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>Impressive recovery vs Feb-Apr 2023, while both consumer and investors sentiment should be boosted, the post holidays purchasing power is still important.</li><li>We find the data points during this 5-1 golden week in 2023 slightly better than expectation and encouraging, esp. after the weakening consumption trend post CNY 2023.</li><li>We are highly delighted to see a surge in recovery rate of domestic tourism volume/ spending during this holiday to 119%/ 101%, which is far better than the 83%/ 51% in Qingming Festival and 89%/ 73% in CNY, according to Ministry of Culture and Tourism/文化和旅游部.</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.

Impressive recovery vs Feb-Apr 2023, while both consumer and investors sentiment should be boosted, the post holidays purchasing power is still important.We find the data points during this 5-1 golden week in 2023 slightly better than expectation and encouraging, esp. after the weakening consumption trend post CNY 2023.We are highly delighted to see a surge in recovery rate of domestic tourism volume/ spending during this holiday to 119%/ 101%, which is far better than the 83%/ 51% in Qingming Festival and 89%/ 73% in CNY, according to Ministry of Culture and Tourism/文化和旅游部.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 Consumer Sector – A Strong Comeback in 5-1 Golden Week

Equity Bottom-Up

<ul><li>1Q23 result was tremendous, and both sales recovery and margins are better than expected.</li><li>YUMC is still one of our sector top picks, as we think its margin and store expansion can continue to surprise the market.</li><li>Hence, we maintain BUY and raise TP to HK$ 595.15, based on 35x FY23E P/E (up from 33x).</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.

1Q23 result was tremendous, and both sales recovery and margins are better than expected.YUMC is still one of our sector top picks, as we think its margin and store expansion can continue to surprise the market.Hence, we maintain BUY and raise TP to HK$ 595.15, based on 35x FY23E P/E (up from 33x).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.

Yum China (9987 HK) – Confidence increases after upbeat 1Q23 result

<ul><li>Maintained OUTPERFORM after our Shenzhen Consumer Tour.</li><li>We visited a number of companies (catering, hotel and sportswear brands) and experts (catering &amp; shopping mall operators) during our trip to Shenzhen this week.</li><li>This channel check has strengthened our OUTPERFORM view on the Consumer discretionary sector, backed by 3 trends</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.

Maintained OUTPERFORM after our Shenzhen Consumer Tour.We visited a number of companies (catering, hotel and sportswear brands) and experts (catering &amp; shopping mall operators) during our trip to Shenzhen this week.This channel check has strengthened our OUTPERFORM view on the Consumer discretionary sector, backed by 3 trendsContent 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 Consumer Sector – Shenzhen Trip: sustained growth in Feb 2023

<ul><li>4Q22 result should have been well expected and the turnaround is already here.</li><li>YUMC is one of our sector top picks, because we think it can further surprise the market in FY23E, due to its: 1) refined store economics, 2) decent room for upward revision on the opening plan and 3) the inclusion in stock connect programme recently.</li><li>Hence, we maintain BUY and raise TP to HK$ 554.61, based on 33x FY23E 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.

4Q22 result should have been well expected and the turnaround is already here.YUMC is one of our sector top picks, because we think it can further surprise the market in FY23E, due to its: 1) refined store economics, 2) decent room for upward revision on the opening plan and 3) the inclusion in stock connect programme recently.Hence, we maintain BUY and raise TP to HK$ 554.61, based on 33x FY23E P/EContent 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.

Yum China (9987 HK) – Robust recovery and store expansion ahead

<ul><li>In our last report dated 17 October, we highlighted a list of 21 long ideas.</li><li>The basket (equal weighted) of these 21 stocks underperformed MSCI China index by 5.4ppt, delivering 0.2% return (vs MSCI China 5.6%).</li><li>China Meidong Auto and Innovent Biologics delivered over 20% of return, and 4 of our 21 long ideas outperformed the benchmark.</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.

In our last report dated 17 October, we highlighted a list of 21 long ideas.The basket (equal weighted) of these 21 stocks underperformed MSCI China index by 5.4ppt, delivering 0.2% return (vs MSCI China 5.6%).China Meidong Auto and Innovent Biologics delivered over 20% of return, and 4 of our 21 long ideas outperformed the benchmark.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.

CMBI Research Focus List (November Edition) – Our best high conviction stock ideas

China

Yum China Holdings, Inc. operates chain restaurants. The Company offers pizza, entrees, pasta, rice dishes, appetizers, soups, vegetables, beverages, and desserts. Yum China Holding conducts its business worldwide.

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Yum China Holdings (9987 HK)

China Consumer Sector – A Strong Comeback in 5-1 Golden Week

Impressive recovery vs Feb-Apr 2023, while both consumer and investors sentiment should be boosted, the post holidays purchasing power is still...

CMB International

Yum China (9987 HK) – Confidence increases after upbeat 1Q23 result

YUMC is still one of our sector top picks, as we think its margin and store expansion can continue to surprise the market.

CMB International

China Consumer Sector – Shenzhen Trip: sustained growth in Feb 2023

We visited a number of companies (catering, hotel and sportswear brands) and experts (catering & shopping mall operators) during our trip to...

CMB International

Yum China (9987 HK) – Robust recovery and store expansion ahead

YUMC is one of our sector top picks, because we think it can further surprise the market in FY23E, due to its: 1) refined store economics, 2)...

CMB International

CMBI Research Focus List (November Edition) – Our best high conviction stock ideas

In our last report dated 17 October, we highlighted a list of 21 long ideas.The basket (equal weighted) of these 21 stocks underperformed MSCI...

CMB International

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