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>We have now turned rather cautious about China Lilang in 2H24E, due to both macro conditions and company specific reasons like the DTC transformation and the surge in opex.</li><li>We still maintain a BUY but that was solely due to its attractive yield (9%) and valuation (9x FY24E P/E).</li><li>Turned more cautious about 2H24E, even though the Company is still making progress for product and brand upgrades</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 have now turned rather cautious about China Lilang in 2H24E, due to both macro conditions and company specific reasons like the DTC transformation and the surge in opex.We still maintain a BUY but that was solely due to its attractive yield (9%) and valuation (9x FY24E P/E).Turned more cautious about 2H24E, even though the Company is still making progress for product and brand upgradesContent 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 Lilang (1234 HK) - Guidance Cut Amid Uncertainties in 2H24E

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

<ul>
<li>Bearish sentiment in Hong Kong declined during the carry trade sell off.</li>
<li>Low Volatility, High Dividend and Value factors have continue to be profitable strategies in Hong Kong.</li>
<li>
<a href="https://www.smartkarma.com/entities/pop-mart-international-group-l" target="_blank" data-smartkarma-citation="entities:29016:1" rel="noopener">Pop Mart International Group L (9992 HK)</a> , <a href="https://www.smartkarma.com/entities/techtronic-industries-co-ltd" target="_blank" data-smartkarma-citation="entities:4561:1" rel="noopener">Techtronic Industries (669 HK)</a> and <a href="https://www.smartkarma.com/entities/giant-biogene-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:35950:1" rel="noopener">Giant Biogene (2367 HK)</a> all reported solid operating and financial news leading to BUY recommendations.
</li>
</ul>


Bearish sentiment in Hong Kong declined during the carry trade sell off.
Low Volatility, High Dividend and Value factors have continue to be profitable strategies in Hong Kong.

Pop Mart International Group L (9992 HK) , Techtronic Industries (669 HK) and Giant Biogene (2367 HK) all reported solid operating and financial news leading to BUY recommendations.



BUY/SELL/HOLD: Hong Kong Stock Updates (August 12)

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

Index Rebalance

<ul>
<li>We see 37 potential adds (including plenty of new listings) and 25 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in September.</li>
<li>We expect 32 stocks to be added to Southbound Stock Connect following the rebalance while 24 stocks could be deleted from the trading link and become Sell-only.</li>
<li>There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.</li>
</ul>


We see 37 potential adds (including plenty of new listings) and 25 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in September.
We expect 32 stocks to be added to Southbound Stock Connect following the rebalance while 24 stocks could be deleted from the trading link and become Sell-only.
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.


HSCI Index Rebalance Preview and Stock Connect: Potential Changes in September

<ul><li>The apparel sector performed well in general in 2H23 as we see China Lilang and JNBY reporting strong numbers (so will Bosideng, in our view).</li><li>Going into FY24E, we tend to be more picky, but China Lilang should still outperform, thanks to its own initiatives (improvements in operational efficiency as well as upgrades in product and brand quality, etc.).</li><li>More importantly, we think the downside is protected given its 8x FY24E P/E and 10% yield</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 apparel sector performed well in general in 2H23 as we see China Lilang and JNBY reporting strong numbers (so will Bosideng, in our view).Going into FY24E, we tend to be more picky, but China Lilang should still outperform, thanks to its own initiatives (improvements in operational efficiency as well as upgrades in product and brand quality, etc.).More importantly, we think the downside is protected given its 8x FY24E P/E and 10% yieldContent 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 Lilang (1234 HK) – Impressive FY24E Guidance with Decent Yield

HK/China Equity Long-Short

Osbert Tang, CFA

Bosideng International Holdings / Equity Bottom-Up

<ul>
<li>Even China's consumption market is tough, <a href="https://www.smartkarma.com/entities/bosideng-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:6537:1" rel="noopener">Bosideng Intl Holdings (3998 HK)</a> has still achieved a 25.1% profit growth. Revenue maintained a healthy trend while gross margin was stable.</li>
<li>Sales trend stayed solid in 2H FY24, and it ranked first in major online channels in various categories of apparel sales during the "double-11" shopping festival.</li>
<li>Store efficiency improved as revenue saw double-digit growth despite a 9.7% YoY fewer retail network. It is encouraging to see its 3-year target is to outperform the last 5 years.</li>
</ul>


Even China's consumption market is tough, Bosideng Intl Holdings (3998 HK) has still achieved a 25.1% profit growth. Revenue maintained a healthy trend while gross margin was stable.
Sales trend stayed solid in 2H FY24, and it ranked first in major online channels in various categories of apparel sales during the "double-11" shopping festival.
Store efficiency improved as revenue saw double-digit growth despite a 9.7% YoY fewer retail network. It is encouraging to see its 3-year target is to outperform the last 5 years.


Bosideng (3998 HK): Never Fail to Deliver

China

China Lilang Ltd. manufactures men's clothing and accessories.  The company produces suits, jackets, shirts, trousers, sweaters, and accessories.

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China Lilang (1234 HK)