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

361 Degrees International / Equity Bottom-Up

<ul><li>361 Degrees’s FY23 result was roughly inline but we are delighted to see its dividend payout ratio resumed to 40%.</li><li>Going forward in FY24E, we are still confident, thanks to: 1) its wholesale business nature (supported by 80%+ sell through rate), 2) resilient retail sales growth (20%+ in Jan-Feb 2024) and 3) solid product and branding upgrades around running and basketball.</li><li>We do appreciate 361 Degrees’s wholesale business nature, because the growth could be more certain.</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.

361 Degrees’s FY23 result was roughly inline but we are delighted to see its dividend payout ratio resumed to 40%.Going forward in FY24E, we are still confident, thanks to: 1) its wholesale business nature (supported by 80%+ sell through rate), 2) resilient retail sales growth (20%+ in Jan-Feb 2024) and 3) solid product and branding upgrades around running and basketball.We do appreciate 361 Degrees’s wholesale business nature, because the growth could be more certain.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.

361 Degrees (1361 HK) – Resilient Outlook Backed by Rising Popularity

<ul><li>We initiate BUY on 361 Degrees with TP of HK$6.23 based on 10x FY24E P/E.</li><li>We forecast 16%/20% sales/ NP CAGRs in FY22-25E vs 7%/20% during FY19-22, driven by major improvements in: 1) star products and endorsement quality, 2) offline store images and e-commerce strategy, and 3) kids business.</li><li>Noted that 361 Degrees’ YTD returns was 25%, the highest among all peers.</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 initiate BUY on 361 Degrees with TP of HK$6.23 based on 10x FY24E P/E.We forecast 16%/20% sales/ NP CAGRs in FY22-25E vs 7%/20% during FY19-22, driven by major improvements in: 1) star products and endorsement quality, 2) offline store images and e-commerce strategy, and 3) kids business.Noted that 361 Degrees’ YTD returns was 25%, the highest among all peers.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.

361 Degrees (1361 HK) - Star Products & Sponsorships-Led Turnaround

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>The turnaround of sports business at <a href="https://www.smartkarma.com/entities/china-dongxiang-group-co" target="_blank" data-smartkarma-citation="entities:1068:1" rel="noopener">China Dongxiang (3818 HK)</a> is very welcoming. We are glad that sales trend in Oct-Nov is sustained and Phenix brand is well-received.</li>
<li>Reported losses widened as poor market environment enlarged investment losses. However, net cash and investment portfolio are still valued at Rmb8.5bn, or 5.9x its market capitalisation. </li>
<li>CNDX looks comfortably at over 6% full-year dividend yield. Together with just 0.15x P/B, there are enough protections for the downside of the stock.  </li>
</ul>


The turnaround of sports business at China Dongxiang (3818 HK) is very welcoming. We are glad that sales trend in Oct-Nov is sustained and Phenix brand is well-received.
Reported losses widened as poor market environment enlarged investment losses. However, net cash and investment portfolio are still valued at Rmb8.5bn, or 5.9x its market capitalisation. 
CNDX looks comfortably at over 6% full-year dividend yield. Together with just 0.15x P/B, there are enough protections for the downside of the stock.  


China Dongxiang (3818 HK): Turned Around on Sports Business

China Tourism Group Duty Free / Equity Bottom-Up

<ul>
<li>Our earnings projections for <a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free-corporation-limited" target="_blank" data-smartkarma-citation="entities:36229:1" rel="noopener">China Tourism Group Duty Free Corp Ltd (1880 HK)</a> are 14% and 18% below market consensus respectively. We think these are more realistic expectations.</li>
<li>At IPO price of HK$158, CDFC H-share sits on 23.9x FY23F PER. We think it is difficult to trade above 22x - the average for top consumer discretionary names.</li>
<li>Weakened visitor appetite to Sanya, potentially higher discounts, increase in border opening, higher fixed cost and uncertainties for duty free policies beyond 2025 are negative earnings factors.</li>
</ul>


Our earnings projections for China Tourism Group Duty Free Corp Ltd (1880 HK) are 14% and 18% below market consensus respectively. We think these are more realistic expectations.
At IPO price of HK$158, CDFC H-share sits on 23.9x FY23F PER. We think it is difficult to trade above 22x - the average for top consumer discretionary names.
Weakened visitor appetite to Sanya, potentially higher discounts, increase in border opening, higher fixed cost and uncertainties for duty free policies beyond 2025 are negative earnings factors.


