Employment Data - In March, the U.S. added 228,000 non-farm jobs, significantly exceeding market expectations of 140,000[1] - The private sector saw job growth increase from 116,000 in February to 209,000 in March[4] - The unemployment rate rose slightly from 4.1% in February to 4.2% in March, with a minimal actual increase from 4.14% to 4.15%[4] Economic Outlook - Despite strong job growth, recession risks are rising due to potential tariff impacts and market signals indicating economic downturn[4] - Financial markets have issued recession warnings, with the S&P 500 index falling over 20%, marking a bear market[4] - The Federal Reserve is expected to cut interest rates in June or July, with another potential cut in September or December[1][4] Sector Performance - Job growth in the service sector surged from 90,000 to 197,000, driven by improved weather and the end of strikes in retail and healthcare[4] - Durable goods manufacturing jobs decreased, with mining and durable goods manufacturing losing 2,000 and 3,000 jobs respectively[4] - Government employment rebounded from 1,000 to 19,000, although federal government jobs decreased by 4,000[4]

Economic Indicators - The ISM Services PMI fell from 53.5 in February to 50.8 in March, below the market expectation of 52.9, indicating a slowdown in service sector expansion[2] - The ISM Manufacturing PMI dropped from 50.3 in February to 49 in March, also below the expected 49.5, signaling a return to contraction in the manufacturing sector[2] Demand and Employment Trends - The New Orders Index for services decreased from 52.2 to 50.4, nearing a nine-month low, reflecting weakened demand[2] - The Employment Index for services plummeted from 53.9 to 46.2, marking the first contraction in six months, indicating reduced hiring demand[2] Inflation and Price Pressures - The Price Index for services remained elevated, decreasing slightly from 62.6 to 60.9, while the Manufacturing Price Index surged from 62.4 to 69.4, the highest since June 2022, suggesting significant inflationary pressures[2] - The report indicates that inflation may rise initially due to supply cost increases but could decline later as economic slowdown and demand contraction take precedence[1] Market Outlook and Federal Reserve Actions - The report suggests a risk of stagflation in the short term, with potential for the S&P 500 to decline further, especially if it drops more than 20%[1] - The Federal Reserve may consider interest rate cuts in June or July, with another potential cut in September or December, in response to rising recession risks and market volatility[1]

Macro Economic Overview - The US economy shows signs of short-term stagflation risk as the March services PMI fell more than expected, with demand and employment weakening significantly while the price index continues to expand [2] - The trade war is expected to elevate the risk of stagflation followed by recession, as rising supply costs and inflation expectations outweigh the effects of demand contraction [2] - The S&P 500 index has issued a recession warning after dropping over 20%, leading to expectations that the Trump administration may slow down aggressive tariffs and government spending cuts while accelerating tax cuts and deregulation [2] Industry Insights Technology Sector - The new tariffs imposed by the US on imports are expected to have a limited direct impact on component suppliers, as most do not export directly to the US [5] - However, OEM/ODM companies will face direct impacts due to assembly operations primarily located in China, Vietnam, and India [5] - Apple is anticipated to be the most affected brand, with over 40% of its sales in the US, while Xiaomi's impact is expected to be minimal due to its limited revenue exposure in the US market [5] Pharmaceutical Sector - The pharmaceutical industry is experiencing weak overall growth, with average revenue growth at 4.2% and net profit growth at 1.0% for 142 listed companies [6] - The innovative drug sector is performing well, with average revenue growth of 36.8%, driven by favorable healthcare payment environments and overseas licensing revenues [6] - The medical device sector shows stability with an average revenue growth of 8.9% and net profit growth of 2.6%, despite ongoing price pressures from procurement policies [7] Automotive Sector - The automotive industry is witnessing a divergence in profitability, with companies like Xpeng and Geely expected to outperform due to strong sales and reduced discounts [8] - The average discount in the industry has narrowed slightly, indicating a potential stabilization in pricing strategies among leading brands [8] - New model launches during the Shanghai Auto Show are anticipated to boost sales in the second quarter of 2025 [8] Stock Recommendations - Recommended stocks include Geely Automobile, Xiaomi, and BYD Electronics, which are expected to benefit from current market conditions and potential recovery in their respective sectors [13]

