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>Proya’s 2Q24 results beat consensus with revenue/net profit +41%/37% YoY (1H24 revenue/net profit +37.9/40.5% YoY), mostly contributed by the accelerated sales growth of main brand to 37.7% YoY.</li><li>The earnings ranked the top among peers. 1H24 GPM dropped by 0.7 ppt. and steadied at 69.8%, accompanied by the 3 ppt. increase in selling expense ratio to 47%, due to the prolonged 618 promotion cycle, continuous rise in unit cost of livestream marketing, and high e-commerce return rate.</li><li>Full-year guidance wise, the company aims to maintain GPM at ~70% and maintain the NPM in a slight upward trend.</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.

Proya’s 2Q24 results beat consensus with revenue/net profit +41%/37% YoY (1H24 revenue/net profit +37.9/40.5% YoY), mostly contributed by the accelerated sales growth of main brand to 37.7% YoY.The earnings ranked the top among peers. 1H24 GPM dropped by 0.7 ppt. and steadied at 69.8%, accompanied by the 3 ppt. increase in selling expense ratio to 47%, due to the prolonged 618 promotion cycle, continuous rise in unit cost of livestream marketing, and high e-commerce return rate.Full-year guidance wise, the company aims to maintain GPM at ~70% and maintain the NPM in a slight upward trend.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.

Proya Cosmetics (603605 CH) - Best Earnings Among Peers, Strong Momentum Sustained

<ul><li>Proya reported impressive results during the 618 promotion event with total GMV ranking top/second on Tmall/Douyin’s cosmetic sector, buoyed by effective hero product strategy and possibly more discounts.</li><li>GMV growth reached +70%/+110% YoY on Tmall/Douyin, largely surpassing the platforms’ sector total and international peers.</li><li>Growth might be lower at the revenue level as the return rate is raising industrywide. </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.

Proya reported impressive results during the 618 promotion event with total GMV ranking top/second on Tmall/Douyin’s cosmetic sector, buoyed by effective hero product strategy and possibly more discounts.GMV growth reached +70%/+110% YoY on Tmall/Douyin, largely surpassing the platforms’ sector total and international peers.Growth might be lower at the revenue level as the return rate is raising industrywide. 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.

Proya Cosmetics (603605 CH) - Impressive 618 with Makeup Brand Making Its Debut to TOP 1

Thematic (Sector/Industry)

<ul><li>Our channel checks and various news sources we monitored suggests cosmetic GMV for 6.18 campaign this year stood at a small decline and reached approximately RMB40bn.</li><li>We argue the broad momentum tracked well to expectation, given only a flattish pre-sale (between 25 May and 31 May). By channel, we observed that livestreaming channels continued to draw traffic flow from marketplace platforms, and this looks to be consistent to the trends observed by our internet team.</li><li>For instance, cosmetic GMV on Douyin increased 70% YoY to RMB15bn.</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.

Our channel checks and various news sources we monitored suggests cosmetic GMV for 6.18 campaign this year stood at a small decline and reached approximately RMB40bn.We argue the broad momentum tracked well to expectation, given only a flattish pre-sale (between 25 May and 31 May). By channel, we observed that livestreaming channels continued to draw traffic flow from marketplace platforms, and this looks to be consistent to the trends observed by our internet team.For instance, cosmetic GMV on Douyin increased 70% YoY to RMB15bn.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 Cosmetics – Key takeaway from 6.18 cosmetic sales

<ul><li>We untangle the “household excess saving” enigma.</li><li>Instead of a silver bullet, we consider it a status-quo in which consumers are confident enough to spend (or invest) beyond their pre-pandemic budgets by tapping into their savings accumulated during the pandemic, after they first normalize their spending to prepandemic level.</li><li>In other words, we believe the use of “excess saving” would predominantly kick-in upon a full-fledged consumption recovery. </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 untangle the “household excess saving” enigma.Instead of a silver bullet, we consider it a status-quo in which consumers are confident enough to spend (or invest) beyond their pre-pandemic budgets by tapping into their savings accumulated during the pandemic, after they first normalize their spending to prepandemic level.In other words, we believe the use of “excess saving” would predominantly kick-in upon a full-fledged consumption recovery. 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 Consumer – From Reopening to Recovery

<ul><li>Undoubtedly, Proya is on track to deliver its long-term financial target stipulated in its ESOP.</li><li>On the flip side, however, this could inevitably imply growth momentum to peak-out/ fully-priced in the medium term, especially when the low hanging fruit from livestreaming is gone.</li><li>We think Proya’s multiple re-rating could take a pause from here. </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.

Undoubtedly, Proya is on track to deliver its long-term financial target stipulated in its ESOP.On the flip side, however, this could inevitably imply growth momentum to peak-out/ fully-priced in the medium term, especially when the low hanging fruit from livestreaming is gone.We think Proya’s multiple re-rating could take a pause from here. 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.

Proya Cosmetics (603605 CH) – ESOP & Mgt Sell-Off Signal Growth to Peak-Out

China

Proya Cosmetics Co., Ltd. operates as a cosmetics products manufacturing company. The Company researches and markets skin care products, make up, body wash, and other related products. Proya Cosmetics markets its products throughout China.

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Proya Cosmetics (603605 CH)