Investment Rating - The report maintains a "BUY" rating for Weichai Power, with a revised target price of RMB20.40, up from RMB17.80, indicating a potential upside of 25.4% from the current price of RMB16.27 [2][3]. Core Insights - Weichai Power's net profit for 2023 increased by 84% year-on-year to RMB9 billion, aligning with earlier profit forecasts [2]. - The company declared a final dividend of RMB0.293 per share, raising the payout ratio to 50%, up from 45% in 2022 [2]. - The positive outlook is supported by factors such as the replacement cycle, increased sales of gas trucks, and export growth, which are expected to drive sales growth in the heavy-duty truck (HDT) industry in 2024 [2][3]. Financial Performance Summary - In 4Q23, Weichai's net profit rose 58% year-on-year to RMB2.5 billion, driven by a 20% increase in revenue to RMB53.6 billion and a gross margin expansion of 3.3 percentage points to 23.7%, the highest since 4Q18 [2][6]. - The engine segment saw a revenue increase of 55% year-on-year to RMB60.8 billion, with segment profit surging 1.7 times to RMB7.7 billion due to a 5.5 percentage point margin expansion [2][3]. - The automobiles and components segment turned profitable in the second half of 2023, recording a profit of RMB610 million compared to losses in previous periods [2]. - The forklift and supply chain solutions segment reported a tenfold increase in profit to RMB4.9 billion in 2023, reflecting a recovery [2][3]. - Agricultural machinery revenue decreased by 9% year-on-year to RMB16.2 billion, but the segment margin improved by 1 percentage point to 4.1%, resulting in a 23% increase in segment profit [2]. Earnings Forecast - The report revises the earnings forecast for 2024 and 2025 upwards by 19% and 20%, respectively, primarily due to higher margin assumptions across various segments [2][3]. - Revenue projections for 2024E and 2025E are set at RMB236.3 billion and RMB250.1 billion, respectively, with expected adjusted net profits of RMB12.1 billion and RMB13.1 billion [3][18]. Valuation - The SOTP-based target price for Weichai Power is set at HK$22/RMB20.4, reflecting a valuation methodology based on EV/EBITDA multiples [10]. - The report highlights that Weichai's core business is valued at an EV/EBITDA multiple of 6.5, contributing significantly to the overall equity value [10].

Investment Rating - The report maintains a "BUY" rating for FIT Hon Teng with a target price (TP) raised to HK$2.42, reflecting a 19.3% upside from the current price of HK$2.03 [5][19]. Core Insights - The report highlights opportunities in the US$1.7 billion server connector and cable market, driven by increased demand for next-generation high-speed connectivity in AI servers for FY24/25E [2][3]. - Management expects a 15-20% year-over-year growth in the networking/server segment for FY24E, with AI server-related revenue projected to reach 8-10% of FY24E sales, up from 1% in FY23 [2][3]. - The report anticipates FIT's net profit to grow by 55% and 27% year-over-year in FY24 and FY25, respectively, supported by the ramp-up of AI server connectivity products and consolidation of the Voltaira auto business [2][3]. Financial Summary - Revenue is projected to increase from US$4.196 billion in FY23 to US$4.715 billion in FY24, representing a 12.4% year-over-year growth [18][22]. - Net profit is expected to rise from US$170.3 million in FY23 to US$200 million in FY24, reflecting a 55.4% increase [18][22]. - Earnings per share (EPS) is forecasted to grow from 2.42 US cents in FY23 to 2.83 US cents in FY24 [18][22]. Market Position - FIT Hon Teng is positioned as a global leader in the server connector market, alongside competitors such as Amphenol, TEL, and Molex [2][3]. - The company is expected to capture a 20-30% market share in the global server connector and cable market, aiming for US$500 million in sales by FY25E [2][3]. Valuation Metrics - The report notes that FIT is trading at 9.2x/7.2x FY24/25 P/E, which is attractive compared to the historical average of 15x [3][19]. - The new target price of HK$2.42 is based on an 11x FY24E P/E, reflecting a 33% discount to the 5-year historical average [19].

M N 25 Mar 2024 CMB International Global Markets | Equity Research | Company Update Henlius Biotech (2696 HK) Anticipating sustained profitability  Profit turnaround driven by core business operations. Henliu’s FY23 revenue Target Price HK$18.67 increased 67.8% YoY to RMB5.40bn, driven by strong sales of HANQUYOU (Previous TP HK$18.67) (trastuzumab biosimilar) and serplulimab (PD-1). HANQUYOU recorded Up/Downside 31.8% RMB2.74bn revenue in FY23, +58% YoY. We think HANQUYOU may be free from Current Price HK ...

