Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company reported strong Q2 2025 results with record-high sales and improved profit margins, particularly in its core PCB business. Revenue reached 5.7 billion RMB, marking a 30% year-over-year and 19% quarter-over-quarter increase, exceeding Bloomberg consensus estimates by 6%. Net profit was 869 million RMB, up 43% year-over-year and 77% quarter-over-quarter, surpassing Bloomberg estimates by 41%. The gross margin improved by 2.8 percentage points to 27.6%, while the net margin reached a historical high of 15.5% [1] - The company's strategic positioning in high-growth sectors such as AI servers, data centers, and automotive electronics supports the "Buy" rating. Continuous capacity expansion from projects in Thailand and Nantong, along with stable R&D investment at 6%-7% of sales, will reinforce the company's competitive advantage and long-term growth [1] - The target price has been raised to 235 RMB, reflecting an 18.7% potential upside from the current price of 198 RMB [3] Financial Summary - For FY25E, the company is projected to achieve sales revenue of 22.68 billion RMB, a 26.6% year-over-year increase. The gross margin is expected to be 26.9%, and net profit is forecasted at 3.03 billion RMB, representing a 61.4% increase year-over-year [2][15] - The company’s EPS is expected to rise to 5.91 RMB in FY25E, with a P/E ratio of 33.5 times [2][15] - The company’s market capitalization is approximately 101.55 billion RMB, with a 52-week stock price range of 198.00/67.53 RMB [3][14] Business Segment Performance - The PCB business, accounting for 60% of total sales, achieved revenue of 6.3 billion RMB in the first half of the year, a 29% year-over-year increase. The growth was driven by strong demand in wireless communication infrastructure, data centers, and automotive applications [8] - The packaging substrate segment saw sales of 1.7 billion RMB, a 9% year-over-year increase, but faced margin pressure due to rising raw material costs and capacity ramp-up challenges [8] Market Comparison - The company’s P/E ratio is projected to be higher than the historical average, reflecting the industry's upward cycle momentum. The new target price is based on a 33.7 times P/E for FY26E, which is approximately one standard deviation above the five-year historical average [8]

Investment Rating - The report maintains a "Buy" rating for the company with a target price raised to 460 RMB, reflecting a potential upside of 23.5% from the current price of 372.50 RMB [1][3]. Core Insights - The company reported a revenue of 79 billion RMB for Q2 2025, representing a year-on-year growth of 22%, despite a quarter-on-quarter decline of 3% due to seasonal fluctuations [1]. - The gross margin decreased to 41.3%, down 6.0 percentage points year-on-year and 1.7 percentage points quarter-on-quarter, primarily due to lower profit margins in the electronic components business [1]. - Net profit was 16 billion RMB, showing a year-on-year decline of 2% but a quarter-on-quarter increase of 3%, with a net profit margin improvement to 20.5% [1]. - The company is strategically positioned in the domestic semiconductor equipment market, benefiting from the trend of domestic substitution [1][7]. - Revenue is expected to grow by 32% and 26% year-on-year in 2025 and 2026, respectively [1]. Financial Summary - For FY25E, the company is projected to achieve sales revenue of 39,473 million RMB, with a year-on-year growth of 31.7% [2]. - The gross margin is expected to be 41.8% in FY25E, with net profit projected at 7,297 million RMB, reflecting a year-on-year growth of 29.6% [2]. - The company’s return on equity is forecasted to be 21.2% in FY25E [2]. Market Position and Growth - The company is expected to capture over 5% market share in the domestic semiconductor equipment sector, with total sales exceeding 210 billion RMB for the year [7]. - The company has expanded its product offerings through R&D and acquisitions, including entering the ion implantation equipment market and acquiring a stake in ChipSource [7]. - The sales of semiconductor equipment are anticipated to grow by approximately 50% year-on-year in the first half of 2025 [7]. Valuation Metrics - The target price of 460 RMB is based on a 35x P/E ratio for 2026, aligning with the historical average [7]. - The company’s market capitalization is approximately 268,945 million RMB [3].