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>AIA reported full-year results with VNB +33% YoY (CER basis, +30% on AER basis) to US$4,034mn, and ANP +45% YoY (CER basis, +41% on AER basis) to US$7,650mn, in line with our forecasts (VNB +31%, ANP +44% on AER basis).</li><li>We saw a narrowed downtrend in VNB margin to 52.6%, sequentially improved by 3.8pct to 54.5% in 2H23 (vs 1H23: 50.7%).</li><li>Among double-digit growth in four segments, AIA HK’s VNB remarkably rose 82% YoY underpinned by sequential growth in 4Q23 by capturing MCV demands against a sector-wide slowdown. </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.

AIA reported full-year results with VNB +33% YoY (CER basis, +30% on AER basis) to US$4,034mn, and ANP +45% YoY (CER basis, +41% on AER basis) to US$7,650mn, in line with our forecasts (VNB +31%, ANP +44% on AER basis).We saw a narrowed downtrend in VNB margin to 52.6%, sequentially improved by 3.8pct to 54.5% in 2H23 (vs 1H23: 50.7%).Among double-digit growth in four segments, AIA HK’s VNB remarkably rose 82% YoY underpinned by sequential growth in 4Q23 by capturing MCV demands against a sector-wide slowdown. 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.

AIA Group Ltd. (1299 HK) - FY23 VNB +33% in Line

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 statistics on top repurchases over one week, one month, one quarter and one year periods ended on May 3rd based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Meituan (3690 HK), Hang Seng Bank (11 HK), Swire Pacific (19 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Meituan (3690 HK), Hang Seng Bank (11 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on May 3rd based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Meituan (3690 HK), Hang Seng Bank (11 HK), Swire Pacific (19 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Meituan (3690 HK), Hang Seng Bank (11 HK).


Hong Kong Buybacks Weekly (May 3rd): Meituan, Hang Seng Bank, Swire Pacific

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>Over three quarters of Global equity managers are underweight China.  Average weights sit at the bottom of the 10 year range, with 18% of funds holding no exposure at all.</li>
<li>Continued rotation over the last 6-months. Within Asia, Japan has taken the lead as the key exposure, whilst Global funds prefer European countries as their main overweight positions.</li>
<li>Tencent owned by 22% of funds, Alibaba by just 18%.  China re-opening/COVID relaxation places Global funds vulnerable to outperformance.</li>
</ul>


Over three quarters of Global equity managers are underweight China.  Average weights sit at the bottom of the 10 year range, with 18% of funds holding no exposure at all.
Continued rotation over the last 6-months. Within Asia, Japan has taken the lead as the key exposure, whilst Global funds prefer European countries as their main overweight positions.
Tencent owned by 22% of funds, Alibaba by just 18%.  China re-opening/COVID relaxation places Global funds vulnerable to outperformance.


Founder of Antler Capital

Stanley Tsai, CFA

AIA <a href="https://www.smartkarma.com/entities/aia-group-ltd" target="_blank" data-smartkarma-citation="entities:14895:1" rel="noopener">(1299 HK)</a> 
AIA's proposed USD1.86bn minority investment in China Post Life marks a notable deviation from its long-held belief in maintaining control over its key operations. The transaction is touted as a barbell strategy that will give AIA's shareholders access to high-net worth clients on the one hand and the mass market on the other. In our view, the economics to China Post Life are clear, but the benefits to AIA may be more subtle (Exhibit 1).
The deal is fairly immaterial to AIA financially. At 1.34x historical P/B, the investment represents less than 0.6% of AIA's assets and 0.3% its IFRS capital. Valuation is in line with New China Life-A's <a href="https://www.smartkarma.com/entities/new-china-life-insurance-co-ltd" target="_blank" data-smartkarma-citation="entities:43:1" rel="noopener">(601336 CH)</a>, but we don't believe AIA is in it to turn a quick profit.
China Post Life stands to benefit almost immediately. The cash injection will boost the insurer's core solvency ratio from 110% to above 200%. But much more important is the promise of product ramp-ups, service upgrades, and sales training. On these fronts, China Post Life will be learning from the best.
The benefits AIA derives from the deal may be somewhat less tangible, but no less significant. The investment places the Hong Kong-based insurer front and center in the country's drive to widen the mass market's financial access. The unique position of the China Postal Group may open other doors down the road.
We are naturally skeptical of all insurance M&amp;As and joint ventures as so few of them have worked globally. That said, financial and executive risks seem to be well contained with the China Post Life transaction. While it may be an overstatement to call this transaction politically motivated, the potential regulatory and policy tailwinds it promises must be the envy of many of AIA's competitors.
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 100%;">Exhibit 1: AIA's China Footprint</td>
</tr>
<tr>
<td style="width: 100%;">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/216/534/original/image_81757729821625228313721.png?1625228314" class="editor-image img-responsive" data-smartkarma-image-id="216534"></figure>
Source: China Banking and Insurance Regulatory Commission (CBIRC), National Bureau of Statistics, Company disclosures, Our analysis
</td>
</tr>
</tbody>
</table>
Related Insight
<ul>
<li>
<a href="https://www.smartkarma.com/insights/china-financials-silver-linings-playbook" target="_blank" data-smartkarma-citation="insights:53013" rel="noopener">China Financials: Silver Linings Playbook</a> </li>
</ul>

