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 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

<ul><li>Yonyou reported in-line revenue growth of +15% YoY to RMB1,475mn in FY1Q23.</li><li>Excluding one-off items (mainly fair value gains), adjusted net loss widened to RMB496mn as margin remained under pressure (OPM -1.2 ppts YoY to -37.6%).</li><li>Cloud revenue grew +27% YoY to RMB950mn, mainly driven by mid-sized enterprises (+65% YoY), but ARR was no longer disclosed. </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 in-line revenue growth of +15% YoY to RMB1,475mn in FY1Q23.Excluding one-off items (mainly fair value gains), adjusted net loss widened to RMB496mn as margin remained under pressure (OPM -1.2 ppts YoY to -37.6%).Cloud revenue grew +27% YoY to RMB950mn, mainly driven by mid-sized enterprises (+65% YoY), but ARR was no longer disclosed. 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) – Lacks visibility in cloud

<ul>
<li>Yonyou reported FY4Q22 revenue of RMB3.67bn (-8% YoY) and net profit of RMB759mn (+31% YoY), missed our/ consensus estimates by 13/ 17% respectively.</li>
<li>The weakness was due to COVID-19 resurgence and GPM erosion given higher staff cost and outsourcing expenses.</li>
<li>For cloud segment, revenue showed no YoY growth although ARR was up +23.8% YoY.</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 FY4Q22 revenue of RMB3.67bn (-8% YoY) and net profit of RMB759mn (+31% YoY), missed our/ consensus estimates by 13/ 17% respectively.
The weakness was due to COVID-19 resurgence and GPM erosion given higher staff cost and outsourcing expenses.
For cloud segment, revenue showed no YoY growth although ARR was up +23.8% YoY.

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) – Concern on the higher R&D capitalization

Thematic (Sector/Industry)

<ul><li>Media reported that Huawei may launch self-developed ERP (MetaERP) in Apr.</li><li>This is negative to the China ERP market as competition heats up but the impacts to Yonyou and Inspur will be larger than Kingdee as the formers are more largeenterprises/ SOEs focused.</li><li>Also, Huawei has to consider the potential implications to its Cloud business as Kingdee/ Yonyou/ Inspur may scale down their cloud resources usage with Huawei Cloud given direct competition in ERP.</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.

Media reported that Huawei may launch self-developed ERP (MetaERP) in Apr.This is negative to the China ERP market as competition heats up but the impacts to Yonyou and Inspur will be larger than Kingdee as the formers are more largeenterprises/ SOEs focused.Also, Huawei has to consider the potential implications to its Cloud business as Kingdee/ Yonyou/ Inspur may scale down their cloud resources usage with Huawei Cloud given direct competition in ERP.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 Software & IT Services – Implications of Huawei MetaERP

<ul><li>Yonyou announced preliminary FY22 net profit of RMB200-220mn (-68.9-71.7% YoY).</li><li>The weakness was attributable to COVID resurgence and FY4Q22 and higher R&amp;D spending.</li><li>While Yonyou’s business is slowly recovering in FY23E, we remain cautious on its cloud migration progress as its large enterprise customers (68% of revenue) are less willing to adopt standardized cloud model. </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 announced preliminary FY22 net profit of RMB200-220mn (-68.9-71.7% YoY).The weakness was attributable to COVID resurgence and FY4Q22 and higher R&amp;D spending.While Yonyou’s business is slowly recovering in FY23E, we remain cautious on its cloud migration progress as its large enterprise customers (68% of revenue) are less willing to adopt standardized cloud model. 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) – Distressed margin with non-standardized cloud

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) – 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

Yonyou (600588 CH) – Lacks visibility in cloud

Cloud revenue grew +27% YoY to RMB950mn, mainly driven by mid-sized enterprises (+65% YoY), but ARR was no longer disclosed.

CMB International

Yonyou (600588 CH) – Concern on the higher R&D capitalization

Yonyou reported FY4Q22 revenue of RMB3.67bn (-8% YoY) and net profit of RMB759mn (+31% YoY), missed our/ consensus estimates by 13/ 17% respectively.

CMB International

China Software & IT Services – Implications of Huawei MetaERP

This is negative to the China ERP market as competition heats up but the impacts to Yonyou and Inspur will be larger than Kingdee as the formers...

CMB International

Yonyou (600588 CH) – Distressed margin with non-standardized cloud

Yonyou announced preliminary FY22 net profit of RMB200-220mn (-68.9-71.7% YoY). The weakness was attributable to COVID resurgence and FY4Q22 and...

CMB International

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