Investment Rating - The report maintains a "Buy" rating for Micron Technology (MU US) with a target price of $118 00, down from the previous target of $148 00 [2][23][25] Core Views - The report highlights potential upside in 2HFY25 driven by HBM (High Bandwidth Memory) volume growth and recovery in traditional DRAM business, which could lead to revenue outperformance [8][25] - Despite near-term challenges in NAND and DRAM markets, the report expects HBM and data center revenue growth to offset some of the pressures, particularly with 12Hi HBM3E contributing to improved product mix [12][13][25] - The report notes that the current stock price already reflects the weaker-than-expected 2QFY25 revenue and gross margin guidance, particularly due to NAND weakness [8][12][22] Financial Adjustments - The report revises FY2025-2027 EPS estimates downward to $7 05, $11 27, and $10 03, respectively, reflecting a 16%, 8%, and 8% reduction from previous estimates [5][14][25] - Revenue forecasts for FY2025-2027 are also adjusted downward by 8%, 2%, and 5%, respectively, due to weaker NAND demand and pricing pressures [11][25] - Gross margin is expected to face pressure from NAND price declines, but HBM revenue growth is seen as a mitigating factor [13][19] Market and Industry Outlook - The semiconductor industry is rated as "Neutral," with expectations of relative performance within a -10% to 10% range compared to the broader market [2][4] - Micron's HBM business is expected to gain traction, with the company already shipping to a second HBM customer and preparing to ship to a third in 1Q25 [12][25] - The report anticipates a recovery in DRAM pricing and volume in 2HFY25, driven by inventory restocking in PC and mobile markets, as well as data center demand [11][12][25] Valuation and Target Price - The report uses a Sum-of-the-Parts (SOTP) valuation method, assigning a 10x P/E multiple to the DRAM business and a 5x P/E multiple to the NAND business, resulting in a total equity valuation of $128 7 billion and a target price of $118 [25][43] - The target price implies a 35% upside from the current stock price of $87 09 [16][25]

Industry Overview - The US and its allies have imposed stricter semiconductor export controls on China, targeting advanced logic processes, memory chips, and high-performance chip technologies [89][90][91] - Japan and the Netherlands have followed the US in restricting semiconductor equipment exports to China, particularly in areas like EUV lithography and etching equipment [89][95][122] - China has shifted its semiconductor equipment imports from the US and Netherlands to Japan and Singapore, with significant declines in imports of key equipment like CVD and lithography machines [102][108][111] Company Analysis - Northern Huachuang (002371 CH) - Northern Huachuang is expected to see strong revenue growth in 2025 driven by new equipment models and increased domestic substitution [33][35] - The company's ICP and CCP etching equipment, as well as CVD products, are expected to contribute significantly to revenue growth in 2025-2026 [36] - Despite being added to the US Entity List in December 2024, the impact on Northern Huachuang is expected to be limited due to its gradual shift to domestically produced components [1][35] - The company's 3Q24 gross margin reached 42.3%, up 5.89% YoY, driven by improved manufacturing efficiency and higher-margin product mix [1] - Northern Huachuang's target price was raised to RMB 491.00, with a "Buy" rating maintained [35][37] Company Analysis - AMEC (688012 CH) - AMEC's new orders in 9M24 grew 52% YoY to RMB 7.64 billion, with etching equipment orders up 54.7% to RMB 6.25 billion [56][69] - The company's LPCVD equipment achieved its first revenue of RMB 28 million in 9M24, with potential for cross-selling opportunities [56][69] - AMEC's 3Q24 gross margin was 43.7%, down 2% YoY, but is expected to improve in 2025 due to higher-margin products and domestic component substitution [70] - The target price for AMEC was raised to RMB 276.00, with a "Buy" rating maintained [70][68] Company Analysis - Kingsemi (688037 CH) - Kingsemi's 3Q24 gross margin improved to 46.2%, up 5.1% YoY, driven by cost reductions from domestic component substitution and strong performance in advanced packaging equipment [14] - However, the company's 3Q24 net profit fell 63% YoY to RMB 31 million due to higher R&D and equity incentive expenses [14] - Kingsemi's target price was lowered to RMB 95.00, with a "Hold" rating maintained [13][14] Key Risks - Downstream demand may fall short of expectations, potentially delaying semiconductor fab investments and reducing orders for equipment manufacturers [63][103] - Further US restrictions on China's semiconductor industry could impact equipment companies' operations and product shipments [22][63] - Intensifying competition in the semiconductor equipment sector, particularly from domestic manufacturers, could pressure profit margins [7][63] Investment Recommendations - AMEC is the top pick in the semiconductor equipment sector, with strong growth potential in 2025-2026 [81][101] - Northern Huachuang is recommended as a long-term beneficiary of domestic substitution trends [81][101] - Kingsemi is advised to be approached with caution due to its ongoing operational adjustments [81][101]

