研究报告全文：FixedIncomeCreditCommentary8Sep2023CMBICreditCommentaryChinaAMCsRepaymentmattersmorethanreportingGlennKoCFA高志和Wecontinuetotakeatop-downapproachinanalyzingthesectorinviewofthestrategicimportanceofthesectorinmaintainingthestabilityofChinesefinancial85236576235systemandthedemonstratedsupportfromtheChinesegovernmentforHuarongglennkocmbicomhkintimesofdistressWeexpectstronggovernmentsupporttosectorcontinuesCyrenaNgCPA吳蒨瑩Overthepast7-8weeksChineseAMCpapershavebeenvolatilegiventhe85239000801collateraldamagefrom1theincreasinglikelihoodofdebtrestructuringofcyrenangcmbicomhkCountryGardenand2thefailureofGreatWalltofileitsFY22annualreportbeforetheendofgraceperiodJerryWang王世超85237618919HRINTHsremaintobethehigherbetaplaysofthesectorfell3-11ptswhilejerrywangcmbicomhkCCAMCLsGRWALLsORIEASsfellupto4ptsbeforerecoveredhalfofthelostgroundoverthepast2weeksWeexpecttoseemorenegativeheadlinessuchasnegativeratingactionsdeteriorationofassetqualitycapitaladequacyfurtherdelayinfinancialreportingetcthecurrentvaluationofChinaAMCspapersoffermoredownsidecushionAdditionallyweprefertostickwithshorter-tenorpapersinviewofthehigherforlongerratesoutlookUnderthesebackdropswepreferHuarongseniorsandperpsforthebetterrisk-returnprofileWithintheHRINTHcurveourpreferencesareHRINTH375052924HRINTH55011625andHRINTH425Perpcallable093025MeanwhileweseebettervalueinGRWALL395Perpcallable073124aftertherecentpricecorrectionresultingfromthedelayinfilingFY22resultsWeprefertheperpsoverseniorsgivenyieldpickupof771bpsoverGRWALL3125073124ForlowerbetaplayswepreferCCAMCL44Perpcallable031126whichis4ptsbelowthelevelinlateJul23andoffers81bpsyieldpick-upoverCCAMCL1875012026Chart1YTMYTCofourpicks16GRWALL395PerpHRINTH425Perp1412HRINTH375052924HRINTH5501162510YTMYTCYTMYTC8CCAMCL44PerpGRWALL3125073124CCAMCL187501202660051152253YeartomaturitycallSourceBloombergPLEASEREADTHEAUTHORCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGECMBIFixedIncomefiscmbicomhk8Sep2023Table1SummaryofourpicksAskYeartoFirstcallStep-upAmtosAskPriceCouponresetYTMYTCmaturitycalldatebpsUSDmnCCAMCL44Perp92174250311265yrUST3232NA1700GRWALL395Perp910159090731245yrUST7145500400HRINTH425Perp810159210930255yrUST6979300250HRINTH37505292495410507NANANA900HRINTH5501162593011214NANANA1400SourceBloombergChart2YTMYTCofChinaAMCbonds16GRWALL395PERPHRINTH425PERP14HRINTHFloat02242512HRINTH55011625HRINTH4060326HRINTH4042727HRINTH375052924HRINTH5111925HRINTH4112226HRINTH411072710HRINTH3111324YTMYTCYTMYTCORIEAS3GRWALL4042825032024GRWALL2112326GRWALL3083127CCAMCL41GRWALL30731248030924CCAMCL44PERPORIEAS4122127ORIEAS5ORIEAS2ORIEAS1090324092424CCAMCL5CCAMCL4111725CCAMCL4020727020828022124CCAMCL1012026CCAMCL36CCAMCL4CCAMCL1CCAMCL4042325CCAMCL3031827012024020825012827CCAMCL2CCAMCL2CCAMCL5031825CCAMCL44012028HRINTH20514240309270930234-05101520253035404550YeartomaturitycallSourceBloomberg28Sep2023CindaRemainstobethemostresilientplayerCindastotalincomedecreasedby169toRMB343bnin1H23comparedto1H22duetodecreaseinrevenuefromsalesofpropertiesandfairvaluegainondistresseddebtassetsoffsetbyincreaseininterestincomeCreditimpairmentlossdecreasedby471toRMB31bnNetprofitdecreasedby92toRMB45bnasaresultTheannualizedROAEdroppedto45andtheannualizedROAEdownto06TotalassetsatJun23downby14comparedtoDec22toRMB1594bnandtotaldebtsdroppedby35toRMB908bnAsatJun23theleverageratiofellto60xcomparedto64xatDec22Thereweresignsofdeteriorationinassetqualityduring1H23Theimpaireddistresseddebtassetstogrossdistresseddebtassetratioincreasedto112atJun23from82atDec22Atthesametimetheimpaireddistresseddebtassetscoverageratiodecreasedto1305from1407InadditionthepercentageofdistressedassetatamortizedcostnetclassifiedasStageIIandIIIincreasedto309atJun23from177atDec22NonethelessCindascapitaladequacyratiostoodat177atJun23supportedbylowerrisk-weightedassetsandhighernetcapitalThisprovidesalargercapitalbufferthanitspeerstoabsorblossundereconomicheadwindsWecontinuetoviewCindaasthemostresilientplayerintheAMCsectorAlongCCAMCLcurvewepreferCCAMCL44PerpcallableinNov26whichoffershighestyieldwithintheCCAMCLcurveAt921CCAMCL44PerpistradingatYTCof74Theperpis4ptsbelowthelevelinlateJul23andoffers81bpsyieldpick-upoverCCAMCL1875012026Table2CindaskeyfinancialsRMBmnexceptotherwisestated1H221H23changeTotalIncome4125834298-169AssetsImpairmentlosses58773112-471NetProfitloss49804521-92ROAEannualized575450-13pptROAAannualized064056-01pptDec22Jun23TotalAssets16159891594009-14TotalDebts940989908046-35TotalEquity20799521595738Netcapital12544312675511Risk-weightedassets727416716032-16Capitaladequacyratio1725177005pptLeverageratio64x60x-04Impaireddistresseddebtassetstogrossratio8211230pptImpaireddistresseddebtassetcoverage14071305-101pptSourceCompanyfillingsCMBIResearch38Sep2023HuarongNetlossin1H23Huarongreported1418increaseinrevenuein1H23Creditimpairmentlossalsoincreasedby208toRMB204bnTheresultingnetlossfor1H23loweredby678toRMB6bnAnnualizedROAEandROAAwere-228and-13respectivelyin1H23improvedfrom-644and-29in1H22MeanwhileHuarongfurtherdownsizeditsassetsby21toRMB935bnatJun23Thecapitaladequacyratiowas151atJun23slightlydroppedfrom150atDec22stillabovetheminimumregulatoryrequirementof125HoweverHuarongsleverageratioof166xasatJun23isclosetotheregulatorycapof1667xornolessthan6AsCindaHuarongsassetsqualitydeterioratedin1H23comparedwithDec22Theimpaireddistressedassetstogrossdistressedassetsincreasedto441atJun23from371atDec22Theimpaireddistresseddebtassetscoverageratioincreasedto352from338InourviewthelowimpaireddistresseddebtassetcoverageratioreflectedthatitsleverageratioisreachingtheregulatoryceilingThispreventsHuarongfrombringitsallowancetoalevel100orabovewithoutsignificantexpansionofequitybaseThatsaidweacknowledgetherepaymenttrackrecordsofHuarongaswellasthedemonstratedgovernmentsupportAsofYTDHuarongredeemedthreebondstotaledUSD135bnwithouttappingoffshoreoronshorebondmarketsSubsequenttotheshareholdingrestructuringinMar23CITICGroupandMOFbecamethelargestandsecondlargestshareholderholding265and248ofHuarongrespectivelyMOFremainsastheultimatecontrollingshareholderforHuaronggivenMOFowns100ofCITICGroupThereforeweexpectthegovernmentsupportivetoremainstrongWeprefershort-datedpaperHRINTH375052924andHRINTH55011625At954and930HRINTH375052924andHRINTH55011625aretradingatYTMof105and112respectivelyWealsolikeHRINTH425PerpcallableSep25tradingataYTCof159foryieldpick-upoverseniorsTable3HuarongskeyfinancialsRMBmnexceptotherwisestated1H221H23changeTotalIncome14742356491418AssetsImpairmentlosses1690020409208NetProfitloss186095988678ROAEannualized-6440-2280416pptROAAannualized-290-13016pptDec22Jun23TotalAssets955326934968-21TotalDebts841692840902-01TotalEquity4837939322-187Capitaladequacyratio15071496-01pptLeverageratio161x166x05Impaireddistresseddebtassetstogrossratio37144170pptImpaireddistresseddebtassetcoverage33835214pptSourceCompanyfillingsCMBIResearch48Sep2023GreatWallrepaymentratherreportingmattersGreatWallhasnotyetpublishedtheFY22annualreportsAmongtheoutstandingbondsGreatWallonlyprovideskeepwellforGRWALL3875033127Accordingtothebondcovenantstheissuerguarantorandthekeepwellproviderhavetopublishtheauditedresultswithin180daysafterthefinancialyear-endandthereare60daysgraceperiodfollowingthe180-daytimeframeTheendofgraceperiodsupposedtobe28AugTheguarantorfiledFY22resultsbutGreatWallthekeepwellproviderhasyettodosoatthetimewritingGreatWallhasdelayedthepublicationofFY21resultsyetitmanagedtopublishon26Aug22WehavesummarizedthebondstructureofAMCbondsinAppendix2WhiletherecouldbemorenegativedeadlineintermsofratingdowngradedeteriorationofassetqualityandCARwearenottooconcernedonthedelayinpublicationoffinancialstatementsofAMCsasthedelayappearstohavenotmuchbearingontherepaymentabilityofAMCsRecalledthatHuarongdelayedthepublicationofFY20annualresultsfor5monthstoAug21fromMar21whenithadahardtimeintheyearof2020ItpublisheditsresultsontimesinceitsHongKonglistingin2015HuarongmadefullrepaymentofoffshorebondsofUSD19bnfromMay-Jul21HuarongalsocalledtheHRINTH2875perponSep21onthefirstcalldateIndeedwesawbetterdownsidecushionaftertherecentcorrectionAt910GRWALL395PerpcallableinJul24istradingatYTCof159Theperpalsooffersyieldpickupof771bpsoverGRWALL3125073124WedrawadditionalcomfortfromGreatWallsrepaymentonGRWALL4375052523ofUSD600mnoffshoreinMay23OrientLargelystablecreditdespitelowerthanpeerscapitaladequacyOrientstotalincomedeclined28in1H23TheassetimpairmentlossdroppedsignificantlytoRMB38mnfromRMB27bnandthishelpedtoboostthenetprofitby156toRMB14bnBothROAEandROAAimprovedduring1H23to13and02respectivelyAsofJun23thecapitaladequacyratiodroppedslightlyto138regardlessincreaseintotalequityreflectedthefasterexpansioninrisk-weightedassetsduring1H23ItscapitalratioatJun23wasalsolowerthanCindas177andHuarongs150butabovetheregulatoryminimumof125OrientismorecomparabletoCindabasedonsimilarcreditratingsandtotalassetssizeWepreferCCAMCLstoORIEASsforhigherdatatransparencyofCindagivenitslistingstatushigherprofitabilityandhighercapitalbuffertoabsorblossTable4OrientskeyfinancialsRMBmnexceptotherwisestated1H221H23changeTotalIncome4748046164-28AssetsImpairmentlosses278938-986NetProfitloss12271418156ROAEannualized07712905pptROAAannualized02002202pptDec22Jun23TotalAssets1247886129569038TotalDebts49615150374615TotalEquity15687316165831Capitaladequacyratio13831376-01pptSourceCompanyfillingsCMBIResearch58Sep2023Non-callriskonperpsshouldbelowTable5OurperpspickAskYeartoFirstcallStep-upAmtosAskPriceCouponresetYTMYTCmaturitycalldatebpsUSDmnCCAMCL44Perp92174250311265yrUST3232NA1700GRWALL395Perp910159090731245yrUST7145500400HRINTH425Perp810159210930255yrUST6979300250SourceBloombergHRINTH2875PerpissuedinSep16wasthefirstperpissuancebyAMCoffshoreAllofthefiveperpsissuedin2016-17byHuarongCindaandOrientwerecalledontheirrespectivefirstcalldatesin2021-22Webelievethatthelikelihoodforthe3outstandingperpsbeingcalledonthefirstcalldatesremainhighevenforCCAMCL44Perpofwhichcouponwillnotstepupincaseofnon-callWiththenotablyhigherUSTandexpectationofhigherforlongerthecouponrateswillberesettoexpensivelevelsfromAMCsperspectiveWeexpectAMCswillcalltheseoffshoreperpswithotherlowercostfundingOrientrecentlyissued3-yearonshorebondsatacouponrateofonly289OurconfidenceontheperpsbeingcalledonthefirstcalldatesisalsopredictedonHuarongscallsonHRINTH2875PerpinSep21andHRINTH45PerpinJan22totaledUSD2bnwhenHuarongwasinthemidoffinancialdistressandrecapitalizationItalsoannouncedthecallofHRINTH4Perpon29Sep22aheadofitsfirstcalldateon7Nov22NetredemptiontrendcontinuesThesectorhasexperiencednetredemptiontrendoffshoresince2021YTDonlyCindaraisedUSD400mnoffshorewhileHuarongandGreatWallrepaidtheoffshorebondswithoutrefinancingInonshoremarketonlyOrientraisedRMB8bnonshorebondsinAug23torefinancetwobondsduewhileCindarepaidRMB5bnwithoutrefinancingThecostofoffshorefundingisincreasinginthecourseofUSFedratehikeandweakeningmarketsentimentoverthepast2yearsComparingwithoffshorefundingtheonshorefundingcostisnotablylowerForinstanceOrientA3BBBAraisedRMB8bnonshoreinAug23atcouponof289TheslowingChineseeconomycoupledwithpropertymarketdownturnwillleadtomorenon-performingassetstobeoffloadedtoAMCswhichinturnswilldrivetheAMCsdistressedassetsgrowthGiventhelowerfundingcostweexpectAMCstofundtheassetgrowththroughtappingonshorebondmarketsHencetheoffshorenetredemptiontrendshouldcontinue68Sep2023Chart3OffshorebondnetredemptionChart4OnshorebondnetredemptionYTD2023USDmnYTD2023RMBbn-0500-11000-21500-32000-425003000-53500-6CCAMCLGRWALLHRINTHORIEASTotalCCAMCLGRWALLHRINTHORIEASTotalSourceBloombergSourceBloombergChart5OffshorebondnetissuanceredemptionUSDmn2000160097210002801000200030004000305050004550600070006000201820192020202120222023YTDSourceBloombergChart6OnshorebondnetissuanceredemptionRMBbn5047402830192010010451020201820192020202120222023YTDSourceBloomberg78Sep2023NegativeratingactionsonAMCspricedinThesectorexperiencedaslewofnegativeratingactionoverthepast12monthsreflectedthedeterioratingoperatingperformanceandassetqualityofAMCsarefacingWewouldnotbesurprisedtoseefurthernegativeratingactionsespeciallyonGreatWallgiventhelackofclarityonits1H23orFY22financialsThatsaidatcurrentvaluationwebelievethatAMCpapershavepricedinmorenegativeratingactionsTable6Summaryofratingactionoverthepast12monthsMoodysSPFitchFromToFromToFromToA3NegativeBBBStableCindaA3StableA-NegativeAStablenochangeOct22Sep22Baa3StableBBB-StableHuarongBaa2NegativeBBBNegativeBBBStablenochangeApr23Sep22AWatchNegBBBStableBaa1ReviewforApr23Sep22GreatWallBaa1NegativedowngradeA-WatchNegAStableA-WatchNegBBBNegativeSep23Aug23May23BBBWatchNegSep23ARatingWatchA3NegativeBBBStableNegApr23OrientA3StableBBBNegativeAStableOct22Sep22ANegativeAug23NoteDateinbracketindicatesthetimeofratingactionsSourceMoodysInvestorsServiceSPGlobalRatingsFitchRatings88Sep2023Appendix1KeyfinancialsofChinaAMCs1H23ROAEROAACapitalLeverageTotalTotalTotalImpairedImpairedadequacyratioassetsdebtsequitydistresseddebtdistresseddebtratioassetstogrossassetcoverageratioCinda450056177060x15940099080462159571121305Huarong-228-1301496166x93496884090239322441352GreatWall1380131510NA70503647547965271NANAOrient1290221376NA1295690503746161658NANANoteGreatWallsfinancialsareasof1H22SourceCompaniesfillingCMBIResearchAppendix2ChinaAMCbondsstructureBondIssuerGuarantorKeepwellproviderCCAMCL1012024ChinaCinda2020IManagementLtdChinaCindaHKHoldingsCoLtdNACCAMCL4022124ChinaCindaFinance2017ILtdChinaCindaHKHoldingsCoLtdChinaCindaAssetManagementCoLtdCCAMCL41030924ChinaCindaFinance2017ILtdChinaCindaHKHoldingsCoLtdChinaCindaAssetManagementCoLtdCCAMCL5051424ChinaCindaFinance2014LtdChinaCindaHKHoldingsCoLtdChinaCindaAssetManagementCoLtdCCAMCL4020825ChinaCindaFinance2017ILtdChinaCindaHKHoldingsCoLtdChinaCindaAssetManagementCoLtdCCAMCL2031825ChinaCinda2020IManagementLtdChinaCindaHKHoldingsCoLtdNACCAMCL4042325ChinaCindaFinance2015ILtdChinaCindaHKHoldingsCoLtdChinaCindaAssetManagementCoLtdCCAMCL1012026ChinaCinda2020IManagementLtdChinaCindaHKHoldingsCoLtdNACCAMCL3012827ChinaCinda2020IManagementLtdChinaCindaHKHoldingsCoLtdNACCAMCL5020727ChinaCinda2020IManagementLtdChinaCindaHKHoldingsCoLtdNACCAMCL44030927ChinaCindaFinance2017ILtdChinaCindaHKHoldingsCoLtdChinaCindaAssetManagementCoLtdCCAMCL3031827ChinaCinda2020IManagementLtdChinaCindaHKHoldingsCoLtdNACCAMCL2012028ChinaCinda2020IManagementLtdChinaCindaHKHoldingsCoLtdNACCAMCL4020828ChinaCindaFinance2017ILtdChinaCindaHKHoldingsCoLtdChinaCindaAssetManagementCoLtdCCAMCL4022129ChinaCindaFinance2017ILtdChinaCindaHKHoldingsCoLtdChinaCindaAssetManagementCoLtdCCAMCL52120529ChinaCindaFinance2014IILtdChinaCindaHKHoldingsCoLtdChinaCindaAssetManagementCoLtdCCAMCL52021130ChinaCindaFinance2014IILtdChinaCindaHKHoldingsCoLtdChinaCindaAssetManagementCoLtdCCAMCL3031830ChinaCinda2020IManagementLtdChinaCindaHKHoldingsCoLtdNACCAMCL3012031ChinaCinda2020IManagementLtdChinaCindaHKHoldingsCoLtdNACCAMCL4120437ChinaCindaFinance2017IIILtdChinaCindaHKHoldingsCoLtdNACCAMCL5020848ChinaCindaFinance2017ILtdChinaCindaHKHoldingsCoLtdChinaCindaAssetManagementCoLtdCCAMCL44PERPChinaCindaAssetManagementCoLtdNANAChinaGreatWallInternationalHoldingsChinaGreatWallInternationalHoldingsGRWALL3073124NAIVLtdCoLtdChinaGreatWallInternationalHoldingsChinaGreatWallInternationalHoldingsGRWALL4042825NAVILtdCoLtdChinaGreatWallInternationalHoldingsVChinaGreatWallInternationalHoldingsGRWALL2112326NALtdCoLtdChinaGreatWallInternationalHoldingsIIIChinaGreatWallInternationalHoldingsChinaGreatWallAssetManagementCoGRWALL3083127LtdCoLtdLtdChinaGreatWallInternationalHoldingsVChinaGreatWallInternationalHoldingsGRWALL2081830NALtdCoLtdChinaGreatWallInternationalHoldingsChinaGreatWallInternationalHoldingsGRWALL395PERPNAIVLtdCoLtd98Sep2023ChinaHuarongAssetManagementCoHRINTH2093023HuarongFinance2019CoLtdChinaHuarongInternationalHoldingsLtdLtdChinaHuarongAssetManagementCoHRINTH3052924HuarongFinance2019CoLtdChinaHuarongInternationalHoldingsLtdLtdChinaHuarongAssetManagementCoHRINTH3111324HuarongFinance