M N 5 Apr 2024 CMB International Global Markets | Equity Research | Company Update GAC Group (2238 HK) PHEV could be a new catalyst We estimate GAC Group (GAC)’s net profit to rise 22% YoY to RMB5.4bn in Target Price HK$5.50 FY24E, as Aion’s upscale attempt, cost reduction and overseas expansion could (Previous TP HK$6.00) help narrow its loss. We are of the view that Aion needs quality growth in FY24E Up/Downside 73.0% to lay out foundation for long-term development. We project Trumpchi’s PHEV Current Pric ...

M N 5 Apr 2024 CMB International Global Markets | Equity Research | Company Update Atour Lifestyle (ATAT US) Prudent guidance but QoQ recovery is likely 4Q23 results were a slight beat but the FY24E guidance is slightly disappointed. Target Price US$23.68 However, we are not that pessimistic because: 1) sequential improvement is (Previous TP US$23.93) likely (high base in 1H), 2) OCC rate is still the best among its peers implying Up/Downside 24.7% further market share gains, and 3) PMI has started to impro ...

制造业重回扩张，服务业小幅放缓 招银国际环球市场 | 策略报告 | 宏观策略 3 月制造业 PMI 经历 16 个月收缩后重回扩张，超出市场预期，显示商品需求 小幅反弹。服务业 PMI 仍在扩张区间但小幅回落，显示服务经济温和放缓。服 务业与制造业就业指数均连续两个月收缩，显示就业市场降温。制造业价格指 数大幅上升，但服务业价格指数回落，预示商品通胀可能反弹，但核心通胀或 继续放缓。制造业和服务业 PMI 数据对 10 年期国债收益率产生相反作用。由 于今年以来经济超预期和通胀反弹，美联储正在引导市场调整之前对降息路径 过度乐观的预期。市场对年内降息次数预期可能从之前的 3 次降至 1-2 次。在 经济和通胀温和放缓的基准情景下，为降低中小银行压力和避免政策在临近大 选时急剧转向，美联储可能选择在 6 月首次降息。我们仍维持全年可能降息 100 个基点的预测，但由于经济和通胀韧性，高利率持续时间比预期更长。回 顾政策利率调整历史，我们发现低利率持续过久预示未来加息更陡，而高利率 持续过久意味着未来降息可能更陡。如果未来 2-3 年美国潜在名义 GDP 增速逐 步回到 4%左右，那么中性名义利率水平约为 3.5 ...

Investment Rating - The report maintains a "BUY" rating for RemeGen, with a revised target price of HK$41.72, down from HK$57.65, indicating a potential upside of 53.7% from the current price of HK$27.15 [5][3]. Core Insights - RemeGen recorded revenue of RMB1.08 billion in FY23, with product sales contributing RMB1.05 billion, reflecting a 42% year-over-year increase. The gross profit margin improved to 76.9% from 63.4% in FY22. However, the company reported a wider attributable net loss of RMB1.51 billion in FY23 compared to RMB999 million in FY22 [3][11]. - The company anticipates a significant ramp-up in sales for FY24, targeting at least a 50% year-over-year increase in product sales, driven by strong performance of RC18 and RC48, an expanded salesforce, and inclusion in numerous top-grade hospitals [3][9]. - RemeGen is progressing with the global development of RC18, with the first stage of its Phase 3 trial completed. The company is considering whether to unblind the study results, which could serve as a catalyst for further development and potential out-licensing deals [3][10]. - The report highlights the potential for overseas business development collaborations, particularly for RC18 and RC88, which has received fast track designation from the FDA. These collaborations are expected to be crucial for RemeGen's growth trajectory [3][10]. Financial Summary - In FY23, RemeGen's revenue was RMB1,076 million, with a gross profit of RMB823 million, resulting in a gross margin of 76.5%. The company incurred operating expenses of RMB2,334 million, leading to an operating loss of RMB1,488 million [11][13]. - For FY24, the revenue is projected to reach RMB1,601 million, with a gross profit of RMB1,225 million, maintaining a gross margin of 76.5% [11][10]. - The net profit for FY24 is expected to be a loss of RMB1,451 million, improving to a loss of RMB1,070 million in FY25, and further narrowing to a loss of RMB362 million in FY26 [11][10].