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price raised to HKD 12.3, reflecting a potential upside of 28.1% from the current price of HKD 9.60 [1][3][7]. Core Insights - The company reported a strong revenue growth of 68% year-on-year, reaching RMB 1.57 billion in the first half of 2025, primarily driven by a significant increase in automotive product solutions, which grew by 250% [1][7]. - Despite a decline in gross margin by 13.7 percentage points due to changes in product mix, the overall gross margin remains high at 65.4% [1][7]. - The company continues to invest heavily in R&D, leading to a slight increase in net loss to RMB 5.2 billion in the first half of the year [1][7]. - The management emphasizes the competitive advantage in the accelerating adoption of assisted driving technologies in China [1][7]. Financial Overview - Revenue projections show a steady increase from RMB 1.55 billion in FY23A to RMB 8.73 billion in FY27E, with year-on-year growth rates of 71.3% in FY23A and 53.6% in FY24A [2][11]. - Gross margin is expected to stabilize above 50% in the long term, with specific forecasts of 63.8% for FY25E and 58.1% for FY26E [2][11]. - The net profit is projected to remain negative in the coming years, with estimates of RMB -6.93 billion in FY25E and RMB -1.96 billion in FY26E [2][11]. Market Position - The company holds a market share of 45.8% in basic assisted driving solutions and 32.4% in overall assisted driving solutions, reinforcing its leadership in the Chinese automotive technology market [1][7]. - The product solutions segment is anticipated to be the core growth engine, with revenue expected to reach RMB 2.1 billion this year, driven by a shift towards higher-value products [7]. Shareholder Structure - Major shareholders include SAIC QIJUN I HLDG LTD with 9.3% and GIL TRUST LIMITED with 8.1% [4]. Stock Performance - The stock has shown strong performance with a 31.3% absolute return over the past month and a 26.8% return over the past three months [5].

Global Market Overview - Major global stock markets showed varied performance, with the Hang Seng Index rising by 2.15% and the Shenzhen Component Index increasing by 0.87% year-to-date [1][2] - The US stock market remained stable, with the Dow Jones and S&P 500 showing no change, while the Nasdaq saw a year-to-date increase of 11.11% [1] - European markets rebounded, with the DAX and CAC showing increases of 0.57% and 0.05% respectively, supported by better-than-expected economic data [3] Company Analysis Kuaishou (1024 HK) - Kuaishou's 2025 conference highlighted positive advancements in AI, e-commerce, and advertising, with a projected global video production market size of approximately $140 billion by 2024 [4] - The company maintains a "Buy" rating with a target price of HKD 84.0, driven by a projected net profit CAGR of 14% from 2025 to 2027 [4] OmniVision Technologies (603501 CH) - OmniVision reported a 15% year-on-year revenue increase to RMB 14 billion for the first half of 2025, with a net profit surge of 48% to RMB 2 billion [4] - The company maintains a "Buy" rating with a target price of RMB 173, supported by strong growth in automotive and medical CIS sectors [4] China Resources Beverage (2460 HK) - China Resources Beverage experienced an 18.5% revenue decline in the first half of 2025, primarily due to a 23% drop in water business revenue [5][6] - The company is undergoing channel reforms and capacity expansion, with expectations for improved performance in 2026, maintaining a "Buy" rating with a target price of HKD 12.85 [5][6] New Hope Service (3658 HK) - New Hope Service reported a 4.3% revenue increase in the first half of 2025, driven by strong performance in property management [8][9] - The company maintains a "Buy" rating with a target price of HKD 2.50, reflecting a slight adjustment in earnings expectations [8][9] China Pacific Insurance (2328 HK) - China Pacific Insurance's net profit for the first half of 2025 increased by 32.3% to RMB 24.5 billion, driven by underwriting profit and investment income [10] - The company maintains a "Buy" rating with a target price of HKD 21.6, supported by a robust combined ratio of 94.8% [10][11] Alibaba (BABA US) - Alibaba's revenue for the first quarter of FY26 was RMB 247.7 billion, a 1.8% year-on-year increase, with cloud business revenue growth of 26% [12][13] - The company maintains a "Buy" rating with a target price of USD 158.80, reflecting positive