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

Luxshare Precision Industry / Equity Bottom-Up

<ul><li>Based on filings of Pegatron (iPhone OEM) on 28 Dec, Luxshare is expected to invest RMB 2.1bn for 62.5% stake of Pegatron’s iPhone assembly plant in Kunshan.</li><li>After the deal close, Luxshare will become the 2 nd largest iPhone assembler with 35%+ share after Foxconn, and Pegatron will target to reallocate resources and regional production capacity.</li><li>Despite recent macro headwinds and iPhone’s pressure from Huawei’s comeback, we believe Luxshare is wellpositioned for further share gain across Apple’s iPhone/ Watch /AirPods/Vision Pro supply chain in FY24/25E. </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.

Based on filings of Pegatron (iPhone OEM) on 28 Dec, Luxshare is expected to invest RMB 2.1bn for 62.5% stake of Pegatron’s iPhone assembly plant in Kunshan.After the deal close, Luxshare will become the 2 nd largest iPhone assembler with 35%+ share after Foxconn, and Pegatron will target to reallocate resources and regional production capacity.Despite recent macro headwinds and iPhone’s pressure from Huawei’s comeback, we believe Luxshare is wellpositioned for further share gain across Apple’s iPhone/ Watch /AirPods/Vision Pro supply chain in FY24/25E. 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.

Luxshare – Acquisition of Pegatron’s Kunshan Plant to Further Boost IPhone Assembly Share Gain

<ul><li>Luxshare posted 3Q23 revenue/NP growth of -8.5%/+15.4% YoY, and preannounced FY23E earnings growth of 17.5-22.5% YoY, implying 31% YoY in 4Q23E.</li><li>3Q23 earnings was largely in-line with the profit alert earlier, while weaker 3Q revenue was mainly due to 1) structural changes of communications product portfolio, 2) lack of wearables product launches, 3) SiP products delivery changes, 4) weaker Mini-LED sales, and 5) customer inventory corrections.</li><li>Looking forward, despite ongoing macro headwinds, we believe that Luxshare is well-positioned to benefit from gain share in iPhone/MacBook/iPad/Watch OEM/components, and capture opportunities in automobile tier-1 and comm. businesses.</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.

Luxshare posted 3Q23 revenue/NP growth of -8.5%/+15.4% YoY, and preannounced FY23E earnings growth of 17.5-22.5% YoY, implying 31% YoY in 4Q23E.3Q23 earnings was largely in-line with the profit alert earlier, while weaker 3Q revenue was mainly due to 1) structural changes of communications product portfolio, 2) lack of wearables product launches, 3) SiP products delivery changes, 4) weaker Mini-LED sales, and 5) customer inventory corrections.Looking forward, despite ongoing macro headwinds, we believe that Luxshare is well-positioned to benefit from gain share in iPhone/MacBook/iPad/Watch OEM/components, and capture opportunities in automobile tier-1 and comm. businesses.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.

Luxshare (002475 CH) – Resilient 3Q23 Despite Macro Headwinds

<ul><li>Luxshare retreated over 10% in the past week mainly due to market concerns on Huawei’s Mate 60 Pro launch and news report on iPhone restrictions by Chinese government and state companies.</li><li>We view both incidents do not have material impact on iPhone shipment given Mate 60’s limited production capacity and high user stickiness on Apple’s ecosystem.</li><li>Despite challenging macro headwinds, Luxshare delivered solid sales/NP growth of 20/15% YoY in 1H23, and we are positive on further share gain in Apple’s iPhone/Watch/AirPods OEM/component, robust outlook in auto/comm., and better operating efficiency in 2H23E. </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.

Luxshare retreated over 10% in the past week mainly due to market concerns on Huawei’s Mate 60 Pro launch and news report on iPhone restrictions by Chinese government and state companies.We view both incidents do not have material impact on iPhone shipment given Mate 60’s limited production capacity and high user stickiness on Apple’s ecosystem.Despite challenging macro headwinds, Luxshare delivered solid sales/NP growth of 20/15% YoY in 1H23, and we are positive on further share gain in Apple’s iPhone/Watch/AirPods OEM/component, robust outlook in auto/comm., and better operating efficiency in 2H23E. 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.

