Investment Rating - The report maintains a HOLD rating for Zhejiang Dingli with a new target price of RMB44, down from RMB51, reflecting a 11.4% upside potential [1][3]. Core Insights - Zhejiang Dingli's net profit for 2024 is projected at RMB1.63 billion, representing a 13% year-over-year decline, which is significantly below expectations by 20% and 21% compared to the report's and Bloomberg's consensus [1]. - The disappointing earnings are attributed to advanced shipments to the US to avoid tariff hikes and the consolidation of higher costs from the acquisition of CMEC [1]. - The company has sufficient AWP inventory to cover US sales until September 2025, but the unpredictable US tariff policy poses a risk to demand and operational capacity [1][8]. - Earnings forecasts for 2025 and 2026 have been revised down by 13% due to increased cost assumptions [1]. Financial Summary - Revenue for FY24 is expected to be RMB7.8 billion, with a year-over-year growth of 23.6% [2]. - Net profit for FY25 is estimated at RMB1.86 billion, showing a recovery with a 14.4% growth [2]. - The P/E ratio for FY24 is projected at 12.3x, while it is expected to decrease to 10.7x in FY25 [2][22]. Performance Metrics - In 4Q24, Dingli's gross profit fell by 28% to RMB515 million, with a gross margin contraction of 14.9 percentage points to 30.9% [1][9]. - The company’s administrative expenses increased significantly, contributing to a 71% year-over-year decline in net profit for 4Q24 [1][9]. - The current ratio is projected to improve from 2.3 in FY23 to 2.6 in FY25, indicating better liquidity [23]. Shareholding Structure - The largest shareholder, Xu Shugen, holds 45.5% of the company, followed by Deqing Zhongding Equity with 10.8% [4]. Market Performance - The stock has experienced a significant decline, with a 1-month drop of 32.9% and a 3-month decline of 42.6% [5].

Investment Rating - The report maintains a BUY rating for Xtep with a target price of HK$ 7.20, indicating a potential upside of 46.9% from the current price of HK$ 4.90 [3][10][18]. Core Views - The 1Q25 results are generally in line with expectations, with an encouraging trend observed in March 2025. The outlook for 2Q25E remains cautiously optimistic due to potential policy support and brand-specific growth momentum [1][10]. - Xtep is expected to benefit from a consumption trade-down effect amidst macroeconomic risks, with management maintaining positive sales growth guidance for FY25E [10][11]. - The company is focusing on enhancing operational efficiency and preparing for a direct-to-consumer (DTC) transformation, with plans to repurchase stores in the coming years [10][11]. Financial Summary - Revenue projections for FY25E are set at RMB 14,312 million, with a year-on-year growth of 5.4%. The net profit is expected to reach RMB 1,372 million, reflecting a growth of 3.6% [2][11]. - The earnings per share (EPS) for FY25E is projected at RMB 0.48, with a net profit margin of 9.6% [2][11]. - The company’s price-to-earnings (P/E) ratio is currently at 10x, compared to the target P/E of 14x for FY25E, indicating that the stock is undervalued relative to its historical average [10][18]. Market Performance - Xtep's market capitalization is approximately HK$ 12,910.7 million, with an average turnover of HK$ 82.9 million over the past three months [4][10]. - The stock has experienced a decline of 13.9% over the past month and 14.0% over the past three months, indicating a challenging market environment [6][10]. Shareholding Structure - The major shareholder is Mr. Ding Shui Po and family, holding 49.2% of the shares, followed by JPMorgan Chase & Co with 4.6% [5][10].

