◼ Indirect competition from other online games | RESEARCH 15 | RESEARCH Investment Thesis Growing potential for third-party medical imaging centers in China ◼ Insufficient resources for medical imaging in China According to Frost & Sullivan, the average CT, MRI and PET/CT units installed per million population in China were 33, 15 and 0.6 respectively, which were lower than the developed countries. When compared to China, i) the average CT units installed per million population in Japan and the US were 3.7x ...

Investment Rating - The report does not provide a specific investment rating for the company [102] Core Insights - Jiangxi Yimai Sunshine is a specialized medical imaging healthcare group in China, primarily providing medical imaging services and solutions. In 2023, the group achieved total revenue of 930 million RMB, representing an annual growth of 18.4% [10] - The revenue from imaging center services was approximately 640 million RMB, while imaging solutions and Yimai Cloud services contributed 280 million RMB and 12.468 million RMB, respectively [10] - The company operates various types of imaging centers, including flagship imaging centers, regional shared imaging centers, specialist medical alliances, and operational management imaging centers [12][17] Summary by Sections Business Overview - Jiangxi Yimai Sunshine operates a network of 97 imaging centers across 17 provinces, autonomous regions, and municipalities in China as of the end of 2023. This includes 9 flagship centers, 24 regional shared centers, 50 specialist medical alliance centers, and 14 operational management centers [17][72] - The flagship imaging centers are typically located in densely populated areas of first and second-tier cities, equipped with advanced imaging technology and staffed by experienced professionals [13] Financial Performance - The revenue from regional shared imaging centers reached 360 million RMB in 2023, marking a year-on-year increase of 31.5%, with the number of examinations rising from 3.426 million in 2022 to 4.225 million [38] - The imaging center services accounted for approximately 68.7% of the total revenue, with regional shared centers contributing about 55.7% of the imaging center service revenue [40] Market Potential - The third-party medical imaging center market in China has shown significant growth, with the market size increasing from 800 million RMB in 2018 to 2.9 billion RMB in 2023, reflecting a compound annual growth rate (CAGR) of 29.0% [25] - The report anticipates that the number of imaging centers will continue to increase, driven by the growing demand for medical imaging services [31][72] Industry Trends - The medical imaging service market in China is projected to grow from 147.4 billion RMB in 2018 to 270.9 billion RMB in 2023, with an expected CAGR of 12.9% [97] - The medical imaging equipment solutions market is also expanding, with a growth from 79.1 billion RMB in 2018 to 109.5 billion RMB in 2023, and a forecasted CAGR of 6.7% [98]

Investment Rating - The report assigns a "Buy" rating to Pentamaster with a target price of HKD 1.10, reflecting a potential upside from the current price of HKD 0.74 [17]. Core Insights - The report highlights a significant revenue increase in the medical sector, which grew 3.1 times to MYR 78.5 million, accounting for 46.0% of total revenue in Q1 2024 [17]. - Despite a 11.9% decline in net profit to MYR 30.2 million due to decreased gross margins in the ATE segment and rising employee costs, the medical sector's strong contribution is expected to continue [17]. - The automotive sector remains weak, with order delays attributed to market headwinds, although long-term optimism for electric vehicle growth is noted [17]. - The report anticipates that the KGD testing personnel will generate revenue, potentially improving the automotive business segment [17]. Financial Summary - Revenue projections for Pentamaster are as follows: MYR 691.9 million in 2023, increasing to MYR 768.1 million in 2024, MYR 942.6 million in 2025, and MYR 1,027.3 million in 2026, reflecting a compound annual growth rate (CAGR) of 11.0% from 2023 to 2024 [4]. - Gross profit is expected to rise from MYR 209.6 million in 2023 to MYR 310.7 million in 2026, with gross margins remaining stable around 30% [4][17]. - Net profit is projected to grow from MYR 142.2 million in 2023 to MYR 196.7 million in 2026, with a notable increase of 24.2% in 2025 [4]. Market Comparison - Pentamaster's market capitalization is MYR 1.75 billion, with a P/E ratio of 7.5, which is significantly lower than the average P/E ratio of 83.1 for comparable companies [21]. - The report indicates that Pentamaster's revenue for 2023 is MYR 1,188.9 million, with a gross margin of 30.3% and a return on equity (ROE) of 16.7% [21].

