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.

Thematic (Sector/Industry)

<ul><li>The aluminium sector has come under pressure since early Apr due to the ease of conflict in the Middle East, the potential restriction of bauxite export from Guinea and sector rotation.</li><li>We reiterate our view that the resumptions of aluminium production being affected in the Middle East will likely take 12-18 months, due to the expensive and time-consuming process to drain and reline the pots (for details, please refer to our sector note “A prolonged supply deficit even assuming the end of Iran war” published on 12 May).</li><li>Besides, any unexpected restart of conflict over the medium term, which is also likely given the lack of trust between the US and Iran, will add uncertainties to the regional aluminium supply from time to time, in our view. </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.

The aluminium sector has come under pressure since early Apr due to the ease of conflict in the Middle East, the potential restriction of bauxite export from Guinea and sector rotation.We reiterate our view that the resumptions of aluminium production being affected in the Middle East will likely take 12-18 months, due to the expensive and time-consuming process to drain and reline the pots (for details, please refer to our sector note “A prolonged supply deficit even assuming the end of Iran war” published on 12 May).Besides, any unexpected restart of conflict over the medium term, which is also likely given the lack of trust between the US and Iran, will add uncertainties to the regional aluminium supply from time to time, in our view. 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.

Materials - Concerns Largely Priced In; Attractive Valuation

<ul><li>Based on our updated industry model, we estimate global aluminium supply deficit will widen to 2% of global demand in 2026E (versus our previous estimate of 1.1%), even after factoring in softer aluminium demand amid slower global GDP growth resulting from the Iran war.</li><li>The key reason for the deficit is the significant production disruptions at smelters in the Middle East.</li><li>We expect a full resumption in the Middle East could take up to 18 months, even assuming the end of war from now. </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.

Based on our updated industry model, we estimate global aluminium supply deficit will widen to 2% of global demand in 2026E (versus our previous estimate of 1.1%), even after factoring in softer aluminium demand amid slower global GDP growth resulting from the Iran war.The key reason for the deficit is the significant production disruptions at smelters in the Middle East.We expect a full resumption in the Middle East could take up to 18 months, even assuming the end of war from now. 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.

Materials - Aluminium: A prolonged supply deficit even assuming the end of Iran war

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>The materials, healthcare, and tech sectors are leading the Hong Kong market out of its consolidation pattern, with January shaping up to be one of the best in years.</li>
<li>China and Hong Kong ETF flows were the strongest in Asia during 2025 posting significant inflows throughout the year although Korea had the most significant increase at 600%.</li>
<li>
<a href="https://www.smartkarma.com/entities/trip-com-group-ltd-23a341d0-4f63-4175-a8c5-ee990906cacd" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com Group (9961 HK)</a> share price plunged after it announced an investigation into its monopolistic business practices. <a href="https://www.smartkarma.com/entities/haidilao-international-holding" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao International Holding (6862 HK)</a> shares jumped after the founder returned as CEO.
</li>
</ul>


The materials, healthcare, and tech sectors are leading the Hong Kong market out of its consolidation pattern, with January shaping up to be one of the best in years.
China and Hong Kong ETF flows were the strongest in Asia during 2025 posting significant inflows throughout the year although Korea had the most significant increase at 600%.

Trip.com Group (9961 HK) share price plunged after it announced an investigation into its monopolistic business practices. Haidilao International Holding (6862 HK) shares jumped after the founder returned as CEO.



The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (January 14)

<ul>
<li>The Hong Kong Alpha portfolio outperformed its benchmark and all Hong Kong indexes in 2025 with an overall gain of 48.41%.  The portfolio achieved a Sharpe ratio of 1.86.</li>
<li>Alpha generation represented 59% of the portfolio's gains in 2025.  Most of this came from the materials, healthcare, and energy sectors.  HKALPHA had low exposure to the real estate sector.</li>
<li>As the Hong Kong market ends its consolidation, we added tech exposure at the end of the year and reduced underperforming positions in mostly in the utility sector.</li>
</ul>


The Hong Kong Alpha portfolio outperformed its benchmark and all Hong Kong indexes in 2025 with an overall gain of 48.41%.  The portfolio achieved a Sharpe ratio of 1.86.
Alpha generation represented 59% of the portfolio's gains in 2025.  Most of this came from the materials, healthcare, and energy sectors.  HKALPHA had low exposure to the real estate sector.
As the Hong Kong market ends its consolidation, we added tech exposure at the end of the year and reduced underperforming positions in mostly in the utility sector.


HONG KONG ALPHA PORTFOLIO: (December 2025)

<ul>
<li>The Hong Kong Alpha portfolio returned -2.89% in November versus +1.72% for its benchmark index. The HK Alpha portfolio has outperformed Hong Kong indexes by 33% to 45% since inception.</li>
<li>The portfolio continues to generate 57% of its returns from alpha (idiosyncratic returns) while maintaining a Sharpe ratio of 2.19 YTD.</li>
<li>We have sold positions in the materials and industrials sectors and added positions in telecom, gold, and insurance industries at the end of November.</li>
</ul>


The Hong Kong Alpha portfolio returned -2.89% in November versus +1.72% for its benchmark index. The HK Alpha portfolio has outperformed Hong Kong indexes by 33% to 45% since inception.
The portfolio continues to generate 57% of its returns from alpha (idiosyncratic returns) while maintaining a Sharpe ratio of 2.19 YTD.
We have sold positions in the materials and industrials sectors and added positions in telecom, gold, and insurance industries at the end of November.


HONG KONG ALPHA PORTFOLIO: (November 2025)

China

Aluminum Corporation of China is a leading integrated aluminum producer, engaged in bauxite mining, alumina refining, primary aluminum smelting, and the production of aluminum alloys and carbon products. The company also operates in energy, trading, and logistics. It was founded in 2001 and is headquartered in Beijing, China.

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Aluminum Corporation of China (2600 HK)

Materials - Concerns Largely Priced In; Attractive Valuation

The aluminium sector has come under pressure since early Apr due to the ease of conflict in the Middle East, the potential restriction of bauxite...

CMB International

Materials - Aluminium: A prolonged supply deficit even assuming the end of Iran war

Based on our updated industry model, we estimate global aluminium supply deficit will widen to 2% of global demand in 2026E (versus our previous...

CMB International

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (January 14)

Trip.com Group (9961 HK) price plunged after it announced an investigation into its monopolistic business practices. Haidilao International Holding...

David Mudd

HONG KONG ALPHA PORTFOLIO: (December 2025)

We have made several mid-month adjustments to the portfolio. We sold Sinofert (297), ENN Energy (2688) and Power Assets (6). We added positions in...

David Mudd

HONG KONG ALPHA PORTFOLIO: (November 2025)

We made small changes to the HK Alpha portfolio mid-month. At the close on 12/12 we sold all of First Pacific (142 HK) and added 2% to our...

David Mudd

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