Investment Rating - The report assigns a cautious investment rating to the marine transportation industry in Japan [3]. Core Insights - The imposition of port entry fees by the US government on foreign-built car carrier ships starting in October is viewed negatively for the Japanese shipping industry, which holds approximately 40% of the global car carrier market [2]. - An estimated 30% of US automobile sales involve imports via car carriers, excluding those delivered via land to Mexico and Canada [2]. - The report forecasts a 9.9% increase in shipping freight space volume in the car carrier industry for 2025, followed by an 8.0% increase in 2026, indicating a potential deterioration in supply/demand dynamics [2]. Summary by Sections Industry Overview - The Japanese shipping industry is facing challenges due to new US port fees, which may weaken end-demand as costs are likely to be passed on to consumers [2]. Market Dynamics - The report highlights that the car carrier industry is expected to see a significant increase in supply, with forecasts of 9.9% growth in 2025 and 8.0% in 2026, which could exacerbate supply/demand issues [2]. Company Ratings - Kawasaki Kisen (9107.T): Underweight (U) as of 10/23/2023, price ¥1,954 [51] - Mitsui O.S.K. Lines (9104.T): Underweight (U) as of 01/27/2023, price ¥5,195 [51] - Nippon Yusen (9101.T): Underweight (U) as of 01/27/2023, price ¥4,792 [51]

Investment Rating - The investment rating for Ming Yang Smart Energy is Overweight, with an industry view classified as Attractive [6]. Core Insights - The financial results for 2024 showed a net profit of Rmb346 million, representing an 8.1% year-over-year decline, primarily due to gross profit margin pressure, lower-than-expected wind turbine generator (WTG) shipments, and reduced wind farm sales [2][4]. - The guidance for 2025 includes total shipments expected to reach 20GW, with 16GW onshore and 4GW offshore, alongside a projected recovery in WTG gross profit margin by 5-10 percentage points due to improved average selling prices (ASP) and cost reductions [4][8]. Financial Performance Summary - In 2024, the gross profit margin (GPM) was 7.5%, down 0.5 percentage points year-over-year, with recurring net profit decreasing by 14.3% to Rmb175 million [2]. - Revenue for 2024 was Rmb27.2 billion, down 3.4% year-over-year, while total WTG shipments were 10.8GW, which was below guidance [2][8]. - The net loss for the fourth quarter of 2024 was Rmb462 million, compared to a net profit of Rmb148 million in the third quarter of 2024 [3]. Future Outlook - The company anticipates new orders to exceed the 2024 level of 27GW, with offshore projects accounting for 20% and overseas projects for 40% [4][8]. - The expected earnings per share (EPS) for 2025 is projected at Rmb2.36, with revenue forecasted to increase to Rmb76.244 billion [6].

Investment Rating - The investment rating for Luzhou Lao Jiao Co. Ltd is Equal-weight [5] Core Insights - The company reported 1.8% sales growth and 0.4% net profit growth year-over-year in 1Q25, which aligns with estimates [8] - The dividend payout ratio increased to 65% in 2024 from 60% in 2023, with targets of 70% and 75% for 2025 and 2026 respectively [8] - The company aims for steady revenue growth in 2025, despite a challenging market environment [8] Revenue and Profitability - Mid-high end liquor sales rose 3% year-over-year, accounting for 88.4% of total liquor sales, while low-end liquor sales increased by 6% in 2024 [2] - Operating profit margin (OPM) declined by 1.0 percentage points year-over-year in 1Q25, with a narrowed gross profit margin (GPM) due to a lower product mix [2] - In 2024, OPM contracted by 0.7 percentage points, driven by a 2.8 percentage point decrease in GPM, partially offset by savings in operating expenses [2] Financial Position - Customer advances were Rmb3.1 billion in 1Q25, down from Rmb4.0 billion in 4Q24 and Rmb2.5 billion in 1Q24 [3] - The net cash position improved to Rmb31.4 billion in 1Q25 from Rmb29.0 billion in 4Q24 and Rmb21.4 billion in 1Q24 [3] - Cash from selling products decreased by 7% year-over-year in 1Q25 to Rmb9.9 billion [3] Future Projections - The company projects net profit growth of 1.7% year-over-year in 2024, which is 4% below consensus estimates [8] - The price target for the stock is set at Rmb122.00, indicating a downside of 3% from the closing price of Rmb125.36 on April 25, 2025 [5] - Earnings per share (EPS) estimates for the fiscal years ending in 2024, 2025, and 2026 are Rmb9.58, Rmb10.10, and Rmb10.74 respectively [5]

