Investment Rating - The report assigns an "Outperform" rating to ADNOC Drilling, indicating an expected relative performance exceeding the benchmark index by over 10% in the next 12-18 months [1]. Core Insights - ADNOC Drilling is positioned as the exclusive drilling service provider for the Abu Dhabi National Oil Company (ADNOC) and aims to support ADNOC's strategic goal of achieving a production capacity of 5 million barrels per day by 2027 [2][3]. - The company has a strong focus on sustainable operations and energy optimization, deploying hybrid land drilling rigs equipped with battery storage systems to enhance efficiency and reduce fuel consumption [2]. - ADNOC Drilling has established a progressive dividend policy, targeting a compound annual growth rate of at least 10% in dividends from FY2024 to FY2028, with an expected dividend of at least $867 million for FY2025 [3][4]. Summary by Sections Company Overview - ADNOC Drilling is headquartered in Abu Dhabi and is the sole drilling service provider for ADNOC, with ADNOC holding 78.5% of its shares [2]. - The company is expanding its operations beyond the UAE, having secured pre-qualification in Kuwait and Oman, and is already operational in Jordan [2]. Financial Performance - ADNOC Drilling boasts the highest profit margins in the global oil service industry, with an EBITDA margin of approximately 50%, compared to the industry average of around 18% [3]. - The company has long-term contracts with ADNOC that guarantee minimum returns, with offshore rigs expected to yield an internal rate of return of 11%-13% and onshore rigs between 10%-12% [3]. Growth Strategy - The company is actively expanding its fleet, with plans to increase its total number of rigs from 142 by the end of FY2024 to over 151 by FY2028 [6]. - ADNOC Drilling is also progressing on unconventional drilling projects, with eight rigs currently operational and plans for further expansion based on demand [4]. Market Position - ADNOC Drilling is recognized as one of the fastest-growing energy service companies globally, leveraging its unique business model and operational efficiencies [1][3]. - The company maintains collaborative relationships with Chinese oil service firms, viewing them as partners rather than competitors [6].

Investment Rating - The report maintains an "Outperform" rating for the company, with a target price of HK$42.54, up from a previous target of HK$23.46, reflecting an 81% increase [2][6][15]. Core Insights - The company's revenue for Q1 2025 was Rmb328 million, representing a decline of 9.2% year-on-year and 36.2% quarter-on-quarter. However, profitability improved with a gross profit of Rmb77 million and a gross profit margin of 23.5%, which is an increase of 11.17 percentage points year-on-year [3][13]. - The decline in revenue was primarily due to a drop in shipments of automotive ADAS LiDAR, attributed to a customer solution switch. Conversely, the overall margin improvement was driven by the high-margin Robotics segment [3][14]. - The company expects the EM series to reverse the growth slowdown in the automotive ADAS LiDAR segment, while the Robotics segment is poised for a significant volume ramp-up, creating a second growth curve [4][14]. Financial Performance Summary - Revenue projections for 2025-2027 are Rmb2.366 billion, Rmb3.138 billion, and Rmb5.195 billion, respectively, with corresponding EPS estimates of -0.42, 0.18, and 1.36 [6][15]. - The gross profit margin is expected to improve significantly, reaching 27.1% in 2025 and stabilizing around 31.3% by 2027 [8][11]. - The company anticipates a substantial increase in shipments of both ADAS and Robotics LiDAR products, with total revenue expected to grow significantly in the coming years [8][11].

Investment Rating - The report assigns an "Outperform" rating for the pharmaceutical industry, specifically recommending an "Accumulate" rating for both the pharmaceutical manufacturing and pharmaceutical services sectors [1][2]. Core Insights - Continuous attention is suggested on innovative drugs with rising prosperity, as evidenced by the record number of 73 oral reports on Chinese innovative drug assets at the 2025 ASCO annual meeting [2][36]. - The Chinese innovative drug industry is experiencing a high demand for assets, with multinational corporations showing greater interest than concerns over geopolitical risks [36]. - The pharmaceutical sector outperformed the market in May 2025, with the SW Pharmaceutical and Biological sector rising by 6.4%, ranking first among Shenwan's primary industries [15][37]. Summary by Sections Monthly Portfolio Performance - The report highlights a monthly portfolio for June 2025, including companies such as Jiangsu Heng Rui Medicine, Huadong Medicine, and Sichuan Kelun Pharmaceutical, among others [5][36]. - In May 2025, the portfolio achieved an average increase of 7.7%, outperforming the overall pharmaceutical index, which rose by 4.5% [11][37]. Market Performance - In May 2025, the pharmaceutical sector ranked first in performance, with notable sub-sectors like chemical raw materials (+10.5%) and chemical preparations (+9.6%) showing strong growth [20][37]. - The report notes that the premium level of the pharmaceutical sector relative to all A-Shares is currently at a normal level, with a relative premium rate of 87.88% as of the end of May 2025 [28][37]. International Market Comparison - The Hong Kong pharmaceutical sector outperformed the market with a rise of 7.8%, while the U.S. pharmaceutical sector underperformed, declining by 5.7% [38]. - The report identifies top-performing stocks in both markets, with significant gains in the Hong Kong sector and notable declines in the U.S. sector [38].

Investment Rating - The report assigns an "Outperform" rating to multiple companies in the discretionary consumption sector, including Nike, Midea Group, and Anta Sports, among others [1]. Core Insights - The gold and jewelry sector continues to show strong performance, while cosmetics and snacks are experiencing adjustments [1][4]. - Most sectors in discretionary consumption are currently valued below their historical five-year averages, indicating potential investment opportunities [6][11]. Sector Performance Review - Weekly performance rankings: Luxury Goods > Gambling > Credit Card > U.S. Hotel > Sportswear > Pet > Cosmetics > Snacks, with only cosmetics and snacks underperforming the MSCI China index [4][14]. - Monthly performance shows similar trends, with luxury goods leading and snacks showing negative growth [15]. - Year-to-date performance indicates luxury goods, pet, cosmetics, and snacks sectors outperforming the MSCI China index, while U.S. hotel, sportswear, and gambling sectors are in negative growth [16]. Sector Valuation Analysis - As of May 30, 2025, expected P/E ratios for various sectors are as follows: - Sportswear: 15.4 (76% of five-year average) - Luxury Goods: 21.7 (61% of five-year average) - Gambling: 14.8 (24% of five-year average) - Cosmetics: 35.6 (88% of five-year average) - Pet: 48.4 (49% of five-year average) - Snacks: 24.3 (37% of five-year average) - U.S. Hotel: 28.7 (18% of five-year average) - Credit Card: 32.0 (61% of five-year average) [6][11][18].

Investment Ratings - The report assigns an "Outperform" rating to multiple companies including Pop Mart, Anta Sports, Haidilao, and Midea Group, while Budweiser Asia is rated "Neutral" [1]. Core Insights - The report highlights significant growth in the F&B sector, with Chagee reporting a total net income of 3.39 billion RMB for Q1 2025, a year-on-year increase of 35.4% [5]. - Pop Mart has suspended sales of its Labubu products in the UK due to safety concerns following an incident at a shopping center [5]. - Miniso has launched its original IP "Gift Family," aiming to engage urban youth through immersive experiences [5]. - Cotti Coffee has commenced operations at its Phase II roasting project, which is the largest single roasting facility in Asia with an annual capacity of 75,000 tons [5]. - The home appliance industry has seen a trade-in initiative that generated sales of 174.5 billion RMB from January to April 2025 [5]. Weekly Performance Summary - In the F&B sector, Nayuki's Tea saw a weekly increase of 9.7%, while Chagee and Tongqinglou both decreased by 5.4% [6]. - In the designer toys sector, Pop Mart had a slight increase of 0.3%, while Miniso experienced a decline of 6.9% [6]. - The home appliance sector showed JS Global Life and Vatti with increases of 1.0% and 0.5% respectively, while Ecovacs and Roborock both decreased by 6.4% [6].

Investment Rating - The report assigns an "Outperform" rating to multiple companies including JD Health, WuXi Biologics, China Biologic Products, and others, while China National Pharmaceutical Group is rated as "Neutral" [1]. Core Insights - The Hang Seng Healthcare Index rose by 3.4% during the week of May 26-30, 2025, outperforming the Hang Seng Index by 20.3 percentage points year-to-date [4][39]. - The report highlights significant gains in the pharmaceutical sector, driven by the suspension of President Trump's tariff policy and the release of the 2025 ASCO abstracts, which increased investor interest in innovative drugs [4][40]. - The report notes that the innovative drug sector remains manageable in terms of geopolitical risks despite ongoing monitoring of tariff impacts [40]. Summary by Sections Industry Performance - The Hang Seng Healthcare Index has increased by 36.4% year-to-date, with sub-sectors such as Pharmaceuticals (+8.5%) and CXO/Research Services (+5.6%) showing strong performance [4][39]. - The report indicates that the U.S. biopharma sector faced pressure due to drug pricing negotiations and trade policy uncertainties, leading to a cautious market sentiment [43]. Key Developments - The 2025 ASCO abstracts were released, showcasing promising data from companies like Innovent Biologics and Kelun Biotech, particularly in the ADC and bispecific antibody fields [11][12][18]. - Summit Therapeutics' HARMONi study reported that Ivonescimab combined with chemotherapy met the primary endpoint of progression-free survival (PFS) in NSCLC patients, indicating a positive trend in overall survival (OS) [18][19]. - CSPC Pharmaceutical is negotiating three potential deals with a total value of up to approximately USD 5 billion, with one deal expected to close in June 2025 [22][40]. Company Highlights - Notable gainers in the Hong Kong healthcare sector included JOINN Laboratories (+24.4%) and Simcere Pharmaceutical (+24.2%), while underperformers included SSY Group (-2.7%) and Zai Lab (-4.2%) [41]. - The report emphasizes the importance of ongoing monitoring of regulatory approvals and market dynamics for companies involved in innovative drug development [19][40].

Investment Rating - The report maintains a positive outlook on innovative drugs and related sectors, recommending continuous attention to innovative drugs and biotech companies [6][25][26]. Core Insights - The significant $6 billion deal between 3SBio and Pfizer is expected to further stimulate the innovative drug market, indicating strong demand for Chinese innovative drug assets despite geopolitical tensions [26]. - In the third week of May 2025, the A-share pharmaceutical sector outperformed the market, with a 1.8% increase compared to a 0.6% decline in the Shanghai Composite Index [9][27]. - The report highlights the strong performance of specific sub-sectors within the pharmaceutical industry, such as chemical raw materials (+8.8%), chemical preparations (+5.1%), and biological products (+4.0%) [15][27]. Summary by Sections Continuous Focus on Innovative Drugs - The report emphasizes the high growth potential of innovative drugs and suggests monitoring companies that are likely to see a revaluation, including Jiangsu Heng Rui Medicine, Huadong Medicine, and others [6][25]. - It also highlights biotech firms with growing pipelines and performance, such as Innovent Biologics and Sunshine Guojian Pharmaceutical [25]. Performance of A-Shares - The A-share pharmaceutical sector ranked first among Shenwan primary industries during the specified week, with notable individual stock performances, including Sunshine Guojian Pharmaceutical (+100.0%) and Nanjing Hicin Pharmaceutical (+51.6%) [9][17][27]. - The relative premium of the pharmaceutical sector compared to all A-shares is currently at a normal level, with a premium rate of 84.21% [17][24]. Performance of Hong Kong and U.S. Stocks - The report notes that the Hong Kong and U.S. pharmaceutical sectors outperformed their respective markets, with the Hang Seng Healthcare index rising by 5.5% and the S&P 500 Healthcare Select Sector declining by 2.1% [21][28]. - Top gainers in the Hong Kong market included 3SBio (+57%) and Clover Biopharmaceuticals (+36%) [21][28].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Growth in the Japanese consumer sector remains weak despite event-driven catalysts such as the Osaka Expo and the Golden Week holiday, with retail markets not showing expected significant growth [2][13] - External demand has shifted due to yen appreciation and changing trade environments, leading to a preference for everyday goods over luxury items among overseas tourists [2][13] - Domestic consumer sentiment is cautious, with a decline in the willingness to travel domestically during the Golden Week, reflecting a conservative household consumption attitude [2][13] Macroeconomic Overview - The core CPI in Japan rose by 3.6% year-on-year in April, maintaining the same level as March, while the core CPI excluding fresh food increased by 3.5%, surpassing previous values and market expectations [9] - The consumer confidence index fell to 31.2 in April, marking the lowest level since February 2023, with a continuous decline for five months [7] - Real wages decreased by 2.1% year-on-year in March, indicating ongoing inflationary pressures on household purchasing power [7][9] Essential Consumption - Essential retail sales showed mixed results, with PPIH, 711, and Aeon reporting same-store sales growth of +6.3%, +1.8%, and +1.0% respectively, driven by higher average transaction values [3][14] - Sales of daily consumer goods like beer saw a significant decline in April, highlighting consumer sensitivity to price changes [3][20] - Drugstore chains like Matsukiyo Cocokara and Welcia reported same-store sales growth of +3.9% and +2.5% respectively, indicating a positive trend in essential goods [3][18] Discretionary Consumption - Duty-free sales continued to decline for the second consecutive month, with a drop of 26.7% in April due to policy changes and a high base from the previous year [4][34] - Restaurant same-store sales showed varied performance, with notable growth in chains like Saizeriya and Skylark, while McDonald's experienced a decline in customer traffic [4][26] - Apparel sales were mixed, with ABC-MART and other brands showing positive growth, while Uniqlo faced a decline due to unfavorable weather conditions affecting summer product demand [4][29] Market Performance - The Tokyo Stock Exchange index for retail, food and beverage, and service industries showed increases of +5.6%, +3.8%, and +1.4% respectively in April, while the textile and apparel sector declined by -7.4% [5] - Investment suggestions focus on companies with optimistic profit growth prospects, including Asics, Pan Pacific International Holdings, Fast Retailing, and Asahi Group [5]

