Investment Rating - The report maintains an optimistic outlook on the pharmaceutical sector for 2025, particularly favoring innovative drugs and high-value consumables [6][56][77]. Core Views - The pharmaceutical sector has shown signs of recovery in the second half of 2024, despite a decline in the MSCI China Pharmaceutical Index and the Hang Seng Biotechnology Index [6][63]. - The report emphasizes the importance of government policies supporting innovative drugs and devices, which are expected to enhance the sector's fundamentals in 2025 [56][57][86]. - The report highlights the anticipated approval of several significant innovative drugs, including ADCs and GLP-1 drugs, which are expected to drive growth in the sector [123][129][134]. Summary by Sections 2024 Review - The MSCI China Pharmaceutical Index and the Hang Seng Biotechnology Index fell by 16% and 10% respectively, underperforming the broader MSCI China Index, which rose by 16% [6][63]. - The best-performing segments were pharmaceutical distribution and innovative drugs, with year-to-date increases of 14.4% and 13.6% respectively [6][63]. 2025 Pharmaceutical Sector Outlook - The report expresses a more optimistic view for 2025, driven by the gradual easing of anti-corruption impacts, clear policy support for innovative drugs, and the expected approval of several key innovative drugs [56][57][86]. - Specific recommendations include focusing on companies with strong R&D capabilities and significant commercialization potential, such as Kelun-Botai and Kangnuo [56][57][142]. Innovative Drugs - The report reiterates a positive outlook for the innovative drug sector, citing strong government support and the anticipated approval of multiple innovative drugs [56][57][76]. - Key companies to watch include Kelun-Botai, Kangnuo, and others with promising pipelines [56][57][142]. Medical Devices - The report is cautiously optimistic about the medical device sector, particularly high-value consumables, which are expected to recover in 2025 due to low performance in 2024 [58][149]. - Recommended companies include Guichuang Tongqiao and Mindray Medical [58][149]. CXO - The CXO sector is expected to benefit from a recovery in overseas financing and an increase in new orders, with companies like WuXi AppTec and Kanglong Chemical highlighted as potential beneficiaries [60][176][179]. Pharmaceutical Distribution & Traditional Chinese Medicine - The report emphasizes the attractiveness of dividend yields in the pharmaceutical distribution and traditional Chinese medicine sectors, with companies like China National Pharmaceutical Group and Shanghai Pharmaceuticals recommended [190][193]. Medical Services - The report highlights the supportive policies for assisted reproduction, suggesting that companies like Jinxin Reproductive Medicine may benefit significantly [218][227]. Conclusion - Overall, the report presents a favorable outlook for the pharmaceutical sector in 2025, driven by supportive policies, anticipated drug approvals, and recovery in various sub-sectors [56][57][86].

Investment Rating - The report gives an "Overweight" rating for the internet industry, indicating a positive outlook for investment opportunities [1]. Core Insights - The report highlights the divergence between the Chinese and American internet sectors, which are evolving into two distinct parallel worlds due to geopolitical tensions, with ongoing fragmentation and localized friction [1][28]. - Investment opportunities in the Chinese internet sector are primarily driven by policy-induced valuation recovery, while the American internet sector relies more on AI-driven performance [22][28]. - The report emphasizes that AI remains a key investment focus for 2025, with expectations of a global explosion in AI applications, potentially leading to a bullish market in the U.S. [1][22]. Summary by Sections Current State of U.S.-China Internet - Year-to-date, the Chinese and U.S. internet indices have increased by 16% and 36%, respectively, with the Chinese sector showing greater volatility [8][14]. - The Chinese internet sector has seen a significant recovery due to government stimulus policies, with a notable 40% increase in stock prices over a two-week period in late September 2024 [8][14]. AI Strategic Direction - U.S. internet companies are investing more aggressively in AI, with a focus on infrastructure, while Chinese firms are more conservative, preferring to use cash for dividends and buybacks [35][42]. - In 2023, China's total AI market investment was only about 12% of that in the U.S. [35]. Globalization Layout - U.S. internet giants derive approximately 50% of their revenue from overseas, while Chinese companies are accelerating their international expansion, with overseas revenue generally below 20% [55][62]. - The report notes that geopolitical risks, particularly under the Trump 2.0 scenario, may complicate the international strategies of Chinese firms [62]. Short Video Market Dynamics - The short video boom in China has led to the emergence of major players like ByteDance, significantly impacting traditional internet giants [65]. - In the U.S., the short video market is still developing, with TikTok facing restrictions, while platforms like Instagram and YouTube are adapting to capture market share [65]. Major Sector Growth Comparisons - The global digital advertising market is projected to grow at a CAGR of 15.5%, reaching $1.1 trillion by 2030, with Google and Meta holding a combined 48% market share [69]. - The Chinese digital advertising market is expected to grow at a rate of 10% from 2023 to 2025, with Alibaba and ByteDance each capturing about 25% of the market [72]. E-commerce Sector Insights - The U.S. e-commerce market is projected to grow at a CAGR of 9% from 2024 to 2029, with Amazon leading at a 37.6% market share [75]. - In China, the online retail sales of physical goods reached 10.33 trillion yuan in the first ten months of 2024, growing by 8.3% year-on-year [79].

