Core Insights - The report highlights the strong performance of China's innovative pharmaceuticals, particularly in international markets, with the MSCI China Healthcare Index rising 27.6% year-to-date, outperforming the MSCI China Index by 14.5% [2] - Significant overseas licensing deals for innovative drugs are being realized, showcasing the international competitiveness of Chinese pharmaceutical companies [6][7] - The report recommends several companies in the pharmaceutical sector, including BeiGene, Innovent Biologics, and others, as potential investment opportunities due to favorable market conditions [7] Industry Analysis - The innovative drug sector is benefiting from overseas licensing transactions, optimization of domestic procurement policies, and the implementation of new medical insurance directories, which are expected to drive valuation recovery in the pharmaceutical industry by 2025 [7] - The report notes that the recent updates from companies like Innovent Biologics and 3SBio at the ASCO conference demonstrate their clinical advancements and potential market impact [2][5] - The report anticipates continued growth in the domestic insurance market, with a projected 12.7% year-on-year increase in total premiums for the first four months of the year, indicating strong growth potential for internet insurance companies [10] Company Insights - 3SBio's licensing agreement with Pfizer for its PD-1/VEGF drug is expected to yield $1.25 billion in upfront payments and up to $4.8 billion in milestone payments, reflecting the drug's best-in-class potential [6] - The report highlights the positive outlook for ZhongAn Online due to its involvement in the stablecoin regulatory framework in Hong Kong, which is expected to enhance its valuation [8][9] - The report projects that ZhongAn's insurance premium growth will be driven by health and automotive sectors, with an expected combined ratio improvement due to better underwriting practices [10]

Investment Rating - Maintain BUY with a target price of HK$58.78, reflecting a potential upside of 61.3% from the current price of HK$36.65 [3][12]. Core Insights - The company is expected to achieve revenue growth of 10-15% YoY in 2025, driven by multiple growth drivers across various segments including optics, precision mechanics, electromagnetic drive, and automotive acoustics [1][9]. - Key growth drivers for 2025 include upgrades in optics specifications, increased adoption of VC in high-end models, expansion in automotive acoustics, and advancements in MEMS microphones for AI smartphones [9]. - The company has a solid product roadmap and is expanding into strategic markets such as robotics and AI glasses, with plans to acquire a stake in a Chinese automotive microphone module company to enhance its offerings [9]. Revenue and Earnings Forecast - Revenue is projected to grow from RMB 20,419 million in FY23 to RMB 32,566 million in FY25, representing a YoY growth of 19.2% [2][11]. - Net profit is expected to increase significantly from RMB 740.4 million in FY23 to RMB 2,488.6 million in FY25, with a YoY growth of 38.5% [2][11]. - The company’s EPS is forecasted to rise from RMB 0.63 in FY23 to RMB 2.12 in FY25, indicating a growth of 38.5% [2][11]. Segment Performance - The revenue breakdown indicates that acoustics will contribute RMB 9,466 million in FY25, while optics is expected to generate RMB 5,672 million [10]. - The gross profit margin is anticipated to improve from 16.9% in FY23 to 23.1% in FY25, reflecting operational efficiency and product mix enhancement [11][18]. Valuation Metrics - The stock is currently trading at a P/E ratio of 15.8x for FY25, which is attractive compared to the expected EPS growth of 39% [12][18]. - The target price is based on a sum-of-the-parts (SOTP) valuation methodology, assigning different P/E multiples to various business segments [12][13].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 69.5, indicating a potential upside of 22.4% from the current price of HKD 56.80 [1][3]. Core Insights - The recent EDA export ban by the Trump administration is expected to accelerate the domestic replacement process for EDA tools in China, which could benefit companies like the report's subject, as they possess self-developed EDA capabilities [1][9]. - The company is positioned as a key beneficiary of the semiconductor domestic replacement trend, with its independent EDA capabilities allowing it to maintain robust revenue growth and high profit margins amid increasing geopolitical risks [9]. Financial Summary - Sales revenue is projected to grow from RMB 464 million in FY23A to RMB 1,284 million by FY27E, with a CAGR of approximately 27.6% [2][14]. - Net profit is expected to increase from RMB 109.2 million in FY23A to RMB 363.3 million in FY27E, reflecting a strong growth trajectory [2][14]. - The company’s P/E ratio is forecasted to decrease from 21.5 in FY23A to 8.6 in FY27E, suggesting an attractive valuation compared to the industry average of 64.0 [2][9]. Market Position - The company has developed a comprehensive EDA platform that integrates EDA tools, IP libraries, and design processes, significantly lowering the barriers to chip design [9]. - As of the end of 2024, the company has integrated over 600 IP modules, establishing a complete tool-IP-design framework [9]. Shareholder Structure - Major shareholders include CICCFT with 12.6% and Value Partners with 6.6% [5]. Stock Performance - The stock has shown strong performance with a 96.2% increase over the past three months [6].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 69.5, indicating a potential upside of 22.4% from the current price of HKD 56.80 [1][3]. Core Insights - The recent EDA export ban by the Trump administration is expected to accelerate the domestic replacement process in China's EDA market, which currently relies heavily on foreign suppliers [1][9]. - The company, 贝克微, is well-positioned to benefit from this trend due to its self-developed EDA platform, which mitigates the impact of export restrictions [9]. - The report highlights that 贝克微's vertical integration in the semiconductor design process provides a strategic advantage in a localized supply chain environment [9]. Financial Summary - Sales revenue is projected to grow from RMB 464 million in FY23A to RMB 1,284 million by FY27E, with a CAGR of approximately 27.6% [2][14]. - Net profit is expected to increase from RMB 109.2 million in FY23A to RMB 363.3 million in FY27E, reflecting a strong growth trajectory [2][14]. - The company's gross margin is forecasted to remain stable around 53% over the next five years [2][14]. Market Position - 贝克微's market capitalization is approximately HKD 3.408 billion, with a current share price of HKD 56.80, which is significantly higher than its 52-week low of HKD 23.05 [4][3]. - The company has a strong shareholder structure, with CICCFT holding 12.6% and 惠理集团 holding 6.6% [5]. - The stock has shown impressive performance, with a 96.2% return over the past three months [6]. Valuation Metrics - The company is currently valued at a P/E ratio of 14.4 for FY25E, which is attractive compared to the industry average of 64.0 [9][13]. - The PEG ratio stands at 0.48, indicating potential undervaluation relative to its growth prospects [9].

