Investment Rating - The report maintains a "Buy" rating with a target price of HKD 58.35, down from a previous target of HKD 71.30, indicating a potential upside of 41.6% from the current price of HKD 41.20 [2][4]. Core Insights - The approval of the first injectable aesthetic product, recombinant type I α1 collagen, marks the beginning of a second growth curve for the company, expanding its product matrix in the aesthetic medicine sector [1][8]. - The Chinese aesthetic injection market is projected to reach RMB 147 billion by 2027, with the collagen injection segment expected to grow to RMB 16.8 billion, highlighting significant growth potential [8]. - The company has a strong channel advantage due to its established network and brand recognition in the aesthetic medicine market, which is expected to drive growth from the new injectable products [8]. Financial Summary - Sales revenue is projected to grow from RMB 3,524 million in FY23A to RMB 8,715 million in FY27E, with a CAGR of approximately 17.7% [3][13]. - Net profit is expected to increase from RMB 1,451.8 million in FY23A to RMB 2,820.5 million in FY27E, reflecting a growth rate of 13.5% [3][13]. - The company’s net debt ratio is projected to increase from (57.2%) in FY23A to (73.4%) in FY27E, indicating a shift towards higher leverage [3][13]. Product Development - The company has two additional injectable collagen products in the approval stage, which are expected to enhance its aesthetic product portfolio and address various anti-aging needs [8][9]. - The newly approved injectable product is designed for facial dermal filling to correct dynamic wrinkles, positioning the company competitively in the market [9]. Market Position - The company has established a comprehensive product matrix that includes injectable products, post-surgery recovery dressings, and functional skincare, allowing it to capture a broader market share [1][8]. - The competitive landscape includes several other approved products, but the company’s strong distribution channels and brand recognition are expected to provide a competitive edge [8][9].

Market Overview - The global stock markets experienced a decline, with the Hang Seng Index falling by 0.94% and the Hang Seng Tech Index dropping by 1.41%. Year-to-date, the Hang Seng Index is up 28.52% [1][2] - In the A-share market, sectors such as non-ferrous metals and electrical equipment saw significant declines, while oil, banking, and real estate sectors showed the largest gains [3] Hong Kong Market Insights - The Hong Kong market is considering easing conditions for private equity funds to open to retail clients, which may enhance its position as an international asset and wealth management center [3] - Southbound capital saw a net inflow of HKD 10.018 billion, with notable net purchases in the Tracker Fund of Hong Kong, CNOOC, and SMIC, while stocks like Hua Hong Semiconductor, Xiaomi, and Alibaba faced net selling [3] Company Analysis: Meituan - For Q3 2025, Meituan is expected to achieve revenue of RMB 97.8 billion, reflecting a year-on-year growth of 4.6%. However, the adjusted net loss is projected to be RMB 16.6 billion, exceeding market expectations due to intense competition in the food delivery sector [4] - The target price for Meituan has been adjusted from HKD 164.0 to HKD 154.4, maintaining a "Buy" rating [4] Company Analysis: Innovent Biologics - Innovent Biologics has established a global strategic collaboration with Takeda Pharmaceutical for several key oncology assets, including IBI363 and IBI343, aimed at enhancing its global footprint and strengthening Takeda's oncology pipeline [5][6] - The collaboration is valued at up to USD 1.14 billion, including an upfront payment of USD 1 billion and potential milestone payments [5] - Innovent aims to transition into a comprehensive biopharmaceutical company with global R&D capabilities, targeting to advance at least five assets into global Phase III multi-regional clinical trials by 2030 [5] Clinical Development Updates - IBI363 and IBI343 are entering global late-stage development, with IBI363 showing competitive progression-free survival in various cancer types. Global Phase III trials are planned for both assets [6][7] - The strategic partnership with Takeda is expected to introduce new immuno-oncology assets to Takeda's portfolio, enhancing its revenue potential in the oncology sector [5][6]