Investment Rating - The report initiates coverage on Aikang Medical (1789.HK) with a "Buy" rating and a target price of HKD 6.8, indicating a potential upside of 27% from the current price of HKD 5.4 [4][5]. Core Views - Aikang Medical, as a leading domestic orthopedic joint company, continues to demonstrate strong bidding performance in the ongoing national procurement of joint products, despite short-term industry disruptions due to anti-corruption measures. The company is expected to see improved visibility in revenue growth in 2025 as these risks clear [1][2]. - The long-term growth potential is supported by Aikang's focus on technological research and development, being the first in China to apply metal 3D printing in orthopedic implants. The company aims to leverage 3D printing, ICOS, and surgical robots to create a digital orthopedic platform, expanding its presence in the mid-to-high-end market [2][3]. Financial Forecasts and Valuation - Revenue is projected to grow from RMB 1,052 million in 2022 to RMB 1,990 million by 2026, with a compound annual growth rate (CAGR) of 22% from 2023 to 2026. The expected revenue growth rates for the years 2024, 2025, and 2026 are 19.3%, 24.5%, and 22.5%, respectively [3][14][97]. - The net profit is forecasted to increase from RMB 205 million in 2022 to RMB 399 million by 2026, with significant growth anticipated in 2025 [3][14][97]. - The report assigns a target price based on a price-to-earnings (PE) ratio of 22x for 2025E, aligning with the company's historical average [2][97]. Industry Overview - The orthopedic industry is currently facing short-term pressures due to anti-corruption measures, but it is expected to benefit in the long term from a large patient base, increasing surgical penetration rates, and domestic product substitution [1][16]. - The national procurement of orthopedic consumables has largely been implemented, with joint products being the first to undergo this process. The average price drop in the recent procurement round was around 6%, indicating a moderate impact on pricing [24][57]. - The domestic orthopedic implant market's localization rate is approximately 50%, with significant room for improvement as domestic brands gain market share through national procurement initiatives [27][29]. Product Development and Innovation - Aikang Medical has a comprehensive product layout in the joint category, having launched various generations of knee and hip joint replacement products since 2004. The company has also expanded its product line through strategic acquisitions, enhancing its technological capabilities and market reach [52][53]. - The introduction of the ICOS platform allows for customized orthopedic solutions, which is expected to drive sales in the mid-to-high-end market segment [62][64]. International Expansion - Aikang Medical employs a dual-brand strategy with Aikang and JRI in overseas markets, focusing on cost-effectiveness and stable product quality. The company aims to increase its overseas revenue contribution from 19% in 1H24 to over 30% in the medium to long term [93][94].

浦银国际研究 浦银国际 主题研究 消费行 业 2025 年展望 主题研究 | 消费行业 消费行业 2025 年展望：扩大内需 势在必行 2024 年回顾：市场情绪先于基本面恢复：中国经济 2024 年继续呈现弱 复苏趋势，疲弱的房地产市场以及不容乐观的就业形势导致中国消费 者信心持续在低位徘徊，整体内需受到抑制（具体表现为销量下滑，客 单价下降，部分消费行业产能过剩，渠道库存偏高，促销力度较大等）。 然而，在政策的刺激下，市场信心在下半年有明显的提振，交易量和流 动性相较上半年都有所改善。 2025 年展望：扩大内需将成为经济增长最主要的驱动力：特朗普再次 当选美国总统无疑将对全球贸易带来较大的不确定性。在出口承压的 情况下，我们认为扩大内需将会是中国政府 2025 年拉动经济增长最主 要的驱动力。我们认为政府将在 2025 年推出力度更大的政策和措施来 增强消费者信心，刺激消费欲望。基于这一假设，我们预计 2025 年（1） 内需驱动型消费企业的股价表现可能好于出口驱动型企业；（2）可选消 费企业的业绩以及股价弹性可能大于必选消费；（3）受特朗普 2.0 影响 较小的出海驱动型企业的股价有望保持强劲；（4） ...