AIA (1299 HK) 
AIA's proposed USD1.86bn minority investment in China Post Life marks a notable deviation from its long-held belief in maintaining control over its key operations. The transaction is touted as a barbell strategy that will give AIA's shareholders access to high-net worth clients on the one hand and the mass market on the other. In our view, the economics to China Post Life are clear, but the benefits to AIA may be more subtle (Exhibit 1).
The deal is fairly immaterial to AIA financially. At 1.34x historical P/B, the investment represents less than 0.6% of AIA's assets and 0.3% its IFRS capital. Valuation is in line with New China Life-A's (601336 CH), but we don't believe AIA is in it to turn a quick profit.
China Post Life stands to benefit almost immediately. The cash injection will boost the insurer's core solvency ratio from 110% to above 200%. But much more important is the promise of product ramp-ups, service upgrades, and sales training. On these fronts, China Post Life will be learning from the best.
The benefits AIA derives from the deal may be somewhat less tangible, but no less significant. The investment places the Hong Kong-based insurer front and center in the country's drive to widen the mass market's financial access. The unique position of the China Postal Group may open other doors down the road.
We are naturally skeptical of all insurance M&amp;As and joint ventures as so few of them have worked globally. That said, financial and executive risks seem to be well contained with the China Post Life transaction. While it may be an overstatement to call this transaction politically motivated, the potential regulatory and policy tailwinds it promises must be the envy of many of AIA's competitors.



Exhibit 1: AIA's China Footprint




Source: China Banking and Insurance Regulatory Commission (CBIRC), National Bureau of Statistics, Company disclosures, Our analysis




Related Insight


China Financials: Silver Linings Playbook 


AIA / China Post Life Deal: A Worthwhile Excursion

Thematic (Sector/Industry)

In the spirit of the long-awaited UEFA Euro 2020, we present our inaugural "China Financials: Silver Linings Playbook", which summarizes our views on the names that are best positioned to navigate an environment of progressively slower credit growth, tighter liquidity and rising defaults. 
Our screen consists of 100+ stocks in the A/H share universe, as well as a select number of international / non-traditional names that have significant exposures to China's financial system. We have a preference for larger-cap and liquid names, which are then filtered by our opinions on their fundamentals, value, momentum and recent trading volumes. We also try to make our selections versatile and less vulnerable to single-factor movements.
Each player's position on the pitch and the team formation itself convey incremental information about our thoughts on the sector's performance over a three to six-month horizon. To the extent possible, we intend to update our ideas on a periodic basis. This provides a feedback loop with our other ongoing research on the industry.
However, our team selections are not investment recommendations. Instead, they are meant to give structure to our analysis. The playbook allows us to articulate our views on the sector in a timely, concise manner. Our objective is to ensure we don't throw the baby out with the bathwater as sentiments on the sector remain bleak.
With that out of the way, the following is our starting XI. We will dive deeper into our rationale for our selections in the remainder of this insight (Exhibit 1).
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 726.047px;">Exhibit 1: China Financials | Silver Linings Playbook</td>
</tr>
<tr>
<td style="width: 726.047px;">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/213/768/original/image_768460236451623962508577.png?1623962508" class="editor-image img-responsive" data-smartkarma-image-id="213768"></figure>

