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>Since our downgrade report on 14 Aug, we have seen a continuous decline on Innolight’s share price by more than 23%.</li><li>Our current view on the stock is becoming increasingly favourable, driven by: 1) continuous strong momentum observed in building up AI infrastructure globally; and 2) quick uptake seen in downstream application market (e.g., AI-powered Ads adopted by Meta, Google and Amazon, GitHub copilot by Microsoft).</li><li>In addition, companies within the AI hardware value chain start to report strong earnings. </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.

Since our downgrade report on 14 Aug, we have seen a continuous decline on Innolight’s share price by more than 23%.Our current view on the stock is becoming increasingly favourable, driven by: 1) continuous strong momentum observed in building up AI infrastructure globally; and 2) quick uptake seen in downstream application market (e.g., AI-powered Ads adopted by Meta, Google and Amazon, GitHub copilot by Microsoft).In addition, companies within the AI hardware value chain start to report strong earnings. 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.

Innolight (300308 CH) – Expect Higher Contribution from AI Revenue in 3Q

<ul><li>Innolight released 1H23 results. Total revenue was RMB4,004mn (-5.4% YoY), mixed impacts from increasing demand for AI-related transceivers and deteriorated demand for traditional datacenter products.</li><li>NP was RMB613.8mn (24.6% YoY), mainly driven by higher GPM and operating cost optimization.</li><li>1H23 NP was close to the mid-point of the preliminary range. </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.

Innolight released 1H23 results. Total revenue was RMB4,004mn (-5.4% YoY), mixed impacts from increasing demand for AI-related transceivers and deteriorated demand for traditional datacenter products.NP was RMB613.8mn (24.6% YoY), mainly driven by higher GPM and operating cost optimization.1H23 NP was close to the mid-point of the preliminary range. 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.

Innolight (300308 CH) – Investors Focusing on 800G Transceivers Ramp-Up After 1H23 Results

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>The FRTIB benchmark switch from the EAFE Index to the ACWI IMI ex-USA ex-China ex-Hong Kong Index will result in a round trip trade of around US$56bn.</li>
<li>The changes for the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300</a>, <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI 500</a>, <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">STAR50</a>, <a href="https://www.smartkarma.com/entities/shanghai-stock-exchange-sse-50-a-share-index" target="_blank" data-smartkarma-citation="entities:31073:1" rel="noopener">SSE50</a> and a bunch of other mainland China indices will be announced after market close on Friday.</li>
<li>Relatively quiet week for ETF flows with no major creations or redemptions during the week.</li>
</ul>


The FRTIB benchmark switch from the EAFE Index to the ACWI IMI ex-USA ex-China ex-Hong Kong Index will result in a round trip trade of around US$56bn.
The changes for the CSI 300, CSI 500, STAR50, SSE50 and a bunch of other mainland China indices will be announced after market close on Friday.
Relatively quiet week for ETF flows with no major creations or redemptions during the week.


Index Rebalance & ETF Flow Recap: FRTIB, Japan, CSI300, CSI500, STAR50, WuXi XDC, Asahi

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Luxshare Precision Industry / Event-Driven

<ul>
<li>The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.</li>
<li>Last week saw NORTHBOUND net BUY RMB +15.9bn of A-shares. NORTHBOUND bought Financials, Industry, Infotech, etc. They sold Communications (which was a HUGE SOUTHBOUND buy) and Pharma/Healthcare.</li>
<li>It is notable that net flows as a percentage of value traded are clearly "short gamma", which is to say, sector underperformers are being sold, sector outperformers being bought.</li>
</ul>


The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net BUY RMB +15.9bn of A-shares. NORTHBOUND bought Financials, Industry, Infotech, etc. They sold Communications (which was a HUGE SOUTHBOUND buy) and Pharma/Healthcare.
It is notable that net flows as a percentage of value traded are clearly "short gamma", which is to say, sector underperformers are being sold, sector outperformers being bought.


Mainland Connect NORTHBOUND Flows (To 12 July 2024): Finance, Industry, Infotech Bought

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 12th.</li>
<li>We estimate the weekly inflows to be US$2,168.8 million, led by financials, information technology, utilities sectors, and offset by health care, communication services, energy.</li>
<li>We highlight flows for Moutai, Yangtze Power, Ping An Insurance, Cosco Shipping, CNNP.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 12th.
We estimate the weekly inflows to be US$2,168.8 million, led by financials, information technology, utilities sectors, and offset by health care, communication services, energy.
We highlight flows for Moutai, Yangtze Power, Ping An Insurance, Cosco Shipping, CNNP.


Northbound Flows (Jul 12th): Moutai, Yangtze Power, Ping An Insurance, Cosco Shipping, CNNP

China

BYD Electronic International Co., Ltd. researches, develops, manufactures handset components such as handset casings and handset keypads and modules for handset manufacturers.  The Company also provides assembly services comprising assembly service and PCB assembly service to global handset manufacturers.

ZTE Corporation develops and markets switches, access servers, videoconferencing systems, mobile communication systems, data communication devices, and optical communication devices.  The Company also offers networking solutions for setup, refurbishment and optimization of networks.

Hengtong Optic-electric Co., Ltd. manufactures and distributes optical fiber and optical cables.

