Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 7.61, indicating a potential upside of 24% from the current price of HKD 6.14 [5][7][58]. Core Insights - The automotive steering system is transitioning from Electric Power Steering (EPS) to steer-by-wire (SbW) technology, which offers better responsiveness and safety features essential for advanced driving assistance systems (ADAS) and L3+ autonomous driving [5][30]. - The company's profitability is recovering, supported by a robust order book and strategic expansion into the steer-by-wire product line, which positions it competitively in the evolving automotive landscape [6][58]. - The company is expected to achieve significant revenue growth, with projected revenues of USD 4.47 billion, USD 4.77 billion, and USD 5.07 billion for FY2025, FY2026, and FY2027, respectively, reflecting year-on-year growth rates of 4.5%, 6.8%, and 6.2% [7][58]. Summary by Sections Company Overview - The company is a global leader in motion control technology, providing solutions for electric and hydraulic steering systems, steer-by-wire systems, and software solutions to over 60 customers, including major automotive manufacturers [16][21]. Transition to Steer-by-Wire - The shift from EPS to steer-by-wire is driven by the increasing demand for autonomous driving capabilities, with the technology expected to enhance vehicle safety and performance [30][31]. Recovery of Core Business - The company has seen a significant recovery in profitability, with net profit for 2024 projected at USD 61.72 million, a 68.1% increase from 2023 [6][38]. - The total order volume for 2024 reached USD 6 billion, with 31% of orders being new business, showcasing the company's competitive strength [41]. Financial Projections - The company forecasts revenues of USD 4.47 billion for FY2025, with a net profit of USD 121 million, representing a 96.2% increase year-on-year [58]. - The projected net profit margins are expected to improve, with net profit margins of 2.7%, 3.4%, and 3.7% for FY2025, FY2026, and FY2027, respectively [8][58]. Strategic Product Development - The company is expanding its steer-by-wire product portfolio, including the launch of rear-wheel steering (RWS) and electronic mechanical brake (EMB) systems, which are expected to enhance vehicle performance and safety [52][53]. - The EMB system represents a significant advancement in brake technology, replacing hydraulic systems with electronic controls for improved precision and integration [52]. Market Position and Competitive Advantage - The company maintains a strong market position in China, with a 16.16% market share in the EPS segment, ranking second in the domestic market [29]. - The strategic focus on software-defined vehicles (SDV) and collaboration with manufacturers enhances the company's ability to meet evolving market demands [36][37].

Economic Indicators - The U.S. manufacturing PMI rebounded strongly to 52.3, indicating expansion in the manufacturing sector[4] - China's total foreign direct investment reached $57.54 billion in the first four months of the year[4] - The total installed power generation capacity in China approached 3.5 billion kilowatts in the first four months[4] U.S. Treasury Market - The 2-year U.S. Treasury yield fell by 3.36 basis points to 3.986%[4] - The 5-year U.S. Treasury yield decreased by 7.44 basis points to 4.090%[4] - The 10-year U.S. Treasury yield dropped by 7.58 basis points to 4.529%[4] Stock Market Performance - The Nasdaq index closed at 18,925.73, up 0.28%[5] - The Dow Jones Industrial Average remained unchanged at 41,859.09[5] - The S&P 500 index closed at 5,842.01, down 0.04%[5] Commodity Prices - The price of ICE Brent crude oil fell by 1.36% to $64.03[5] - The spot price of London gold decreased by 0.60% to $3,294.49[5] - The CME Bitcoin futures rose by 2.21% to $111,365.00[5]

Economic Data - Global new energy vehicle sales exceeded 4 million units in Q1, marking a 39% year-on-year increase[3] - Japan's exports to the US declined for the first time in four months in April[3] Market Trends - 20-year US Treasury auction showed weakness, leading to declines in stocks, bonds, and currencies[3] - 2-year US Treasury yield rose by 4.90 basis points to 4.019%[4] - 10-year US Treasury yield increased by 11.56 basis points to 4.605%[4] Stock Market Performance - Nasdaq index closed at 18,872.64, down 1.41%[5] - Dow Jones Industrial Average closed at 41,860.44, down 1.91%[5] - Hang Seng Index closed at 23,827.78, up 0.62%[5] Corporate Earnings - XPeng Motors reported Q1 revenue exceeding expectations[2] - Baidu's Q1 revenue and adjusted operating profit also surpassed expectations[3]