Report Summary 1. Report Industry Investment Rating No information provided in the report regarding the industry investment rating. 2. Core Viewpoints - The report provides a comprehensive update on the fixed - income market, including bond price movements, new issues, and macro - economic news. It maintains a buy recommendation on the FAEACO 12.814 Perp bond, which has gained about 20 pts in the past two weeks [2]. - SoftBank Group's new bond issues are analyzed, with estimated fair values for SOFTBK 61s and SOFTBK 65s at around 7.6% and 8.4% respectively [4][8][9]. 3. Section - by - Section Summaries Trading Desk Comments - Yesterday, the TW lifers/BBLTB sub curve/HYUELE curve/PETMK curve tightened by 1 - 3 bps. There were two - way flows on JP/KR/AU front - end FRNs from PBs [2]. - Japanese insurance hybrids and AT1s edged 0.1 pt firmer with light flows, while Yankee AT1s opened cautiously in London. BNP papers recovered after a previous plunge [2]. - Chinese IG benchmarks tightened by 1 - 2 bps. In Greater China higher - beta space, NWDEVL 28 - 31s were up 0.6 - 1.5 pts, but NWDEVL Perps were down 0.3 - 1.3 pts. FAEACO 12.814 Perp gained 0.4 pt [2]. - In Chinese properties, VNKRLE 27 - 29s decreased by 0.4 - 0.6 pt after Moody's downgrade. YUZHOU 27 lost 0.7 pt. In Southeast Asia, VLLPM 27 - 29s led the space and rose 3.2 - 4.4 pts [2]. - In LGFV space, there were mixed, light two - way flows. RMs and AMs were topping up IG USD and AAA - guaranteed issues, and flows on higher - yielding papers were sporadic [3]. Morning Update - This morning, the new ASBBNK 4.155 30 tightened 1 bp from initial issuance at T + 60, and ASBBNK Float 30 tightened 10 bps from RO at SOFR+90. The new GSCCOR 4.25 30 tightened 1 bp from pricing at T + 77 [4]. - The new GEZHOU 4.25 Perp traded up to 0.1 pt higher with light flows. SOFTBKs were unchanged, and LGELECs were unchanged after S&P revised the outlook of LG Electronics to positive from stable [4]. Top Performers and Underperformers - Top performers included VLLPM 7 1/4 07/20/27 (price 69.2, change 4.4) and NWDEVL 4 1/2 05/19/30 (price 72.7, change 1.5). Top underperformers included NWDEVL 5 1/4 PERP (price 48.8, change - 1.3) and YUZHOU 7 06/30/27 (price 12.0, change - 0.7) [5]. Macro News Recap - On Tuesday, the S&P was flat (+0.00%), the Dow rose 0.47%, and the Nasdaq fell 0.16%. UST yields were lower, with 2/5/10/30 - year yields at 3.45%/3.56%/3.98%/4.55% [7]. Desk Analyst Comments on SoftBank - SoftBank Group proposes to issue 35.5NC5.5 and 40NC10 Reg S USD subordinated bonds (S&P: B+) and 37NC7 EUR subordinated bonds for general corporate purposes [8]. - The fair value of the new SOFTBK 61 (first call Apr'31) is estimated at around 7.6% vs IPT at 7.875% - 8%, and for the new SOFTBK 65 (first call Oct'35) at around 8.4% vs IPT at 8.5% - 8.625% [9]. - The bonds have step - up mechanisms, and will receive 50% equity credit from S&P and JCR until the first reset date. SoftBank has a track record of calling its bonds on the first call date [10]. - In Jun'25, SoftBank's investment portfolio was valued at about USD269.6 bn, with 76% in listed shares (about USD205 bn). It held cash of about USD25.3 bn and standalone net debts of about USD45.9 bn, with an LTV ratio of 17.0% [11][12]. - While it has completed refinancing for the current fiscal year, there is a medium - term refinancing requirement in 2028 - 31, but it has access to diverse funding channels [12]. Offshore Asia New Issues - Priced new issues include ASB Bank (USD500/300 mn, 5 - year, 4.155%/SOFR+90), China Energy Overseas Investment (USD100/100 mn, 3 - year/PerpNC5, 3.8%/4.25%), GS Caltex Corporation (USD300 mn, 5 - year, 4.25%), and Republic of Kazakhstan (USD1500 mn, 5 - year, 4.412%) [16]. - Pipeline new issues include Avation Plc, China Three Gorges Corporation, Softbank Group, and The Republic of Korea with various tenors and coupon rates [17]. News and Market Color - Yesterday, there were 158 onshore credit bonds issued with an amount of RMB156 bn. Month - to - date, 910 credit bonds were issued with a total amount of RMB889 bn, a 31.1% yoy increase [18]. - S&P revised the outlook of LG Electronics to positive from stable, and the Republic of Indonesia is looking to price 5 - year/10 - year dim sum bonds tomorrow [18]. - Other corporate news includes S&P revising the outlook of Japfa Comfeed to stable from negative, NWD denying LME on perps, San Miguel obtaining a USD1.5 bn syndicated loan, Sun Hung Kai Properties announcing a USD10 bn debt instruments issuance programme, and Woodside Energy's 9M25 oil and gas output rising 5% yoy [25].

