Investment Rating - The report maintains a "Buy" rating for Xiaomi Group with a target price of HK$34.00, indicating a potential upside of 20% from the current price of HK$28.30 [2][3][8]. Core Insights - The report emphasizes the structural growth opportunities for Xiaomi in the Southeast Asian market, driven by smartphone replacement cycles and increasing IoT product penetration [6][17][22]. - Despite challenges in overseas markets, Xiaomi's revenue contribution from international markets has increased to 45% in 2023, up from 36% in 2020, indicating a shift towards emerging markets as key growth drivers [17][19]. - The report highlights the potential for Xiaomi to capture a larger market share in Southeast Asia, with expectations of an increase from 15% in Q3 2024 to approximately 18% by 2026 [46][48]. Financial Summary - Revenue projections for Xiaomi are as follows: RMB 356,281 million for 2024E, RMB 423,470 million for 2025E, and RMB 465,323 million for 2026E [11]. - Earnings per share (EPS) estimates are projected at RMB 0.99 for 2024E, RMB 1.08 for 2025E, and RMB 1.24 for 2026E, reflecting a growth trajectory [11]. - The report notes a significant increase in the average price of smartphones in Southeast Asia, with potential market value growth of 13% driven by rising prices [35][36]. Market Opportunities - The Southeast Asian smartphone market is expected to see a structural growth opportunity, with a projected increase in smartphone shipments to 17 million units by 2026, driven by a shortening replacement cycle [29][31]. - The report identifies that the average smartphone price in Southeast Asia is currently lower than in China, suggesting room for price increases as 5G penetration grows [35][38]. - Xiaomi's IoT product offerings are expected to drive significant traffic and sales growth in the region, with a focus on enhancing product accessibility and expanding SKU variety [62][67]. Competitive Landscape - Xiaomi ranks among the top three smartphone vendors in Southeast Asia, alongside Samsung and Oppo, with a competitive edge in both high-end and low-end market segments [46][48]. - The report indicates that Xiaomi's market share has fluctuated due to challenges faced in overseas markets, but there is optimism for recovery and growth in market share through strategic initiatives [46][48]. - The report also highlights the importance of enhancing retail experiences and expanding distribution networks to capture market opportunities effectively [59][63].

Investment Rating - The report maintains a "Buy" rating for Huahong Semiconductor with a target price of HK$29.00, representing a potential upside of 22% from the current price of HK$23.70 [1][4]. Core Views - The report indicates that Huahong Semiconductor is on a path to recovery in profitability, with expectations of revenue growth driven by a gradual recovery in demand and price increases [1][2]. - The forecast for 3Q24 includes a revenue increase of 9% quarter-on-quarter to US$522 million, with a gross margin of 11.8% [1][2]. - The semiconductor industry is experiencing a slow recovery, particularly in consumer electronics, which is expected to be a key driver for Huahong's performance [1][2]. Summary by Sections Investment Rating - The investment rating is "Buy" with a target price of HK$29.00, reflecting a 1.0x P/B for 2024 [1][4]. Financial Forecasts - Revenue for 2024 is projected at US$2,036 million, with a year-on-year decline of 11% [2]. - Gross profit is expected to be US$220 million, with a gross margin of 11% [2]. - Net profit attributable to shareholders is forecasted at US$122 million, reflecting a 57% decline year-on-year [2]. Quarterly Projections - For 3Q24, revenue is expected to reach US$522 million, with a gross margin of 12% [3]. - The report anticipates a gradual improvement in operating profit, projecting a loss of US$40 million for 3Q24, improving to a loss of US$29 million in 4Q24 [3]. Valuation - The report adjusts the target P/B from 0.8x to 1.0x for 2024, indicating a potential revaluation based on expected recovery in demand and profitability [4][5]. - The estimated book value per share for 2024 is adjusted to US$3.69, supporting the target price of HK$29.00 [5]. Industry Context - The semiconductor industry is facing challenges, including competition in traditional processes and high capital expenditures, which may impact long-term ROE [4][6]. - The report highlights that Huahong's stock has increased by 28% year-to-date, outperforming the Hang Seng Index, yet remains below its book value [1][4].

