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>Following our note last week, we received investor questions focused on 1) “20% US content rule” exemptions, 2) impact of China 34% tariff' on the US, 3) Vietnam proposed 0% tariff, 4) de-minimis rule removal, 5) bottom-fishing opportunities, and 6) company feedback/response on the new tariff. Below we offer perspectives on investor FAQs regarding the implications.</li><li>Despite sector valuation still being 15-20% away from the historical trough now, we would start to look for some quality names to accumulate on further weakness, including Xiaomi, AAC, Sunny Optical, BYDE and Q-tech.</li><li>“20% US content rule” exemptions in “Annex III” sub-document? The US White House published a sub-document, Annex II, for the US Reciprocal Tariffs.</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.

Following our note last week, we received investor questions focused on 1) “20% US content rule” exemptions, 2) impact of China 34% tariff' on the US, 3) Vietnam proposed 0% tariff, 4) de-minimis rule removal, 5) bottom-fishing opportunities, and 6) company feedback/response on the new tariff. Below we offer perspectives on investor FAQs regarding the implications.Despite sector valuation still being 15-20% away from the historical trough now, we would start to look for some quality names to accumulate on further weakness, including Xiaomi, AAC, Sunny Optical, BYDE and Q-tech.“20% US content rule” exemptions in “Annex III” sub-document? The US White House published a sub-document, Annex II, for the US Reciprocal Tariffs.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.

Technology - US Tariff Updates: Addressing FAQs After a Volatile Day

Equity Bottom-Up

<ul><li>Tongda’s 1H24 revenue/GPM beat market expectations mainly on Android recovery, Apple and Smart-tech business growth while net profit declined 34% YoY due to the disposal of Apple biz.</li><li>We spoke to mgmt. post 1H24 results, and expect earnings recovery on track in FY25/26E.</li><li>Looking forward, despite intensified competition in smartphone casing business in 2H24E, mgmt. is positive on spec upgrade of non-metal glastic casing, higher-margin Smart-tech business and better operating efficiency after business disposal in FY25-26E.</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.

Tongda’s 1H24 revenue/GPM beat market expectations mainly on Android recovery, Apple and Smart-tech business growth while net profit declined 34% YoY due to the disposal of Apple biz.We spoke to mgmt. post 1H24 results, and expect earnings recovery on track in FY25/26E.Looking forward, despite intensified competition in smartphone casing business in 2H24E, mgmt. is positive on spec upgrade of non-metal glastic casing, higher-margin Smart-tech business and better operating efficiency after business disposal in FY25-26E.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.

Tongda (698 HK) - Non-Metal Casing Upgrade and Smart-Tech to Drive Earnings Recovery in FY25E

<ul><li>Tongda will report 1H24 results on 28 Aug. We estimate 1H24 revenue/net profit of HK$ 2.6bn/35mn (-10%/+82% YoY) mainly driven by Android smartphone recovery, inventory restocking from overseas household &amp; sports goods customers, network communications router demand pick-up on Wifi-7 upgrade and stabilized GPM for each segment.</li><li>Looking into 2H24/FY25E, we expect handset recovery with stable ASP and order wins in household &amp; sports goods.</li><li>We are also positive on Malaysian plant ramp-up to meet non-handset customers’ demand. </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.

Tongda will report 1H24 results on 28 Aug. We estimate 1H24 revenue/net profit of HK$ 2.6bn/35mn (-10%/+82% YoY) mainly driven by Android smartphone recovery, inventory restocking from overseas household &amp; sports goods customers, network communications router demand pick-up on Wifi-7 upgrade and stabilized GPM for each segment.Looking into 2H24/FY25E, we expect handset recovery with stable ASP and order wins in household &amp; sports goods.We are also positive on Malaysian plant ramp-up to meet non-handset customers’ demand. 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.