2019CoLtdChinaHuarongInternationalHoldingsLtdLtdChinaHuarongAssetManagementCoHRINTH5011625HuarongFinanceIICoLtdChinaHuarongInternationalHoldingsLtdLtdHRINTHFloat022425HuarongFinance2019CoLtdChinaHuarongInternationalHoldingsLtdNAChinaHuarongAssetManagementCoHRINTH5111925HuarongFinanceIICoLtdChinaHuarongInternationalHoldingsLtdLtdChinaHuarongAssetManagementCoHRINTH4060326HuarongFinanceIICoLtdChinaHuarongInternationalHoldingsLtdLtdChinaHuarongAssetManagementCoHRINTH4112226HuarongFinanceIICoLtdChinaHuarongInternationalHoldingsLtdLtdChinaHuarongAssetManagementCoHRINTH4042727HuarongFinance2017CoLtdChinaHuarongInternationalHoldingsLtdLtdChinaHuarongAssetManagementCoHRINTH4110727HuarongFinance2017CoLtdChinaHuarongInternationalHoldingsLtdLtdChinaHuarongAssetManagementCoHRINTH4052929HuarongFinance2019CoLtdChinaHuarongInternationalHoldingsLtdLtdChinaHuarongAssetManagementCoHRINTH3111329HuarongFinance2019CoLtdChinaHuarongInternationalHoldingsLtdLtdChinaHuarongAssetManagementCoHRINTH3022430HuarongFinance2019CoLtdChinaHuarongInternationalHoldingsLtdLtdChinaHuarongAssetManagementCoHRINTH3093030HuarongFinance2019CoLtdChinaHuarongInternationalHoldingsLtdLtdChinaHuarongAssetManagementCoHRINTH5042747HuarongFinance2017CoLtdChinaHuarongInternationalHoldingsLtdLtdChinaHuarongAssetManagementCoHRINTH495110747HuarongFinance2017CoLtdChinaHuarongInternationalHoldingsLtdLtdChinaHuarongAssetManagementCoHRINTH4PERPHuarongFinance2019CoLtdChinaHuarongInternationalHoldingsLtdLtdChinaOrientAssetManagementORIEAS3032024JoyTreasureAssetsHoldingsIncNAInternationalHoldingsLtdChinaOrientAssetManagementORIEAS5090324CharmingLightInvestmentsLtdChinaOrientAssetManagementCoInternationalHoldingsLtdChinaOrientAssetManagementORIEAS2092424JoyTreasureAssetsHoldingsIncNAInternationalHoldingsLtdChinaOrientAssetManagementORIEAS1111725JoyTreasureAssetsHoldingsIncNAInternationalHoldingsLtdChinaOrientAssetManagementORIEAS4122126CharmingLightInvestmentsLtdChinaOrientAssetManagementCoInternationalHoldingsLtdChinaOrientAssetManagementORIEAS4122127CharmingLightInvestmentsLtdChinaOrientAssetManagementCoInternationalHoldingsLtdChinaOrientAssetManagementORIEAS4032029JoyTreasureAssetsHoldingsIncNAInternationalHoldingsLtdChinaOrientAssetManagementORIEAS3092429JoyTreasureAssetsHoldingsIncNAInternationalHoldingsLtdChinaOrientAssetManagementORIEAS2111730JoyTreasureAssetsHoldingsIncNAInternationalHoldingsLtdSourceBloombergCMBInternationalGlobalMarketsLimitedFixedIncomeDepartmentTel8523657623585239000801fiscmbicomhkCMBInternationalGlobalMarketsLimitedCMBGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankAuthorCertificationTheauthorwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheauthorcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatauthorinthisreportBesidestheauthorconfirmsthatneithertheauthornorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportImportantDisclosures108Sep2023TherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMandoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBIGMwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestDisclaimerForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereport11