Core Insights - The report highlights a strong recovery in the core business of King’s Ray Bio, with a significant increase in revenue and adjusted net profit for 1H25, leading to an upward revision of guidance for the life sciences segment [1][2] - The closing price of King’s Ray Bio is HKD 18.17, with a target price set at HKD 28.75, indicating a potential upside of 58.2% [1] Financial Performance - For 1H25, the company reported a revenue increase of 82% year-on-year to USD 519 million, and an adjusted net profit growth of 510% to USD 178 million [1] - The life sciences segment saw an 11% revenue growth with an adjusted gross margin of 51.0%, and the full-year revenue growth guidance for this segment has been raised to 13-15% [1] - The custom services revenue in the booming bio segment returned to double-digit growth, with 20 new antibody protein drug projects and 30 CGT projects acquired in 1H25 [1] Business Segments - The report details the performance of various business segments: - **Life Sciences**: Revenue growth of 11%, with a full-year growth guidance of 13-15% and a stable gross margin expected [1] - **Booming Bio**: Custom services revenue growth guidance maintained at 15-20%, with expectations for the first non-COVID BLA project in 2H25 [1] - **Baisjie**: Revenue growth of 8% with an adjusted gross margin of 40.4%, focusing on team building and early strain screening [1] Valuation and Ratings - The report maintains a "Buy" rating for King’s Ray Bio, with a slight upward adjustment of revenue forecasts for 2025-2027 by 1-5%, while lowering the net profit forecast for 2025 due to significant net losses [2] - The SOTP (Sum of the Parts) valuation model has been rolled over to 2026, with target valuation multiples for each business segment remaining unchanged [2]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 3.84, indicating a potential upside of 25.5% from the current price of HKD 3.06 [1][2]. Core Insights - The company's performance in the first half of 2025 met expectations, with a revenue increase of 1.2% year-on-year to HKD 224.59 million and a net property income rise of 3.43% to HKD 185.56 million [6][7]. - The distribution per unit (DPU) for the first half of 2025 was HKD 0.131, a decrease of 10.9% year-on-year, but a slight increase of 3.2% quarter-on-quarter [6][7]. - The overall occupancy rate of the company's properties remained high at 97.5% as of June 2025, with four properties maintaining occupancy rates above 95% [6][8]. - The company anticipates stable performance in 2025, with uncertainties primarily in 2026 due to potential rental adjustments following lease renewals with SF Holding [6][8]. - Financial costs are expected to decrease, which may alleviate downward pressure on rents in 2026, as the average borrowing cost fell to 3.95% [6][8]. Financial Overview - Revenue projections for 2025 are estimated at HKD 458 million, with a slight growth of 2.7% year-on-year, while net property income is expected to reach HKD 368 million [5][12]. - The company plans to maintain a distribution payout ratio of 90% for the year, with expected DPU adjustments reflecting current rental levels [6][12]. - The total debt as of mid-2025 was approximately HKD 24.78 billion, a slight decrease from HKD 25.05 billion at the end of 2024 [6][12]. Performance Metrics - The company’s market capitalization is approximately HKD 2,481.32 million, with a year-to-date change of -2.24% [4]. - The 52-week high and low for the stock are HKD 3.26 and HKD 2.56, respectively [4]. - The average daily trading volume is around 0.95 million shares [4].