M N 25 Mar 2024 CMB International Global Markets | Equity Research | Company Update AAC Tech (2018 HK) Solid outlook for PSS merger & optics margin recovery; Maintain HOLD on fair valuation Target Price HK$22.44 AAC reported FY23 revenue of RMB20.4bn (-1.0% YoY) and net income of RMB740mn (-9.9% YoY), above consensus estimates mainly due to exchange (Previous TP HK$14.04) gains and other income. FY23 GPM came in at 16.9%, largely in line, and 2H23 Up/Downside (10.2%) GPM recovered to 19.2% (+1.4ppts YoY/+5. ...

M N 25 Mar 2024 CMB International Global Markets | Equity Research | Company Update Baozun (BZUN US) GAP revitalization making good progress Target Price US$4.93 Baozun delivered mixed 4Q23 results with in-line revenue (+9% YoY) but soft (Previous TP US$6.90) bottom line. For 1Q24E, we expect a low-single-digit YoY decline in revenue, with Up/Downside 113.0% a net loss position, for slower BEC (Baozun E-commerce) recovery with soft Current Price US$2.30 consumption sentiment. Despite that, BBM (Baozun Brand ...

Investment Rating - The report maintains a "BUY" rating for Greentown Management with a target price of HK$ 9.37, reflecting a 13x 2024E PE [2][4]. Core Insights - Greentown Management achieved a net profit growth of +31% YoY in FY23, with a maintained dividend payout ratio of 100%, resulting in an 8% dividend yield [2][5]. - The company is expected to guide industry-leading growth with a revenue CAGR of +20% and net profit CAGR of +25% over the next three years, potentially outperforming the broader property market [2][8]. - The company's adaptability in business restructuring has been highlighted as a key factor in its strong performance despite a sluggish property market [2][8]. Financial Performance Summary - FY23 results showed revenue of RMB 3,302 million, a 24.3% increase YoY, and attributable net profit of RMB 974 million, up 31% YoY [3][5]. - Gross profit margin remained stable at 52%, with a slight decrease in commercial project management (PJM) margin to 52% and an improvement in government PJM margin to 45% [5][12]. - The company reported a net margin of 29.5% in FY23, reflecting a 1 percentage point increase from the previous year [5][12]. Future Projections - Revenue is projected to reach RMB 4,048 million in FY24, with a YoY growth of 22.6%, and net profit is expected to be RMB 1,250.9 million, reflecting a 28.5% increase [3][7]. - The company has a billable contract value of RMB 25 billion, with an expected annual increase of approximately RMB 10 billion [2][8]. - The forecast for net profit in FY26 is RMB 1,897.3 million, indicating a continued growth trajectory [3][12]. Market Position and Strategy - Greentown Management has expanded its business into non-residential projects, which accounted for 15% of new contracts in FY23, in response to a contracting residential market [2][8]. - The company has successfully maintained its market share in the property management sector, with newly contracted gross floor area (GFA) increasing to 35.3 million square meters in FY23 [10][11]. - The report emphasizes the company's asset-light model and high cash flow as significant advantages in the current market environment [2][8].

Investment Rating - The report maintains a "BUY" rating for Zhejiang Dingli with a target price of RMB70, representing an upside of 24.8% from the current price of RMB56.10 [2]. Core Insights - Zhejiang Dingli plans to invest RMB1.7 billion to build a new production base for 20,000 units of new energy aerial work platforms (AWP), which is expected to enhance its global competitiveness [2]. - The new capacity is projected to contribute approximately RMB2.5 billion in annual sales once operational, with completion expected in 36 months [2]. - The company has sufficient internal resources to finance the capital expenditure without needing equity financing [2]. Financial Performance Summary - Revenue is expected to grow from RMB5,445 million in FY22 to RMB6,267 million in FY23, and further to RMB7,508 million in FY24, reflecting a year-on-year growth of 15.1% and 19.8% respectively [9]. - Net profit is projected to increase from RMB1,257 million in FY22 to RMB1,693 million in FY23, and RMB1,963 million in FY24, indicating a growth rate of 34.7% [9]. - The earnings per share (EPS) is forecasted to rise from RMB2.48 in FY22 to RMB3.34 in FY23, and RMB3.88 in FY24, showing a year-on-year growth of 34.7% [9]. Capacity Expansion and Market Position - The new production base will add 30% capacity by 2026-27, focusing on scissors lifts to meet rising demand for electric and advanced models in overseas markets [2]. - Dingli currently operates five production bases, and the new facility will require acquiring additional land in Deqing, Zhejiang [2]. - The company is positioned to benefit from the increasing demand for aerial work platforms, particularly in international markets [2]. Revenue Breakdown and Growth Projections - The revenue from core business segments is expected to grow significantly, with boom lifts projected to generate RMB2,250 million in FY24 and scissor lifts expected to reach RMB4,419 million [4]. - The average gross margin for the core business is anticipated to improve from 29.4% in FY22 to 36.5% in FY24 [4]. - The overall revenue growth rate is projected to stabilize around 15.2% in FY25, indicating sustained demand and operational efficiency [12].

