Company Analysis - Alibaba (BABA US) reported total revenue of 236.5 billion RMB for 4QFY25, a year-on-year increase of 6.6%, aligning with expectations [2] - Adjusted EBITA reached 32.6 billion RMB, up 36% year-on-year, driven by improved profitability across all business segments [2] - The company is optimistic about the Taobao Group's steady profit growth in 1QFY26, supported by increased commission rates and healthy GMV growth [2] - Alibaba's cloud and AI sectors are identified as key strategic growth areas for the coming years [2] - NetEase (NTES US) reported a total revenue of 28.8 billion RMB for 1Q25, reflecting a year-on-year growth of 7%, which met market expectations [7] - Operating profit increased by 37% to 10.4 billion RMB, exceeding market expectations by 25%, primarily due to effective control of operating expenses [7] - The gaming segment showed a 12% year-on-year revenue growth, surpassing market forecasts, indicating a recovery in growth momentum [7] - Beike (BEKE US) achieved a revenue of 23.3 billion RMB in 1Q25, a 42% year-on-year increase, outperforming market expectations [7] - The company reported a significant increase in transaction volumes for both existing and new homes, with respective year-on-year growth of 28% and 53% [7] - However, concerns arose from the company's cautious guidance for 2Q25, projecting a revenue of approximately 26 billion RMB, representing a 12% year-on-year increase [7] - Geely Automobile (175 HK) reported a net profit of 5.7 billion RMB for 1Q25, in line with previous profit forecasts [8] - The company achieved a 25% year-on-year revenue growth, with a notable improvement in cost control reflected in a 12% decrease in selling and administrative expenses [9] - Geely's overall performance is bolstered by the strong profitability of its Zeekr brand, which achieved a historical high gross margin of 21.2% in 1Q25 [9] Market Overview - The Hang Seng Index closed at 23,641, up 2.30% for the day and 38.68% year-to-date [4] - The Hang Seng Tech Index rose by 2.13%, reflecting a year-to-date increase of 42.97% [4] - The Shanghai Composite Index increased by 0.86%, with a year-to-date growth of 14.42% [4] - The US markets showed mixed results, with the Dow Jones down 0.21% and the S&P 500 up 0.10% [6]

Economic Overview - The April CPI inflation in the U.S. was lower than market expectations, indicating that the impact of tariffs has not fully materialized[2] - CPI and core CPI year-on-year growth rates are expected to rise from 2.3% and 2.8% in April to 3.1% and 3.3% in August, before slightly declining to 2.7% and 3.1% in December[3] Tariff Impact - The inflationary impact of tariffs is projected to peak in the third quarter, with short-term cost-push effects outweighing demand contraction effects[3] - Core CPI showed a slight rebound, with core services growth declining to a near four-year low, indicating mixed inflationary pressures[6] Federal Reserve Policy - The Federal Reserve is likely to maintain interest rates steady in June and July, with potential rate cuts in September and again in November or December[2][3] - The demand contraction effects are expected to increase post-September, leading to a slowdown in the job market and a potential decline in inflation[3] Price Trends - Food prices have shown a significant drop, with household food prices decreasing from 0.5% to -0.4% in April, while energy prices rebounded slightly[6] - Core goods prices are expected to recover starting in May due to the gradual realization of tariff impacts on import prices[6]