Group 1: NetEase (NTES US) - The gaming improvement trend for the second half of the year is clear, with new games expected in 2026, leading to a target price increase from $143 to $155, reflecting a potential upside of 19.5% [3] - Q2 2025 results were in line with expectations, with gaming revenue slightly below market expectations but gross margin improvement exceeding expectations [3] - Strong performance of flagship games in July and August indicates a robust recovery in mobile gaming, with a strong year-on-year growth expected in the second half of the year [3] Group 2: NetEase Cloud Music (9899 HK) - The company reported better-than-expected profits for the first half of 2025, leading to a target price increase from HKD 240 to HKD 339, indicating a potential upside of 25.5% [4] - Revenue for the first half of 2025 was HKD 3.83 billion, a year-on-year decline of 6%, primarily due to a decrease in social entertainment revenue, while subscription revenue grew by 15% [4] - Adjusted net profit for the first half was HKD 1.1 billion, exceeding market expectations [4] Group 3: JD Logistics (2618 HK) - The company is experiencing accelerated growth in external integration revenue due to prior investments, with a target price of HKD 18.50, indicating a potential upside of 32.5% [6] - Q2 2025 results met expectations, with revenue driven by the group's food delivery service and profits aligning with forecasts [6] - The company expects continued growth trends in the second half of the year [8] Group 4: JD (JD US) - The company faced higher-than-expected losses in new businesses, but retail revenue and profits are expected to grow by approximately 10% year-on-year in Q3 2025 [9] - The target price remains at $40, reflecting a potential upside of 26.7%, with a focus on improving cross-selling efficiency between food delivery and retail [9] - The company anticipates a narrowing of losses in new businesses by Q4 2025 [9] Group 5: Youdao (DAO US) - The company turned profitable in Q2 2025, focusing on AI and high school education, with a target price of $12, indicating a potential upside of 23% [10] - Revenue growth is supported by strong demand in AI-enhanced high school products and advertising business [10] - The company expects a decline in learning services and hardware revenue but a significant increase in advertising revenue [10] Group 6: Geely Automobile (175 HK) - The company reported a 27% year-on-year revenue increase to RMB 150.3 billion in the first half of 2025, with a net profit growth of 102% to RMB 6.66 billion, exceeding market expectations [11] - The target price is raised to HKD 24.21, indicating a potential upside of 27.8%, driven by improved brand integration and sales growth [11] - The company is expected to benefit from industry trends that reduce price competition, focusing more on configuration and driving experience [11] Group 7: Hesai Group (HSAI US) - The company continues to see high growth in shipments, with a target price of $27.52, indicating a potential upside of 18% [12] - Q2 2025 revenue reached RMB 706 million, with a gross margin of 42.5% [13] - The company expects to achieve a total shipment of 1.4 million units in 2025, with significant growth in ADAS and robotics products [12][13] Group 8: QFIN Technology (QFIN US) - The company achieved a net profit of RMB 1.73 billion in Q2 2025, a year-on-year increase of 25.7%, with a target price of $58, indicating a potential upside of 74.2% [14] - The company is focusing on improving asset quality and enhancing risk control measures [15] - Despite short-term uncertainties from new regulations, the company maintains a strong competitive advantage and attractive valuation [15] Group 9: SF REIT (2191 HK) - The company reported a 1.2% year-on-year revenue increase to HKD 225 million in the first half of 2025, with a target price of HKD 3.84, indicating a potential upside of 25.5% [16] - The overall occupancy rate was 97.5% as of June 2025, with expectations for moderate revenue growth in 2025 [17] - The company anticipates potential rental pressure in 2026 following lease renewals with SF Holdings [17] Group 10: Pharmaceutical Industry - The pharmaceutical sector is expected to see steady growth driven by multiple favorable factors in the second half of 2025, with a focus on high-growth opportunities in biotechnology and prescription drugs [18] Group 11: Internet Industry - E-commerce revenue growth in July 2025 exceeded expectations, with a year-on-year increase of 8.3%, driven by strong performance in communication equipment and home appliances [19] - The industry is benefiting from regulatory measures that promote healthy development and reduce aggressive subsidy strategies [19] - Investment insights suggest that Alibaba's revenue adjustments may offset the impact of flash sales subsidies, while JD's new business investments are expected to stabilize overall profit margins [19]

Investment Rating - The report assigns a "Buy" rating to Geely Automobile (175 HK) with a target price of HKD 24.21, indicating a potential upside of 27.8% from the current closing price of HKD 18.95 [1][9]. Core Insights - The report highlights a significant increase in non-GAAP net profit, exceeding market expectations, and expresses optimism regarding sales performance in the second half of the year, benefiting from industry trends against excessive competition [2][7]. - Geely's revenue for the first half of 2025 reached RMB 150.3 billion, a year-on-year increase of 27%, while the net profit attributable to shareholders was RMB 9.29 billion, a year-on-year decrease of 14%. However, the non-GAAP net profit grew by 102% year-on-year to RMB 6.66 billion, surpassing market forecasts [7][11]. - The report anticipates Geely's sales target for the year to be raised from 2.7 million to 3 million units, supported by the launch of approximately five new key electric and hybrid models in the second half of the year [7][11]. Financial Overview - Revenue projections for Geely are as follows: RMB 179.2 billion in 2023, RMB 240.2 billion in 2024, RMB 335.1 billion in 2025, RMB 395.8 billion in 2026, and RMB 439.1 billion in 2027, with year-on-year growth rates of 21.1%, 34.0%, 39.5%, 18.1%, and 10.9% respectively [3][11]. - The net profit forecast shows an increase from RMB 5.3 billion in 2023 to RMB 21.1 billion in 2027, with a notable jump to RMB 16.6 billion in 2024, followed by a slight decrease in 2025 [3][11]. - The report indicates a projected earnings per share (EPS) of RMB 0.53 in 2023, rising to RMB 2.10 by 2027, with a peak EPS of RMB 1.65 in 2024 [3][11]. Market Performance - Geely's stock has shown a year-to-date increase of 27.87%, with a 52-week high of HKD 20.35 and a low of HKD 7.70 [6][11]. - The average daily trading volume is reported at 102.16 million shares, reflecting strong market interest [6][11].