M N 22 Mar 2024 CMB International Global Markets | Equity Research | Company Update Innovent Biologics (1801 HK) More than obesity  Strong product sales in FY23. In FY23, Innovent recorded total revenue of Target Price HK$55.00 RMB6.21bn, including RMB5.73bn product sales revenue (+38.4% YoY), in line with (Previous TP HK$57.35) our expectation. Innovent had a strong 2H23, with product sales +33.1% HoH vs the Up/Downside 44.4% first half. As per Eli Lilly, total sales of sintilimab in FY23 reached US$393.3 ...

Investment Rating - The report maintains a "BUY" rating for Intron Tech with a new target price (TP) of HK$5.53, based on a 12x FY24E P/E valuation methodology [13][14][21]. Core Insights - Intron's FY23 revenue was RMB 5.8 billion, reflecting a 20% year-over-year (YoY) growth, while net income decreased by 23.5% YoY to RMB 317 million. The gross profit margin (GPM) was 18.7%, down 2.8 percentage points YoY, attributed to intensified price competition [21][32]. - The company expects solid growth in the New Energy Vehicle (NEV) and Hybrid Electric Vehicle (HEV) segments, driven by increasing demand and export opportunities in China. However, margin pressure may persist due to heightened competition [21][32]. - The report highlights a significant increase in R&D expenses, which reached 9.0% of revenue due to talent recruitment and upfront investments. Management anticipates a normalization of these expenses in FY24E [21][32]. Revenue Forecasts - Revenue is projected to grow from RMB 6,975 million in FY24E to RMB 10,805 million in FY26E, with a YoY growth rate of 20.2% in FY24E and 24.2% in FY25E [21][26]. - The breakdown of revenue by segment shows strong growth in New Energy (131.6% YoY in 2021, 91.0% in 2022) and Automation & Connectivity (151.3% YoY in 2022) [21][26]. Earnings Summary - The earnings forecast for FY24E includes a revenue estimate of RMB 6,975 million, a gross profit of RMB 1,298 million, and a net profit of RMB 441 million, indicating a 39% YoY growth in net profit [21][26][32]. - The report notes that the EPS for FY24E is expected to be RMB 0.41, with a consensus estimate of RMB 0.55 for FY25E [21][26]. Valuation Metrics - Intron is currently trading at 4.5x FY24E P/E, significantly lower than the average P/E of 22.8x for its peers, indicating that it is undervalued [14][21]. - The report emphasizes the attractive risk/reward profile of Intron, especially in light of potential catalysts such as favorable NEV policies and increasing penetration of Advanced Driver Assistance Systems (ADAS) [14][21].

Investment Rating - The report maintains a "BUY" rating for Prudential Plc with a target price adjusted to HK$137.8, reflecting a potential upside of 81.9% from the current price of HK$75.75 [2][3]. Core Insights - Prudential reported a strong FY23 performance with new business profit (NBP) increasing by 45% year-over-year (YoY) to US$3.13 billion, surpassing consensus estimates by 6.4% [2]. - The NBP margin expanded by 3 percentage points to 53% for the full year, with a notable improvement in the second half of FY23, where the margin reached 57% [2]. - The board approved a full-year dividend of US$0.2 per share, indicating a 9% increase from FY22, and expects continued dividend per share (DPS) growth of 7%-9% in FY24 [2]. Summary by Sections Financial Performance - FY23 net profit was US$1.7 billion, a significant recovery from a loss of US$1.0 billion in FY22 [3]. - The adjusted operating profit for FY23 grew by 8% YoY to US$2.9 billion, driven by lower central costs and restructuring expenses [2][3]. - The Group's total assets increased to US$174.1 billion in FY23, with a projected growth to US$198.6 billion by FY24 [8]. Business Segments - Agency NBP surged by 75% YoY to US$2.1 billion, supported by a 37% growth in Health & Protections (H&P) and a 59% increase in agent productivity [2]. - The bancassurance segment saw a decline of 8% to US$793 million, primarily due to poor performance in China and Vietnam [2]. - The NBP of the China joint venture, CITIC Prudential Life, fell by 43% YoY to US$222 million, impacted by a 40% decline in APE sales [2]. Valuation Metrics - The stock is currently trading at a price-to-embedded value (P/EV) of 0.54x for FY24E, close to historical lows, reflecting concerns over China exposure and trading liquidity [2][3]. - The expected return on equity (ROE) is projected to improve from 9.8% in FY23 to 12.5% by FY26 [9]. - The dividend yield is anticipated to rise from 1.6% in FY23 to 2.7% by FY26 [9].