Investment Rating - The report maintains a "BUY" rating for WuXi Biologics, with a target price raised from HK$22.88 to HK$24.24, indicating a potential upside of 36.6% from the current price of HK$17.74 [3][8]. Core Insights - WuXi Biologics added 151 new projects in 2024, the highest in its history, with over half from the US, showcasing strong global competitiveness and client trust [1][8]. - The company is set to receive US$140 million in near-term payments from enabling discovery services for 7 global projects in 2024, highlighting lucrative milestone income [1][8]. - The Ireland site is on track to achieve breakeven in 2025, and the company plans to expand its drug substance capacity significantly, with a focus on establishing a comprehensive global production network [1][8]. Financial Summary - Revenue is projected to grow from RMB 17,034 million in FY23A to RMB 20,687 million in FY25E, reflecting a year-on-year growth of 13.4% [2][18]. - Adjusted net profit is expected to increase from RMB 4,739 million in FY24E to RMB 5,358 million in FY25E, representing a growth of 13.0% [2][18]. - The adjusted EPS is forecasted to rise from RMB 1.15 in FY24E to RMB 1.30 in FY25E, with a P/E ratio decreasing from 14.3x in FY24E to 12.7x in FY25E [2][18]. Project Pipeline and Growth - The company’s project pipeline now includes 817 projects, with a significant increase in process performance qualification (PPQ) projects expected to grow by 31% YoY to 101 in 2025 [1][8]. - WuXi Biologics completed 77 PPQ projects in 2024, marking a 26% increase year-on-year, indicating strong momentum for future growth in CMO revenue [1][8]. Overseas Operations - The Ireland biologics facility has shown strong client demand trends, successfully completing multiple 16k-liter PPQ batch productions, supporting profitability targets for 2025 [1][8]. - WuXi Biologics is constructing a new 36k-liter drug substance capacity facility in the US, aiming to expand total drug substance capacity to 491k liters, with approximately 49% located overseas [1][8].

Investment Rating - The report maintains a "Buy" rating for WuXi Biologics, reflecting a positive outlook based on demand recovery and growth potential [4][28]. Core Insights - WuXi Biologics achieved a record addition of 151 new projects in 2024, with over half coming from the United States, indicating strong global competitiveness and client trust [2][3]. - The company expects revenue and adjusted profit (excluding minority interests) to grow by 5%-10% in 2024, with accelerated growth anticipated in 2025 [1][4]. - The unique CRDMO business model continues to drive significant milestone revenue, with $140 million in recent payments expected from seven global projects [3][4]. - The company is expanding its global manufacturing network, with a focus on achieving breakeven at its Ireland site in 2025 and increasing drug substance capacity in the U.S. [3][4]. Financial Summary - Revenue is projected to grow from RMB 18,236 million in FY24E to RMB 20,687 million in FY25E, representing a 13.4% increase [5][12]. - Adjusted net profit is expected to rise from RMB 4,739 million in FY24E to RMB 5,358 million in FY25E, reflecting a 13.0% growth [5][12]. - The adjusted earnings per share (EPS) is forecasted to increase from RMB 1.15 in FY24E to RMB 1.30 in FY25E [5][12]. Target Price Adjustment - The target price has been raised from HKD 22.88 to HKD 24.24 based on a discounted cash flow (DCF) model, with a weighted average cost of capital (WACC) of 9.64% and a terminal growth rate of 2.0% [4][6].