Tongda (698 HK) - 1H24E Preview: Eyes on Android Recovery and Smart Tech Growth

<ul><li>We recently spoke to Tongda’s mgmt., and with Apple biz disposal and business reorganisation in 1H24E, mgmt. reiterated their positive view on Android demand recovery, major customers’ share gains (Xiaomi, Honor/Huawei), household &amp; sports goods demand and cooling modules for AI servers to drive growth in FY24-25E.</li><li>We lower FY24/25E EPS by 1-9% to reflect the business disposal, a lower GPM and debt repayment.</li><li>Our new TP of HK$0.14 is based on the same 6.0x FY24E P/E. Trading at 3.0x/2.5x FY24/25E P/E (lower than 1sd below 10-year hist. avg.), the stock offers attractive risk/reward in our view. Maintain BUY.</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 recently spoke to Tongda’s mgmt., and with Apple biz disposal and business reorganisation in 1H24E, mgmt. reiterated their positive view on Android demand recovery, major customers’ share gains (Xiaomi, Honor/Huawei), household &amp; sports goods demand and cooling modules for AI servers to drive growth in FY24-25E.We lower FY24/25E EPS by 1-9% to reflect the business disposal, a lower GPM and debt repayment.Our new TP of HK$0.14 is based on the same 6.0x FY24E P/E. Trading at 3.0x/2.5x FY24/25E P/E (lower than 1sd below 10-year hist. avg.), the stock offers attractive risk/reward in our view. Maintain BUY.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.

Tongda (698 HK) - Healthier Balance Sheet and Android Momentum to Drive Profitability Recovery

<ul><li>Tongda announced plans to dispose its Apple business and purchase back smart electrical appliances and motor businesses, in order to mitigate geopolitical risks and boost capital for future new business development.</li><li>After our discussion with mgmt., we expect Apple biz disposal will allow Tongda to focus more on non-Apple customers’ market share gains and boost capital for new businesses given the likely smartphone recovery in 2024, while business buyback should accelerate profitability improvement driven by order wins in FY24-25E.</li><li>We lower FY23/25E EPS estimates by 4-19% to reflect the business disposal and cut interest expense assumptions.</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.

Tongda announced plans to dispose its Apple business and purchase back smart electrical appliances and motor businesses, in order to mitigate geopolitical risks and boost capital for future new business development.After our discussion with mgmt., we expect Apple biz disposal will allow Tongda to focus more on non-Apple customers’ market share gains and boost capital for new businesses given the likely smartphone recovery in 2024, while business buyback should accelerate profitability improvement driven by order wins in FY24-25E.We lower FY23/25E EPS estimates by 4-19% to reflect the business disposal and cut interest expense assumptions.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.

Tongda (698 HK) – Positive on Earnings Recovery in FY24-25E After Disposal of Apple Business

Hong Kong

Tongda Group Holdings Limited is a supplier of high-precision components of consumer electronic products. The Company uses its in-mould lamination ("IML") technology for customers in the in the PRC.   The Group has established a solid presence in handset, electrical appliance and notebook computer casings and related products.

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Tongda Group Holdings (698 HK)

Technology - US Tariff Updates: Addressing FAQs After a Volatile Day

Following our note last week, we received investor questions focused on 1) “20% US content rule” exemptions, 2) impact of China 34% tariff' on the...

CMB International

Tongda (698 HK) - Non-Metal Casing Upgrade and Smart-Tech to Drive Earnings Recovery in FY25E

Tongda’s 1H24 revenue/GPM beat market expectations mainly on Android recovery, Apple and Smart-tech business growth while net profit declined 34%...

CMB International

Tongda (698 HK) - 1H24E Preview: Eyes on Android Recovery and Smart Tech Growth

We lowered our FY24-25E EPS by 23-32% to reflect Apple business disposal and Android market competition. Maintain BUY with new TP of HK$0.13, based...

CMB International

Tongda (698 HK) - Healthier Balance Sheet and Android Momentum to Drive Profitability Recovery

Our new TP of HK$0.14 is based on the same 6.0x FY24E P/E. Trading at 3.0x/2.5x FY24/25E P/E (lower than 1sd below 10-year hist. avg.), the stock...

CMB International

Tongda (698 HK) – Positive on Earnings Recovery in FY24-25E After Disposal of Apple Business

Tongda announced plans to dispose its Apple business and purchase back smart electrical appliances and motor businesses, in order to mitigate...

CMB International

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