Investment Rating - The report maintains a "Buy" rating for IGG (799.HK) with a target price of HKD 4.2, representing a potential upside of 13% from the current price of HKD 3.73 [4][5]. Core Insights - The company is expected to see a revenue growth of 9% year-on-year in 2024, reaching RMB 5.72 billion, with an adjusted net profit of RMB 614 million and an adjusted net profit margin of 10.7% [3][4]. - The core product, "King of Avalon," is anticipated to maintain stable revenue in the second half of 2024 due to gameplay adjustments and content updates [3]. - New game products "Doomsday: Last Survivors" (DLS) and "Viking Rise" (VR) are projected to contribute significantly to revenue growth in the second half of 2024, offsetting declines from older games [3][4]. - The company's APP business has transitioned to focus on content-driven applications, particularly in news services, which is expected to drive strong revenue growth in the second half of 2024 [3]. Financial Projections - Revenue and profit forecasts for IGG are as follows: - FY22 Revenue: HKD 4,591 million - FY23 Revenue: HKD 5,266 million - FY24E Revenue: HKD 5,720 million - FY25E Revenue: HKD 6,136 million - FY26E Revenue: HKD 6,348 million - Adjusted Net Profit for FY24E: HKD 614 million, with a target PE of 8.0x [5][4].

Core Viewpoints - The report emphasizes the implementation of a plan to promote long-term capital inflow into the market, which is expected to improve market sentiment and liquidity [2][4] - The plan aims to optimize the capital market system and drive funds into fundamentally sound listed companies, fostering a positive cycle of capital flow [2][4] Key Areas of Focus - The plan is expected to enhance market sentiment and trading liquidity in the short term, with a target of at least 100 billion yuan in insurance funds allocated for long-term stock investments, including 50 billion yuan approved before the Spring Festival [3][4] - A-shares are anticipated to benefit more than Hong Kong stocks and U.S.-listed Chinese stocks due to this plan [3] - The report suggests focusing on high-quality dividend stocks, as the dividend yield of the CSI 300 index has reached 3%, highlighting the investment value in the market [3] - Over 310 listed companies are expected to distribute more than 34 billion yuan in dividends in the two months leading up to the Spring Festival [3] Implementation Measures - The plan sets clear targets for long-term capital inflow, requiring public funds to increase their holdings of A-shares by at least 10% annually over the next three years [4][5] - It aims for large state-owned insurance companies to allocate 30% of their new premiums to A-share investments starting in 2025 [4][5] - The plan includes a long-term performance assessment for public funds and state-owned insurance companies, reducing the weight of annual performance metrics [4][5] - It seeks to increase the scale and proportion of equity funds, optimize the investment ecosystem, and encourage share buybacks and multiple dividend distributions [4][5] Market Impact - The introduction of hard targets for long-term capital inflow is expected to provide substantial and stable incremental funds to A-shares annually [4][5] - The plan aims to enhance the quality of information disclosure by listed companies and strengthen their commitment to returning value to investors through cash dividends and share buybacks [4][5]

