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>CRG’s operating performance showed better recovery, with retailed /residential/industrial/commercial gas sales up by 10%/13%/10%/17% YoY in Aug.</li><li>In Jan-Aug 2023, the retailed gas sales growth recorded 7.1% YoY. For dollar margin, CRG achieved RMB0.58/cbm in Aug and RMB0.52-0.53/cbm in Jan-Aug.</li><li>We regard CRG can reach the target of gas sales growth of 8% YoY and a dollar margin of RMB0.5/cbm. </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.

CRG’s operating performance showed better recovery, with retailed /residential/industrial/commercial gas sales up by 10%/13%/10%/17% YoY in Aug.In Jan-Aug 2023, the retailed gas sales growth recorded 7.1% YoY. For dollar margin, CRG achieved RMB0.58/cbm in Aug and RMB0.52-0.53/cbm in Jan-Aug.We regard CRG can reach the target of gas sales growth of 8% YoY and a dollar margin of RMB0.5/cbm. 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.

CR Gas (1193 HK) – Sound Operating Data in Aug with Steady Growth Outlook

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>We think <a href="https://www.smartkarma.com/entities/kunlun-energy-co-ltd" target="_blank" data-smartkarma-citation="entities:10054:1" rel="noopener">Kunlun Energy (135 HK)</a> will see its operating momentum accelerate in 2H23, leading by better natural gas sales growth and sustained positive dollar margin performance.</li>
<li>It has strengthened its financial position in 1H23, with net cash amounting to 36% of market cap. This has demonstrated its cash-generating capability and controlled capex. </li>
<li>Its 7.0x and 6.6x PERs for FY23 and FY24 are inexpensive. Its annualised ROE of 10.6% is also attractive. There is room for the other businesses to recover in 2H23.</li>
</ul>


We think Kunlun Energy (135 HK) will see its operating momentum accelerate in 2H23, leading by better natural gas sales growth and sustained positive dollar margin performance.
It has strengthened its financial position in 1H23, with net cash amounting to 36% of market cap. This has demonstrated its cash-generating capability and controlled capex. 
Its 7.0x and 6.6x PERs for FY23 and FY24 are inexpensive. Its annualised ROE of 10.6% is also attractive. There is room for the other businesses to recover in 2H23.


Kunlun Energy (135 HK): The Story Is Still Going On

<ul><li>CR Gas’s 1H23 net profit rose by 16% YoY to HK$3,545mn, beating market expectation.</li><li>The strong earnings growth was mainly driven by gas sales volume growth of 6.9% YoY on the back of rebound of residential and commercial gas sales, which contributed 12.0%/6.9% volume growth respectively.</li><li>Looking ahead in 2H23E, CR Gas expects gas consumption to continue to recover gradually, with dollar margin of RMB0.5/cbm.</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.

CR Gas’s 1H23 net profit rose by 16% YoY to HK$3,545mn, beating market expectation.The strong earnings growth was mainly driven by gas sales volume growth of 6.9% YoY on the back of rebound of residential and commercial gas sales, which contributed 12.0%/6.9% volume growth respectively.Looking ahead in 2H23E, CR Gas expects gas consumption to continue to recover gradually, with dollar margin of RMB0.5/cbm.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.

CR Gas (1193 HK) – 1H23 Results Marginally Beat

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 finally got to 80 <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index</a> constituents in June. Now comes the next step of moving up to 100 index constituents though there is no timeline for completion.</li>
<li>The conclusions of the market consultation on the inclusion of foreign stocks in the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index</a> should be announced soon though implementation could start only in December.</li>
<li>We highlight 10 potential inclusions to the index with passive trading impact varying from 1.5-5.6 days of ADV. There are large shorts on some of the stocks.</li>
</ul>


We finally got to 80 Hang Seng Index constituents in June. Now comes the next step of moving up to 100 index constituents though there is no timeline for completion.
The conclusions of the market consultation on the inclusion of foreign stocks in the Hang Seng Index should be announced soon though implementation could start only in December.
We highlight 10 potential inclusions to the index with passive trading impact varying from 1.5-5.6 days of ADV. There are large shorts on some of the stocks.


Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?

<ul>
<li>Dismal share price performance for <a href="https://www.smartkarma.com/entities/china-gas-holdings-ltd" target="_blank" data-smartkarma-citation="entities:14315:1" rel="noopener">China Gas Holdings (384 HK)</a> has created an opportunity for bottom fishing. Management also looks positive with 30% profit growth guidance for FY23.</li>
<li>There are rooms for good dollar margin recovery, unit sales rebound and improvement in free cash flow in FY24. Spin-off of value-added services is also a value-enhancing move. </li>
<li>De-Rating over the last three years has put the stock on undemanding multiples of 8x PER and 0.75x P/B. Its 14.8% 3-year EPS CAGR is also better than sector average.</li>
</ul>


Dismal share price performance for China Gas Holdings (384 HK) has created an opportunity for bottom fishing. Management also looks positive with 30% profit growth guidance for FY23.
There are rooms for good dollar margin recovery, unit sales rebound and improvement in free cash flow in FY24. Spin-off of value-added services is also a value-enhancing move. 
De-Rating over the last three years has put the stock on undemanding multiples of 8x PER and 0.75x P/B. Its 14.8% 3-year EPS CAGR is also better than sector average.


China Gas Holdings (384 HK): Worth a Bet Now

Hong Kong

China Resources Gas Group Limited is an investment holding company primarily engaged in the sale and distribution of natural and liquefied gas, and the construction and connection of gas pipelines. The company also offers comprehensive services including the sale of gas appliances and related products, and provides design, construction, consultancy, and management services for gas connection projects, as well as operating gas stations. It was incorporated in 1994 and is based in Wan Chai, Hong Kong.

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China Resources Gas (1193 HK)

CR Gas (1193 HK) – Sound Operating Data in Aug with Steady Growth Outlook

CRG’s operating performance showed better recovery, with retailed /residential/industrial/commercial gas sales up by 10%/13%/10%/17% YoY in Aug.

CMB International

Kunlun Energy (135 HK): The Story Is Still Going On

Kunlun is expected to accelerate its operating momentum in 2H23, driven by increased natural gas sales and a positive dollar margin. Its strong...

Osbert Tang, CFA

CR Gas (1193 HK) – 1H23 Results Marginally Beat

Looking ahead in 2H23E, CR Gas expects gas consumption to continue to recover gradually, with dollar margin of RMB0.5/cbm.

CMB International

Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?

There is just over a week to the announcement of the September changes for the HSI. A lot of the potential inclusions have outperformed the HSI...

Brian Freitas

China Gas Holdings (384 HK): Worth a Bet Now

There are rooms for good dollar margin recovery, unit sales rebound and improvement in free cash flow in FY24. Spin-off of value-added services is...

Osbert Tang, CFA

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52-week Range

Market Cap (USDm)

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CR Gas (1193 HK) – Sound Operating Data in Aug with Steady Growth Outlook

CRG’s operating performance showed better recovery, with retailed /residential/industrial/commercial gas sales up by 10%/13%/10%/17% YoY in Aug.

CMB International

Kunlun Energy (135 HK): The Story Is Still Going On

​Kunlun is expected to accelerate its operating momentum in 2H23, driven by increased natural gas sales and a positive dollar margin. Its strong...

Osbert Tang, CFA

CR Gas (1193 HK) – 1H23 Results Marginally Beat

Looking ahead in 2H23E, CR Gas expects gas consumption to continue to recover gradually, with dollar margin of RMB0.5/cbm.

CMB International

Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?

There is just over a week to the announcement of the September changes for the HSI. A lot of the potential inclusions have outperformed the HSI...

Brian Freitas

China Gas Holdings (384 HK): Worth a Bet Now

There are rooms for good dollar margin recovery, unit sales rebound and improvement in free cash flow in FY24. Spin-off of value-added services is...

Osbert Tang, CFA

Kunlun is expected to accelerate its operating momentum in 2H23, driven by increased natural gas sales and a positive dollar margin. Its strong...