Investment Rating - The report maintains a "Buy" rating for RoboSense (2498 HK) with a target price of HK$38.18 [2][7][9] Core Views - RoboSense's MX product is expected to accelerate the penetration of ADAS LiDAR in the mid-to-low-end market, becoming a major growth driver in 2025 [6][7] - The robotics business is anticipated to become a second growth curve, with projected LiDAR shipments reaching 100,000 units in 2025 [6][8] - The company's LiDAR shipments are expected to grow significantly, with 2024E shipments forecasted at 589,900 units, a 127.2% YoY increase [9] - The average selling price (ASP) of LiDAR is expected to decline to RMB 2,000 in 2025 and further to RMB 1,800 in 2026 due to the increasing proportion of MX products [9][18] Financial Performance - RoboSense's revenue is projected to grow from RMB 1,721 million in 2024E to RMB 2,880 million in 2026E [11][18] - The company's gross margin is expected to improve from 16.3% in 2024E to 28.0% in 2026E, driven by economies of scale and cost reductions from in-house chip development [18] - RoboSense is forecasted to achieve positive adjusted net income in 2026E, reaching RMB 96 million [11][18] Market Position and Competitive Advantage - RoboSense ranked first in LiDAR installations in 2024, with 401,940 units installed, capturing a significant market share [7] - The company has secured partnerships with over 2,600 robotics companies, positioning itself well in the robotics sector [8] - RoboSense's ADAS LiDAR is widely adopted by major automakers, including XPeng, AITO, Zeekr, and BYD (Yangwang) [7] Valuation - The report values RoboSense at 7x P/S for 2025E, resulting in a target price of HK$38.18 [9][22] - Compared to peers, RoboSense is expected to command a higher valuation due to its leading market position, improving gross margins, and potential growth in the robotics industry [22][24] Industry Outlook - The LiDAR penetration rate in the Chinese new energy vehicle market reached 12.0% in 2024, indicating significant growth potential [7] - The robotics industry is in its early stages of rapid development, with increasing demand for sensors like LiDAR expected to drive future growth [8]

Investment Rating - The report assigns an "Overweight" rating to the automotive and auto parts industry, indicating a positive outlook for investment opportunities in this sector [3]. Core Insights - The "scrap + replacement" subsidy policy has shown significant effects, stimulating a rapid increase in new energy vehicle (NEV) sales, which are expected to maintain high growth rates into December [3][8]. - In November, retail and wholesale sales of passenger cars grew by 16.5% and 15.3% year-on-year, respectively, with NEV sales experiencing a remarkable 50.5% increase in retail volume [6]. - The total number of applications for the "scrap + replacement" subsidy has exceeded 5 million, suggesting strong consumer demand for vehicle upgrades [8]. Summary by Sections Sales Performance - In November, the retail sales of narrow-sense passenger cars reached 2.423 million units, a year-on-year increase of 16.5%, while wholesale sales reached 2.940 million units, up 15.3% [6]. - NEV retail sales in November hit 1.268 million units, marking a 50.5% year-on-year increase, with a penetration rate of 52.3% [6]. Battery Production and Sales - In November, the sales and installed capacity of power batteries increased by 10.9% and 13.5% month-on-month, respectively, with an average single vehicle battery capacity of 45.3 kWh [4][7]. - Cumulative sales of power and energy storage batteries reached 914.3 GWh from January to November, reflecting a year-on-year growth of 42.8% [7]. Policy Impact - The "scrap + replacement" subsidy applications have surpassed 5 million, with expectations for continued high sales growth in December due to the impending deadline for subsidy applications [8]. - The report highlights that the automotive market remains buoyant, driven by the ongoing effects of the subsidy policies [8]. Market Trends - The report notes a significant release of production capacity among NEV manufacturers, with November production reaching 1.481 million units, exceeding retail sales by 213,000 units, indicating optimism for future sales [6]. - The overall inventory of passenger cars has decreased, with manufacturers reducing stock by 210,000 units from January to November [6].