Investment Rating - The report maintains a "Buy" rating for Microsoft (MSFT US) with a target price of $510.30, indicating a potential upside of 11.3% from the current price of $458.68 [3][4]. Core Insights - Microsoft aims to build an open AI agent network, transitioning from isolated AI models to interconnected agents with distinct identities, facilitated through Azure and Windows platforms [1][10]. - The report highlights three core trends from the Build 2025 conference: 1) collaboration among multiple models and agents, 2) cost-effective inference on the edge, and 3) unified identity governance and observability [1][10]. - Microsoft continues to strengthen its position in AI cloud services and applications, supported by its extensive developer and enterprise customer ecosystem [1][10]. Financial Overview - For FY23A, Microsoft reported sales revenue of $211,915 million, with a year-on-year growth of 6.9%. Projections for FY24A and FY25E are $245,122 million and $283,148 million, reflecting growth rates of 15.7% and 15.5% respectively [9][27]. - Net profit for FY23A was $72,361 million, with a projected increase to $88,136 million in FY24A and $101,947 million in FY25E, indicating growth rates of 21.8% and 15.7% respectively [9][27]. - The earnings per share (EPS) for FY23A is $9.72, expected to rise to $11.86 in FY24A and $13.75 in FY25E [9][27]. Shareholder Structure - Vanguard holds 8.7% and BlackRock holds 7.2% of Microsoft’s shares, indicating significant institutional investment [5]. Stock Performance - Over the past month, Microsoft has achieved an absolute return of 16.0% and a relative return of 5.6% [6].