Macro Economic Overview - The US economy is experiencing a delay in the impact of tariffs, with April CPI inflation lower than market expectations. Concerns about inflation rebound persist, with food prices declining and energy prices recovering due to a smaller drop in gasoline prices [2] - Core CPI showed a slight rebound, with core goods rebounding modestly and core services, particularly hotel and airline ticket prices, seeing reduced declines. The impact of tariffs on inflation is expected to rise initially before declining, while falling oil prices may partially offset tariff effects [2] - CPI and core CPI year-on-year growth rates are projected to rise from April's 2.3% and 2.8% to 3.1% and 3.3% in August, before slightly decreasing to 2.7% and 3.1% in December. The Federal Reserve is expected to maintain interest rates in June and July, with potential rate cuts in September and November or December [2] Company Analysis Tencent (700 HK) - Tencent reported 1Q25 results with total revenue growing 13% year-on-year to RMB 180 billion, exceeding Bloomberg consensus by 3%. Strong growth in gaming and marketing revenues contributed significantly [5] - Non-IFRS net profit increased by 22% year-on-year to RMB 61.3 billion, also surpassing consensus by 3%, driven by strong revenue performance and improved gross margins [5] - The target price for Tencent has been raised to HKD 660 from HKD 625, reflecting an optimistic outlook on AI development supporting growth across various business lines [5] JD.com (JD US) - JD.com reported 1Q25 revenue of RMB 301.1 billion, a 15.8% year-on-year increase, exceeding expectations by 3-4%. Non-GAAP net profit rose 43% year-on-year to RMB 12.8 billion, surpassing expectations by 18-23% [5] - The company is increasing investments in its food delivery business to drive nationwide expansion and enhance user engagement among high-quality customer segments [5] - The target price remains at USD 55 per ADS, with a slight increase in revenue forecasts but a 10% decrease in non-GAAP net profit projections for 2025 due to increased investment in the food delivery segment [5] Nuocheng Jianhua (9969 HK) - Nuocheng Jianhua reported strong 1Q25 results with sales of Obutin increasing by 89% year-on-year to RMB 311 million, primarily driven by growth in marginal zone lymphoma (MZL) [6] - The company has raised its sales growth target for Obutin from 30% to over 35% for FY25, supported by the anticipated contribution from MZL and the recent approval for chronic lymphocytic leukemia (CLL) [6] - The company holds RMB 7.8 billion in cash reserves, providing ample support for future R&D investments [6] Industry Focus - The report highlights a positive outlook for the automotive sector, with companies like Geely and Xpeng receiving "Buy" ratings and target price increases, indicating strong growth potential in the electric vehicle market [10] - The consumer discretionary sector, including companies like Anta Sports and Luckin Coffee, is also noted for its growth potential, with several companies maintaining "Buy" ratings and significant target price upside [10] - The healthcare sector, particularly companies like BeiGene and Innovent Biologics, is recognized for its robust pipeline and potential for significant market impact, with "Buy" ratings reflecting confidence in their growth trajectories [10]

Investment Rating - The report maintains a "BUY" rating for the AI infrastructure supply chain, indicating a potential return exceeding 15% over the next 12 months [18]. Core Insights - The report highlights that major tech giants, including Amazon, Google, Meta, and Microsoft, have shown strong capital expenditure (capex) growth, reaching $73 billion in Q1 2025, a 63% year-over-year increase [1][2]. - Meta has significantly raised its capex guidance from $60-65 billion to $64-72 billion, reflecting a 73% increase compared to 2024 [2]. - The AI infrastructure supply chain is experiencing substantial investment from large-scale computing firms, with capex intensity reaching 20.3% in Q1 2025, up from 13.8% in Q1 2024 [3]. Summary by Sections Capital Expenditure Trends - The four major tech companies are expected to continue increasing their capital expenditures, with projections for Q2 2025 indicating a 48% year-over-year growth, reaching approximately $78.6 billion [1]. - The overall capex for 2025 is anticipated to exceed $319 billion, representing a 39% increase compared to the previous year [1][2]. AI Infrastructure Investment - The report emphasizes the ongoing investment in AI infrastructure, with Amazon's AI business revenue reaching hundreds of billions and a triple-digit growth rate [3]. - The report notes that 85% of global IT infrastructure is still on-premises, suggesting a significant opportunity for cloud services to grow in the next 10-20 years [3]. Domestic Beneficiaries - Key domestic beneficiaries of this trend include Yingli Technology (300308 CH, Buy), Yitexun (300502 CH, Hold), and TFC (300394 CH, Hold), which are expected to experience strong growth due to the increasing demand for AI infrastructure [4].

Investment Rating - The report maintains a positive outlook on the AI infrastructure supply chain, particularly for companies like Zhongji Xuchuang (300308 CH, Buy, target price: RMB 151) [2][5]. Core Insights - The four major cloud service providers (Amazon, Google, Meta, and Microsoft) reported strong capital expenditures in Q1 2025, totaling $72.7 billion, a year-on-year increase of 63% [2][5]. - The capital expenditures for these companies are projected to exceed $319 billion for the year, reflecting a 39% year-on-year growth [2][5]. - Meta has raised its capital expenditure guidance from $60-65 billion to $64-72 billion, indicating a significant increase of 73% compared to 2024 [5]. - The AI infrastructure supply chain is expected to benefit from the large-scale investments by major cloud service providers, with no signs of a slowdown [5]. Summary by Sections Capital Expenditure Trends - The total capital expenditure of the four major cloud service providers reached a historical high of $72.8 billion in Q1 2025, with a year-on-year growth of 68% and a quarter-on-quarter growth of 22% [2][5]. - The capital expenditure ratio for these providers reached 20.3% of their revenue in Q1, compared to 13.8% in the same period last year [5]. AI Investment Outlook - The report expresses optimism regarding the ongoing commercialization of AI, with Amazon's AI business achieving annualized sales in the billions and a year-on-year growth rate exceeding three digits [5]. - The global IT landscape still has 85% of its infrastructure on-premises, with only 15% in the cloud, indicating significant potential for future growth in cloud services and AI chip demand [5]. Key Beneficiaries - Domestic beneficiaries of the AI infrastructure investment include Zhongji Xuchuang (300308 CH, Buy), Xinyi Sheng (300502 CH, Not Rated), and Tianfu Communication (300394 CH, Not Rated) [5].

