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>We are turning more positive on the construction machinery &amp; heavy-duty truck (HDT) sector as we expect meaningful earnings recovery in 2023E (following the down-cycle since early 2021), underpinned by: (1) resilient overseas demand; (2) strong mining activities; (3) gradual reopening in China; (4) decline in freight rate and steel price.</li><li>Meanwhile, the supporting policies on property will serve as risk reduction factor for the sector.</li><li>Aerial work platform (AWP) is our most preferred subsector, followed by HDT, excavator and other machinery.</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 are turning more positive on the construction machinery &amp; heavy-duty truck (HDT) sector as we expect meaningful earnings recovery in 2023E (following the down-cycle since early 2021), underpinned by: (1) resilient overseas demand; (2) strong mining activities; (3) gradual reopening in China; (4) decline in freight rate and steel price.Meanwhile, the supporting policies on property will serve as risk reduction factor for the sector.Aerial work platform (AWP) is our most preferred subsector, followed by HDT, excavator and other machinery.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 – 2023 Outlook

Equity Bottom-Up

<ul><li>Sinotruk’s 1H25 net profit grew 4% YoY to RMB3.4bn, which is largely in-line with our below-consensus estimate.</li><li>Sinotruk proposed an interim dividend of HK$0.74/shr, equivalent to 55% of dividend payout.</li><li>We maintain our view that the lack of export growth will weaken the overall sales growth this year (despite decent sales from 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.

Sinotruk’s 1H25 net profit grew 4% YoY to RMB3.4bn, which is largely in-line with our below-consensus estimate.Sinotruk proposed an interim dividend of HK$0.74/shr, equivalent to 55% of dividend payout.We maintain our view that the lack of export growth will weaken the overall sales growth this year (despite decent sales from 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.

Sinotruk (Hong Kong) (3808 HK) - 1H25 Profit In-Line with Our Below-Consensus Forecast...

<ul><li>We revise down our 2024E/25E earnings forecast by 5/2%, after incorporating our new industry HDT sales forecast (for details, please refer to our sector report “China Heavy-duty Truck – Headwinds in 4Q24 in both China &amp; export; Eyes on policy-driven recovery in 2025”).</li><li>We forecast ~20% YoY earnings decline in 2H24E, before recovering in 2025E. We rolled over our target valuation to 2025E, with a new TP of HK$21.4 (previously HK$19.5) which is based on 4.5x EV/EBITDA (equivalent to the historical average).</li><li>We believe the earnings downside risk has yet to be reflected in the current share price, in particular after recent rally. Maintain HOLD.</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 revise down our 2024E/25E earnings forecast by 5/2%, after incorporating our new industry HDT sales forecast (for details, please refer to our sector report “China Heavy-duty Truck – Headwinds in 4Q24 in both China &amp; export; Eyes on policy-driven recovery in 2025”).We forecast ~20% YoY earnings decline in 2H24E, before recovering in 2025E. We rolled over our target valuation to 2025E, with a new TP of HK$21.4 (previously HK$19.5) which is based on 4.5x EV/EBITDA (equivalent to the historical average).We believe the earnings downside risk has yet to be reflected in the current share price, in particular after recent rally. Maintain HOLD.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.

Sinotruk (Hong Kong) (3808 HK) - Earnings risk not yet priced in

<ul><li>Sinotruk pre-announced impressive net profit growth of 2x-2.4x YoY for 2023 (to RMB5.0-5.68bn), which is &gt;20% above consensus.</li><li>We believe the surprise came from the strong operating leverage.</li><li>We revise up our 2023E-25E earnings forecast substantially by 43%-52%, due to higher sales volume and, more importantly, higher operating margin. </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.

Sinotruk pre-announced impressive net profit growth of 2x-2.4x YoY for 2023 (to RMB5.0-5.68bn), which is &gt;20% above consensus.We believe the surprise came from the strong operating leverage.We revise up our 2023E-25E earnings forecast substantially by 43%-52%, due to higher sales volume and, more importantly, higher operating margin. 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.

Sinotruk (Hong Kong) (3808 HK) – Big Surprise on 2023E Earnings; TP Raised

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)

China Construction Machinery / HDT – 2023 Outlook

We are turning more positive on the construction machinery & heavy-duty truck (HDT) sector as we expect meaningful earnings recovery in 2023E...

CMB International