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>In the Central Commission for Financial and Economic Affairs (CCFEA) meeting held on 23 Feb, President Xi proposed an acceleration of a large-scale replacement of production equipment to support economic growth.</li><li>This is the first time that equipment replacement is mentioned as a tool to support the economy.</li><li>We believe this message is a positive signal to the heavy-duty truck (HDT) sector. </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.

In the Central Commission for Financial and Economic Affairs (CCFEA) meeting held on 23 Feb, President Xi proposed an acceleration of a large-scale replacement of production equipment to support economic growth.This is the first time that equipment replacement is mentioned as a tool to support the economy.We believe this message is a positive signal to the heavy-duty truck (HDT) sector. 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 – Equipment Replacement Proposed in Central Government Meeting

<ul><li>According to preliminary data from Cvworld, China HDT sales volume (domestic sales + exports) surged 64% YoY to ~80k units in Jan 2024.</li><li>The growth is stronger than our expectation as: (1) part of the sales in Dec 2023 were postponed to Jan 2024; (2) an early CNY in 2023 resulted in a low base effect.</li><li>Smoothing out the CNY effect by comparing the average sales in 2M23 (63k units), the sales of 80k units in Jan 2024 represented 27% growth. </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 preliminary data from Cvworld, China HDT sales volume (domestic sales + exports) surged 64% YoY to ~80k units in Jan 2024.The growth is stronger than our expectation as: (1) part of the sales in Dec 2023 were postponed to Jan 2024; (2) an early CNY in 2023 resulted in a low base effect.Smoothing out the CNY effect by comparing the average sales in 2M23 (63k units), the sales of 80k units in Jan 2024 represented 27% growth. 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 Volume Surged ~64% YoY in Jan on Low Base

<ul><li>For Chinese machinery manufacturers, penetration overseas remains a longterm driver.</li><li>That said, with growth trend reversing since mid-2023 after 2-3 years of extraordinary growth, the way to overseas expansion will likely be bumpy in 2024E, especially when the overseas competitors are recovering from the supply chain bottleneck.</li><li>Geographically, we expect strong demand to continue in the US and the Middle East, but weakness in Europe and China. </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.

For Chinese machinery manufacturers, penetration overseas remains a longterm driver.That said, with growth trend reversing since mid-2023 after 2-3 years of extraordinary growth, the way to overseas expansion will likely be bumpy in 2024E, especially when the overseas competitors are recovering from the supply chain bottleneck.Geographically, we expect strong demand to continue in the US and the Middle East, but weakness in Europe and China. 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 / HDT – 2024 Outlook

<ul><li>Major aerial work platform (AWP) manufacturers (Terex, Oshkosh) and rental company (United Rentals) in the US provide bullish guidance on 2023E outlook after reporting their 2022 results.</li><li>Key takeaways: (1) AWP manufacturers saw strong order flow with backlog visibility of &gt;12 months; (2) The mega projects, which are less macro reliant, will provide both rental companies and AWP manufacturers with growth certainty over the coming years; (3) manufacturers’ margin improvement trend will continue despite the fact that supply chain will remain a constraint this year, suggesting strong pricing power.</li><li>All these reaffirm our positive stance on the AWP sector this 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.

Major aerial work platform (AWP) manufacturers (Terex, Oshkosh) and rental company (United Rentals) in the US provide bullish guidance on 2023E outlook after reporting their 2022 results.Key takeaways: (1) AWP manufacturers saw strong order flow with backlog visibility of &gt;12 months; (2) The mega projects, which are less macro reliant, will provide both rental companies and AWP manufacturers with growth certainty over the coming years; (3) manufacturers’ margin improvement trend will continue despite the fact that supply chain will remain a constraint this year, suggesting strong pricing power.All these reaffirm our positive stance on the AWP sector this 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.

China Construction Machinery – Upbeat Guidance from US AWP Manufacturers

<ul><li>What is new? The 24% YoY decline in excavator sales in 2022 (for the industry as a whole) is largely in line with our expectation.</li><li>Meanwhile, Jiangsu Hengli’s scheduled production of excavator cylinders in Jan 2023 drops &gt;20% YoY, likely due to (1) the pandemic impact and (2) base effect of CNY.</li><li>On the back of reopening and easing liquidity, we expect demand for excavator to pick up moderately in Feb/Mar and we maintain our forecast of 10% YoY increase in the industry demand in 2023E (China: +15%, export: +5%).</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? The 24% YoY decline in excavator sales in 2022 (for the industry as a whole) is largely in line with our expectation.Meanwhile, Jiangsu Hengli’s scheduled production of excavator cylinders in Jan 2023 drops &gt;20% YoY, likely due to (1) the pandemic impact and (2) base effect of CNY.On the back of reopening and easing liquidity, we expect demand for excavator to pick up moderately in Feb/Mar and we maintain our forecast of 10% YoY increase in the industry demand in 2023E (China: +15%, export: +5%).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 – Prefer AWP to excavator in the near term

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 – Equipment Replacement Proposed in Central Government Meeting

This is the first time that equipment replacement is mentioned as a tool to support the economy.We believe this message is a positive signal to the...

CMB International

Capital Goods - HDT Sales Volume Surged ~64% YoY in Jan on Low Base

According to preliminary data from Cvworld, China HDT sales volume (domestic sales + exports) surged 64% YoY to ~80k units in Jan 2024

CMB International

China Construction Machinery / HDT – 2024 Outlook

That said, with growth trend reversing since mid-2023 after 2-3 years of extraordinary growth, the way to overseas expansion will likely be bumpy...

CMB International

China Construction Machinery – Upbeat Guidance from US AWP Manufacturers

Major aerial work platform (AWP) manufacturers (Terex, Oshkosh) and rental company (United Rentals) in the US provide bullish guidance on 2023E...

CMB International

China Construction Machinery – Prefer AWP to excavator in the near term

What is new? The 24% YoY decline in excavator sales in 2022 (for the industry as a whole) is largely in line with our expectation.

CMB International

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