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>TME announced 2Q24 results on 13 Aug: total revenue declined by 2% YoY to RMB7.16bn, in line with our/Bloomberg consensus estimate of RMB7.16/7.13bn; non-IFRS net income was up by 22% YoY to RMB1.87bn, 2/2% ahead of our/consensus estimate.</li><li>For 2H24E, management will focus more on balanced growth of music subs and ARPPU, expecting slower music subscriber net adds but continued QoQ ARPPU growth, which has raised certain investor concerns.</li><li>That said, management reiterated its long-term target (150mn music subscribers &amp; RMB15 in monthly ARPPU). </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.

TME announced 2Q24 results on 13 Aug: total revenue declined by 2% YoY to RMB7.16bn, in line with our/Bloomberg consensus estimate of RMB7.16/7.13bn; non-IFRS net income was up by 22% YoY to RMB1.87bn, 2/2% ahead of our/consensus estimate.For 2H24E, management will focus more on balanced growth of music subs and ARPPU, expecting slower music subscriber net adds but continued QoQ ARPPU growth, which has raised certain investor concerns.That said, management reiterated its long-term target (150mn music subscribers &amp; RMB15 in monthly ARPPU). 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.

TME (TME US) - Focus on Balanced Growth of Music Subs and ARPPU in 2H24E

Thematic (Sector/Industry)

<ul><li>Year to date, the internet sector has pulled back after rapid rallies buoyed by improved sentiment and short-term fund inflows, in line with our previous expectation.</li><li>From a full-year perspective, given the rate cut cycle has not yet started and liquidity remains tight, we suggest focusing on: 1) companies capable of boosting shareholder returns or maintaining decent returns, supported by solid fundamentals (strong competitive advantages, steady growth in core business, and stable profitability) and committed to enhancing shareholder returns (also depends on management's willingness), such as Alibaba, Tencent, and NetEase;</li><li>2) companies whose new businesses have significant market potential and are poised to bring considerable capital gains in the long run, particularly from overseas expansion and AI-related initiatives, such as Pinduoduo, Tencent, Alibaba, and Trip.com</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.

Year to date, the internet sector has pulled back after rapid rallies buoyed by improved sentiment and short-term fund inflows, in line with our previous expectation.From a full-year perspective, given the rate cut cycle has not yet started and liquidity remains tight, we suggest focusing on: 1) companies capable of boosting shareholder returns or maintaining decent returns, supported by solid fundamentals (strong competitive advantages, steady growth in core business, and stable profitability) and committed to enhancing shareholder returns (also depends on management's willingness), such as Alibaba, Tencent, and NetEase;2) companies whose new businesses have significant market potential and are poised to bring considerable capital gains in the long run, particularly from overseas expansion and AI-related initiatives, such as Pinduoduo, Tencent, Alibaba, and Trip.comContent 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.

Internet - 1Q24 recap & our three stock-picking ideas

<ul><li>TME reported 1Q24 results: total revenue declined by 3% YoY to RMB6.77bn, beating consensus estimate by 3% on strong online music revenue growth; non-IFRS net income grew by 21% YoY to RMB1.70bn, 7% ahead of consensus estimate, primarily attributable to the solid GPM expansion (+7.9ppt YoY) and effective control in opex (-8% YoY).</li><li>TME further enhanced shareholder return on its strong cash generation capability and announced its first annual cash dividend of US$0.137 per ADS (c.1.0% dividend yield).</li><li>Looking ahead, we forecast total revenue to decline by 2% YoY, while non-IFRS net income to grow by 20% in 2Q24E on solid music revenue growth and GPM expansion.</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.

TME reported 1Q24 results: total revenue declined by 3% YoY to RMB6.77bn, beating consensus estimate by 3% on strong online music revenue growth; non-IFRS net income grew by 21% YoY to RMB1.70bn, 7% ahead of consensus estimate, primarily attributable to the solid GPM expansion (+7.9ppt YoY) and effective control in opex (-8% YoY).TME further enhanced shareholder return on its strong cash generation capability and announced its first annual cash dividend of US$0.137 per ADS (c.1.0% dividend yield).Looking ahead, we forecast total revenue to decline by 2% YoY, while non-IFRS net income to grow by 20% in 2Q24E on solid music revenue growth and GPM expansion.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.

