Investment Rating - The report maintains a "Buy" rating for Unity (U.US) with a target price of $33, indicating a potential upside of 16% from the current price of $28.34 [4][7][8]. Core Insights - Unity's Q4 2024 revenue was $457 million, exceeding market expectations by 5.9%, driven by strong seasonal demand and product performance improvements. The strategic combination revenue was $442 million, reflecting a year-on-year growth of 4.4% [7][8]. - The adjusted EBITDA for the company was $106 million, surpassing market expectations by 26.8%. However, due to the impact of the migration of core advertising products, the guidance for Q1 2025 remains cautious, with revenue expected to be between $405 million and $415 million, corresponding to a year-on-year decline of 3% to 5% [7][8]. - Unity 6 adoption has shown positive progress, with approximately 38% of active users upgraded to Unity 6, which is higher than previous new version adoption rates. This indicates a recovery of customer trust following the announcement of the cancellation of the Runtime Fee [7][8]. - The AI advertising platform, Unity Vector, is set to begin full migration by the end of Q1 2025, leveraging the entire Unity ecosystem's data to provide deeper insights and optimize performance for clients [7][8]. - The report anticipates that Unity's Create business revenue will return to double-digit growth, and the AI advertising platform Vector may represent a business turning point [7][8]. Financial Summary - For FY23, Unity's revenue is projected at $2,187 million, with a decline to $1,813 million in FY24, followed by a slight decrease to $1,757 million in FY25E. The adjusted EBITDA is expected to be $448 million in FY23, decreasing to $390 million in FY24 [3][8]. - The report adjusts FY25E and FY26E revenue estimates to $1,757 million and $1,912 million, respectively, with adjusted EBITDA margins projected at 20% and 24% [7][8]. - The total market capitalization of Unity is approximately $11.61 billion, with an average trading volume of $263 million over the past three months [4][7].

Investment Rating - The report maintains a "Buy" rating for the company and raises the target price to HKD 185 / USD 119 [4][6][7]. Core Insights - The company's Q4 2024 revenue was RMB 26.75 billion, a slight year-on-year decline of 1.4%, primarily due to a decrease in non-gaming business [1]. - Game-related revenue increased by 1.5% year-on-year, with a notable 56.6% growth in PC game revenue, driven by titles such as "Naraka: Bladepoint" and "Dungeons & Dragons" [2][3]. - The launch of new games is expected to drive revenue growth, with strong performance from titles like "Marvel's Avengers" and "World of Warcraft" [3]. Summary by Sections Financial Performance - Q4 2024 adjusted net profit was RMB 9.68 billion, exceeding market expectations of RMB 8.12 billion, with an adjusted net profit margin of 28.6% [1]. - The company forecasts FY25E revenue of RMB 113.5 billion and FY26E revenue of RMB 121.5 billion, with adjusted net profits of RMB 34.5 billion and RMB 37 billion respectively [4][5]. Game Revenue Breakdown - Q4 2024 game revenue reached RMB 20.5 billion, a year-on-year increase of 5.1%, with mobile game revenue declining by 10.5% due to high base effects from the previous year [2]. - The share of PC games in total game revenue increased to 34.7%, reflecting the company's strong long-term operational capabilities [2]. New Game Pipeline - The company has a robust pipeline of new games, including "Destiny: Rising" and "Marvel's Secret Wars," which are expected to launch in 2025 [3]. - The successful launch of "Marvel's Avengers" has already seen over 40 million registered users, indicating strong market interest [3]. Shareholder Returns - The company is committed to shareholder returns, with a total of USD 2.88 billion allocated for dividends and buybacks in 2024, representing a return rate of approximately 4.3% [4].