Investment Rating - The report assigns an "Overweight" rating to the pharmaceutical industry, indicating a positive outlook for investment opportunities [2]. Core Insights - The negative factors affecting the valuation of leading Chinese CXO companies have been eliminated following the failure to include the Biodefense Act in the National Defense Authorization Act (NDAA) [3]. - The financing and demand sides of the CXO industry are expected to continue improving, with a favorable environment for pharmaceutical investments anticipated in 2025 [4]. - The report highlights the growth potential of leading Contract Research Organizations (CROs) and recommends focusing on WuXi AppTec A, WuXi AppTec H, and WuXi Biologics [4]. Summary by Sections Industry Overview - The failure to include the Biodefense Act in the NDAA signifies the removal of short-term negative valuation factors for the CXO industry [3]. - The global pharmaceutical research and development sector is recovering, which is expected to enhance profit margins for leading CXO companies while maintaining long-term growth [4]. Financial Environment - The Federal Reserve's decision to lower the federal funds rate target range to 4.50% to 4.75% is anticipated to improve the investment environment for pharmaceuticals in 2025 [4]. - The rapid growth of peptide drugs represented by GLP-1 and the continuous expansion of the ADC market are expected to bring new business increments to the global CXO industry [4]. Recommended Companies - The report recommends the following companies for investment: - WuXi AppTec A (603259 CH) with a buy rating and a target price of RMB 66.31 [4]. - WuXi AppTec H (2359 HK) with a buy rating and a target price of HK$ 73.00 [4]. - WuXi Biologics (2269 HK) with a buy rating and a target price of HK$ 26.12 [4].

Investment Rating - The report maintains a "Buy" rating for Meituan with a target price raised to HK$240.00 from HK$193.00, indicating a potential upside of 39% from the current price of HK$172.20 [2][3][10]. Core Insights - Meituan's 3Q24 performance showed stable and sustainable profit growth, with revenue and operating profit growth in the instant delivery segment outpacing order volume growth [6][10]. - The report highlights a healthy growth forecast for the dine-in and travel segments, with expected revenue and operating profit growth of 25% year-on-year in 4Q24 [7][10]. - The report emphasizes the improvement in profitability prospects for core local businesses, including food delivery and dine-in services, leading to a projected 23% year-on-year growth in operating profit for 2025 [10][18]. Financial Summary - Revenue for 2024 is projected at RMB 336,900 million, with an expected year-on-year growth of 22% [11][17]. - Adjusted EPS for 2024 is forecasted to be RMB 7.47, reflecting a 15% increase from previous estimates [9][17]. - The adjusted net income for 2024 is expected to reach RMB 47,348 million, with a net profit margin of 14.1% [11][17]. Segment Performance - The instant delivery segment reported a 14.5% year-on-year increase in order volume, with management projecting that flash purchase orders could eventually capture 10% of the Chinese e-commerce market [8][10]. - The dine-in and travel segment saw a 50% increase in order volume in 3Q24, with revenue growth of 25% year-on-year [10][11]. - New business losses narrowed to RMB 10 billion in 3Q24, down from RMB 13 billion in 2Q24, indicating a trend towards improved profitability [10][11]. Valuation - The report employs a sum-of-the-parts (SOTP) valuation approach, estimating the food delivery business at USD 78 billion and the dine-in and travel business at USD 49 billion, both based on a 15x P/E ratio for 2025 [18][20][22]. - The community e-commerce and local retail business is valued at USD 63 billion, using a 0.8x P/GMV multiple for 2025 [20][22].

Investment Rating - The report maintains a "Hold" rating for NIO Inc. with a target price of US$4.80, reflecting a slight downside potential of 1% from the current price of US$4.84 [2][14]. Core Insights - The report highlights that NIO's Q3 2024 losses remain challenging to improve, with new brand models facing margin pressures. Despite achieving a record delivery of 61,861 vehicles, revenue was impacted by product mix changes and promotional discounts, leading to a significant decline in average revenue per vehicle [2][9]. - The report notes that while the gross margin improved by 1 percentage point to 10.7% due to cost reductions and increased deliveries, operational expenses continued to rise, resulting in a net loss of RMB 51.4 billion for the quarter [2][9]. - The report anticipates that the introduction of new brands "Ledo" and "Firefly" will require NIO to achieve higher and more stable monthly delivery targets to maintain margins, especially in a competitive market [2][9]. Summary by Sections Financial Performance - NIO's Q3 2024 revenue was RMB 18.7 billion, a 2.1% year-over-year decline, while the gross profit was RMB 2.0 billion, reflecting a gross margin of 10.8% [5][9]. - The report indicates that R&D expenses were RMB 3.3 billion, and selling and administrative expenses were RMB 4.1 billion, contributing to a net loss of RMB 5.1 billion for the quarter [5][9]. Delivery and Sales Forecast - The report projects a downward adjustment in delivery forecasts for 2024 to approximately 220,887 vehicles, reflecting a 4.6% decrease due to increasing competition in the domestic EV market [9][10]. - For 2025 and 2026, the delivery estimates are adjusted to 318,300 and 365,300 vehicles, respectively, indicating a 6.6% and 6.5% reduction [9][10]. Revenue and Profitability Projections - The report revises revenue forecasts for 2024 to RMB 67.8 billion, a 4.7% decrease, with further reductions of 9.6% and 14.4% for 2025 and 2026 [10][14]. - The adjusted non-GAAP net losses for 2024, 2025, and 2026 are projected at RMB -188.4 billion, -187.1 billion, and -178.2 billion, respectively [9][10]. Valuation - The report employs a P/S valuation method, adjusting the valuation multiple to 0.8 times the 2025 P/S, primarily due to expected sales increases from new brand launches and improving gross margins [14][10]. - The target price remains at US$4.80, consistent with the "Hold" rating [14].

Investment Rating - The report upgrades the investment rating to "Buy" with a target price of US$16.70, reflecting a significant increase from the previous target of US$7.70, indicating a potential upside of 36% from the current price of US$12.29 [3][7][20]. Core Insights - The report highlights a strong product cycle and the integration of AI technology as key competitive advantages for the company. The sales gross margin for Q3 2024 increased by 2.6 percentage points, driven by the successful launch of the MONA M03 and P7+ models, marking the beginning of a major product cycle [2][3][4]. - The company plans to launch four new models in 2025, incorporating the "Kunpeng Super Electric System," which allows for dual driving modes. The overseas market sales saw a remarkable growth of 70% in Q3 2024, contributing 15% to total sales [3][4][5]. Financial Summary - The revenue for Q3 2024 reached RMB 10.1 billion, with automotive sales revenue of RMB 8.8 billion, reflecting a 29% quarter-on-quarter increase. The average revenue per vehicle for Q3 2024 was RMB 189,000, a decrease of approximately RMB 26,000 due to a higher proportion of lower-priced M03 model deliveries [3][4][16]. - The report projects the company's revenue to reach RMB 40.8 billion in 2024, RMB 76.0 billion in 2025, and RMB 98.3 billion in 2026. The gross margin is expected to improve to 15.3% in 2025 and 18.5% in 2026 [5][16][17]. - The forecasted net loss for 2025 is expected to narrow to RMB 1.05 billion, with a projected profit of RMB 1.73 billion in 2026 [5][16][17]. Valuation - The valuation is based on a price-to-sales (P/S) ratio of 1.5 times the 2025 estimates, leading to a target price of US$16.70, which corresponds to a P/S ratio of 2.8 times for 2024 [20][25]. The report emphasizes that the company deserves a higher valuation due to its strong product cycle, AI-driven product ecosystem, and rapid growth in overseas sales [20].