developments in cloud and instant retail businesses [12][13] Mindray Medical (300760 CH) - Mindray Medical reported a revenue decline of 18.4% in the first half of 2025, with domestic revenue down 33.4% due to pricing pressures [14][15] - The company maintains a "Buy" rating with a target price of RMB 279.70, anticipating recovery in the second half of 2025 [14][15] Haier Smart Home (6690 HK) - Haier Smart Home expects strong sales growth in the second half of 2025, driven by brand expansion and digital inventory initiatives [16][17] - The company maintains a "Buy" rating with a target price of HKD 31.57, reflecting positive adjustments in profit forecasts [16][17] BYD Electronics (285 HK) - BYD Electronics reported a 4% revenue increase in Q2 2025, driven by growth in the new energy vehicle sector [18] - The company maintains a "Buy" rating with a target price of HKD 47.37, supported by multiple growth drivers including Apple foldable devices [18]

1. Report Industry Investment Rating - No information provided on the report industry investment rating 2. Core Viewpoints of the Report - The report provides a comprehensive update on the fixed - income market, including bond price movements, macroeconomic news, and company - specific analyses. It also offers insights into the Chinese economy and makes predictions on future policy adjustments [2][7][20] - In the fixed - income market, different bonds show various price changes, influenced by factors such as market sentiment, company performance, and macroeconomic conditions [2][4] - Regarding the Chinese economy, there are signs of mild reflation in upstream sectors, but the economic growth may face slowdown pressure in Q4 2025, which could lead to demand - side stimulus and supply - side capacity reduction policies [20][23] 3. Summary by Relevant Catalogs 3.1 Trading Desk Comments - Last Friday, recent IG new issues were overall unchanged to 1bp wider. There were buying flows on HOKKEL 4.587 09/04/30 and two - way flows on OCBCSP 4.55 35s. Some bonds widened, tightened, or remained unchanged. In Chinese properties, some bonds were 0.1 - 0.6pt higher. There were selling flows on front - end Chinese banks/leasing names. Korean corps widened, and S&P changed SAMTOT rating outlook to negative. In Japan, there were selling flows on MUFG/NOMURA curves, and Japanese insurance hybrids edged up. In SEA, GLPSP bonds continued to grow [2] - This morning, there were selling flows for HSBC/MIZUHO/SUMIBK 5 - 6yr floaters. PTTGC 51 - 52s and TOPTB 49 were 0.7 - 2pts higher. FAEACO 12.814 Perp was 1.1pts lower. There were buyers for CNH short - term bonds in LGFVs, and ZHOSHK 28 was largely unchanged [4] 3.2 Macro News Recap - Last Friday, S&P (-0.64%), Dow (-0.20%), and Nasdaq (-1.15%) were lower. The US Jul'25 Core PCE Price Index was +0.3% mom/+2.9% yoy, in line with market expectations. UST yield was lower while 10/30 yr UST yield was higher, with 2/5/10/30 yield at 3.59%/3.68%/4.23%/4.92% [7] 3.3 Desk Analyst Comments - Fubon Life proposes to issue 10.25yr USD T2 bond. The fair value of the new FUBON is considered to be T + 95 - 100, adjusted for tenor and new issue premiums compared to its peers. Fubon Life's credit profile is slightly better than CATLIF in terms of profitability and capital strength [8][9][12] - ZHOSHK's credit profile remains solid. Despite the negative gross margin of new car sales in 1H25, it has consistent positive FCF generation, reducing debts, and low near - term refinancing pressure. The report maintains a buy on ZHOSHK 5.98 01/30/28 [17][18] 3.4 China Economy - China's manufacturing PMI edged higher in August, with improvements in production and demand. There is mild reflation in upstream sectors due to the anti - involution campaign. Non - manufacturing PMI picked up as the service sector recovered, but construction extended its weakness. The economic growth may face slowdown pressure in Q4 2025, and the report expects a 10 bps LPR and 50 bps cut, along with possible transfer payment policies [20][21][23] 3.5 Offshore Asia New Issues - There were no offshore Asia new issues priced or in the pipeline today [25][26] 3.6 News and Market Color - Last Friday, 56 credit bonds were issued onshore with an amount of RMB30bn. In Aug'25, 2,193 credit bonds were issued with a total amount of RMB1,833bn, an 8.9% yoy decrease. There are also various company - specific news such as Alibaba's adjusted EBITDA fall, Bank of