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

Li Auto Inc. manufactures automobiles. The Company designs, develops, and sells smart new energy electric sport utility vehicles. Li Auto conducts businesses in China.

<ul><li>We are of the view that Li Auto has lowered priority for its FY24E profitability and the sell-off after the 1Q24 earnings call has largely priced in such management mentality.</li><li>We believe the key lies in its new BEV strategy, EREV sales recovery in 2H24 and FY25 sales growth with BEVs being postponed.</li><li>1Q24 GP in line; R&amp;D and SG&amp;A dragged NP. Li Auto’s 1Q24 revenue was about 3% higher than our prior forecast, largely due to its other sales and services.</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 are of the view that Li Auto has lowered priority for its FY24E profitability and the sell-off after the 1Q24 earnings call has largely priced in such management mentality.We believe the key lies in its new BEV strategy, EREV sales recovery in 2H24 and FY25 sales growth with BEVs being postponed.1Q24 GP in line; R&amp;D and SG&amp;A dragged NP. Li Auto’s 1Q24 revenue was about 3% higher than our prior forecast, largely due to its other sales and services.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.

Li Auto Inc. (LI US) - Is the Mega Lesson Worthwhile?

Thematic (Sector/Industry)

<ul><li>Listed insurers reported 4M24 premiums with resilience shown among six life peers, of which the total premiums grew by +0.4% YoY to RMB 854.1bn swinging to a positive reading after three consecutive months in first quarter (Fig.1).</li><li>In Apr, total premiums of six listed life peers rose by +7.9% YoY to RMB 107.2bn (vs +3.0%/+6.6% YoY in Feb/Mar), despite a high base due to the PIR cut in 2Q23.</li><li>For life peers, we see divergence in growth, and regard it as progression in channel and product mix enhancement after the outpaced 1Q24 results. </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.

Listed insurers reported 4M24 premiums with resilience shown among six life peers, of which the total premiums grew by +0.4% YoY to RMB 854.1bn swinging to a positive reading after three consecutive months in first quarter (Fig.1).In Apr, total premiums of six listed life peers rose by +7.9% YoY to RMB 107.2bn (vs +3.0%/+6.6% YoY in Feb/Mar), despite a high base due to the PIR cut in 2Q23.For life peers, we see divergence in growth, and regard it as progression in channel and product mix enhancement after the outpaced 1Q24 results. 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 Insurance - 4M24 Life Diverged in Face of High Base

iQIYI, Inc. offers video entertainment services. The Company provides movies, television dramas, variety shows, and other video contents. iQIYI offers services worldwide.

<ul><li>1Q24 beat on margin again, with adj. NP at RMB844mn (91% above consensus) and top line 1% above consensus.</li><li>For 2Q24E, we expect IQ’s revenue -1% YoY (in which subs revenue -5% YoY while ads +7% YoY), with a rich content pipeline ahead (e.g. Fox Spirit Matchmaker &lt;狐妖小红 娘&gt;).</li><li>We forecast 2Q24E non-GAAP OP resilient at RMB800mn, and we are positive on mgmt’s FY24E OP target of RMB5bn. </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.

1Q24 beat on margin again, with adj. NP at RMB844mn (91% above consensus) and top line 1% above consensus.For 2Q24E, we expect IQ’s revenue -1% YoY (in which subs revenue -5% YoY while ads +7% YoY), with a rich content pipeline ahead (e.g. Fox Spirit Matchmaker &lt;狐妖小红 娘&gt;).We forecast 2Q24E non-GAAP OP resilient at RMB800mn, and we are positive on mgmt’s FY24E OP target of RMB5bn. 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.

iQIYI (IQ US) - Margin surprise on higher efficiency

JD.com Inc is an online direct sales company in China.  The Company offers a wide selection of products through its website and mobile applications.  JD.com sells appliances, computers, digital products, communication products, garments, books, and household items to consumers and vendors.

<ul><li>JD.com (JD) reported (16 May) better-than-expected 1Q24 results: revenue was RMB260.0bn, up 7% YoY, 1% ahead of Bloomberg consensus; non-GAAP net income was RMB8.9bn, ahead of consensus estimates of RMB7.4bn thanks to better-than-feared gross profit margin aided by scale effect.</li><li>Management noted that general merchandise category has entered clean base since 1Q24, and commission revenue growth has also entered clean base since 2Q24 since the impact from enhancing merchant support has reached the full-year milestone.</li><li>JD is staying vigilant in industry competition, although industry competition seems more benign than market expectation given that all the industry peers are focusing on driving growth in an efficient way by targeting more on core user base operation. </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.

JD.com (JD) reported (16 May) better-than-expected 1Q24 results: revenue was RMB260.0bn, up 7% YoY, 1% ahead of Bloomberg consensus; non-GAAP net income was RMB8.9bn, ahead of consensus estimates of RMB7.4bn thanks to better-than-feared gross profit margin aided by scale effect.Management noted that general merchandise category has entered clean base since 1Q24, and commission revenue growth has also entered clean base since 2Q24 since the impact from enhancing merchant support has reached the full-year milestone.JD is staying vigilant in industry competition, although industry competition seems more benign than market expectation given that all the industry peers are focusing on driving growth in an efficient way by targeting more on core user base operation. 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.

JD.com (JD US) - Entering into a Clean Base for Growth

Baidu, Inc. operates an Internet search engine. The Company offers algorithmic search, enterprise search, news, MP3, and image searches, voice assistance, online storage, and navigation services. Baidu serves clients globally.

<ul><li>Baidu announced (16 May) its 1Q24 results: revenue was RMB31.5bn, up 1.2% YoY, and was in line with Bloomberg consensus.</li><li>Non-GAAP net income of Baidu Core was RMB6.6bn, better than consensus at RMB5.1bn, thanks to better-thanexpected cost control.</li><li>Management highlighted that AI-related ads and cloud revenue are continuously ramping up, and it is accelerating generative AIempowered search business transformation, to drive better long-term business development prospects. </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.

Baidu announced (16 May) its 1Q24 results: revenue was RMB31.5bn, up 1.2% YoY, and was in line with Bloomberg consensus.Non-GAAP net income of Baidu Core was RMB6.6bn, better than consensus at RMB5.1bn, thanks to better-thanexpected cost control.Management highlighted that AI-related ads and cloud revenue are continuously ramping up, and it is accelerating generative AIempowered search business transformation, to drive better long-term business development prospects. 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.

Baidu (BIDU US) - Accelerating Gen AI-Empowered Business Transformation