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

Yonyou Network Technology A / Equity Bottom-Up

<ul><li>Yonyou hosted (2 April) an earnings conference call following its 2024 annual results.</li><li>In 2024, Yonyou’s total revenue reached RMB9.2bn, down 7% YoY, owing to postponed customer demand amid macro headwinds, and Yonyou’s strategy to promote the subscription business model with greater intensity.</li><li>Net loss attributable to ordinary shareholders expanded to RMB2.1bn in 2024 (2023: RMB967mn), mainly due to: 1) the decline in revenue generation; 2) compensation provided to the employees that have left their jobs; and 3) provisions for goodwill impairment. </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.

Yonyou hosted (2 April) an earnings conference call following its 2024 annual results.In 2024, Yonyou’s total revenue reached RMB9.2bn, down 7% YoY, owing to postponed customer demand amid macro headwinds, and Yonyou’s strategy to promote the subscription business model with greater intensity.Net loss attributable to ordinary shareholders expanded to RMB2.1bn in 2024 (2023: RMB967mn), mainly due to: 1) the decline in revenue generation; 2) compensation provided to the employees that have left their jobs; and 3) provisions for goodwill impairment. 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.

Yonyou (600588 CH) - Striving for Large-Scale Loss Reduction in 2025

<ul><li>Yonyou reported (26 Apr) 1Q24 results: revenue was RMB1.7bn, up 19% YoY (1Q23: 15% YoY), 13% better than Bloomberg consensus driven by solid revenue growth in large enterprises.</li><li>Net loss attributable to ordinary shareholders was RMB453mn, missing Bloomberg consensus by 16%, while adjusted net loss (excluding change in fair value gain or loss of investment) narrowed by RMB44mn YoY to RMB451mn, driven by expansion in gross margin aided by increase in cloud services revenue contribution and efficient cost control in operating expenses.</li><li>Yonyou’s business adjustment impact is gradually fading. </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.

Yonyou reported (26 Apr) 1Q24 results: revenue was RMB1.7bn, up 19% YoY (1Q23: 15% YoY), 13% better than Bloomberg consensus driven by solid revenue growth in large enterprises.Net loss attributable to ordinary shareholders was RMB453mn, missing Bloomberg consensus by 16%, while adjusted net loss (excluding change in fair value gain or loss of investment) narrowed by RMB44mn YoY to RMB451mn, driven by expansion in gross margin aided by increase in cloud services revenue contribution and efficient cost control in operating expenses.Yonyou’s business adjustment impact is gradually fading. 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.

Yonyou (600588 CH) - Business Adjustment Impact Gradually Fading

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>SSE 50 and SSE 180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.</li>
<li>The reference period is for the December 2024 index rebal event is now complete. In this insight, we have presented our final list of expected ADDs and DELs.</li>
<li>While our SSE 50 expected ADDs/DELs list remains unchanged, there have been multiple last-minute changes to our SSE 180 expected ADDs/DELs list.</li>
</ul>


SSE 50 and SSE 180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.
The reference period is for the December 2024 index rebal event is now complete. In this insight, we have presented our final list of expected ADDs and DELs.
While our SSE 50 expected ADDs/DELs list remains unchanged, there have been multiple last-minute changes to our SSE 180 expected ADDs/DELs list.


Quiddity Leaderboard SSE50/180 Dec 24: Multiple Changes to Expectations; ~US$2.3bn Collective Flows

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>Low volatility investing has taken the mantle from Dividend yield as the top strategy during July</li>
<li><a href="https://www.smartkarma.com/entities/byd-electronic-international-co-ltd" target="_blank" data-smartkarma-citation="entities:1927:1" rel="noopener">BYD Electronics (285 HK)</a> and <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a> are rated BUYs as their businesses show improvement.  </li>
<li>
<a href="https://www.smartkarma.com/entities/kingdee-international-sftwr" target="_blank" data-smartkarma-citation="entities:37:1" rel="noopener">Kingdee International Software (268 HK)</a> is seeing a softening in its SME business, however there is  potential to gain market share from foreign ERP companies given the pledged government's policies.
</li>
</ul>


Low volatility investing has taken the mantle from Dividend yield as the top strategy during July
BYD Electronics (285 HK) and Alibaba Group Holding (9988 HK) are rated BUYs as their businesses show improvement.  

