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

<ul><li>3Q net profit grew 16.0% YoY to RMB16.9bn. The growth momentum sequentially decelerated from 20.8% in 1H, as revenue of the quarter slowed in tandem to 13.1% from 19.4% in 1H.</li><li>The 17% 9M revenue growth still largely tracks to consensus estimates; however, an unchanged 15% full year revenue growth guidance could imply 4Q revenue growth to dip further to HSD%, the lowest we note since 3Q20.</li><li>In fact, the trend looks to go hand-in-hand with distributors’ reluctance to restock after the Golden Week Holiday, when consumers have been increasingly trading down, and when sentiment to consume has been languishing. </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 net profit grew 16.0% YoY to RMB16.9bn. The growth momentum sequentially decelerated from 20.8% in 1H, as revenue of the quarter slowed in tandem to 13.1% from 19.4% in 1H.The 17% 9M revenue growth still largely tracks to consensus estimates; however, an unchanged 15% full year revenue growth guidance could imply 4Q revenue growth to dip further to HSD%, the lowest we note since 3Q20.In fact, the trend looks to go hand-in-hand with distributors’ reluctance to restock after the Golden Week Holiday, when consumers have been increasingly trading down, and when sentiment to consume has been languishing. 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.

Kweichow Moutai (600519 CH) – 3Q Rev/Np +13%/16%; Mixed Near-Term Outlook

<ul><li>Moutai announced 2Q results that matched with its pre-announcement, and we do not expect the numbers to be eventful to near term share price.</li><li>While Moutai has been a laggard of the recent baijiu sector rally in response to a positive market takeaway from the recent politburo meeting, the company remains a solid defensive name which shields itself from any malignant price competition through its brand scarcity.</li><li>Our recent channel check with distributors indicated that prices of sealed/unpacked Feitian Moutai steadied at RMB2,940/2,740 per bottle by end-July, largely unchanged from that we observed in early June, not to mention a healthy 15-day inventory level. </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.

Moutai announced 2Q results that matched with its pre-announcement, and we do not expect the numbers to be eventful to near term share price.While Moutai has been a laggard of the recent baijiu sector rally in response to a positive market takeaway from the recent politburo meeting, the company remains a solid defensive name which shields itself from any malignant price competition through its brand scarcity.Our recent channel check with distributors indicated that prices of sealed/unpacked Feitian Moutai steadied at RMB2,940/2,740 per bottle by end-July, largely unchanged from that we observed in early June, not to mention a healthy 15-day inventory level. 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.

Kweichou Moutai (600519 CH) – 2Q Rev/NP +20.4/21.0% as Pre-Announced

Thematic (Sector/Industry)

<ul><li>We had diverging takeaways from our distributor chancel check after the Dragon Boat Festival holiday, with beer being the only segment with positive momentum over 2Q.</li><li>Considering the price gap between beer and other alcoholic drinks, and also the growing preference of low alcoholic content, in our view, breweries still offer a multi-year story that looks to be sustainable in the next 4-5 years.</li><li>In the contrary, we continue to see near-term drags in baijiu, dairies and condiments that not only led to a lacklustre 2Q but also a possible slow 2H. </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 had diverging takeaways from our distributor chancel check after the Dragon Boat Festival holiday, with beer being the only segment with positive momentum over 2Q.Considering the price gap between beer and other alcoholic drinks, and also the growing preference of low alcoholic content, in our view, breweries still offer a multi-year story that looks to be sustainable in the next 4-5 years.In the contrary, we continue to see near-term drags in baijiu, dairies and condiments that not only led to a lacklustre 2Q but also a possible slow 2H. 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 Staples – Divergence continues

<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

<ul><li>Moutai released its 1Q preliminary financial data that beat expectation with revenue/ net profits growing by 18/19%, respectively.</li><li>The data tracked above the 15% management guidance given for the numbers for the full year of 2023.</li><li>We attribute the strength mainly to the incremental sales growth from iMoutai and a strong premiumization effort.</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.

Moutai released its 1Q preliminary financial data that beat expectation with revenue/ net profits growing by 18/19%, respectively.The data tracked above the 15% management guidance given for the numbers for the full year of 2023.We attribute the strength mainly to the incremental sales growth from iMoutai and a strong premiumization effort.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.

Kweichow Moutai (600519 CH) – 1Q came in slightly higher than we expected

China

Kweichow Moutai Co., Ltd. manufactures spirits.  The Company's spirit products are distilled from sorghum and wheat.  Kweichow Moutai markets its products worldwide.

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Kweichow Moutai (600519 CH)