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>Maintain HOLD. Despite NIO’s 3Q23 earnings beat on R&amp;D and SG&amp;A, its 4Q23 sales guidance could imply a tough FY24, in our view.</li><li>We see little chance for NIO to achieve double-digit GPM in FY24E given the lingering drag from battery swap.</li><li>We believe the limited GPM lift from the completion of the NT2.0 shift and acquiring plants from JAC (600418 CH, NR) could not offset its heavy SG&amp;A and R&amp;D, even as it finally plans to cut non-core projects. </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.

Maintain HOLD. Despite NIO’s 3Q23 earnings beat on R&amp;D and SG&amp;A, its 4Q23 sales guidance could imply a tough FY24, in our view.We see little chance for NIO to achieve double-digit GPM in FY24E given the lingering drag from battery swap.We believe the limited GPM lift from the completion of the NT2.0 shift and acquiring plants from JAC (600418 CH, NR) could not offset its heavy SG&amp;A and R&amp;D, even as it finally plans to cut non-core projects. 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.

NIO Inc. (NIO US) – Back to Square One?

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

<ul>
<li>Multiple new agencies have been reporting that <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> plans to trim its investment portfolio over the remainder of the year. </li>
<li>The reports have been coming in since the second half of the year and the company has been duly denying these rumors.</li>
<li>In this note, we look at Tencent’s shareholding in various companies to try and gauge which ones it could sell out of and how.</li>
</ul>


Multiple new agencies have been reporting that Tencent (700 HK) plans to trim its investment portfolio over the remainder of the year. 
The reports have been coming in since the second half of the year and the company has been duly denying these rumors.
In this note, we look at Tencent’s shareholding in various companies to try and gauge which ones it could sell out of and how.


Tencent Investee Selldown - The US$120bn Global Overhang

Forensic Analyst

Jason Yap, CFA

Forensic Accounting

On 20 August 2021, the Cyberspace Administration of China and the Ministry of Transport, together with other relevant authorities, jointly issued the Provisions on Management of Automotive Data Security (Trial) ("Auto Data Provisions"). 
The Auto Data Provisions since took effect on 1 October 2021 to limited fanfare, with media headlines instead focused on the Personal Information Protection Law ("PIPL"), which took effect on 1 November 2021, and specific affected sectors, such as <a href="https://www.reuters.com/business/chinese-online-brokers-futu-up-fintech-face-regulatory-risks-peoples-daily-2021-10-14/" target="_blank" rel="noopener">China online brokerages</a>. 
Further, on 29 October 2021, regulators issued <a href="https://asia.nikkei.com/Business/China-tech/China-to-tighten-rules-on-data-transfers-abroad-with-review-trigger" target="_blank" rel="noopener">draft data protection regulations</a> which provide that businesses in China face a national security review prior to transfers outside the country of personal information of 100,000 individuals or more.  The draft consultation period will last through 28 November 2021, following which the directives would likely take effect soon after. 
EVs of today are no longer a mere mode of transport that depend on analog platforms.  As EV companies race to develop autonomous driving technologies, most if not all EV companies now harness vast amounts of users and real-time mobility data.  Think <a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Global (DIDI US)</a>. 
Yet, apart from <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a>, Chinese EV manufacturers (all listed in the US) such as <a href="https://www.smartkarma.com/entities/nio-inc" target="_blank" data-smartkarma-citation="entities:27399:1" rel="noopener">NIO Inc (NIO US)</a>, <a href="https://www.smartkarma.com/entities/xpeng-inc" target="_blank" data-smartkarma-citation="entities:29217:1" rel="noopener">Xpeng (XPEV US)</a> and <a href="https://www.smartkarma.com/entities/li-auto-inc" target="_blank" data-smartkarma-citation="entities:28812:1" rel="noopener">Li Auto Inc. (LI US)</a> have remained largely unscathed from the news flow and analysis surrounding data security in China. 
In this Insight, we discuss what the Auto Data Provisions entail, whether Chinese EV companies face any repercussions from tightening of data security laws, and which one is the most at risk.

On 20 August 2021, the Cyberspace Administration of China and the Ministry of Transport, together with other relevant authorities, jointly issued the Provisions on Management of Automotive Data Security (Trial) ("Auto Data Provisions"). 
The Auto Data Provisions since took effect on 1 October 2021 to limited fanfare, with media headlines instead focused on the Personal Information Protection Law ("PIPL"), which took effect on 1 November 2021, and specific affected sectors, such as China online brokerages. 
Further, on 29 October 2021, regulators issued draft data protection regulations which provide that businesses in China face a national security review prior to transfers outside the country of personal information of 100,000 individuals or more.  The draft consultation period will last through 28 November 2021, following which the directives would likely take effect soon after. 
EVs of today are no longer a mere mode of transport that depend on analog platforms.  As EV companies race to develop autonomous driving technologies, most if not all EV companies now harness vast amounts of users and real-time mobility data.  Think DiDi Global (DIDI US). 
Yet, apart from Tesla Motors (TSLA US), Chinese EV manufacturers (all listed in the US) such as NIO Inc (NIO US), Xpeng (XPEV US) and Li Auto Inc. (LI US) have remained largely unscathed from the news flow and analysis surrounding data security in China. 
In this Insight, we discuss what the Auto Data Provisions entail, whether Chinese EV companies face any repercussions from tightening of data security laws, and which one is the most at risk. 

Nio Inc (Nio US) - Automotive Data Security, Delivery Declines and Hefei Investors

In recent months, <a href="https://www.smartkarma.com/entities/nio-inc" target="_blank" data-smartkarma-citation="entities:27399:1" rel="noopener">NIO Inc (NIO US)</a> announced record vehicle deliveries and ambitious domestic and international expansion plans.  These developments highlight the significant progress it made compared to early 2020 when it appeared to be on the verge of bankruptcy.  This article discusses the Hefei Investors' emergency funding which facilitated Nio Inc's subsequent business and share price turnaround but subjected ADR holders to certain risks including, amongst others, structural subordination in terms of their claim on the key operating assets in China.

In recent months, NIO Inc (NIO US) announced record vehicle deliveries and ambitious domestic and international expansion plans.  These developments highlight the significant progress it made compared to early 2020 when it appeared to be on the verge of bankruptcy.  This article discusses the Hefei Investors' emergency funding which facilitated Nio Inc's subsequent business and share price turnaround but subjected ADR holders to certain risks including, amongst others, structural subordination in terms of their claim on the key operating assets in China.

Nio Inc – Structural Subordination to Hefei Investors and Associated Risks

China

NIO Inc. manufactures and sells automobiles. The Company offers electric vehicles and parts, as well as provides battery charging services. NIO serves customers worldwide.

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NIO (NIO US)

NIO Inc. (NIO US) – Back to Square One?

Maintain HOLD. Despite NIO’s 3Q23 earnings beat on R&D and SG&A, its 4Q23 sales guidance could imply a tough FY24, in our view.

CMB International

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

Tencent Investee Selldown - The US$120bn Global Overhang

There have been multiple reports that Tencent (700 HK) plans to trim its investment portfolio over the remainder of the year. We look at Tencent's...

Sumeet Singh

Nio Inc (Nio US) - Automotive Data Security, Delivery Declines and Hefei Investors

In this Insight, we discuss the impact of tightening auto data security laws, Oct 2021 delivery declines and residual Hefei investors risks on Nio...

Jason Yap, CFA

Nio Inc – Structural Subordination to Hefei Investors and Associated Risks

Nio Inc has experienced a remarkable turnaround. This article discusses the Hefei Investors' funding which enabled the turnaround and the resultant...

Jason Yap, CFA

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