J P M O R G A N Asia Pacific Equity Research 27 April 2025 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. Wuliangye - A 2024 sales up 7.1% yoy at expense of relaxing credit & rising rebates to distributors; 2025 sales target of c5% (in line with GDP growth) ...

Investment Rating - The report rates Yonyou Network as Neutral with a price target of Rmb12.00 for December 2025, down from a previous target of Rmb13.00, indicating a potential downside of 12% from the current share price [2][12][13]. Core Insights - Yonyou experienced another earnings shock in Q1 2025, reporting a 21% year-over-year revenue decline, the worst in over 30 years, and a net loss of Rmb736 million, resulting in a net profit margin of -53% [8][11]. - Despite the poor financial results, Yonyou's share price has increased by 35% year-to-date and 17% over the past 12 months, contrasting with the SHCOMP index performance [8]. - The company has been adjusting its workforce, reducing staff by 25% over two years, with current employment at 19,600 [8]. - The report suggests that Yonyou's aggressive R&D capitalization policy, which exceeds 50% of total spending, raises concerns about the quality of its earnings [11]. Summary by Sections Financial Estimates - Adjusted EPS for FY25 is revised down to -Rmb0.34 from -Rmb0.22, and for FY26 to -Rmb0.12 from Rmb0.01 [3]. - Revenue forecasts for FY25-26 have been reduced by approximately 4% [8]. Quarterly Forecasts - The adjusted EPS for FY24 is projected at -Rmb0.62, with expectations of gradual improvement leading to a positive EPS of Rmb0.07 by FY27 [4][10]. Performance Metrics - Yonyou's revenue for FY24 is estimated at Rmb9,153 million, with a projected growth of 2.9% in FY25 and 7.5% in FY26 [10]. - The company reported a significant decline in gross profit margin to 39.1% in Q1 2025, down from 41.5% in the previous year [18]. Market Position - Yonyou holds a mid-30% market share in the ERP sector in China, primarily serving state-owned enterprises and government organizations [11]. - The report recommends considering rival Kingdee for ERP investments due to better execution and growth metrics [12].

Investment Rating - The investment rating for CGN Power Co., Ltd is Overweight [6][68]. Core Viewpoints - The approval of 10 new nuclear reactors in China aligns with expectations, supporting the goal of achieving a total nuclear capacity of 150GW by 2035 [3][4]. - CGN Power Co., Ltd owns four of the new reactor units, which will utilize Hualong No. 1 technology with a capacity of approximately 1.2GW each [2][4]. - China's nuclear capacity is projected to reach 110GW by 2030 and 200GW by 2040, making it the world leader in nuclear energy [4]. Summary by Sections Investment Overview - CGN Power Co., Ltd has a market capitalization of approximately RMB 122.42 billion and an enterprise value of RMB 313.49 billion [6]. - The price target for CGN Power is set at HK$2.81, with the current share price at HK$2.45 [6]. Industry Context - The construction of five new nuclear power projects, totaling 10 reactor units, has been approved, which is a slight decrease from the 11 units approved in 2024 [1][2]. - The trend of annual approvals of 8-10 units is expected to continue, facilitating China's nuclear capacity expansion [3]. Financial Metrics - The average daily trading value for CGN Power is approximately HK$228 million [6]. - The company is applying a P/E multiple of 13x on the estimated EPS for 2025, indicating a positive outlook based on accelerating project trends [10][11].