China's net interest income drop, etc. [27][31]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price raised to 415 RMB, reflecting a 15.6% potential upside from the current price of 354.92 RMB [1][3]. Core Insights - The company reported strong Q2 2025 results, with revenue reaching 8.1 billion RMB, marking a historical high and a year-on-year growth of 36% and a quarter-on-quarter growth of 22%. Net profit surged to 2.4 billion RMB, with a year-on-year increase of 79% and a quarter-on-quarter increase of 52%, exceeding Bloomberg consensus estimates by 28% [1][6]. - Gross margin and net margin reached historical highs of 41.5% and 29.7%, respectively, surpassing market expectations by 5.7 percentage points and 7.2 percentage points [1][6]. - The company announced a first interim dividend of 0.4 RMB per share, enhancing shareholder returns [1]. Financial Performance Summary - For FY25E, the company expects sales revenue of 38.252 billion RMB, representing a year-on-year growth of 60.3% [2][9]. - The gross margin is projected to be 43.0% for FY25E, an increase from previous estimates [6][9]. - Net profit for FY25E is forecasted at 11.691 billion RMB, reflecting a year-on-year growth of 126.1% [2][9]. - The earnings per share (EPS) is expected to be 10.66 RMB for FY25E, with a significant increase from prior years [2][9]. Market Dynamics - The demand for high-performance optical modules is driving revenue growth, with a strong emphasis on 800G and 1.6T product shipments [6]. - The company’s overseas revenue, accounting for 86% of total revenue in the first half of 2025, remains a core growth driver [6]. - The capital expenditure cycle driven by AI is expected to sustain the company's performance, with major cloud providers projected to increase their capital expenditures significantly [6]. Profitability and Margin Expansion - The gross margin for optical modules increased by 6.1 percentage points year-on-year to 40.0%, while the net margin rose by 5.8 percentage points to 29.7% [6]. - The expansion in margins is attributed to a higher proportion of high-margin products and effective supply chain management [6]. - The report anticipates further margin improvement with the large-scale production of 1.6T products in the second half of the year [6].

Investment Rating - The report maintains a "Buy" rating for the company [7][8]. Core Views - The company's revenue for 1H25 increased by 9.5% year-on-year to 1.49 billion RMB, while net profit rose by 41.6% to 150 million RMB, indicating strong performance driven by robust offline demand [1][7]. - The management has adjusted the 2025 revenue growth forecast to 10%-15% from the previous 25%, citing changes in the macro environment [1][7]. - The company is expected to return to a revenue growth rate of over 20% in 2026 [1]. Financial Summary - For FY25E, the company is projected to achieve sales revenue of 3.445 billion RMB, reflecting a year-on-year growth of 14.0% [2][8]. - Adjusted net profit for FY25E is estimated at 460 million RMB, with a growth rate of 15.0% [2][8]. - The adjusted earnings per share (EPS) for FY25E is forecasted to be 1.95 RMB [2][8]. Price Target and Valuation - The target price is set at 48.28 HKD, down from a previous target of 52.75 HKD, representing a potential upside of 48.6% from the current stock price of 32.50 HKD [3][7]. - The discounted cash flow (DCF) valuation indicates a per-share value of 48.28 HKD, based on a weighted average cost of capital (WACC) of 10.2% and a perpetual growth rate of 3.0% [10][11]. Shareholder Structure - The largest shareholder is Tu Zhiliang, holding 34.2% of the shares, followed by Ruiyuan Fund with 8.0% [4]. Stock Performance - The stock has shown a decline in absolute returns over the past month (-8.2%) and three months (-11.6%) [5]. Business Development - The company opened 7 new stores in 1H25, bringing the total to 83, and plans to add approximately 15 more stores in 2025 [7]. - The number of doctors in the network increased by 1,501 in 1H25, with a 23.5% year-on-year growth in offline doctors [7]. AI Initiatives - The company has launched AI initiatives, including the first "Famous Doctor AI Avatar," which is expected to generate significant revenue in the future [7]. Shareholder Returns - In 1H25, the company repurchased shares worth 84.69 million HKD, equivalent to 50% of net profit, and declared a mid-term dividend of 75.77 million RMB, also 50% of net profit [7].

