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

China Tourism Group Duty Free Corp Ltd / Equity Bottom-Up

China Tourism Group Duty Free Corp Ltd (601888 CH)

<ul><li>CTGDF reported preliminary 3Q financial data with revenue increasing by +27.9% YoY to RMB15.0bn, gross margins expanding to 34.3% (1Q/2Q: 28.8%/32.5%), and net profits growing +93.1% to RMB1.3bn.</li><li>The quarter’s revenue was apparently flattish compared to that of 2Q, and that should not come in as a surprise to the market given the trajectory we observed in the visitation momentum to Hainan (6M: 30.3% YoY vs 8M: 38.6% YoY).</li><li>Other than that, a slightly lower pre-tax margin of 10.8% (2Q: 11.9%) caught our attention and that was probably owing to higher revenue shares to airports. </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.

CTGDF reported preliminary 3Q financial data with revenue increasing by +27.9% YoY to RMB15.0bn, gross margins expanding to 34.3% (1Q/2Q: 28.8%/32.5%), and net profits growing +93.1% to RMB1.3bn.The quarter’s revenue was apparently flattish compared to that of 2Q, and that should not come in as a surprise to the market given the trajectory we observed in the visitation momentum to Hainan (6M: 30.3% YoY vs 8M: 38.6% YoY).Other than that, a slightly lower pre-tax margin of 10.8% (2Q: 11.9%) caught our attention and that was probably owing to higher revenue shares to airports. 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.

CTGDF (601888 CH) – 3Q Prelim Rev/Np +28%/93%; Estimates Unchanged

<ul><li>1H results were reportedly in line with preannouncement, with 1H/2Q revenue growing +29.7%/+38.8% YoY to RMB35.9bn/15.1bn and net profits changing by -1.9%/+13.8% YoY to RMB3.9bn/1.6bn, respectively.</li><li>We hold our view that near-term earnings expectation is settling, and we assert a symmetric earnings outlook for 2H, when visitation momentum to Hainan (7M23: +38% YoY) is likely to hold into the remainder of the year.</li><li>Meanwhile, efforts in upholding a disciplined pricing promotion is bearing fruit, in our view, with 2Q GPM improving 3.8pp QoQ to 32.8%. </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.

1H results were reportedly in line with preannouncement, with 1H/2Q revenue growing +29.7%/+38.8% YoY to RMB35.9bn/15.1bn and net profits changing by -1.9%/+13.8% YoY to RMB3.9bn/1.6bn, respectively.We hold our view that near-term earnings expectation is settling, and we assert a symmetric earnings outlook for 2H, when visitation momentum to Hainan (7M23: +38% YoY) is likely to hold into the remainder of the year.Meanwhile, efforts in upholding a disciplined pricing promotion is bearing fruit, in our view, with 2Q GPM improving 3.8pp QoQ to 32.8%. 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.

CTGDF (601888 CH) – 2Q in Line with Profit Alert; Subtle Recovery Ahead

<ul><li>2Q pre-announced. After market close last Friday (7 July), CTGDF preannounced major financial data for its 1H23 results.</li><li>Revenue came in at RMB35.9bn, up 29.7% YoY, when net profits reported at RMB3.9bn, down 1.9% YoY.</li><li>This implies 2Q23 revenue and net profits to be RMB15.1bn and RMB1.6bn, up 38.8% and 14.3% YoY, respectively. </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.

2Q pre-announced. After market close last Friday (7 July), CTGDF preannounced major financial data for its 1H23 results.Revenue came in at RMB35.9bn, up 29.7% YoY, when net profits reported at RMB3.9bn, down 1.9% YoY.This implies 2Q23 revenue and net profits to be RMB15.1bn and RMB1.6bn, up 38.8% and 14.3% YoY, respectively. 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.

