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

Guangzhou Automobile Group / Equity Bottom-Up

<ul><li>GAC posted the largest quarterly net loss (RMB1.4bn) in 3Q24 since at least 2013, partly due to the FX loss and lower government grants.</li><li>Management is determined to revive its homegrown brands with a plethora of new models in 2025.</li><li>The market demand for GAC Toyota and GAC Honda has also recovered a bit recently aided by the peak season and stimulus measures.</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.

GAC posted the largest quarterly net loss (RMB1.4bn) in 3Q24 since at least 2013, partly due to the FX loss and lower government grants.Management is determined to revive its homegrown brands with a plethora of new models in 2025.The market demand for GAC Toyota and GAC Honda has also recovered a bit recently aided by the peak season and stimulus measures.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.

GAC Group (2238 HK) - 3Q Miss; New Models, Cost Cut as Key in FY25

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Guangzhou Automobile Group / Event-Driven

<ul>
<li>Huge volumes continue to be traded on the mainland share markets. AH Premia have not moved much this week (or last).</li>
<li>Average AH pairwise volatility has started to drop sharply. Intracorrelation of spreads quite low. Still room to market-make wide spreads/high premia. High premia may continue to contract on speculation.</li>
<li>Continuing differences in opinion between onshore and offshore opinion regarding the vibe of Chinese stimulus will continue to lead to interesting dispersion. Identify the trend and jump in.</li>
</ul>


Huge volumes continue to be traded on the mainland share markets. AH Premia have not moved much this week (or last).
Average AH pairwise volatility has started to drop sharply. Intracorrelation of spreads quite low. Still room to market-make wide spreads/high premia. High premia may continue to contract on speculation.
Continuing differences in opinion between onshore and offshore opinion regarding the vibe of Chinese stimulus will continue to lead to interesting dispersion. Identify the trend and jump in.


A/H Premium Tracker (To 25 Oct 2024): AH Premia Curve Shift, Wide Premia Brokers Bounce

<ul>
<li>Repeat of last week: Miserable economic data continues. Trade geopol is mixed. Territorial geopol getting more serious. SOUTHBOUND gross volumes and net back up, but not high.</li>
<li>AH Premia rose slightly as HK-listed shares underperformed mainland share indices. Hs underperform their As consistently compared to relative index performance.</li>
<li>It is not clear what impetus there might be for better H performance.</li>
</ul>


Repeat of last week: Miserable economic data continues. Trade geopol is mixed. Territorial geopol getting more serious. SOUTHBOUND gross volumes and net back up, but not high.
AH Premia rose slightly as HK-listed shares underperformed mainland share indices. Hs underperform their As consistently compared to relative index performance.
It is not clear what impetus there might be for better H performance.


A/H Premium Tracker (To 6 Sep 2024): SB Buying of H Underperformance, AH Premia Up

<ul><li>We are of the view that the positive side of GAC’s 2Q24 earnings miss is that the company has started reform to increase synergies between different brands and cope with fast-changing market dynamics, including accelerating the launch of EREVs and PHEVs for Aion and Trumpchi, closer collaboration with Huawei to roll out competitive models.</li><li>These could lay a foundation for GAC to regain traction.</li><li>2Q24 earnings miss on both homegrown brands and JVs. GAC’s 2Q24 revenue fell 30% YoY on lower average selling price (ASP) and sales volume.</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 are of the view that the positive side of GAC’s 2Q24 earnings miss is that the company has started reform to increase synergies between different brands and cope with fast-changing market dynamics, including accelerating the launch of EREVs and PHEVs for Aion and Trumpchi, closer collaboration with Huawei to roll out competitive models.These could lay a foundation for GAC to regain traction.2Q24 earnings miss on both homegrown brands and JVs. GAC’s 2Q24 revenue fell 30% YoY on lower average selling price (ASP) and sales volume.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.

GAC Group (2238 HK) - More EREVs, Tech Partnership to Revive Sales

<ul>
<li>Delayed this week because of the long (Japanese holiday, which I took for myself) weekend, as were the <a href="https://www.smartkarma.com/insights/hk-connect-southbound-flows-to-9-aug-2024-tencent-the-big-buy-again" target="_blank" rel="noopener">SOUTHBOUND</a> and <a href="https://www.smartkarma.com/insights/mainland-connect-northbound-flows-to-9-aug-2024-back-to-net-selling-of-renewables-and-consumer" target="_blank" rel="noopener">NORTHBOUND</a> monitors. </li>
<li>SOUTHBOUND inflow strong. Tencent strong inflows. Net buying every day for two weeks. NORTHBOUND outflows large. Record foreign investor outflows from China's capital markets this year.</li>
<li>As expected (with AH 20d Premia returns at multi-year highs last week), AH Premia fell slightly, with narrow premia falling more than wide premia. I'd expect more H-vs-A gains.</li>
</ul>


Delayed this week because of the long (Japanese holiday, which I took for myself) weekend, as were the SOUTHBOUND and NORTHBOUND monitors. 
SOUTHBOUND inflow strong. Tencent strong inflows. Net buying every day for two weeks. NORTHBOUND outflows large. Record foreign investor outflows from China's capital markets this year.
As expected (with AH 20d Premia returns at multi-year highs last week), AH Premia fell slightly, with narrow premia falling more than wide premia. I'd expect more H-vs-A gains.


A/H Premium Tracker (To 9 Aug 2024): Global Market Vol. SB Bought. NB Sold. Premia Down.

China

Guangzhou Automobile Group Company, Ltd. manufactures, sells, and services automobiles. The Company is also involved in automobile parts and components, and auto finance and related services for both overseas and domestic markets.

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Guangzhou Automobile Group (2238 HK)

GAC Group (2238 HK) - 3Q Miss; New Models, Cost Cut as Key in FY25

GAC posted the largest quarterly net loss (RMB1.4bn) in 3Q24 since at least 2013, partly due to the FX loss and lower government grants.

CMB International

A/H Premium Tracker (To 25 Oct 2024): AH Premia Curve Shift, Wide Premia Brokers Bounce

AH Premia were somewhat quiet overall for the second week in a row. Wide spreads saw Hs outperform. Narrow spreads saw As outperform. Brokers H...

Travis Lundy

A/H Premium Tracker (To 6 Sep 2024): SB Buying of H Underperformance, AH Premia Up

H-shares underperformed A-shares in the 4-day week. H/A relationships have generally underperformed HK/Mainland index relationships the last...

Travis Lundy

GAC Group (2238 HK) - More EREVs, Tech Partnership to Revive Sales

GAC’s 2Q24 net profit of RMB300mn was only RMB130mn lower than our estimates due to the fair value gain of RMB1.1bn from Chenqi Tech’s (9680 HK,...

CMB International

A/H Premium Tracker (To 9 Aug 2024): Global Market Vol. SB Bought. NB Sold. Premia Down.

AH Premia 20d returns were at a multi-year high as of 2 August, suggesting they were likely to fall (it's an oscillator), and they did this week....

Travis Lundy

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