Investment Rating - The report maintains a "Buy" rating for Kuaishou Technology with a target price of HK$72.00, representing a potential upside of 27% from the current price of HK$56.90 [1][3][11]. Core Insights - Kuaishou's revenue for Q1 2024 grew by 17% year-on-year to RMB 29.4 billion, aligning with expectations, while adjusted net profit margin exceeded forecasts at 14.9% [3][4]. - The e-commerce and advertising segments are expected to drive a significant increase in adjusted net profit, projected to grow by 85% year-on-year in 2024 [3][4]. - The company announced a share buyback plan of HK$16 billion over the next three years, aiming to repurchase approximately 2% of its shares annually [3]. Financial Summary - Revenue projections for 2024 are set at RMB 126.9 billion, reflecting a 12% year-on-year increase, with e-commerce GMV expected to grow by 24% [4][10]. - Adjusted net profit for 2024 is revised upwards to RMB 19.05 billion, corresponding to a net profit margin of 15.0%, up from 9.1% in 2023 [4][10]. - The report forecasts EPS of RMB 4.35 for 2024, increasing to RMB 5.54 in 2025 and RMB 7.22 in 2026, with corresponding P/E ratios of 11.7x for 2024 and 9.2x for 2025 [1][5][10]. Market Position and Growth Drivers - Kuaishou's e-commerce GMV reached RMB 288 billion in Q1 2024, driven by an increase in monthly active users and a 70% rise in active merchants [3][4]. - The company is enhancing its multi-scenario shopping experience, with shelf e-commerce GMV growing over 50%, now accounting for 25% of total GMV [3][4]. - Advertising revenue is projected to grow by 21% in 2024, supported by strong internal advertising growth and a recovery in external advertising [4][10].

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings with a target price of HK$460.00, indicating a potential upside of approximately 20% from the current price of HK$381.80 [2][54]. Core Insights - The report highlights a strong performance in the advertising segment, with a year-on-year revenue growth of 26% in Q1 2024, surpassing expectations. This growth is attributed to increased user engagement and improved ad targeting [55]. - The financial technology and enterprise services segment experienced a year-on-year revenue growth of 7% in Q1 2024, although this is a slowdown compared to the mid-double-digit growth in 2023. The management attributes this slowdown to weak offline consumption affecting payment growth [6]. - The report projects a revenue growth of 8% for 2Q24 and 2024, driven by domestic and international gaming revenue growth and improved advertising prospects, partially offset by a slowdown in financial technology revenue [60]. Financial Summary - The report provides a financial outlook with projected revenues and net profits for the years 2024 to 2026. For 2024, the expected revenue is RMB 660,683 million, with a net profit of RMB 199,780 million, translating to an EPS of RMB 20.79 [7]. - The report notes an increase in gross profit margin for the financial technology and enterprise services segment, which rose by approximately 11 percentage points to 45.6% due to a higher proportion of high-margin cloud and video services [6]. Valuation Adjustments - The report adjusts the valuation of the online advertising segment to HK$1.2 trillion, based on a 20x P/E for 2024, up from HK$1.1 trillion [14][62]. - The SOTP (Sum of the Parts) valuation for Tencent is detailed, with the cloud and other segments valued at HK$198 billion, based on a 5x P/S for 2024 [34]. Market Comparisons - The report includes a comparison of Tencent's valuation with peer companies, indicating a competitive position in the market [36].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HK$13.60, representing a potential upside of 27% from the current price of HK$10.68 [1][2][11]. Core Insights - The company is expected to lead the industry due to its expanding market share and increased investment in top films, despite a slight downward adjustment in the 2024 box office growth forecast [4][5]. - The report highlights a strong performance in 2H23, with revenue soaring 127% year-on-year to RMB 2.56 billion and adjusted net profit reaching RMB 573 million, indicating a profit margin of 22.4% [4][8]. - The company plans to increase its investment in major films to capture box office revenue potential, with expectations of a 10% revenue growth in 2024 [5][11]. Financial Summary - Revenue for 2024 is projected at RMB 5.23 billion, reflecting a 9.9% year-on-year increase, with entertainment content services expected to grow by 11% [9][10]. - The adjusted net profit for 2024 is estimated at RMB 1.09 billion, with a net profit margin of 20.7% [10][12]. - The company’s earnings per share (EPS) for 2024 is forecasted to be RMB 0.94, with a price-to-earnings (P/E) ratio of 11x based on the 2024 earnings [3][12]. Market Performance - The company’s market capitalization stands at approximately US$1.56 billion, with a three-month average daily trading volume of US$5 million [2]. - The stock has shown a 52-week high of HK$12.18 and a low of HK$6.32, indicating significant volatility [2]. Industry Outlook - The report expresses a cautious outlook on the Chinese film industry, anticipating a modest 4% growth in box office revenue for 2024 due to a decrease in contributions from major films and slow macroeconomic recovery [5][11]. - Despite the overall industry challenges, the company is positioned to outperform its peers, leveraging its strong content library and marketing capabilities [5][11].