Luxshare (002475 CH) – Recent Correction Overdone

<ul><li>Luxshare posted FY22 revenue/NP growth of 39%/30% YoY, largely in-line with expectations, and it also pre-announced 1H23 earnings growth of 10-20% YoY, which we believe is resilient given weakness in smartphone/ consumer electronics market.</li><li>Given challenging macro headwinds, Luxshare delivered impressive operating efficiency and cost synergies.</li><li>Looking forward, following multiple strategic M&amp;As in 2020/21, we believe Luxshare is well-positioned to gain share in iPhone/Macbook/iPad/Watch OEM/components, and capture opportunities in automobile tier-1 biz and AR/VR product cycle. </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.

Luxshare posted FY22 revenue/NP growth of 39%/30% YoY, largely in-line with expectations, and it also pre-announced 1H23 earnings growth of 10-20% YoY, which we believe is resilient given weakness in smartphone/ consumer electronics market.Given challenging macro headwinds, Luxshare delivered impressive operating efficiency and cost synergies.Looking forward, following multiple strategic M&amp;As in 2020/21, we believe Luxshare is well-positioned to gain share in iPhone/Macbook/iPad/Watch OEM/components, and capture opportunities in automobile tier-1 biz and AR/VR product cycle. 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.

Luxshare (002475 CH) – Resilient FY22/1H23 despite industry headwinds

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>Industrials and Consumer Staples Remain Top Overweights, Though Sentiment Fragile for Both.</li>
<li>Energy sector shows signs of a turnaround from long-term decline, whilst Financials remain unloved by China investors.</li>
<li>Real Estate allocations have hit record lows, with average holdings at just 2.93%, while Consumer Discretionary sector approaches all-time highs.</li>
</ul>


Industrials and Consumer Staples Remain Top Overweights, Though Sentiment Fragile for Both.
Energy sector shows signs of a turnaround from long-term decline, whilst Financials remain unloved by China investors.
Real Estate allocations have hit record lows, with average holdings at just 2.93%, while Consumer Discretionary sector approaches all-time highs.


China

Luxshare Precision Industry Co., Ltd. researches, manufactures and sells connectors. The Company's products are widely used in computers, communication devices, consumer electronics products and automobiles.

Luxshare Precision Industry (002475 CH)

Luxshare (002475 CH) – Resilient 3Q23 Despite Macro Headwinds

Luxshare posted 3Q23 revenue/NP growth of -8.5%/+15.4% YoY, and preannounced FY23E earnings growth of 17.5-22.5% YoY, implying 31% YoY in 4Q23E.

CMB International

Luxshare (002475 CH) – Recent Correction Overdone

Luxshare retreated over 10% in the past week mainly due to market concerns on Huawei’s Mate 60 Pro launch and news report on iPhone restrictions by...

CMB International

Luxshare (002475 CH) – Resilient FY22/1H23 despite industry headwinds

Luxshare posted FY22 revenue/NP growth of 39%/30% YoY, largely in-line with expectations, and it also pre-announced 1H23 earnings growth of 10-20% YoY

CMB International

China Macro: Sector Positioning Update

Sector positioning among active China Funds. Industrials and Consumer Staples Remain Top Overweights, Energy shows signs of a turnaround, whilst...

Steven Holden

Luxshare – Acquisition of Pegatron’s Kunshan Plant to Further Boost IPhone Assembly Share Gain

Based on filings of Pegatron (iPhone OEM) on 28 Dec, Luxshare is expected to invest RMB 2.1bn for 62.5% stake of Pegatron’s iPhone assembly plant...

CMB International

Luxshare (002475 CH) – Resilient 3Q23 Despite Macro Headwinds

Luxshare posted 3Q23 revenue/NP growth of -8.5%/+15.4% YoY, and preannounced FY23E earnings growth of 17.5-22.5% YoY, implying 31% YoY in 4Q23E.

CMB International

Luxshare (002475 CH) – Recent Correction Overdone

Luxshare retreated over 10% in the past week mainly due to market concerns on Huawei’s Mate 60 Pro launch and news report on iPhone restrictions by...

CMB International

Luxshare (002475 CH) – Resilient FY22/1H23 despite industry headwinds

Luxshare posted FY22 revenue/NP growth of 39%/30% YoY, largely in-line with expectations, and it also pre-announced 1H23 earnings growth of 10-20% YoY

CMB International

China Macro: Sector Positioning Update

Sector positioning among active China Funds. Industrials and Consumer Staples Remain Top Overweights, Energy shows signs of a turnaround, whilst...

Steven Holden