Investment Rating - Maintain BUY rating with a target price of HK$13.00, implying a 39.2% upside from the current price of HK$9.34 [2][3][4] Core Views - The Tank brand, pick-up trucks, and exports are expected to support Great Wall Motor's earnings in FY24E, with projected sales volume increasing by 10% YoY to 1.35 million units and net profit rising by 13% YoY to RMB 7.9 billion [2][3] - PHEVs are identified as key to the company's electrification strategy, while BEV sales volume is projected to decline YoY in FY24E due to a lack of competitive products [2][3] Financial Summary - Revenue is projected to grow from RMB 173.2 billion in FY23A to RMB 197.2 billion in FY24E, representing a 13.8% YoY growth [3][6] - Net profit is expected to increase from RMB 7.0 billion in FY23A to RMB 7.9 billion in FY24E, reflecting a 13.0% YoY growth [3][6] - Gross profit margin (GPM) is revised up by 0.4 percentage points to 18.6% for FY24E, driven by better-than-expected margins from PHEVs [2][3] Sales and Profitability - 1Q24E net profit is projected to be approximately RMB 1.6 billion, with a net profit per vehicle of RMB 5,800, which is 6% higher than in 4Q23 [2][3] - The company’s GPM for 4Q23 is estimated to be around 21%, indicating stable profitability despite a 25% QoQ sales volume decline [2][3] Market Position and Strategy - Great Wall Motor's success in off-road style SUVs has positively impacted PHEV sales and margins, although challenges remain in transitioning to BEVs [2][3] - The upcoming Beijing Auto Show is anticipated to be a positive catalyst for share price, particularly with the debut of new PHEV models [2][3]

M N 2 Apr 2024 CMB International Global Markets | Equity Research | Company Update Jinxin Fertility (1951 HK) Impressive business rebound in 2023 Target Price HK$4.43 Jinxin Fertility (Jinxin) reported 2023 revenue of RMB2,789mn, up 18.0% YoY. (Previous TP HK$7.35) Non-IFRS adjusted net profit grew substantially by 72.0% YoY to RMB472mn. Up/Downside 82.3% Revenue was in line with our forecast while non-IFRS adjusted net income Current Price HK$2.43 slightly missed our forecast by 5.7%, which was mainly attr ...

M N 2 Apr 2024 CMB International Global Markets | Equity Research | Company Update Tigermed (300347 CH) Expect business rebound in 2024E Target Price RMB68.57 Tigermed reported 2023 revenue of RMB7,384mn, up 4.2% YoY, and attributable (Previous TP RMB80.31) recurring net income of RMB1,477mn, down 4.1% YoY. Revenue/ attributable Up/Downside 29.1% recurring net income missed our forecast by 2.9%/ 12.1%, respectively, mainly Current Price RMB53.10 due to shrinking COVID vaccine revenue, slowdown in global R&D ...

Investment Rating - The report maintains a "BUY" rating for Xiaomi with a new SOTP-based target price of HK$22.19, reflecting a 49% upside from the current price of HK$14.94 [1][15]. Core Insights - Xiaomi's SU7 Series electric sedans launched on March 28, 2024, with competitive pricing and strong initial pre-orders, indicating positive market reception. The pre-orders reached 50,000 units in the first 27 minutes and 89,000 units within 24 hours, surpassing market expectations [1][2]. - The report highlights Xiaomi's unique "Human-car-home" ecosystem as a major competitive advantage over other EV brands, which is expected to drive future growth [1][2]. - Adjustments to revenue forecasts reflect expected EV shipments of 80,000, 150,000, and 200,000 units for FY24, FY25, and FY26, respectively [1][2]. Financial Summary - Revenue for FY24 is projected at RMB 321,495 million, with a year-on-year growth of 18.6%. The adjusted net profit is estimated at RMB 17,321 million, reflecting a decline of 10.1% year-on-year [4][10]. - The report indicates a gross margin of 19.0% for FY24, with an operating margin of 4.8% and an adjusted net margin of 5.4% [10][11]. - The earnings per share (EPS) for FY24 is projected at RMB 0.70, with subsequent years showing gradual increases [4][10]. Valuation Methodology - The valuation is based on a sum-of-the-parts (SOTP) approach, assigning different price-to-earnings (P/E) multiples to Xiaomi's various business segments: 13x for smartphones, 10x for AIoT, and 15x for internet services. The EV business is valued at 0.75x FY25E price-to-sales (P/S) [15][16]. - The total valuation for Xiaomi is estimated at RMB 508,115 million, leading to a target price of HK$22.19 [16].

