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>SANY’s 3Q22 net profit declined 61% YoY to RMB963mn, with earnings largely contributed by finance income and other gains.</li><li>The lack of gross margin recovery along with the increased distribution expense and R&amp;D spending are the key factors that dragged the earnings.</li><li>We slash our 2022E/23E/24E earnings forecast by 52%/38%/36% (37%-44% below consensus), largely a result of lower sales volume and higher expense assumptions.</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>

SANY’s 3Q22 net profit declined 61% YoY to RMB963mn, with earnings largely contributed by finance income and other gains.The lack of gross margin recovery along with the increased distribution expense and R&amp;D spending are the key factors that dragged the earnings.We slash our 2022E/23E/24E earnings forecast by 52%/38%/36% (37%-44% below consensus), largely a result of lower sales volume and higher expense assumptions.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.

SANY Heavy Industry – A (600031 CH) – Another Weak Quarter; Still Challenging

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

<ul><li>Sany Heavy Industry, one of China’s largest construction machinery makers, reported a plunge in first-half profit as slower growth and Covid restrictions reduce demand for building equipment.</li><li>Revenue fell 40.9% to 39.7 billion yuan ($5.76 billion) for the first six months of 2022, the company said Tuesday. Net income plummeted 73.85% to 2.63 billion yuan.</li><li>Excavators are Sany’s core product. In the first half, the company’s excavator sales declined 35.6% year-on-year to 16.7 billion yuan</li></ul>

Sany Heavy Industry, one of China’s largest construction machinery makers, reported a plunge in first-half profit as slower growth and Covid restrictions reduce demand for building equipment.Revenue fell 40.9% to 39.7 billion yuan ($5.76 billion) for the first six months of 2022, the company said Tuesday. Net income plummeted 73.85% to 2.63 billion yuan.Excavators are Sany’s core product. In the first half, the company’s excavator sales declined 35.6% year-on-year to 16.7 billion yuan

Sany Profit Falls 73.85% as Demand for Construction Gear Dries Up

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>China started mulling an expansion of its Stock Connect relationships in late 2021 with plans to allow GDR issuance in Switzerland and eventually Germany.</li>
<li>New GDR issuance rules came into effect in February and companies started planning to issue GDRs in Switzerland in March.</li>
<li>The new SIX Listing Rules went into effect 25 July. Two companies priced GDRs on 22 July and two more yesterday. US$1.5bn so far. There are 6 more near-term.</li>
</ul>


China started mulling an expansion of its Stock Connect relationships in late 2021 with plans to allow GDR issuance in Switzerland and eventually Germany.
New GDR issuance rules came into effect in February and companies started planning to issue GDRs in Switzerland in March.
The new SIX Listing Rules went into effect 25 July. Two companies priced GDRs on 22 July and two more yesterday. US$1.5bn so far. There are 6 more near-term.


Chinese GDRs on the SIX Exchange - More Names, Smaller Discounts, Smaller Size, Less Liquidity

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Infrastructure, new energy, consumer discretionary and, to a lesser extent, transportation and logistics are sectors that will benefit from extensive government economic supportive policies over the last few days. </li>
<li>Acceleration of special purpose bonds will drive <a href="https://www.smartkarma.com/entities/china-communications-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:265:1" rel="noopener">China Communications Construction (1800 HK)</a>. We see <a href="https://www.smartkarma.com/entities/china-longyuan-power-group-corp-ltd" target="_blank" data-smartkarma-citation="entities:14215:1" rel="noopener">China Longyuan Power (916 HK)</a> and <a href="https://www.smartkarma.com/entities/dongfang-electric-corporation-limited" target="_blank" data-smartkarma-citation="entities:1251:1" rel="noopener">Dongfang Electric (1072 HK)</a> benefit from new energy initiatives.</li>
<li>
<a href="https://www.smartkarma.com/entities/li-ning-co-ltd" target="_blank" data-smartkarma-citation="entities:6047:1" rel="noopener">Li Ning (2331 HK)</a> will be the near-term winner in the consumer discretionary space and so as <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home Co Ltd (6690 HK)</a>.</li>
</ul>


Infrastructure, new energy, consumer discretionary and, to a lesser extent, transportation and logistics are sectors that will benefit from extensive government economic supportive policies over the last few days. 
Acceleration of special purpose bonds will drive China Communications Construction (1800 HK). We see China Longyuan Power (916 HK) and Dongfang Electric (1072 HK) benefit from new energy initiatives.

Li Ning (2331 HK) will be the near-term winner in the consumer discretionary space and so as Haier Smart Home Co Ltd (6690 HK).


Roundup of Government Economic Supportive Policies: Key Winners

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

<ul>
<li>Over the past 2 years, Industrials exposure has almost doubled among China A-Share active investors.  Today's weight of 18.7% and overweight of 1.69% are near peak levels.</li>
<li>The most widely held stocks in the sector are CATL (A), Luxshare Precision Industry (002475 CH), Shenzhen Inovance Technology Co. (300124 CH) and EVE Energy (300014 CH)</li>
<li>Weight increases in the Industrials sector far outweighed decreases over the last half of 2021. Sungrow Power Supply (300274 CH) and NARI Technology Co (600406 CH) were among the beneficiaries.</li>
</ul>


Over the past 2 years, Industrials exposure has almost doubled among China A-Share active investors.  Today's weight of 18.7% and overweight of 1.69% are near peak levels.
The most widely held stocks in the sector are CATL (A), Luxshare Precision Industry (002475 CH), Shenzhen Inovance Technology Co. (300124 CH) and EVE Energy (300014 CH)
Weight increases in the Industrials sector far outweighed decreases over the last half of 2021. Sungrow Power Supply (300274 CH) and NARI Technology Co (600406 CH) were among the beneficiaries.


China

SANY Heavy Industry Co., Ltd manufactures and markets construction and engineering machinery and related parts. The Company produces and sells concrete pumps, concrete pump vehicles, road rollers, pavers, and other related products. Sany Heavy Industry markets its products worldwide.

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Sany Heavy Industry (600031 CH)

SANY Heavy Industry – A (600031 CH) – Another Weak Quarter; Still Challenging

We slash our 2022E/23E/24E earnings forecast by 52%/38%/36% (37%-44% below consensus), largely a result of lower sales volume and higher expense...

CMB International

Sany Profit Falls 73.85% as Demand for Construction Gear Dries Up

Sany Heavy Industry, one of China’s largest construction machinery makers, reported a plunge in first-half profit as slower growth and Covid...

Caixin Global

Chinese GDRs on the SIX Exchange - More Names, Smaller Discounts, Smaller Size, Less Liquidity

China amended its rules for GDR issuance in February 2022 and planned issuance in Switzerland to start this summer. Official issuance was permitted...

Travis Lundy

Roundup of Government Economic Supportive Policies: Key Winners

We expect the government economic supportive policies released in the last few days to drive the infrastructure, new energy, consumer discretionary...

Osbert Tang, CFA

China A-Shares: Industrials Revolution

Over the past 2 years, Industrials exposure has almost doubled among China A-Share active investors. Today's weight of 18.7% and overweight of...

Steven Holden

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