Investment Rating - The report maintains a "BUY" rating for SANY International, indicating a potential return of over 15% over the next 12 months [19]. Core Insights - SANY International's net profit for 1Q25 increased by 23% year-on-year to RMB635 million, marking the first quarterly profit growth since 3Q23. This growth was attributed to strong performance in large port machinery, oil & gas equipment, overseas mining trucks, and other emerging businesses [1][8]. - The report expresses optimism regarding SANY International's sustainable overseas growth and gradual stabilization in the domestic coal mining equipment sector. The earnings forecast remains unchanged, with a target price set at HK$8.20, reflecting an attractive valuation of 8x 2025E P/E amid earnings recovery [1][3]. Financial Summary - Revenue is projected to grow from RMB20,278 million in FY23A to RMB25,110 million in FY25E, representing a year-on-year growth of 14.6% [2]. - Adjusted net profit is expected to increase from RMB1,929 million in FY23A to RMB2,159 million in FY25E, with a year-on-year growth of 16.7% [2]. - The earnings per share (EPS) is forecasted to rise from RMB0.61 in FY23A to RMB0.67 in FY25E [2]. - The price-to-earnings (P/E) ratio is projected to be 8.0x in FY25E, indicating a favorable valuation compared to historical averages [2]. Share Performance - The current market capitalization of SANY International is approximately HK$18,801.3 million, with a current share price of HK$5.85, suggesting a potential upside of 40.2% to the target price [3]. - Over the past three months, the stock has experienced a 26.9% increase in absolute terms [5]. Shareholding Structure - Sany Heavy Equipment holds a significant 66.4% stake in SANY International, indicating strong insider confidence in the company's future [4].

Investment Rating - The report maintains a "BUY" rating for Salesforce, indicating a potential return of over 15% over the next 12 months [17]. Core Insights - Salesforce reported a total revenue growth of 8% YoY to US$9.8 billion in 1QFY26, with non-GAAP operating income also increasing by 8% YoY to US$3.2 billion, both aligning with Bloomberg consensus estimates [1]. - The company's current remaining performance obligation (cRPO) grew by 12% YoY to US$29.6 billion, exceeding consensus estimates by 2%, driven by strong renewal trends and momentum in Data Cloud and AI businesses [1][8]. - Management raised the FY26 total revenue guidance by US$400 million to a range of US$41.0-41.3 billion, reflecting a YoY growth of 8-9%, primarily due to favorable currency effects [1]. - The report highlights robust momentum in Data Cloud and AI solutions, with annual recurring revenue (ARR) surpassing US$1 billion, up over 120% YoY [8]. - Salesforce's acquisition of Informatica for approximately US$8 billion is expected to enhance its Data Cloud capabilities and is projected to be accretive to non-GAAP operating profit margin (OPM), earnings per share (EPS), and free cash flow (FCF) within two years post-close [8][11]. Financial Performance Summary - For FY26E, total revenue is projected at US$41.1 billion, with adjusted net profit expected to reach US$10.97 billion, reflecting a YoY growth of 8.5% and 10.5% respectively [2][9]. - The adjusted EPS for FY26E is estimated at US$11.30, with a P/E ratio of 38.1x [2][14]. - The report indicates a target price of US$388.00 per share, based on a valuation of 21x FY26E EV/EBITDA, which is at a discount to the sector average of 24x [3][11]. Business Forecasts Update - The report revises revenue forecasts for FY26E, FY27E, and FY28E upwards by 0.4%, 4.9%, and 4.8% respectively, reflecting the positive impact of the Informatica acquisition [9]. - Non-GAAP operating profit for FY26E is expected to be US$14.0 billion, with a non-GAAP OPM of 34.0%, maintaining a 1 percentage point increase YoY [9][10]. - The gross margin is projected to be 77.9% for FY26E, with a gradual increase in profitability metrics over the forecast period [10][15].

