Investment Rating - The report maintains a "Hold" rating for the company, with an adjusted target price of HKD 121, reflecting a 7% increase from the previous target price [45][47]. Core Insights - The company's Q1 2024 revenue reached RMB 73.3 billion, a year-on-year increase of 25%, exceeding market expectations by 6.2%. The adjusted net profit was RMB 7.5 billion, surpassing market expectations by 29%, with an adjusted net profit margin of 10.2% [2][29]. - New business losses have significantly narrowed, with operational losses of RMB 2.76 billion, down from 32% to 14.8% year-on-year. Revenue from new businesses grew by 18.5% to RMB 15.7 billion [12][29]. - The core business saw a revenue increase of 27.4% to RMB 54.6 billion, with delivery, commission, and advertising revenues growing by 25%, 27%, and 33% respectively. However, the operating profit only slightly increased by 2.7% [29]. Financial Performance Summary - For FY22, the company reported a revenue of RMB 219.96 billion, which is projected to grow to RMB 346.45 billion in FY24E and RMB 397.66 billion in FY25E [49]. - The adjusted net profit is expected to rise from RMB 2.83 billion in FY22 to RMB 37.42 billion in FY24E and RMB 44.66 billion in FY25E [49]. - The operating profit is projected to improve from a loss of RMB 5.82 billion in FY22 to a profit of RMB 28.19 billion in FY24E and RMB 36.12 billion in FY25E [49]. Market Expectations - The stock price as of June 6, 2024, was HKD 112.7, with a target price of HKD 121, indicating potential upside [5][35]. - The report highlights that the delivery transaction volume grew by 28.1% year-on-year, reaching 5.46 billion transactions, which is better than expected [29].

Group 1: China Economic Outlook - China maintains a full-year GDP growth forecast of 4.9%, with expectations for domestic demand to improve in the second half due to policy support[2] - Concerns about consumption resilience and infrastructure investment have eased, but worries about the real estate downturn and low inflation persist[2] - The nominal GDP growth forecast has been adjusted down to 5% due to a slower-than-expected inflation recovery[2] Group 2: U.S. Economic Forecast - The U.S. economy is expected to see significant weakening in momentum in the second half, triggering a potential interest rate cut in Q3[3] - A 50 basis point rate cut is anticipated in the second half, with a higher likelihood of a September cut compared to July[3] - The possibility of a recession is estimated at 30%, influenced by strong economic resilience potentially delaying rate cuts[3] Group 3: Japan Economic Insights - Japan's wage negotiations are expected to positively impact service sector CPI and economic momentum, leading to a potential interest rate hike in October[4] - The anticipated wage increases from spring negotiations could help maintain a 2% inflation rate, marking a significant shift after decades of deflation[4] Group 4: Risks and Challenges - Risks for China include ineffective policy implementation, delayed stabilization in the real estate sector, and deteriorating U.S.-China relations[4] - For the U.S., risks involve the Federal Reserve's delayed response to economic weakness, which could lead to recession, and geopolitical tensions that may spur inflation[4] - Japan faces risks from wage growth not materializing as expected and potential ineffective interventions in the foreign exchange market[4]