Investment Rating - The report maintains a "Buy" rating for both Micron Technology (MU US) and SK Hynix (000660 KS) with target prices of $148.00 and 259,548 KRW respectively, indicating potential upside of 44% and 47% [2][7]. Core Insights - The HBM (High Bandwidth Memory) market is expected to remain in a supply-demand imbalance from 2024 to 2027, driven by increasing demand from AI applications and server investments [19][20]. - Micron is anticipated to enhance its market share in the HBM sector, particularly in the HBM4 era, as it adopts a "jumping" strategy to focus on HBM3E and HBM4 products [6][27]. - SK Hynix is projected to maintain its position as a leading supplier of HBM products, although it may face market share erosion from competitors like Micron and Samsung in the HBM4 and HBM5 eras [6][7]. Financial Data Summary - Micron's expected P/E ratios for FY1E and FY2E are 12.3 and 8.4, with an ROE of 17.1% and an EPS CAGR of 149.8% [2]. - SK Hynix's expected P/E ratios for FY1E and FY2E are 6.7 and 4.5, with an ROE of 26.1% [2]. Demand Analysis - The demand for HBM products is projected to be significantly driven by AI applications, with expected demand reaching 1.4 billion GB in 2024 and 2.4 billion GB in 2025 [5][19]. - Major cloud service providers maintain a positive outlook on AI and server investments, which supports the demand for HBM [19]. Supply Analysis - By the end of 2025, the combined HBM supply from SK Hynix, Micron, and Samsung is expected to reach 20.1 billion GB, but demand is projected to outstrip supply, indicating a continued supply-demand imbalance [20]. - The report highlights that SK Hynix and Micron are expected to improve their production yields and capacity, which will be crucial for meeting the anticipated demand [21][22]. Competitive Landscape - The competition in the HBM market is expected to intensify as Micron and Samsung aim to capture higher market shares in the HBM4 segment, potentially impacting SK Hynix's market position [6][7]. - The report notes that SK Hynix's current advantage in production yield and customer supply rhythm may be challenged as the industry transitions to HBM4 technology [22]. Equipment and Technology Trends - The report indicates a shift towards mixed bonding technology in HBM production, which is expected to increase equipment investment intensity [26]. - The demand for advanced TCB (Thermal Compression Bonding) equipment is anticipated to rise as companies like Micron and Samsung adopt new manufacturing processes [23][25].

Investment Rating - The report maintains a "Buy" rating for EHang Intelligent (EH US) with a target price of US$18.84, indicating a potential upside of approximately 20% from the current price of US$15.67 [2][3][10]. Core Insights - EHang delivered 63 units of the EH216-S in Q3 2024, marking the first quarter of positive Non-GAAP operating profit and positive operating cash flow for four consecutive quarters [6][8]. - The company is expected to receive its first Operational Certificate (OC) by the end of this year, which could attract more customers [7][9]. - Revenue for Q4 2024 is projected to be around RMB 135 million, with an estimated total revenue of RMB 427 million for the full year, representing a year-on-year growth of 263.5% [8][10]. Financial Summary - The target price has been adjusted from US$19.71 to US$18.84, reflecting a 4% decrease [3][10]. - The 2024E EPS has been revised down to RMB 0.47 from RMB 0.86, a reduction of 46% [3][10]. - The 2025E EPS is slightly increased to RMB 2.72 from RMB 2.65, a 2% rise, while the 2026E EPS is raised to RMB 7.00 from RMB 6.72, a 4% increase [3][10]. - The company expects to deliver approximately 70 units of the EH216-S in Q4 2024, with a backlog of over 1,000 orders [18][10]. Revenue and Profitability Forecast - Revenue projections for 2024 have been slightly adjusted to RMB 4.31 billion, with a 12.6% reduction in net profit forecasted to a loss of RMB 2.29 billion [10][19]. - Non-GAAP net profit for 2024 is expected to be RMB 0.31 billion, down 45.1% from previous estimates [10][19]. - The company anticipates maintaining a gross margin of over 60% for the EH216-S due to a lack of direct competitors in the market [18][10]. Valuation - The report maintains a 10x P/S valuation for 2025, leading to the target price of US$18.84, which corresponds to a 20x P/S for 2024 [10][22]. - EHang's average trading multiple this year has been around 17x based on 2024 revenue forecasts, with the current valuation slightly above this average [22][10].