Analyst

Steve

Thematic (Sector/Industry)

<ul>
<li>China's beer sector is still trading up, despite the deflation concerns of the overall China consumer sector.</li>
<li>Visible ASP growth and margin improvement over the next few years make the sector an attractive investment opportunity.</li>
<li>Prefer <a href="https://www.smartkarma.com/entities/china-resources-beer-holdings" target="_blank" data-smartkarma-citation="entities:399:1" rel="noopener">China Resources Beer Holdings (291 HK)</a> as it offers the best risk-reward within the sector.  </li>
</ul>


China's beer sector is still trading up, despite the deflation concerns of the overall China consumer sector.
Visible ASP growth and margin improvement over the next few years make the sector an attractive investment opportunity.
Prefer China Resources Beer Holdings (291 HK) as it offers the best risk-reward within the sector.  


China Beer Sector: One of The Few Consumer Sectors That Are Still Trading Up After The Pandemic

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 Resources Beer Holdings / Equity Bottom-Up

<ul><li>2Q preview. 1H23 operational performance came in largely in line with midsingle-digit volume growth, although that of 1Q was slightly stronger than 2Q due to Chinese New Year impact.</li><li>By segment, sub-premium+ delivered 20% growth, with Heineken achieving 30%+.</li><li>Meanwhile, SuperX and others saw teen growth. By channel, restaurant demand has fully recovered to prepandemic levels, while that from night life has been ramping up. </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.

2Q preview. 1H23 operational performance came in largely in line with midsingle-digit volume growth, although that of 1Q was slightly stronger than 2Q due to Chinese New Year impact.By segment, sub-premium+ delivered 20% growth, with Heineken achieving 30%+.Meanwhile, SuperX and others saw teen growth. By channel, restaurant demand has fully recovered to prepandemic levels, while that from night life has been ramping up. 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.

CR Beer (291 HK) – Expecting a Solid 1H23

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 Hong Kong Connect flows with our data engine for holding position as of July 7th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We analyzed southbound Hong Kong connect flows in the past week and highlight flows for  China Mobile, ICBC, ABC, Tencent, HSBC, BYD.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of July 7th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We analyzed southbound Hong Kong connect flows in the past week and highlight flows for  China Mobile, ICBC, ABC, Tencent, HSBC, BYD.


Hong Kong Connect Flows (Jul 7th): China Mobile, ICBC, ABC, Tencent, HSBC, BYD

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

<ul>
<li>An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top 100 stocks in the MSCI GEM Index.</li>
<li>The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.</li>
<li>Developed over roughly 4 years and implemented in its current state for over 3 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.</li>
</ul>


An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top 100 stocks in the MSCI GEM Index.
The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.
Developed over roughly 4 years and implemented in its current state for over 3 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.


<ul><li>We had diverging takeaways from our distributor chancel check after the Dragon Boat Festival holiday, with beer being the only segment with positive momentum over 2Q.</li><li>Considering the price gap between beer and other alcoholic drinks, and also the growing preference of low alcoholic content, in our view, breweries still offer a multi-year story that looks to be sustainable in the next 4-5 years.</li><li>In the contrary, we continue to see near-term drags in baijiu, dairies and condiments that not only led to a lacklustre 2Q but also a possible slow 2H. </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 had diverging takeaways from our distributor chancel check after the Dragon Boat Festival holiday, with beer being the only segment with positive momentum over 2Q.Considering the price gap between beer and other alcoholic drinks, and also the growing preference of low alcoholic content, in our view, breweries still offer a multi-year story that looks to be sustainable in the next 4-5 years.In the contrary, we continue to see near-term drags in baijiu, dairies and condiments that not only led to a lacklustre 2Q but also a possible slow 2H. 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 Staples – Divergence continues

Hong Kong

China Resources Beer (Holdings) Company Limited is an alcoholic beverage retailer.

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China Resources Beer Holdings (291 HK)

China Beer Sector: One of The Few Consumer Sectors That Are Still Trading Up After The Pandemic

China's beer sector is still trading up, despite the deflation concerns of the overall China consumer sector. One of the best consumer sectors to...

Steve

CR Beer (291 HK) – Expecting a Solid 1H23

1H23 operational performance came in largely in line with midsingle-digit volume growth, although that of 1Q was slightly stronger than 2Q due to...

CMB International

Hong Kong Connect Flows (Jul 7th): China Mobile, ICBC, ABC, Tencent, HSBC, BYD

We analyzed the Hong Kong Connect Scheme for last week and highlight flows for China Mobile, ICBC, ABC, Tencent, HSBC, BYD.

Ke Yan, CFA, FRM

Screening for GEMs: July 2023

This insight provides an overview of our, machine learning-driven, proprietary GEM screening model, based on a Multifactor model, a Deep Neural...

Wium Malan, CFA

China Consumer Staples – Divergence continues

We had diverging takeaways from our distributor chancel check after the Dragon Boat Festival holiday, with beer being the only segment with...

CMB International

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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