Investment Rating - The report assigns a "Buy" rating for the company [2]. Core Insights - The company experienced a revenue of 170 million Ringgit in Q1 2024, facing headwinds due to a decline in orders and increased costs [9][20]. - The medical segment showed significant growth, contributing 785.47 million Ringgit, which accounted for approximately 46.0% of total revenue [20]. - The report anticipates that the medical segment will be a major growth driver for the company in 2024, with expectations of increased contributions from single-use medical instruments as new factories come online [20]. Financial Summary - Total revenue projections for the company are as follows: 691.9 million Ringgit in 2023, increasing to 1,027.3 million Ringgit by 2026, reflecting a compound annual growth rate (CAGR) of 9.0% [5][20]. - Gross profit is expected to rise from 209.6 million Ringgit in 2024 to 310.7 million Ringgit in 2026, maintaining a gross margin around 30% [5][20]. - Net profit is projected to grow from 148.2 million Ringgit in 2024 to 196.7 million Ringgit in 2026, with a net profit margin of approximately 19.1% [5][20]. Market Comparison - The report highlights that the automotive market remains weak, impacting order volumes and profit margins for the company [21]. - The demand for single-use medical instruments is also noted to be insufficient, which may affect future revenue streams [21].

Investment Rating - The report assigns a "BUY" rating for the company with a target price of HK$ 1.10, reflecting a potential upside from the current price of HK$ 0.74 [2][3]. Core Insights - The company experienced a year-on-year decline in net profit by 11.9% to MYR 30.2 million, attributed to a decrease in gross margin in the ATE segment, increased staff expenses, and amortization of development costs [3]. - Revenue from the medical segment surged 3.1 times to MYR 78.5 million, making up 46.0% of total revenue in Q1 2024, indicating strong order visibility from primary customers [3]. - The automotive segment remains weak due to order deferrals, but long-term prospects in the EV market are viewed positively despite current challenges [3][12]. Financial Performance - The company reported MYR 170.7 million in revenue for Q1 2024, a 3.3% increase from Q1 2023 [10]. - The gross profit for 2024 is projected to be MYR 231.8 million, with a gross margin of 30.2% [13]. - Net profit is expected to grow from MYR 142.2 million in 2025 to MYR 196.7 million by 2026, reflecting a year-on-year growth of 4.2% and 6.9% respectively [13]. Segment Analysis - The medical segment is anticipated to continue its robust performance, with significant contributions expected from single-use medical devices after the completion of Campus 3 phases [3]. - The electro-optical segment saw a 47.8% year-on-year growth, but recovery in the semiconductor and automotive segments is uncertain due to limited technological advancements and market headwinds [3][12]. - The report highlights insufficient demand for single-use medical devices and loss of orders from key customers in the medical segment as challenges [6][12].

| RESEARCH 6 May, 2024 Nameson (01982.HK) Current Price HK$ 0.69 HKD, mn 2019/ Absolute 27.8% 38.0% 91.3% 63.3% TARGET PRICE HK$ - Expansion of cashmere yarn business: Nameson (01982.HK) entered into a JV agreement with its largest cashmere supplier, Hebei Yuteng, to engage in the manufacturing of cashmere yarn in Vietnam, the total production capacity per annum is designed to be 500 - 550 tonnes. Given the >80% utilization rate of cashmere yarn in Hebei, an increase in production capacity in Vietnam suppor ...

Investment Rating - The report assigns a "Not Rated" (NR) investment rating to Nameson (01982.HK) [3][16]. Core Insights - Nameson is expanding its cashmere yarn business through a joint venture with its largest supplier, Hebei Yuteng, which is expected to enhance production capacity and meet potential demand from Southeast Asia [6][16]. - The company anticipates a capital expenditure of approximately $8 million for the new factory, with the first phase of production (around 300 tons) expected to commence in 2026 [6]. - Despite an increase in sales volume, the average selling price (ASP) may decline due to lower raw material prices and the expiration of long-term agreements, potentially impacting revenue stability [7][11]. - The company has reported a steady order visibility and order book compared to the previous year, indicating potential for future growth despite cautious financial guidance from clients [7][11]. Financial Summary - Revenue for the fiscal year 2022/23 was reported at HKD 4,602.3 million, reflecting a year-on-year growth of 13.9% [11]. - Gross profit for the same period was HKD 745.5 million, with a gross margin of 16.2% [11][12]. - Net profit for 2022/23 was HKD 158.3 million, showing a significant decline of 42.6% compared to the previous year [11][12]. - The company’s return on equity (ROE) for 2022/23 was 6.2%, down from 11.0% in 2021/22 [12][13]. Market Comparison - Nameson has a market capitalization of HKD 1,572.8 million, with a price-to-earnings (P/E) ratio of 7.6, which is lower than the average P/E of 13.7 for comparable companies [18]. - The average gross margin for comparable companies is 17.4%, while Nameson’s gross margin stands at 16.2% [18].