CTGDF (601888 CH) – Earnings Expectation Is Settling

<ul><li>CTGDF’s shares have been a laggard and are c.30% behind its re-opening peers, on an assumption that international travel is set to recover and likely takes the wallet shares from domestic travelers.</li><li>With year-to-date overseas travel recovery tracking c.30% of that in 2019, however, we think year-end recovery rate should reasonably reach 70%+, slightly lower than a 90% ballpark estimates from talks we held with investors.</li><li>Meanwhile, despite a just-in-line 1Q results, we think GPM should continue to improve sequentially, driven by 1) an increasing higher-margin airport sales mix, 2) a better inventory mix with sufficient stocks on popular hardluxury/ fashion items, and 3) a consistently well-disciplined discount policy. Beyond these, during the earnings call, management remains upbeat on the outlook, and discussed a few positive operation updates.</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.

CTGDF’s shares have been a laggard and are c.30% behind its re-opening peers, on an assumption that international travel is set to recover and likely takes the wallet shares from domestic travelers.With year-to-date overseas travel recovery tracking c.30% of that in 2019, however, we think year-end recovery rate should reasonably reach 70%+, slightly lower than a 90% ballpark estimates from talks we held with investors.Meanwhile, despite a just-in-line 1Q results, we think GPM should continue to improve sequentially, driven by 1) an increasing higher-margin airport sales mix, 2) a better inventory mix with sufficient stocks on popular hardluxury/ fashion items, and 3) a consistently well-disciplined discount policy. Beyond these, during the earnings call, management remains upbeat on the outlook, and discussed a few positive operation updates.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.

CTGDF (601888 CH) – Overseas Travel a Lingering Headwind to Valuation

<ul><li>Owing to a weak but expected 4Q earnings, CTGDF’s recent share price has pulled back by 10%+ to its pre-reopening level.</li><li>While lockdown risk has already behind us, we again see buying opportunity when earnings momentum, in our view, troughed, and subsequently picks up within 1H23E.</li><li>Our call is further supported by channel check findings in which 1) YTD DF sales still tracking 20%+, 2) inelastic procurement demand from reseller given the prevailing logistic bottleneck and less favorable rebate policy with Korea DF, and 3) a very disciplined discount policy. </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.

Owing to a weak but expected 4Q earnings, CTGDF’s recent share price has pulled back by 10%+ to its pre-reopening level.While lockdown risk has already behind us, we again see buying opportunity when earnings momentum, in our view, troughed, and subsequently picks up within 1H23E.Our call is further supported by channel check findings in which 1) YTD DF sales still tracking 20%+, 2) inelastic procurement demand from reseller given the prevailing logistic bottleneck and less favorable rebate policy with Korea DF, and 3) a very disciplined discount policy. 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.

CTGDF (601888 CH) – Still the crown jewel among reopening plays

China

China Tourism Group Duty Free Corporation Limited engages in sales of duty free goods and tax goods. The Company sells tobacco, wine and spirits, perfume, cosmetics, fashion and accessories, watches, jewelry, food, luggage products,and other products. China Tourism Group Duty Free also engages in investment and development of tourism destination commercial complexes.

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CTGDF (601888 CH) – 3Q Prelim Rev/Np +28%/93%; Estimates Unchanged

CTGDF reported preliminary 3Q financial data with revenue increasing by +27.9% YoY to RMB15.0bn, gross margins expanding to 34.3% (1Q/2Q: 28.8%/32.5%)

CMB International

CTGDF (601888 CH) – 2Q in Line with Profit Alert; Subtle Recovery Ahead

1H results were reportedly in line with preannouncement, with 1H/2Q revenue growing +29.7%/+38.8% YoY to RMB35.9bn/15.1bn and net profits changing...

CMB International

CTGDF (601888 CH) – Earnings Expectation Is Settling

2Q pre-announced. After market close last Friday (7 July), CTGDF preannounced major financial data for its 1H23 results.

CMB International

CTGDF (601888 CH) – Overseas Travel a Lingering Headwind to Valuation

With year-to-date overseas travel recovery tracking c.30% of that in 2019, however, we think year-end recovery rate should reasonably reach 70%+

CMB International

CTGDF (601888 CH) – Still the crown jewel among reopening plays

Owing to a weak but expected 4Q earnings, CTGDF’s recent share price has pulled back by 10%+ to its pre-reopening level.

CMB International