Investment Rating - The report maintains a "Buy" rating with a slight adjustment of the SOTP target price from HKD 180.00 to HKD 175.00 [6][27]. Core Insights - The company is expected to experience revenue growth of 20% in Q1 2024, 17% in Q2 2024, and 17% for the full year 2024, despite macroeconomic challenges and strategic adjustments in new business areas [4][20]. - The adjusted diluted earnings per share (EPS) for 2024 has been raised by 19% following the updated forecasts [4][22]. - The report introduces forecasts for 2026, indicating a continued positive outlook for the company's financial performance [4]. Financial Summary - Adjusted EBITDA for Q1 2024 is projected at RMB 5,447 million, with a margin of 8.2%, and is expected to increase to RMB 8,788 million in Q2 2024 with a margin of 10.8% [3][4]. - The core local business is anticipated to generate revenues of RMB 8,601 million in Q1 2024, increasing to RMB 11,874 million in Q2 2024 [3]. - New business segments are projected to incur losses of RMB 3,153 million in Q1 2024, with losses expected to narrow over time [3][4]. Valuation Metrics - The valuation for the restaurant delivery business is set at USD 53 billion based on a 15x P/E multiple for 2024, reflecting a 60% discount compared to global peers [24]. - The community e-commerce and local retail business is valued at USD 51 billion using a 0.8x P/GMV multiple, which is a 20% discount relative to comparable companies [25]. - The total market capitalization of the company is approximately USD 71.08 billion [29]. Earnings Forecast - The company is expected to achieve adjusted net income of RMB 32,016 million in 2024, with a net income margin of 9.9% [22]. - The adjusted EPS for 2024 is projected to be RMB 5.03, reflecting a 19% increase from previous estimates [22][24].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HK$15.90, reflecting a potential upside of 26% from the current price of HK$12.58 [1][15]. Core Insights - The company is focusing on increasing payment fees rather than transaction volume growth in 2024, aiming for a 1 basis point increase in payment fees [4][5]. - The company has adjusted its earnings forecasts downward, with a 24% reduction for 2024 and a 34% reduction for 2025, primarily due to lower expected growth in total payment volume (TPV) and in-store e-commerce [12][15]. - The company reported a significant increase in adjusted EBITDA by 85% to RMB 265 million for 2H23, although adjusted net profit decreased by 68% to RMB 31 million due to non-recurring service fee adjustments [8][9]. Summary by Sections Investment Rating - Current rating: Buy - Target price: HK$15.90 - Current share price: HK$12.58 - Upside potential: +26% [1][15]. Financial Performance - 2H23 adjusted EBITDA increased by 85% to RMB 265 million, while adjusted net profit decreased by 68% to RMB 31 million [8][9]. - Revenue from one-stop payment services grew by 11% to RMB 1.65 billion in 2H23, driven by a 25% increase in TPV [8][10]. - The company reported a total payment volume (TPV) of RMB 14.6 trillion for 2H23, with a 30% increase in QR code-based TPV [8][10]. Earnings Forecasts - The 2024 adjusted net profit forecast has been reduced by 24% to RMB 427 million, and the 2025 forecast has been reduced by 34% to RMB 480 million [12][15]. - The 2024 revenue forecast is now RMB 4.91 billion, reflecting a 24% year-on-year growth [13][15]. - The company expects a compound annual growth rate (CAGR) of 12.5% for adjusted net profit from 2024 to 2026 [15][16]. Market Position and Strategy - The company aims to achieve a balance between payment fee increases and transaction volume growth, focusing on enhancing its merchant acquiring business and expanding overseas [5][15]. - The company plans to achieve breakeven in its in-store e-commerce segment in 2024, despite a 78% decline in revenue in 2H23 [4][8].

Investment Rating - The report maintains a "Buy" rating for Kuaishou Technology with a target price of HK$72.00, reflecting a 12x P/E for 2025 [1][10]. Core Insights - Kuaishou's e-commerce and advertising businesses are expected to drive strong profit growth in 2024, with an anticipated 67% year-on-year increase in adjusted net profit [1][2]. - The company reported a 15% year-on-year revenue growth in Q4 2023, reaching RMB 32.6 billion, which met expectations [1][7]. - The adjusted net profit margin improved to 13.4% in Q4 2023, exceeding forecasts [2][7]. Summary by Sections Financial Performance - Q4 2023 revenue was RMB 32.6 billion, a 15% increase year-on-year, aligning with predictions [1][7]. - The adjusted net profit for Q4 2023 was RMB 4.36 billion, reflecting a 37% increase year-on-year [2][7]. - The gross profit margin improved from 51.7% in Q3 2023 to 53.1% in Q4 2023 [2][7]. User Metrics - Daily active users (DAUs) grew by 4% year-on-year to 383 million in Q4 2023, with a target of reaching 400 million DAUs in the second half of 2024 [1][2]. - E-commerce gross merchandise volume (GMV) increased by 29% year-on-year to RMB 404 billion in Q4 2023, driven by a rise in monthly paying users [1][2]. Revenue Streams - E-commerce GMV is projected to grow by 25% year-on-year in 2024, with shelf e-commerce expected to maintain high growth rates [2][8]. - Online marketing revenue increased by 21% year-on-year, supported by strong growth in both internal and external advertising [1][2]. Profitability Outlook - The report forecasts total revenue growth of 12% for 2024, with adjusted net profit expected to reach RMB 17.2 billion, corresponding to a net profit margin of 13.6% [2][8]. - The adjusted net profit margin is projected to remain stable, benefiting from improved revenue mix and cost efficiency [2][8]. Valuation - The target price of HK$72.00 corresponds to a 12x P/E ratio for 2025, factoring in the company's net cash position of RMB 47.9 billion [10][11]. - The report slightly adjusted revenue forecasts for 2024-2025 down by 2% to reflect changes in live-streaming revenue expectations [2][8].

