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

<ul><li>ZTE announced 1H24 results. Revenue increased by 2.9% YoY to RMB62.5bn, while net profit grew by 4.8% YoY to RMB5.7bn in 1H2.</li><li>Despite the headwinds from declining capex of domestic telcos for ZTE’s carrier business, non-carrier businesses managed to grew double-digits (14.3% and 56.1% YoY growth in consumer and govt/enterprise segments).</li><li>On a quarterly basis, 2Q24 revenue increased by 1.1% YoY / 4.4% QoQ, while net profit increased by 5.7% YoY / 9.1% QoQ.</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>

ZTE announced 1H24 results. Revenue increased by 2.9% YoY to RMB62.5bn, while net profit grew by 4.8% YoY to RMB5.7bn in 1H2.Despite the headwinds from declining capex of domestic telcos for ZTE’s carrier business, non-carrier businesses managed to grew double-digits (14.3% and 56.1% YoY growth in consumer and govt/enterprise segments).On a quarterly basis, 2Q24 revenue increased by 1.1% YoY / 4.4% QoQ, while net profit increased by 5.7% YoY / 9.1% QoQ.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.

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 Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 26th.</li>
<li>We estimate the weekly outflows to be US$1,578.2 million, led by consumer staples, information technology, financials, and offset by consumer discretionary, health care, utilities.</li>
<li>We highlight flows for Zijin Mining, Moutai, CATL, Zhongji Innolight, Wuliangye, Boe Technology.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 26th.
We estimate the weekly outflows to be US$1,578.2 million, led by consumer staples, information technology, financials, and offset by consumer discretionary, health care, utilities.
We highlight flows for Zijin Mining, Moutai, CATL, Zhongji Innolight, Wuliangye, Boe Technology.


Northbound Flows (Jul 26th): Zijin Mining, Moutai, Zhongji Innolight, Wuliangye, Boe Technology

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>A month out from cutoff for the September rebalance, we see one potential change for the <a href="https://www.smartkarma.com/entities/ishares-china-large-cap-etf" target="_blank" data-smartkarma-citation="entities:766:1" rel="noopener">iShares China Large-Cap (FXI) (FXI US)</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/china-tower-corp-ltd" target="_blank" data-smartkarma-citation="entities:27037:1" rel="noopener">China Tower (788 HK)</a> is a potential inclusion while <a href="https://www.smartkarma.com/entities/china-international-capital-corporation-ltd" target="_blank" data-smartkarma-citation="entities:1071:1" rel="noopener">China International Capital Corporation (3908 HK)</a> should be deleted from the ETF.</li>
<li>Shorts have been dropping in <a href="https://www.smartkarma.com/entities/china-tower-corp-ltd" target="_blank" data-smartkarma-citation="entities:27037:1" rel="noopener">China Tower (788 HK)</a> and are near their lows while increasing in <a href="https://www.smartkarma.com/entities/china-international-capital-corporation-ltd" target="_blank" data-smartkarma-citation="entities:1071:1" rel="noopener">China International Capital Corporation (3908 HK)</a>. </li>
</ul>


A month out from cutoff for the September rebalance, we see one potential change for the iShares China Large-Cap (FXI) (FXI US). 

China Tower (788 HK) is a potential inclusion while China International Capital Corporation (3908 HK) should be deleted from the ETF.
Shorts have been dropping in China Tower (788 HK) and are near their lows while increasing in China International Capital Corporation (3908 HK). 


FXI Rebalance Preview: One High Probability Change; One More Possible

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 12th.</li>
<li>We estimate the weekly inflows to be US$2,168.8 million, led by financials, information technology, utilities sectors, and offset by health care, communication services, energy.</li>
<li>We highlight flows for Moutai, Yangtze Power, Ping An Insurance, Cosco Shipping, CNNP.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 12th.
We estimate the weekly inflows to be US$2,168.8 million, led by financials, information technology, utilities sectors, and offset by health care, communication services, energy.
We highlight flows for Moutai, Yangtze Power, Ping An Insurance, Cosco Shipping, CNNP.


Northbound Flows (Jul 12th): Moutai, Yangtze Power, Ping An Insurance, Cosco Shipping, CNNP

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.</li>
<li>Last week saw NORTHBOUND net SELL RMB 21.9bn of A-shares. NORTHBOUND bought tech and sold everything else, especially consumer names. Kweichow Moutai, Midea, appliances and renewables.</li>
<li>Ongoing questions as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected from earlier announcements.</li>
</ul>


The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net SELL RMB 21.9bn of A-shares. NORTHBOUND bought tech and sold everything else, especially consumer names. Kweichow Moutai, Midea, appliances and renewables.
Ongoing questions as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected from earlier announcements.


Mainland Connect NORTHBOUND Flows (To 14 June 2024): Large Tech Buying, Large Consumer Selling

China

ZTE Corporation develops and markets switches, access servers, videoconferencing systems, mobile communication systems, data communication devices, and optical communication devices.  The Company also offers networking solutions for setup, refurbishment and optimization of networks.

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ZTE Corp H (763 HK)

ZTE (763 HK) - Mixed 1H24 Results

The stock is currently trading at 7x 2024E P/E, 1-SD below its 3-year historical avg. Maintain BUY rating with adjusted TP at HK$22.17.

CMB International

Northbound Flows (Jul 26th): Zijin Mining, Moutai, Zhongji Innolight, Wuliangye, Boe Technology

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Zijin Mining, Moutai, CATL, Zhongji Innolight,...

Ke Yan, CFA, FRM

FXI Rebalance Preview: One High Probability Change; One More Possible

There should be 1 change for the FXI ETF in Sep. There could be another change if Wuxi Apptec underperforms some of the other stocks by 3% over the...

Brian Freitas

Northbound Flows (Jul 12th): Moutai, Yangtze Power, Ping An Insurance, Cosco Shipping, CNNP

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Moutai, Yangtze Power, Ping An Insurance, Cosco...

Ke Yan, CFA, FRM

Mainland Connect NORTHBOUND Flows (To 14 June 2024): Large Tech Buying, Large Consumer Selling

Mainland Connect NORTHBOUND flows this past 4-day week were heavily to the sell side. Consumer Staples/Discretionary were HUGE net sells. Tech was...

Travis Lundy

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