Investment Rating - The report maintains a BUY rating for Joinn Laboratories with a target price revised to HK$14.41 from HK$21.18, reflecting a potential upside of 57.1% from the current price of HK$9.17 [2][4]. Core Insights - Joinn Laboratories reported a revenue of RMB2,376 million for 2023, representing a 4.8% year-over-year increase, while attributable net income fell by 66.9% to RMB338 million due to fair value losses from biological assets [2]. - The company anticipates that revenue for 2024 will remain on par with 2023, facing continued pressure on profitability due to uncertainties in the R&D recovery of the domestic pharmaceutical market [2]. - Early signs of stabilizing client demand were noted, with a 20% year-over-year growth in contract booking volume in January-February 2024 [2]. - Joinn's overseas business saw a significant revenue increase of 51% year-over-year in 2023, driven by the performance of Biomere [2]. Financial Summary - For FY23, Joinn's revenue was RMB2,376 million, with a projected revenue of RMB2,425 million for FY24, indicating a modest growth of 2.0% [3][9]. - Adjusted net profit for FY23 was RMB481.6 million, with expectations of RMB436 million for FY24, reflecting a decline of 9.5% [3][9]. - The company’s gross profit margin is expected to decrease to 38.08% in FY24, with operating and net margins also projected to decline [5][12]. Operational Developments - Joinn has completed the construction of its Phase II facilities in Suzhou and is strategically planning the operational launch of these sites in line with market conditions [2]. - The company plans to hire an additional 100-200 staff in 2024 to support growth in emerging service areas, particularly clinical services [2]. Valuation Metrics - The report provides a DCF valuation with a WACC of 12.2% and a terminal growth rate of 2.0%, leading to a target price of HK$14.41 per share [7][4]. - The adjusted EPS for FY24 is projected at RMB0.58, with a P/E ratio of 15.5x for FY24 [3][12].

Investment Rating - Maintain BUY rating with a new target price (TTM) of HK$11.9, implying 1.0x FY24E P/B [2][7] Core Views - PICC P&C reported a solid underwriting combined ratio (CoR) of 97.8%, 0.3pct lower than the estimate, driven by better-than-expected non-auto CoR at 99.1% [2] - The company is expected to sustain a payout ratio of over 40% in the next two years, with a dividend yield of 5.7% in FY24E [2][7] - The auto segment met guidance with a CoR of 96.9%, while non-auto outperformed, particularly in individual A&H, which achieved RMB1.0bn underwriting profits [2] - The company's long-term auto premium growth is adjusted to 5%, with NEV profitability expected to improve [2] Financial Performance - Net profit for FY23A was RMB24.6bn, with EPS of RMB1.11, and is expected to grow to RMB30.0bn in FY24E [4] - The combined ratio is forecasted to improve from 97.8% in FY23A to 96.9% by FY26E [4] - ROE is expected to recover from 10.8% in FY23A to 12.6% by FY26E [4] Valuation - The stock is currently trading at 0.84x FY24 P/B, with a target valuation of HK$11.9 based on P/B-ROE [7][8] - Key valuation assumptions include a long-term growth rate of 3%, a revised long-term ROE of 12.8%, and a cost of equity of 9.7% [7] Dividend Policy - The company raised DPS by 2.3% YoY to RMB0.489 per share in 2023, maintaining a payout ratio of 44.2% [2] - Management guided to maintain a robust payout ratio of over 40% in the next two years [2] Segment Performance - Auto premiums grew by 5.3% YoY to RMB285.6bn, with a conversion rate of 98.8% [2] - Non-auto individual A&H achieved RMB43.7bn in insurance revenue, growing 23.8% YoY, with a CoR of 97.7% [2] Future Outlook - The company expects a lift in auto comprehensive loss ratio and a contraction in comprehensive expense ratio to 70.6%/26.1% in FY24E [2] - NEV profitability is anticipated to improve, with NEV CoR expected to drop below 100% [2]