Group 1 - The report highlights that negative events lead to a short duration of market declines, with major A-share indices showing significant drops on the first day of negative events but stabilizing within six days [2] - It notes that despite negative events causing declines, sectors such as pharmaceuticals, food and beverage, and tourism can still yield positive returns, indicating potential alpha investment opportunities [2][3] - The report emphasizes that under uncertainty, investors show limited positive reactions to favorable events, resulting in constrained market rebounds [2] Group 2 - The report suggests that if US-China relations improve, it could boost market sentiment, with potential for a more moderate US stance towards China [3][4] - It indicates that the Trump 2.0 administration may pose challenges to the RMB exchange rate, corporate earnings, and capital flows, leading to increased market volatility [4][14] - The report recommends focusing on companies with strong brand power and those that have already established global operations to mitigate risks associated with potential trade conflicts [4][14] Group 3 - The report discusses the recent performance of major Chinese indices, noting that the MSCI China Index fell by 0.8% and the Shanghai Composite Index dropped by 3.7% over the past month, while the Hang Seng Index rose by 2.0% [13] - It highlights that sectors such as information technology and consumer discretionary performed well due to earnings upgrades, while telecommunications and utilities faced valuation contractions [13][14] - The report points out that the current valuation levels of major Chinese stock indices remain attractive compared to global markets, with the MSCI China Index and Hang Seng Index trading at forward P/E ratios of 9.8 and 9.1, respectively [22][23] Group 4 - The report notes that the trend of downward revisions in earnings expectations has slowed, with the MSCI China Index's 2025 earnings growth forecast adjusted to 7.7% [36][38] - It indicates that external uncertainties, including the potential for renewed trade tensions, may continue to impact earnings growth, but recent policy measures could help stabilize corporate earnings [37][38] - The report emphasizes the importance of monitoring the upcoming policy announcements, particularly during the National People's Congress, which may signal new stimulus measures [22][36] Group 5 - The report identifies short-term capital flows, noting that domestic funds have shown significant net inflows into the Chinese stock market, while foreign capital has experienced net outflows [48][49] - It highlights that the recent increase in domestic capital inflows is a positive sign, despite the overall market facing pressure from external factors [48][49] - The report suggests that foreign capital may return to the Chinese market if there is a noticeable improvement in the economic fundamentals [48][49] Group 6 - The report recommends focusing on sectors such as telecommunications and consumer discretionary, which are expected to benefit from policy support aimed at boosting domestic consumption [57] - It highlights the potential for telecommunications companies to lead in digital transformation and cloud services, benefiting from stable cash flows and solid fundamentals [57] - The report also emphasizes the importance of brand strength in consumer-driven companies, particularly those that can leverage domestic demand recovery [57]

Trade Policy and Inflation - Trump announced a 25% import tariff on Canada and Mexico starting February 1, which could raise U.S. inflation by approximately 0.46 percentage points if fully passed on to consumers[7] - The actual impact of tariffs may be less due to potential currency fluctuations and trade negotiations, particularly with the EU and China[2] - Trump's tariff threats appear to be more of a political bargaining chip rather than immediate policy changes[10] Economic Data and Labor Market - December's core CPI inflation rate decreased by 0.08 percentage points to 0.23%, indicating a moderate decline in inflation[10] - Non-farm payrolls increased by 256,000 in December, exceeding market expectations, while the unemployment rate fell from 4.231% to 4.086%[13] - Retail sales showed a 0.4% month-on-month increase in December, reflecting consumer resilience despite concerns over future inflation[17] Monetary Policy Outlook - The Federal Reserve is expected to pause interest rate cuts in January, with the likelihood of 3-4 rate cuts throughout the year, each by 25 basis points[25] - The Fed's recent hawkish stance has reduced its forecast for rate cuts from five to two for the year[27] - High U.S. Treasury yields are anticipated to impact economic momentum and labor market performance throughout the year[25] Financial Market Trends - The U.S. dollar index is projected to remain strong around 108 in the short term, influenced by tariff policies and interest rate expectations[28] - The ten-year Treasury yield is forecasted to end the year at 4.1%, up from a previous estimate of 3.8%[29] - Concerns over slow rate cuts could lead to recession risks and potential financial crises in the U.S.[4]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 177 HKD / 23 USD, indicating a potential upside of 29% from the current price of 137.2 HKD [4][5][7]. Core Insights - The company's revenue is expected to grow by 19% year-on-year in Q4 2024, with adjusted net profit reaching 400 million RMB and an adjusted net profit margin of 5.3% [3]. - The strong performance of the game "Three Kingdoms: Strategizing the World" is anticipated to drive a 76% year-on-year growth in game revenue for Q4 2024, with a focus on long-term operations and an overseas version launch planned for 2025 [3]. - Advertising revenue is projected to reach 2.4 billion RMB in Q4 2024, reflecting a 22% year-on-year increase, supported by the exploration of multi-scenario advertising models and a recent partnership with the Central Radio and Television Station [3]. Financial Projections - The financial model forecasts the following revenue and profit figures (in million RMB): - FY22 Revenue: 21,899 - FY23 Revenue: 22,528 - FY24E Revenue: 26,679 - FY25E Revenue: 29,700 - FY26E Revenue: 32,254 - Adjusted Net Profit FY25E: 1,825 - Adjusted Net Profit FY26E: 2,911 [5].

