M N 18 Mar 2024 CMB International Global Markets | Equity Research | Company Update Tuhu Car (9690 HK) Solid FY23 with better profitability Target Price HK$35.3 Tuhu Car (Tuhu) achieved decent profit for the first time in FY23, with revenue (Previous TP HK$50.10) +18% YoY (in line) and adj. NP at RMB481mn (27% above consensus). Looking Up/Downside 195.2% into FY24E, we are positive on its resilient growth (forecasting revenue + 16% Current Price HK$11.96 YoY), backed by workshop expansion, richer offerings, ...

M N 18 Mar 2024 CMB International Global Markets | Equity Research | Company Update Shennan Circuit (002916 CH) FY23 results beat helped by better 4Q Q Shennan Circuit released its FY23 earnings, with revenue down 3.3% YoY to Target Price RMB79.00 RMB13.5bn (5%/2% higher than our forecast/consensus) and net profit down (Previous TP RMB72.00) 14.8% YoY to RMB1.4bn (11%/5% higher than our forecast/consensus). The Up/Downside -11.2% Company beat estimates thanks to a stronger-than-expected 4Q. The Current Pric ...

Investment Rating - The report maintains a "BUY" rating for Mobvista Inc. with a target price of HK$6.00, indicating an upside potential of 85.8% from the current price of HK$3.23 [5][15]. Core Insights - Mobvista's FY23 results were largely in line with expectations, showing a revenue increase of 18% year-over-year (YoY) and an adjusted net profit of US$19.1 million, which is 9% above consensus estimates [2][3]. - The company is expected to enhance profitability significantly in FY24, with a forecasted bottom line of US$37 million and a net margin of 2.9%, alongside solid revenue growth of 20% YoY [2][3]. - The report highlights the resilience of the Mintegral revenue, which grew by 19.5% YoY in Q4 2023, and anticipates continued momentum in midcore and hardcore games [2][3]. Revenue and Profitability - Mobvista's revenue for FY23 reached US$1,054 million, with a gross profit margin (GPM) improvement to 20.6%, up 0.8 percentage points YoY, driven by higher advertising efficiency and cost discipline [3][17]. - The company reported a significant increase in adjusted net profit, which rose by 97% YoY, reflecting strong operational performance [3][17]. - By segment, ad-tech and mar-tech revenues grew by 17.8% and 23.9% YoY, respectively, indicating robust growth across its business lines [3][17]. Future Outlook - For FY24, Mobvista is projected to achieve revenue of US$1,265 million, with continued growth expected in the lifestyle segment, which saw a remarkable 143% YoY increase in revenue [3][12]. - The intelligent bidding system upgrade is anticipated to facilitate category expansion, particularly in non-gaming sectors such as e-commerce [2][3]. - The adjusted net margin is expected to improve to 2.9% in FY24 and 3.0% in FY25, reflecting a positive long-term margin outlook [3][12]. Valuation Metrics - The report employs a sum-of-the-parts (SOTP) valuation method, applying a 20x FY24E P/E for the ad-tech business and a 3x FY24E P/S for the mar-tech business, resulting in a target price of HK$6.00 [2][14]. - The projected earnings compound annual growth rate (CAGR) for FY24-26 is estimated at 21%, indicating strong growth potential compared to industry peers [2][14].

2024 年 3 月 15 日 招银国际环球市场 | 宏观研究 | 宏观视角 零售温和放缓，商品通胀反弹 叶丙南, Ph.D (852) 3761 8967 yebingnan@cmbi.com.hk 1 | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |--------------------------------------|------------------|-------------------|-----------------|-----------------|----------------|---------------------------------------------------------|-------------------|-------------|-----------| | 总计 | 占比 (%) \n100.0 | 2022 年月均 \n0.5 | 1Q23 月均 \n0.6 | 2Q23 月均 \n0.4 | 3Q23月均 \n0.7 | 零售和食品服务销售额(季调月环比,%） 4Q ...

Investment Rating - The report assigns a "Buy" rating to Walt Disney Company (DIS US) with a target price of $142, representing a 26.4% potential upside from the current price of $112.3 [1][2] Core Views - Disney is expected to benefit from the growth of streaming and sports sectors, driven by its extensive content ecosystem, iconic IPs, and diversified product portfolio [1] - The company's streaming losses narrowed better than expected in 1QFY24, and management expects streaming to achieve profitability by 4QFY24 [1] - Disney is projected to achieve a 5% revenue CAGR and 16% profit CAGR from FY24 to FY26, supported by advertising-tier membership penetration, shared subscription plans, Hulu synergies, and resilient theme park growth [1] - The sports business, particularly ESPN+, is seen as a long-term growth engine, with potential from strategic partnerships and standalone app launches [1] Business Segments Streaming (DTC) - Disney+ reached 150 million paid subscribers in 1QFY24, with a projected 4% CAGR in subscriber growth from FY24 to FY26 [1] - The streaming business is expected to achieve breakeven in 4QFY24 and deliver double-digit operating margins in the long term [1] - Key growth drivers include rich content library, advertising-tier memberships, shared subscriptions, and Hulu synergies [1] Theme Parks - Theme parks remain a cash cow for Disney, contributing approximately 2/3 of the group's operating profit in FY24 [1] - International parks are expected to maintain steady growth, while US parks are projected to accelerate revenue growth in 2H24 [1] - The segment is forecasted to deliver a 10% operating profit CAGR from FY24 to FY26 [1] Sports (ESPN+) - ESPN+ is positioned to capture growth in the digital sports market, leveraging rising streaming penetration and strong demand from sports enthusiasts [1] - Strategic partnerships and standalone app initiatives are expected to drive long-term growth in this segment [1] Financial Projections - FY24 revenue is projected at $91.8 billion, with a 3.3% YoY growth, while adjusted net profit is expected to reach $8.5 billion, a 23.9% YoY increase [5] - FY24 EPS is forecasted at $4.62, representing a 23.4% YoY growth [5] - Free cash flow is expected to reach $8 billion in FY24 [1] - The company's long-term operating margin for theme parks is projected to exceed 25% [1] Valuation - The SOTP-based target price of $142 implies a FY24 P/E of 30.7x, which is 14% lower than Netflix's valuation but slightly above the industry average [1][7] - Key valuation catalysts include streaming profitability, content-driven subscriber growth, resilient theme park performance, and sports business potential [1][6] Peer Comparison - Disney's FY24E P/E of 23.8x is lower than Netflix's 35.5x but higher than Comcast's 10.2x [11] - The company's FY24-26 EPS CAGR of 16% is higher than the industry average of 17% [11]

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].

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 ...

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]

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 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 ...