浦银国际研究 公司研究 | 互联网行业 浦银国际 公司研究 HKD 109 HKD 300 HKD 168.7 HKD 200 HKD… SPDBI 目标价 目前价 市场预期区间 注：截至 2024 年 11 月 29 日收盘价 资料来源：Bloomberg、浦银国际 美团 股价表现 （3690.HK） 美团（3690.HK）：业绩超预期，新业务 盈利可期 业绩超预期：公司 3Q24 收入为人民币 936 亿元，同比增长 22.4%，高 于市场预期 1.7%；调整后净利润 128 亿元，同比增长 124%，高于市 场预期 10.1%，调整后净利润率为 13.7%（2Q24 为 16.5%，3Q23 为 7.5%）。由于零售业务效率提升，毛利率同比改善 4.0pp 至 39.3%，销 售费用率同比下降 2.9pp 至 19.2%。公司年初至今已回购约 4.2%总股份。 单均配送收入同比提升，外卖业务海外试水营运：公司 3Q24 核心本 地商业收入同比增长 20.2%至 694 亿元，其中配送/佣金/广告收入分别 同比增长 21%/24%/18%；经营利润 146 亿元，同比增长 45%，经营利 润率同比提升 3 ...

Investment Rating - Maintains a "Buy" rating for Huazhu Group (1179 HK/HTHT US) with an upward revision of the target price to HKD 32.9 for HK shares and USD 41.1 for US shares [2][3] Core Views - Huazhu Group's 3Q24 revenue reached RMB 6.4 billion, a YoY increase of 2.4%, with domestic revenue growing 1% and overseas revenue growing 8.9% [2] - Net profit attributable to shareholders in 3Q24 was RMB 1.27 billion, a YoY decline of 4.8%, impacted by one-off factors [2] - The company opened 790 new stores in 3Q24, setting a new quarterly record, with 774 net new stores in China and 16 overseas [2] - Domestic RevPAR in 3Q24 was RMB 256, a YoY decline of 8.1%, primarily due to high base effects from the previous year and adverse weather conditions [2] - Overseas business restructuring is expected to drive long-term high-quality growth, with one-time restructuring costs of RMB 81 million in 3Q24 [2] Financial Performance and Forecasts - Revenue for 2024E is projected at RMB 23.6 billion, with a YoY growth of 7.8%, while net profit attributable to shareholders is expected to be RMB 3.525 billion, a YoY decline of 13.7% [4] - Gross margin for 2024E is forecasted at 35.7%, with operating margin at 19.7% [4] - The company's PE ratio for 2024E is estimated at 22.1x for US shares and 22.0x for HK shares [4] Operational Metrics - Domestic ADR in 3Q24 was RMB 301, a YoY decline of 7%, while OCC remained relatively stable at 84.9%, down 1ppt YoY [15] - Overseas ADR in 3Q24 was USD 117, a YoY increase of 2.5%, with OCC at 69.8%, up 0.8ppt YoY [15] Market Valuation and Target Price - The target price for Huazhu Group's HK shares is set at HKD 32.9, representing a potential upside of 26.1% from the current price of HKD 26.1 [3] - The target price for Huazhu Group's US shares is set at USD 41.1, representing a potential upside of 24.2% from the current price of USD 33.1 [3] Industry Context - The hotel industry's valuation multiple has increased, leading to an upward revision of Huazhu Group's target price based on a 14x 2025E EV/EBITDA, a 20% discount compared to the average of international hotel groups [2]