Investment Rating - The report does not provide a specific investment rating for the company [2][8]. Core Insights - The company, Huaxian Optoelectronics (00334.HK), experienced a rebound in sales driven by the recovery in demand for mobile TFT LCD modules, with both sales and processing businesses recording positive growth in Q3 and Q4 of 2023 [39]. - In 2023, the company achieved a total revenue of 2.58 billion RMB, with a year-on-year decrease of 8.4% in the second half and 55.1% in the first half, primarily due to a rebound in sales volume in the latter half [3][12]. - The average selling price of TFT LCD modules increased significantly, reaching 85.9 RMB per unit in Q1 2024, supported by contributions from the tablet and smart home product segments [42][44]. Summary by Sections Revenue Performance - In 2023, the company reported total revenue of 2.58 billion RMB, with a significant drop in the first half but a recovery in the second half, particularly in non-bonded and bonded TFT LCD module sales [3][12]. - The sales volume for non-bonded TFT LCD modules reached approximately 4.1 million units in 2023, while bonded modules sold around 38.7 million units, showing a notable increase in the second half [3][12]. Product Segments - The tablet display module and other display modules saw a substantial increase in shipment volumes, with Q1 2024 shipments reaching 735,000 and 1,065,000 units, respectively, compared to the same period in 2023 [6]. - The company’s main customer base consists of mobile manufacturers, whose orders remained relatively stable during the previous year's industry downturn, contributing over half of the total revenue [15]. Financial Metrics - The gross profit margin for the second half of 2023 was 6.5%, a decline of approximately 1.4 percentage points from the first half, primarily due to changes in product mix [44]. - The company reported a net profit of 13.1 million RMB for the fiscal year 2023, reversing losses from the first half, attributed to effective cost control measures [21][44]. Market Outlook - The company is expected to maintain a low gross margin due to the anticipated increase in revenue contribution from lower-margin segments such as tablet and smart home products [44][22]. - The market for TFT LCD modules is highly mature, and while horizontal expansion may enhance profitability, the focus should be on long-term value drivers for sustainable investment [22].

Investment Rating - The report assigns a stock rating of NR (Not Rated) for CDOT (00334.HK) [27]. Core Insights - The company experienced a significant year-on-year revenue increase of 57.3% to RMB 931.7 million in 2024 Q1, driven by strong sales of tablet display modules and other display modules, which offset a decline in smartphone module sales [2]. - The gross margin for CDOT in FY 2023 dropped to 6.5%, primarily due to a change in product mix, which may continue to affect profitability [41]. - The company has seen a recovery in sales volume, particularly in the second half of 2023, with non-laminated and laminated module sales volumes reaching 4.1 million and 38.7 million respectively [7]. Summary by Relevant Sections Revenue and Profitability - CDOT reported RMB 2.6 billion in revenue for FY 2023, reflecting a year-on-year decline of 8.4% and a significant drop of 55.1% in the first half of 2023 [7]. - The company achieved a net profit of RMB 13.1 million and an operating profit of RMB 19.0 million in FY 2023, reversing from a loss in the first half of 2023 [20]. Sales Performance - The sales volume of tablet display modules and other display modules in 2024 Q1 reached 0.7 million and 1.1 million, representing increases of 22.7 times and 87.8 times compared to 2023 Q1 [11]. - The ASP (Average Selling Price) of non-laminated and laminated modules increased to RMB 28.5 and RMB 70.4 in 2023 Q4, marking a rebound from previous lows [15]. Market Dynamics - The order book from a major smartphone manufacturer remained stable, contributing significantly to revenue stability in 2024 Q1 [36]. - The company’s strategy includes leveraging support from CSOT to customize panel sizes, enhancing its ability to meet customer demands and expand into the tablet market [40]. Future Outlook - The report indicates that while there has been operational improvement, low gross margins remain a concern, limiting the company's ability to withstand market fluctuations [42]. - The company is expected to see further contributions from the tablet and smart home device segments, potentially driving ASP increases in 2024 [17][19].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HK$ 16.78 [2][3] Core Insights - The company achieved a total revenue of RMB 6.91 billion in 2023, with a slight increase in gross margin to 75.3%, leading to a net profit growth of 121.8% year-on-year [2][8] - The company plans to announce quarterly revenue starting from Q1 2024, reflecting confidence in its operations [2] - The outlook for 2024 is stable, with potential surprises in 2025 due to double-digit growth in its brands and a rebound in retail sales in China [2][8] - The company is focusing on brand strategy, investing approximately 3% of its revenue in brand promotion, which includes activities like fashion week events and selecting brand ambassadors [2][8] Financial Performance - Revenue projections for the upcoming years are as follows: RMB 7.88 billion in 2024, RMB 8.45 billion in 2025, and RMB 9.06 billion in 2026, with annual growth rates of 14.0%, 7.3%, and 7.2% respectively [8][12] - The gross profit is expected to increase from RMB 5.21 billion in 2024 to RMB 6.83 billion in 2026, maintaining a gross margin around 75% [8][12] - Net profit is projected to grow from RMB 832.6 million in 2024 to RMB 1.12 billion in 2026, with annual growth rates of 12.5% and 14.1% respectively [8][12] Market Position - The company has a market capitalization of approximately HK$ 9.38 billion, with a price-to-earnings ratio of 9.9x and a price-to-sales ratio of 1.9x [5] - Compared to industry peers, the company maintains a competitive gross margin of 75.3%, which is higher than the average of 56.7% in the sector [5]