Investment Rating - The report maintains a "Buy" rating for iQIYI, with a target price adjusted to $3.00 based on a 12x P/E ratio for FY2025 [1][2][13]. Core Insights - iQIYI's total revenue for Q4 2024 is expected to decline by 14% year-on-year to RMB 6.6 billion, primarily due to reduced content offerings and a decrease in transaction offset revenue [1]. - The company anticipates a 7% quarter-on-quarter increase in non-GAAP operating profit for Q4 2024, reaching RMB 395 million, attributed to stringent content cost control [1]. - The competitive landscape in the online video market is expected to remain intense, leading to a cautious outlook on revenue and profit recovery for 2025 [1]. Revenue Breakdown - Membership revenue is projected to decline by 15% year-on-year and 6% quarter-on-quarter to RMB 4.1 billion in Q4 2024 [1]. - Online advertising revenue is expected to decrease by 13% year-on-year but increase by 7% quarter-on-quarter to RMB 1.4 billion, driven by brand advertising growth [1]. - Content distribution revenue is forecasted to drop by 20% year-on-year to RMB 404 million, mainly due to a decline in transaction exchange revenue [1]. Financial Projections - Revenue estimates for FY2024 have been revised down by 7%-10%, with total revenue projected at RMB 29.2 billion for FY2024 and RMB 30.0 billion for FY2025 [11]. - The adjusted net profit for FY2024 is expected to be RMB 1.49 billion, with a projected increase to RMB 1.80 billion in FY2025 [3][11]. - The report indicates a projected operating profit margin of 6.0% for Q4 2024, reflecting a 0.9 percentage point increase quarter-on-quarter [2]. Valuation Metrics - iQIYI's current P/E ratio is estimated at 8x based on FY2025 earnings, significantly lower than the industry average of 23x, indicating substantial downside protection [2][13]. - The target price of $3.00 represents a potential upside of 61.3% from the current price of $1.86 [3].

Investment Rating - The report maintains a "BUY" rating for iQIYI, indicating a potential return of over 15% over the next 12 months [1][18]. Core Views - iQIYI's total revenue for 4Q24E is expected to decline by 14% YoY to RMB6.6 billion, primarily due to a light content slate and a decrease in barter transaction revenue [1]. - Non-GAAP operating profit is forecasted to grow by 7% QoQ to RMB395 million in 4Q24E, attributed to stringent content cost control [1]. - The target price has been lowered to US$3.00 based on a 12x FY25E PE, reflecting a more conservative outlook on future revenue and earnings recovery due to intense competition in the online video sector [1][10]. Financial Performance Summary - Revenue projections for FY24E, FY25E, and FY26E have been trimmed by 7-10% [1]. - For FY24E, total revenue is expected to be RMB29.2 billion, with a gross profit of RMB7.2 billion and an operating profit of RMB1.8 billion [8]. - The adjusted net profit for FY24E is forecasted at RMB1.5 billion, with an adjusted EPS of RMB1.6 [8]. Revenue Breakdown - Membership revenue is estimated to decline by 15% YoY to RMB4.1 billion in 4Q24E, while online advertising revenue is expected to decrease by 13% YoY but grow by 7% QoQ to RMB1.4 billion [7]. - Content distribution revenue is projected to drop by 20% YoY to RMB404 million in 4Q24E [7]. Margin Analysis - Gross margin is expected to improve by 2 percentage points QoQ to 24.0% in 4Q24E, driven by fewer barter transactions and effective cost control [7]. - Non-GAAP operating margin is anticipated to expand by 0.9 percentage points QoQ to 6.0% in 4Q24E [7]. Market Position and Valuation - iQIYI's current valuation of 8x FY25E PE offers a significant safety margin compared to peers' average of 23x [7]. - The report highlights the competitive landscape in China's video streaming sector, which is expected to remain intense [1][10].

Investment Rating - The report maintains a "BUY" rating for Baidu, indicating a potential return of over 15% over the next 12 months [3][20]. Core Insights - Baidu is expected to experience a 4.8% year-over-year decline in total revenue for 4Q24, with a non-GAAP net income of RMB4.7 billion, influenced by a one-off impact from an equity investee [1][7]. - Cloud revenue growth is anticipated to be a bright spot, driven by strong demand in GPU cloud services, while the recovery pace of advertising revenue remains critical [1][7]. - The target price has been adjusted down by 6% to US$144.6, reflecting a more subdued recovery in the advertising business [1][11]. Revenue and Profitability - For FY24E, total revenue is projected at RMB132.3 billion, a slight decline from FY23A's RMB134.6 billion, with a forecasted growth of 3.2% in FY25E [2][9]. - Adjusted net profit is expected to decrease by 13% in FY24E to RMB25.0 billion, with a recovery to RMB26.0 billion in FY25E [2][9]. - The adjusted EPS for FY24E is forecasted at RMB71.47, with a consensus EPS of RMB72.60 for the same period [2][9]. Segment Performance - Baidu Core is projected to generate revenue of RMB26.9 billion in 4Q24, down 2.3% year-over-year, primarily due to an 8% decline in core advertising revenue [7][8]. - The cloud business is expected to grow by 13% year-over-year in 4Q24, improving from previous quarters, driven by AI GPU-related revenue [7][8]. Valuation Metrics - The SOTP-based target price of US$144.6 per ADS translates to a 14x 2025E non-GAAP PE, or 7x if excluding net cash [11][12]. - The valuation breakdown includes US$49.1 for Baidu Core, US$0.3 for Apollo ASD, and US$32.6 for Baidu Cloud [11][12]. Cash Position - As of the end of 3Q24, Baidu had approximately RMB144.5 billion in cash on hand, equating to about US$57 per ADS [1][7].