Group 1: Automotive Industry Analysis - The automotive industry is experiencing a strong push towards the implementation of intelligent driving technologies, with a significant increase in the adoption of lidar systems in vehicles priced below 150,000 yuan. In the first half of 2025, 1.044 million passenger cars in mainland China were equipped with lidar, representing a year-on-year increase of 83.14% [1][2] - The report highlights the importance of monitoring the regulatory developments for Level 3 conditional autonomous driving within the next year, which is expected to enhance the value per vehicle and benefit key suppliers in the industry [1][2] - The long-term outlook suggests that the robotics market, particularly consumer-grade robots, is poised for significant growth, with expectations of over 10 million humanoid robots shipped by 2035, coinciding with an increase in lidar integration [1][2] Group 2: Company Ratings and Market Position - The report initiates coverage on Hesai Technology and RoboSense, both of which lead the global lidar market. Both companies are expected to release ADAS lidar systems suitable for vehicles priced under 200,000 yuan in 2024, priced below 200 USD, aligning with the trend of democratizing intelligent driving [2] - The report assigns a "Buy" rating to Hesai Technology (HSAI US) with a target price of 27.52 USD and RoboSense (2498 HK) with a target price of 41.89 HKD, indicating confidence in their market positions and growth potential [2] Group 3: Tencent Holdings Performance - Tencent Holdings reported a total revenue growth of 15% year-on-year in Q2 2025, surpassing market expectations. Key segments such as gaming and marketing saw growth rates of 22% and 20%, respectively [3][5] - The gross margin improved by approximately 3.6 percentage points to 57%, driven by high-margin businesses including local gaming and video services [3][5] - The forecast for Q3 2025 anticipates an overall revenue growth rate of 11%, slightly above previous market expectations, with social, gaming, and marketing segments expected to grow at rates of 7%, 13%, and 18%, respectively [3][5] Group 4: Banking Sector Insights - In July, the net increase in new RMB loans decreased by 50 billion yuan year-on-year, primarily due to seasonal factors and weak credit demand. However, the total social financing (TSF) increased by 1.16 trillion yuan, reflecting a year-on-year increase of 3.893 trillion yuan, mainly driven by government bonds [6] - The report indicates that despite the decrease in new RMB loans, social financing continues to provide strong support to the real economy, with government initiatives expected to boost consumer loan growth [6]

Investment Rating - The report maintains a "Buy" rating for several companies in the banking sector, indicating an expectation of total returns exceeding the relevant industry over the next 12 months [16]. Core Insights - In July, new RMB loans decreased by 50 billion, a year-on-year reduction of 310 billion, primarily due to weak credit demand during the off-peak season [1][2]. - The total social financing (社融) in July was 1.16 trillion, a year-on-year increase of 389.3 billion, with government bonds being the main source of this financing [1][2]. - M1 growth rate was 5.6% and M2 growth rate was 8.8%, both showing a month-on-month increase [3][4][9]. - Despite a net decrease in new RMB loans in July, social financing still showed a year-on-year increase, indicating continued financial support for the real economy [1]. Summary by Sections New RMB Loans - In July, new RMB loans saw a net decrease of 50 billion, with short-term loans and medium to long-term loans also experiencing declines [2]. - The total new RMB loans for the first seven months of 2025 amounted to 1.287 trillion, reflecting a year-on-year decrease of 660 billion [2]. Social Financing - The new social financing in July was 1.16 trillion, with a significant contribution from government bonds, which amounted to 1.244 trillion, a year-on-year increase of 555.9 billion [1][2]. - For the first seven months of 2025, total social financing reached 23.99 trillion, up 51.2 billion year-on-year [2]. Deposits - New RMB deposits in July were 500 billion, a year-on-year increase of 1.3 trillion, primarily driven by non-bank financial institution deposits [1][2]. - Resident deposits saw a net decrease of 1.11 trillion, while non-bank financial institutions added 2.14 trillion in deposits [1][2]. Economic Support Measures - The report highlights the government's recent initiative to boost consumption through fiscal subsidies for eligible personal consumption loans, which is expected to stimulate demand and promote growth in personal loans [1].