Investment Rating - The report maintains a "Buy" rating for Microsoft (MSFT US) with a target price of $510.30, indicating a potential upside of 11.3% from the current price of $458.68 [3][4]. Core Insights - Microsoft aims to build an open AI agent network, transitioning from isolated AI models to interconnected agents with distinct identities, facilitated through Azure and Windows platforms [1][10]. - The report highlights three core trends from the Build 2025 conference: 1) Multi-model and multi-agent collaboration; 2) Low-cost inference on the edge; 3) Unified identity governance and observability [1]. - Microsoft continues to strengthen its position in AI cloud services and applications, supported by its extensive developer and enterprise customer ecosystem [1][13]. Financial Overview - For FY23A, Microsoft reported sales revenue of $211,915 million, with a year-on-year growth of 6.9%. Projections for FY24A and FY25E are $245,122 million and $283,148 million, reflecting growth rates of 15.7% and 15.5% respectively [9][27]. - Net profit for FY23A was $72,361 million, with a projected increase to $88,136 million in FY24A and $101,947 million in FY25E, showing year-on-year growth rates of 21.8% and 15.7% [9][27]. - Earnings per share (EPS) are expected to rise from $9.72 in FY23A to $11.86 in FY24A and $13.75 in FY25E [9][27]. Shareholder Structure - Vanguard holds 8.7% and BlackRock holds 7.2% of Microsoft's shares, indicating significant institutional investment [5]. Stock Performance - Over the past month, Microsoft's stock has returned 16.0%, outperforming the market by 5.6% [6].

Investment Rating - Maintain BUY rating for Li Auto Inc. with a target price of US$33.00 (or HK$131) based on a revised FY26E P/E of 17x [1][6] Core Views - Li Auto's 1Q25 net profit aligned with forecasts, and cost reduction efforts exceeded expectations, providing a foundation for FY25E earnings resilience despite a lowered full-year sales volume forecast [1][6] - The facelifted Mega model has been well-received, indicating potential for upcoming BEVs, with new orders significantly exceeding expectations [1][6] Financial Summary - Revenue projections for FY25E are RMB 161,161 million, reflecting a 7% decrease from previous estimates, while net profit is projected at RMB 10,361 million, a 13% reduction [8][9] - FY25E sales volume forecast has been cut by 8% to 0.58 million units, with expectations for FY26E sales volume to rise 24% YoY to 0.72 million units [6][8] - Gross margin is expected to slightly decline to 20.3% in FY25E, with operating profit projected at RMB 8,280 million [8][10] Earnings Summary - FY23A revenue was RMB 123,851 million, with a YoY growth of 173.5%, while FY24A revenue is projected at RMB 144,460 million, showing a 16.6% growth [2][10] - Net profit for FY24A is expected to be RMB 8,032 million, down 31.4% from FY23A, but projected to recover with a 29% increase in FY25E [2][10] Cost Management - Li Auto has reduced its FY25 R&D expense guidance to RMB 11-12 billion and cut SG&A expenses forecast by 8% to RMB 12.5 billion, indicating strong cost control measures [6][8] Market Performance - Li Auto's stock has shown a 1-month increase of 16.8% and a 6-month increase of 20.3%, indicating positive market sentiment [5]

Industry Insights - The semiconductor industry is experiencing strong demand, as evidenced by NVIDIA's Q1 performance, which reported revenue of $44.1 billion, a year-on-year increase of 69.2% and a quarter-on-quarter increase of 12.0%, surpassing Bloomberg consensus estimates [2] - NVIDIA's non-GAAP gross margin was 61.0%, and if excluding a $4.5 billion impairment related to H20, it would be 71.3%, slightly above market expectations [2] - The management anticipates Q2 revenue to reach $45 billion, reflecting a 50% year-on-year growth and a 12% quarter-on-quarter increase, indicating sustained AI demand [2] Company Analysis - Ideal Auto (LI US/2015 HK) reported Q1 2025 earnings in line with expectations, with a gross margin of 20.5%, exceeding predictions by 1.3 percentage points due to effective cost control [5][6] - SANY International (631 HK) achieved a 23% year-on-year increase in net profit for Q1 2025, driven by growth in large port machinery and oil and gas equipment, alleviating market concerns about growth prospects [6] - Salesforce (CRM US) reported Q1 FY26 revenue of $9.8 billion, a year-on-year growth of 8%, with cRPO increasing by 12% to $29.6 billion, indicating strong renewal performance and growth in data cloud and AI business [7][8] - Microsoft (MSFT US) is focusing on building an open AI agent network, with updates on three major AI platforms, which are expected to enhance AI product commercialization [8]