Global Economic Outlook - Global economic uncertainty increases significantly with Trump's potential re-election, particularly due to his tariff policies[2] - The US may impose tariffs on 25-50% of China's exports to the US in the second half of 2025, potentially impacting China's GDP by 0.3-0.6 percentage points[2] China's Economic Policy - China's fiscal deficit ratio is expected to rise to 3.5%-4.0% in 2025, with new special bond issuance increasing by 300-600 billion yuan[2] - Monetary policy will remain accommodative, with 20-30 basis points of rate cuts and 50-100 basis points of reserve requirement ratio (RRR) cuts expected in 2025[2] - At least 800 billion yuan of new special bonds will be allocated to support land acquisition and storage, with an initial scale of 300 billion yuan for central bank loans[2] Domestic Demand and Inflation - Domestic demand in China is expected to improve significantly in 2025, with investment and consumption contributing 0.9 percentage points more to GDP than in 2024[2] - Inflation is projected to rise, with CPI expected to increase to 0.8% in 2025, helping nominal GDP growth rise by 0.5 percentage points to 4.7%[21] US Economic Outlook - The US economy is expected to achieve a soft landing, with GDP growth slowing from 2.6% in 2024 to 1.5% in 2025[13] - The Federal Reserve is expected to cut rates six times by 25 basis points each, bringing the policy rate down to 3.0% by the end of 2025[13] Trade and Tariffs - Net exports are expected to contribute negatively to China's GDP in 2025, with a projected contribution of -0.2 percentage points, down from +1.2 percentage points in 2024[20] - If tariffs on all Chinese exports to the US rise to 60%, China's GDP growth could be reduced by 2.3 percentage points[69] Real Estate and Investment - Real estate investment in China is expected to decline by 5.0% in 2025, an improvement from the -10.5% decline in 2024[33] - Fixed asset investment is projected to grow by 4.4% in 2025, driven by improvements in infrastructure and manufacturing investment[30] Consumer and Retail - Retail sales growth in China is expected to accelerate to 5.0% in 2025, up from 3.6% in 2024, supported by policy incentives and labor market improvements[43] - Consumer confidence remains weak, with the consumer confidence index continuing to decline, reflecting ongoing challenges in boosting consumption[41] Export and Import Trends - China's export growth is expected to slow to 1.0% in 2025, down from 5.0% in 2024, due to global economic conditions and potential tariff impacts[51] - Import growth is projected to remain low, with a slight increase to 2.0% in 2025, driven by weak domestic demand and falling commodity prices[59] Risks and Uncertainties - Key risks include the potential for a slower-than-expected recovery in China's real estate sector and the impact of US tariff policies on trade and economic growth[3] - The US faces risks of re-inflation if Trump's policies lead to faster-than-expected tariff increases or immigration restrictions[3]

Investment Rating - The report initiates coverage on Kolun Botai (6990.HK) with a "Buy" rating and recommends it as a top pick in the ADC industry, setting a target price of HKD 230 [3][6][15]. Core Insights - Kolun Botai is recognized as a leader in the Chinese ADC industry, with significant international collaboration, particularly with Merck, which has resulted in multiple licensing agreements totaling over USD 10 billion [4][15]. - The company's core asset, SKB264 (TROP2 ADC), is positioned as a global best-in-class product with promising clinical data and a robust pipeline, including several NDA submissions expected in the near future [5][39][44]. - The anticipated commercialization of multiple products in the domestic market is set to begin, with approvals expected for SKB264 and other key products by late 2024 and early 2025 [6][39][45]. Financial Projections - Revenue projections for Kolun Botai are estimated at RMB 1.895 billion for 2024, RMB 1.675 billion for 2025, and RMB 2.877 billion for 2026, with net losses expected to be RMB 351 million, RMB 1.042 billion, and RMB 255 million for the respective years [6][11][13]. - The report utilizes a DCF valuation model with a WACC of 10.8% and a perpetual growth rate of 3%, leading to a target market capitalization of HKD 51.3 billion [6][11]. Product Pipeline - Kolun Botai has over 10 products in clinical stages, with four products, including SKB264 and A166, expected to receive market approval in the near term [39][44]. - The company is actively conducting multiple Phase III clinical trials for its key products, indicating a strong commitment to advancing its pipeline [44][45]. Shareholder Structure - The major shareholder, Kolun Pharmaceutical, holds a 67.4% stake in Kolun Botai, while Merck is the second-largest shareholder with a 6.0% stake [23][24]. Management Team - The management team includes experienced professionals from various pharmaceutical backgrounds, with a strong focus on strategic planning and operational decision-making [26][30][36].

