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 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

<ul><li>Youyou reported in-line revenue growth of +17% YoY to RMB2.06bn in FY3Q22.</li><li>However, net loss widened unexpectedly to RMB284mn mainly due to margin erosion. </li><li>Yonyou delivered slowest cloud revenue growth of +22% YoY since the company adopted cloud-focus strategy in 2019. </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.

Youyou reported in-line revenue growth of +17% YoY to RMB2.06bn in FY3Q22.However, net loss widened unexpectedly to RMB284mn mainly due to margin erosion. Yonyou delivered slowest cloud revenue growth of +22% YoY since the company adopted cloud-focus strategy in 2019. 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) – Software Localization Adds Uncertainty to Cloud Strategy

Thematic (Sector/Industry)

<ul><li>Growing macro concerns related to stagflation, US rate hike, geopolitical tensions and RMB depreciation continue to weigh on growth stocks, especially to software tech. </li><li>We use five criteria including 1) valuation, 2) profitability, 3) cash level, 4) short ratio and 5) RMB/USD depreciation to determine companies that are less vulnerable to market fluctuations. We find Hikvision (BUY), Glodon (BUY) and AsiaInfo (NR) in the best positions under these five criteria.</li><li><div><div><div>Heightened macro uncertainties unfavorable to software tech stocks. </div></div></div></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.

Growing macro concerns related to stagflation, US rate hike, geopolitical tensions and RMB depreciation continue to weigh on growth stocks, especially to software tech. We use five criteria including 1) valuation, 2) profitability, 3) cash level, 4) short ratio and 5) RMB/USD depreciation to determine companies that are less vulnerable to market fluctuations. We find Hikvision (BUY), Glodon (BUY) and AsiaInfo (NR) in the best positions under these five criteria.Heightened macro uncertainties unfavorable to software tech stocks. 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 - Which Stocks Are Less Vulnerable to Market Volatility?

<div><ul><li>Structural changes in China cloud market. There are three structural changes in China cloud market since the internet sector crackdown in 2021.</li><li>China cloud development roadmap is different compared to the US</li><li>Cloud supply chain turmoil amid rising geopolitical tension.</li></ul></div>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.

Structural changes in China cloud market. There are three structural changes in China cloud market since the internet sector crackdown in 2021.China cloud development roadmap is different compared to the USCloud supply chain turmoil amid rising geopolitical tension.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 – A mixed outlook for China cloud amid rising China-US tension

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) – 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

Yonyou (600588 CH) – Software Localization Adds Uncertainty to Cloud Strategy

Youyou reported in-line revenue growth of +17% YoY to RMB2.06bn in FY3Q22. However, net loss widened unexpectedly to RMB284mn mainly due to margin...

CMB International

China Software & IT Services - Which Stocks Are Less Vulnerable to Market Volatility?

Growing macro concerns related to stagflation, US rate hike, geopolitical tensions and RMB depreciation continue to weigh on growth stocks,...

CMB International

China Software & IT Services – A mixed outlook for China cloud amid rising China-US tension

Structural changes in China cloud market. There are three structural changes in China cloud market since the internet sector crackdown in 2021.

CMB International

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