External broker reports(aggregated public sources), CMB International

CMB International

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.

External broker reports(aggregated public sources)

Thematic (Sector/Industry)

United states It / Thematic (Sector/Industry)

<ul><li>US internet and software companies delivered mixed performances in 1Q24 in terms of revenue growth: advertising and cloud services revenue growth saw a reacceleration trend, while SaaS services revenue growth edged down slightly. However, the optimization in labour cost, increase in economies of scale and operating efficiency improvement continue to drive YoY margin expansion, which looks likely to sustain in 2Q24, in our view, but will face higher comps in 2H24.</li><li>AI-related monetization and profitability expansion remain the key investment themes for US internet and software stocks, while the sectors’ stock performance reacts positively to interest rate cuts , albeit the expectation might have been partly reflected in price.</li><li>Our stock picks are Microsoft (MSFT US; BUY; well positioned to ride on the tide of rapid development of Gen AI and related monetization), Amazon (AMZN US; BUY; solid margin expansion could exceed market expectation), and ServiceNow (NOW US; BUY; steady current remaining performance obligations (cRPO) growth and profitability expansion likely to sustain).</li></ul><p><em>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.</em></p>

US internet and software companies delivered mixed performances in 1Q24 in terms of revenue growth: advertising and cloud services revenue growth saw a reacceleration trend, while SaaS services revenue growth edged down slightly. However, the optimization in labour cost, increase in economies of scale and operating efficiency improvement continue to drive YoY margin expansion, which looks likely to sustain in 2Q24, in our view, but will face higher comps in 2H24.AI-related monetization and profitability expansion remain the key investment themes for US internet and software stocks, while the sectors’ stock performance reacts positively to interest rate cuts , albeit the expectation might have been partly reflected in price.Our stock picks are Microsoft (MSFT US; BUY; well positioned to ride on the tide of rapid development of Gen AI and related monetization), Amazon (AMZN US; BUY; solid margin expansion could exceed market expectation), and ServiceNow (NOW US; BUY; steady current remaining performance obligations (cRPO) growth and profitability expansion likely to sustain).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.

Internet - AI and Margin Expansion Still Key Themes