game grossing from existing games and rescheduling of several key titles.We suggest looking to revenue acceleration and margin recovery in FY24E (forecast top line +32% YoY, with adj. NM at 11%), boosted by: 1) a strong pipeline in FY24E, including Soul Land: Space and Time Reversal (斗罗大 陆：逆转时空), Fights Break Firmament: Peak Confrontation (斗破苍穹：巅峰 对决) and Sword and Fair World (仙剑世界); 2) rising contribution from minigames; and 3) continued overseas expansion.CMGE would pursue a ROIdriven R&amp;D and S&amp;M strategy ahead, to enhance its margin. 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.

CMGE Technology (302 HK) - Eyes on Strong Pipeline Ahead

<ul><li>CMGE delivered above-industrial rev growth (+25% YoY) and profitability in 1H23.</li><li>Looking ahead, we expect 2H23E to see rev acceleration and stronger earnings, for: 1) rising contribution from newly launched games in 1H23; 2) several key titles to be launched in 4Q23E; 3) R&amp;D to decline with lower outsourcing cost and manageable S&amp;M.</li><li>We think pipeline delay has been partially priced in recent stock price, and the delay would be acceptable for fierce competition and high TAC in summer. </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.

CMGE delivered above-industrial rev growth (+25% YoY) and profitability in 1H23.Looking ahead, we expect 2H23E to see rev acceleration and stronger earnings, for: 1) rising contribution from newly launched games in 1H23; 2) several key titles to be launched in 4Q23E; 3) R&amp;D to decline with lower outsourcing cost and manageable S&amp;M.We think pipeline delay has been partially priced in recent stock price, and the delay would be acceptable for fierce competition and high TAC in summer. 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.

CMGE Technology (302 HK) – Looking into improving profitability in 2H23E

Thematic (Sector/Industry)

<ul><li>Although geographical tension and macro challenges are yet over, we believe most worst-case scenarios have been priced in.</li><li>Jun would be good timing to accumulate some defensive &amp; undervalued names over a 12-month horizon, as we expect sector sentiment will be moderately boosted by: 1) 2Q23E acceleration with low base; 2) upcoming strong drama &amp; game pipeline in summer holiday; 3) solid performance for 618 promotions;; and 4) potential positive economic incentives.</li><li>We prefer SFV&amp;LFV and game subsectors, for resilience on macro uncertainty, stable competition landscape, and better margin outlook with solid growth. </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.

Although geographical tension and macro challenges are yet over, we believe most worst-case scenarios have been priced in.Jun would be good timing to accumulate some defensive &amp; undervalued names over a 12-month horizon, as we expect sector sentiment will be moderately boosted by: 1) 2Q23E acceleration with low base; 2) upcoming strong drama &amp; game pipeline in summer holiday; 3) solid performance for 618 promotions;; and 4) potential positive economic incentives.We prefer SFV&amp;LFV and game subsectors, for resilience on macro uncertainty, stable competition landscape, and better margin outlook with solid growth. 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 Entertainment – Embracing rich pipeline and sector mild re-rating

<ul><li>After recent price correction on weak market sentiment, we view it as a good entry point to accumulate CMGE, for: 1) solid performance of new tiles launched in 2Q23E; 2) more highly-anticipated titles to come, including Sword and Fairy: Wen Qing (新仙剑之挥剑问情, 9 Jun), Hoop city 3v3 (licensed/Aug 2023), Soul Land: Shrek College (斗罗大陆, Oct 2023), Sword and Fair World (仙剑世界, Dec 2023); and 3) strong growth of 1H23E results.</li><li>We believe CMGE is relatively defensive to macro uncertainty, and would benefit from AIGC initiatives on both UGC content and efficiency.</li><li>We keep our financials unchanged, with DCF-based TP at HK$3.52 (implying 14x/11x FY23/24E P/E).</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.

After recent price correction on weak market sentiment, we view it as a good entry point to accumulate CMGE, for: 1) solid performance of new tiles launched in 2Q23E; 2) more highly-anticipated titles to come, including Sword and Fairy: Wen Qing (新仙剑之挥剑问情, 9 Jun), Hoop city 3v3 (licensed/Aug 2023), Soul Land: Shrek College (斗罗大陆, Oct 2023), Sword and Fair World (仙剑世界, Dec 2023); and 3) strong growth of 1H23E results.We believe CMGE is relatively defensive to macro uncertainty, and would benefit from AIGC initiatives on both UGC content and efficiency.We keep our financials unchanged, with DCF-based TP at HK$3.52 (implying 14x/11x FY23/24E P/E).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.

CMGE Technology (302 HK) – Bearing Fruit from More Titles in 2H23E

<ul><li>We suggest investors to look beyond CMGE’s soft FY22 (rev -31% YoY) which is disrupted by licenses suspension. </li><li>Looking into 2023E, we see high visibility for CMGE to regain momentum (forecasting rev +97% in FY23E), backed by 11 new titles to be launched (including two highly-anticipated titles: Soul Land: Shrek College, Sword and Fairy: Wen Qing).</li><li>Sword and Fair World (仙剑世界), a self developed metaverse platform to be launched in 2H23E, will bring further upside if it is executed well.</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 suggest investors to look beyond CMGE’s soft FY22 (rev -31% YoY) which is disrupted by licenses suspension. Looking into 2023E, we see high visibility for CMGE to regain momentum (forecasting rev +97% in FY23E), backed by 11 new titles to be launched (including two highly-anticipated titles: Soul Land: Shrek College, Sword and Fairy: Wen Qing).Sword and Fair World (仙剑世界), a self developed metaverse platform to be launched in 2H23E, will bring further upside if it is executed well.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.

CMGE Technology (302 HK) – Eyes on strong pipeline in FY23E

China

CMGE Technology Group Limited serves customers in China.

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CMGE Tech (302 HK)

CMGE Technology (302 HK) - Eyes on Strong Pipeline Ahead

CMGE delivered soft top line and profitability in FY23 for declining game grossing from existing games and rescheduling of several key titles.

CMB International

CMGE Technology (302 HK) – Looking into improving profitability in 2H23E

We think pipeline delay has been partially priced in recent stock price, and the delay would be acceptable for fierce competition and high TAC in...

CMB International

China Entertainment – Embracing rich pipeline and sector mild re-rating

Although geographical tension and macro challenges are yet over, we believe most worst-case scenarios have been priced in.

CMB International

CMGE Technology (302 HK) – Bearing Fruit from More Titles in 2H23E

We believe CMGE is relatively defensive to macro uncertainty, and would benefit from AIGC initiatives on both UGC content and efficiency.

CMB International

CMGE Technology (302 HK) – Eyes on strong pipeline in FY23E

We suggest investors to look beyond CMGE’s soft FY22 (rev -31% YoY) which is disrupted by licenses suspension. Looking into 2023E, we see high...

CMB International

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