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 prelim results released in Jan 2023, the sector started to rally substantially despite a mixed or disappointing set of results.</li><li>In our view, the rebound is mainly due to: 1) a relief rally with better-than-feared results; 2) rising expectation for economy rebound on China reopening; 3) accelerated localization trend under the backdrop of Sino-US tensions.</li><li>However, based on our checks with semi contacts in China and analysis of recent results from major global/ Chinese semi companies, we think the consumer electronic market will remain challenging in 1H23, and recovery may come in 2H23 the earliest. </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>

Following prelim results released in Jan 2023, the sector started to rally substantially despite a mixed or disappointing set of results.In our view, the rebound is mainly due to: 1) a relief rally with better-than-feared results; 2) rising expectation for economy rebound on China reopening; 3) accelerated localization trend under the backdrop of Sino-US tensions.However, based on our checks with semi contacts in China and analysis of recent results from major global/ Chinese semi companies, we think the consumer electronic market will remain challenging in 1H23, and recovery may come in 2H23 the earliest. 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 Hardware/Semi – Reality Check on Smartphone Supply Chain

Equity Bottom-Up

<ul><li>Willsemi announced preliminary 2022 net income of RMB800 mn to RMB1,200 mn, showing 73.2% to 82.1% YoY decline.</li><li>Even a weak 4Q22 was already widely anticipated, the results came in significantly below our/consensus forecasts of RMB2.46 bn/RMB2.97 bn.</li><li>The mgmt. attributed the miss to 1) weak consumer electronic market demand (lower rev. and margin), 2) an inventory write down of RMB1.3 bn to RMB1.5 bn (as a result of high inventory base). We see no clear sign of recovery of consumer electronic demand in near-term, maintain HOLD and revise TP to RMB72.</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>

Willsemi announced preliminary 2022 net income of RMB800 mn to RMB1,200 mn, showing 73.2% to 82.1% YoY decline.Even a weak 4Q22 was already widely anticipated, the results came in significantly below our/consensus forecasts of RMB2.46 bn/RMB2.97 bn.The mgmt. attributed the miss to 1) weak consumer electronic market demand (lower rev. and margin), 2) an inventory write down of RMB1.3 bn to RMB1.5 bn (as a result of high inventory base). We see no clear sign of recovery of consumer electronic demand in near-term, maintain HOLD and revise TP to RMB72.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.

Willsemi (603501 CH) – Preliminary 2022 Results Came in Below Estimate

<ul><li>Willsemi announced its 3Q22 results. 3Q revenue declined 26.5% YoY and 22.1% QoQ to RMB4.3bn.</li><li>NP to shareholders recorded a net loss of RMB120mn, a hard hit from smartphone market weakness and slow digestion of CIS inventory.</li><li>GPM dropped to 28.4% in 3Q (vs. 33.3%/34.5% in 2Q22 and 2021).</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>

Willsemi announced its 3Q22 results. 3Q revenue declined 26.5% YoY and 22.1% QoQ to RMB4.3bn.NP to shareholders recorded a net loss of RMB120mn, a hard hit from smartphone market weakness and slow digestion of CIS inventory.GPM dropped to 28.4% in 3Q (vs. 33.3%/34.5% in 2Q22 and 2021).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.

Willsemi (603501 CH) – Sluggish 3Q22 Performance

<div><div><div><div><ul><li>We expect global CIS sales to decline 5.1% YoY in 2022, mainly dragged by the weak performance in mobile CIS market.</li><li>We expect CIS market to recover in 2H23, as mobile CIS inventory level returns to a normal level.</li><li>However, challenges remain given high uncertainties in economy and geopolitical issues.</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>

We expect global CIS sales to decline 5.1% YoY in 2022, mainly dragged by the weak performance in mobile CIS market.We expect CIS market to recover in 2H23, as mobile CIS inventory level returns to a normal level.However, challenges remain given high uncertainties in economy and geopolitical issues.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 CIS Sector – Maintain long-term positive outlook; near-term challenges persist

China

Will Semiconductor Co.,Ltd. Shanghai manufactures image sensor products and semiconductor products. The Company produces and sells complementary metal oxide semiconductors, protecting devices, power devices, power management integrated circuits, radio frequency devices, microphone sensors, and more. Will Semiconductor Shanghai markets its products worldwide.

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Will Semiconductor (603501 CH)

China Hardware/Semi – Reality Check on Smartphone Supply Chain

Following prelim results released in Jan 2023, the sector started to rally substantially despite a mixed or disappointing set of results.

CMB International

Willsemi (603501 CH) – Preliminary 2022 Results Came in Below Estimate

Even a weak 4Q22 was already widely anticipated, the results came in significantly below our/consensus forecasts of RMB2.46 bn/RMB2.97 bn.

CMB International

Willsemi (603501 CH) – Sluggish 3Q22 Performance

NP to shareholders recorded a net loss of RMB120mn, a hard hit from smartphone market weakness and slow digestion of CIS inventory.

CMB International

China CIS Sector – Maintain long-term positive outlook; near-term challenges persist

We expect CIS market to recover in 2H23, as mobile CIS inventory level returns to a normal level.However, challenges remain given high...

CMB International

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