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

Jiangsu Hengli Highpressure Oil Cylinder / Equity Bottom-Up

<ul><li>Hengli’s net profit in 2023 was +7% YoY to RMB2.5bn, which is -5%/+3% versus our/consensus estimates.</li><li>Net profit in 1Q24 dropped 4% YoY to RMB602mn, due to weak demand for excavators’ hydraulic components and an increased expense ratio.</li><li>We trim our earnings forecast in 2024E/25E by 13%/15%, mainly due to lower volume assumptions for excavator-related products. </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.

Hengli’s net profit in 2023 was +7% YoY to RMB2.5bn, which is -5%/+3% versus our/consensus estimates.Net profit in 1Q24 dropped 4% YoY to RMB602mn, due to weak demand for excavators’ hydraulic components and an increased expense ratio.We trim our earnings forecast in 2024E/25E by 13%/15%, mainly due to lower volume assumptions for excavator-related products. 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.

Jiangsu Hengli (601100 CH) - 4Q23 & 1Q24 Earnings Not Exciting

<ul><li>Hengli’s net profit in 2Q23 grew 24% YoY to RMB653mn, with growth accelerated from 18% in 1Q23.</li><li>That said, we do not see this as high quality growth as it was largely driven by FX gain that offset a surprisingly decline in gross margin (-4 ppt YoY).</li><li>While the overall hydraulic components demand remained weak in Jul and Aug, we expect the gross margin to recover from 2Q as we understand that Hengli reduced the discount offered to customers. </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.

Hengli’s net profit in 2Q23 grew 24% YoY to RMB653mn, with growth accelerated from 18% in 1Q23.That said, we do not see this as high quality growth as it was largely driven by FX gain that offset a surprisingly decline in gross margin (-4 ppt YoY).While the overall hydraulic components demand remained weak in Jul and Aug, we expect the gross margin to recover from 2Q as we understand that Hengli reduced the discount offered to customers. 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.

Jiangsu Hengli (601100 CH) – 2Q23 Earnings +24%

Thematic (Sector/Industry)

<ul><li>We expect the rally of the construction machinery sector to continue, given more policy details released earlier by the Ministry of Housing and Urban-Rural Development to support the replacement and upgrade of machinery.</li><li>Besides, the NDRC mentioned in a press conference yesterday (17 Apr) that the authority has completed the preliminary screening for the local government special bond projects.</li><li>We believe all these will gradually help improve the domestic machinery demand. Our short-term pecking order in the construction machinery space is Zhejiang Dingli (603338 CH, BUY), Zoomlion (1157 HK/000157 CH, HOLD), Jiangsu Hengli (601100 CH, BUY) and SANY Heavy (600031 CH, HOLD).</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 expect the rally of the construction machinery sector to continue, given more policy details released earlier by the Ministry of Housing and Urban-Rural Development to support the replacement and upgrade of machinery.Besides, the NDRC mentioned in a press conference yesterday (17 Apr) that the authority has completed the preliminary screening for the local government special bond projects.We believe all these will gradually help improve the domestic machinery demand. Our short-term pecking order in the construction machinery space is Zhejiang Dingli (603338 CH, BUY), Zoomlion (1157 HK/000157 CH, HOLD), Jiangsu Hengli (601100 CH, BUY) and SANY Heavy (600031 CH, HOLD).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 Construction Machinery - More Policies to Support Domestic Machinery Demand

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 December 29th.</li>
<li>We estimate the weekly inflows to be US$2,840.5 million, led by information technology, materials, industrials sectors, and offset by communication services.</li>
<li>We highlight flows for Longi Green, Wuliangye, Chongqing Changan Automobile.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of December 29th.
We estimate the weekly inflows to be US$2,840.5 million, led by information technology, materials, industrials sectors, and offset by communication services.
We highlight flows for Longi Green, Wuliangye, Chongqing Changan Automobile.


Northbound Flows (Dec 29th): Longi Green, Wuliangye, Changan Automobile

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

LONGi Green Energy Technology / Event-Driven

<ul>
<li>The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.</li>
<li>Last week saw NORTHBOUND net BUY RMB 18.7bn of A-shares on stronger average activity. BIG net buying flows on Weds and Thursday.</li>
<li>Looking at the change in the weekly position charts over the last year is striking (easiest in the Sectors table to start). Still.</li>
</ul>


The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net BUY RMB 18.7bn of A-shares on stronger average activity. BIG net buying flows on Weds and Thursday.
Looking at the change in the weekly position charts over the last year is striking (easiest in the Sectors table to start). Still.


Mainland Connect NORTHBOUND Flows (To 29 Dec 23): Renewables Are a BIG NET BUY This Week

China

Jiangsu Hengli Hydraulic Co Ltd develops, manufactures and sells high pressure tank, hydraulic components and hydraulic systems. The Company's main products include fuel tanks and non-standard cylinders for heavy equipment.

Jiangsu Hengli Highpressure Oil Cylinder (601100 CH)

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Jiangsu Hengli Highpressure Oil Cylinder (601100 CH)

Jiangsu Hengli (601100 CH) - 4Q23 & 1Q24 Earnings Not Exciting

Hengli’s net profit in 2023 was +7% YoY to RMB2.5bn, which is -5%/+3% versus our/consensus estimates. Net profit in 1Q24 dropped 4% YoY to RMB602mn

CMB International

Jiangsu Hengli (601100 CH) – 2Q23 Earnings +24%

Hengli’s net profit in 2Q23 grew 24% YoY to RMB653mn, with growth accelerated from 18% in 1Q23. That said, we do not see this as high quality...

CMB International

China Construction Machinery - More Policies to Support Domestic Machinery Demand

We expect the rally of the construction machinery sector to continue, given more policy details released earlier by the Ministry of Housing and...

CMB International

Northbound Flows (Dec 29th): Longi Green, Wuliangye, Changan Automobile

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Longi Green, Wuliangye, Chongqing Changan Automobile.

Ke Yan, CFA, FRM

Mainland Connect NORTHBOUND Flows (To 29 Dec 23): Renewables Are a BIG NET BUY This Week

Very strong "week" of net NORTHBOUND inflows this week, with Weds+Thursday seeing RMB 19bn of inflow on strong volume. Thurs HUGE volume....

Travis Lundy

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