Investment Rating - The report maintains a long-term positive outlook on the Chinese innovative drug industry, indicating a favorable investment environment due to supportive policies [3][5]. Core Viewpoints - The release of the second draft of the "Support for High-Quality Development of Innovative Drugs" policy is expected to enhance the long-term development of the innovative drug sector in China [3][5]. - The second draft clarifies policies related to the commercial insurance category of drugs, which is anticipated to have a more immediate impact [5][7]. - The report highlights the potential inclusion of high-value innovative drugs in the new commercial insurance category, which could significantly benefit companies with strong R&D capabilities and differentiated products [7][8]. Summary by Sections Policy Support for Innovative Drug Development - The second draft encourages the development of commercial health insurance and the establishment of a category for innovative drugs, allowing for price negotiations between insurance companies and drug manufacturers [4][8]. - It emphasizes the importance of integrating innovative drugs into the basic medical insurance directory and the new commercial insurance category [4][8]. Investment Opportunities - The report suggests that innovative drugs with strong clinical value, such as certain PD-1/PD-L1 inhibitors and ADC drugs, are likely candidates for inclusion in the new category [7][8]. - It recommends focusing on leading innovative drug companies with strong R&D capabilities and commercial potential [7][8]. Market Mechanisms and Pricing - The report discusses the exploration of a self-assessment mechanism for pricing new drugs based on their clinical value, which could support higher returns for innovative drugs [8][9]. - It also mentions the need for a dynamic adjustment mechanism for the drug directory to ensure timely inclusion of new innovative drugs [9]. Enhancing Clinical Application - The report outlines measures to facilitate the entry of innovative drugs into healthcare institutions, ensuring they receive similar treatment as drugs in the basic insurance directory [9]. - It highlights the importance of improving pharmaceutical services and promoting the rational use of innovative drugs among healthcare providers [9].

Investment Rating - The report maintains a "Buy" rating for Apple (AAPL.US) based on expected short-term shipment momentum and AI sentiment valuation [3]. Core Insights - The launch of the iPhone 16e is anticipated to provide incremental support for Apple's iPhone shipment volume this year, particularly benefiting from current government subsidy policies in China [2][3]. - The iPhone 16e features the A18 chip and 8GB of RAM, aligning it closer to the iPhone 16 series, which enhances its AI capabilities and competitive positioning in the AI sector [2][3]. - The iPhone 16e is priced at $599 (approximately 4,499 RMB), making it the most affordable model in the iPhone 16 series, which could attract a broader customer base [1][2]. Summary by Sections Product Launch - Apple officially launched the iPhone 16e on February 19, 2025, which is the entry-level model of the iPhone 16 series [1]. - The iPhone 16e is equipped with a single rear camera and does not support 5G millimeter wave, but offers improved battery life with up to 26 hours of video playback [1]. Technical Specifications - The iPhone 16e features the A18 chip, 8GB of RAM, and a starting price of $599, with significant improvements over the previous generation SE model [1][5]. - Key specifications include a 48MP rear camera, 3,455mAh battery, and support for Apple Intelligence for enhanced AI functionalities [2][5]. Market Opportunities - The report suggests monitoring Apple's supply chain, including companies like BYD Electronics, Lens Technology, Luxshare Precision, and Sunny Optical, which are expected to benefit from growth opportunities [3]. - Additionally, the report highlights potential growth in the Android supply chain due to government subsidies and AI developments, recommending attention to companies like Xiaomi, Will Semiconductor, Qualcomm, and MediaTek [3].

Investment Rating - The report maintains a "Buy" rating for Huahong Semiconductor [3][4] Core Views - Huahong Semiconductor's revenue growth has significantly improved, with a projected 18% year-on-year growth in Q4 2024 and a 17% growth forecast for Q1 2025 [3][4] - The company is expected to benefit from new capacity and a recovery in demand from downstream customers, particularly in the industrial and automotive sectors [3][4] - Despite increased depreciation from new capacity impacting gross margins, the current EV/EBITDA and P/B ratios are attractive at 6.9x and 0.6x respectively [3][4] Financial Performance Summary - Q4 2024 revenue was $539 million, a 2% increase quarter-on-quarter and an 18% increase year-on-year [4][12] - The gross margin for Q4 2024 was 11.4%, with a forecasted gross margin of 10% for Q1 2025, slightly down from 12.2% in Q3 2024 [4][12] - The company expects to expand its capacity to 30,000-40,000 wafers per month by the end of the year, leading to an additional depreciation of approximately $170-180 million [4][12] Earnings Forecast Adjustments - The 2025 revenue forecast has been adjusted to $2.356 billion, reflecting an 18% year-on-year growth [6][14] - The projected net profit for 2025 is $140 million, a significant recovery from a loss in 2024 [6][14] - The basic earnings per share for 2025 is estimated at $0.08, with a gross margin forecast of 11.1% [6][14] Valuation Summary - The target price for Huahong Semiconductor is set at HKD 30.0, representing a potential upside of 17% [3][7] - For the A-share market, the target price is set at RMB 55.0, indicating a potential upside of 18% [3][8] - The report highlights that the current market valuation is below historical averages, suggesting potential for price appreciation [21][20]