Investment Rating - The report maintains a "BUY" rating for SANY Heavy, with a target price revised to RMB22 from RMB21, indicating a potential upside of 15.4% from the current price of RMB19.06 [1][3]. Core Insights - SANY Heavy's net profit for 2024 is projected at RMB5.97 billion, reflecting a 32% year-over-year increase, which aligns closely with estimates [1]. - The company is focusing on emerging markets such as Asia Pacific, Africa, the Middle East, and South America, while remaining cautious about the US and European markets due to geopolitical concerns [1]. - The management highlighted the growth potential in large-size and mining excavators, positioning SANY as a key player in the excavator upcycle [1]. Financial Performance - Revenue for FY24 is expected to reach RMB78.38 billion, a 5.9% increase from FY23, with further growth projected to RMB88.84 billion in FY25 and RMB97.80 billion in FY26 [2]. - Adjusted net profit is forecasted to grow to RMB7.72 billion in FY25 and RMB8.88 billion in FY26, with corresponding EPS increasing to RMB0.91 and RMB1.05 respectively [2]. - The proposed dividend for FY24 indicates a 51% payout ratio, up from 41% in FY23, marking the highest payout since 2017 [1]. Regional Revenue Breakdown - In 2024, overseas revenue is expected to grow by 12% year-over-year, contributing 64% of total revenue, with Africa showing a significant 44% increase [6][8]. - The revenue breakdown for overseas markets in 2024 includes Asia Pacific (42%), Europe (25%), America (21%), and Africa (11%) [8]. Earnings Forecast Adjustments - The earnings forecasts for 2025 and 2026 have been slightly revised upwards by 5% and 7% respectively, reflecting the anticipated earnings upcycle [1][13]. - The target price adjustment to RMB22 is based on an unchanged target P/E of 24x, which is 0.5 standard deviations above the average of 20x since 2017 [1][3]. Share Performance - The market capitalization of SANY Heavy is approximately RMB161.74 billion, with an average turnover of RMB1.51 billion over the past three months [3]. - The stock has experienced a 1-month decline of 6.7% but a 3-month increase of 23.6% [5].

Economic Overview - In March, U.S. retail sales rebounded with a month-on-month increase of 1.4%, driven by preemptive purchases due to tariff concerns[5] - Sales of motor vehicles and parts surged by 5.3% month-on-month, while gas station sales fell by 2.5% due to declining oil prices[5] - Excluding motor vehicles and gas stations, retail sales grew by 0.8%[5] Federal Reserve and Monetary Policy - Fed Chair Powell emphasized the importance of achieving inflation targets and acknowledged the conflict between anti-inflation and employment goals, reflecting concerns over stagflation risks[2] - Powell denied the existence of a "Fed Put," indicating that the responsibility for stabilizing financial markets lies with the White House[2] - The Fed is expected to cut interest rates once in June or July and again in September or December due to market volatility and recession risks[1][2] Industrial Production - Industrial production fell by 0.3% month-on-month in March, slightly below the market expectation of -0.2%[5] - Utility output dropped significantly by 5.8%, contributing to the overall decline in industrial production[5] - Manufacturing, which accounts for three-quarters of industrial output, saw a slight decrease from 1% in January to 0.3% in March[5]

Macro Economic Overview - China's GDP growth rate for Q1 was 5.4%, exceeding market expectations, but the GDP deflator indicates significant deflationary pressure [2] - Economic activity data for March significantly surpassed market expectations, driven by the "old for new" policy, leading to a rebound in retail sales and strong industrial output [2] - Fixed asset investment saw a slight increase, benefiting from a recovery in infrastructure investment, while the real estate market showed signs of fatigue with declining sales growth in new and second-hand homes in early April [2] - Trade conflicts may challenge economic growth through reduced exports, suppressed domestic investment, and weakened consumer confidence, exacerbating deflationary pressures [2] Industry Insights - The technology sector is facing supply chain disruptions due to the U.S. government's export restrictions on Nvidia's H20 chips to China and other D5 countries, which could lead to fluctuations in the AI server supply chain [5] - Nvidia's inventory write-down of $5.5 billion corresponds to 1.1 million H20 chips and 138,000 AI servers, indicating a significant impact on the supply chain [5] - The Chinese CSPs are expected to accelerate the procurement of domestic computing power chips and servers in response to these restrictions, potentially leading to a rapid rise of the domestic supply chain [5] Company Analysis - Tongcheng Travel (780 HK) is expected to achieve revenue of RMB 4.35 billion in Q1, a 12% year-on-year increase, and a non-GAAP net profit of RMB 737 million, a 32% increase, aligning with Bloomberg consensus [5] - The strong profit growth outlook for Tongcheng Travel is primarily driven by domestic demand, relatively insulated from tariffs and geopolitical conflicts [5] - The target price for Tongcheng Travel remains at HKD 24, with a projected growth of 25% in core online travel operating profit and 18% in overall non-GAAP net profit from 2025 to 2027 [5] Focus Stocks - Geely Automobile (175 HK) is rated "Buy" with a target price of HKD 23, indicating a potential upside of 49% [6] - Xpeng Motors (XPEV US) is also rated "Buy" with a target price of USD 28, representing a 50% upside [6] - Anta Sports (2020 HK) is rated "Buy" with a target price of HKD 119.08, showing a 36% upside potential [6] - Luckin Coffee (LKNCY US) is rated "Buy" with a target price of USD 38.51, indicating a 28% upside [6] - BYD Electronics (285 HK) is rated "Buy" with a target price of HKD 47.10, reflecting a 48% upside [6]