TME (TME US) - 1Q24 Beat on Strong Music Business Growth and GPM Expansion

<ul><li>TME announced its 4Q23 results on 19 Mar: total revenue decreased by 7% YoY to RMB6.9bn, 3% ahead of consensus/our estimate thanks to the robust core music revenue growth (+41% YoY); non-IFRS net income grew 10% YoY to RMB1.58bn, beating consensus/our estimate of RMB1.56/1.50bn.</li><li>For FY23, total revenue declined by 2% YoY, while non-IFRS net income was up 25% YoY on solid improvement in GPM and operating efficiency.</li><li>For FY24E, we expect total revenue will return to the growth track (+3% YoY), backed by the robust core music business. </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.

TME announced its 4Q23 results on 19 Mar: total revenue decreased by 7% YoY to RMB6.9bn, 3% ahead of consensus/our estimate thanks to the robust core music revenue growth (+41% YoY); non-IFRS net income grew 10% YoY to RMB1.58bn, beating consensus/our estimate of RMB1.56/1.50bn.For FY23, total revenue declined by 2% YoY, while non-IFRS net income was up 25% YoY on solid improvement in GPM and operating efficiency.For FY24E, we expect total revenue will return to the growth track (+3% YoY), backed by the robust core music business. 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.

TME (TME US) - Expect Solid Core Music Business and GPM Expansion in FY24

<ul><li>Based on NBS data, 2M24 online retail sales GMV/online physical goods GMV reached RMB2.2tn/1.8tn, up 15.3/14.4% YoY, which implied a two-year CAGR of 10.7/9.8%.</li><li>The growth of total online retail sales GMV continued to outpace that of online physical goods GMV, which was likely due to the robust growth in online travel bookings during the CNY holiday.</li><li>Leading e-commerce platforms are prioritizing GMV and revenue growth over margin improvement in 2024, and guided to reinvest incremental operating profit generated to drive further business growth, which likely indicates more intensified industry competition. </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 NBS data, 2M24 online retail sales GMV/online physical goods GMV reached RMB2.2tn/1.8tn, up 15.3/14.4% YoY, which implied a two-year CAGR of 10.7/9.8%.The growth of total online retail sales GMV continued to outpace that of online physical goods GMV, which was likely due to the robust growth in online travel bookings during the CNY holiday.Leading e-commerce platforms are prioritizing GMV and revenue growth over margin improvement in 2024, and guided to reinvest incremental operating profit generated to drive further business growth, which likely indicates more intensified industry competition. 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.

Internet - 2M24 online retail sales recap

China

Tencent Music Entertainment operates an online music entertainment platform in China. The Company offers platform that comprises of online music, recording, music-centric live streaming enabling users to discover, listen, sing, watch, perform, and socialize music.

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Tencent Music (TME US)

TME (TME US) - Focus on Balanced Growth of Music Subs and ARPPU in 2H24E

TME announced 2Q24 results on 13 Aug: total revenue declined by 2% YoY to RMB7.16bn, in line with our/Bloomberg consensus estimate of RMB7.16/7.13bn

CMB International

Internet - 1Q24 recap & our three stock-picking ideas

Year to date, the internet sector has pulled back after rapid rallies buoyed by improved sentiment and short-term fund inflows, in line with our...

CMB International

TME (TME US) - 1Q24 Beat on Strong Music Business Growth and GPM Expansion

TME reported 1Q24 results: total revenue declined by 3% YoY to RMB6.77bn, beating consensus estimate by 3% on strong online music revenue growth

CMB International

TME (TME US) - Expect Solid Core Music Business and GPM Expansion in FY24

TME announced its 4Q23 results on 19 Mar: total revenue decreased by 7% YoY to RMB6.9bn, 3% ahead of consensus/our estimate thanks to the robust...

CMB International

Internet - 2M24 online retail sales recap

Based on NBS data, 2M24 online retail sales GMV/online physical goods GMV reached RMB2.2tn/1.8tn, up 15.3/14.4% YoY, which implied a two-year CAGR...

CMB International

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