Zhao Yin Guo Ji

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FY23 in line; upbeat FY24E outlook on AI server/networking, EV and AirPods upside
Zhao Yin Guo Ji· 2024-03-13 16:00
Investment Rating - The report maintains a "BUY" rating for FIT Hon Teng with a new target price of HK$2.21, representing a 64.7% upside from the current price of HK$1.34 [4][15]. Core Insights - FIT Hon Teng's FY23 results were in line with expectations, reporting revenue of US$4,196 million, a decrease of 7% year-on-year, and a net profit of US$130 million, down 24% year-on-year. The decline was attributed to softer demand in traditional servers and PCs, while the EV segment saw a significant increase of 100% year-on-year due to the Voltaira merger [2][3]. - The management provided an optimistic outlook for FY24E, forecasting double-digit year-on-year growth in both revenue and gross profit, driven by new product launches and synergies from the Voltaira auto electronics business. Revenue and net profit are expected to rebound by 12.2% and 41.6% year-on-year, respectively [2][10]. Financial Performance Summary - FY23 revenue was US$4,196 million, with a gross margin of 19.2%, an improvement from 16.9% in FY22, due to a better product mix and effective execution of the "3+3 Strategy" [2][19]. - The company expects revenue for FY24E to reach US$4,706 million, with a gross profit of US$931 million, reflecting a gross margin of 19.8% [10][19]. - The net profit for FY24E is projected at US$183 million, with an EPS of 2.58 US cents, indicating a significant recovery from FY23 [11][19]. Growth Drivers - Key growth drivers include the integration of Voltaira's auto business, advancements in AI server and networking products, and increased orders for AirPods expected in Q3 2024 from major US customers [2][10]. - The report highlights the attractive valuation of FIT Hon Teng, trading at 6.6x FY24E P/E, which is considered favorable given the anticipated earnings visibility and growth potential [2][15]. Market Position - FIT Hon Teng's market capitalization is approximately HK$9,737.8 million, with a shareholding structure dominated by Foxconn Far East Ltd, holding 71.1% [5][16]. - The stock has shown strong performance, with a 1-month increase of 38.1% and a 3-month increase of 27.6% [5].
Resilient outlook backed by rising popularity
Zhao Yin Guo Ji· 2024-03-13 16:00
M N 14 Mar 2024 CMB International Global Markets | Equity Research | Company Update 361 Degrees (1361 HK) Resilient outlook backed by rising popularity Target Price HK$6.25 361 Degrees’s FY23 result was roughly inline but we are delighted to see its dividend payout ratio resumed to 40%. Going forward in FY24E, we are still (Previous TP HK$6.23) confident, thanks to: 1) its wholesale business nature (supported by 80%+ sell Up/Downside 36.6% through rate), 2) resilient retail sales growth (20%+ in Jan-Feb 202 ...
2023年利润率提高;预计2024年稳步增长
Zhao Yin Guo Ji· 2024-03-13 16:00
Investment Rating - Target price: HKD 24.80 (previously HKD 27.40), with a potential upside of 38.4% from the current price of HKD 17.92 [1] - Maintains a "Buy" rating for ZTE Corporation (763 HK) based on a 10x FY24E P/E ratio, close to its three-year average [2] Core Views - ZTE's FY23 revenue reached RMB 124 billion, up 1.1% YoY, in line with Bloomberg expectations and 3% above the firm's forecast [2] - FY23 net profit grew 15.4% YoY to RMB 9.3 billion, 5% below Bloomberg expectations but in line with the firm's forecast [2] - FY23 gross margin improved to 41.5%, up 4.34 percentage points from FY22, driven by operational optimization and cost reduction through in-house components [2] - FY23 net profit margin rose to 7.5%, up from 4.2%/5.9%/6.6% in FY20-22 [2] - 4Q23 revenue grew 14.7% YoY and 21.5% QoQ, while net profit increased 17.8% YoY but declined 37.3% QoQ due to product mix changes and higher employee benefits and marketing expenses [2] - ZTE is expected to benefit from telecom industry trends, focusing on 5.5G/6G and AI computing capabilities [2] Financial Summary Revenue and Profit - FY21A-FY25E revenue: