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 its 4Q22 financial results on 21 March.</li><li>Total revenue declined 2% YoY to RMB7.4bn in 4Q22, inline with consensus and CMBI estimates.</li><li>2022 Full-year revenue declined 9% YoY, mainly due to soft social entertainment and ad businesses amid macro uncertainty. </li></ul><p><em>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.</em></p>

TME announced its 4Q22 financial results on 21 March.Total revenue declined 2% YoY to RMB7.4bn in 4Q22, inline with consensus and CMBI estimates.2022 Full-year revenue declined 9% YoY, mainly due to soft social entertainment and ad businesses amid macro uncertainty. 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 a year of mild recovery in FY23

<ul><li>TME online music business operating efficiency continues to improve progressively amid economic recovery.</li><li>It is on track for strong earnings rebound despite near-term top-line pressure.</li><li>Social entertainment business continues to face pressure as the surge of COVID-19 cases impact content supply and competition is still abundant. </li></ul><p><em>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.</em></p>

TME online music business operating efficiency continues to improve progressively amid economic recovery.It is on track for strong earnings rebound despite near-term top-line pressure.Social entertainment business continues to face pressure as the surge of COVID-19 cases impact content supply and competition is still abundant. 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) – Making progress into scale optimization

<ul><li>TME reported its 3Q22 financial results on 15 Nov.</li><li>Total revenue declined by 5.6% YoY but grew by 6.7% QoQ to RMB7.4bn in 3Q22, largely inline with consensus/CMBI estimate of RMB7.1/7.1bn.</li><li>9M22 revenue was down 11.5% YoY due to the soft performance of social entertainment business.</li></ul><p><em>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.</em></p>

TME reported its 3Q22 financial results on 15 Nov.Total revenue declined by 5.6% YoY but grew by 6.7% QoQ to RMB7.4bn in 3Q22, largely inline with consensus/CMBI estimate of RMB7.1/7.1bn.9M22 revenue was down 11.5% YoY due to the soft performance of social entertainment 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) – Strong earnings beat on improvement in GPM and operating efficiency

Thematic (Sector/Industry)

<ul><li>For 3Q22E, social entertainment platforms still face intensifying competition and macro challenges that can weigh on their revenue growth and margin expansion.</li><li>Social entertainment platforms need to innovate their monetization methods and enhance operating efficiency in order to fend off competition and macro headwind, in our view.</li><li>Platforms with concentrated revenue exposure to ad business like Weibo and loss-making platforms like BiliBili (Bili) might be more sensitive to the competition and macro environment.</li></ul><p><em>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.</em></p>

For 3Q22E, social entertainment platforms still face intensifying competition and macro challenges that can weigh on their revenue growth and margin expansion.Social entertainment platforms need to innovate their monetization methods and enhance operating efficiency in order to fend off competition and macro headwind, in our view.Platforms with concentrated revenue exposure to ad business like Weibo and loss-making platforms like BiliBili (Bili) might be more sensitive to the competition and macro environment.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 Internet– Social Entertainment 3Q22 Preview: Remains Under Pressure

<div><div><div><div><ul><li>Consumption sentiment and offline activities’ recovery pace continued to weigh on internet sector’s 3Q financials performance.</li><li>Looking into 4Q and 2023, business model robustness, operating leverage improvement, and ability to expand into new revenue streams will be the key stock alpha drivers, while the heavily under-owned China Internet sector will remain sensitive to policies and other sentiment related beta drivers.</li><li>We expect leading technology companies will play vital role in building digital infrastructure and empowering enterprise digital transformation. </li></ul></div></div></div></div><p><em>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.</em></p>

Consumption sentiment and offline activities’ recovery pace continued to weigh on internet sector’s 3Q financials performance.Looking into 4Q and 2023, business model robustness, operating leverage improvement, and ability to expand into new revenue streams will be the key stock alpha drivers, while the heavily under-owned China Internet sector will remain sensitive to policies and other sentiment related beta drivers.We expect leading technology companies will play vital role in building digital infrastructure and empowering enterprise digital transformation. 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 Internet Sector – 3Q22 preview: near term bumpy recovery

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) – Expect a year of mild recovery in FY23

TME announced its 4Q22 financial results on 21 March. Total revenue declined 2% YoY to RMB7.4bn in 4Q22, inline with consensus and CMBI estimates.

CMB International

TME (TME US) – Making progress into scale optimization

TME online music business operating efficiency continues to improve progressively amid economic recovery. It is on track for strong earnings...

CMB International

TME (TME US) – Strong earnings beat on improvement in GPM and operating efficiency

Total revenue declined by 5.6% YoY but grew by 6.7% QoQ to RMB7.4bn in 3Q22, largely inline with consensus/CMBI estimate of RMB7.1/7.1bn.

CMB International

China Internet Sector – 3Q22 preview: near term bumpy recovery

We expect leading technology companies will play vital role in building digital infrastructure and empowering enterprise digital transformation.

CMB International

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52-week Range

Market Cap (USDm)

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TME (TME US) – Expect a year of mild recovery in FY23

TME announced its 4Q22 financial results on 21 March. Total revenue declined 2% YoY to RMB7.4bn in 4Q22, inline with consensus and CMBI estimates.

CMB International

TME (TME US) – Making progress into scale optimization

TME online music business operating efficiency continues to improve progressively amid economic recovery. It is on track for strong earnings...

CMB International

TME (TME US) – Strong earnings beat on improvement in GPM and operating efficiency

Total revenue declined by 5.6% YoY but grew by 6.7% QoQ to RMB7.4bn in 3Q22, largely inline with consensus/CMBI estimate of RMB7.1/7.1bn.

CMB International

China Internet– Social Entertainment 3Q22 Preview: Remains Under Pressure

For 3Q22E, social entertainment platforms still face intensifying competition and macro challenges that can weigh on their revenue growth and...

CMB International

China Internet Sector – 3Q22 preview: near term bumpy recovery

We expect leading technology companies will play vital role in building digital infrastructure and empowering enterprise digital transformation.

CMB International