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>We expect Kingdee to deliver FY22E revenue of RMB4.8bn (+15% YoY) with net loss widened to RMB395mn (vs. –RMB302mn in FY21).</li><li>Looking into FY23E, ARR growth recovery, core SaaS product Galaxy profitability improvement and Xinchuang initiative will remain as the key growth drivers.</li><li>Our recent channel check suggested an accelerating software local substitution trend. Kingdee’s total bidding won was up +82%/ +141% YoY in FY22/ FY23 YTD, based on dollar amount. </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 Kingdee to deliver FY22E revenue of RMB4.8bn (+15% YoY) with net loss widened to RMB395mn (vs. –RMB302mn in FY21).Looking into FY23E, ARR growth recovery, core SaaS product Galaxy profitability improvement and Xinchuang initiative will remain as the key growth drivers.Our recent channel check suggested an accelerating software local substitution trend. Kingdee’s total bidding won was up +82%/ +141% YoY in FY22/ FY23 YTD, based on dollar amount. 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) – Bidding data implied accelerated software substitution

Thematic (Sector/Industry)

<ul><li>We recently talked to some software and IT services companies regarding FY23E business outlook.</li><li>While most companies are encouraged by China reopening and lifting of COVID restrictions, the pace of business recovery is likely to be slow.</li><li>We suggest investors to focus on the localization theme. Horizontal SaaS and IT services companies with government/ telecom/ financial customer exposure are likely to benefit.</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 recently talked to some software and IT services companies regarding FY23E business outlook.While most companies are encouraged by China reopening and lifting of COVID restrictions, the pace of business recovery is likely to be slow.We suggest investors to focus on the localization theme. Horizontal SaaS and IT services companies with government/ telecom/ financial customer exposure are likely to benefit.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 Software & IT Services – Year of rabbit: still about localization

<ul><li>China IaaS + PaaS market grew 30.7% YoY in 1H22, according to IDC data.</li><li>However, this may have slowed to 10-20% YoY in 3Q22, reflected by China Telecom/ China Mobile sluggish cloud revenue growth. </li><li>China cloud spending in 2023E could remain conservative with structural changes</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.

China IaaS + PaaS market grew 30.7% YoY in 1H22, according to IDC data.However, this may have slowed to 10-20% YoY in 3Q22, reflected by China Telecom/ China Mobile sluggish cloud revenue growth. China cloud spending in 2023E could remain conservative with structural changesContent 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 Software & IT Services – China IaaS + PaaS growth slowed further in 3Q22

<ul><li>Growing macro concerns related to stagflation, US rate hike, geopolitical tensions and RMB depreciation continue to weigh on growth stocks, especially to software tech. </li><li>We use five criteria including 1) valuation, 2) profitability, 3) cash level, 4) short ratio and 5) RMB/USD depreciation to determine companies that are less vulnerable to market fluctuations. We find Hikvision (BUY), Glodon (BUY) and AsiaInfo (NR) in the best positions under these five criteria.</li><li><div><div><div>Heightened macro uncertainties unfavorable to software tech stocks. </div></div></div></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.

Growing macro concerns related to stagflation, US rate hike, geopolitical tensions and RMB depreciation continue to weigh on growth stocks, especially to software tech. We use five criteria including 1) valuation, 2) profitability, 3) cash level, 4) short ratio and 5) RMB/USD depreciation to determine companies that are less vulnerable to market fluctuations. We find Hikvision (BUY), Glodon (BUY) and AsiaInfo (NR) in the best positions under these five criteria.Heightened macro uncertainties unfavorable to software tech stocks. 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 Software & IT Services - Which Stocks Are Less Vulnerable to Market Volatility?

<div><ul><li>Structural changes in China cloud market. There are three structural changes in China cloud market since the internet sector crackdown in 2021.</li><li>China cloud development roadmap is different compared to the US</li><li>Cloud supply chain turmoil amid rising geopolitical tension.</li></ul></div>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.

Structural changes in China cloud market. There are three structural changes in China cloud market since the internet sector crackdown in 2021.China cloud development roadmap is different compared to the USCloud supply chain turmoil amid rising geopolitical tension.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 Software & IT Services – A mixed outlook for China cloud amid rising China-US tension

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) – Bidding data implied accelerated software substitution

We expect Kingdee to deliver FY22E revenue of RMB4.8bn (+15% YoY) with net loss widened to RMB395mn (vs. –RMB302mn in FY21).

CMB International

China Software & IT Services – Year of rabbit: still about localization

While most companies are encouraged by China reopening and lifting of COVID restrictions, the pace of business recovery is likely to be slow.

CMB International

China Software & IT Services – China IaaS + PaaS growth slowed further in 3Q22

China IaaS + PaaS market grew 30.7% YoY in 1H22, according to IDC data. However, this may have slowed to 10-20% YoY in 3Q22, reflected by China...

CMB International

China Software & IT Services - Which Stocks Are Less Vulnerable to Market Volatility?

Growing macro concerns related to stagflation, US rate hike, geopolitical tensions and RMB depreciation continue to weigh on growth stocks,...

CMB International

China Software & IT Services – A mixed outlook for China cloud amid rising China-US tension

Structural changes in China cloud market. There are three structural changes in China cloud market since the internet sector crackdown in 2021.

CMB International

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