RMB 114.5 billion, RMB 123.0 billion, RMB 124.3 billion, RMB 133.7 billion, RMB 142.6 billion [1] - FY21A-FY25E net profit: RMB 6.8 billion, RMB 8.1 billion, RMB 9.3 billion, RMB 10.8 billion, RMB 12.2 billion [1] - FY21A-FY25E revenue growth: 12.9%, 7.4%, 1.1%, 7.6%, 6.7% [1] - FY21A-FY25E net profit growth: 31.4%, 18.6%, 15.4%, 16.3%, 12.5% [1] Margins and Ratios - FY21A-FY25E gross margin: 35.2%, 37.2%, 41.5%, 41.9%, 42.0% [1] - FY21A-FY25E P/E ratio: 11.2x, 9.6x, 8.4x, 7.3x, 6.5x [1] - FY21A-FY25E ROE: 13.2%, 13.8%, 13.7%, 14.3%, 14.5% [1] Business Segments - Carrier network revenue grew 3.4% YoY, driven by domestic wireline and wireless market optimization and overseas strategic progress [2] - Consumer business revenue declined 1.3% YoY due to overseas inventory digestion and competition, partially offset by domestic home network growth [2] - Government and enterprise revenue fell 7.1% YoY, impacted by industry investment and key customer construction timing [2] Forecast Comparison - FY24E revenue: RMB 133.7 billion (firm) vs. RMB 152.8 billion (Bloomberg consensus), 12% lower [7] - FY24E net profit: RMB 10.8 billion (firm) vs. RMB 11.2 billion (Bloomberg consensus), 3% lower [7] - FY24E gross margin: 41.9% (firm) vs. 37.7% (Bloomberg consensus), 4.2 percentage points higher [7] - FY24E net margin: 8.1% (firm) vs. 7.3% (Bloomberg consensus), 0.8 percentage points higher [7] Shareholder Structure - BlackRock holds 7.1% and Vanguard holds 4.2% of ZTE's shares [4] Stock Performance - 1-month absolute return: 21.9%, relative return: 18.4% [5] - 3-month absolute return: 7.2%, relative return: 7.1% [5] - 6-month absolute return: -25.6%, relative return: -17.2% [5] Financial Statements Income Statement - FY21A-FY25E operating income: RMB 114.5 billion, RMB 123.0 billion, RMB 124.3 billion, RMB 133.7 billion, RMB 142.6 billion [9] - FY21A-FY25E operating profit: RMB 8.5 billion, RMB 10.6 billion, RMB 11.0 billion, RMB 12.2 billion, RMB 12.9 billion [9] - FY21A-FY25E net profit: RMB 6.8 billion, RMB 8.1 billion, RMB 9.3 billion, RMB 10.8 billion, RMB 12.2 billion [9] Balance Sheet - FY21A-FY25E total assets: RMB 168.8 billion, RMB 181.0 billion, RMB 201.0 billion, RMB 194.6 billion, RMB 206.5 billion [9] - FY21A-FY25E total liabilities: RMB 115.5 billion, RMB 121.4 billion, RMB 132.6 billion, RMB 118.8 billion, RMB 122.4 billion [9] - FY21A-FY25E total equity: RMB 51.5 billion, RMB 58.6 billion, RMB 68.0 billion, RMB 75.6 billion, RMB 84.0 billion [9] Cash Flow - FY21A-FY25E net operating cash flow: RMB 15.7 billion, RMB 7.6 billion, RMB 17.4 billion, RMB 29.3 billion, RMB 11.6 billion [10] - FY21A-FY25E net investment cash flow: RMB -10.6 billion, RMB -1.3 billion, RMB -20.9 billion, RMB -2.3 billion, RMB -2.6 billion [10] - FY21A-FY25E net financing cash flow: RMB 2.8 billion, RMB 1.5 billion, RMB 7.4 billion, RMB -16.2 billion, RMB -8.0 billion [10]
2023 earnings in line; 15% share price pullback looks overdone
Zhao Yin Guo Ji· 2024-03-12 16:00
M N 13 Mar 2024 CMB International Global Markets | Equity Research | Company Update Horizon CD (9930 HK) 2023 earnings in line; 15% share price pullback BUY (Maintain) looks overdone Target Price HK$3.70 Horizon CD’s core net profit in 2023 grew 10% YoY to RMB1bn, in line with our (Previous TP HK$5.20) expectation. While the lack of dividend payout is disappointing given that Up/Downside 189.1% positive free cash flow is achieved, we believe the 15% share price pullback Current Price HK$1.28 yesterday was o ...
FY23E Preview: industry headwinds mostly priced in; Awaiting recovery in FY24E
Zhao Yin Guo Ji· 2024-03-12 16:00
FY23E Preview: industry headwinds mostly priced in; Awaiting recovery in FY24E PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG: RESP CMBR OR http://www.cmbi.com.hk1 Source: Company data, CMBIGM estimates 28% 37% 15% -14% 59%52% 19% 20% 24% 0 2,000 4,000 6,000 8,000 10,000 12,000 2017 2018 2019 2020 2021 2022 2023E 2024E 2025E (RMB mn) Revenue YoY Source: Company data, CMBIGM estimates PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON ...
