Investment Rating - The report downgrades the investment rating of CSPC Pharmaceutical Group (1093 HK) to **Neutral** from the previous rating, citing increased short-term performance uncertainty due to the impact of centralized procurement [1][2] Core Views - The 2Q24 performance was significantly impacted by centralized procurement, with revenue and net profit declining by 9.0% and 8.5% YoY respectively [1] - The sales of key new products, such as Irinotecan Liposome and Mingfule, fell short of expectations due to slower market expansion under regulatory scrutiny [1] - The company expects the negative impact of centralized procurement to persist until 2025, particularly affecting major products like Jinyouli and Duomeisu [1] - CSPC plans to focus on extending the DOT (Duration of Therapy) for Enbipu in both hospital and retail markets, with current retail sales accounting for less than 10% of total sales [1] - The company aims to have 10 NDAs (New Drug Applications) approved between 2H24 and 2025, including 2 in the US, to mitigate the impact of centralized procurement [1] Financial Performance - 1H24 revenue and net profit grew by 1.3% and 1.8% YoY, respectively, but 2Q24 saw a decline of 9.0% and 8.5% YoY [1] - The sales expense ratio improved significantly, dropping by 5.2 percentage points to 24.9% in 2Q24 due to better cost control and optimized sales team allocation [1] - R&D expenses increased by 5.9% in 2Q24 and 10.3% in 1H24, with ongoing Phase III studies for new drugs and indications [1] - The company forecasts stable or slightly lower sales expenses for 2024, with R&D expenses expected to grow by over 10% annually from 2024 to 2025 [1] Valuation and Forecast - The DCF target price is revised downward to HKD 6.30, representing a 12.0x 2025 P/E ratio, in line with the three-year historical average [2] - The 2024-2026 net profit forecasts are reduced by 11-29%, reflecting the ongoing impact of centralized procurement [2] - Revenue growth is expected to slow, with 2024E revenue projected at RMB 31,964 million, a 1.6% YoY increase, but down 10.0% from previous forecasts [5] - Gross margin remains stable at around 72.2% for 2024E, with net margin expected to decline slightly to 19.2% [5] Strategic Focus - CSPC is focusing on expanding the market penetration of Enbipu in both hospital and retail settings, with current DOT at around 20 days and retail sales accounting for less than 10% [1] - The company is preparing for the year-end national drug price negotiations, with six products, including RANKL, PD-1, and Irinotecan Liposome, expected to be included [1] - CSPC plans to push for the approval of 10 NDAs between 2H24 and 2025, including 2 in the US, to offset the impact of centralized procurement [1]

Investment Rating - The report upgrades the investment rating of the company to "Buy" [3][8]. Core Insights - The company's core earnings for the first half of 2024 decreased by 16.6% year-on-year to 3.26 billion RMB, which aligns with expectations. Excluding LNG trading profits, domestic core earnings increased by 9.5% to 3.08 billion RMB [2][3]. - The report highlights significant growth in the company's energy and smart home segments, with respective gross profits increasing by 17% and 23% year-on-year [2]. - The company is expected to return to a growth trajectory in 2025 and 2026, with projected core earnings growth of 10.6% and 10.0% respectively [3]. Financial Overview - The company’s revenue for 2024 is projected to be 117.5 billion RMB, with a year-on-year growth of 3.2% [3][11]. - Net profit for 2024 is expected to be 6.85 billion RMB, reflecting a slight decrease of 9.8% compared to the previous year [3][11]. - The report anticipates a recovery in gross margins, with the gas retail gross margin expected to improve to 0.54 RMB per cubic meter in 2024 [2][3]. Segment Performance - The energy segment is projected to achieve a sales growth of 20-30% in 2024, while the smart home segment is expected to see gross profit growth of 20-30% [5][6]. - Retail gas sales are expected to increase by over 5% in 2024, with gross profit from retail gas sales anticipated to grow by over 10% [5][6]. Valuation Metrics - The target price for the company has been raised to 65.10 HKD, representing a potential upside of 21.7% from the current price of 53.50 HKD [3][8]. - The report uses a valuation standard of 9 times the projected earnings for 2025 [3].