Investment Rating - The report maintains a "Buy" rating for the company and raises the target price to HKD 69.19, up from HKD 66.15, indicating a potential upside of 33.8% from the current price of HKD 51.70 [1][3]. Core Insights - The company has shown impressive online growth in 2024, with a projected revenue increase of over 50% and a net profit growth of around 40%. The GMV for its brands, 可复美 and 可丽金, reached RMB 5.4 billion, a year-on-year increase of 57% across major online platforms [1][6]. - The report highlights the strong performance of 可复美 on Tmall and Taobao, with a GMV growth of 42%, ranking second in the market. The anticipated approval of a new collagen injection product is expected to further drive growth in 2025 [1][6]. - 可丽金 is also experiencing rapid growth, with a GMV of RMB 660 million in 2024, reflecting a 103% year-on-year increase, driven by key product launches [1][6]. Financial Summary - The company’s revenue is projected to grow from RMB 3,524 million in FY23 to RMB 5,406 million in FY24, representing a growth rate of 53.4%. The adjusted net profit is expected to increase from RMB 1,451.8 million in FY23 to RMB 2,108.6 million in FY24, a growth of 45.2% [2][36]. - The report provides a detailed financial outlook, with revenue estimates for FY25 and FY26 at RMB 7,288 million and RMB 9,729 million, respectively, indicating continued strong growth [2][36]. - The company’s net debt ratio is projected to increase, reflecting a shift towards a more leveraged capital structure as it invests in growth opportunities [2][36].

Group 1: IPO Overview - Beijing Saimo Technology Co., Ltd. successfully listed on the Hong Kong Stock Exchange on January 15, 2025, under the stock code 2571.HK[1] - The company issued 33,333,400 H-shares, representing approximately 25.0% of the total issued shares post-global offering, at a price of HKD 12.99 per share, raising approximately HKD 433 million[2] Group 2: Company Profile - Saimo Technology specializes in simulation testing technology for intelligent connected vehicles (ICV), focusing on the design and development of ICV simulation testing products[2] - The company holds a market share of approximately 5.9% in China's ICV simulation testing software and platform market, making it the largest market participant based on 2023 revenue[2] Group 3: Innovation and Recognition - Saimo Technology has launched several innovative products, including the SimPro testing toolchain and the SafetyPro analysis tools for ICV[3] - The company has received multiple recognitions from Chinese government departments, including being designated as a key software enterprise and a "little giant" enterprise by the Ministry of Industry and Information Technology[3] Group 4: Underwriting and Advisory - CMB International acted as the joint bookrunner and lead manager for the IPO, showcasing strong client service capabilities and resource advantages[4] - CMB International has established itself as a leading financial institution in providing advisory services for overseas capital markets, participating in significant IPOs and refinancing projects in Hong Kong over the past five years[5]