Macro Economic Insights - China's manufacturing PMI slightly increased to 49.4 in August, indicating improvements in supply and demand, with "anti-involution" policies driving a rebound in raw material and finished product prices, potentially alleviating deflationary pressures [2] - The rebound in upstream prices may suggest a mild recovery in PPI, which is closely related to corporate profit growth [2] - Economic growth in China may face further slowdown pressures by Q4 2025, but weak data could lead to increased demand stimulus and capacity reduction policies from decision-makers [2] Market Performance - Hong Kong's Hang Seng Index closed at 25,078, up 0.32% year-to-date performance at 25.01% [3] - The Shanghai Composite Index closed at 3,858, up 0.37% with a year-to-date performance of 15.10% [3] - The U.S. markets saw declines, with the Nasdaq dropping over 1% and the S&P 500 showing a year-to-date increase of 9.84% [5] Industry Insights - The AI theme is gaining traction, with the State Council's recent policy accelerating AI applications across various sectors, aiming for over 70% penetration of new intelligent terminals by 2027 [6] - Key sectors to watch include AI cloud, AI in industrial internet, and AI in consumer internet, with major companies like Tencent, Alibaba, and Baidu highlighted as core targets [6] - In the semiconductor sector, focus on domestic computing power and semiconductor equipment suppliers is recommended, with companies like Zhongji Xuchuang and Beike Microelectronics identified as key players [6] Company Analysis - DualityBio reported a revenue of 1.23 billion RMB in H1 2025, a 23% increase, benefiting from licensing and collaboration payments, with a strong cash reserve of 3.75 billion RMB to support ongoing R&D [7] - The company is advancing its ADC pipeline, with plans to submit applications for DB-1303/BNT323 for cancer treatment by the end of 2025, marking significant commercialization progress [8] - Jitu Express achieved a net profit of 153 million USD in H1 2025, a 66% increase, driven by reduced expenses, while maintaining a strong growth outlook in Southeast Asia and new markets [11] Investment Recommendations - North China Innovation's revenue reached 7.9 billion RMB in Q2 2025, a 22% year-on-year increase, with a target price set at 460 RMB, reflecting optimism about its role in China's semiconductor equipment localization strategy [12][13] - Nongfu Spring's revenue grew by 15.6% in H1 2025, with a target price raised to 57.75 HKD, supported by strong performance in tea and functional beverages [14][15] - Proya's revenue increased by 7.2% in H1 2025, with a target price adjusted to 129.83 RMB, driven by growth in sub-brands despite pressure on the main brand [16][17]

Investment Rating - The report maintains a "Buy" rating for companies benefiting from the AI supply chain, specifically for 中际旭创 (300308 CH) and 生益科技 (600183 CH) [2][4]. Core Insights - AI infrastructure investment continues to grow, with NVIDIA's strong performance indicating sustained demand. NVIDIA's revenue for Q2 FY26 reached $46.7 billion, a 56% year-over-year increase and a 6% quarter-over-quarter increase, exceeding Bloomberg consensus estimates [2][4]. - The management expects Q3 revenue to be $54 billion, indicating a 16% quarter-over-quarter growth, which is significantly higher than previous quarters [2][4]. - The report highlights the robust growth in NVIDIA's data center revenue, which increased by 17% quarter-over-quarter, driven by high sales of Blackwell chips and strong network business growth [4]. Summary by Sections NVIDIA Performance - NVIDIA's Q2 FY26 revenue was $46.7 billion, with a Non-GAAP gross margin of 72.7%, expected to rise to around 75% by year-end [2][4]. - The net profit for Q2 was $25.8 billion, reflecting a 52% year-over-year increase and a 30% quarter-over-quarter increase [2][4]. Market Outlook - Management anticipates that the capital expenditure of the four major cloud providers will reach $600 billion by 2025, with market opportunities potentially expanding to $3-4 trillion by 2030 [4]. - The report emphasizes the improving return on investment for AI infrastructure, with GB200's ROI projected to be 10 times [4]. Geopolitical Considerations - NVIDIA's sales outlook in China remains uncertain due to geopolitical tensions, with potential revenue from H20 products estimated between $2 billion to $5 billion if conditions improve [4].

