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)

<ul><li>What’s new? The State Council officially published the “Rural Highway Regulations” (农村公路条例) yesterday, which was approved in late Jun and will come into effect starting from 15 Sep.</li><li>The regulations highlight that rural highway construction should aim to improve road network quality to promote urban-rural transportation integration.</li><li>Most importantly, new rural highways must meet technical standards, and existing roads that do not meet the minimum technical standards must be upgraded.</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.

What’s new? The State Council officially published the “Rural Highway Regulations” (农村公路条例) yesterday, which was approved in late Jun and will come into effect starting from 15 Sep.The regulations highlight that rural highway construction should aim to improve road network quality to promote urban-rural transportation integration.Most importantly, new rural highways must meet technical standards, and existing roads that do not meet the minimum technical standards must be upgraded.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.

Capital Goods - Upgrade of rural highways could become a trillion yuan market

<ul><li>According to the preliminary data released by Cvworld, HDT wholesale volume (domestic + export) surged 29% YoY to 92k units in Jun, driven by both diesel and new-energy HDTs, which is above our expectation.</li><li>We believe the underlying driver for the strong growth was the implementation of truck replacement subsidies launched in Mar (for details, please find our publication “New subsidies on truck replacement cover NES IV and natural gas trucks; +ve to Weichai”.</li><li>The strong data point reaffirms our positive stance on HDT sector this year. We maintain our full-year HDT sales growth estimate of 10%. </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.

According to the preliminary data released by Cvworld, HDT wholesale volume (domestic + export) surged 29% YoY to 92k units in Jun, driven by both diesel and new-energy HDTs, which is above our expectation.We believe the underlying driver for the strong growth was the implementation of truck replacement subsidies launched in Mar (for details, please find our publication “New subsidies on truck replacement cover NES IV and natural gas trucks; +ve to Weichai”.The strong data point reaffirms our positive stance on HDT sector this year. We maintain our full-year HDT sales growth estimate of 10%. 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.

Capital Goods - HDT Sales +29% YoY in Jun, Better than Expectation

<ul><li>China Construction Machinery Association (CCMA) released the earth-moving machinery sales data for Mar.</li><li>Domestic sales of excavators / wheel loaders grew 29%/23% YoY, suggesting strong demand in the traditional peak season.</li><li>We believe excavator offers resilience with growth driven largely by the domestic replacement demand, which is less affected by the tariff war. </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.

China Construction Machinery Association (CCMA) released the earth-moving machinery sales data for Mar.Domestic sales of excavators / wheel loaders grew 29%/23% YoY, suggesting strong demand in the traditional peak season.We believe excavator offers resilience with growth driven largely by the domestic replacement demand, which is less affected by the tariff war. 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.

Capital Goods - Strong Domestic Sales of Earth-Moving Machinery in Mar

<ul><li>What is new? China’s Ministry of Transport, National Development and Reform Commission (NDRC) and Ministry of Finance jointly announced on 18 Mar a circular regarding the policy on truck replacement [关于实施老旧营运货车报废更新 的通知].</li><li>Subsidies level in 2025 will be largely the same as that in 2024. Key changes include: (1) the scope of subsidies cover the scrapping of both NES III &amp; IV trucks; (2) the purchase of all trucks (previously only diesel trucks) will be eligible for subsidies.</li><li>Our view: The new subsidy programme enhances our positive view on the HDT sales this year, as (1) the fleet size of NES IV HDT accounts for 30% of the total HDT, which is sizable, based on our estimates; and (2) most importantly, the scope of new purchase will include natural gas trucks this year, whereas only diesel trucks were included last year. </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.

What is new? China’s Ministry of Transport, National Development and Reform Commission (NDRC) and Ministry of Finance jointly announced on 18 Mar a circular regarding the policy on truck replacement [关于实施老旧营运货车报废更新 的通知].Subsidies level in 2025 will be largely the same as that in 2024. Key changes include: (1) the scope of subsidies cover the scrapping of both NES III &amp; IV trucks; (2) the purchase of all trucks (previously only diesel trucks) will be eligible for subsidies.Our view: The new subsidy programme enhances our positive view on the HDT sales this year, as (1) the fleet size of NES IV HDT accounts for 30% of the total HDT, which is sizable, based on our estimates; and (2) most importantly, the scope of new purchase will include natural gas trucks this year, whereas only diesel trucks were included last year. 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.

Capital Goods - New Subsidies on Truck Replacement Cover NES IV and Natural Gas Trucks

<ul><li>The €500bn infrastructure plan proposed by Friedrich Merz, German Chancellor-in-waiting, is scheduled for parliament approval on 18 Mar.</li><li>The approval of the plan has become likely (2/3 is needed) after winning support from the Greens last week.</li><li>In HK &amp; A share market, Weichai Power (2338 HK / 000338 CH, BUY), being the controlling shareholder of KION Group (KGX GR, NR) which is the major industrial truck manufacturer in Europe, will likely become a beneficiary. </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.

The €500bn infrastructure plan proposed by Friedrich Merz, German Chancellor-in-waiting, is scheduled for parliament approval on 18 Mar.The approval of the plan has become likely (2/3 is needed) after winning support from the Greens last week.In HK &amp; A share market, Weichai Power (2338 HK / 000338 CH, BUY), being the controlling shareholder of KION Group (KGX GR, NR) which is the major industrial truck manufacturer in Europe, will likely become a beneficiary. 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.

Who Are the Potential Beneficiaries of Germany’s Mega Infrastructure Investment Plan?

China

Sinotruk Hong Kong manufactures and sells a wide range of commercial vehicles, including heavy-duty, medium-duty, and light-duty trucks, buses, and specialized vehicles. The company also produces key components like engines, axles, and gearboxes, and offers financial services. It was incorporated on January 31, 2007, and is headquartered in Jinan, China.

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Sinotruk Hong Kong (3808 HK)

Capital Goods - Upgrade of rural highways could become a trillion yuan market

The regulations highlight that rural highway construction should aim to improve road network quality to promote urban-rural transportation...

CMB International

Capital Goods - HDT Sales +29% YoY in Jun, Better than Expectation

We believe both Weichai Power (2338 HK/000338 CH, BUY) and Sinotruk (3808 HK, HOLD) will benefit from the favourable sector trend in 2H25E.

CMB International

Capital Goods - Strong Domestic Sales of Earth-Moving Machinery in Mar

We also like Zoomlion (1157 HK / 000157 CH, BUY) given its strategic focus on emerging markets (the US contributes <1% of revenue).

CMB International

Capital Goods - New Subsidies on Truck Replacement Cover NES IV and Natural Gas Trucks

China’s Ministry of Transport, National Development and Reform Commission (NDRC) and Ministry of Finance jointly announced on 18 Mar a circular...

CMB International

Who Are the Potential Beneficiaries of Germany’s Mega Infrastructure Investment Plan?

The €500bn infrastructure plan proposed by Friedrich Merz, German Chancellor-in-waiting, is scheduled for parliament approval on 18 Mar.

CMB International

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