Investment Rating - The report maintains a "Buy" rating for 康诺亚 (2162.HK) with a target price of 58 HKD [2][3]. Core Insights - Recent data for CM310 and CMG901 aligns with expectations, showing stable and positive trends. CM310 demonstrates superior efficacy compared to Dupixent in treating moderate to severe atopic dermatitis, with a 52-week EASI-75 response rate of 92.5% and a low rate of anti-drug antibodies [2]. - CMG901 shows promising results in the treatment of 2L+ gastric cancer, with an overall objective response rate (ORR) of 35% and a disease control rate (DCR) of 70%, indicating its potential as a best-in-class therapy [2]. - Key upcoming catalysts for 2024 include potential approvals for CM310 in adult atopic dermatitis and chronic rhinosinusitis with nasal polyps, as well as important data readouts for other candidates [2]. Summary by Sections CM310 Efficacy Data - CM310 shows a 52-week EASI-75 response rate of 92.5% and an EASI-90 response rate of 77.1%, outperforming Dupixent [2]. - Serious adverse events (SAE) were reported at 5.1%, with no new safety signals identified compared to previous data [2]. CMG901 Update - The updated 1b phase data for CMG901 in gastric cancer shows an ORR of 35% and a DCR of 70%, with the 2.2 mg/kg dose group achieving an ORR of 48% [2]. - The median progression-free survival (mPFS) is reported at 4.8 months, and median overall survival (mOS) is 11.8 months [2]. Financial Projections - Revenue projections for 2024 estimate 1,175 million RMB, with a significant increase from 2023 [8]. - The report anticipates a net loss of 803 million RMB for 2024, reflecting ongoing investment in R&D [8]. Market Performance - The current stock price is 31.5 HKD, with a potential upside of 84% to the target price of 58 HKD [4]. - The stock has traded within a 52-week range of 26.6 to 64.8 HKD, indicating volatility [4].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 63, indicating a potential upside of 43% from the current price of HKD 44 [4][5]. Core Insights - The interim analysis of the AK112 head-to-head trial against Keytruda (K drug) for the treatment of 1L PD-L1+ NSCLC has shown positive results, aligning with expectations and driving a significant rebound in the company's stock price [2][3]. - The specific interim analysis data from the HARMONi-2 trial is expected to be presented at the WCLC 2024 conference in September, which could further influence market sentiment [3]. - The success of the HARMONi-2 trial is anticipated to accelerate the company's ongoing trials and open up new potential combination therapies, although the commercial potential in the 1L NSCLC market remains to be clarified by the results of the HARMONi-3 trial [3]. Financial Projections - Revenue is projected to grow significantly from RMB 838 million in 2022 to RMB 6,200 million by 2026, with a notable increase of 440.3% in 2023 [7][8]. - The company is expected to return to profitability with a net profit of RMB 1,501 million by 2026, following a loss of RMB 1,168 million in 2022 [7][8]. - The price-to-sales (PS) ratio is forecasted to decrease from 35.1 in 2022 to 5.0 by 2026, indicating improved valuation metrics as the company scales [7][8].

Investment Rating - The report maintains a positive outlook on the new energy vehicle (NEV) sector, with a sales forecast of 11-12 million units for 2023 [1] - The smartphone sector is expected to see low single-digit growth for the year, with a focus on companies with business growth potential [3] Core Insights - The NEV market is experiencing intense price competition, leading to potential downward pressure on prices throughout the supply chain [1] - The smartphone supply chain saw a 12% year-on-year increase in global shipments in Q1, with a notable difference in performance between Apple and Android devices [3] - The report highlights the importance of new model growth momentum in the NEV sector and suggests investors focus on companies like Li Auto (LI.US/2015.HK) and Leap Motor (9863.HK) [3] Summary by Sections New Energy Vehicles - The NEV sector's sales have rebounded from a low during the Spring Festival to 830,000 units in March, maintaining high levels in April and May [1] - The penetration rate of new energy passenger vehicles in China reached 44% in April, continuing an upward trend [1] - Market concerns include the high competition leading to price pressures and the impact of Li Auto's downward adjustment of annual delivery guidance on the supply chain [1] Smartphone Industry - Global smartphone shipments in Q1 showed a 12% year-on-year growth, with the Android segment outperforming Apple [3] - Apple's supply chain experienced a significant decline in shipment growth, with some suppliers seeing a drop of up to 30% [3] - The report anticipates that while the Android segment performed well, the overall smartphone market is expected to see low single-digit growth for the year [3]

