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>Apple reported a FY1Q (CY4Q22) with EPS of US$1.88 (-10% YoY) and revenue of US$117.2bn (-5% YoY), which are 3.1% and 3.3% below consensus, largely due to weak macro and iPhone 14 Pro/Max supply chain constraints on COVID-19 in China.</li><li>Looking into FY2Q23, mgmt. expected revenue to perform similarly to FY1Q23 (-5% YoY) with iPhone to accelerate and Mac/iPad to decline double digit YoY.</li><li>Given the challenging revenue outlook, we expect near-term profit taking on slower iPhone/Mac/iPad, but we remain positive on Apple supply chain over Android camp in 2H23E, given iPhone replacement cycle and share gain from Samsung/Android camp. </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.

Apple reported a FY1Q (CY4Q22) with EPS of US$1.88 (-10% YoY) and revenue of US$117.2bn (-5% YoY), which are 3.1% and 3.3% below consensus, largely due to weak macro and iPhone 14 Pro/Max supply chain constraints on COVID-19 in China.Looking into FY2Q23, mgmt. expected revenue to perform similarly to FY1Q23 (-5% YoY) with iPhone to accelerate and Mac/iPad to decline double digit YoY.Given the challenging revenue outlook, we expect near-term profit taking on slower iPhone/Mac/iPad, but we remain positive on Apple supply chain over Android camp in 2H23E, given iPhone replacement cycle and share gain from Samsung/Android camp. 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 Technology Sector – Apple FY1Q23 Miss on Macro and Supply Chain Issues

<ul><li>IDC released 4Q22 global smartphone shipment with 18% YoY decline (vs -9.3% in 3Q22), mainly due to weak consumer demand, rising inflation and China COVID-19 impact.</li><li>For 2022, global smartphone shipment fell 11% YoY to 1.21bn unit, marking the lowest annual shipment since 2013.</li><li>By brand, Apple/ Samsung/Xiaomi/Oppo/Vivo declined 15%/16%/26%/16%/19% YoY in 4Q22.</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.

IDC released 4Q22 global smartphone shipment with 18% YoY decline (vs -9.3% in 3Q22), mainly due to weak consumer demand, rising inflation and China COVID-19 impact.For 2022, global smartphone shipment fell 11% YoY to 1.21bn unit, marking the lowest annual shipment since 2013.By brand, Apple/ Samsung/Xiaomi/Oppo/Vivo declined 15%/16%/26%/16%/19% YoY in 4Q22.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 Technology - 4Q22 Global Smartphone Shipment Down 18% YoY

Equity Bottom-Up

<ul><li>We believe Q-Tech’s FY22 profit warning (70-80% YoY decline) is not surprising given 1) 1H22 earnings decline of 72% YoY, 2) 2H22 CCM shipment weakness (-17% YoY, vs -5% in 1H22) and 3) margin pressure on low utilization and lossmaking IoT/auto CCM biz.</li><li>Looking ahead, while handset CCM/FPM shipment will remain muted in 2023, we believe IoT/auto CCM will become major sales growth drivers with 204%/130% YoY in FY23/24E (vs +1%/4% for mobile CCM), accounting for 10%/19% of sales in FY23/24E (vs 3% in FY22).</li><li>We slightly adjusted FY23/24E EPS for stronger IoT/auto CCM, and reiterate BUY with new TP of HK$5.76, based on same 10x P/E. </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 believe Q-Tech’s FY22 profit warning (70-80% YoY decline) is not surprising given 1) 1H22 earnings decline of 72% YoY, 2) 2H22 CCM shipment weakness (-17% YoY, vs -5% in 1H22) and 3) margin pressure on low utilization and lossmaking IoT/auto CCM biz.Looking ahead, while handset CCM/FPM shipment will remain muted in 2023, we believe IoT/auto CCM will become major sales growth drivers with 204%/130% YoY in FY23/24E (vs +1%/4% for mobile CCM), accounting for 10%/19% of sales in FY23/24E (vs 3% in FY22).We slightly adjusted FY23/24E EPS for stronger IoT/auto CCM, and reiterate BUY with new TP of HK$5.76, based on same 10x P/E. 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.

Q-Tech (1478 HK) – Weak 2H22 as Expected

<ul><li>We hosted an investor call with Q-Tech during our Corporate Day on 28 Nov.</li><li>Despite no clear sign of smartphone demand recovery, mgmt. expects 4Q CCM ASP/shipment to improve QoQ due to seasonality.</li><li>4Q GPM will remain flat given competition and slower spec upgrade.</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 hosted an investor call with Q-Tech during our Corporate Day on 28 Nov.Despite no clear sign of smartphone demand recovery, mgmt. expects 4Q CCM ASP/shipment to improve QoQ due to seasonality.4Q GPM will remain flat given competition and slower spec upgrade.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.

Q-Tech (1478 HK) – Expect 4Q22E QoQ Improvement; Non-Handset to Accelerate in 2023

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of November 18th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight inflows into Tencent, HKEx, Country Garden and outflows from Meituan.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of November 18th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight inflows into Tencent, HKEx, Country Garden and outflows from Meituan.


Hong Kong Connect Flows (Nov 18th): Tencent, HKEx, Country Garden, Meituan

China

Q TECHNOLOGY (GROUP) Company Limited is a PRC-based camera module manufacturer focusing on mid-to-high end camera module market for Chinese branded smartphone, tablet and PC manufacturers.

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Q Technology Group (1478 HK)

China Technology Sector – Apple FY1Q23 Miss on Macro and Supply Chain Issues

Apple reported a FY1Q (CY4Q22) with EPS of US$1.88 (-10% YoY) and revenue of US$117.2bn (-5% YoY), which are 3.1% and 3.3% below consensus

CMB International

China Technology - 4Q22 Global Smartphone Shipment Down 18% YoY

IDC released 4Q22 global smartphone shipment with 18% YoY decline (vs -9.3% in 3Q22), mainly due to weak consumer demand, rising inflation and...

CMB International

Q-Tech (1478 HK) – Weak 2H22 as Expected

We slightly adjusted FY23/24E EPS for stronger IoT/auto CCM, and reiterate BUY with new TP of HK$5.76, based on same 10x P/E.

CMB International

Q-Tech (1478 HK) – Expect 4Q22E QoQ Improvement; Non-Handset to Accelerate in 2023

We hosted an investor call with Q-Tech during our Corporate Day on 28 Nov. Despite no clear sign of smartphone demand recovery, mgmt. expects 4Q...

CMB International

Hong Kong Connect Flows (Nov 18th): Tencent, HKEx, Country Garden, Meituan

We analyzed the Hong Kong Connect Scheme for last week and highlight flows for Tencent, Hong Kong Exchange and Clearing, Country Garden, Meituan.

Ke Yan, CFA, FRM

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