Macroeconomic Strategy - Recent policy stimulus has led to a rebound in government bond net financing and sales of housing and durable goods, with credit growth starting to recover from a low point[1] - Social financing stock, household medium-to-long term loans, and M2 growth have all shown improvement, but corporate credit demand remains weak[1] - Monetary policy is expected to remain accommodative, with a potential 50 basis point cut in the reserve requirement ratio in the first half of the year[1] - By the end of 2025, social financing scale and RMB loan balance growth may slightly increase to 8% and 8.1%, respectively[1] Industry Commentary - Global smartphone shipments in Q4 2024 grew by 2.4% year-on-year to 332 million units, driven by promotional activities and new model releases in China[2] - Xiaomi and Vivo outperformed competitors with shipment growth of 4.8% and 12.7%, while Apple and Samsung saw declines of 4.1% and 2.7%[2] - Global smartphone shipments are projected to grow by 3% in 2025, benefiting from the iPhone 17 cycle and AI integration[2] Company Analysis - BeiGene expects to achieve GAAP operating profit breakeven by 2025, with non-GAAP operating profit reaching $66 million in Q3 2024[4] - The company reported $188 million in operating cash flow for Q3 2024, marking its first positive quarterly cash flow[4] - BeiGene is advancing 13 new molecules into clinical trials in 2024, with promising early data expected for BGB-43395 in H1 2025[5] Product Pipeline and Market Position - Zebrutinib's global sales reached $690 million in Q3 2024, capturing approximately 25% of the market share[6] - Zebrutinib is the leading BTK inhibitor for new patients in the U.S. for first-line and relapsed/refractory chronic lymphocytic leukemia (CLL)[6] - The company plans to initiate a head-to-head trial for BGB-16673 in late 2025, demonstrating confidence in its pipeline[7] Growth Projections - Giant Bio has raised its 2024 revenue growth guidance to over 50%, with net profit expected to grow around 40%[9] - The GMV for its brands on major online platforms is projected to reach 5.4 billion yuan, reflecting a 57% year-on-year increase[10] - The company anticipates strong growth in its collagen injection products, with approvals expected in Q1 2025[11]

Economic Indicators - The ISM Services PMI increased from 52.1 in November to 54.1 in December, indicating economic expansion with an annualized GDP growth rate of 1.7%[2] - The Manufacturing PMI rose from 48.4 in November to 49.3 in December, suggesting a slight improvement in manufacturing conditions, corresponding to a GDP growth rate of approximately 1.9%[3] Employment Trends - Job vacancies unexpectedly increased by 259,000 to 8.1 million in November, exceeding market expectations of 7.74 million[3] - The hiring rate decreased by 0.1 percentage points to 3.3%, while the voluntary resignation rate fell by 0.2 percentage points to 1.9%, indicating a balanced labor market[3] Inflation and Market Reactions - The price index in the services sector surged from 58.2 to 64.4, the highest since January 2024, raising concerns about inflation risks[2] - The 10-year U.S. Treasury yield reached 4.68%, the highest in nearly a year, as investors anticipated a delay in interest rate cuts by the Federal Reserve[1] Federal Reserve Outlook - The target federal funds rate is expected to decrease by 50 basis points from a range of 4.25%-4.5% at the end of 2024 to 3.75%-4.0% by the end of 2025[1] - The Federal Reserve may pause rate cuts in January, with potential cuts of 25 basis points in March or May, and another 25 basis points in September[1] Market Valuation Concerns - The S&P 500's price-to-earnings ratio is near the 80th percentile of the past 20 years, indicating high market valuations and increased volatility risks[5] - The yield on BBB-rated corporate bonds at 5.6% is significantly higher than the earnings yield of 3.7% for stocks, suggesting that equities may carry greater risk compared to high-yield bonds[5]

Macro Strategy - The US services PMI accelerated expansion in December, driven by businesses preparing for tariffs, leading to a significant increase in commercial activity[1] - The price index rebounded to a new high since January 2024, potentially due to temporary year-end price fluctuations[2] - The manufacturing PMI continues to contract but shows signs of improvement, with production and demand both improving[1] Inflation Concerns - The surge in the services PMI price index has raised market concerns about inflation rebounding, leading to expectations that the Federal Reserve's rate cut space is narrowing[2] - The US 10-year Treasury yield rose to 4.68%, the highest in nearly a year, putting pressure on US stocks and gold prices[2] - Inflation is expected to decline moderately in the first half of the year due to high year-on-year bases and falling used car and energy prices[2] Industry Insights - The MSCI China Healthcare Index has fallen by 4.7% since the beginning of 2025, underperforming the MSCI China Index by 0.9%[3] - The Chinese government is promoting high-quality development in the pharmaceutical industry, which is expected to benefit innovative drugs and medical devices[4] - The medical device bidding market saw a year-on-year growth of 37% in December, indicating a significant recovery in the sector[5]