Global Market Overview - The Hang Seng Index closed at 26,028, up 0.65% for the day and 29.75% year-to-date [1] - The Shanghai Composite Index rose by 1.36% to 3,916, with a year-to-date increase of 16.84% [1] - The Shenzhen Component Index increased by 1.76% to 2,463, showing a year-to-date rise of 25.83% [1] - The US markets showed mixed results, with the Dow Jones up 0.47% and the S&P 500 unchanged, while the Nasdaq fell by 0.16% [1] Sector Performance - The Hang Seng Financial Index rose by 1.06% to 45,270, with a year-to-date increase of 28.84% [2] - The Hang Seng Industrial and Commercial Index increased by 0.52% to 14,826, reflecting a year-to-date rise of 31.79% [2] - The Hang Seng Real Estate Index slightly decreased by 0.05% to 18,358, with a year-to-date increase of 23.10% [2] Capital Flows and Stock Performance - Southbound capital recorded a net inflow of HKD 1.17 billion, with notable net purchases in Pop Mart, Xiaomi, and Hua Hong Semiconductor [3] - Pop Mart's Q3 revenue is expected to grow by 245%-250% year-on-year, with overseas revenue increasing by 365%-370% [3] - A-shares in hardware equipment, semiconductors, and industrial trade showed strong gains, while coal, telecommunications, and household goods lagged [3] Economic and Policy Developments - The Chinese Commerce Minister held talks with EU officials to address semiconductor issues, emphasizing the importance of maintaining global supply chain stability [3] - Japan's new Prime Minister, Kishida, may influence the Bank of Japan to delay interest rate hikes, with market expectations for an October rate increase dropping to 25% [3] US Market Insights - US stock performance was mixed, with consumer discretionary, industrials, and healthcare sectors leading gains, while utilities, communication services, and materials declined [3] - Strong Q3 earnings reports have boosted investor sentiment, with 86% of companies exceeding earnings expectations [3] - Notable stock movements included significant gains for Coca-Cola and 3M, while Netflix faced a decline due to lower-than-expected earnings [3] Commodity and Currency Trends - US Treasury yields fell, while the dollar index continued to rise [3] - Gold and silver prices dropped amid reduced geopolitical tensions, although speculative long positions in these metals have increased [3] - Oil prices rebounded as the White House announced plans to purchase 1 million barrels for the Strategic Petroleum Reserve [3]

Group 1: Market Overview - The Hang Seng Index closed at 25,859, up 2.42% for the day and 28.91% year-to-date [1] - The US stock market saw the Dow Jones increase by 1.12%, while the S&P 500 and Nasdaq rose by 1.07% and 1.37% respectively [1] - The Nikkei 225 index in Japan surged by 3.37%, reaching a historical high [3] Group 2: Sector Performance - In the Hong Kong market, the Hang Seng Financial sector rose by 1.92%, while the Hang Seng Industrial sector increased by 2.79% [2] - The Hang Seng Technology sector outperformed with a 3.00% increase, reflecting strong performance in selected consumer and technology stocks [3] - The Australian stock market saw a 0.41% increase in the ASX 200 index, indicating a stable performance [1] Group 3: Economic Insights - China's economic growth is expected to slow down, with a projected GDP growth rate of 5% for the year and a potential drop to 4.6% by Q4 2025 [4] - The People's Bank of China is anticipated to implement further monetary easing, including a possible 50 basis points reserve requirement ratio cut and a 10 basis points interest rate reduction [4] - The implementation of anti-involution policies may temporarily hinder economic growth but is expected to promote long-term economic rebalancing and alleviate deflationary pressures [4] Group 4: Company Analysis - Yancoal Australia (3668 HK) reported a 9% decrease in production for Q3 2025 due to adverse weather conditions, while sales increased by 3% [5] - The average coal price for Yancoal Australia fell by 18% year-on-year, leading to a projected revenue of approximately AUD 1.48 billion, a 17% decline compared to the previous year [5] - Despite the short-term challenges, Yancoal Australia maintains a "Buy" rating due to its strong balance sheet and stable dividend policy [5]

Group 1: Stock Recommendations - 吉利汽车 (Geely Auto) has a target price of HKD 32.00, with a current market value of USD 24.8 billion and a PE ratio of 19.01[5] - 零跑汽车 (Leap Motor) is rated as a buy with a target price of HKD 80.00, showing a potential upside of 35%[5] - 极兔速递 (J&T Express) has a target price of HKD 58.00, with a market value of USD 11.7 million and a PE ratio of 11.7[5] Group 2: Performance Overview - The basket of 25 stocks listed in the previous report had an average return of -3.9%, compared to the MSCI China Index return of -3.6%[10] - Out of the 25 stocks, 11 stocks outperformed the benchmark index[10] - The report includes a total of 25 long positions, indicating a diverse investment strategy[10]

