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>Jiumaojiu issued a profit warning for 1H24, which is still awful compared to our already negative outlook.</li><li>With risks to linger in the near future (SSSG drop may sustain and store expansion may also slow down, etc.), plus the fairly high valuation (23x FY24E P/E), we now cut our FY24E-26E net profit forecasts by 69%-57% and downgrade the stock to HOLD.</li><li>We also think the implications for the catering sector and most of the peers are rather gloomy.</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.

Jiumaojiu issued a profit warning for 1H24, which is still awful compared to our already negative outlook.With risks to linger in the near future (SSSG drop may sustain and store expansion may also slow down, etc.), plus the fairly high valuation (23x FY24E P/E), we now cut our FY24E-26E net profit forecasts by 69%-57% and downgrade the stock to HOLD.We also think the implications for the catering sector and most of the peers are rather gloomy.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.

Jiumaojiu (9922 HK) - We See Risks in 2H24E After the Miss in 2Q24

<ul><li>Maintain BUY and raise TP to HK$8.39 (we now assume a gradual improvement in SSS recovery rate onwards as the group is rolling out more new initiatives this year).</li><li>We are still cautious about catering sector, but JMJ’s numbers have stabilized lately.</li><li>A rebound in share price is possible given undemanding valuation (12x FY24E P/E) while our TP is based on 17x and 3-year sales/ NP CAGR are at 20%/ 25%.</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 TP to HK$8.39 (we now assume a gradual improvement in SSS recovery rate onwards as the group is rolling out more new initiatives this year).We are still cautious about catering sector, but JMJ’s numbers have stabilized lately.A rebound in share price is possible given undemanding valuation (12x FY24E P/E) while our TP is based on 17x and 3-year sales/ NP CAGR are at 20%/ 25%.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.

Jiumaojiu (9922 HK) - Resilient Margin in 2H23 with Positive Outlook

<ul><li>Maintain BUY but cut TP (we now assume a stable SSS recovery rate onwards).</li><li>While we think the introduction of the franchise model for Tai Er is positive to JMJ group, a turnaround in operating numbers is more crucial.</li><li>We are still cautious on the catering sector and on JMJ, but we also think the room for a rebound is meaningful.</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 TP (we now assume a stable SSS recovery rate onwards).While we think the introduction of the franchise model for Tai Er is positive to JMJ group, a turnaround in operating numbers is more crucial.We are still cautious on the catering sector and on JMJ, but we also think the room for a rebound is meaningful.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.

Jiumaojiu (9922 HK) – Introduced the Franchise Model for Tai Er

Greater China Equity Long/Short Analyst

Eric Chen

<ul>
<li>Sentiment driven rally is fading. Although COVID exit remains swing factor, individual company’s performance will increasingly be driven by their business models.</li>
<li>Our proprietary store expansion framework suggests divergent growth outlook for major players - stretched for Haidilao, moderate for Jiumaojiu and Yum China, and ample for Xiabuxiabu.</li>
<li>Xiabuxiabu is our top pick due to its strong turnaround not yet priced in depressed valuation. We also like Yum China but stay cautious on Jiumaojiu and Haidilao on valuation.     </li>
</ul>


Sentiment driven rally is fading. Although COVID exit remains swing factor, individual company’s performance will increasingly be driven by their business models.
Our proprietary store expansion framework suggests divergent growth outlook for major players - stretched for Haidilao, moderate for Jiumaojiu and Yum China, and ample for Xiabuxiabu.
Xiabuxiabu is our top pick due to its strong turnaround not yet priced in depressed valuation. We also like Yum China but stay cautious on Jiumaojiu and Haidilao on valuation.     


China Catering Sector: In Search of Alpha

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

CK Infrastructure Holdings / Equity Bottom-Up

<ul>
<li>Equity ETF flows in China continued to lead Asia as the "National Team" in China supports market levels during the 3rd Plenum.</li>
<li>
<a href="https://www.smartkarma.com/entities/ck-infrastructure-holdings-l" target="_blank" data-smartkarma-citation="entities:163:1" rel="noopener">CK Infrastructure Holdings (1038 HK)</a> , <a href="https://www.smartkarma.com/entities/genscript-biotech-corp" target="_blank" data-smartkarma-citation="entities:21041:1" rel="noopener">Genscript Biotech (1548 HK)</a> and <a href="https://www.smartkarma.com/entities/boc-aviation" target="_blank" data-smartkarma-citation="entities:22689:1" rel="noopener">BOC Aviation (2588 HK)</a> saw positive news sentiment and share price movements for the week.</li>
<li>
<a href="https://www.smartkarma.com/entities/jiumaojiu-international-holdings-limited" target="_blank" data-smartkarma-citation="entities:28293:1" rel="noopener">Jiumaojiu (9922 HK)</a> , <a href="https://www.smartkarma.com/entities/aluminum-corporation-of-china-limited" target="_blank" data-smartkarma-citation="entities:6884:1" rel="noopener">Aluminum Corporation Of China (2600 HK)</a> and <a href="https://www.smartkarma.com/entities/china-hongqiao-group-ltd" target="_blank" data-smartkarma-citation="entities:1909:1" rel="noopener">China Hongqiao (1378 HK)</a> saw negative news sentiment and share price drops for the week.</li>
</ul>


Equity ETF flows in China continued to lead Asia as the "National Team" in China supports market levels during the 3rd Plenum.

CK Infrastructure Holdings (1038 HK) , Genscript Biotech (1548 HK) and BOC Aviation (2588 HK) saw positive news sentiment and share price movements for the week.

Jiumaojiu (9922 HK) , Aluminum Corporation Of China (2600 HK) and China Hongqiao (1378 HK) saw negative news sentiment and share price drops for the week.


The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (July 19)

China

Jiumaojiu International Holdings Limited operates as a holding company. The Company, through its subsidiaries, focuses on manufactures food products. Jiumaojiu International Holdings serves customers in China.

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Jiumaojiu (9922 HK)