Investment Rating - The report maintains a "Buy" rating for the company and upgrades it to an industry favorite, with a target price of HKD 3.34, indicating a potential upside of 18.4% from the current price of HKD 2.82 [2][5]. Core Insights - The company's revenue performance is gradually improving, with expectations that FY25 revenue will outperform the previously guided high single-digit decline. The successful promotional strategies are credited for this positive trend [2][3]. - The recovery of Nike's brand strength, particularly after signing Wang Jiaer as a global ambassador, is expected to enhance market sentiment towards the company and improve FY26 performance outlook [4][5]. - The current valuation is considered low at 10.3x FY26 P/E, coupled with a high dividend yield of around 10%, suggesting significant upside potential compared to downside risks [2][5]. Revenue Trends - For 4QFY25, the company anticipates a reduction in revenue decline to low single digits year-on-year, an improvement from the previous quarter [3]. - The retail discounting strategy has deepened in 4QFY25, aligning with the company's inventory reduction efforts and increasing online sales proportion [3]. Financial Projections - The report provides financial forecasts indicating a revenue of RMB 27,129 million for FY25, a decline of 6% year-on-year, with a projected net profit of RMB 1,382 million, reflecting a 38% decrease [5][12]. - The expected financial metrics for FY26 include a slight revenue decline to RMB 26,849 million and a net profit increase to RMB 1,595 million, indicating a recovery trend [5][12]. Market Positioning - The company is positioned as a leading player in the sports apparel retail sector, with a focus on enhancing brand image and expanding market reach, particularly in lower-tier cities [4][5]. - The overall market sentiment is expected to improve as Nike enhances its product promotion and marketing efforts in China post-inventory resolution [4].

Investment Rating - The report maintains a "Buy" rating for the company and considers it an industry favorite, with an updated target price of 178 HKD / 46 USD [2][22]. Core Insights - The company is expected to benefit from the expanded "trade-in" policy, which includes subsidies for various household appliances and digital products, potentially accelerating revenue growth in the fourth quarter [1][2]. - Revenue forecast for Q4 is raised to RMB 333.6 billion, representing a 9% year-on-year increase, with adjusted net profit expected to reach RMB 9.4 billion, a growth of 11% [2]. - The report highlights significant improvements in the sales of electronic products due to government subsidies, with active user growth anticipated to remain in double digits [2]. Financial Projections - Revenue and profit forecasts for FY24E and FY25E have been slightly adjusted upwards by 1.3% and 1.2%, respectively, reflecting the positive impact of the trade-in policy [2]. - The projected financial metrics include: - FY24E Revenue: RMB 1,145.4 billion - FY25E Revenue: RMB 1,203.1 billion - FY24E Adjusted Net Profit: RMB 45.9 billion - FY25E Adjusted Net Profit: RMB 50.2 billion [4][6][7]. - The adjusted target P/E ratios for FY25E and FY26E are 10.0x and 9.2x, respectively [2][7].

Investment Rating - The report suggests a focus on overseas AI chip companies such as TSMC (2330.TT/TSM.US), NVIDIA (NVDA.US), and AMD (AMD.US) while also highlighting potential beneficiaries in China's domestic AI server power and power management sectors [5]. Core Insights - The new semiconductor export control regulations by the U.S. Department of Commerce aim to reinforce the leadership of advanced integrated circuit chips (IC) and ensure national security, impacting both wafer manufacturing and packaging/testing industries [3][4]. - The updated regulations include exemptions for 33 authorized semiconductor design companies, including major players like NVIDIA and AMD, allowing them to produce advanced logic chips without restrictions [4]. - The report indicates that the U.S. policy will benefit leading AI companies while accelerating the domestic production of AI in China [5]. Summary by Sections Export Control Regulations - The U.S. government has authorized 33 semiconductor design companies to produce advanced logic chips at wafer and packaging factories without restrictions [4]. - Non-authorized companies must obtain licenses to use 16/14nm processes or FinFET structures [4]. - The definition of advanced DRAM has been updated, with the standard cell area adjusted to 0.0026 square micrometers and storage density to 0.20Gb per square millimeter [4][7]. Impact on Companies - The report recommends monitoring overseas AI chip companies and domestic companies in China that may benefit from the increased demand for AI server power and power management [5]. - Specific companies mentioned include Huahong Semiconductor (1347.HK/688347.CH), SMIC (981.HK/688981.CH), and others that may gain from the domestic AI production push [5]. Historical Context - The report outlines a timeline of U.S. sanctions against Chinese semiconductor companies, highlighting the increasing restrictions over the years, culminating in the latest regulations that further limit China's access to advanced computing chips [10].