Star products & sponsorships-led turnaround
Zhao Yin Guo Ji· 2024-03-12 16:00
Investment Rating - The report initiates a BUY rating on 361 Degrees with a target price (TP) of HK$6.23, based on a 10x FY24E P/E ratio, indicating a potential upside of 43.5% from the current price of HK$4.34 [4]. Core Insights - The report highlights a turnaround driven by star products and sponsorships, forecasting a 16% sales CAGR and a 20% net profit CAGR from FY22 to FY25, compared to previous growth rates of 7% and 20% from FY19 to FY22 [2][27]. - 361 Degrees is positioned as the 4th-largest domestic sportswear brand in China, with a market share of 3.1% in 2022 and a robust store network of approximately 5,480 adult stores and 2,288 kids stores [2][19]. Summary by Sections Company Overview - 361 Degrees is recognized as the 4th-largest domestic sportswear company in China, established in 2003 and listed on the HKEX in 2008, with significant sales and net profit figures of RMB7.0 billion and RMB747 million in FY22 [19][23]. Key Positives and Growth Drivers - The brand's successful rebranding strategy initiated in 2019 has led to improved market share and financial performance, with retail sales growth accelerating since FY21 [27][28]. - Significant improvements in product offerings, particularly in running and basketball segments, have been noted, with a focus on R&D and innovative designs [41][53]. - The e-commerce segment has shown remarkable growth, with a sales CAGR of 23% from FY19 to FY22, and is expected to continue its upward trajectory [38][35]. Financial Forecast - Revenue is projected to grow from RMB6.96 billion in FY22 to RMB10.97 billion by FY25, with net profit expected to increase from RMB747 million to RMB1.27 billion over the same period [3][9]. - The report anticipates a P/E ratio decline from 9.0x in FY22 to 6.2x by FY25, indicating an attractive valuation compared to industry averages [3][4]. Market Position and Strategy - The company has effectively utilized sponsorships and endorsements to enhance its professional image and connect with younger consumers, which is crucial for market share expansion [59][60]. - The strategic focus on lower-tier cities has been beneficial, as these markets are expected to show resilience in consumer spending [20][22].
Streaming and ESPN+ on the rise
Zhao Yin Guo Ji· 2024-03-12 16:00
Investment Rating - The report initiates coverage on Walt Disney Co with a BUY rating and a target price of US$142, implying a 28.7% upside from the current price of US$110.3 [4][5]. Core Insights - The report highlights that Disney is expected to benefit from streaming and sports industry tailwinds, alongside cost control initiatives. The company has shown significant improvement in streaming losses and operational efficiency, with management guiding for an EPS of US$4.6 (+22% YoY) and free cash flow of US$8 billion in FY24E. Streaming profitability is anticipated by 4QFY24E, with projected revenue and earnings CAGR of 5% and 16% respectively from FY24-26E [2][3][28]. Company Overview - Established in 1923, Disney is a global entertainment and media conglomerate with a diversified portfolio that includes film production, theme parks, and streaming services. The company is currently prioritizing its streaming and ESPN segments, supported by cash flow from its Experiences business [12][17]. Streaming and Sports Growth - Disney+ has reached 150 million paid subscribers as of 1QFY24, with expectations for continued growth driven by strong content, AVOD initiatives, and paid-sharing strategies. The report forecasts a 4% CAGR in Disney+ subscribers from FY24-26E, with net adds of 5.5-6 million expected in 2QFY24E [2][20][38]. Parks and Experiences - The Parks segment is projected to be a significant cash generator, contributing approximately two-thirds of the Group's operating income in FY24E, with an expected 10% CAGR in operating income from FY24-26E. Revenue from US parks is anticipated to accelerate in the second half of FY24E [2][3][9]. Financial Performance - For FY24E, Disney's revenue is expected to reach US$91.8 billion, with a YoY growth of 3.3%. Adjusted net profit is projected at US$8.5 billion, reflecting a 23.9% increase YoY. The diluted EPS is forecasted to be US$4.62, a 23.4% increase YoY [3][4]. Valuation Metrics - The report sets a target price based on a sum-of-the-parts (SOTP) valuation, implying a P/E ratio of 30.7x for FY24E, which is 14% below Netflix's valuation but slightly above the industry average [2][4]. Key Catalysts - The report identifies several key catalysts for Disney's growth, including the upcoming breakeven on streaming, strong net subscriber additions, resilient performance in parks, and progress in the sports segment [2][3][4].
