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>Seven out of the 16 leading PCB manufacturers in China have announced profit alerts by mid-July, with an avg. 75% to 105% YoY and 21% to 43% QoQ increase in net profit for 2Q24.</li><li>We think the strong performance is supported by inventory restocking and upgrade cycle driven by the AI boom.</li><li>These positive announcements added momentum for the PCB sector, with an avg. 9% month-to-date increase in share price (for the seven companies with profit alerts announcements).</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.

Seven out of the 16 leading PCB manufacturers in China have announced profit alerts by mid-July, with an avg. 75% to 105% YoY and 21% to 43% QoQ increase in net profit for 2Q24.We think the strong performance is supported by inventory restocking and upgrade cycle driven by the AI boom.These positive announcements added momentum for the PCB sector, with an avg. 9% month-to-date increase in share price (for the seven companies with profit alerts announcements).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.

Semiconductors - PCB sector: 1H24 earnings preview

Equity Bottom-Up

Yancoal Australia Limited provides coal mining services. The Company mines, processes, and sells pure-coal, metallurgical coal, and more. Yancoal Australia also exports its products.

<ul><li>Yancoal’s (YAL) 2Q24 operating data came in slightly below our expectation, with only 1% YoY increase in attributable sales volume due to adverse weather conditions and operational factors such as longwall move and wash plant throughput rates.</li><li>Blended ASP dropped 20% YoY in 2Q24 but is in line with the market trend and our expectation.</li><li>We estimate Yancoal delivered ~A$1.5bn of revenue in 2Q24 (-20% YoY; +3% QoQ). YAL maintains the full-year sales volume guidance unchanged. </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.

Yancoal’s (YAL) 2Q24 operating data came in slightly below our expectation, with only 1% YoY increase in attributable sales volume due to adverse weather conditions and operational factors such as longwall move and wash plant throughput rates.Blended ASP dropped 20% YoY in 2Q24 but is in line with the market trend and our expectation.We estimate Yancoal delivered ~A$1.5bn of revenue in 2Q24 (-20% YoY; +3% QoQ). YAL maintains the full-year sales volume guidance unchanged. 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.

Yancoal Australia (3668 HK) - 2Q24 Sales Volume +1%; Full-Year Target Still Achievable

Ping An Insurance (Group) Company of China Limited provides a variety of insurance service in China.  The Company writes property, casualty, and life insurance.  Ping An Insurance also offers financial services.

<ul><li>The insurer announced the issuance of US$3.5bn convertible bonds (CB) to offshore professional investors outside the US on 15 Jul 2024, at 0.0875% par per annum due in Jul 2029.</li><li>The proposed principal amount is within the range of an estimated US2bn-5bn, according to the Bloomberg news.</li><li>Against the closing price on 15 Jul of HK$36.05, the initial conversion price of HK$43.71 implies a premium rate of 21.2%. </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.

The insurer announced the issuance of US$3.5bn convertible bonds (CB) to offshore professional investors outside the US on 15 Jul 2024, at 0.0875% par per annum due in Jul 2029.The proposed principal amount is within the range of an estimated US2bn-5bn, according to the Bloomberg news.Against the closing price on 15 Jul of HK$36.05, the initial conversion price of HK$43.71 implies a premium rate of 21.2%. 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.

Ping An (2318 HK) - Expect $3.5bn CB Dilutive Effect to Be Short-Term

Baidu, Inc. operates an Internet search engine. The Company offers algorithmic search, enterprise search, news, MP3, and image searches, voice assistance, online storage, and navigation services. Baidu serves clients globally.

<ul><li>We expect Baidu Core business to deliver revenue growth in line with our expectation but slightly slower than market consensus estimates in 2Q24E, owing to the proactive business adjustment to embed more GenAI-related results in search results which are currently under-monetized, as well as the soft macro environment which has weighed on overall advertising budget.</li><li>However, we are positive that this proactive adjustment could help improve user experience and enhance long-term monetization prospects.</li><li>Cloud profitability is on expansion track, and the increase in penetration of fully driverless cars, as well as the deployment of new car models could drive unit economics (UE) improvement for Robotaxi business, in our view. </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.

We expect Baidu Core business to deliver revenue growth in line with our expectation but slightly slower than market consensus estimates in 2Q24E, owing to the proactive business adjustment to embed more GenAI-related results in search results which are currently under-monetized, as well as the soft macro environment which has weighed on overall advertising budget.However, we are positive that this proactive adjustment could help improve user experience and enhance long-term monetization prospects.Cloud profitability is on expansion track, and the increase in penetration of fully driverless cars, as well as the deployment of new car models could drive unit economics (UE) improvement for Robotaxi business, in our view. 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.

Baidu (BIDU US) - Impact from Proactive Business Adjustment Likely in Line with Our Expectation

Minth Group Ltd. manufactures exterior automobile body parts.  The Company produces structural body parts, decorative parts, and trim.  Minth supplies multinational automobile manufacturers operating in China.

<ul><li>Initiate with BUY and TP of HK$21.00. Minth Group (Minth) has been transforming from an exterior decorative parts maker to a more diversified tier1 supplier with manufacturing capabilities in different materials.</li><li>We are of the view that investors have probably underestimated Minth’s solid overseas foundation which is crucial for the upcoming trade risks, as its valuation has dropped to a historical-low level.</li><li>We also think battery housing and other new products such as chassis structural parts and intelligent integrated exteriors could lift Minth’s dollar content per car in the next few years, which is also an important driver for its profit growth.</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.

Initiate with BUY and TP of HK$21.00. Minth Group (Minth) has been transforming from an exterior decorative parts maker to a more diversified tier1 supplier with manufacturing capabilities in different materials.We are of the view that investors have probably underestimated Minth’s solid overseas foundation which is crucial for the upcoming trade risks, as its valuation has dropped to a historical-low level.We also think battery housing and other new products such as chassis structural parts and intelligent integrated exteriors could lift Minth’s dollar content per car in the next few years, which is also an important driver for its profit growth.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.

Minth Group (425 HK) - Overseas Foundation to Withstand Trade Risks