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)

<div><div><div><div><ul><li>A non-eventful 3Q. While earnings cuts and de-ratings have taken place and reset market expectation across 1H results, in our view, earnings volatility for 3Q is unlikely to be drastic.</li><li>For items that we monitored, our channel checks suggested that sales momentum was largely on track to us - low-teen growth for CRB, double-digit growth for Nongfu, and particularly sequential double- digit recovery for Mengniu and Feihe.</li><li>Separately, the lockdown of Hainan since August could mean downside revision potential for CTGDF despite a well-maintained GPM.</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>

A non-eventful 3Q. While earnings cuts and de-ratings have taken place and reset market expectation across 1H results, in our view, earnings volatility for 3Q is unlikely to be drastic.For items that we monitored, our channel checks suggested that sales momentum was largely on track to us - low-teen growth for CRB, double-digit growth for Nongfu, and particularly sequential double- digit recovery for Mengniu and Feihe.Separately, the lockdown of Hainan since August could mean downside revision potential for CTGDF despite a well-maintained GPM.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 – Addressing Recent Investors’ Concerns

<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><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>

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

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. / Equity Bottom-Up

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd.

<ul>
<li>Due to the lockdown/pandemic, <a href="https://www.smartkarma.com/entities/zhangzhou-pientzehuang-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:15709:1" rel="noopener">Pientzehuang Pharmaceutical</a>’s 2022H1 performance slowed down. Considering the economic downturn and people's cutting back spending on non-rigid consumption, the full-year revenue growth could be around 10%-20%.</li>
<li>The Company's key challenge lies in revenue growth. However, it is not easy to increase sales largely due to the scarcity of raw materials, which limits the expansion of production.</li>
<li>Pien Tze Huang is overvalued. Share price could continue to fall,but it will bounce back due to its high moat. 2022 is a good time for bottom fishing this stock.</li>
</ul>


Due to the lockdown/pandemic, Pientzehuang Pharmaceutical’s 2022H1 performance slowed down. Considering the economic downturn and people's cutting back spending on non-rigid consumption, the full-year revenue growth could be around 10%-20%.
The Company's key challenge lies in revenue growth. However, it is not easy to increase sales largely due to the scarcity of raw materials, which limits the expansion of production.
Pien Tze Huang is overvalued. Share price could continue to fall,but it will bounce back due to its high moat. 2022 is a good time for bottom fishing this stock.


Zhangzhou Pientzehuang Pharmaceutical (600436CH) 22H1- 2022 Is Stressful but Shares Will Bounce Back

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>There are 28 changes for the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX)</a> at the upcoming rebalance that will be implemented at the close of trading on 9 June.</li>
<li>We had forecast nearly all the changes, though the index committee seems to have used discretion in deciding not to add three Distillers to the index, leading to other changes.</li>
<li>There's a large sector skew with Industrials, Information Technology and Materials stocks taking 17 more spots in the index, while Health Care and Financials lose 9 and 5 spots respectively.</li>
</ul>


There are 28 changes for the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) at the upcoming rebalance that will be implemented at the close of trading on 9 June.
We had forecast nearly all the changes, though the index committee seems to have used discretion in deciding not to add three Distillers to the index, leading to other changes.
There's a large sector skew with Industrials, Information Technology and Materials stocks taking 17 more spots in the index, while Health Care and Financials lose 9 and 5 spots respectively.


CSI300 Index Rebalance: Big Sector Shift with 28 Changes

Bloomage Biotechnology  Lt / Equity Bottom-Up

<ul>
<li>Botanee has outstanding performance at the current stage, but WINONA alone is not enough to establish a high moat. Its weak R&amp;D/innovation in raw materials/products would cast doubts on outlook.</li>
<li>Bloomage is more R&amp;D oriented and characterized by integration of industrial chain. Its advanced synthetic biology will bring more possibilities for future development.The collagen would be a new growth point.</li>
<li>Although with lower net profit margin, Bloomage is expected to have better outlook than Botanee. So, we think Bloomage could have higher valuation than Botanee in the future.  </li>
</ul>


Botanee has outstanding performance at the current stage, but WINONA alone is not enough to establish a high moat. Its weak R&amp;D/innovation in raw materials/products would cast doubts on outlook.
Bloomage is more R&amp;D oriented and characterized by integration of industrial chain. Its advanced synthetic biology will bring more possibilities for future development.The collagen would be a new growth point.
Although with lower net profit margin, Bloomage is expected to have better outlook than Botanee. So, we think Bloomage could have higher valuation than Botanee in the future.  


Bloomage Biotechnology Vs Yunnan Botanee Bio-Technology - Accumulate Richly and Break Forth Vastly

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.

Yunnan Botanee Bio-Technology (300957 CH)

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Yunnan Botanee Bio-Technology (300957 CH)

China Consumer – Addressing Recent Investors’ Concerns

A non-eventful 3Q. While earnings cuts and de-ratings have taken place and reset market expectation across 1H results, in our view, earnings...

CMB International

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

Zhangzhou Pientzehuang Pharmaceutical (600436CH) 22H1- 2022 Is Stressful but Shares Will Bounce Back

Pien Tze Huang's performance slows down this year. Shares could continue to fall due to overvaluation, but will bounce back due to its high moat....

Xinyao (Criss) Wang

CSI300 Index Rebalance: Big Sector Shift with 28 Changes

The June rebalance of the CSI300 Index will have 28 changes, a large sector skew, one-way turnover of 4.11% and a one-way trade of CNY 10bn. The...

Brian Freitas

Bloomage Biotechnology Vs Yunnan Botanee Bio-Technology - Accumulate Richly and Break Forth Vastly

Botanee takes the lead in performance due to WINONA, but Bloomage's strong R&D/industrial chain integration/collagen/synthetic biology indicate...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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