Investment Rating - The investment rating for Chongqing Changan Automobile is Overweight [7]. Core Insights - The report highlights a resilient performance in Q1 2025, with a net profit after tax (NPAT) of Rmb1.35 billion, reflecting a year-on-year growth of 16.8%, despite a revenue decline of 7.7% to Rmb34.1 billion [1][2]. - The report anticipates a notable narrowing of losses in the NEV (New Energy Vehicle) segment, as indicated by a reduction in minority interest losses [1]. - Gross margin improved modestly by 1.1 percentage points year-on-year to 13.9%, although it remains below the previous year's margin of 14.9%, suggesting ongoing pricing pressures [2]. - The investment thesis is strengthened by the visibility of profit growth driven by advancements in NEV technology [2]. Summary by Sections Financial Performance - Q1 2025 NPAT: Rmb1.35 billion, YoY growth of 16.8% [1]. - Revenue decreased by 7.7% to Rmb34.1 billion [1]. - Gross margin increased by 1.1 percentage points YoY to 13.9% [2]. NEV Business Outlook - Expected significant reduction in losses related to the NEV business, with minority interest losses decreasing from Rmb302 million in Q1 2024 to Rmb137 million in Q1 2025 [1]. - The report emphasizes improving profit growth visibility into 2025 due to NEV advancements [2]. Market Position - The price target for Chongqing Changan Automobile is set at Rmb17.90, indicating a potential upside of 45% from the current price of Rmb12.35 [7]. - The company has a market capitalization of Rmb105.43 billion [7].

Investment Rating - The investment rating for Pharmaron is Equal-weight [4] Core Insights - The industry view is considered Attractive, with a price target set at Rmb27.40, indicating a 3% upside from the current price of Rmb26.61 [4] - In 1Q25, Pharmaron reported revenue of Rmb3,099 million, reflecting a 16% year-over-year growth, aligning with the 2025 guidance of 10-15% growth [7] - The revenue streams from North America, EU, and China showed year-over-year growth of 16.8%, 26.6%, and 13.1%, respectively, contributing approximately 65%, 18%, and 15% to total revenue [2] - The customer base saw revenue from the top 20 pharmaceutical customers grow by 29% year-over-year, while other customers grew by 14% [2] - Adjusted non-IFRS net profit for 1Q25 was Rmb349 million, a 3.1% increase year-over-year, with softer growth attributed to depreciation and amortization costs from biologics capacity launch [7] Summary by Sections Financial Performance - 1Q25 revenue was Rmb3,099 million, up 16% year-over-year, consistent with the guidance for 2025 [7] - Net operating cash flow increased by 14.4% to Rmb853 million, with capital expenditures of Rmb556 million, up 11.4% year-over-year [2] Customer and Market Dynamics - Revenue from the top 20 pharma customers increased by 29% year-over-year, while other customers saw a 14% growth [2] - New order growth for both Lab services and CMC was over 10%, although it decelerated from over 20% in 2024 due to a higher order base in 1Q24 [7] Valuation Metrics - The company has a market capitalization of Rmb29,328.6 million and an enterprise value of Rmb33,234.4 million [4] - The projected EPS for the fiscal years ending in 2024, 2025, and 2026 are Rmb0.97, Rmb1.26, and Rmb1.00, respectively [4]

J P M O R G A N Asia Pacific Equity Research 27 April 2025 Futu Holdings Our thoughts on Ant Group set to take control of a retail broker in HK Futu's share price fell 6.4% on Friday (vs. KWEB index -0.2%), following the news that Ant Group is acquiring 50.55% stake in Bright Smart Securities (耀才 證券), a retail broker in HK (link). For details about Bright Smart Securities and comparison with Futu, please refer to Table 1Comparisn betwBrigh Smartnd Fuand Table 2Sumary ofkeprating dforFut andBright Smarecuits ...

J P M O R G A N Asia Pacific Economic Research 27 April 2025 Tingting Ge (852) 2800-0143 tingting.ge@jpmorgan.com Tongfang Yuan (852) 2800-0085 tongfang.yuan@jpmorgan.com JPMorgan Chase Bank, N.A., Hong Kong Branch China: April Politburo meeting emphasized policy reserves No rush for more incremental policy stimulus yet, as expected The April Politburo meeting was held on 25 April, focusing on economic conditions and policy guidance. This policy event has been closely watched by market participants in antic ...