Driving growth in a more ambitious way
Zhao Yin Guo Ji· 2024-03-12 16:00
Investment Rating - The report maintains a "BUY" rating for JD.com with a target price of US$52.00, indicating a potential upside of 142.5% from the current price of US$21.44 [1][6][23]. Core Insights - JD.com reported better-than-expected results for 4Q23, with revenue of RMB306.1 billion, up 3.6% year-over-year, and non-GAAP net income of RMB8.4 billion, surpassing estimates [6]. - The company aims to enhance user experience and market share in 2024, with a focus on reinvesting profits to drive user acquisition amid intensified market competition [6]. - JD's net product revenue for 4Q23 was RMB246.5 billion, reflecting a 3.7% year-over-year increase, with electronics and home appliance revenue growing by 6.1% [6][27]. - The new share repurchase program and increased dividends are expected to support valuation and drive a rerating of the stock [6][23]. Financial Performance Summary - For FY23, total revenue reached RMB1.1 trillion, up 3.7% year-over-year, with non-GAAP net income of RMB35.2 billion, a 25% increase [6][7]. - The forecast for FY24 estimates total revenue of RMB1,160.3 billion, with a gross profit of RMB173.6 billion and a non-GAAP net profit of RMB36.1 billion [5][22]. - JD's gross margin is projected to be 15.0% in FY24, with a non-GAAP net margin of 3.1% [5][22]. Revenue Breakdown - JD Retail generated RMB267.6 billion in revenue for 4Q23, up 3.4% year-over-year, driven by better-than-expected growth in electronics and home appliances [6]. - Net services revenue for 4Q23 was RMB59.6 billion, up 3.0% year-over-year, although marketplace and advertising revenues declined by 4% [6][27]. Future Outlook - The management's focus for 2024 includes enhancing merchant support and user acquisition strategies, with expectations for commission revenue to return to growth by 3Q24 [6]. - The company anticipates an 8% year-over-year growth in JD Retail's revenue and a 4% increase in non-GAAP operating profit for FY24 [6].
美国经济:CPI再超预期,但不改6月首次降息可能
Zhao Yin Guo Ji· 2024-03-12 16:00
2024 年 3 月 13 日 招银国际环球市场 | 宏观研究 | 宏观视角 美国经济 CPI 再超预期,但不改 6 月首次降息可能 美国 2 月 CPI 和核心 CPI 环比增速连续第二个月高于市场预期,CPI 同比增速 也小幅反弹。食品价格回落,但能源与核心商品价格反弹。服务通胀小幅回 落,业主等价租金环比涨幅收窄令市场宽慰,但能源服务、运输服务价格反弹 推动超级核心服务通胀小幅回升。CPI 略超预期将强化美联储保持观望而不立 即降息的态度,预计 3 月和 5 月议息会议将保持利率不变。通胀数据公布后, 10 年国债收益率从 4.09%最高升至近 4.17%,美元指数走强,但美股小幅上 扬,货币市场预期 6 月美联储降息概率保持在 70%不变。由于春季出行需求推 动汽油价格回升与基数效应,3 月 CPI 同比可能延续反弹;但二手车等核心商品 与房租通胀回落将推动核心 CPI 增速延续回落。预计第二季度美国经济和就业 将有所降温。美联储可能避免在临近大选前的第三季度启动政策转向,6 月首次 降息的可能性相对更大,预计全年降息幅度 100 个基点,年末联邦基金利率在 4.3%左右。 食品价格回落,能源与核心商 ...
线上销售数据跟踪:春节基数影响2月线上销售增速,3.8大促表现亮眼
Zhao Yin Guo Ji· 2024-03-11 16:00
Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 48.84, indicating a potential upside of 25.1% from the current price of HKD 39.05 [1]. Core Insights - The company has shown strong online sales performance, particularly during promotional events, with significant growth in its key brands, especially 可复美 and 可丽金 [1][2]. - The report highlights that the online sales growth is expected to continue, driven by the company's strong product offerings and market positioning [1]. - The financial projections indicate a steady increase in revenue and net profit over the next few years, with sales expected to reach RMB 4,358 million in FY24E and RMB 5,590 million in FY25E [15][16]. Sales Performance - In February 2024, the online sales of 可复美 reached RMB 2,143.6 million, showing a year-on-year growth of 51.9% [1]. - The brand ranked seventh in terms of GMV among beauty brands during a recent promotional event, achieving sales of RMB 2,385.69 million [2]. - The report notes that the sales growth for 可丽金 was robust, with a year-on-year increase of 463.9% in February 2024 [1]. Financial Projections - The company is projected to achieve a net profit of RMB 1,607 million in FY24E, with a growth rate of 23.1% [15][16]. - The gross margin is expected to remain stable around 83.8% for FY24E [15]. - The report anticipates a steady increase in free cash flow, reaching RMB 1,364 million in FY24E [13]. Market Positioning - The company is well-positioned in the beauty and skincare market, with its products performing strongly on major e-commerce platforms like Tmall and Douyin [1][3]. - The report emphasizes the importance of the company's innovative product launches and marketing strategies in maintaining its competitive edge [1]. Valuation Metrics - The DCF model values the company's equity at RMB 43,735 million, translating to a per-share value of HKD 48.84 [13][14]. - The report indicates a favorable valuation with a P/E ratio projected to decrease from 41.4 in FY23E to 21.8 in FY26E, suggesting potential for growth [19].