Market Overview - The global stock markets experienced mixed performance, with the Hang Seng Index closing at 25,247, down 2.48% for the day but up 25.86% year-to-date [1] - The US markets showed slight gains, with the Dow Jones up 0.52% and the S&P 500 up 0.53% [1] - The Chinese stock market saw significant declines, particularly in healthcare, consumer discretionary, and industrial sectors, while defensive sectors like telecommunications and utilities outperformed [3] Sector Performance - In the Hong Kong market, the Hang Seng Financial Index fell by 1.72% while the Hang Seng Industrial Index dropped by 3.04% [2] - The healthcare sector in Hong Kong led the declines, indicating a potential shift in investor sentiment towards defensive stocks [3] Investment Opportunities - The software and IT services industry is highlighted for its potential investment opportunities, particularly in companies that are enhancing their strategic collaborations and commercializing AI applications [4] - Specific companies to watch include Alibaba (BABA US), Baidu (BIDU US), Tencent (700 HK), and Kuaishou (1024 HK) for their strong growth in cloud services and AI-related revenues [4] - In the engineering machinery sector, a recovery in non-earthmoving machinery sales in September suggests the beginning of an upward cycle, with companies like Zoomlion (1157 HK), Sany Heavy Industry (600031 CH), and Hengli Hydraulic (601100 CH) recommended for investment [4] Economic Indicators - The Chinese ETF market has seen a net inflow of nearly 90 billion yuan since the National Day holiday, indicating a trend of investors buying on dips, particularly in technology and high-dividend sectors [3] - The Chinese central bank is expected to maintain a loose monetary policy, with potential rate cuts anticipated in November or December [3]

Company Analysis - iQIYI (IQ US; Buy; Target Price: $2.70) is expected to have total revenue in Q3 2025 remain flat quarter-on-quarter, with a year-on-year decline of 8% to 6.64 billion yuan, supported by a strong content reserve leading to a 3% quarter-on-quarter growth in membership business [2] - The non-GAAP operating loss for iQIYI in Q3 2025 is projected to be 23 million yuan, compared to operating profits of 369 million yuan and 59 million yuan in Q3 2024 and Q2 2025 respectively, primarily due to adjustments in non-core businesses and increased content investment during the summer peak season [2] - The revenue forecast for FY25-27 remains largely unchanged, but the non-GAAP operating profit forecast has been adjusted down by 0.4-2% to account for increased content investment [2] Market Performance - The Hang Seng Index closed at 25,889, down 0.09% for the day but up 29.06% year-to-date, while the Hang Seng Tech Index fell 1.18% for the day but is up 34.36% year-to-date [2] - The A-share market saw gains, with coal, banking, and industrial trade sectors leading the rise, while steel, building materials, and non-ferrous metals lagged [4] - Southbound capital recorded a net inflow of 15.82 billion HKD, with Zijin Mining, Xiaomi, and Alibaba seeing the largest net purchases, while SMIC, Giant Biogene, and Laopu Gold experienced significant net sales [4]