Report Summary 1. Report Industry Investment Rating No information provided regarding the industry investment rating. 2. Core Viewpoints - The report analyzes the daily fixed - income market, including bond price changes, new issues, and macro - economic news. It also provides in - depth analysis of specific companies such as CNMDHL and Meituan [2][3][6]. - For CNMDHL, it is considered a yield pick - up play over CHMEDA, taking into account its relationship with Mengniu and trading liquidity [7]. - Regarding Meituan, although facing near - term profitability pressure due to intensified competition, its overall credit profile remains robust, and the analyst maintains a buy rating on some of its bonds [9]. 3. Summary by Relevant Catalogs Trading Desk Comments - Yesterday, the new HOKKEL 30 tightened 3 - 4bps, while other IG new issues like OCBCSP 4.55 35s/BOCAVI 31/JERA 4.544 30 widened 1 - 2bps or were unchanged. MEITUAs widened 3 - 5bps due to EBITDA decline in 1H25, and other Chinese TMT names had minor changes. Some bonds like LIFUNG 5 ¼ PERP rose due to positive EBITDA news, while VNKRLE 27 - 29s lowered [2]. - This morning, the new CNH GUAMET 2.15 28 was 0.3pt lower, the new HOKKEL 30 tightened 1bp, and some IG new issues were unchanged. JP long - end insurance bonds and HYSAN 7.2 Perp rose [3]. Macro News Recap - On Thursday, S&P (+0.32%), Dow (+0.16%), and Nasdaq (+0.53%) were higher. US 2Q25 GDP was +3.3% qoq, higher than the market expectation of +3.0%. The latest initial jobless claims were +229k, lower than the market expectation of +231k. 2yr UST yield was higher while 10/30yr UST yield was lower [6]. Desk Analyst Comments - **CNMDHL**: CNMDHL 4 ⅞ 07/10/30 is trading at a YTM of 4.9% and 61bps over CHMEDA 2 ½ 06/17/30. It has lagged the recent rally in the 5 - year Asia USD bucket by 20 - 30bps. It is considered a yield pick - up play over CHMEDA [7]. - **MEITUA**: Competition in the mainland China food delivery market is heating up, and margin squeeze will continue in 3Q25. Despite the weak operating performance, Meituan's credit story remains solid with a net cash position of RMB120.0bn. The analyst maintains a buy on MEITUA 3.05 10/28/30 and MEITUA 0 04/27/28 (CB) [9]. Offshore Asia New Issues - There were no offshore Asia new issues priced or in the pipeline today [21][22]. News and Market Color - Yesterday, 91 credit bonds were issued onshore with an amount of RMB65bn. Month - to - date, 2,140 credit bonds were issued with a total amount of RMB1,805bn, representing an 8% yoy decrease [23]. Company - Specific News - ACEN decided to inject USD76mn into subsidiaries and a solar project and spend PHP34.5bn (cUSD602.6mn) to develop Quezon wind park [28]. - GLP secures up to USD1.5bn investment from ADIA to accelerate growth [28]. - Li & Fung 1H25 EBITDA rises 4% yoy to USD75mn [28]. - Mongolian Mining 1H25 adjusted EBITDA falls 65.2% yoy to USD94.1mn [28]. - Orix to issue unsecured five - year bonds for JPY20bn (cUSD135mn) [28]. - Shui On Land 1H25 profit before tax down 95.4% yoy to RMB13mn (cUSD1.8mn) [28]. - SJM Holdings 1H25 adjusted EBITDA drops 5% yoy to HKD1.7bn (cUSD212mn) and plans to buy part of Hotel Lisboa for HKD529m (cUSD68mn) [28]. - SK Telecom was slapped with a KRW134.8bn (cUSD97mn) penalty following a personal data breach [28]. - Fitch downgraded China Vanke and Vanke Hong Kong to CCC - from CCC +, reflecting further weakening in liquidity [28]. - Yuzhou Group offshore debt revamp to become effective on 29 Aug'25 [28].