Group 1: Industry Insights - The semiconductor industry shows strong resilience in capital expenditures from major overseas cloud providers, with a combined capital expenditure of $73 billion in Q1 2025, representing a 63% year-on-year increase [2] - The outlook for 2025 remains optimistic, with expectations for capital expenditures to exceed $319 billion, a 39% year-on-year growth [2] - The recent reduction in tariffs between the US and China is seen as a positive signal for the Chinese technology supply chain, particularly benefiting consumer electronics companies like Apple [2][6] Group 2: Company Analysis - Tencent Music reported Q1 2025 earnings that met expectations, with total revenue growing by 9% year-on-year to $7.36 billion, and non-IFRS net profit increasing by 25% to $2.12 billion [6] - The company is expected to see revenue and non-IFRS net profit growth of 12% and 23% respectively in Q2 2025, leading to an upward revision of FY25-27 earnings forecasts by 0-6% [6] - The target price for Tencent Music has been raised by 6% to $17.5, reflecting confidence in its competitive position and business model despite macroeconomic uncertainties [6] Group 3: Stock Recommendations - Recommended stocks include BYD Electronics, AAC Technologies, Luxshare, and FIT Hon Teng, all of which are expected to benefit from the favorable tariff environment and strong demand in the technology sector [6][7] - Specific target prices and potential upside for these stocks have been outlined, with BYD Electronics having a target price of $43.22, representing a 23% upside [7] - Other notable recommendations include Alibaba, Tencent, and Kuaishou, all rated as "Buy" with significant potential upside based on current valuations [7]

