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

Inner Mongolia Yili Industrial Group (A) / Equity Bottom-Up

Inner Mongolia Yili Industrial Group (A) (600887 CH)

<ul><li>2Q results came in slightly below us, with revenue and net profits growing only 1%/3% (vs CMBIe MSD growth for both), respectively.</li><li>We attribute this to &lt;1%/- 9% growth/decline in liquid milk/milk powder revenue, when both exhibited slowdown from 1Q. Management did not explicitly revise down the 10% full year revenue guidance, and looks forward to seeing the below to help attain the target.</li><li>These include 1) the continued double-digit growth in Satine, when premium room-temp milk remains popular among health-conscious consumers; 2) a recovery on 2C demand for cheese products, as initiatives taken for 2C (new launches) and 2B (consumer education) should start bearing fruit; 3) a gradual recovery on low-temp SKU along with the resumption of consumption habits post-pandemic; and 4) the resolution of patent bottleneck associated with Ausnutria. </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 results came in slightly below us, with revenue and net profits growing only 1%/3% (vs CMBIe MSD growth for both), respectively.We attribute this to &lt;1%/- 9% growth/decline in liquid milk/milk powder revenue, when both exhibited slowdown from 1Q. Management did not explicitly revise down the 10% full year revenue guidance, and looks forward to seeing the below to help attain the target.These include 1) the continued double-digit growth in Satine, when premium room-temp milk remains popular among health-conscious consumers; 2) a recovery on 2C demand for cheese products, as initiatives taken for 2C (new launches) and 2B (consumer education) should start bearing fruit; 3) a gradual recovery on low-temp SKU along with the resumption of consumption habits post-pandemic; and 4) the resolution of patent bottleneck associated with Ausnutria. 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.

Yili Industrial (600887 CH) – 2Q Rev/Np +1%/3%; All Eyes on Cost Savings

<ul><li>We hosted a NDR with Yili management to obtain follow-up post the company’s investor day on 14th Jul and 2Q operational update.</li><li>Overall, Yili maintained its initial guidance of a HSD top line growth with a 0.3pp uptake in net margins for the year.</li><li>On a sequential basis, 2Q sales has further accelerated from that of 1Q. </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 hosted a NDR with Yili management to obtain follow-up post the company’s investor day on 14th Jul and 2Q operational update.Overall, Yili maintained its initial guidance of a HSD top line growth with a 0.3pp uptake in net margins for the year.On a sequential basis, 2Q sales has further accelerated from that of 1Q. 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.

Yili Industrial (600887 CH) – Full-Year Guidance Unchanged

<ul><li>We see trading opportunity on Yili into results season.</li><li>This would mainly be underpinned by 1) an easy and stabilizing earnings expectation (for both 4Q22 and 2023E), when we see subdued downside risk to current consensus estimates, and 2) a lagging valuation to peers who have already been re-rated on reopening sentiment.</li><li>We argue the stock could play near term catch-up, when a likely in line 4Q could relieve market sentiment. </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 see trading opportunity on Yili into results season.This would mainly be underpinned by 1) an easy and stabilizing earnings expectation (for both 4Q22 and 2023E), when we see subdued downside risk to current consensus estimates, and 2) a lagging valuation to peers who have already been re-rated on reopening sentiment.We argue the stock could play near term catch-up, when a likely in line 4Q could relieve market sentiment. 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.

Yili Industrial (600887 CH) – Shares could rally in relief on back of an in line 4Q22

<ul><li>Share price down 10% post 3Q results. Despite a conservative guidance, net profits came in at 10% lower than consensus at RMB1.9bn, down 27% YoY, driven mainly by 1) a decelerating revenue growth at 7% (vs 2Q 11%), 2) a thinner organic GPM of 30.9% (vs YTD 32.9%) and a 3.3pp increase in opex ratio.</li><li>The surge of opex ratio was eye-catching, and was mainly attributable to 1) the operating deleverage of a slowdown in liquid milk sales upon cities’ lockdown, 2) a seasonally higher advertising expense with TV shows, which are mainly clustered in 3Q, and 3) the consolidation impact of Ausnutria.</li><li>4Q momentum showed sequential pick-up. Liquid milk demand has accelerated QoQ with healthy restocking momentum for the CNY in Jan 2023, per management during the earnings call.</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.

Share price down 10% post 3Q results. Despite a conservative guidance, net profits came in at 10% lower than consensus at RMB1.9bn, down 27% YoY, driven mainly by 1) a decelerating revenue growth at 7% (vs 2Q 11%), 2) a thinner organic GPM of 30.9% (vs YTD 32.9%) and a 3.3pp increase in opex ratio.The surge of opex ratio was eye-catching, and was mainly attributable to 1) the operating deleverage of a slowdown in liquid milk sales upon cities’ lockdown, 2) a seasonally higher advertising expense with TV shows, which are mainly clustered in 3Q, and 3) the consolidation impact of Ausnutria.4Q momentum showed sequential pick-up. Liquid milk demand has accelerated QoQ with healthy restocking momentum for the CNY in Jan 2023, per management during the earnings call.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.

Yili Industrial (600887 CH) – Sequential recovery in-sight

China

Inner Mongolia Yili Industrial Group Co., Ltd. produces milk, powdered milk, ice cream, and other dairy products.  The Company also produces frozen food and noodles.

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Yili Industrial (600887 CH) – 2Q Rev/Np +1%/3%; All Eyes on Cost Savings

2Q results came in slightly below us, with revenue and net profits growing only 1%/3% (vs CMBIe MSD growth for both), respectively.

CMB International

Yili Industrial (600887 CH) – Full-Year Guidance Unchanged

We hosted a NDR with Yili management to obtain follow-up post the company’s investor day on 14th Jul and 2Q operational update.

CMB International

Yili Industrial (600887 CH) – Shares could rally in relief on back of an in line 4Q22

We forecast 4Q revenue to grow 6% YoY to RMB27bn. Momentum in October and November has been weak, and a more obvious recovery has kicked-in in...

CMB International

Yili Industrial (600887 CH) – Sequential recovery in-sight

Share price down 10% post 3Q results. Despite a conservative guidance, net profits came in at 10% lower than consensus at RMB1.9bn, down 27% YoY

CMB International