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>We expect Kuaishou to deliver resilient 4Q22E, with upbeat ads &amp; livestreaming and better margin (overseas narrowing loss to offset lower GPM and higher S&amp;M).</li><li>Rising COVID cases after China reopening dampened ecommerce take rate (on higher returns with logistics disruptions), but GMV trend remained intact (also supporting internal ads performance).</li><li>Looking ahead, we see high visibility for KS to embrace ads recovery from 2Q23E, and group breakeven is in sight. </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 Kuaishou to deliver resilient 4Q22E, with upbeat ads &amp; livestreaming and better margin (overseas narrowing loss to offset lower GPM and higher S&amp;M).Rising COVID cases after China reopening dampened ecommerce take rate (on higher returns with logistics disruptions), but GMV trend remained intact (also supporting internal ads performance).Looking ahead, we see high visibility for KS to embrace ads recovery from 2Q23E, and group breakeven is in sight. 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.

Kuaishou (1024 HK) – Solid 4Q22E with better margin outlook

Thematic (Sector/Industry)

<ul><li>China online advertising market revenue declined by 6.4% YoY to RMB508.8bn in 2022 as per IMZ, the first YoY revenue drop in the past 7 years, but compared to offline advertising this performance is relatively more resilient.</li><li>On a QoQ basis, the online advertising market has been showing recovery signs since 3Q22.</li><li>Online ad market revenue returned to positive 6.5% YoY growth in November 2022. Given the pace of economic recovery, we expect online ads sector should deliver strong rebound from 2Q23E onwards. </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 online advertising market revenue declined by 6.4% YoY to RMB508.8bn in 2022 as per IMZ, the first YoY revenue drop in the past 7 years, but compared to offline advertising this performance is relatively more resilient.On a QoQ basis, the online advertising market has been showing recovery signs since 3Q22.Online ad market revenue returned to positive 6.5% YoY growth in November 2022. Given the pace of economic recovery, we expect online ads sector should deliver strong rebound from 2Q23E onwards. 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 Internet – China Online Advertising: Onset for Gradual Recovery in 2023E

<ul><li>Kuaishou achieved another upbeat quarter, with topline +13% YoY (3% above consensus) and better-than-feared bottom line.</li><li>Compared to other players, KS would be more defensive in 4Q22E due to: 1) rev acceleration (forecasting +10% YoY) on stronger ecommerce and ads recovery; and 2) better margin with narrowing loss.</li><li>Stock price might see volatility for epidemic resurgence, short- term profit taking, and unsurprised bottom line guidance in 4Q22E.</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.

Kuaishou achieved another upbeat quarter, with topline +13% YoY (3% above consensus) and better-than-feared bottom line.Compared to other players, KS would be more defensive in 4Q22E due to: 1) rev acceleration (forecasting +10% YoY) on stronger ecommerce and ads recovery; and 2) better margin with narrowing loss.Stock price might see volatility for epidemic resurgence, short- term profit taking, and unsurprised bottom line guidance in 4Q22E.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.

Kuaishou (1024 HK) – Resilient Growth with FY23E Group Breakeven

<ul><li>In our last report dated 17 October, we highlighted a list of 21 long ideas.</li><li>The basket (equal weighted) of these 21 stocks underperformed MSCI China index by 5.4ppt, delivering 0.2% return (vs MSCI China 5.6%).</li><li>China Meidong Auto and Innovent Biologics delivered over 20% of return, and 4 of our 21 long ideas outperformed the benchmark.</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.

In our last report dated 17 October, we highlighted a list of 21 long ideas.The basket (equal weighted) of these 21 stocks underperformed MSCI China index by 5.4ppt, delivering 0.2% return (vs MSCI China 5.6%).China Meidong Auto and Innovent Biologics delivered over 20% of return, and 4 of our 21 long ideas outperformed the benchmark.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.

CMBI Research Focus List (November Edition) – Our best high conviction stock ideas

<ul><li>2022 “11.11” saw mild GMV recovery, with emphasis on “quality growth”, “agricultural incentives”, “domestics promotion”, “opening up” and “user experience”.</li><li>Total GMV recorded RMB1,151bn, +13% YoY, based on Syntun data.</li><li>Short videos share gain continued, up to 16% mkt share from 7% in 2021 (livestreaming ecommerce GMV+146% YoY, vs. comprehensive platforms +2.9%).</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.

2022 “11.11” saw mild GMV recovery, with emphasis on “quality growth”, “agricultural incentives”, “domestics promotion”, “opening up” and “user experience”.Total GMV recorded RMB1,151bn, +13% YoY, based on Syntun data.Short videos share gain continued, up to 16% mkt share from 7% in 2021 (livestreaming ecommerce GMV+146% YoY, vs. comprehensive platforms +2.9%).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 Internet Sector – 2022 "11.11": Moderate recovery with quality growth

China

Kuaishou Technology operates as a content community and social platform. The Company helps users create, upload and watch short videos on mobile devices. Kuaishou Technology offers services worldwide.

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Kuaishou Technology (1024 HK)

Kuaishou (1024 HK) – Solid 4Q22E with better margin outlook

We expect Kuaishou to deliver resilient 4Q22E, with upbeat ads & livestreaming and better margin (overseas narrowing loss to offset lower GPM and...

CMB International

China Internet – China Online Advertising: Onset for Gradual Recovery in 2023E

China online advertising market revenue declined by 6.4% YoY to RMB508.8bn in 2022 as per IMZ, the first YoY revenue drop in the past 7 years

CMB International

Kuaishou (1024 HK) – Resilient Growth with FY23E Group Breakeven

Kuaishou achieved another upbeat quarter, with topline +13% YoY (3% above consensus) and better-than-feared bottom line.

CMB International

CMBI Research Focus List (November Edition) – Our best high conviction stock ideas

In our last report dated 17 October, we highlighted a list of 21 long ideas.The basket (equal weighted) of these 21 stocks underperformed MSCI...

CMB International

China Internet Sector – 2022 "11.11": Moderate recovery with quality growth

2022 “11.11” saw mild GMV recovery, with emphasis on “quality growth”, “agricultural incentives”, “domestics promotion”, “opening up” and “user...

CMB International

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