Report Industry Investment Rating No relevant information provided. Core Viewpoints - The Chinese property market shows signs of slight improvement, with the decline in contracted sales in 9M25 narrowing compared to 8M25, and more developers reporting year - on - year increases in September 2025. However, overall sales are still down significantly year - on - year [8][9][10]. - China's social financing flow beat market expectations, but its growth remained weak, and government bond issuance slowed down. Credit demand in the real economy was subdued, and the central bank is likely to maintain ample liquidity and support credit growth with expected cuts in LPR and RRR in 4Q25 [4][12][13]. - China's CPI marginally recovered due to a rebound in food prices, core CPI rose, and PPI narrowed its contraction. Demand - side stimulus and supply - side restructuring are needed to support economic recovery, and a policy easing window is expected in 4Q25 [17][18][19]. Summary by Directory Trading Desk Comments - Yesterday, spreads of some bonds tightened or widened, such as KEBHNB Float 28/KEBHNB 30 tightening 3 - 5bps, KOROIL/HYUELE/HYNMTR belly bonds tightening 1 - 3bps, and PKX widening 1 - 2bps. Japanese AT1s and insurance hybrids firmed, while UBS bonds faced selling [2]. - In Greater China, higher - beta credits like NWDEVLs rose, MTRC perps increased, and some names in Macau gaming also went up. However, LASUDE 26 lost points, and some Chinese property bonds had price changes [2]. - This morning, Asia IG names were 1 - 2bps wider overall, and some bonds like VNKRLE 29/IHFLIN 28/FAEACO 12.814 Perp increased in price, while others decreased [4]. Chinese Properties - In 9M25, the contracted sales of 31 developers dropped 18.5% year - on - year to RMB1,285.6bn. Only 2 state - owned developers reported year - on - year increases, while several others had significant declines [9]. - In September 2025, 31 developers reported contracted sales of RMB136.3bn, a 9.9% year - on - year decrease from RMB151.3bn in September 2024. Nine out of 31 developers reported year - on - year increases in contracted sales, up from 4 in August 2025 [8]. China Economy Credit Weakness with Liquidity Easing - Social financing flows beat market expectations, but outstanding social financing growth edged down to 8.7% in September from 8.8% in August. Government bond issuance contracted, and corporate bond issuance continued to recover [13]. - New RMB loans remained subdued, with growth of outstanding RMB loans edging down to 6.6% in September. Credit demand in the household and corporate sectors was weak [14]. - The central bank is likely to maintain ample liquidity and support credit growth, with expected 10 bps LPR cut and 50 bps RRR cut in 4Q25 [16]. Mild Reflation in Upstream Sectors - China's CPI YoY recovered to - 0.3% in September from - 0.4% in August, and core CPI rose to 1% YoY, the highest since early 2024, indicating a gradual recovery in consumer demand [19][20]. - PPI's year - on - year contraction narrowed to - 2.3% in September from - 2.9%, mainly driven by the rebound in the mining sector, while downstream consumer goods remained subdued [21]. - Policy easing is expected in 4Q25, including a 10bps LPR cut, 50bps RRR cut, and expanding fiscal stimulus towards consumption and the property market [18][23]. Offshore Asia New Issues - Newly priced issues include BOSC International Investment Ltd (USD60mn, 3M, 4.12% coupon), China Water Affairs (USD150mn, 5NC3, 5.875% coupon), and Chengdu Sino French Ecological (USD100mn, 3yr, 4.3% coupon) [25]. - There are no offshore Asia new issues in the pipeline today [26]. News and Market Color - There were 107 credit bonds issued onshore yesterday with an amount of RMB88bn, and month - to - date, 395 credit bonds were issued with a total amount of RMB457bn, a 35.8% year - on - year increase [27]. - Various corporate news, such as BHP considering reviving copper mines, BOCOM redeeming bonds, and CIFIHG unveiling debt restructuring terms [27].

Group 1: Market Overview - The Hang Seng Index closed at 25,911, up 1.84% for the day and 29.17% year-to-date, while the Hang Seng Tech Index rose 2.57% for the day and 35.97% year-to-date [1] - The Chinese stock market rebounded, with sectors like consumer discretionary and staples leading gains, while telecommunications, utilities, and energy lagged [3] - Southbound capital saw a net sell of 5.44 billion HKD, with notable net sells in Hang Seng China Enterprises, Tracker Fund, and SMIC, while Alibaba, Huahong Semiconductor, and Xiaomi received significant net buys [3] Group 2: Economic Insights - The Chinese economy shows signs of weak credit demand, with M1 growth indicating improved business activity, while the central bank is expected to maintain a loose liquidity policy [4][5] - CPI showed a slight recovery, indicating a slow revival in consumer demand, while PPI decline has narrowed due to rising upstream mining prices [4] - The report anticipates a policy easing window in Q4 2025, with expected reductions in LPR and reserve requirement ratios to support consumption and the real estate market [5] Group 3: Company Analysis - Futu Holdings - Futu Holdings is a leading technology-driven financial services platform, covering eight major markets and providing services like securities trading and wealth management [6] - The company is expected to achieve a compound annual growth rate (CAGR) of 12% in revenue and 14% in Non-GAAP net profit from FY25 to FY28, driven by growth in asset clients and improved operational efficiency [5][6] - Futu's AUM in virtual assets reached 4 billion HKD in Q2 2025, with projections indicating it could contribute 2.4 to 3.1 billion HKD in incremental revenue by 2027 [7] Group 4: Investment Rating - The report initiates coverage on Futu Holdings with a "Buy" rating and a target price of 224 USD, supported by its global expansion and strong growth in core business segments [6][7] - The company is currently trading at a significant discount compared to peers, with a P/E ratio of 19x/17x for FY25E/FY26E, presenting an attractive entry point for investors [7]