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)

<div><div><div><div><ul><li>China’s passenger-vehicle (PV) wholesale volume surged 37% YoY to 2.13mn units in Aug 2022, 1% higher than our prior projection.</li><li>Similar to Jul 2022, that figure made the best Aug wholesale volume in history and 13% higher than the second-best Aug sales occurred in 2017.</li><li>Retail sales volume, based on insurance data, rose 18% YoY to 1.89mn units, 2% lower than our prior forecast.</li></ul></div></div></div></div><p><em>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.</em></p>

China’s passenger-vehicle (PV) wholesale volume surged 37% YoY to 2.13mn units in Aug 2022, 1% higher than our prior projection.Similar to Jul 2022, that figure made the best Aug wholesale volume in history and 13% higher than the second-best Aug sales occurred in 2017.Retail sales volume, based on insurance data, rose 18% YoY to 1.89mn units, 2% lower than our prior forecast.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 – What we worried earlier is partially priced in now

Equity Bottom-Up

Eva Precision Industrial / Equity Bottom-Up

<ul><li>EVA’s 1H23 earnings beat our prior forecast despite lower revenue and GPM, due to higher other income and one-off gains.</li><li>We expect its Mexico plant to turn profitable in 2H23E, after meeting with management.</li><li>We expect EVA’s FY24E net profit to rise 20% YoY, mainly contributed by its Mexico plant and lower interest expense. </li></ul><p><em>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.</em></p>

EVA’s 1H23 earnings beat our prior forecast despite lower revenue and GPM, due to higher other income and one-off gains.We expect its Mexico plant to turn profitable in 2H23E, after meeting with management.We expect EVA’s FY24E net profit to rise 20% YoY, mainly contributed by its Mexico plant and lower interest expense. 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.

EVA Holdings (838 HK) – Better 2H23 and FY24 as Mexico to Turn Profitable

<ul><li>Despite lingering industry headwinds, we believe EVA Holdings’ profitability is on track to recover from weak 1Q23, especially with strong office automation (OA) equipment profit growth, based on our channel checks and meetings with various management in both auto parts and OA businesses, including chairman, CEO and CFO, during the past two months</li><li>We lower auto parts revenue projection amid industry headwinds.</li><li>We project EVA’s auto parts revenue to rise 20% YoY, or HK$ 350mn YoY, to HK$ 2.1bn in FY23E, lower than management’s guidance of HK$ 2.3bn to account for industrywide sales uncertainties, especially from internal combustion engine (ICE) cars. </li></ul><p><em>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.</em></p>

Despite lingering industry headwinds, we believe EVA Holdings’ profitability is on track to recover from weak 1Q23, especially with strong office automation (OA) equipment profit growth, based on our channel checks and meetings with various management in both auto parts and OA businesses, including chairman, CEO and CFO, during the past two monthsWe lower auto parts revenue projection amid industry headwinds.We project EVA’s auto parts revenue to rise 20% YoY, or HK$ 350mn YoY, to HK$ 2.1bn in FY23E, lower than management’s guidance of HK$ 2.3bn to account for industrywide sales uncertainties, especially from internal combustion engine (ICE) cars. 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.

EVA Holdings (838 HK) – Recovering Gradually

Research from Quam Securities, Quam Securities

Quam Securities Research

Research from Quam Securities

Quam Securities

Since its inception in 1986, Quam Securities Limited (Quam Securities) has grown to become one of the few mid-tier securities brokerages in Hong Kong with global execution capabilities for both private and institutional clients. It boasts a well-established network in Greater China including Taiwan and in major world markets through the Global Alliance Partners (GAP). Quam Securities is well-positioned not only to harness and drive business within the China Tonghai International Financial Limited but also between China and the world markets.

<ul><li>Intron, which is a provider of electronic solutions, mainly for vehicles, announced its 2022 annual result with a net profit growth of 107% on 52% growth in revenue and GPM expansion of 1.9 ppts to 21.5%.</li><li>The company has benefited from the strong growth in the NEV market in China as NEVs tend to packed with more electronic parts and components for many advanced features.</li><li>Although there is intense price competition in the auto market in China currently, this could offer more opportunities to the company as OEMs seek for more price competitive solutions from third-party suppliers. Intron is currently trading at 12x 2023 consensus P/E.</li></ul>

Intron, which is a provider of electronic solutions, mainly for vehicles, announced its 2022 annual result with a net profit growth of 107% on 52% growth in revenue and GPM expansion of 1.9 ppts to 21.5%.The company has benefited from the strong growth in the NEV market in China as NEVs tend to packed with more electronic parts and components for many advanced features.Although there is intense price competition in the auto market in China currently, this could offer more opportunities to the company as OEMs seek for more price competitive solutions from third-party suppliers. Intron is currently trading at 12x 2023 consensus P/E.

Intron (1760 HK, NR) - OEM Price War Could Be an Opportunity

Hong Kong

Eva Precision Industrial is a vertically integrated precision manufacturing services provider specializing in the design and fabrication of precision metal stamping and plastic injection moulds, and the manufacturing of related components. The company offers automated assembly services and produces components for office automation equipment, automotive products, and smart devices. Headquartered in Kowloon, Hong Kong, the company was founded in 1993.

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Eva Precision Industrial (838 HK)

China Auto Sector – What we worried earlier is partially priced in now

Similar to Jul 2022, that figure made the best Aug wholesale volume in history and 13% higher than the second-best Aug sales occurred in 2017.

CMB International

EVA Holdings (838 HK) – Better 2H23 and FY24 as Mexico to Turn Profitable

EVA’s 1H23 earnings beat our prior forecast despite lower revenue and GPM, due to higher other income and one-off gains.

CMB International

EVA Holdings (838 HK) – Recovering Gradually

We project EVA’s auto parts revenue to rise 20% YoY, or HK$ 350mn YoY, to HK$ 2.1bn in FY23E, lower than management’s guidance of HK$ 2.3bn

CMB International

Intron (1760 HK, NR) - OEM Price War Could Be an Opportunity

The company has benefited from the strong growth in the NEV market in China as NEVs tend to packed with more electronic parts and components for...

Quam Securities

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