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.

Thematic (Sector/Industry)

<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><p><em>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.</em></p>

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

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In mid-August at mid-day, a Reuters <a href="https://www.reuters.com/markets/deals/exclusive-tencent-plans-divest-24-bln-meituan-stake-sources-2022-08-16/" target="_blank" rel="noopener">article</a> suggested <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> would seek to divest its $24bn stake in <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> this year. The stock fell 9% that afternoon.</li>
<li>The general underlying suggestion was that regulators wanted them to sell. Other articles suggested later both aspects were "untrue" </li>
<li>With Q3 earnings, Tencent today <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2022/1116/2022111600357.pdf" target="_blank" rel="noopener">announced</a> a Jan23 distribution (Mar23 settlement) of 958,121,562 Meituan shares (1 for every 10 Tencent shares held). There are significant flow and index implications.</li>
</ul>


In mid-August at mid-day, a Reuters article suggested Tencent (700 HK) would seek to divest its $24bn stake in Meituan (3690 HK) this year. The stock fell 9% that afternoon.
The general underlying suggestion was that regulators wanted them to sell. Other articles suggested later both aspects were "untrue" 
With Q3 earnings, Tencent today announced a Jan23 distribution (Mar23 settlement) of 958,121,562 Meituan shares (1 for every 10 Tencent shares held). There are significant flow and index implications.


Tencent Distribution of Meituan Shares Official - Impact and Index Implications

Equity Bottom-Up

<ul><li>NIO’s 3Q22 earnings missed on lower GPM and higher R&amp;D costs.</li><li>It plans to launch five new models in 1H23, which could help NIO’s sales volume outperform the NEV market next year.</li><li>The upcoming NIO Day could be a positive catalyst, as it may debut these new models.</li></ul><p><em>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.</em></p>

NIO’s 3Q22 earnings missed on lower GPM and higher R&amp;D costs.It plans to launch five new models in 1H23, which could help NIO’s sales volume outperform the NEV market next year.The upcoming NIO Day could be a positive catalyst, as it may debut these new models.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.

NIO Inc. (NIO US) – Five new models in 1H23 to regain market share

<div><div><div><div><ul><li>China’s passenger-vehicle (PV) retail sales volume, based on insurance data, rose 9% YoY to 1.86mn units in Sep 2022, 3% lower than our prior forecast.</li><li>Wholesale volume surged 33% YoY to 2.33mn units, 8% higher than our prior projection due to more inventories pushed to dealers than expected.</li><li>Almost 260,000 units of inventories were added into dealers in Sep 2022, the most in any Sep in history. </li></ul></div></div></div></div><p><em>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.</em></p>

China’s passenger-vehicle (PV) retail sales volume, based on insurance data, rose 9% YoY to 1.86mn units in Sep 2022, 3% lower than our prior forecast.Wholesale volume surged 33% YoY to 2.33mn units, 8% higher than our prior projection due to more inventories pushed to dealers than expected.Almost 260,000 units of inventories were added into dealers in Sep 2022, the most in any Sep in history. 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 Auto Sector – 2H22E likely beat; FY23E consensus overstated

<div><div><div><div><ul><li>Golden week data missed market’s already low expectation for all three major categories - property sales, domestic tourism spending and auto sales.</li><li>4Q is unlikely to be a big surprise as property and its supply chain (20-30% of GDP) will still be the major drag that could neutralize the still resilient auto and gradually recovering consumption.</li><li>Together with more market volatility from pandemic and CPC meeting, we recommend investors to avoid one-sided long or short, but focus on pair trade opportunities to play the difference of BtoC over BtoB as BtoB is more vulnerable in terms of bad debts and pricing power than BtoC amid weak macro.</li></ul></div></div></div></div><p><em>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.</em></p>

Golden week data missed market’s already low expectation for all three major categories - property sales, domestic tourism spending and auto sales.4Q is unlikely to be a big surprise as property and its supply chain (20-30% of GDP) will still be the major drag that could neutralize the still resilient auto and gradually recovering consumption.Together with more market volatility from pandemic and CPC meeting, we recommend investors to avoid one-sided long or short, but focus on pair trade opportunities to play the difference of BtoC over BtoB as BtoB is more vulnerable in terms of bad debts and pricing power than BtoC amid weak macro.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.

Cross sector report – Post-Golden Week: More positive on BToC recovery potential; Cautious on BToB

China

NIO Inc. manufactures and sells automobiles. The Company offers electric vehicles and parts, as well as provides battery charging services. NIO serves customers worldwide.

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NIO (NIO US)

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

Tencent Distribution of Meituan Shares Official - Impact and Index Implications

Tencent will distribute 90% of its holdings in Meituan in an in-specie distribution, which goes ex- on 5 January and gets settled 24 March 2023....

Travis Lundy

China Auto Sector – 2H22E likely beat; FY23E consensus overstated

China’s passenger-vehicle (PV) retail sales volume, based on insurance data, rose 9% YoY to 1.86mn units in Sep 2022, 3% lower than our prior...

CMB International

Cross sector report – Post-Golden Week: More positive on BToC recovery potential; Cautious on BToB

Golden week data missed market’s already low expectation for all three major categories - property sales, domestic tourism spending and auto sales.

CMB International

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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

Tencent Distribution of Meituan Shares Official - Impact and Index Implications

Tencent will distribute 90% of its holdings in Meituan in an in-specie distribution, which goes ex- on 5 January and gets settled 24 March 2023....

Travis Lundy

NIO Inc. (NIO US) – Five new models in 1H23 to regain market share

NIO’s 3Q22 earnings missed on lower GPM and higher R&D costs. It plans to launch five new models in 1H23, which could help NIO’s sales volume...

CMB International

China Auto Sector – 2H22E likely beat; FY23E consensus overstated

China’s passenger-vehicle (PV) retail sales volume, based on insurance data, rose 9% YoY to 1.86mn units in Sep 2022, 3% lower than our prior...

CMB International

Cross sector report – Post-Golden Week: More positive on BToC recovery potential; Cautious on BToB

Golden week data missed market’s already low expectation for all three major categories - property sales, domestic tourism spending and auto sales.

CMB International