Global Market Overview - The Hang Seng Index closed at 21,466, up 2.64% for the day and 25.92% year-to-date [1] - The S&P 500 closed at 5,397, up 0.62% for the day and 13.14% year-to-date [1] - European markets showed gains, with the DAX up 4.32% and the CAC up 3.25% [1] Sector Performance - The Hang Seng Financial Index rose by 3.46%, while the Hang Seng Real Estate Index fell by 1.30% [2] - Defensive sectors such as telecommunications and utilities led gains in Hong Kong, while sectors like healthcare and real estate faced declines [3] Economic Outlook - Trade conflicts are expected to significantly impact global trade, manufacturing activity, and consumer confidence in Q2 [3] - The Chinese government plans to boost domestic consumption and stabilize the real estate market as a response to trade tensions [3] - Monetary policy easing is anticipated in Q2, followed by fiscal stimulus after negotiations with the U.S. commence [3] Company Recommendations - Geely Automobile (175 HK) is rated "Buy" with a target price of 23.00, indicating a potential upside of 41% [4] - Luckin Coffee (LKNCY US) is rated "Buy" with a target price of 38.51, representing a 26% upside [4] - Tencent (700 HK) is rated "Buy" with a target price of 625.00, suggesting a 37% upside [4] Investment Opportunities - The report highlights several companies with strong potential returns, including: - BYD (285 HK) with a target price of 47.10, indicating a 42% upside [4] - Kweichow Moutai (600519 CH) with a target price of 133.86, suggesting a 69% upside [4] - The semiconductor sector is noted for significant growth potential, with companies like Zhongji Xuchuang (300308 CH) showing a potential upside of 132% [4]

Macro Commentary - China's trade surplus reached a record high of over 100 billion USD in March, driven by a significant rebound in exports due to anticipated tariff increases leading to a rush in exports [2] - Export growth is expected to slow from 5.9% in 2024 to 3.3% in 2025, while import growth may slightly rise from 1.1% to 2.2% [2] - The aggressive tariff policies of the Trump administration could reduce China's economic growth by over 0.5 percentage points through various channels [2] - China is likely to strengthen trade and investment ties with non-US regions and shift towards a more consumption-driven growth model, potentially introducing additional fiscal stimulus measures [2] Company Commentary - China Pacific Insurance (2328 HK) is expected to report a net profit growth of 80%-100% YoY for Q1 2025, driven by reduced disaster losses and improved investment returns [6] - The company anticipates a significant improvement in its combined ratio, benefiting from a decrease in natural disaster-related economic losses [6] - The forecast for FY25-27 EPS has been slightly adjusted, with estimates of 1.62, 1.76, and 1.91 CNY respectively, while maintaining a "Buy" rating with a target price of 15.80 HKD [6] - Yihua Holdings (838 HK) is projected to see a 12% YoY increase in automotive parts revenue for FY25, primarily from contributions by Great Wall Motors and Changan Automobile [7] - The company’s Mexican factory is expected to benefit from increased business from OEMs and new tariff policies, with continuous revenue growth and profitability [8] - Yihua's new business segments, including server chassis and robotic assembly, are anticipated to support long-term growth, with revenue from server chassis expected to exceed 400 million HKD this year [8][9] - Baidu (BIDU US) is expected to achieve a core business revenue of 24 billion CNY in Q1 2025, driven by strong demand in cloud services [7] - The company is actively transforming its business model to integrate generative AI into search results, which is expected to enhance user experience and engagement [7] - The target price for Baidu has been adjusted to 146.70 USD, reflecting a PE ratio of 13.9x for 2025E [7] Market Performance - The Hang Seng Index closed at 21,417, up 2.40% for the day and 25.63% year-to-date [2] - The performance of various sectors in the Hong Kong stock market showed healthcare, materials, and consumer discretionary leading gains, while telecommunications and real estate lagged [4] - The US stock market saw mixed results, with defensive sectors like real estate and utilities performing well, while consumer discretionary and technology sectors underperformed [4]