Investment Rating - The report assigns a "Neutral" rating to the company with a target price reduced from HKD 13.4 to HKD 8.5, indicating a potential downside of 21.9% from the current closing price of HKD 10.88 [1][8]. Core Insights - The company reported that self-operated products accounted for 40% of its GMV in the fiscal year 2024, with expectations for profit margins to recover as normal business operations resume [1]. - The forecast for fiscal year 2025 has been adjusted downwards by 43% for GMV, 19% for revenue, and 33% for profit due to the impact of brand day activities and sales adjustments [1]. - The company plans to enhance its influencer team and brand influence while seeking synergies with New Oriental and expanding its offline presence [1]. Financial Performance Summary - For fiscal year 2024, the company expects total GMV and revenue from self-operated products and live e-commerce to reach RMB 14.3 billion and RMB 6.53 billion, respectively [1]. - The self-operated product GMV is projected to be RMB 5.7 billion, up from approximately 30% in the previous fiscal year [1]. - The company launched 488 SKUs of self-operated products in fiscal year 2024, compared to 120 in fiscal year 2023 [1]. - The monthly GMV from the company's Douyin account has consistently exceeded RMB 100 million, with plans to add over 10 vertical accounts on Douyin [1]. - The company aims to ensure food safety and stabilize online public opinion, enhance its influencer team, and improve online traffic and user engagement [1]. Financial Forecast Adjustments - Revenue forecasts for fiscal year 2025 have been revised to RMB 6.02 billion, a decrease of 19% from previous estimates [4]. - Gross profit is expected to decline to RMB 1.14 billion, reflecting a 39.4% reduction [4]. - The adjusted operating profit is forecasted at RMB 458 million, down 41.3% from earlier predictions [4]. - The adjusted net profit attributable to shareholders is projected to be RMB 558 million, a decrease of 33.3% [4].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 24.00, indicating a potential upside of 38.2% from the current closing price of HKD 17.36 [1][7]. Core Insights - The company's mid-2024 performance met expectations, with an anticipated revenue growth of 8% year-on-year to RMB 14.7 billion and an adjusted net profit of RMB 730 million, corresponding to a net profit margin of 5% [1][5]. - The report highlights that while consumer demand for cost-effectiveness is pressuring average transaction values, the trend of improving profit margins remains intact. The company is focusing on expanding its factory store network and optimizing its product mix to increase the share of high-margin proprietary and self-controlled products, which currently account for approximately 70% of sales [1][4]. - The company has made significant progress in its store expansion, with a total of 6,311 factory stores as of June 30, 2024, an increase of 402 stores from the end of 2023, with over 60% of new stores located in lower-tier cities [1][5]. Financial Summary - For the first half of 2024, the company reported revenue of RMB 7.1 billion, a year-on-year increase of 9.3%, with a gross margin improvement of 1.7 percentage points to 26% [1][5]. - The adjusted net profit for the first half of 2024 was RMB 360 million, reflecting a 67% year-on-year increase, maintaining a net profit margin of 5% [1][5]. - The report projects revenue growth for 2024E at RMB 14.7 billion, with gross profit expected to reach RMB 3.9 billion, resulting in a gross margin of 26.4% [4][8].

Investment Rating - The report maintains a "Buy" rating for the company [2] Core Views - The chemical sector shows signs of recovery, while clean energy growth exceeds expectations. The company's core profit for the first half of 2024 decreased by 3.5% year-on-year to 600 million RMB. The clean energy segment continued its strong growth from Q1, with overseas revenue increasing by 72% year-on-year, driven by offshore products. Hydrogen energy product revenue rose by 74% to 170 million RMB. However, the chemical and liquid food segments underperformed, with the chemical sector's gross profit declining by 63% due to low industry demand [1][2] - The second half of 2024 is expected to see a slight rebound in the chemical sector, with continued strong growth in clean energy. Despite weak performance in the first half, the likelihood of a bottoming out is high, especially in the chemical sector, which saw a 32% quarter-on-quarter revenue increase in Q2. New orders for standard containers have also rebounded significantly [1][2] - The company expects the liquid food segment to achieve over 10% revenue growth and over 20% gross profit growth year-on-year in 2024. The total gross profit for the chemical and liquid food segments in the second half of the year is estimated to be 810 million RMB, with a year-on-year decline narrowing to 4% [1][2] Financial Summary - The company’s revenue is projected to grow from 19,602 million RMB in 2022 to 37,267 million RMB in 2026, with a compound annual growth rate (CAGR) of 11% from 2024 to 2026. Net profit is expected to increase from 1,055 million RMB in 2022 to 1,604 million RMB in 2026, with a recovery to double-digit growth in 2025 [5][11] - The estimated earnings per share (EPS) for 2024 is 0.64 RMB, with a projected P/E ratio of 9.1 times. The report adjusts the target price to 8.45 HKD, reflecting a 31.8% potential upside from the current price of 6.41 HKD [2][5]