Suzhou TFC Optical Communication Co., Ltd. researches, develops, and distributes fiber optic components.

Yealink Network Technology Corporation Limited operates as a communication equipment manufacturer. The Company provides telephones, unified communication terminals, video conferencing systems, conference phones, and other accessories. Yealink Network Technology serves customers worldwide.

Yealink Network Technology Cor (300628 CH)

Fiberhome Telecommunication Technologies Co., Ltd. designs and manufactures telecommunication products.  The Company's products include Integrated Broadband Access Systems (IBAS), fiber optics, fiber cables, wires, and products used in the DWDM (Dense Wavelength Division Multiplexing) systems.

Shenzhen Sunway Communication Co., Ltd is mainly engaged in the development, production, marketing and technical support of mobile terminal antenna systems. The company's core products mobile terminal antennas can be applied in portable communications equipment such as mobile phones, laptops and netbooks.

Guangzhou Haige Communications Group Inc Co develops and provides communication products and services.  The Company's products and services include digital communication system, internet communication system, and global positioning system navigation receiver.

Guangzhou Haige Cmncts Grp Inc Co (002465 CH)

China Zhenhua (Group) Science & Technology Co., Ltd. designs, manufactures, and markets electronic components, telecommunication equipment, and electric machines. The Company produces capacitors, integrated circuits, electric resistors, wireless phones, visual phones, and other products. China Zhenhua (Group) Science & Technology also invests in real estate businesses.

China Zhenhua (Group) Science & Tech (000733 CH)

Beijing BDStar Navigation Co., Ltd. provides the location-based system integration, satellite navigation and positioning products and location-based information services.

Beijing Bdstar Navigation Co, Ltd. (002151 CH)

Ubiquiti Inc. provides wireless networking products and solutions. The Company offers radios, antennas, and management tools that have been designed to deliver carrier class performance for wireless networking and other applications in the unlicensed radio frequency. Ubiquiti operates in the State of New York.

Accton Technology Corporation researches, develops, manufactures, and markets computer network system products such as adapters, hubs, switches, routers, and bridges. The Company also manufactures network computers and network peripheral equipment.

Juniper Networks, Inc. provides Internet infrastructure solutions for Internet service providers and other telecommunications service providers.  The Company offers network infrastructure solutions that includes IP routing, Ethernet switching, security and application acceleration solutions.

F5 Networks, Inc. provides integrated Internet traffic management solutions designed to improve the availability and performance of mission-critical Internet-based servers and applications.  The Company's software-based solutions manage, control and optimize Internet traffic and content.  F5's solutions automatically deliver Internet content for service providers and e-businesses.

Nokia Oyj is a global communications company that operates a network of production facilities for location intelligence and network infrastructure, as well as a network of sales and customer service. The Company also operates research and software development facilities worldwide.

Telefonaktiebolaget LM Ericsson develops and manufactures network equipment and software, as well as services for network and business operations. The Company's portfolio also includes products for the enterprise, cable, mobile platform and power module markets.

Telefonaktiebolaget Lm Ericsso (ERICB SS)

Telefonaktiebolaget LM Ericsson develops and manufactures network equipment and software, as well as services for network and business operations. The Company's portfolio also includes products for the enterprise, cable, mobile platform, and power module markets.

EchoStar Corporation manufactures broadcast satellite receivers and antennas, and offers commercial satellite services.

Ciena Corporation develops and markets communications network platforms and software, and offers professional services.  The Company's broadband access, data and optical networking platforms, software tools, and global network services support worldwide telecom and cable/MSO services providers, and enterprise and government networks.

Wistron NeWeb Corporation manufactures wireless communication systems.  The Company's products include satellite communication, wireless networking, embedded antenna, and mobile handset products.

Zhongji Innolight Co., Ltd. manufactures and distributes industrial machines and machine parts. The Company produces motor stator windings, insulating machines, coil winding equipment, automatic production lines, and more. Zhongji Innolight mainly conducts businesses domestically.

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Zhongji Innolight (300308 CH)

Innolight (300308 CH) – Expect Higher Contribution from AI Revenue in 3Q

Our current view on the stock is becoming increasingly favourable, driven by: 1) continuous strong momentum observed in building up AI...

CMB International

Innolight (300308 CH) – Investors Focusing on 800G Transceivers Ramp-Up After 1H23 Results

NP was RMB613.8mn (24.6% YoY), mainly driven by higher GPM and operating cost optimization. 1H23 NP was close to the mid-point of the preliminary...

CMB International

Index Rebalance & ETF Flow Recap: FRTIB, Japan, CSI300, CSI500, STAR50, WuXi XDC, Asahi

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Mainland Connect NORTHBOUND Flows (To 12 July 2024): Finance, Industry, Infotech Bought

NORTHBOUND saw net buying. Significant volume spread across a LOT of names, not index-weighted. The weights indicate some short-covering ahead of...

Travis Lundy

Northbound Flows (Jul 12th): Moutai, Yangtze Power, Ping An Insurance, Cosco Shipping, CNNP

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Moutai, Yangtze Power, Ping An Insurance, Cosco...

Ke Yan, CFA, FRM

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