Investment Rating - The report maintains a "Buy" rating for Duolingo (DUOL US) with a target price of USD 400, implying a potential upside of 17% from the current price of USD 341 8 [2][8] Core View - Duolingo is benefiting from a surge in Chinese language learning in the US, driven by the "TikTok Refugee" phenomenon, with Mandarin learners increasing by 216% YoY from December 1, 2024, to January 13, 2025 [1] - The company's innovative gamified language learning model has significantly lowered user barriers, covering over 40 languages and targeting a global market of over 2 billion foreign language learners with a current penetration rate of less than 6% [8] - Duolingo is expected to achieve 1 76 billion MAUs by 2026, with a CAGR of 30%, and paid subscribers are projected to reach 15 6 million by 2026, growing at a CAGR of 33% [8] Financial Performance and Forecasts - Revenue is forecasted to grow from USD 369 million in FY22 to USD 1,218 million in FY26E, with a CAGR of 34 7% [2][9] - Operating profit is expected to turn positive in FY24E at USD 66 million, increasing to USD 196 million by FY26E [2][9] - Net income is projected to rise from USD 16 million in FY22 to USD 390 million in FY26E, with a significant improvement in profitability [2][9] - Adjusted EBITDA is forecasted to grow from USD 16 million in FY22 to USD 390 million in FY26E, with an EBITDA margin of 24 4% in 4Q24 [8][9] User Metrics and Growth - MAUs are expected to reach 115 million in 4Q24, a 30% YoY increase, with DAUs nearing 40 million [8] - Paid subscription users stood at 8 6 million in 3Q24, with a paid rate of 7 6%, and are expected to grow to 15 6 million by 2026 [8] Valuation Metrics - The target EV/EBITDA multiples are 88 3x for FY24E, 60 0x for FY25E, and 42 9x for FY26E [2][9] - The target P/E multiples are 68x for FY25E and 52x for FY26E [8] Market Context - Duolingo's stock price has shown strong performance, with a 52-week range of USD 145 05 to USD 378 48, and a current market cap of USD 15,034 million [2] - The company's stock has outperformed the S&P 500 index significantly over the past year [6]

Economic Growth - China's Q4 economic growth rebounded significantly, increasing by 0.8 percentage points to 5.4%, surpassing the market expectation of 5.0%[2] - The annual economic growth rate reached 5.0%, meeting the target set at the beginning of the year[2] - The service sector's growth accelerated to 5.8% in Q4 from 4.8% in Q3, becoming the main driver of economic recovery[2] Consumption and Investment - In December, retail sales growth improved to 3.7%, up from 3.0% in November, exceeding the market expectation of 3.6%[3] - Fixed asset investment growth declined by 0.1 percentage points to 3.2% in December, slightly below the market expectation of 3.3%[7] - The cumulative growth rate of social retail sales for the year fell sharply from 7.2% in 2023 to 3.5% in 2024, slightly below the forecast of 3.6%[6] Industrial Production and Exports - Industrial production growth in December surged to 6.2%, significantly higher than the expected 5.4%, driven by a manufacturing production increase to 7.4%[7] - Strong export performance contributed to the economic rebound, although concerns about the U.S.-China trade war may have led to preemptive export activities[8] Policy Implications - The better-than-expected economic growth in Q4 may reduce the likelihood of significant policy support before the March meetings, with a focus on implementing existing policies[9] - Continued policy support is anticipated to maintain economic recovery momentum, particularly in consumption and investment sectors[11]