Investment Rating - The report maintains a "Buy" rating for the company, with an upgraded target price of HKD 55.6 for the Hong Kong stock and RMB 120.1 for the A-share, indicating potential upside of 15.8% and 15.2% respectively [2][4]. Core Insights - The company is experiencing a continuous improvement in gross margin, with Q4 2024 revenue reaching USD 2.207 billion, a 32% year-on-year increase, and a gross margin of 22.6%, exceeding market expectations [3][11]. - The company anticipates a strong order demand for the first half of 2025, driven by domestic subsidies for consumer electronics and geopolitical factors leading to preemptive orders [2][3]. - The long-term outlook remains optimistic due to domestic demand for localization and the company's competitive advantages in the semiconductor industry [2][4]. Financial Performance Summary - Q4 2024 revenue was USD 2.207 billion, with a gross profit of USD 499 million, resulting in a gross margin of 22.6%, which is a 6.2 percentage point increase year-on-year [11]. - The company expects Q1 2025 revenue to be around USD 2.362 billion, reflecting a 35% year-on-year growth [12]. - The projected revenue for 2025 is USD 9.764 billion, with a gross margin forecasted to improve to 19.7% [5][13]. Earnings Forecast Summary - The company’s net profit for 2024 is projected to be USD 493 million, with a significant increase to USD 829 million in 2025, representing a 68% growth [5][13]. - Basic earnings per share are expected to rise from USD 0.06 in 2024 to USD 0.10 in 2025 [5][13]. - The EBITDA for 2025 is forecasted at USD 5.246 billion, with an EV/EBITDA multiple of 15.9x [4][14]. Market Position and Valuation - The company is positioned favorably within the semiconductor industry, with a projected EV/EBITDA of 15.9x for 2025, indicating potential for valuation upside [4][14]. - The report highlights the competitive landscape, noting that while there is pressure from new capacity in the semiconductor foundry sector, the company maintains a strong market position [2][4].

Investment Rating - The report maintains a "Buy" rating for AppLovin (APP.US) with a target price of $535, indicating a potential upside of 41% from the current price of $380.32 [4][7]. Core Insights - AppLovin's Q4 2024 revenue reached $1.373 billion, a year-over-year increase of 44.0%, exceeding market expectations by 8.6%. The net profit was $599 million, with a net profit margin increase of 25.6 percentage points to 43.6%. Adjusted EBITDA was $848 million, surpassing market expectations by 10.9%, with an adjusted EBITDA margin improvement of 11.8 percentage points to 61.8% [7][8]. - The company is transitioning to a pure advertising platform by divesting its existing Apps business, expected to generate a total transaction value of $900 million, which is anticipated to significantly enhance profit margins. The company aims to expand its advertiser coverage beyond gaming, leveraging AI to automate ad placements and attributions [7][8]. - E-commerce is projected to contribute significantly this year, with the advertising business growing by 73% year-over-year in Q4 2024. The company expects e-commerce to account for 10% of total revenue by year-end [7][8]. - The target price has been raised to $535 based on strong advertising performance, with revenue forecasts for 2025 and 2026 adjusted to $4.5 billion and $5.6 billion, respectively, and adjusted EBITDA margins projected at 79% and 80% [7][8]. Financial Summary - For FY23, AppLovin's revenue is projected at $3.283 billion, with operating profit of $648 million and adjusted EBITDA of $1.503 billion. By FY27, revenue is expected to reach $8.037 billion, with operating profit of $3.962 billion and adjusted EBITDA of $5.628 billion [3][8]. - The company’s net profit is forecasted to grow from $357 million in FY23 to $3.390 billion in FY27, reflecting a significant increase in profitability over the forecast period [8].

