Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Cross Asset Strategy

<ul>
<li>A monthly review of how the markets and our themes are currently performing</li>
<li>Analysing what went wrong and what went right in stocks and sectors</li>
<li>Highlighting positions added or removed from the thematic investment portfolio</li>
</ul>


A monthly review of how the markets and our themes are currently performing
Analysing what went wrong and what went right in stocks and sectors
Highlighting positions added or removed from the thematic investment portfolio


September Themes and Thematic Portfolio Review

Thematic (Sector/Industry)

<ul>
<li>Obvious policy efforts are being made to drive consumption and improve consumer confidence.</li>
<li>Previous attempts have resulted in increased savings but policy direction has changed</li>
<li>Beaten-Up consumer names have a good risk-reward at this stage</li>
</ul>


Obvious policy efforts are being made to drive consumption and improve consumer confidence.
Previous attempts have resulted in increased savings but policy direction has changed
Beaten-Up consumer names have a good risk-reward at this stage


China Crosses the Rubicon - Direct Payments to Kickstart Consumption

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.

<ul><li>We project Li Auto’s net profit to rise 27% QoQ to RMB 1.2bn in 2Q23E. Profitability in FY24E could also beat expectation on greater economies of scale.</li><li>Apart from its products, we like the Company’s high self-discipline in costs and business expansion even as it is much more resourceful than before.</li><li>We project Li Auto’s 2Q23E revenue to more than triple YoY to RMB 27.9bn, as its sales volume beat guidance.</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 project Li Auto’s net profit to rise 27% QoQ to RMB 1.2bn in 2Q23E. Profitability in FY24E could also beat expectation on greater economies of scale.Apart from its products, we like the Company’s high self-discipline in costs and business expansion even as it is much more resourceful than before.We project Li Auto’s 2Q23E revenue to more than triple YoY to RMB 27.9bn, as its sales volume beat guidance.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.

CMBI Research Focus List (July Edition) – Our best high conviction stock ideas

<ul><li>We had diverging takeaways from our distributor chancel check after the Dragon Boat Festival holiday, with beer being the only segment with positive momentum over 2Q.</li><li>Considering the price gap between beer and other alcoholic drinks, and also the growing preference of low alcoholic content, in our view, breweries still offer a multi-year story that looks to be sustainable in the next 4-5 years.</li><li>In the contrary, we continue to see near-term drags in baijiu, dairies and condiments that not only led to a lacklustre 2Q but also a possible slow 2H. </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 had diverging takeaways from our distributor chancel check after the Dragon Boat Festival holiday, with beer being the only segment with positive momentum over 2Q.Considering the price gap between beer and other alcoholic drinks, and also the growing preference of low alcoholic content, in our view, breweries still offer a multi-year story that looks to be sustainable in the next 4-5 years.In the contrary, we continue to see near-term drags in baijiu, dairies and condiments that not only led to a lacklustre 2Q but also a possible slow 2H. 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 Consumer Staples – Divergence continues

<ul><li>The lukewarm May-23 CPI print may not be a positive read to near-term economic growth.</li><li>On the flip side, decelerating PPI growth looks to be favourable to food &amp; beverage producers.</li><li>Of note, major raw material prices (agricultural/ packaging) represent approximately half of F&amp;B producers’ COGS, and the formers have come down on average by 11% since 4Q22.</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.

The lukewarm May-23 CPI print may not be a positive read to near-term economic growth.On the flip side, decelerating PPI growth looks to be favourable to food &amp; beverage producers.Of note, major raw material prices (agricultural/ packaging) represent approximately half of F&amp;B producers’ COGS, and the formers have come down on average by 11% since 4Q22.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 Consumer Staples – Easing raw material pressure underpins cost savings

China

Tsingtao Brewery Company Limited produces and distributes beer products.  The Company markets its products throughout China and around the world under the Tsingtao Beer brand name.

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Tsingtao Brewery Co Ltd A (600600 CH)

September Themes and Thematic Portfolio Review

We review overall market performance, our investment themes, highlighting additions and substractions in the thematic portfolio.

Rikki Malik

China Crosses the Rubicon - Direct Payments to Kickstart Consumption

Policy efforts are shifting towards driving consumption and boosting consumer confidence, presenting a favourable risk-reward opportunity for...

Rikki Malik

CMBI Research Focus List (July Edition) – Our best high conviction stock ideas

We project Li Auto’s net profit to rise 27% QoQ to RMB 1.2bn in 2Q23E. Profitability in FY24E could also beat expectation on greater economies of...

CMB International

China Consumer Staples – Divergence continues

We had diverging takeaways from our distributor chancel check after the Dragon Boat Festival holiday, with beer being the only segment with...

CMB International

China Consumer Staples – Easing raw material pressure underpins cost savings

Of note, major raw material prices (agricultural/ packaging) represent approximately half of F&B producers’ COGS, and the formers have come down on...

CMB International

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

September Themes and Thematic Portfolio Review

We review overall market performance, our investment themes, highlighting additions and substractions in the thematic portfolio.

Rikki Malik

China Crosses the Rubicon - Direct Payments to Kickstart Consumption

​Policy efforts are shifting towards driving consumption and boosting consumer confidence, presenting a favourable risk-reward opportunity for...

Rikki Malik

CMBI Research Focus List (July Edition) – Our best high conviction stock ideas

We project Li Auto’s net profit to rise 27% QoQ to RMB 1.2bn in 2Q23E. Profitability in FY24E could also beat expectation on greater economies of...

CMB International

China Consumer Staples – Divergence continues

We had diverging takeaways from our distributor chancel check after the Dragon Boat Festival holiday, with beer being the only segment with...

CMB International

China Consumer Staples – Easing raw material pressure underpins cost savings

Of note, major raw material prices (agricultural/ packaging) represent approximately half of F&B producers’ COGS, and the formers have come down on...

CMB International

Policy efforts are shifting towards driving consumption and boosting consumer confidence, presenting a favourable risk-reward opportunity for...