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings (700 HK) with a target price raised to HKD 700.00, indicating a potential upside of 19.5% from the current price of HKD 586.00 [1][41]. Core Insights - The second quarter performance exceeded expectations, with a total revenue growth of 15% year-on-year to RMB 184.5 billion, surpassing market expectations by 4% [5][6]. - The growth was driven by strong performances in gaming, social networking, marketing, and financial technology services, with notable contributions from both domestic and overseas gaming segments [5][6]. - The report projects a continued robust growth trajectory, with an expected revenue growth rate of 11% for the third quarter, slightly above previous market expectations [5][6]. Financial Overview - Revenue projections for the years 2023 to 2027 are as follows: RMB 609.0 billion in 2023, RMB 660.3 billion in 2024, RMB 734.6 billion in 2025, RMB 790.5 billion in 2026, and RMB 843.3 billion in 2027, reflecting a compound annual growth rate [2][44]. - Net profit is expected to grow from RMB 157.7 billion in 2023 to RMB 296.8 billion in 2027, with significant year-on-year growth rates, particularly in 2024 and 2025 [2][44]. - The earnings per share (EPS) are projected to increase from RMB 16.33 in 2023 to RMB 33.05 in 2027, indicating a strong profitability outlook [2][44]. Segment Performance - Domestic gaming revenue grew by 17% year-on-year, supported by new game launches and the performance of established titles [5][6]. - Overseas gaming revenue saw a remarkable increase of 35%, driven by successful titles like PUBG MOBILE and Supercell games [5][6]. - Social networking revenue increased by 6%, with contributions from mobile game in-app purchases and video streaming services [5][6]. - Marketing services revenue maintained a robust growth rate of 20%, aided by enhanced advertising effectiveness across various platforms [5][6]. Capital Expenditure and AI Investment - Capital expenditures surged by 119% year-on-year, reflecting ongoing investments in AI and technology to enhance existing business operations [5][6]. - The report emphasizes the balance between cost control and profitability enhancement, with expectations for profit growth to continue outpacing revenue growth [5][6].

