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.

Equity Bottom-Up

Zoomlion Heavy Industry S A / Equity Bottom-Up

<ul><li>Upgrade to BUY from Hold. Zoomlion’s net profit in 2022 came in at RMB2.35bn (-63% YoY), in the middle of the range of RMB2.25-4.45bn preannounced in Jan.</li><li>What surprised us is the final dividend of RMB0.32, which represents a 115% payout ratio.</li><li>The generous dividend, together with the potential resumption of buy-back (A-share), suggest that management is confident of the cash generating capability which will likely translate into positive share price performance.</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 to BUY from Hold. Zoomlion’s net profit in 2022 came in at RMB2.35bn (-63% YoY), in the middle of the range of RMB2.25-4.45bn preannounced in Jan.What surprised us is the final dividend of RMB0.32, which represents a 115% payout ratio.The generous dividend, together with the potential resumption of buy-back (A-share), suggest that management is confident of the cash generating capability which will likely translate into positive share price performance.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.

Zoomlion (000157 CH) – Surprise on Dividend

Thematic (Sector/Industry)

<ul><li>Following a rally since early Feb, we believe the market has already priced in the upcoming recovery of machinery demand.</li><li>We see little upside potential in the near term, as (1) the recovery could be more seasonal (MoM) than structural (YoY), with sales of excavator (proxy for the sector) likely falling short of expectation in Mar; (2) We expect the strong credit growth will only translate into a moderate recovery of excavator demand this year (+10% YoY in our industry assumption).</li><li>Therefore, we are selective in our universe, and prefer only AWP (the only type of machinery that stands out by achieving 15% YoY growth in Jan). </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.

Following a rally since early Feb, we believe the market has already priced in the upcoming recovery of machinery demand.We see little upside potential in the near term, as (1) the recovery could be more seasonal (MoM) than structural (YoY), with sales of excavator (proxy for the sector) likely falling short of expectation in Mar; (2) We expect the strong credit growth will only translate into a moderate recovery of excavator demand this year (+10% YoY in our industry assumption).Therefore, we are selective in our universe, and prefer only AWP (the only type of machinery that stands out by achieving 15% YoY growth in Jan). 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 – Near-Term Recovery More Seasonal than Structural

<ul><li>Major aerial work platform (AWP) manufacturers (Terex, Oshkosh) and rental company (United Rentals) in the US provide bullish guidance on 2023E outlook after reporting their 2022 results.</li><li>Key takeaways: (1) AWP manufacturers saw strong order flow with backlog visibility of &gt;12 months; (2) The mega projects, which are less macro reliant, will provide both rental companies and AWP manufacturers with growth certainty over the coming years; (3) manufacturers’ margin improvement trend will continue despite the fact that supply chain will remain a constraint this year, suggesting strong pricing power.</li><li>All these reaffirm our positive stance on the AWP sector this year. </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.

Major aerial work platform (AWP) manufacturers (Terex, Oshkosh) and rental company (United Rentals) in the US provide bullish guidance on 2023E outlook after reporting their 2022 results.Key takeaways: (1) AWP manufacturers saw strong order flow with backlog visibility of &gt;12 months; (2) The mega projects, which are less macro reliant, will provide both rental companies and AWP manufacturers with growth certainty over the coming years; (3) manufacturers’ margin improvement trend will continue despite the fact that supply chain will remain a constraint this year, suggesting strong pricing power.All these reaffirm our positive stance on the AWP sector this year. 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 – Upbeat Guidance from US AWP Manufacturers

Zoomlion Heavy Industry H / Equity Bottom-Up

<ul><li>We believe the potential spin-off of Zoomlion Aerial Machinery, through asset injection into Shenzhen RoadRover Technology (002813 CH, NR), can help Zoomlion unlock the value of the AWP business.</li><li>Upon the completion of the transaction, RoadRover will become a major AWP play and should deserve a higher valuation, which will help reduce funding cost for any potential capacity expansion in future.</li><li>We reiterate our BUY rating on Zoomlion-H with TP of HK$5.24</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 believe the potential spin-off of Zoomlion Aerial Machinery, through asset injection into Shenzhen RoadRover Technology (002813 CH, NR), can help Zoomlion unlock the value of the AWP business.Upon the completion of the transaction, RoadRover will become a major AWP play and should deserve a higher valuation, which will help reduce funding cost for any potential capacity expansion in future.We reiterate our BUY rating on Zoomlion-H with TP of HK$5.24Content 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.

Zoomlion (1157 HK) – Spin-off of AWP business to unlock value

<ul><li>What is new? The 24% YoY decline in excavator sales in 2022 (for the industry as a whole) is largely in line with our expectation.</li><li>Meanwhile, Jiangsu Hengli’s scheduled production of excavator cylinders in Jan 2023 drops &gt;20% YoY, likely due to (1) the pandemic impact and (2) base effect of CNY.</li><li>On the back of reopening and easing liquidity, we expect demand for excavator to pick up moderately in Feb/Mar and we maintain our forecast of 10% YoY increase in the industry demand in 2023E (China: +15%, export: +5%).</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.

What is new? The 24% YoY decline in excavator sales in 2022 (for the industry as a whole) is largely in line with our expectation.Meanwhile, Jiangsu Hengli’s scheduled production of excavator cylinders in Jan 2023 drops &gt;20% YoY, likely due to (1) the pandemic impact and (2) base effect of CNY.On the back of reopening and easing liquidity, we expect demand for excavator to pick up moderately in Feb/Mar and we maintain our forecast of 10% YoY increase in the industry demand in 2023E (China: +15%, export: +5%).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 – Prefer AWP to excavator in the near term

China

Zoomlion Heavy Industry Science and Technology Co., Ltd.manufactures and markets construction machinery.  The Company's products include concrete machinery, cranes, road machinery, drilling equipment, and other heavy construction equipment.  Zoomlion also produces environmental machinery and satellite navigation products.

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Zoomlion Heavy Industry H (1157 HK)

Zoomlion (000157 CH) – Surprise on Dividend

Upgrade to BUY from Hold. Zoomlion’s net profit in 2022 came in at RMB2.35bn (-63% YoY), in the middle of the range of RMB2.25-4.45bn preannounced...

CMB International

China Construction Machinery – Near-Term Recovery More Seasonal than Structural

Following a rally since early Feb, we believe the market has already priced in the upcoming recovery of machinery demand.

CMB International

China Construction Machinery – Upbeat Guidance from US AWP Manufacturers

Major aerial work platform (AWP) manufacturers (Terex, Oshkosh) and rental company (United Rentals) in the US provide bullish guidance on 2023E...

CMB International

Zoomlion (1157 HK) – Spin-off of AWP business to unlock value

We believe the potential spin-off of Zoomlion Aerial Machinery, through asset injection into Shenzhen RoadRover Technology (002813 CH, NR), can...

CMB International

China Construction Machinery – Prefer AWP to excavator in the near term

What is new? The 24% YoY decline in excavator sales in 2022 (for the industry as a whole) is largely in line with our expectation.

CMB International

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