Economic Performance - In July, China's industrial added value increased by 5.1% year-on-year, slightly below the expected 5.2% and down from 5.3% in the previous month[1] - Retail sales in July rose by 2.7% year-on-year, surpassing the expected 2.6% and improving from 2.0% in June[1] - Fixed asset investment from January to July grew by 3.6% year-on-year, matching the previous month's figure but below the expected 3.9%[1] Sector Analysis - High-tech industries saw a significant year-on-year growth of 10% in July, while the service production index increased by 4.8%[1] - Manufacturing investment rose by 8.3% year-on-year, supported by high export demand and large-scale equipment upgrades[2] - Infrastructure investment growth slowed to 2.0% year-on-year in July, down from 4.6% in June, potentially impacted by weather conditions[4] Real Estate and Consumer Trends - Real estate development investment decreased by 10.2% year-on-year, with residential investment down by 10.6%[1] - Consumer demand for durable goods remains weak, with categories like automobiles showing sluggish performance[2] - The July consumer price index (CPI) data reflected improved retail performance, particularly in travel-related services due to seasonal factors[2] Financial Indicators - Total social financing in July increased by CNY 772.4 billion, a year-on-year increase of CNY 235.8 billion[4] - New RMB loans in July amounted to CNY 260 billion, reflecting a year-on-year decrease of CNY 859 billion, indicating a need for improved financing demand[4] - M1 and M2 growth rates were -6.6% and 6.3%, respectively, showing a decline in M1 and a slight increase in M2 compared to the previous month[4]

Inflation Data - The US CPI for July 2024 increased by 2.9% year-on-year, lower than market expectations and the previous month's 3.0%, marking the lowest level since March 2021[1] - The core CPI year-on-year fell to 3.2%, consistent with expectations and down from 3.3% in the previous month, indicating a continuous slowdown in core inflation for four consecutive months[1] - Month-on-month CPI rose by 0.2%, matching expectations but higher than the previous month's -0.1%[1] Energy and Housing - Energy prices rebounded in July, with gasoline prices increasing after significant declines in the previous two months, while electricity prices also turned positive[1] - Housing inflation rebounded in July, with major rent indices showing increases of 0.5% and 0.4% for primary residence rent and Owners' Equivalent Rent (OER), respectively[1] - The housing inflation trend indicates potential upward risks despite a general slowdown in inflation[1] Market Expectations - Despite the overall inflation slowdown, the rebound in sticky inflation data like housing has reduced market expectations for a significant rate cut in September[2] - The probability of a 50 basis point rate cut in September dropped to 44% after the July CPI release, down from 53% prior to the data announcement[2] - The market is currently pricing in a 25 basis point rate cut, supported by the return of the CPI to the "2" range, but a 50 basis point cut seems unlikely[2]

Investment Rating - The report maintains a neutral rating for the company, New Energy (2688 HK), with a target price adjusted to HKD 64.1 from HKD 66.3 [6][10]. Core Insights - The company's core profit for the first half of 2024 is expected to decline by approximately 15.6% year-on-year to RMB 3.3 billion, primarily due to a 29% drop in gross profit from connection projects and a 59% decrease in wholesale gas profits from LNG trading [6][9]. - Retail gas volume is anticipated to increase by about 5%, with the gross margin improving from RMB 0.46 per cubic meter to RMB 0.49, leading to a 20% rise in retail gas gross profit [6][9]. - The report suggests that the mid-year performance will be crucial for valuation recovery and potential rating adjustments, pending further observation [6]. Financial Forecast Adjustments - The revenue forecast for 2024 is set at RMB 119.826 billion, reflecting a slight increase of 0.3% from the previous estimate [8]. - Core earnings for 2024 and 2025 have been slightly reduced by approximately 1% and 3%, respectively, due to conservative expectations for new connections and smart home business [6][8]. - The valuation multiple has been adjusted from 10 times to 9 times the projected earnings, with the benchmark year moved to 2025 [6]. Performance Overview - For the first half of 2024, the expected revenue is RMB 55.581 billion, showing a year-on-year increase of 2.7% [9]. - The gross profit for the same period is projected to be RMB 7.282 billion, reflecting a 1.7% increase year-on-year [9]. - The net profit for the first half of 2024 is expected to be RMB 3.302 billion, a decrease of 0.9% compared to the previous year [9][14].