Investment Rating - The report initiates coverage on WuXi AppTec (2268.HK) with a "Buy" rating and a target price of HKD 35, indicating a potential upside of 33% from the current price of HKD 26.4 [2][10]. Core Insights - The ADC market is experiencing rapid growth, with a projected compound annual growth rate (CAGR) of 30% from USD 7.9 billion in 2022 to USD 64.7 billion by 2030, significantly outpacing the overall biopharmaceutical market [10][11]. - WuXi AppTec is positioned as a leading global ADC outsourcing service provider, benefiting from a high outsourcing rate of approximately 70% in the ADC sector, compared to 34% in the biopharmaceutical sector [10][11]. - The company has a robust project pipeline with 167 projects as of June 30, 2024, including 91 preclinical projects and 12 in Phase 3, indicating strong revenue growth potential [10][71]. Summary by Sections Company Overview - WuXi AppTec was established in 2013 and has grown into a leading integrated research, development, and manufacturing platform for bioconjugates, ranking second globally in ADC outsourcing services by revenue [25][34]. Market Analysis - The ADC market is expected to grow from USD 7.9 billion in 2022 to USD 64.7 billion by 2030, with China’s market projected to reach RMB 66.2 billion, reflecting a CAGR of 72.8% [10][11]. - The global ADC outsourcing market is projected to expand from USD 1.5 billion in 2022 to USD 11 billion by 2030, with a CAGR of approximately 28% [10][15]. Financial Projections - Revenue forecasts for WuXi AppTec are RMB 3.4 billion in 2024, RMB 4.9 billion in 2025, and RMB 6.7 billion in 2026, with adjusted net profits expected to reach RMB 820 million, RMB 1.12 billion, and RMB 1.53 billion respectively [4][87]. - The company’s revenue CAGR from 2020 to 2023 was 180%, with a 68% year-over-year growth in the first half of 2024 [87][95]. Operational Efficiency - WuXi AppTec has reduced the average development timeline from 24-30 months to 13-15 months for projects moving from antibody DNA sequence to IND submission, significantly enhancing operational efficiency [35][66]. - The company operates three facilities within a 200 km radius in China, facilitating coordinated development and production, which further reduces costs and time [66][71]. Client Base and Growth Strategy - The client base has expanded to 419 as of June 30, 2024, with 13 of the top 20 global pharmaceutical companies contributing to 29% of revenue [80][84]. - The "Empower, Follow, and Win Molecules" strategy is expected to drive continuous revenue growth as projects advance through clinical phases [71][75].

Investment Rating - The report initiates coverage on Hengrui Medicine with a "Buy" rating and a target price of RMB 61 [1][2] Core Views - Hengrui Medicine's innovative drug revenue has become a strong engine for its performance growth, with a 22% YoY increase in 2023 and a 33% YoY increase in 1H24 [2] - The company's ADC pipeline is one of the most abundant in China, with 12 differentiated ADC molecules in clinical stages, and the first ADC product, SHR-A1811, is expected to be approved in 2025 [2] - Hengrui Medicine is accelerating its internationalization efforts, with increasing out-licensing deals and partnerships with global pharmaceutical companies such as Merck KGaA and GSK [2] - The company is expected to achieve revenue of RMB 27.2 billion, RMB 29.7 billion, and RMB 33.4 billion in 2024E, 2025E, and 2026E, respectively, with net profits of RMB 6.0 billion, RMB 6.5 billion, and RMB 7.7 billion [2] Financial Performance and Forecast - In 2023, Hengrui Medicine's revenue was RMB 22.8 billion, a 7.3% YoY increase, with net profit of RMB 4.3 billion, a 10.1% YoY increase [6] - For 2024E, the company is expected to achieve revenue of RMB 27.2 billion, a 19.1% YoY increase, and net profit of RMB 6.0 billion, a 40.2% YoY increase [6] - The company's innovative drug revenue accounted for 46% of total revenue in 1H24, up from 38% in 2022 [2][19] Pipeline and R&D - Hengrui Medicine has 17 innovative drugs approved in China, covering oncology, hematology, anesthesia, and chronic diseases [22] - The company's ADC pipeline includes 12 differentiated molecules, with 4 in Phase 3 clinical trials, and the first ADC product, SHR-A1811, is expected to be approved in 2025 [2] - Key late-stage assets include SHR-A1811 (HER2 ADC), SHR-A1921 (TROP2 ADC), SHR-A1904 (Claudin 18.2 ADC), and SHR-1701 (PD-L1/TGF-β bispecific antibody) [37] Internationalization - Hengrui Medicine has accelerated its out-licensing efforts since 2023, with deals including HRS-1167 and SHR-A1904 to Merck KGaA and TSLP to OneBio, which was later acquired by GSK [2] - The company is exploring new models for internationalization, such as forming NewCos for GLP-1 drugs with Hercules, allowing it to retain influence and benefit from potential valuation gains [2] - The appointment of Jens Bitsche-Norhave, with over 20 years of BD experience in multinational pharmaceutical companies, is expected to further accelerate the company's internationalization efforts [2]