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

China Tourism Group Duty Free Corp Ltd / Equity Bottom-Up

<ul><li>CTGDF’s shares have been a laggard and are c.30% behind its re-opening peers, on an assumption that international travel is set to recover and likely takes the wallet shares from domestic travelers.</li><li>With year-to-date overseas travel recovery tracking c.30% of that in 2019, however, we think year-end recovery rate should reasonably reach 70%+, slightly lower than a 90% ballpark estimates from talks we held with investors.</li><li>Meanwhile, despite a just-in-line 1Q results, we think GPM should continue to improve sequentially, driven by 1) an increasing higher-margin airport sales mix, 2) a better inventory mix with sufficient stocks on popular hardluxury/ fashion items, and 3) a consistently well-disciplined discount policy. Beyond these, during the earnings call, management remains upbeat on the outlook, and discussed a few positive operation updates.</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.

CTGDF’s shares have been a laggard and are c.30% behind its re-opening peers, on an assumption that international travel is set to recover and likely takes the wallet shares from domestic travelers.With year-to-date overseas travel recovery tracking c.30% of that in 2019, however, we think year-end recovery rate should reasonably reach 70%+, slightly lower than a 90% ballpark estimates from talks we held with investors.Meanwhile, despite a just-in-line 1Q results, we think GPM should continue to improve sequentially, driven by 1) an increasing higher-margin airport sales mix, 2) a better inventory mix with sufficient stocks on popular hardluxury/ fashion items, and 3) a consistently well-disciplined discount policy. Beyond these, during the earnings call, management remains upbeat on the outlook, and discussed a few positive operation updates.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.

CTGDF (601888 CH) – Overseas Travel a Lingering Headwind to Valuation

Thematic (Sector/Industry)

<ul><li>We expect encouraging 5.1 travel data. According to various sources and news we monitor, air passenger during the holiday is likely to surpass 9mn persons, tracking approximately 110% of the level we saw in 2019.</li><li>Splitting between domestic and overseas travellers, the former will likely grow by approximately 25%, while, for the latter, the recovery could track up to 30-40% of that in 2019.</li><li>By destination, air ticket booking to Hainan grew by 1.5x, and Hainan represented 93% of the travel destination of domestic trips.</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 encouraging 5.1 travel data. According to various sources and news we monitor, air passenger during the holiday is likely to surpass 9mn persons, tracking approximately 110% of the level we saw in 2019.Splitting between domestic and overseas travellers, the former will likely grow by approximately 25%, while, for the latter, the recovery could track up to 30-40% of that in 2019.By destination, air ticket booking to Hainan grew by 1.5x, and Hainan represented 93% of the travel destination of domestic trips.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 – Expecting Encouraging Data from the 5.1 Holiday This Year

<ul><li>Owing to a weak but expected 4Q earnings, CTGDF’s recent share price has pulled back by 10%+ to its pre-reopening level.</li><li>While lockdown risk has already behind us, we again see buying opportunity when earnings momentum, in our view, troughed, and subsequently picks up within 1H23E.</li><li>Our call is further supported by channel check findings in which 1) YTD DF sales still tracking 20%+, 2) inelastic procurement demand from reseller given the prevailing logistic bottleneck and less favorable rebate policy with Korea DF, and 3) a very disciplined discount policy. </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.

Owing to a weak but expected 4Q earnings, CTGDF’s recent share price has pulled back by 10%+ to its pre-reopening level.While lockdown risk has already behind us, we again see buying opportunity when earnings momentum, in our view, troughed, and subsequently picks up within 1H23E.Our call is further supported by channel check findings in which 1) YTD DF sales still tracking 20%+, 2) inelastic procurement demand from reseller given the prevailing logistic bottleneck and less favorable rebate policy with Korea DF, and 3) a very disciplined discount policy. 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.

CTGDF (601888 CH) – Still the crown jewel among reopening plays

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

<ul><li>China’s luxury market contracted 10% in 2022, ending a five-year streak of growth as Beijing’s “zero-Covid” policy and a slowing economy hit spending</li><li>Repeated Covid-related lockdowns starting in the second quarter curbed travel and consumption, with shopping mall traffic falling by 30% to 35%</li><li>Sales at Hainan’s duty-free shops operated by state-owned China Duty Free Group Co. Ltd. were expected to drop 30% to 35 billion yuan ($515 million) last year.</li></ul>

China’s luxury market contracted 10% in 2022, ending a five-year streak of growth as Beijing’s “zero-Covid” policy and a slowing economy hit spendingRepeated Covid-related lockdowns starting in the second quarter curbed travel and consumption, with shopping mall traffic falling by 30% to 35%Sales at Hainan’s duty-free shops operated by state-owned China Duty Free Group Co. Ltd. were expected to drop 30% to 35 billion yuan ($515 million) last year.

China’s Luxury Market Contracts for First Time in Five Years

<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

China Tourism Group Duty Free Corporation Limited engages in sales of duty free goods and tax goods. The Company sells tobacco, wine and spirits, perfume, cosmetics, fashion and accessories, watches, jewelry, food, luggage products,and other products. China Tourism Group Duty Free also engages in investment and development of tourism destination commercial complexes.

China Tourism Group Duty Free Corp Ltd (601888 CH)

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China Tourism Group Duty Free Corp Ltd (601888 CH)

CTGDF (601888 CH) – Overseas Travel a Lingering Headwind to Valuation

With year-to-date overseas travel recovery tracking c.30% of that in 2019, however, we think year-end recovery rate should reasonably reach 70%+

CMB International

China Consumer – Expecting Encouraging Data from the 5.1 Holiday This Year

According to various sources and news we monitor, air passenger during the holiday is likely to surpass 9mn persons, tracking approximately 110% of...

CMB International

CTGDF (601888 CH) – Still the crown jewel among reopening plays

Owing to a weak but expected 4Q earnings, CTGDF’s recent share price has pulled back by 10%+ to its pre-reopening level.

CMB International

China’s Luxury Market Contracts for First Time in Five Years

China’s luxury market contracted 10% in 2022, ending a five-year streak of growth as Beijing’s “zero-Covid” policy and a slowing economy hit spending

Caixin Global

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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