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

Kingdee International Software / Equity Bottom-Up

<ul><li>Kingdee reported 2023 financial results: revenue was RMB5.7bn, up 17% YoY (2022: 17% YoY), and net loss attributable to ordinary shareholders was RMB210mn (2022: loss of RMB389mn), both in line with our estimate and Bloomberg consensus.</li><li>Kingdee’s loss reduction effort was on track, with loss margin narrowing from -17.9% in 2022 to -12.1% in 2023, driven by 2.6ppt improvement in gross margin, on an increase in subscription revenue, cloud infrastructure cost optimization, as well as operating efficiency improvement.</li><li>We remain positive that Kingdee is well-positioned to benefit from the domestic substitution trend, backed by strong and continuously enhanced product capability and partner ecosystem. </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.

Kingdee reported 2023 financial results: revenue was RMB5.7bn, up 17% YoY (2022: 17% YoY), and net loss attributable to ordinary shareholders was RMB210mn (2022: loss of RMB389mn), both in line with our estimate and Bloomberg consensus.Kingdee’s loss reduction effort was on track, with loss margin narrowing from -17.9% in 2022 to -12.1% in 2023, driven by 2.6ppt improvement in gross margin, on an increase in subscription revenue, cloud infrastructure cost optimization, as well as operating efficiency improvement.We remain positive that Kingdee is well-positioned to benefit from the domestic substitution trend, backed by strong and continuously enhanced product capability and partner ecosystem. 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.

Kingdee (268 HK) - Steady Rev Growth with On-Track Loss Reduction

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/asm-pacific-technology-ltd" target="_blank" data-smartkarma-citation="entities:15061:1" rel="noopener">ASM Pacific Technology (522 HK)</a> is expected to replace <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technol" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technol (1833 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index (HSTECH INDEX)</a> at the September rebalance.</li>
<li>Constituent changes and capping changes will result in a one-way turnover of 3.7% and that will result in a round-trip trade of HK$7.8bn (US$1bn).</li>
<li>Short interest is near the lows on both stocks but there has been a recent tick higher for <a href="https://www.smartkarma.com/entities/asm-pacific-technology-ltd" target="_blank" data-smartkarma-citation="entities:15061:1" rel="noopener">ASM Pacific Technology (522 HK)</a>.</li>
</ul>



ASM Pacific Technology (522 HK) is expected to replace Ping An Healthcare and Technol (1833 HK) in the Hang Seng TECH Index (HSTECH INDEX) at the September rebalance.
Constituent changes and capping changes will result in a one-way turnover of 3.7% and that will result in a round-trip trade of HK$7.8bn (US$1bn).
Short interest is near the lows on both stocks but there has been a recent tick higher for ASM Pacific Technology (522 HK).


HSTECH Index Rebalance Preview: ASM Pacific (522) Could Replace Ping An Health (1833); US$1bn Trade

<ul><li>Kingdee reported its 1H23 results: revenue was up 16.8% YoY to RMB2.6bn, 1.2% shy of Bloomberg consensus, while the net loss of RMB284mn was 8% narrower than consensus estimate of RMB307mn loss, indicating an on-track loss reduction.</li><li>Core SaaS product Galaxy’s ARR growth momentum remained healthy with 28.6% YoY growth in subscription ARR.</li><li>Meanwhile, domestic substitution trend continues to drive solid large enterprise revenue growth (+38.4% YoY). </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.

Kingdee reported its 1H23 results: revenue was up 16.8% YoY to RMB2.6bn, 1.2% shy of Bloomberg consensus, while the net loss of RMB284mn was 8% narrower than consensus estimate of RMB307mn loss, indicating an on-track loss reduction.Core SaaS product Galaxy’s ARR growth momentum remained healthy with 28.6% YoY growth in subscription ARR.Meanwhile, domestic substitution trend continues to drive solid large enterprise revenue growth (+38.4% YoY). 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.

