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.

Thematic (Sector/Industry)

<ul><li>We expect encouraging 5.1 travel data. According to various sources and news we monitor, air passenger during the holiday is likely to surpass 9mn persons, tracking approximately 110% of the level we saw in 2019.</li><li>Splitting between domestic and overseas travellers, the former will likely grow by approximately 25%, while, for the latter, the recovery could track up to 30-40% of that in 2019.</li><li>By destination, air ticket booking to Hainan grew by 1.5x, and Hainan represented 93% of the travel destination of domestic trips.</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 expect encouraging 5.1 travel data. According to various sources and news we monitor, air passenger during the holiday is likely to surpass 9mn persons, tracking approximately 110% of the level we saw in 2019.Splitting between domestic and overseas travellers, the former will likely grow by approximately 25%, while, for the latter, the recovery could track up to 30-40% of that in 2019.By destination, air ticket booking to Hainan grew by 1.5x, and Hainan represented 93% of the travel destination of domestic trips.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 Consumer – Expecting Encouraging Data from the 5.1 Holiday This Year

Equity Bottom-Up

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

<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

<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>Sanya’s lockdown weighed on CTGDF’s 3Q results as we expected, with recurring net profits standing at RMB656mn, down ~45%, as we exclude non-core Beijing airport rental concession and Hainan tax cut impact.</li><li>Despite this, revenue of the quarter rose 8% QoQ to RMB11.7bn, when online sales with Sunrise Shanghai made up most of the offline hiccups.</li><li>The change in sales mix also led to an almost 10pp/11pp QoQ decline in GPM/ OPM to 24.7%/ 12.5%, 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.

Sanya’s lockdown weighed on CTGDF’s 3Q results as we expected, with recurring net profits standing at RMB656mn, down ~45%, as we exclude non-core Beijing airport rental concession and Hainan tax cut impact.Despite this, revenue of the quarter rose 8% QoQ to RMB11.7bn, when online sales with Sunrise Shanghai made up most of the offline hiccups.The change in sales mix also led to an almost 10pp/11pp QoQ decline in GPM/ OPM to 24.7%/ 12.5%, 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) – A Weak 3Q on Sanya’s Lockdown

<ul><li>3Q wrapped up with 2 beats, 2 in-lines and 2 misses. We revised our 2022E earnings forecasts by -1 to -23%, and that put us roughly 5-25% below consensus.</li><li>In our view, risks are still skewed to the downside, barring any sporadic lockdowns.</li><li>When policy rhetoric is not turning, we again see grounds on the enforcement of “stay put for the holiday” for the coming CNY holiday.</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.

3Q wrapped up with 2 beats, 2 in-lines and 2 misses. We revised our 2022E earnings forecasts by -1 to -23%, and that put us roughly 5-25% below consensus.In our view, risks are still skewed to the downside, barring any sporadic lockdowns.When policy rhetoric is not turning, we again see grounds on the enforcement of “stay put for the holiday” for the coming CNY holiday.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 Consumer – Lacklustre 4Q22E Outlook Despite Any Short-Lived Rally; Top Buy CRB/ Proya/ CTGDF

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.

China Tourism Group Duty Free Corp Ltd (601888 CH)

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China Tourism Group Duty Free Corp Ltd (601888 CH)

China Consumer – Expecting Encouraging Data from the 5.1 Holiday This Year

According to various sources and news we monitor, air passenger during the holiday is likely to surpass 9mn persons, tracking approximately 110% of...

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

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

CTGDF (601888 CH) – A Weak 3Q on Sanya’s Lockdown

Despite this, revenue of the quarter rose 8% QoQ to RMB11.7bn, when online sales with Sunrise Shanghai made up most of the offline hiccups.

CMB International

China Consumer – Lacklustre 4Q22E Outlook Despite Any Short-Lived Rally; Top Buy CRB/ Proya/ CTGDF

3Q wrapped up with 2 beats, 2 in-lines and 2 misses. We revised our 2022E earnings forecasts by -1 to -23%, and that put us roughly 5-25% below...

CMB International

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