CTG Duty Free (1880 HK): Our Earnings Forecasts and Views on H-Share Fair Value

<ul>
<li>After a solid FY23, <a href="https://www.smartkarma.com/entities/anta-sports-products-ltd" target="_blank" data-smartkarma-citation="entities:10261:1" rel="noopener">Anta Sports Products (2020 HK)</a>'s outlook for FY24 looks equally encouraging. Its various brands are expected to grow by 10-30% YoY still.  </li>
<li>Listing of <a href="https://www.smartkarma.com/entities/amer-sports-inc" target="_blank" data-smartkarma-citation="entities:21751:1" rel="noopener">Amer Sports (AS US)</a> will provide Rmb1.6bn non-recurring gain in 1H24. For the full year, there will be a positive swing in its profit contribution. </li>
<li>Anta Sports can be considered as a sportswear brand incubator, and its premium PERs of 18.3x and 15.9x for FY24 and FY25 reflect the ability to brew new brands. </li>
</ul>


After a solid FY23, Anta Sports Products (2020 HK)'s outlook for FY24 looks equally encouraging. Its various brands are expected to grow by 10-30% YoY still.  
Listing of Amer Sports (AS US) will provide Rmb1.6bn non-recurring gain in 1H24. For the full year, there will be a positive swing in its profit contribution. 
Anta Sports can be considered as a sportswear brand incubator, and its premium PERs of 18.3x and 15.9x for FY24 and FY25 reflect the ability to brew new brands. 


Anta Sports (2020 HK): Sustains Strengths into FY24

China

361 Degrees International Ltd. designs, develops, manufactures, markets and distributes sportswear products, including athletic footwear, apparel and accessories.

361 Degrees International (1361 HK)

361 Degrees (1361 HK) – Resilient Outlook Backed by Rising Popularity

361 Degrees’s FY23 result was roughly inline but we are delighted to see its dividend payout ratio resumed to 40%. Going forward in FY24E, we are...

CMB International

361 Degrees (1361 HK) - Star Products & Sponsorships-Led Turnaround

We initiate BUY on 361 Degrees with TP of HK$6.23 based on 10x FY24E P/E. We forecast 16%/20% sales/ NP CAGRs in FY22-25E vs 7%/20% during FY19-22,...

CMB International

China Dongxiang (3818 HK): Turned Around on Sports Business

Along with the encouraging 3Q FY24 (Oct-Dec 2023) sportswear sales - Kappa brand sales up mid 40%–50% YoY, China Dongxiang has benefited from the...

Osbert Tang, CFA

Anta Sports (2020 HK): Sustains Strengths into FY24

Anta's 1Q24 sales were lower than the full-year target, with ANTA brand up mid-single digit, FILA brand up high-single digit, and other brands up...

Osbert Tang, CFA

361 Degrees (1361 HK) – Resilient Outlook Backed by Rising Popularity

361 Degrees’s FY23 result was roughly inline but we are delighted to see its dividend payout ratio resumed to 40%. Going forward in FY24E, we are...

CMB International

361 Degrees (1361 HK) - Star Products & Sponsorships-Led Turnaround

We initiate BUY on 361 Degrees with TP of HK$6.23 based on 10x FY24E P/E. We forecast 16%/20% sales/ NP CAGRs in FY22-25E vs 7%/20% during FY19-22,...

CMB International

China Dongxiang (3818 HK): Turned Around on Sports Business

Along with the encouraging 3Q FY24 (Oct-Dec 2023) sportswear sales - Kappa brand sales up mid 40%–50% YoY, China Dongxiang has benefited from the...

Osbert Tang, CFA

CTG Duty Free (1880 HK): Our Earnings Forecasts and Views on H-Share Fair Value

CDFC's H-share lPO is priced too high relative to fair value based on our earnings forecasts. There are potentially better entry levels when the...

Osbert Tang, CFA

Anta Sports (2020 HK): Sustains Strengths into FY24

Anta's 1Q24 sales were lower than the full-year target, with ANTA brand up mid-single digit, FILA brand up high-single digit, and other brands up...

Osbert Tang, CFA