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 Yongda Automobile Services Hldg / Equity Bottom-Up

<ul><li>Maintain BUY. We project Yongda’s 1H23E net profit to fall 34% YoY to RMB 445mn amid price war and we cut our FY23E net profit to RMB 1.2bn.</li><li>Given that major luxury automakers in China provided significant additional rebates to dealers in 1H23, we are of the view that new-car GPM of about 1% could be a bottom for Yongda.</li><li>We project 1H23E net profit to be RMB 445mn. We project Yongda’s newcar sales volume to rise 16% YoY to about 89,000 units in 1H23E due to low base, with average selling price falling about 11% YoY amid price war.</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.

Maintain BUY. We project Yongda’s 1H23E net profit to fall 34% YoY to RMB 445mn amid price war and we cut our FY23E net profit to RMB 1.2bn.Given that major luxury automakers in China provided significant additional rebates to dealers in 1H23, we are of the view that new-car GPM of about 1% could be a bottom for Yongda.We project 1H23E net profit to be RMB 445mn. We project Yongda’s newcar sales volume to rise 16% YoY to about 89,000 units in 1H23E due to low base, with average selling price falling about 11% YoY amid price war.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.

Yongda Automobiles (3669 HK) – 1H23E Preview: New-Car GPM Could Be a Bottom

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

Chow Tai Fook Jewellery / Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/trip-com-group-ltd-23a341d0-4f63-4175-a8c5-ee990906cacd" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com (9961 HK)</a> and <a href="https://www.smartkarma.com/entities/chow-tai-fook-jewellery-group" target="_blank" data-smartkarma-citation="entities:549:1" rel="noopener">Chow Tai Fook Jewellery (1929 HK)</a> could replace <a href="https://www.smartkarma.com/entities/country-garden-services-holdings-company-limited" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services Holdings (6098 HK)</a> and <a href="https://www.smartkarma.com/entities/zhongsheng-group-holdings" target="_blank" data-smartkarma-citation="entities:10573:1" rel="noopener">Zhongsheng Group (881 HK)</a> at the upcoming rebalance in September.</li>
<li>Estimated one-way turnover at the rebalance is 1.2% resulting in a one-way trade of HK$744m. The official capping will be done based on closing prices from 29 August.</li>
<li>Short interest has been rising on the potential adds and short covering could take the stocks higher, especially <a href="https://www.smartkarma.com/entities/chow-tai-fook-jewellery-group" target="_blank" data-smartkarma-citation="entities:549:1" rel="noopener">Chow Tai Fook Jewellery (1929 HK)</a>. </li>
</ul>



Trip.com (9961 HK) and Chow Tai Fook Jewellery (1929 HK) could replace Country Garden Services Holdings (6098 HK) and Zhongsheng Group (881 HK) at the upcoming rebalance in September.
Estimated one-way turnover at the rebalance is 1.2% resulting in a one-way trade of HK$744m. The official capping will be done based on closing prices from 29 August.
Short interest has been rising on the potential adds and short covering could take the stocks higher, especially Chow Tai Fook Jewellery (1929 HK). 


HSCEI Index Rebalance Preview: Two Changes Likely in September

Thematic (Sector/Industry)

<ul><li>Nine new-energy vehicle (NEV) brands including BYD, NIO, Xpeng, Li Auto, Zeekr, Aion, Aito, Neta and Leap reported their May 2023 sales volumes on 1 Jun 2023.</li><li>Sales volume of the nine brands combined rose 88% YoY (ranged from -26% to +146%) and 13% MoM (ranged from -8% to 38%) in May 2023.</li><li>Li Auto’s May sales more than doubled NIO and Xpeng combined.</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.

Nine new-energy vehicle (NEV) brands including BYD, NIO, Xpeng, Li Auto, Zeekr, Aion, Aito, Neta and Leap reported their May 2023 sales volumes on 1 Jun 2023.Sales volume of the nine brands combined rose 88% YoY (ranged from -26% to +146%) and 13% MoM (ranged from -8% to 38%) in May 2023.Li Auto’s May sales more than doubled NIO and Xpeng combined.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 Auto Sector – May NEV likely to hit second highest in history

<ul><li>Maintain BUY. We believe Yongda’s FY22 analyst briefing has reaffirmed our prior argument that after-sales services could be key earnings driver. </li><li>We are more conservative than management in terms of new-car sales in FY23E. We are of the view that a substantial YoY decline in 1Q23E NP could be largely priced in. </li><li>We expect Yongda’s earnings to improve sequentially each quarter in FY23E.</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.

Maintain BUY. We believe Yongda’s FY22 analyst briefing has reaffirmed our prior argument that after-sales services could be key earnings driver. We are more conservative than management in terms of new-car sales in FY23E. We are of the view that a substantial YoY decline in 1Q23E NP could be largely priced in. We expect Yongda’s earnings to improve sequentially each quarter in FY23E.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.

Yongda Automobiles (3669 HK) – FY23E NP to improve sequentially each quarter

<ul><li>Initiate with BUY. We initiate coverage of Yongda with a BUY rating and a target price of HK$ 8.50, based on 7x FY23E P/E.</li><li>Despite direct-sales attempts by some new-energy-vehicle (NEV) makers, we believe dealership business model is still justified.</li><li>We believe the majority of short-term negatives has been priced in given its low valuation now. </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.

Initiate with BUY. We initiate coverage of Yongda with a BUY rating and a target price of HK$ 8.50, based on 7x FY23E P/E.Despite direct-sales attempts by some new-energy-vehicle (NEV) makers, we believe dealership business model is still justified.We believe the majority of short-term negatives has been priced in given its low valuation now. 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.

Yongda Automobiles (3669 HK) – After-sales as earnings driver amid low valuation

China

China Yongda Automobiles Services Holdings Ltd. retails passenger vehicles. The Company sells new and used vehicles and offers automobile rentals. China Yongda Automobiles also provides service.

China Yongda Automobile Services Hldg (3669 HK)

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China Yongda Automobile Services Hldg (3669 HK)

Yongda Automobiles (3669 HK) – 1H23E Preview: New-Car GPM Could Be a Bottom

Maintain BUY. We project Yongda’s 1H23E net profit to fall 34% YoY to RMB 445mn amid price war and we cut our FY23E net profit to RMB 1.2bn.

CMB International

HSCEI Index Rebalance Preview: Two Changes Likely in September

There should be 2 changes to the HSCEI in September with Trip.com & CTF replacing CG Services & Zhongsheng. Short interest has been increasing on...

Brian Freitas

China Auto Sector – May NEV likely to hit second highest in history

Nine new-energy vehicle (NEV) brands including BYD, NIO, Xpeng, Li Auto, Zeekr, Aion, Aito, Neta and Leap reported their May 2023 sales volumes on...

CMB International

Yongda Automobiles (3669 HK) – FY23E NP to improve sequentially each quarter

Maintain BUY. We believe Yongda’s FY22 analyst briefing has reaffirmed our prior argument that after-sales services could be key earnings driver.

CMB International

Yongda Automobiles (3669 HK) – After-sales as earnings driver amid low valuation

Initiate with BUY. We initiate coverage of Yongda with a BUY rating and a target price of HK$ 8.50, based on 7x FY23E P/E.

CMB International

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