Source: Our analysis
</td>
</tr>
</tbody>
</table>
Related Insights
<a href="https://www.smartkarma.com/insights/china-macro-consumers-remain-on-the-sidelines-as-their-home-equity-grows" target="_blank" data-smartkarma-citation="insights:53210" rel="noopener">China Macro: Consumers Remain on the Sidelines, as Their Home Equity Grows</a> 
<a href="https://www.smartkarma.com/insights/glut-and-famine-we-might-see-snow-in-china-this-summer" target="_blank" data-smartkarma-citation="insights:52840" rel="noopener">Glut and Famine: We Might See Snow in China This Summer</a> 
<a href="https://www.smartkarma.com/insights/china-macro-ppi-peaks-while-cpi-eases-tightening-fears" target="_blank" data-smartkarma-citation="insights:52778" rel="noopener">China Macro: PPI Peaks, while CPI Eases Tightening Fears</a> 
<a href="https://www.smartkarma.com/insights/china-macro-exports-disappoint-but-it-s-still-early-in-the-game" target="_blank" data-smartkarma-citation="insights:52728" rel="noopener">China Macro: Exports Disappoint, but It's Still Early in the Game</a> 
<a href="https://www.smartkarma.com/insights/glut-and-famine-china-s-monetary-conditions-a-notch-tighter-in-may" target="_blank" data-smartkarma-citation="insights:51799" rel="noopener">Glut and Famine: China's Monetary Conditions a Notch Tighter in May</a> 
<a href="https://www.smartkarma.com/insights/icbc-the-bond-identity-a-zero-growth-dividend-discount-story" target="_blank" data-smartkarma-citation="insights:51463" rel="noopener">ICBC: The Bond Identity | A Zero-Growth Dividend Discount Story</a> 
<a href="https://www.smartkarma.com/insights/boc-aviation-2588-hk-the-stars-don-t-look-bigger-but-they-do-look-brighter" target="_blank" data-smartkarma-citation="insights:52283" rel="noopener">BOC Aviation (2588 HK): The Stars Don't Look Bigger, but They Do Look Brighter</a>

In the spirit of the long-awaited UEFA Euro 2020, we present our inaugural "China Financials: Silver Linings Playbook", which summarizes our views on the names that are best positioned to navigate an environment of progressively slower credit growth, tighter liquidity and rising defaults. 
Our screen consists of 100+ stocks in the A/H share universe, as well as a select number of international / non-traditional names that have significant exposures to China's financial system. We have a preference for larger-cap and liquid names, which are then filtered by our opinions on their fundamentals, value, momentum and recent trading volumes. We also try to make our selections versatile and less vulnerable to single-factor movements.
Each player's position on the pitch and the team formation itself convey incremental information about our thoughts on the sector's performance over a three to six-month horizon. To the extent possible, we intend to update our ideas on a periodic basis. This provides a feedback loop with our other ongoing research on the industry.
However, our team selections are not investment recommendations. Instead, they are meant to give structure to our analysis. The playbook allows us to articulate our views on the sector in a timely, concise manner. Our objective is to ensure we don't throw the baby out with the bathwater as sentiments on the sector remain bleak.
With that out of the way, the following is our starting XI. We will dive deeper into our rationale for our selections in the remainder of this insight (Exhibit 1).



Exhibit 1: China Financials | Silver Linings Playbook





Source: Our analysis




Related Insights
China Macro: Consumers Remain on the Sidelines, as Their Home Equity Grows 
Glut and Famine: We Might See Snow in China This Summer 
China Macro: PPI Peaks, while CPI Eases Tightening Fears 
China Macro: Exports Disappoint, but It's Still Early in the Game 
Glut and Famine: China's Monetary Conditions a Notch Tighter in May 
ICBC: The Bond Identity | A Zero-Growth Dividend Discount Story 
BOC Aviation (2588 HK): The Stars Don't Look Bigger, but They Do Look Brighter

China Financials: Silver Linings Playbook

Hong Kong

AIA Group Limited offers insurance and financial services. The Company writes life insurance for individuals, businesses, accident, and health insurance, as well as retirement planning and wealth management services.

AIA Group Ltd (1299 HK)