Group 1: Global Macro Insights - The US July CPI increased by 2.7% year-on-year, matching the previous month and below the expected 2.8%. The month-on-month increase was 0.2%, consistent with expectations, while core CPI rose to 3.1% year-on-year, indicating a continuous upward trend over three months [3][4] - The likelihood of a rate cut in September has increased significantly, driven by soft non-farm payroll data and rising employment risks. The appointment of Stephen Moore to the Federal Reserve may further tilt the Fed towards a rate cut [4] Group 2: Company-Specific Insights - Tencent Music - Tencent Music's Q2 revenue reached 8.4 billion yuan, exceeding market expectations by 6%. Subscription revenue grew by 17% year-on-year, with SVIP penetration rising to 12%. Non-member business revenue surged by 47%, driven by advertising and concert revenues [9][10] - The company maintains a forecast of 6.1 million net new members for the year, with an expected ARPPU of 12.2 yuan by year-end. Non-subscription revenue is projected to grow by 30% in 2025, supported by advertising and concert collaborations [9] Group 3: Company-Specific Insights -阅文集团 (Yuewen Group) - Yuewen Group's revenue for the first half of 2025 was 3.2 billion yuan, a 24% year-on-year decline. However, adjusted net profit increased by 36% to 550 million yuan, with an adjusted net profit margin of 17% [5][8] - The IP derivatives business continues to show strong growth, with GMV reaching 480 million yuan, nearing the total for the entire year of 2024. The company expects a 15% decline in copyright operations revenue, while core IP operations are projected to grow by 4% [5][8] Group 4: Valuation Adjustments - For Yuewen Group, the target price has been raised to 39 HKD, reflecting an upward adjustment in valuation based on a 25x P/E ratio, considering the industry's valuation center has shifted upwards [8] - Tencent Music's target price has been adjusted to 30 USD, based on a 30x P/E ratio, highlighting the potential for diversified monetization in the music services sector [10]

Global Macro - The July CPI in the US increased by 2.7% year-on-year, matching the previous month and below the expected 2.8% [2] - The core CPI rose to 3.1% year-on-year, up from 2.9% in the previous month, indicating a continuous increase over three months [2] - Energy prices have significantly contributed to the decline in inflation, with international oil prices dropping due to easing geopolitical tensions [4] - The core goods and services prices have both risen, with tariffs not fully reflected in the current inflation data as US companies absorbed over 50% of the tariff costs [2][4] Interest Rate Outlook - The probability of a rate cut in September has increased to 93.6%, with expectations of nearly three cuts throughout the year [2] - The soft non-farm payroll data in July raises concerns about employment, making a rate cut a reasonable action for the Federal Reserve [3] - The upcoming Jackson Hole conference may provide signals regarding potential rate cuts from the Federal Reserve [3] Core Inflation Dynamics - Core goods prices have risen for four consecutive months, driven by tariff impacts on furniture and used car prices [4] - Supercore inflation, excluding housing, has shown significant increases, particularly in medical services, influenced by recent policy changes [4] - The rising costs in medical services are attributed to cuts in healthcare spending and potential tariffs on drug imports, leading to increased insurance premiums [4]

Investment Rating - The report upgrades the investment rating of the company to "Buy" with a target price of HKD 39.00, indicating a potential upside of 25.0% from the current price of HKD 31.20 [1][15]. Core Insights - The report highlights that the company's derivative business is accelerating, which is a key driver for the upgraded rating. The company maintains a leading position in high-quality IP reserves and is expected to benefit from the expansion of IP derivative products [1][5]. - The financial outlook for the company shows a mixed performance, with expected revenue growth stabilizing in the online business for 2025, despite a projected decline in copyright operations revenue [5][10]. Financial Overview - Revenue projections for the company are as follows: - 2023: RMB 7,012 million - 2024: RMB 8,121 million - 2025E: RMB 7,439 million - 2026E: RMB 8,067 million - 2027E: RMB 8,403 million - The year-on-year growth rates show a decline of 8.0% in 2023, followed by a recovery of 15.8% in 2024, and further fluctuations in subsequent years [2][10][16]. - Net profit estimates are: - 2023: RMB 1,130 million - 2024: RMB 1,142 million - 2025E: RMB 1,348 million - 2026E: RMB 1,486 million - 2027E: RMB 1,659 million - The net profit growth rate is expected to be 24.8% in 2025, following a slight increase in 2024 [2][10][16]. Business Segment Performance - The online business revenue showed a slight increase of 2% year-on-year, with a stable monthly active user (MAU) count of 10.3 million and a 5% increase in paying users to 9.2 million [5][9]. - The report notes a significant decline in revenue from copyright operations, down 46% year-on-year, primarily due to delays in new content releases [5][9]. Valuation and Market Position - The report maintains the non-IFRS net profit expectations for 2025/26 and adjusts the valuation to 2026, referencing an average price-to-earnings (P/E) ratio of 25 times for comparable companies [5][10]. - The company is positioned to leverage its IP reserves and the integration of AI-generated content (AIGC) to enhance efficiency and accelerate the adaptation of mid-tier IP into visual formats [5][10].