Market Overview - Global markets showed mixed performance with the Hang Seng Index closing at 23,203, down 0.02% for the day but up 36.11% year-to-date [1] - The S&P 500 and Nasdaq in the US rose by 0.67% and 0.87% respectively, while European markets experienced declines, particularly in healthcare and real estate sectors [3] Company Analysis 用友 (Yonyou) - Reported total revenue of 9.2 billion RMB for 2024, a decrease of 7% year-on-year, attributed to macroeconomic headwinds and a strategic shift towards subscription models [4] - Net loss expanded to 2.1 billion RMB from 967 million RMB in 2023, primarily due to reduced revenue and increased costs related to employee compensation and goodwill impairment [4] - Target price adjusted to 14.49 RMB based on a 2025E EV/sales multiple of 5.3x, maintaining a "Hold" rating [4] 新希望服务 (New Hope Service) - Achieved a revenue increase of 17% to 1.48 billion RMB in 2024, exceeding expectations by 5% [4] - Net profit rose by 5% to 230 million RMB, driven by a 29% increase in basic property management revenue [4] - Target price set at 2.67 HKD, maintaining a "Buy" rating, with a projected dividend yield of 9.7% for FY25E [4] 滨江服务 (Binjiang Service) - Revenue grew by 28% to 3.6 billion RMB, surpassing estimates by 3% [5] - Net profit increased by 11% to 550 million RMB, with a core net profit growth of 21% to 600 million RMB after adjusting for tax impacts [6] - Target price adjusted to 32.86 HKD, maintaining a "Buy" rating, with a projected dividend yield of 7.0% for FY25E [6] Sector Performance - The Hang Seng Financial Index rose by 0.39% year-to-date, while the Hang Seng Real Estate Index saw a decline of 14.03% [2] - The technology sector within the Hang Seng Index performed well, with a year-to-date increase of 44.16% [1]

Investment Rating - The report maintains a HOLD rating for Yonyou, with a target price (TP) raised to RMB14.49 from RMB9.08, reflecting a 5.3x 2025E EV/sales valuation, in line with its two-year average [1][3][9]. Core Insights - Yonyou's total revenue for 2024 was RMB9.2 billion, a decrease of 7% year-over-year (YoY), primarily due to postponed customer demand and a strategic shift towards a subscription business model [1][2]. - The net loss attributable to ordinary shareholders increased to RMB2.1 billion in 2024 from RMB967 million in 2023, driven by revenue decline, employee compensation, and goodwill impairment provisions [1][2]. - Management aims for significant loss reduction in 2025 by enhancing labor productivity and improving product delivery quality and efficiency [1]. - Despite a positive long-term outlook due to increasing digitalization demand and international expansion plans, caution is advised in the near term due to already priced-in market sentiment following a 40% stock price increase year-to-date [1][9]. Financial Performance Summary - Revenue projections for 2025 and 2026 have been lowered by 18% to RMB9.982 billion and RMB11.081 billion, respectively, reflecting slower-than-expected growth in large and mid-sized enterprises [9][10]. - The gross profit margin is expected to improve to 55.0% in 2025, up from 47.5% in 2024, while the operating margin is projected to remain negative at -5.3% [10][16]. - The number of employees decreased by 15% YoY to 21,283, which is anticipated to enhance labor productivity and operational efficiency [9][10]. Revenue and Profit Forecast - The revenue for 2025 is estimated at RMB9.982 billion, with a YoY growth of 9.1%, followed by RMB11.081 billion in 2026, representing an 11.0% growth [2][15]. - The net profit is projected to improve to a loss of RMB426 million in 2025, narrowing from a loss of RMB2.061 billion in 2024, and is expected to turn positive with a profit of RMB768 million by 2027 [2][15]. Market and Share Performance - Yonyou's market capitalization stands at RMB51.22 billion, with a current share price of RMB14.99, reflecting a slight downside of 3.4% from the target price [3][4]. - The stock has shown a strong performance with a 47.4% increase over the past three months [6].

Investment Rating - The report maintains a "BUY" rating for New Hope Services with a target price revised down by 4% to HK$2.67, reflecting lower earnings forecasts [1][8]. Core Insights - New Hope Services' FY24 revenue grew 17% YoY to RMB 1,480 million, exceeding CMBI estimates by 5%, driven by stable managed GFA growth and strong retail & catering services [1][8]. - Net profit increased by 5% YoY to RMB 230 million, aligning with the company's guidance, despite a decline in gross margin and a reduction in SG&A ratio [1][8]. - The company reported impressive third-party expansion, with new contract value reaching RMB 600 million, a 192% increase YoY, and expects FY25 third-party expansion to rise by 16% to RMB 700 million [1][8]. Financial Performance Summary - FY24 revenue: RMB 1,481 million, a 17.5% increase YoY [2]. - FY24 net profit: RMB 227 million, a 5% increase YoY [2]. - EPS for FY24: RMB 0.28, reflecting a 5.5% growth YoY [2]. - Average PM fee for new third-party projects rose by 51% to RMB 2.63, indicating a shift towards higher-end projects [1][8]. - The company expects a dividend yield of 9.6% in 2025E based on the current price [1][8]. Earnings Forecast - Revenue projections for FY25E: RMB 1,644 million, with a YoY growth of 11% [2][10]. - Net profit projections for FY25E: RMB 250 million, with a YoY growth of 10.4% [2][10]. - The gross margin is expected to decline to 29.5% in FY25E from 30.4% in FY24A [10][11]. Shareholder Structure - Golden Rose Developments holds a 66.9% stake in New Hope Services, indicating a strong controlling interest [4]. Market Data - Current market capitalization: HK$ 1,619.9 million [3]. - The stock is currently trading at a P/E ratio of 6.0x for FY25E [3][11]. Share Performance - The stock has shown a 1.5% decline over the past month and a 0.5% increase over the past three months [5].

