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>The 35% decline in China’s LNG price (due to abundant supply) along with the 4% increase in diesel price (due to strong crude price) YTD have reduced the gas/diesel price ratio to only 0.56x (0.9x in late Dec 2023).</li><li>The expanding price spread boosted the sales of natural gas HDTs substantially by 2x YoY in Mar, taking the gas HDT ratio to 25% (vs 7% in Jan).</li><li>We expect the current gas/diesel price spread could last longer than that in 2023, given the elevated crude price arising from the geopolitical tension in the Middle East. </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 35% decline in China’s LNG price (due to abundant supply) along with the 4% increase in diesel price (due to strong crude price) YTD have reduced the gas/diesel price ratio to only 0.56x (0.9x in late Dec 2023).The expanding price spread boosted the sales of natural gas HDTs substantially by 2x YoY in Mar, taking the gas HDT ratio to 25% (vs 7% in Jan).We expect the current gas/diesel price spread could last longer than that in 2023, given the elevated crude price arising from the geopolitical tension in the Middle East. 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 Heavy Duty Truck - Expanding Gas/Diesel Price Spread to Further Boost Sales of Gas HDTs

<ul><li>In the Central Commission for Financial and Economic Affairs (CCFEA) meeting held on 23 Feb, President Xi proposed an acceleration of a large-scale replacement of production equipment to support economic growth.</li><li>This is the first time that equipment replacement is mentioned as a tool to support the economy.</li><li>We believe this message is a positive signal to the heavy-duty truck (HDT) sector. </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.

In the Central Commission for Financial and Economic Affairs (CCFEA) meeting held on 23 Feb, President Xi proposed an acceleration of a large-scale replacement of production equipment to support economic growth.This is the first time that equipment replacement is mentioned as a tool to support the economy.We believe this message is a positive signal to the heavy-duty truck (HDT) sector. 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.

Capital Goods – Equipment Replacement Proposed in Central Government Meeting

<ul><li>We summarize the Jan 2024 leading indicators as below, including the number of leads, customer flows and new orders generated, for Tesla, NIO, Li Auto, Xpeng, BYD and Aion.</li><li>Note that such data are based on a sample size of 96 stores (15-18 stores for each brand) in 15 cities in China.</li><li>The following data reflect same-store metrics, and the metrics on a company level could be better than these figures, as most players are still expanding their sales network.</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 summarize the Jan 2024 leading indicators as below, including the number of leads, customer flows and new orders generated, for Tesla, NIO, Li Auto, Xpeng, BYD and Aion.Note that such data are based on a sample size of 96 stores (15-18 stores for each brand) in 15 cities in China.The following data reflect same-store metrics, and the metrics on a company level could be better than these figures, as most players are still expanding their sales network.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.

Auto - Moderate Leading Indicators May Result in Mild Recovery After CNY

<ul><li>According to preliminary data from Cvworld, China HDT sales volume (domestic sales + exports) surged 64% YoY to ~80k units in Jan 2024.</li><li>The growth is stronger than our expectation as: (1) part of the sales in Dec 2023 were postponed to Jan 2024; (2) an early CNY in 2023 resulted in a low base effect.</li><li>Smoothing out the CNY effect by comparing the average sales in 2M23 (63k units), the sales of 80k units in Jan 2024 represented 27% growth. </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.

According to preliminary data from Cvworld, China HDT sales volume (domestic sales + exports) surged 64% YoY to ~80k units in Jan 2024.The growth is stronger than our expectation as: (1) part of the sales in Dec 2023 were postponed to Jan 2024; (2) an early CNY in 2023 resulted in a low base effect.Smoothing out the CNY effect by comparing the average sales in 2M23 (63k units), the sales of 80k units in Jan 2024 represented 27% growth. 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.

Capital Goods - HDT Sales Volume Surged ~64% YoY in Jan on Low Base

<ul><li>For Chinese machinery manufacturers, penetration overseas remains a longterm driver.</li><li>That said, with growth trend reversing since mid-2023 after 2-3 years of extraordinary growth, the way to overseas expansion will likely be bumpy in 2024E, especially when the overseas competitors are recovering from the supply chain bottleneck.</li><li>Geographically, we expect strong demand to continue in the US and the Middle East, but weakness in Europe and 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.

For Chinese machinery manufacturers, penetration overseas remains a longterm driver.That said, with growth trend reversing since mid-2023 after 2-3 years of extraordinary growth, the way to overseas expansion will likely be bumpy in 2024E, especially when the overseas competitors are recovering from the supply chain bottleneck.Geographically, we expect strong demand to continue in the US and the Middle East, but weakness in Europe and 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.

China Construction Machinery / HDT – 2024 Outlook

China

Weichai Power Co., Ltd. specializes in the research and development, manufacturing and sales of vehicles and parts. The Company produces engines, heavy vehicles, light vehicles, construction machinery, hydraulic products, automotive electronics, and related parts. Weichai Power markets its products across worldwide.

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Weichai Power (000338 CH)

China Heavy Duty Truck - Expanding Gas/Diesel Price Spread to Further Boost Sales of Gas HDTs

The expanding price spread boosted the sales of natural gas HDTs substantially by 2x YoY in Mar, taking the gas HDT ratio to 25% (vs 7% in Jan).

CMB International

Capital Goods – Equipment Replacement Proposed in Central Government Meeting

This is the first time that equipment replacement is mentioned as a tool to support the economy.We believe this message is a positive signal to the...

CMB International

Auto - Moderate Leading Indicators May Result in Mild Recovery After CNY

We summarize the Jan 2024 leading indicators as below, including the number of leads, customer flows and new orders generated, for Tesla, NIO, Li...

CMB International

Capital Goods - HDT Sales Volume Surged ~64% YoY in Jan on Low Base

According to preliminary data from Cvworld, China HDT sales volume (domestic sales + exports) surged 64% YoY to ~80k units in Jan 2024

CMB International

China Construction Machinery / HDT – 2024 Outlook

That said, with growth trend reversing since mid-2023 after 2-3 years of extraordinary growth, the way to overseas expansion will likely be bumpy...

CMB International

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