Group 1: US Economic Outlook - The US economy is expected to show significant weakening momentum in the second half of the year, potentially triggering a rate cut in Q3[1] - A baseline scenario predicts a 50 basis point rate cut in the second half, with a higher likelihood of cuts starting in September rather than July[1] - If inflation and labor market data remain strong, the possibility of delaying rate cuts until Q4 or even no cuts for the year cannot be ruled out[1] Group 2: Japan Economic Outlook - Japan's spring wage negotiations are expected to lead to a gradual increase in wages starting in summer, supporting a recovery in service sector CPI and economic momentum[2] - The anticipated wage increases provide a crucial opportunity for Japan to maintain a 2% inflation rate, with the Bank of Japan likely to start raising rates in October[2] - Despite potential depreciation pressure on the yen, a moderate appreciation against the dollar is expected in the medium term[2] Group 3: China Economic Outlook - China's GDP growth forecast for the year is maintained at 4.9%, with expectations of improved domestic demand in the second half due to policy support[7] - Concerns about the real estate downturn and low inflation persist, with the real estate sector continuing to be a significant drag on the economy[7] - The nominal GDP growth forecast has been adjusted down to 5% due to a slower-than-expected inflation recovery[7] Group 4: Risks and Challenges - Risks for China include policy effectiveness falling short of expectations, delays in real estate stabilization, and deteriorating US-China relations[8] - For the US, risks involve the Federal Reserve not responding timely to economic weakness, leading to a recession, or strong economic resilience causing re-inflation and rate hikes[8] - In Japan, risks include wage growth not materializing as expected and ineffective foreign exchange market interventions[8]

Investment Rating - The report maintains a "Hold" rating for Alibaba Health with a target price of HK$4.0, indicating an expected upside of approximately 18% from the current price of HK$3.38 [3][5]. Core Insights - Alibaba Health's FY24 revenue is projected to grow by 1% year-on-year to RMB 27.03 billion, while adjusted net profit is expected to increase by 91% to RMB 1.44 billion, driven by improved fulfillment cost efficiency and a higher proportion of non-epidemic product sales [2][4]. - For FY25, the company anticipates revenue growth of at least 15% and an increase in net profit margin by approximately 5 percentage points, leading to a net profit growth of around 76% [2][4]. Summary by Sections Financial Performance - FY24 revenue is expected to be RMB 27.03 billion, with a year-on-year growth of 1%, impacted by a high base from epidemic-related product sales in FY23 [2][4]. - Adjusted net profit for FY24 is projected at RMB 1.44 billion, reflecting a significant increase of 91% due to improved gross margins and reduced fulfillment costs [2][4]. - Revenue breakdown for FY24 includes: - Self-operated business: RMB 23.74 billion, a 0.6% increase year-on-year, with non-epidemic product sales growing over 40% [2]. - E-commerce platform: RMB 2.33 billion, a 4% increase, benefiting from GMV growth and new acquisitions [2]. - Healthcare and digitalization: RMB 960 million, a 3% increase, despite optimization efforts in lower-margin businesses [2]. Future Outlook - The company expects continued optimization of fulfillment costs in FY25, with revenue growth no longer hindered by high base effects from epidemic-related sales [2][4]. - Management guidance for FY25 includes revenue growth of at least 15% and an increase in net profit margin to approximately 5%, translating to a net profit growth of at least 76% [2][4]. Valuation Metrics - The report assigns a target price of HK$4.0 based on a price-to-sales ratio of 1.9x for FY25E, which is approximately 0.5 standard deviations below the average of the past three years [3][5]. - The company’s market capitalization is reported at HK$49.4 billion, with an average trading volume of HK$142 million over the past three months [5].