Global Market Overview - The report highlights a significant increase in major global stock markets, with the Hang Seng Index rising by 2.98% and the Nasdaq gaining 4.35% year-to-date performance reaching 24.63% [1][3] - The report notes that the market sentiment was positively influenced by the preliminary results of the US-China trade negotiations, leading to a rally in sectors sensitive to trade and economic cycles [3] Sector Performance - In the Hong Kong market, sectors such as consumer discretionary, industrials, and information technology led the gains, while defensive sectors like healthcare and utilities lagged behind [3] - The report indicates that the Hang Seng Financial Index increased by 2.46% and the Hang Seng Industrial Index rose by 3.45% year-to-date performance for these sectors is 34.00% and 46.55% respectively [2] Economic Impact - The report discusses the reduction of tariffs between the US and China, with the average tariff rate for US goods to China dropping to approximately 53% and China's tariff rate to the US at around 33% [3] - The impact of tariff reductions on China's GDP growth forecast was adjusted from 1% to approximately 0.5%, leading to an upward revision of the second-quarter GDP growth forecast from 4.5% to 4.8% [3] Investment Opportunities - The report lists several companies with buy ratings, including Geely Automobile (target price: 23.00), XPeng Motors (target price: 28.00), and Anta Sports (target price: 119.08), indicating potential upside of 21%, 33%, and 26% respectively [4] - Notable mentions include Luckin Coffee with a target price of 40.61 and a potential upside of 23%, and BYD Electronics with a target price of 43.22, showing a 14% upside [4] Market Sentiment - The easing of trade tensions has significantly boosted global market risk appetite, leading to a rebound in global equities and emerging market currencies, while safe-haven assets like gold and US Treasuries saw declines [3] - The report anticipates a delay in the Federal Reserve's interest rate cuts, pushing the expected timing from July to September, with a potential additional cut in November or December [3]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price raised to HKD 37.5, reflecting a potential upside of 15.6% from the current price of HKD 32.45 [1][3]. Core Insights - The company reported a 1Q25 revenue of USD 541 million, a year-on-year increase of 17.6%, driven by a 42% increase in wafer shipments, despite ongoing price pressures [1]. - The gross margin for 1Q25 was 9.2%, which is below market expectations and the guidance range, but improved from the previous year [1]. - Management expects 2Q25 revenue to be in the range of USD 550-570 million, indicating a year-on-year growth of 17% and a quarter-on-quarter growth of 3% [1]. - The semiconductor industry is expected to benefit from accelerated domestic substitution processes amid increasing geopolitical risks [1][7]. Financial Summary - For FY25E, the company is projected to achieve revenue of USD 2.317 billion, reflecting a year-on-year growth of 15.6% [2][8]. - The gross margin is expected to recover to 10.6% in FY25E and further to 16.8% in FY26E [7][8]. - Net profit for FY25E is estimated at USD 24 million, with a significant recovery projected for FY26E at USD 253 million [2][8]. Market Position - The company maintains high capacity utilization rates of 100% for 8-inch and 105% for 12-inch factories, with new capacity expected to contribute to revenue starting from 1Q25 [7]. - Approximately 82% of the company's revenue is derived from China, with 9.4% from North America, positioning it favorably amid rising tariffs and export restrictions [7]. Valuation Metrics - The target price adjustment is based on a forecasted price-to-book ratio of 1.35 times for FY25, which is in line with the historical average [7]. - The company’s market capitalization is approximately HKD 42.477 billion [3]. Shareholder Structure - Major shareholders include Shanghai Huahong International Co., Ltd. with 26.4% and Xinxin (Hong Kong) Investment Co., Ltd. with 13.0% [4]. Stock Performance - The stock has shown a 22.7% return over the past three months and a 41.7% return over the past six months [5].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price raised to HKD 37.5, reflecting a potential upside of 15.6% from the current price of HKD 32.45 [1][3][7]. Core Insights - The company reported a 1Q25 revenue of USD 541 million, a year-on-year increase of 17.6%, driven by a 42% increase in wafer shipments, despite ongoing price pressures [1]. - The gross margin for 1Q25 was 9.2%, which is below market expectations and the guidance range, but improved from 6.4% in the same quarter last year [1]. - Management expects 2Q25 revenue to be in the range of USD 550-570 million, indicating a 17% year-on-year growth [1]. - The semiconductor industry is expected to benefit from accelerated domestic substitution processes amid increasing geopolitical risks [1][7]. Financial Summary - For FY25E, the company is projected to achieve revenue of USD 2.317 billion, reflecting a 15.6% year-on-year growth, with gross margins expected to recover to 10.6% [2][8]. - The net profit for FY25E is estimated at USD 24 million, a significant decrease from the previous year, but expected to rebound in FY26E to USD 253 million [2][8]. - The company’s capacity utilization rates remain high at 100% for 8-inch and 105% for 12-inch factories, with new capacity expected to contribute from 1Q25 [7][8]. Market Position - Approximately 82% of the company's revenue comes from China, with 9.4% from North America, positioning it well to benefit from domestic demand for semiconductor manufacturing [7]. - The report highlights that the company is likely to maintain high utilization rates post new capacity deployment, driven by increasing domestic chip manufacturing needs [7].

2025 年 5 月 12 日 招银国际环球市场 | 市场策略 | 招财日报 每日投资策略 宏观、行业及公司点评 ◼ 中国经济 - 转口贸易和抢出口暂时抵消关税影响 尽管受到关税冲击，中国出口在 4 月仍表现出意想不到的韧性。尽管对美出 口大幅下滑，但对东盟的强劲增长在很大程度上抵消了这一损失，凸显了东 盟作为贸易转口目的地的作用日益增强。进口也远超市场预期，工业原材料 和集成电路进口量激增，可能因为对美国芯片关税豁免政策刺激抢进口。 我们预计关税政策最坏时刻可能过去，但对外贸冲击最严重的时刻尚未到来。 中国到美国的集装箱海运订单量和 PMI 出口订单指数等先行指标均大幅下降。 中美已开启谈判，我们认为将总体关税税率从 145%降至 80%在近期是可以 实现的，但进一步降至 30-40%的长期终端税率可能需要更长时间。 展望未来，我们预计中国商品出口增速将从 2024 年 5.9%放缓至 2025 年 1%， 进口增速可能从 1.1%小幅放缓至 0.5%。我们预计美元/人民币将从 2024 年 底的 7.35 降至 2025 年底的 7.25。（链接） 招银国际研究部 全球市场观察 宏观点评 邮件：resea ...