Kingdee (268 HK) – Loss reduction on track

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Quantitative Analysis

<ul>
<li>SOUTHBOUND was again a net buyer, for HK$27.0bn this week, on small two-way volumes. Energy, banks, utilities, tech all saw inflows. </li>
<li>It is not clear how much of this is H/A discounts, expected dividend tax removal, KPIs for SOE CEOs to raise prices and payout ratios, or upcoming Third Plenum policy...</li>
<li>But valuations are acceptable. Flows are good. Policy changes are afoot. SOUTHBOUND may continue to see inflows - national team and otherwise.</li>
</ul>


SOUTHBOUND was again a net buyer, for HK$27.0bn this week, on small two-way volumes. Energy, banks, utilities, tech all saw inflows. 
It is not clear how much of this is H/A discounts, expected dividend tax removal, KPIs for SOE CEOs to raise prices and payout ratios, or upcoming Third Plenum policy...
But valuations are acceptable. Flows are good. Policy changes are afoot. SOUTHBOUND may continue to see inflows - national team and otherwise.


HK Connect SOUTHBOUND Flows (To 14 June 2024); Energy/Utes/Banks/Tech Bought Bigly

<ul>
<li>SOUTHBOUND was again a net buyer, for HK$27.2bn this week, on small two-way volumes. <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> dominated as it reached dividend ex-date. Other high-div SOEs also saw buying.</li>
<li>It is not clear how much of this is H/A discounts, expected dividend tax removal, and the KPIs for SOE CEOs to raise prices and payout ratios, but it continues.</li>
<li>Valuations are acceptable. Flows are good. Policy changes are afoot. SOUTHBOUND may continue to see inflows - national team and otherwise.</li>
</ul>


SOUTHBOUND was again a net buyer, for HK$27.2bn this week, on small two-way volumes. China Mobile (941 HK) dominated as it reached dividend ex-date. Other high-div SOEs also saw buying.
It is not clear how much of this is H/A discounts, expected dividend tax removal, and the KPIs for SOE CEOs to raise prices and payout ratios, but it continues.
Valuations are acceptable. Flows are good. Policy changes are afoot. SOUTHBOUND may continue to see inflows - national team and otherwise.


HK Connect SOUTHBOUND Flows (To 7 June 2024); China Mobile, Energy, Financials All Bought Bigly

China

Kingdee International Software Group Company Limited, through its subsidiaries, develops and sells enterprise management software, e-commerce application software and middleware software.  The Company also provides internet-based services and setting up e-commerce platforms for enterprises. In addition, Kingdee provides solution consulting and technical support services.

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Kingdee International Software (268 HK)

Kingdee (268 HK) - Steady Rev Growth with On-Track Loss Reduction

We roll forward our valuation to 2024E, and our new target price of HK$15.5 (prior HK$15.1) is based on 6.4x FY24E EV/sales, in-line with the one...

CMB International

HSTECH Index Rebalance Preview: ASM Pacific (522) Could Replace Ping An Health (1833); US$1bn Trade

ASM Pacific could replace Ping An Healthcare in Sep. Constituent and capping changes will result in a 1-way turnover of 3.7% and in a round-trip...

Brian Freitas

Kingdee (268 HK) – Loss reduction on track

Kingdee reported its 1H23 results: revenue was up 16.8% YoY to RMB2.6bn, 1.2% shy of Bloomberg consensus, while the net loss of RMB284mn was 8%...

CMB International

HK Connect SOUTHBOUND Flows (To 14 June 2024); Energy/Utes/Banks/Tech Bought Bigly

HK Connect SOUTHBOUND saw HUGE net buying this past week in Energy, Banks, Tech, and Utilities. SOEs saw strong flows. May be coming in front of...

Travis Lundy

HK Connect SOUTHBOUND Flows (To 7 June 2024); China Mobile, Energy, Financials All Bought Bigly

Big net buying on HK Connect by SOUTHBOUND. This week it was China Mobile (ex-div on 6 June), energy, and financials again. MMG was sold on the...

Travis Lundy

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