Investment Rating - Maintains a "Buy" rating with an adjusted target price of $16.8 USD / 131 HKD [3][6][7] Core Views - Revenue in 1Q24 reached RMB 5.67 billion, a 12% YoY increase, surpassing market expectations by 1% [3] - Adjusted net loss narrowed to RMB 440 million, better than the market expectation of RMB 500 million, with a 57% YoY improvement [3] - Adjusted loss margin improved by 12.5 percentage points YoY to 7.8% [3] - Daily active users (DAU) grew 9.3% YoY to 100 million, while monthly active users (MAU) reached 342 million, an 8% YoY increase [3] - Advertising revenue grew 31% YoY in 1Q24, with expectations of maintaining a high growth rate of 27% YoY in 2Q24 [3] - Game revenue declined 13% YoY due to the decline of older games, but is expected to recover with the launch of the new game "Three Kingdoms: Strategic World" on June 13 [3] - Gross margin improved to 28.3% in 1Q24, up 6.5 percentage points YoY and 2.2 percentage points QoQ, driven by the optimization of revenue structure [3] - The company aims to achieve adjusted operating profit breakeven in 3Q24 [3] Financial Forecasts - 2024E revenue is forecasted at RMB 24.94 billion, with 2025E revenue expected to reach RMB 27.35 billion [3][4] - Adjusted net loss for 2024E is projected at RMB 395 million, turning to a profit of RMB 984 million in 2025E [4] - Target P/S ratio for 2024E is 2.0x, with a slight decline to 1.8x in 2025E [4] User Metrics and Advertising - Average daily usage time reached a record high of 105 minutes in 1Q24 [3] - Advertising growth is supported by increased traffic, expanded ad inventory, and improved e-commerce ecosystem [3] Game Business Outlook - Game revenue is expected to return to positive growth in 2Q24 with the launch of the new game "Three Kingdoms: Strategic World" [3] Valuation and Target Price - The target price is based on a 2024E P/S ratio of 2.0x, reflecting confidence in the company's steady traffic growth and improving advertising ecosystem [3][6][7] Industry Context - The report covers the internet industry, with a focus on companies like Bilibili, Tencent, and NetEase, highlighting their performance in gaming and advertising sectors [16]

Investment Rating - The report maintains a "Buy" rating for the company with a target price adjusted to HKD 173 / USD 111, reflecting a potential upside of 22% from the current price of HKD 141.5 / USD 94.74 [3][4][12] Core Insights - The company's Q1 2024 revenue reached RMB 26.9 billion, a year-on-year increase of 7.2%, slightly above market expectations. The adjusted net profit was RMB 8.5 billion, up 31.7% year-on-year, also exceeding market forecasts [3][6] - The gaming segment continues to show strong growth, with game revenue at RMB 20.4 billion, a 10% increase year-on-year, driven by popular titles such as "逆水寒" and "蛋仔派对" [3][6] - The company is set to launch several new games in Q3, which are expected to act as catalysts for growth despite recent adjustments to existing games [3][6] Financial Performance Summary - Revenue projections for FY24E have been slightly adjusted downwards by 1% to RMB 111.6 billion, with adjusted net profit forecasted at RMB 33.6 billion [3][6] - The company’s gross margin improved to 63.4%, up 3.9 percentage points year-on-year, while the adjusted net margin increased to 31.7%, up 1.5 percentage points [3][6] - The report outlines a steady growth trajectory with revenue expected to reach RMB 130.1 billion by FY26E, with a compound annual growth rate (CAGR) of 6.5% [6][10]

Investment Rating - The report assigns a "Buy" rating to 康方生物 (9926.HK) [2][3] Core Viewpoints - 康方生物's AK112 Phase III HARMONi-A data for EGFR mutation NSCLC shows slightly lower ORR and mPFS than expected, but the PFS benefit HR is better than approved drugs, especially in the T790M mutation subgroup. If subsequent OS data is strong, the company's stock price is expected to rebound [2][3] - 科伦博泰's SKB264 Phase III data for 3L+ TNBC is excellent, showing potential as a best-in-class treatment. The mPFS is 5.7 months compared to 2.3 months for the chemotherapy control group, with a 69% reduction in the risk of disease progression or death [4] - In the early development stage, 科伦博泰's SKB264 shows promising results in 1L NSCLC, with ORR of 48.6% and mPFS of 15.4 months in one cohort, indicating better efficacy compared to competitors [5] Summary by Sections 康方生物 (9926.HK) - AK112's mPFS is 7.06 months versus 4.8 months for the chemotherapy control group, with an ORR of 50.6% compared to 35.4% for the control [2] - The data shows significant PFS benefits across various subgroups, particularly in T790M mutation patients with an HR of 0.22 [3] 科伦博泰 (6990.HK) - SKB264's Phase III results indicate a mPFS of 5.7 months and an ORR of 43.8%, outperforming previous Phase II data and showing better results than DS-1062 [4] - In the 1L NSCLC trial, SKB264 combined with PD-L1 shows an ORR of 77.6% in one cohort, with a DCR of 100% [5]