Core Insights - The report highlights significant economic indicators, including a 2.1% year-on-year decline in China's tax revenue from January to April 2025, while non-tax revenue increased by 7.7% during the same period [4] - The report notes that the issuance of European bonds has surpassed €1 trillion at the fastest pace in history [4] - The Australian central bank has lowered the benchmark interest rate by 25 basis points to 3.85%, aligning with market expectations [4] Economic Data Summary - The Baltic Dry Index decreased by 2.95% to 1347.00, while the Nasdaq Index fell by 0.38% to 19142.71 [5] - The Dow Jones Industrial Average closed at 42677.24, down 0.27%, and the S&P 500 decreased by 0.39% to 5940.46 [5] - The Hang Seng Index rose by 1.49% to 23681.48, and the Hang Seng China Enterprises Index increased by 1.52% to 8589.08 [5] - The Shanghai Composite Index saw a slight increase of 0.38%, closing at 3380.48 [5]

2025 年 5 月 20 日星期二 【实时热点】 请务必阅读免责条款 1 证 券 研 究 报 告 微软发布一系列 AI 更新 【美国债市】 资料来源：BLOOMBERG、AASTOCKS、WIND、格隆汇、国元证券经纪（香港）整理 | 重要指数 | 收市价 | 涨跌(%) | 海外市场重要指数 | 收市价 | 涨跌(%) | | --- | --- | --- | --- | --- | --- | | 波罗的海干散货 | 1388.00 | 6.36 | 纳斯达克指数 | 19215.46 | 0.02 | | CME比特币期货 | 105780.00 | 1.30 | 道琼斯工业指数 | 42792.07 | 0.32 | | ICE布油 | 65.48 | 0.11 | 美元指数 | 100.37 | -0.60 | | 伦敦金现 | 3229.21 | 0.86 | 标普500 | 5963.60 | 0.09 | | 美元兑人民币(CFETS) | 7.21 | 0.12 | 日经225 | 37498.63 | -0.68 | | 香港重要指数 | 收市价 | 涨跌(%) | 内地重要指数 | ...

Core Insights - The report highlights that the U.S. retail sales in April exceeded expectations, indicating a stronger consumer spending trend [4] - Alibaba's Q1 revenue reached 236.5 billion yuan, with Alibaba Cloud revenue growing by 18%, showcasing robust performance in the technology sector [4] - Walmart's Q1 revenue was reported at $165.6 billion, which fell short of market expectations, reflecting challenges in the retail sector [4] Economic Data - The U.S. Producer Price Index (PPI) for April showed a year-on-year increase of 2.4% and a month-on-month decrease of 0.5%, both below expectations, indicating potential deflationary pressures [4] - The 2-year U.S. Treasury yield decreased by 7.95 basis points to 3.963%, while the 5-year and 10-year yields also saw declines, suggesting a shift in investor sentiment [4] - The Baltic Dry Index fell by 1.02%, indicating a decrease in shipping rates, which may impact global trade dynamics [5] Market Performance - The Nasdaq index closed at 19,112.32, down by 0.18%, while the Dow Jones Industrial Average rose by 0.65% to 42,322.75, reflecting mixed performance in the U.S. stock market [5] - The Hang Seng Index closed at 23,453.16, down by 0.79%, and the Shanghai Composite Index fell by 0.68% to 3,380.82, indicating a bearish trend in the Chinese market [5]

Economic Indicators - The 2-year U.S. Treasury yield increased by 4.65 basis points to 4.042%[2] - The 5-year U.S. Treasury yield rose by 6.73 basis points to 4.162%[4] - The 10-year U.S. Treasury yield climbed by 6.93 basis points to 4.534%[4] Market Performance - The Nasdaq index closed at 19,146.81, up 0.72%[6] - The Dow Jones Industrial Average closed at 42,051.06, down 0.21%[6] - The S&P 500 index finished at 5,892.58, up 0.10%[6] Corporate Developments - The White House announced a new agreement expected to generate at least $1.2 trillion in economic exchanges[3] - Tencent reported a Q1 operating profit of 69.32 billion yuan, a year-on-year increase of 18%[3] - Boeing received its largest order ever from Qatar, totaling $200 billion for aircraft[3]

