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 noticed SemiAnalysis published an article on Jun 9 discussing potential deployment delays in 1) co-packaged optics (CPO) and 2) Nvidia’s native single-ended 800VDC architecture, which has triggered market debate and put pressure on AI infrastructure-related names, particularly optical, power semiconductor and datacom interconnect suppliers.</li><li>We think the note is better interpreted as a timing reset rather than a demand reset.</li><li>On optics, its conclusion is broadly consistent with our prior view that mass CPO adoption is unlikely before late-2027 at the earliest (see our prev. note), while pluggable optical modules and NPO should remain key deployment paths for the foreseeable future, supporting leading domestic optical module suppliers including Innolight (300308 CH, BUY) and Eoptolink (300502 CH, NR).</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 noticed SemiAnalysis published an article on Jun 9 discussing potential deployment delays in 1) co-packaged optics (CPO) and 2) Nvidia’s native single-ended 800VDC architecture, which has triggered market debate and put pressure on AI infrastructure-related names, particularly optical, power semiconductor and datacom interconnect suppliers.We think the note is better interpreted as a timing reset rather than a demand reset.On optics, its conclusion is broadly consistent with our prior view that mass CPO adoption is unlikely before late-2027 at the earliest (see our prev. note), while pluggable optical modules and NPO should remain key deployment paths for the foreseeable future, supporting leading domestic optical module suppliers including Innolight (300308 CH, BUY) and Eoptolink (300502 CH, NR).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.

Semiconductors - A quick read on recently reported CPO and 800VDC deployment delay

<ul><li>2025 has proven a standout year for optical transceiver suppliers with high AIexposures, with key suppliers posting stellar revenue growth and material margin expansion.</li><li>We expect this outperformance to persist through 2026 and beyond, underpinned by an unabated AI infrastructure investment cycle and a sustained mix shift to higher-value solutions.</li><li>We reiterate the sector as one of our top picks. Reiterate our BUY rating on Innolight (300308 CH, BUY, TP: RMB591.00), the 2024 global optical transceiver market leader, positioned to benefit from surging overseas AI capex and 1.6T demand.</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.

2025 has proven a standout year for optical transceiver suppliers with high AIexposures, with key suppliers posting stellar revenue growth and material margin expansion.We expect this outperformance to persist through 2026 and beyond, underpinned by an unabated AI infrastructure investment cycle and a sustained mix shift to higher-value solutions.We reiterate the sector as one of our top picks. Reiterate our BUY rating on Innolight (300308 CH, BUY, TP: RMB591.00), the 2024 global optical transceiver market leader, positioned to benefit from surging overseas AI capex and 1.6T demand.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.

Semiconductors - Optical transceivers – sustained AI-driven outperformance ahead

<ul><li>Alibaba released its 3QFY25 earnings (see our internet team report) with a significant step-up in capex plan for the next three years, the total of which is expected to surpass the company’s cumulative capex of the past decade, per mgmt., reaching as high as ~RMB120bn per year during CY2026-28E, according to our calculation.</li><li>We believe cloud service providers (CSPs) in China are trying to pick up the pace in capex in compute infrastructure to keep up with the relentless investment strides of overseas CSPs (Amazon, Meta, Microsoft, and Google).</li><li>We believe the ripple effects of Alibaba’s increased capex plan will benefit domestic AI infrastructure supply chain names, such as Innolight (300308 CH, BUY, TP: RMB186) and Shengyi Tech (600183 CH, BUY, TP: RMB34.5), which supply critical components (e.g., high-speed optical transceivers, ultra-low-loss CCL) for datacenter buildout.</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.

Alibaba released its 3QFY25 earnings (see our internet team report) with a significant step-up in capex plan for the next three years, the total of which is expected to surpass the company’s cumulative capex of the past decade, per mgmt., reaching as high as ~RMB120bn per year during CY2026-28E, according to our calculation.We believe cloud service providers (CSPs) in China are trying to pick up the pace in capex in compute infrastructure to keep up with the relentless investment strides of overseas CSPs (Amazon, Meta, Microsoft, and Google).We believe the ripple effects of Alibaba’s increased capex plan will benefit domestic AI infrastructure supply chain names, such as Innolight (300308 CH, BUY, TP: RMB186) and Shengyi Tech (600183 CH, BUY, TP: RMB34.5), which supply critical components (e.g., high-speed optical transceivers, ultra-low-loss CCL) for datacenter buildout.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.

Semiconductors - Thematic Investing and Megatrends

<ul><li>After two years of significant investments in AI infrastructure, investors are counting 2025 to be a transformational year for AI.</li><li>As market leaders will continue to deploy a large amount of capital in AI infrastructure buildout to widen their competitive moats, new themes in the downstream are rising, including AI agents, humanoid robots, robotaxi, etc.</li><li>We remain bullish on AI demand. We continue to rank AI theme as our top pick for 2025. Market leaders will continue to enjoy the AI tailwind beyond 2025.</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.

After two years of significant investments in AI infrastructure, investors are counting 2025 to be a transformational year for AI.As market leaders will continue to deploy a large amount of capital in AI infrastructure buildout to widen their competitive moats, new themes in the downstream are rising, including AI agents, humanoid robots, robotaxi, etc.We remain bullish on AI demand. We continue to rank AI theme as our top pick for 2025. Market leaders will continue to enjoy the AI tailwind beyond 2025.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.

Semiconductors -Stargate Poised to Accelerate Global AI Arms Race

<ul><li>China’s stock markets (both A/H shares) have soared recently on government stimulus policies.</li><li>Per Reuters, Chinese stocks recorded their biggest single-day gains since 2008, with highest turnover (domestic A-share) on 30 Sep.</li><li>As of 2 Oct 2024, HSI and CSI 300 have surged 32.2% and 18.5% YTD, respectively, currently ranking as top performing indices globally. </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.

China’s stock markets (both A/H shares) have soared recently on government stimulus policies.Per Reuters, Chinese stocks recorded their biggest single-day gains since 2008, with highest turnover (domestic A-share) on 30 Sep.As of 2 Oct 2024, HSI and CSI 300 have surged 32.2% and 18.5% YTD, respectively, currently ranking as top performing indices globally. 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.

Semiconductors - Sector Valuation Revisit After Recent Rally; Potential Rerating Opportunities Ahead

China

Eoptolink Technology Inc., Ltd.  designs and manufactures communication components.  The Company sells a variety of optical transceiver modules.  Eoptolink Technology sells products around the world.

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Eoptolink Technology (300502 CH)

Semiconductors - A quick read on recently reported CPO and 800VDC deployment delay

We noticed SemiAnalysis published an article on Jun 9 discussing potential deployment delays in 1) co-packaged optics (CPO) and 2) Nvidia’s native...

CMB International

Semiconductors - Optical transceivers – sustained AI-driven outperformance ahead

2025 has proven a standout year for optical transceiver suppliers with high AIexposures, with key suppliers posting stellar revenue growth and...

CMB International

Semiconductors - Thematic Investing and Megatrends

We believe cloud service providers (CSPs) in China are trying to pick up the pace in capex in compute infrastructure to keep up with the relentless...

CMB International

Semiconductors -Stargate Poised to Accelerate Global AI Arms Race

We remain bullish on AI demand. We continue to rank AI theme as our top pick for 2025. Market leaders will continue to enjoy the AI tailwind beyond...

CMB International

Semiconductors - Sector Valuation Revisit After Recent Rally; Potential Rerating Opportunities Ahead

China’s stock markets (both A/H shares) have soared recently on government stimulus policies. Per Reuters, Chinese stocks recorded their biggest...

CMB International

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