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 consumption trend in Apr 2025 improved MoM across most sub-sectors compared to Mar 2025.</li><li>Numbers during the 2025 5-1 holidays either maintained this trend or further improved, mainly thanks to: 1) a low base, 2) improving weather conditions, 3) longer holidays compared to last year, and 4) fairly robust inbound tourism growth.</li><li>By subsector, apparel and tourism-hotel outperformed our expectations, sportswear and home appliances met expectations, while catering lagged behind. </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 consumption trend in Apr 2025 improved MoM across most sub-sectors compared to Mar 2025.Numbers during the 2025 5-1 holidays either maintained this trend or further improved, mainly thanks to: 1) a low base, 2) improving weather conditions, 3) longer holidays compared to last year, and 4) fairly robust inbound tourism growth.By subsector, apparel and tourism-hotel outperformed our expectations, sportswear and home appliances met expectations, while catering lagged behind. 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.

Consumer Discretionary - Constructive trend in S-R but cautious in L-R

Equity Bottom-Up

<ul><li>3Q24 result was a strong beat, from sales to margin, to capital return program.</li><li>Going forward in 4Q24E, we remain optimistic and expect SSSG to turn around and margin to further improve, thanks to the excellent execution of various strategies like: 1) widening of customer base, 2) optimizing the delivery growth and 3) rolling out of more stores with new formats like K-coffee and Pizza Hut WOW.</li><li>Maintain BUY and raise TP to HK$ 451.11.</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.

3Q24 result was a strong beat, from sales to margin, to capital return program.Going forward in 4Q24E, we remain optimistic and expect SSSG to turn around and margin to further improve, thanks to the excellent execution of various strategies like: 1) widening of customer base, 2) optimizing the delivery growth and 3) rolling out of more stores with new formats like K-coffee and Pizza Hut WOW.Maintain BUY and raise TP to HK$ 451.11.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.

Yum China (9987 HK) - A Strong Beat once Again and We Are Optimistic

<ul><li>Upgrade our rating to OUTPERFORM on the consumer discretionary sector.</li><li>The foot traffic of the 2024 10-1 National Day holidays was strong (recovery rate has improved vs Mid-autumn and Dragon Boat Festival) but the spending power remained fairly week.</li><li>Even though the retail sales growth was still under pressure, a sequential improvement was observed compared with Sep 2024, and this should be able to support the further re-rating of the sector valuation. </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.

Upgrade our rating to OUTPERFORM on the consumer discretionary sector.The foot traffic of the 2024 10-1 National Day holidays was strong (recovery rate has improved vs Mid-autumn and Dragon Boat Festival) but the spending power remained fairly week.Even though the retail sales growth was still under pressure, a sequential improvement was observed compared with Sep 2024, and this should be able to support the further re-rating of the sector valuation. 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.

Consumer Discretionary - Sequential Improvement May Support Re-Rating

<ul><li>Sales growth was indeed a miss in 2Q24, but the net profit was a significant beat.</li><li>For 2H24E, we are still very cautious about the demand and so as the level of competition.</li><li>However, thanks to various efforts like Project Fresh Eye, Project Red Eye, rationalizing number of SKUs, more direct sourcing, and ramp up of more profitable store formats (e.g. K-coffee and Pizza Hut’s WOW model) etc., we are confident on a turnaround in 4Q24E. </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.

Sales growth was indeed a miss in 2Q24, but the net profit was a significant beat.For 2H24E, we are still very cautious about the demand and so as the level of competition.However, thanks to various efforts like Project Fresh Eye, Project Red Eye, rationalizing number of SKUs, more direct sourcing, and ramp up of more profitable store formats (e.g. K-coffee and Pizza Hut’s WOW model) etc., we are confident on a turnaround in 4Q24E. 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.

Yum China (9987 HK) - The Best-In-Class Costs Management in 2Q24

<ul><li>The 1Q24 results of Yum China were satisfactory, however the catering industry remain subdued and hence we have become more cautious about YUMC’s 2Q24E outlook.</li><li>But since the turnaround in 2H24E should still be intact, plus the massive buyback and dividend payment, we continue to maintain BUY.</li><li>1Q24 results roughly inline. For 1Q24, Yum China’s sales increased by 1% YoY to US$ 2.96bn, missing CMBI est. by 6%, due to: 1) slight miss in Pizza Hut’s SSSG (fell by 5% vs CMBI est. of -3%), 2) CNY depreciation, 3) lower-than-expected sales per store (as a result of smaller-sized new stores).</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 1Q24 results of Yum China were satisfactory, however the catering industry remain subdued and hence we have become more cautious about YUMC’s 2Q24E outlook.But since the turnaround in 2H24E should still be intact, plus the massive buyback and dividend payment, we continue to maintain BUY.1Q24 results roughly inline. For 1Q24, Yum China’s sales increased by 1% YoY to US$ 2.96bn, missing CMBI est. by 6%, due to: 1) slight miss in Pizza Hut’s SSSG (fell by 5% vs CMBI est. of -3%), 2) CNY depreciation, 3) lower-than-expected sales per store (as a result of smaller-sized new stores).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.

Yum China (9987 HK) - 2Q24E Is Tough but Turnaround Is Still Possible

China

Yum China Holdings, Inc. operates chain restaurants. The Company offers pizza, entrees, pasta, rice dishes, appetizers, soups, vegetables, beverages, and desserts. Yum China Holding conducts its business worldwide.

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Yum China Holdings (9987 HK)

Consumer Discretionary - Constructive trend in S-R but cautious in L-R

Numbers during the 2025 5-1 holidays either maintained this trend or further improved, mainly thanks to: 1) a low base, 2) improving weather...

CMB International

Yum China (9987 HK) - A Strong Beat once Again and We Are Optimistic

Going forward in 4Q24E, we remain optimistic and expect SSSG to turn around and margin to further improve, thanks to the excellent execution of...

CMB International

Consumer Discretionary - Sequential Improvement May Support Re-Rating

Upgrade our rating to OUTPERFORM on the consumer discretionary sector. The foot traffic of the 2024 10-1 National Day holidays was strong

CMB International

Yum China (9987 HK) - The Best-In-Class Costs Management in 2Q24

Sales growth was indeed a miss in 2Q24, but the net profit was a significant beat. For 2H24E, we are still very cautious about the demand and so as...

CMB International

Yum China (9987 HK) - 2Q24E Is Tough but Turnaround Is Still Possible

The 1Q24 results of Yum China were satisfactory, however the catering industry remain subdued and hence we have become more cautious about YUMC’s...

CMB International

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