Core Insights - The report highlights that the US April CPI increased by 2.3% year-on-year, which is lower than expected, while the core CPI rose by 2.8% [4] - JD Group reported a net revenue of 301.08 billion yuan for the first quarter, reflecting a year-on-year growth of 16% [4] - The IPO of CATL in Hong Kong attracted a significant retail subscription amounting to 161 billion USD [4] Economic Data - The Baltic Dry Index closed at 1304.00, up by 0.38% [5] - The Nasdaq Index closed at 19010.08, increasing by 1.61% [5] - The Dow Jones Industrial Average closed at 42140.43, decreasing by 0.64% [5] - The S&P 500 closed at 5886.55, up by 0.72% [5] - The ICE Brent crude oil price was 66.60 USD, up by 2.52% [5] - The USD/CNY exchange rate (CFETS) was 7.20, down by 0.17% [5] - The Hang Seng Index closed at 23108.27, down by 1.87% [5] - The Shanghai Composite Index closed at 3374.87, increasing by 0.17% [5]

Investment Rating - The report maintains a positive outlook on the Chinese innovative pharmaceutical sector, suggesting that it is a high-quality asset with significant potential for international expansion [4]. Core Insights - The recent U.S. drug pricing policy, while complex, is unlikely to have a substantial negative impact on the profits of major pharmaceutical companies [2][3]. - Chinese innovative drugs are recognized as some of the best assets globally, driven by a decade of development and reform in the drug research and development policy since 2015 [3]. - The report emphasizes that multinational corporations (MNCs) are likely to accelerate their business development (BD) efforts in innovative drugs due to the U.S. pricing policy and the upcoming expiration of numerous patents by 2028 [3][4]. Summary by Sections U.S. Drug Pricing Policy - The complexity of the U.S. healthcare system makes significant price reductions challenging, with the potential impact on pharmaceutical profits being limited [2]. - The administrative order signed by Trump aims to align U.S. drug prices with those in other countries, but its execution may face practical difficulties [2]. Chinese Innovative Drugs - The report highlights the strengths of the Chinese pharmaceutical industry, including a robust pipeline of innovative drugs and a well-developed clinical research environment [3]. - The integration of high-quality resources in China has led to recognition from MNCs, positioning Chinese innovative drugs favorably in the global market [3]. Investment Recommendations - The report suggests focusing on companies with globally competitive innovative drug pipelines that are likely to engage in business development, including companies like HeYue-B (2256.HK), YiMing Oncology-B (1541.HK), and others [4].

Key Points - The report highlights a significant increase in US tariff revenue, which surged by 130% year-on-year to reach 16 billion USD in April [4] - The US Treasury Secretary indicated potential meetings with Chinese officials in the coming weeks to achieve a more comprehensive agreement [4] - The report notes that the 2-year US Treasury yield rose by 11.93 basis points to 4.0082%, while the 5-year and 10-year yields increased by 10.92 and 9.05 basis points, respectively [4] - Nissan is reported to be laying off approximately 15% of its global workforce [4] - Apple is considering raising prices for its iPhone product line set to be released in the fall [4] - The report mentions that CATL's initial public offering was fully subscribed on its first day [4] Economic Data Summary - The Baltic Dry Index closed at 1299.00, down 1.29% [5] - The Nasdaq Index closed at 18708.34, up 4.35%, while the Dow Jones Industrial Average rose by 2.81% to 42410.10 [5] - The ICE Brent crude oil price increased by 1.69% to 64.99 USD [5] - The Hong Kong Hang Seng Index closed at 23549.46, up 2.98%, and the Hang Seng China Enterprises Index rose by 3.01% to 8559.23 [5] - The Shanghai Composite Index increased by 0.82% to 3369.24 [5]