Research from Quam Securities, Quam Securities

Quam Securities Research

Research from Quam Securities

Quam Securities

Since its inception in 1986, Quam Securities Limited (Quam Securities) has grown to become one of the few mid-tier securities brokerages in Hong Kong with global execution capabilities for both private and institutional clients. It boasts a well-established network in Greater China including Taiwan and in major world markets through the Global Alliance Partners (GAP). Quam Securities is well-positioned not only to harness and drive business within the China Tonghai International Financial Limited but also between China and the world markets.

Thematic (Sector/Industry)

<ul><li>MIIT recently released Aug operating data for the telecoms industry in China. On items related to revenues, MIIT reported on YTD basis and, for 8M22, telecoms industry revenue grew 8.2% y/y, which slowed marginally from 8.3% for 7M22.</li><li>Mobile data traffic revenue, which is the single biggest item and accounted for 40.9% of total industry revenue in 8M22, edged up 0.5% y/y.</li><li>Revenue of new businesses, which include IPTV, IDC, big data, cloud and IoT, continued to be the star performer with YTD y/y growth of 34.1%.</li></ul>

MIIT recently released Aug operating data for the telecoms industry in China. On items related to revenues, MIIT reported on YTD basis and, for 8M22, telecoms industry revenue grew 8.2% y/y, which slowed marginally from 8.3% for 7M22.Mobile data traffic revenue, which is the single biggest item and accounted for 40.9% of total industry revenue in 8M22, edged up 0.5% y/y.Revenue of new businesses, which include IPTV, IDC, big data, cloud and IoT, continued to be the star performer with YTD y/y growth of 34.1%.

Tactical Trade Ideas – Telecoms-A Small Step in Revenue Growth, a Giant Leap in Sentiment

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.

<div><div><div><div><ul><li>We regard the domestic telecom sector as a defensive play amid macro- economic pressure, consumer weakness, rising uncertainties, etc.</li><li>We expect China telcos to be the most favorable defensive picks with ample FCF, high dividend yield and potential share repo opportunities.</li><li>China Mobile’s (600941 CH/941 HK) share price grew 12.5%/8.3% YTD. The investors’ appetite seems to confirm our previous prediction “Good compound returns (dividends, share repo) in an environment of uncertainty will become more valued by investors.” </li></ul></div></div></div></div><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>

We regard the domestic telecom sector as a defensive play amid macro- economic pressure, consumer weakness, rising uncertainties, etc.We expect China telcos to be the most favorable defensive picks with ample FCF, high dividend yield and potential share repo opportunities.China Mobile’s (600941 CH/941 HK) share price grew 12.5%/8.3% YTD. The investors’ appetite seems to confirm our previous prediction “Good compound returns (dividends, share repo) in an environment of uncertainty will become more valued by investors.” 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.

China 5G Sector – Expect telecom names continue to show strength in broad market weakness

<ul><li>We initiate coverage on the three Chinese telcos following their impressive 1H22 results.</li><li>We rate all three as BUYs with China Unicom (762 HK, BUY) and China Telecom (728 HK, BUY) as our top picks.</li><li>Despite their outperformance YTD, all three are still attractive in PE valuation with a range of 5.6-7.5x FY23 earnings and div yld of 9.5- 9.9%.</li></ul>

We initiate coverage on the three Chinese telcos following their impressive 1H22 results.We rate all three as BUYs with China Unicom (762 HK, BUY) and China Telecom (728 HK, BUY) as our top picks.Despite their outperformance YTD, all three are still attractive in PE valuation with a range of 5.6-7.5x FY23 earnings and div yld of 9.5- 9.9%.

TMT – Chinese Telcos - Growth Momentum Sustained

Asia biased macro & technical analysis, Untying The Gordian Knot

Untying The Gordian Knot

Asia biased macro & technical analysis

A differentiated process with a primary focus on Asia. Technical Analysis as core and Macro drivers that could bring the view to fruition & changes that could make the idea fall apart. The objective is to be the best in class, hence corner shop.

Technical Analysis

<ul><li>The Hang Seng index constituents have moved away from just local Hong Kong shares to being dominated by China H and China-centric shares</li><li>Focusing on these constituents adds much value, especially with shifting liquidity away from US-listed ADS to HKEX listed shares.</li><li>It brings together a more diverse investor base ranging from local Hong Kong, mainland China and the rest of the world.</li></ul>

The Hang Seng index constituents have moved away from just local Hong Kong shares to being dominated by China H and China-centric sharesFocusing on these constituents adds much value, especially with shifting liquidity away from US-listed ADS to HKEX listed shares.It brings together a more diverse investor base ranging from local Hong Kong, mainland China and the rest of the world.

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Equity Capital Markets

<ul><li>The Hong Kong Stock Exchange (HKEX) launched its new dual-currency counter Monday, and the first batch of 24 stocks had a total turnover of 163 million yuan ($22.9 million) on the first day.</li><li>The Hong Kong Dollar-yuan dual-currency counter allows investors to trade and settle designated shares in Hong Kong or mainland China currency, offering the potential to access new liquidity.</li><li>The model also lays the groundwork to support the next phase of development to allow investors from the Chinese mainland to trade Hong Kong-listed yuan, or renminbi, securities through the southbound Stock Connect, the HKEX said.</li></ul>

The Hong Kong Stock Exchange (HKEX) launched its new dual-currency counter Monday, and the first batch of 24 stocks had a total turnover of 163 million yuan ($22.9 million) on the first day.The Hong Kong Dollar-yuan dual-currency counter allows investors to trade and settle designated shares in Hong Kong or mainland China currency, offering the potential to access new liquidity.The model also lays the groundwork to support the next phase of development to allow investors from the Chinese mainland to trade Hong Kong-listed yuan, or renminbi, securities through the southbound Stock Connect, the HKEX said.

HKEX Launches Yuan Counter for Trading of Hong Kong-Listed Shares

Hong Kong

China Mobile is a Chinese state-owned telecommunications company that provides mobile voice, data, and multimedia services through its extensive nationwide network across mainland China and Hong Kong. It also offers fixed-line broadband, enterprise solutions, and cloud services, leveraging advanced 4G and 5G technologies. The company was incorporated in Hong Kong on September 3, 1997, and is headquartered in Beijing, China.

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China Mobile (941 HK)

Tactical Trade Ideas – Telecoms-A Small Step in Revenue Growth, a Giant Leap in Sentiment

Mobile data traffic revenue, which is the single biggest item and accounted for 40.9% of total industry revenue in 8M22, edged up 0.5% y/y.

Quam Securities

China 5G Sector – Expect telecom names continue to show strength in broad market weakness

We expect China telcos to be the most favorable defensive picks with ample FCF, high dividend yield and potential share repo opportunities.

CMB International

TMT – Chinese Telcos - Growth Momentum Sustained

Despite their outperformance YTD, all three are still attractive in PE valuation with a range of 5.6-7.5x FY23 earnings and div yld of 9.5- 9.9%.

Quam Securities

Hang Seng Index Constituents

The Hang Seng index constituents have moved away from just local Hong Kong shares to being dominated by China H and China-centric shares

Untying The Gordian Knot

HKEX Launches Yuan Counter for Trading of Hong Kong-Listed Shares

The Hong Kong Stock Exchange (HKEX) launched its new dual-currency counter Monday, and the first batch of 24 stocks had a total turnover of 163...

Caixin Global

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