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

Bosideng International Holdings / Equity Bottom-Up

<ul><li>1H9/23 was inline in general, except for the womenswear (drags on GP margin and impairment losses induced).</li><li>Despite the drags, the operating income was still growing at 31% YoY.</li><li>However, for the upcoming 2H23E, we urge investors to stay cautious to: 1) Covid-19 outbreaks, 2) macro-economic status and 3) the unfavorable weather in China. </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.

1H9/23 was inline in general, except for the womenswear (drags on GP margin and impairment losses induced).Despite the drags, the operating income was still growing at 31% YoY.However, for the upcoming 2H23E, we urge investors to stay cautious to: 1) Covid-19 outbreaks, 2) macro-economic status and 3) the unfavorable weather in China. 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.

Bosideng (3998 HK) – An inline 1H9/23 result but the macro is at risk

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>Lower losses for investment business and sportswear retailing have contributed to a 48.4% reduction in losses for 1H FY23 at <a href="https://www.smartkarma.com/entities/china-dongxiang-group-co" target="_blank" data-smartkarma-citation="entities:1068:1" rel="noopener">China Dongxiang Group Co (3818 HK)</a>.</li>
<li>The resumption of interim special dividend is a welcoming sign. Inventory clearance, store optimisation, cost reduction and growth at the PHENIX ski wear brands are positive drivers.</li>
<li>Its market capitalisation of HK$1.88bn represents a steep discount of 79% to its cash and investment portfolio of Rmb8.46bn, and this also means sportswear business is free.</li>
</ul>


Lower losses for investment business and sportswear retailing have contributed to a 48.4% reduction in losses for 1H FY23 at China Dongxiang Group Co (3818 HK).
The resumption of interim special dividend is a welcoming sign. Inventory clearance, store optimisation, cost reduction and growth at the PHENIX ski wear brands are positive drivers.
Its market capitalisation of HK$1.88bn represents a steep discount of 79% to its cash and investment portfolio of Rmb8.46bn, and this also means sportswear business is free.


China Dongxiang (3818 HK): Losses Narrowing Down, a Good Sign

Thematic (Sector/Industry)

<ul><li>In our last report dated 17 October, we highlighted a list of 21 long ideas.</li><li>The basket (equal weighted) of these 21 stocks underperformed MSCI China index by 5.4ppt, delivering 0.2% return (vs MSCI China 5.6%).</li><li>China Meidong Auto and Innovent Biologics delivered over 20% of return, and 4 of our 21 long ideas outperformed the benchmark.</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.

In our last report dated 17 October, we highlighted a list of 21 long ideas.The basket (equal weighted) of these 21 stocks underperformed MSCI China index by 5.4ppt, delivering 0.2% return (vs MSCI China 5.6%).China Meidong Auto and Innovent Biologics delivered over 20% of return, and 4 of our 21 long ideas outperformed the benchmark.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.

CMBI Research Focus List (November Edition) – Our best high conviction stock ideas

<ul>
<li>China's twists in its COVID combating measures are positive to the economy as many quarantine requirements are relaxed and secondary contacts are not identified and traced.</li>
<li>The latest change should bring more spending confidence to the consumers, and this will benefit consumer discretionary companies in the retail and F&amp;B sectors. </li>
<li>Relaxed quarantine requirements are positive to the travel and hospitality companies. Chinese airlines and international air tickets have seen immediate demand surge after the announcement.  </li>
</ul>


China's twists in its COVID combating measures are positive to the economy as many quarantine requirements are relaxed and secondary contacts are not identified and traced.
The latest change should bring more spending confidence to the consumers, and this will benefit consumer discretionary companies in the retail and F&amp;B sectors. 
Relaxed quarantine requirements are positive to the travel and hospitality companies. Chinese airlines and international air tickets have seen immediate demand surge after the announcement.  


China's Latest COVID Policy: What Are the Plays?

<ul>
<li>
<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> sees positive sales momentum in 3Q22 and will benefit from further distribution network optimisation. Potentially, Amer Sports will start positive contribution as well. </li>
<li>Rollout of "light down apparel" concept, introduction of Eileen Gu as spokesperson and opening of Shanghai flagship store will contribute to <a href="https://www.smartkarma.com/entities/bosideng-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:6537:1" rel="noopener">Bosideng International Holdings (3998 HK)</a>'s peak season. </li>
<li>
<a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home Co Ltd (6690 HK)</a> will benefit from Casarte's good growth pace and the catch-up in "Three-Winged Bird" stores. More emerging market expansions will drive overseas business. </li>
</ul>



Anta Sports Products (2020 HK) sees positive sales momentum in 3Q22 and will benefit from further distribution network optimisation. Potentially, Amer Sports will start positive contribution as well. 
Rollout of "light down apparel" concept, introduction of Eileen Gu as spokesperson and opening of Shanghai flagship store will contribute to Bosideng International Holdings (3998 HK)'s peak season. 

Haier Smart Home Co Ltd (6690 HK) will benefit from Casarte's good growth pace and the catch-up in "Three-Winged Bird" stores. More emerging market expansions will drive overseas business. 


China Consumer Discretionary: Looking Forward to the Spending Season

Hong Kong

Bosideng International Holdings Limited develops down apparel products in the Peoples Republic of China. The Company's products include down jackets, vests, and pants which it offers through retail outlets located in multiple cities.

Bosideng International Holdings (3998 HK)

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Bosideng International Holdings (3998 HK)

Bosideng (3998 HK) – An inline 1H9/23 result but the macro is at risk

1H9/23 was inline in general, except for the womenswear (drags on GP margin and impairment losses induced). Despite the drags, the operating income...

CMB International

China Dongxiang (3818 HK): Losses Narrowing Down, a Good Sign

Sharply lower losses and resumption of interim dividends should clear concerns on negative equity market and weak sportswear retailing. Share price...

Osbert Tang, CFA

CMBI Research Focus List (November Edition) – Our best high conviction stock ideas

In our last report dated 17 October, we highlighted a list of 21 long ideas.The basket (equal weighted) of these 21 stocks underperformed MSCI...

CMB International

China's Latest COVID Policy: What Are the Plays?

The refined COVID combating measures in China is welcoming and should benefit the consumer discretionary, travel and hospitality and airlines...

Osbert Tang, CFA

China Consumer Discretionary: Looking Forward to the Spending Season

Consumer spending should improve in 4Q22 as government pushes ahead stimulus and pent-up demand is further released. The recent retreat in share...

Osbert Tang, CFA

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