Investment Rating - The report maintains an "OUTPERFORM" rating for Uni-President China Holdings with a target price of HK$12.10, representing a potential upside of 15.0% from the current price of HK$10.36 [1][6]. Core Insights - The company has shown steady performance growth and continuous improvement in profitability, with a net profit after tax of 602 million yuan in Q1 2025, a year-on-year increase of 32%, exceeding market expectations [4][11]. - The beverage segment performed exceptionally well, with revenue growth driven by low raw material costs and improved production capacity utilization, leading to a gross profit margin increase of approximately 2 percentage points [4][12]. - The food segment also demonstrated stable performance, with instant noodle revenue achieving a high single-digit year-on-year increase, although the gross profit margin slightly declined due to palm oil cost pressures [5][13]. - The dividend yield remains attractive, with a projected yield of 5.2% based on a historical 100% dividend payout ratio, reflecting the company's commitment to returning value to shareholders [5][14]. Financial Performance Summary - Revenue projections for 2025-2027 are estimated at 32.45 billion yuan, 34.19 billion yuan, and 36.00 billion yuan, with year-on-year growth rates of 7.0%, 5.4%, and 5.3% respectively [6][15]. - The net profit attributable to the parent company is forecasted to be 2.17 billion yuan in 2025, with corresponding EPS of 0.50 yuan, reflecting a year-on-year growth of 17.4% [6][15]. - The company's gross profit margin is expected to improve from 33.8% in 2025 to 34.4% in 2027, indicating a positive trend in profitability [6][10].

Investment Rating - The report maintains an "Outperform" rating for the company [2][6][17] Core Insights - The company reported a significant year-on-year revenue increase of 46.3% in Q1 2025, reaching Rmb525 million, with gross profit rising by 57.5% to Rmb219 million, surpassing expectations [3][15] - The gross profit margin stood at 41.7%, reflecting a year-on-year increase of 2.97 percentage points, indicating strong profitability [3][15] - The company anticipates Q2 2025 revenue between Rmb680 million and Rmb720 million, with expected deliveries exceeding 300,000 units and a gross profit margin around 40% [3][15] Financial Performance Summary - Revenue projections for 2025-2027 are Rmb3.245 billion, Rmb4.795 billion, and Rmb6.851 billion respectively, with net profits expected to be Rmb241 million, Rmb552 million, and Rmb1.041 billion [6][17] - The company achieved a net profit margin of -3.3% in Q1 2025, a significant improvement from previous periods, and is expected to reach breakeven under GAAP in Q2 2025 [3][15] - The report highlights a strong growth trajectory with a forecasted revenue growth rate of 56% for 2025 and 48% for 2026 [11][13] Market and Product Developments - The company has ramped up production of ADAS LiDAR, with Q1 2025 shipments reaching 195,800 units, a 178% increase year-on-year [4][16] - The introduction of the ATX low-cost product has positively impacted margins, with a focus on maintaining quality while optimizing cost structures [4][16] - The company has secured exclusive partnerships with top OEMs in Europe and Japan, indicating strong international market penetration [5][16]