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings with a target price of HK$430.00, representing a potential upside of 49% from the current price of HK$288.80 [2][4]. Core Insights - The report highlights significant growth in high-margin business revenues, leading to a substantial increase in gross profit. The focus will shift towards measuring organic growth through gross profit growth metrics [4][9]. - The management has proposed a 42% increase in the annual dividend for 2023 to HK$3.40 per share, with a total dividend payout of HK$32 billion. Additionally, the stock buyback program for 2024 is expected to exceed HK$100 billion, doubling the previous year's buyback [9][32]. Financial Performance Summary - Revenue and Profit Forecasts: - 2022A Revenue: RMB 554,552 million - 2023A Revenue: RMB 609,015 million - 2024E Revenue: RMB 676,279 million (down 3% from market forecast) - 2025E Revenue: RMB 749,798 million (down 4% from market forecast) - 2022A Net Profit: RMB 115,649 million - 2023A Net Profit: RMB 157,688 million - 2024E Net Profit: RMB 188,885 million - 2025E Net Profit: RMB 213,165 million [5][3]. - Earnings Per Share (EPS) Projections: - 2022A EPS: RMB 11.84 - 2023A EPS: RMB 16.32 - 2024E EPS: RMB 18.69 (up 5% from market forecast) - 2025E EPS: RMB 21.24 (up 3% from market forecast) [5][3]. Business Segment Performance - Online Gaming: - Domestic gaming revenue decreased by 3% year-on-year in 4Q23, with expectations of a gradual recovery in 2024. The anticipated release of "Dungeon and Fighter Mobile" in 2Q24 is expected to contribute significantly to growth [9][32]. - Online Advertising: - Revenue from online advertising grew by 21% year-on-year in 4Q23, driven by advancements in advertising platform upgrades and a doubling of revenue from video accounts. The report forecasts an 18% year-on-year growth in advertising revenue for 1Q24 and 2024 [9][36]. - Financial Technology and Business Services: - Revenue in this segment increased by 15% year-on-year in 4Q23, with expectations of continued growth driven by strong demand for cloud services and commercial payments [9][36]. Valuation Analysis - The SOTP (Sum of the Parts) valuation for Tencent is detailed as follows: - Social Value-Added Services: HK$200 billion - Financial Technology: HK$956 billion - Content Ecosystem: HK$116 billion - Total Company Valuation: HK$4,552 billion [20][24].

Investment Rating - The report maintains a "Hold" rating for the company with a target price of HK$27.39, indicating a potential downside of 4% from the current price of HK$28.65 [1][2][14]. Core Insights - The company has shown strong performance in 2023, with revenue and adjusted net profit exceeding expectations by 36.5% and 106.3% respectively, driven by initial success in overseas markets and recovering domestic demand [4][5]. - Future growth is expected to heavily rely on overseas market expansion, while domestic growth may slow down [4][5]. - The target price has been raised to HK$27.39, reflecting a price-to-earnings (P/E) ratio of 23.4 times for 2024, up from a previous target of HK$20.30 [4][14]. Financial Summary - Revenue for 2023 reached RMB 6,301 million, a 36.5% increase from 2022, with adjusted net profit at RMB 1,183 million, a 106.3% increase [6][12]. - The company expects total revenue to grow to RMB 8,027 million in 2024, with a projected growth rate of 27.4% [6][13]. - The adjusted earnings per share (EPS) for 2024 is forecasted to be RMB 1.06, reflecting a 22.3% increase from the previous estimate [6][13]. Market Performance - The company has achieved significant growth in overseas markets, with revenue exceeding RMB 1 billion in 2023, marking over 100% growth [5][8]. - The number of retail and robot stores has expanded significantly, contributing to increased sales [5][8]. - The management has set a target for overseas revenue growth of 100% in 2024, aiming for overall revenue growth of 30% [5][8]. Valuation Metrics - The current P/E ratio is 24.5 for 2024 and 20.5 for 2025, with an expected adjusted EPS growth of 20.5% and 19.3% for the respective years [4][14]. - The report indicates that the current valuation reflects a reasonable risk-reward profile, considering the uncertainties associated with international expansion and competition [4][14].