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>1H ended with 3 beats, 3 misses and 5 in-lines. The wrap-up of 1H/ 2Q earnings season has largely reset market expectation with latest earnings forecasts, management guidance and hence a refreshed 2H outlook.</li><li>In the near term, in our view, when the PPI-CPI scissor gap continues to narrow, market likely refocuses on the legitimation of any GPM expansion for staple players.</li><li>Meanwhile, lockdown risks prompt us to reside with plays that enjoy high online sales mix, and more importantly, relevant to the upcoming Double 11 campaign.</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.

1H ended with 3 beats, 3 misses and 5 in-lines. The wrap-up of 1H/ 2Q earnings season has largely reset market expectation with latest earnings forecasts, management guidance and hence a refreshed 2H outlook.In the near term, in our view, when the PPI-CPI scissor gap continues to narrow, market likely refocuses on the legitimation of any GPM expansion for staple players.Meanwhile, lockdown risks prompt us to reside with plays that enjoy high online sales mix, and more importantly, relevant to the upcoming Double 11 campaign.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 – A diverging 1H; mix upgrade and cost savings were keys to stay relevant

Equity Bottom-Up

Yunnan Botanee Bio-Technology / Equity Bottom-Up

Yunnan Botanee Bio-Technology (300957 CH)

<ul><li>Botanee made a pronounced come-back year-to-date, reviving Tmall GMV from -59.8% YoY to -6.9% YoY between Jan and Oct, and accelerating its quarterly sales growth from 7% in 1Q to 26% in 3Q.</li><li>Year-to-date shares performance has gone against this trend and, in our view, the free-fall is running ahead of consensus estimates which still looked rather reserved in pricing-in the ongoing dilemma that Botanee is facing.</li><li>These are threefold: 1) when macro headwinds such as consumption trade-down (see our thematic report) and low fertility wish linger (see our Feihe downgrade report), growth outlook among AOXMED (super high-end) and Winona Baby could normalise sooner than expected, and Botanee’s single-brand risk could be exposed further given a full-fledged closequarters competition among brands; 2) herbal-/HA-based functional skincare is incrementally crowded out by the collagen-based. </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.

Botanee made a pronounced come-back year-to-date, reviving Tmall GMV from -59.8% YoY to -6.9% YoY between Jan and Oct, and accelerating its quarterly sales growth from 7% in 1Q to 26% in 3Q.Year-to-date shares performance has gone against this trend and, in our view, the free-fall is running ahead of consensus estimates which still looked rather reserved in pricing-in the ongoing dilemma that Botanee is facing.These are threefold: 1) when macro headwinds such as consumption trade-down (see our thematic report) and low fertility wish linger (see our Feihe downgrade report), growth outlook among AOXMED (super high-end) and Winona Baby could normalise sooner than expected, and Botanee’s single-brand risk could be exposed further given a full-fledged closequarters competition among brands; 2) herbal-/HA-based functional skincare is incrementally crowded out by the collagen-based. 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.

Botanee Biotech (300957 CH) – Headwinds Endure

<ul><li>2023 outlook. Despite a miss in 4Q, we think Botanee is set to recover along with China’s reopening, thanks to its OMO distribution network and an unchallenged R&amp;D franchise that differentiates from peers.</li><li>Our channel check suggested Winona 2M23 sales grew 20%+ on Tmall/ Taobao and 300%+ on Tiktok.</li><li>For its offline business, we still see huge potential to expand from currently 19% to 26% of total revenue by 2024E, when Botanee only penetrates less than 5% of the national drug stores at present.</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.

2023 outlook. Despite a miss in 4Q, we think Botanee is set to recover along with China’s reopening, thanks to its OMO distribution network and an unchallenged R&amp;D franchise that differentiates from peers.Our channel check suggested Winona 2M23 sales grew 20%+ on Tmall/ Taobao and 300%+ on Tiktok.For its offline business, we still see huge potential to expand from currently 19% to 26% of total revenue by 2024E, when Botanee only penetrates less than 5% of the national drug stores at present.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.

Botanee Biotech (300957 CH) – ESOP Targets Stabilize Earnings Expectation

<ul><li>3Q net profit was in line with both consensus and our estimates, although revenue was c.10%/5% below.</li><li>Excluding non-core items, recurring net profits grew 20% YoY to RMB96mn, in line with a 21% top line growth.</li><li>Double 11 update. Botanee achieved RMB1bn sales on Tmall on the first day of the Double 11 presale.</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.

3Q net profit was in line with both consensus and our estimates, although revenue was c.10%/5% below.Excluding non-core items, recurring net profits grew 20% YoY to RMB96mn, in line with a 21% top line growth.Double 11 update. Botanee achieved RMB1bn sales on Tmall on the first day of the Double 11 presale.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.

Botanee Biotech (300957 CH) – A soft 3Q prompted for an earnings cut

China

Yunnan Botanee Bio-Technology Group Co. LTD manufactures and sells skin care and cosmetics. The Company produces masks, toners, hand creams, and other cosmetics. Yunnan Botanee Bio-Technology Group also develops new biology technologies.

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Yunnan Botanee Bio-Technology (300957 CH)

China Consumer Staples – A diverging 1H; mix upgrade and cost savings were keys to stay relevant

In the near term, in our view, when the PPI-CPI scissor gap continues to narrow, market likely refocuses on the legitimation of any GPM expansion...

CMB International

Botanee Biotech (300957 CH) – Headwinds Endure

Botanee made a pronounced come-back year-to-date, reviving Tmall GMV from -59.8% YoY to -6.9% YoY between Jan and Oct, and accelerating its...

CMB International

Botanee Biotech (300957 CH) – ESOP Targets Stabilize Earnings Expectation

Despite a miss in 4Q, we think Botanee is set to recover along with China’s reopening, thanks to its OMO distribution network and an unchallenged...

CMB International

Botanee Biotech (300957 CH) – A soft 3Q prompted for an earnings cut

3Q net profit was in line with both consensus and our estimates, although revenue was c.10%/5% below. Excluding non-core items, recurring net...

CMB International

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