Investment Rating - The report maintains a "Buy" rating for Microsoft (MSFT.US) with a target price of $500, indicating a potential upside of 22% from the current price of $411.4 [2][6][7]. Core Insights - Microsoft's FY25 Q2 revenue reached $69.63 billion, a year-on-year increase of 12%, slightly above market expectations. Net profit was $24.11 billion, growing 10% year-on-year. The productivity and business processes segment saw a 14% increase, while intelligent cloud revenue grew by 19%, with Azure revenue increasing by 31%, although this was below market expectations. AI-related services contributed 13% to revenue, showing continuous improvement [2][4]. - The company has slightly adjusted its FY2025 revenue forecast to $275.876 billion and expects a net profit of $98.294 billion, maintaining a target price of $500, which corresponds to a 38x price-to-earnings ratio for FY2025E. The report expresses confidence in Microsoft's leading position in the office software sector and anticipates long-term benefits from AI integration [2][4]. Financial Forecast Summary - FY2025E Revenue: $275.876 billion (previously $276.229 billion, a decrease of 0.1%) - FY2025E Gross Profit: $189.104 billion (previously $188.862 billion, an increase of 0.1%) - FY2025E Operating Profit: $123.594 billion (previously $122.802 billion, an increase of 0.6%) - FY2025E Net Profit: $98.294 billion (previously $98.175 billion, an increase of 0.1%) - FY2025E Gross Margin: 68.5% (previously 68.4%, an increase of 0.2%) - FY2025E Net Margin: 35.6% (previously 35.5%, an increase of 0.1%) [4].

Investment Rating - The report maintains a "Buy" rating for Alphabet with a target price raised to $226, reflecting a potential upside of approximately 21% from the current price of $186.5 [1][4][5] Core Insights - Alphabet's cloud business growth has slowed, but its advertising segment remains robust. The company reported Q4 2024 revenue of $96.47 billion, a 12% year-over-year increase, and a net profit of $26.54 billion, up 28% year-over-year, exceeding market expectations [1][2] - The core advertising business showed solid growth, with search ad revenue increasing by 13% and YouTube ad revenue by 14%. However, Google Cloud's growth rate has decelerated, with a 30% year-over-year revenue increase compared to 35% in the previous quarter [1][2] - The company plans to continue investing in AI and cloud computing, with capital expenditures expected to rise to $75 billion by 2025 [1] Financial Projections - The updated revenue forecast for 2025 is $387.22 billion, a slight decrease of 0.7% from the previous estimate. The net profit forecast for 2025 has been raised to $106.12 billion, reflecting a 4.8% increase [3] - Key financial metrics for 2025 include a gross profit of $225.85 billion and a net profit margin of 27.4% [3]

Investment Rating - The report maintains a "Buy" rating for Amazon (AMZN.US) with a target price raised to $282, indicating a potential upside of 21% from the current price of $232.76 [3][4]. Core Insights - Amazon's Q4 2024 revenue is projected at $187.79 billion, reflecting a 10% year-over-year growth, slightly exceeding market expectations. The net profit is expected to reach $20 billion, marking an 88% increase year-over-year, significantly surpassing market forecasts. E-commerce revenue is anticipated to grow by 9%, while AWS revenue is expected to rise by 19%. However, the guidance for Q1 2025 is relatively weak, with revenue expected between $151.0 billion and $155.5 billion, which is 3.6% below market expectations. Capital expenditures are projected to increase to $105 billion in 2025 [1][2]. Financial Projections Summary - Revenue for 2025 is estimated at $704.87 billion, a slight decrease of 0.1% from previous forecasts. Gross profit is projected at $349.94 billion, down 0.7%, with a gross margin of 49.6%. Operating profit is expected to be $80.58 billion, reflecting a 6.1% decrease, with an operating margin of 11.4%. Net profit is forecasted at $67.11 billion, also down 6.1%, with a net margin of 9.5% [2].