Investment Rating - The report maintains a "BUY" rating for Binjiang Service with a target price of HK$32.86, reflecting a potential upside of 29.9% from the current price of HK$25.30 [1][3]. Core Insights - Binjiang Service's FY24 revenue increased by 28% year-over-year to RMB 3.6 billion, driven by managed GFA expansion and a strong renovation business. Net profit rose 11% year-over-year to RMB 550 million, slightly below expectations due to a decline in gross margin and an additional withholding tax [1][7]. - The company plans to focus on expanding its operations outside Zhejiang, where it currently has a significant concentration of third-party GFA, to mitigate risks associated with regional concentration [1][7]. - The basic payout ratio was raised by 10 percentage points to 70%, indicating a dividend yield of 5.9% for FY24 and 7.0% for FY25E, showcasing attractive shareholder returns [1][7]. Financial Summary - FY24 revenue is projected at RMB 3,595 million, with a year-over-year growth of 28% [2][13]. - Net profit for FY24 is expected to be RMB 547 million, reflecting an 11% increase compared to FY23 [2][13]. - The company anticipates continued growth in managed GFA, with a target of 67.9 million square meters for FY24, representing a 24% increase [2][8]. Earnings Projections - Revenue is expected to grow to RMB 4,145 million in FY25E, with a year-over-year growth rate of 15.3% [2][9]. - Net profit is projected to reach RMB 643 million in FY25E, indicating a growth of 17.6% [2][9]. - The P/E ratio is forecasted to decrease from 12.0x in FY24 to 10.2x in FY25E, suggesting a more attractive valuation over time [2][9]. Shareholder Structure - The major shareholders include Great Dragon Ventures with a 45.9% stake and Haoyu Ventures Ltd with a 12.9% stake, indicating a concentrated ownership structure [4]. Market Performance - The stock has shown strong performance, with a 1-month increase of 16.3% and a 3-month increase of 24.6% [5].

Company Analysis - SANY International (631 HK) is expected to enter a recovery phase, targeting RMB 50 billion in revenue and a 24% gross margin by 2027, indicating a compound annual growth rate (CAGR) of 32% from 2025 to 2027 [2] - The company anticipates a 20% CAGR in overseas mining equipment driven by strong demand for mining trucks, with confidence in a rebound in coal mining machinery in the second half of this year [2] - The target price for SANY International has been raised from HKD 7.2 to HKD 8.2, maintaining a buy rating [2] Market Performance - The Hang Seng Index closed at 23,207, up 0.38% for the day and 36.13% year-to-date [2] - The Hang Seng Tech Index rose by 0.23%, reflecting a year-to-date increase of 43.65% [2] - European markets rebounded, with technology, industrials, and financials leading the gains, while energy and healthcare lagged [4] Healthcare Sector - Kangfang Biotech (9926 HK) reported a total revenue of RMB 2.1 billion for 2024, with product sales increasing by 25% year-on-year [5] - The company expects a 60% increase in product sales to RMB 3.3 billion in 2025, driven by the inclusion of AK104 and AK112 in the national medical insurance [5] - AK112 is positioned as a next-generation immuno-oncology therapy, with key clinical data expected to validate its clinical advantages [6][7] AI and Traditional Medicine - Guoshengtang (2273 HK) achieved a revenue growth of 30.1% to RMB 3.02 billion in 2024, with adjusted net profit increasing by 31.4% to RMB 400 million [8] - The company plans to expand its store network significantly, with a target of opening 15-20 new stores in 2025 [9] - AI applications are being integrated into Guoshengtang's operations, with expectations of generating additional revenue through enhanced medical services [9] Semiconductor Industry - Zhaoshengwei (300782 CH) reported a revenue of RMB 4.5 billion for the 2024 fiscal year, a 2.5% increase year-on-year, but net profit fell by 64.2% to RMB 400 million [10] - The company is transitioning from a Fabless to a Fab-lite operational model, which is expected to impact profit margins in the short term [11] - Long-term growth prospects remain positive as the company builds platform-level manufacturing capabilities [11] Investment Ratings - The report maintains a buy rating for several companies, including SANY International, Kangfang Biotech, and Guoshengtang, with target prices adjusted based on growth forecasts and market conditions [2][5][8]