Investment Rating - The report maintains a "Buy" rating for China Biologic Products (1177 HK) with a target price of HKD 4.80, indicating a potential upside of 62.8% from the current closing price of HKD 2.95 [1][2]. Core Insights - The report highlights that the company's performance in the first half of 2024 met expectations, with revenue and adjusted net profit growing by 11% and 14% respectively. The growth is driven by rapid uptake of new products and biosimilars, alongside cost reduction efforts that are expected to enhance profit margins [1][2]. - The company is projected to return to double-digit revenue growth over the next three years, with innovative drugs expected to account for 50% of revenue by 2026 [1][3]. Summary by Sections Financial Performance - In 1H24, revenue and adjusted net profit increased by 11% and 14%, respectively, with highlights including a 15% rise in innovative drug revenue, which now constitutes 39% of total revenue. The generics segment also showed positive growth at 9% [1][3]. - Cost reduction measures have led to a 0.3 percentage point increase in gross margin, with sales and management expense ratios decreasing by 0.5 percentage points. The workforce was reduced by 5.3%, yet productivity improved by 17% [1][3]. Future Projections - The report projects revenue growth to rebound to double digits over the next three years, with innovative drugs expected to grow at a high double-digit rate and generics returning to positive growth [1][3]. - The company plans to launch at least six new products by 2025, which is anticipated to drive revenue growth [1][3]. Valuation - The report adjusts the profit forecasts for 2024-2026 down by 3-5% to RMB 30 billion, RMB 36 billion, and RMB 40 billion, respectively. The DCF valuation model's starting year has been rolled forward to 2025, maintaining the target price of HKD 4.80 [1][3].

Investment Rating - The report maintains a "Buy" rating for the company, QFIN US, with a target price raised from $25.8 to $27.5, indicating a potential upside of 30.3% from the current price of $21.11 [1][2][10]. Core Insights - The company reported strong earnings growth, with a 6.3% year-over-year increase in net revenue for Q2 2024, driven primarily by on-balance sheet loans and advisory services. Non-GAAP net profit increased by 23.3% year-over-year, exceeding market expectations by 25% due to a decrease in provisioning costs and lower marketing and management expenses [2][6]. - The company expects Q3 Non-GAAP net profit to be between 1.55 billion and 1.65 billion RMB, reflecting a growth rate of 30-40% [2]. - The company has seen a significant improvement in its net take rate, which rose to 4.4% in Q2, with expectations for further increases in Q3 due to declining funding and risk costs [2][6]. Summary by Sections Financial Performance - Q2 2024 net income was 4.281 billion RMB, with a year-over-year growth of 3.3% [6]. - The company achieved a net profit of 1.138 billion RMB in Q2 2024, marking a 15.1% increase year-over-year [6]. - The average internal rate of return (IRR) on facilitated loans remained stable at 21.6% [2]. Loan Facilitation and Asset Quality - The facilitated loan volume decreased by 23% year-over-year in Q2 2024, with a light asset model accounting for 64.9% of the total [2][6]. - The 90-day overdue rate slightly increased to 3.4%, while the collection rate improved, indicating a stabilization in credit demand and ongoing risk management improvements [2][6]. Future Projections - The company anticipates a rebound in facilitated loan growth in the second half of the year, supported by improved credit demand and risk indicators [2]. - Revenue projections for 2024 are set at 17.191 billion RMB, with a year-over-year growth of 5.5% [5][7]. - The forecasted net profit for 2024 is 5.246 billion RMB, reflecting a growth rate of 22.4% [5][7].