Kingdee International Software (268 HK) is seeing a softening in its SME business, however there is  potential to gain market share from foreign ERP companies given the pledged government's policies.



BUY/SELL/HOLD: Hong Kong Stock Updates (July 29)

<ul><li>Yonyou reported (28 Oct) mixed 3Q23 results: revenue was RMB2.3bn (+14 % YoY), in line with Bloomberg consensus estimates, and demonstrated an improvement from -5% YoY decline in 1H23, thanks to the gradual wear off of reorganizational impact.</li><li>3Q23 net loss attributable to ordinary shareholders was RMB185mn; although it narrowed from that of RMB284mn in 3Q22, it missed consensus of a loss of RMB138mn, which we attribute to the 4.3ppt miss on GPM, which came in at 50.9% (3Q22: 49.9%).</li><li>We upgrade the stock from SELL to HOLD given likely better outlook on revenue growth and margin improvement in 4Q23 with the wear off of reorganizational impact, but overall macro and enterprises’ budget pressure takes time to relieve, and we await more concrete evidence to become more positive. </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.

Yonyou reported (28 Oct) mixed 3Q23 results: revenue was RMB2.3bn (+14 % YoY), in line with Bloomberg consensus estimates, and demonstrated an improvement from -5% YoY decline in 1H23, thanks to the gradual wear off of reorganizational impact.3Q23 net loss attributable to ordinary shareholders was RMB185mn; although it narrowed from that of RMB284mn in 3Q22, it missed consensus of a loss of RMB138mn, which we attribute to the 4.3ppt miss on GPM, which came in at 50.9% (3Q22: 49.9%).We upgrade the stock from SELL to HOLD given likely better outlook on revenue growth and margin improvement in 4Q23 with the wear off of reorganizational impact, but overall macro and enterprises’ budget pressure takes time to relieve, and we await more concrete evidence to become more positive. 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.

Yonyou (600588 CH) – Inflection Point Appeared, but Structural Improvement Likely Takes Time

China

Yonyou Network Technology Co., Ltd. develops and markets enterprise-wide business applications software, including financial, web-based, management, and security development software. The Company also offers training programs.

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Yonyou Network Technology A (600588 CH)

Yonyou (600588 CH) - Striving for Large-Scale Loss Reduction in 2025

Net loss attributable to ordinary shareholders expanded to RMB2.1bn in 2024 (2023: RMB967mn), mainly due to: 1) the decline in revenue generation

CMB International

Yonyou (600588 CH) - Business Adjustment Impact Gradually Fading

Yonyou reported (26 Apr) 1Q24 results: revenue was RMB1.7bn, up 19% YoY (1Q23: 15% YoY), 13% better than Bloomberg consensus driven by solid...

CMB International

Quiddity Leaderboard SSE50/180 Dec 24: Multiple Changes to Expectations; ~US$2.3bn Collective Flows

We estimate SSE 50 one-way flow to be US$1.98bn and SSE 180 one-way flow to be US$286mn during the December 2024 index rebal event.

Janaghan Jeyakumar, CFA

BUY/SELL/HOLD: Hong Kong Stock Updates (July 29)

Low volatility investing is performing well in July. BYD Electronics has seen better Apple related and NEV sales and Alibaba is increasing some...

David Mudd

Yonyou (600588 CH) – Inflection Point Appeared, but Structural Improvement Likely Takes Time

Yonyou reported (28 Oct) mixed 3Q23 results: revenue was RMB2.3bn (+14 % YoY), in line with Bloomberg consensus estimates, and demonstrated an...

CMB International

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