Investment Rating - The report maintains a "Buy" rating for the company [7][8]. Core Insights - The company reported a revenue growth of 30.1% year-on-year to 3.02 billion RMB and an adjusted net profit growth of 31.4% to 400 million RMB, exceeding profit expectations by 3.1% [1][2]. - The company is expanding its offline store network, adding 21 new stores in 2024, significantly up from 9 in 2023, and now operates 78 stores across 20 cities in China and Singapore [1][7]. - The management expects a revenue growth of 25% year-on-year in 2025, with adjusted profit growth of no less than 20% [1][7]. Financial Performance - For FY23A, the company achieved a sales revenue of 2,323 million RMB, with a projected increase to 3,022 million RMB in FY24A [2]. - The adjusted net profit for FY23A was 305 million RMB, expected to rise to 400 million RMB in FY24A [2]. - The adjusted earnings per share (EPS) for FY24A is projected at 1.64 RMB, with a market average estimate of 1.93 RMB for FY25E [2]. Valuation - The target price is set at 52.38 HKD, representing a potential upside of 57.5% from the current price of 33.25 HKD [3][7]. - The report adjusts the DCF-based target price, reflecting a WACC of 10.2% and a perpetual growth rate of 3.0% [10][7]. Growth Strategy - The company is leveraging AI technology to enhance service efficiency and patient care, with plans to launch AI-powered services to improve the productivity of scarce medical resources [7][8]. - The management aims to increase overseas revenue to 150-200 million RMB by 2025, focusing on expanding in first-tier cities in China and entering new markets [7][8]. Shareholder Returns - The company returned 420 million RMB to shareholders in 2024 through dividends and buybacks, amounting to 137% of its net profit for the year [7][8]. - The management anticipates maintaining a dividend payout ratio of over 30% in the future [7].

Investment Rating - The report maintains a "BUY" rating for Akeso, indicating a potential return of over 15% over the next 12 months [15]. Core Insights - Akeso's FY24 results showed strong cost controls despite a revenue shortfall, with total revenue of RMB2.1 billion, including RMB2.0 billion from product sales, representing a 25% YoY increase [8]. - The company is expected to see product sales surge by 60% YoY to RMB3.3 billion in FY25, driven by the inclusion of AK104 and AK112 in the National Reimbursement Drug List (NRDL) [8]. - AK112 is positioned as a next-generation immuno-oncology (IO) therapy, with pivotal clinical data demonstrating a meaningful progression-free survival (PFS) benefit in a Phase 3 trial against Keytruda for first-line PD-L1-positive non-small cell lung cancer (NSCLC) [8]. - The report highlights ongoing clinical trials for AK112 in various cancer types, including triple-negative breast cancer (TNBC) and pancreatic cancer, indicating a broad first-line strategy [8]. - The target price for Akeso has been raised from HK$58.97 to HK$102.61, reflecting increased sales projections for AK112 [8]. Financial Summary - For FY23A, Akeso reported revenue of RMB4,526 million, with a YoY growth of 440.3%, followed by a projected revenue of RMB2,124 million for FY24A, reflecting a decline of 53.1% [2]. - The net profit for FY23A was RMB2,028.3 million, with a projected net loss of RMB501 million for FY24A [2]. - R&D expenses are projected to be RMB1,306 million for FY25E, increasing to RMB1,937 million by FY27E [2]. - The company held a cash balance of RMB7.3 billion at the end of FY24, sufficient to support ongoing R&D and future commercial expansion [8]. Share Performance - Akeso's current market capitalization is HK$77,191.5 million, with a current price of HK$86.00 and a target price indicating a 19.3% upside [3]. - The stock has shown strong performance, with a 1-month absolute return of 17.9% and a 3-month return of 41.7% [5]. Valuation - The DCF valuation estimates the equity value at RMB 85,652 million, translating to a DCF per share of RMB 95.43 or HK$ 102.61 [9]. - The report includes a sensitivity analysis indicating how changes in the weighted average cost of capital (WACC) and terminal growth rate affect the target price [10].