Investment Rating - The report maintains a "BUY" rating for PICC P&C, with a target price of HK$15.80, implying a 16.5% upside from the current price of HK$13.96 [1][3]. Core Insights - PICC P&C is expected to report a strong net profit surge of 80%-100% YoY for 1Q25, reaching RMB10.6 billion to RMB11.7 billion, which represents 33%-37% of last year's total net profit [1]. - The improvement in the combined ratio (CoR) is attributed to reduced catastrophic claims and optimized asset allocation, with an estimated CoR of less than 95% for 1Q25 [1][7]. - The company is adjusting its auto and non-auto CoR forecasts to 95.9% and 99.0% respectively for FY25E, reflecting stringent expense controls and an improved underwriting structure [1][8]. Financial Performance - For FY25E, net profit is projected at RMB36.05 billion, with an EPS of RMB1.62, and a dividend yield of 5.1% [2][19]. - The company's return on equity (ROE) is expected to be 13.4% for FY25E, with a combined ratio of 97.1% [19][8]. - The total investment assets are forecasted to grow by 12.6% YoY, reaching RMB676.51 billion in FY24 [9]. Investment Strategy - The insurer is expected to increase its equity allocation to high-yield stocks under FVOCI, building on a 40% growth in FY24 [1][7]. - The report anticipates that the insurer's investment income in 1Q25 will benefit from equity gains and a rebound in bond yields, with China's 10-year government bond yield rising by 14.4bps to 1.82% [7][1]. Share Performance - The stock has shown a 1-month performance of 4.5% and a 3-month performance of 15.3% [5]. - The market capitalization of PICC P&C is approximately HK$301.6 billion, with an average turnover of HK$514.7 million over the past three months [3].

15 Apr 2025 Baidu (BIDU US) Expecting steady cloud revenue growth For 1Q25E, we expect Baidu Core business revenue could reach RMB24.0bn, up 1% YoY, and would be 3% better than Bloomberg consensus, mainly driven by likely better-than-expected cloud revenue growth boosted by strong AI- related demand. Aided by solid cloud revenue growth, we are anticipating non- GAAP operating profit of RMB4.5bn for Baidu Core, 1% better than consensus. Baidu is still proactively driving business transformation, embedding mo ...

2025 年 4 月 14 日 招银国际环球市场 | 宏观研究 | 宏观视角 美国经济 通胀超预期放缓显示消费已经转弱 美国通胀与核心通胀连续两个月超预期放缓，因消费需求已在关税冲击落地前 走弱。特朗普的关税计划和联邦政府裁员与减支已通过预期机制作用于经济活 动，消费者信心指数和企业信心指数明显下滑，机票与住宿等非必要支出下 降。这种状态意味着消费需求将对因关税而上涨的消费价格非常敏感，经济近 期面临"滞涨"风险，远期面临"衰退"风险。据我们估计，10%有效关税将 在未来 12 个月降低美国 GDP 增速 0.4 个百分点，推升美国 PCE 通胀 0.3 个百 分点。近期"滞涨"风险将令美联储陷入两难，但金融市场动荡和远期衰退风 险可能推动美联储在 6 月或 7 月降息，9 月或 12 月再降息 1 次。 刘泽晖 (852) 3761 8957 frankliu@cmbi.com.hk 叶丙南, Ph.D (852) 3761 8967 yebingnan@cmbi.com.hk 资料来源：Wind，招银国际环球市场 资料来源：Wind，招银国际环球市场 0 2 4 6 8 10 2019 2020 2021 ...