Investment Rating - The report maintains a "Buy" rating for iQIYI, with a target price adjusted to $3.00 based on a 12x P/E ratio for FY2025 [1][2][13]. Core Insights - iQIYI's total revenue for Q4 2024 is expected to decline by 14% year-on-year to RMB 6.6 billion, primarily due to reduced content offerings and a decrease in transaction offset revenue [1]. - The company anticipates a 7% quarter-on-quarter increase in non-GAAP operating profit for Q4 2024, reaching RMB 395 million, attributed to stringent content cost control [1]. - The competitive landscape in the online video market is expected to remain intense, leading to a cautious outlook on revenue and profit recovery for 2025 [1]. Revenue Breakdown - Membership revenue is projected to decline by 15% year-on-year and 6% quarter-on-quarter to RMB 4.1 billion in Q4 2024 [1]. - Online advertising revenue is expected to decrease by 13% year-on-year but increase by 7% quarter-on-quarter to RMB 1.4 billion, driven by brand advertising growth [1]. - Content distribution revenue is forecasted to drop by 20% year-on-year to RMB 404 million, mainly due to a decline in transaction exchange revenue [1]. Financial Projections - Revenue estimates for FY2024 have been revised down by 7%-10%, with total revenue projected at RMB 29.2 billion for FY2024 and RMB 30.0 billion for FY2025 [11]. - The adjusted net profit for FY2024 is expected to be RMB 1.49 billion, with a projected increase to RMB 1.80 billion in FY2025 [3][11]. - The report indicates a projected operating profit margin of 6.0% for Q4 2024, reflecting a 0.9 percentage point increase quarter-on-quarter [2]. Valuation Metrics - iQIYI's current P/E ratio is estimated at 8x based on FY2025 earnings, significantly lower than the industry average of 23x, indicating substantial downside protection [2][13]. - The target price of $3.00 represents a potential upside of 61.3% from the current price of $1.86 [3].

Investment Rating - The report maintains a "BUY" rating for iQIYI, indicating a potential return of over 15% over the next 12 months [1][18]. Core Views - iQIYI's total revenue for 4Q24E is expected to decline by 14% YoY to RMB6.6 billion, primarily due to a light content slate and a decrease in barter transaction revenue [1]. - Non-GAAP operating profit is forecasted to grow by 7% QoQ to RMB395 million in 4Q24E, attributed to stringent content cost control [1]. - The target price has been lowered to US$3.00 based on a 12x FY25E PE, reflecting a more conservative outlook on future revenue and earnings recovery due to intense competition in the online video sector [1][10]. Financial Performance Summary - Revenue projections for FY24E, FY25E, and FY26E have been trimmed by 7-10% [1]. - For FY24E, total revenue is expected to be RMB29.2 billion, with a gross profit of RMB7.2 billion and an operating profit of RMB1.8 billion [8]. - The adjusted net profit for FY24E is forecasted at RMB1.5 billion, with an adjusted EPS of RMB1.6 [8]. Revenue Breakdown - Membership revenue is estimated to decline by 15% YoY to RMB4.1 billion in 4Q24E, while online advertising revenue is expected to decrease by 13% YoY but grow by 7% QoQ to RMB1.4 billion [7]. - Content distribution revenue is projected to drop by 20% YoY to RMB404 million in 4Q24E [7]. Margin Analysis - Gross margin is expected to improve by 2 percentage points QoQ to 24.0% in 4Q24E, driven by fewer barter transactions and effective cost control [7]. - Non-GAAP operating margin is anticipated to expand by 0.9 percentage points QoQ to 6.0% in 4Q24E [7]. Market Position and Valuation - iQIYI's current valuation of 8x FY25E PE offers a significant safety margin compared to peers' average of 23x [7]. - The report highlights the competitive landscape in China's video streaming sector, which is expected to remain intense [1][10].

Investment Rating - The report maintains a "BUY" rating for Baidu, indicating a potential return of over 15% over the next 12 months [3][20]. Core Insights - Baidu is expected to experience a 4.8% year-over-year decline in total revenue for 4Q24, with a non-GAAP net income of RMB4.7 billion, influenced by a one-off impact from an equity investee [1][7]. - Cloud revenue growth is anticipated to be a bright spot, driven by strong demand in GPU cloud services, while the recovery pace of advertising revenue remains critical [1][7]. - The target price has been adjusted down by 6% to US$144.6, reflecting a more subdued recovery in the advertising business [1][11]. Revenue and Profitability - For FY24E, total revenue is projected at RMB132.3 billion, a slight decline from FY23A's RMB134.6 billion, with a forecasted growth of 3.2% in FY25E [2][9]. - Adjusted net profit is expected to decrease by 13% in FY24E to RMB25.0 billion, with a recovery to RMB26.0 billion in FY25E [2][9]. - The adjusted EPS for FY24E is forecasted at RMB71.47, with a consensus EPS of RMB72.60 for the same period [2][9]. Segment Performance - Baidu Core is projected to generate revenue of RMB26.9 billion in 4Q24, down 2.3% year-over-year, primarily due to an 8% decline in core advertising revenue [7][8]. - The cloud business is expected to grow by 13% year-over-year in 4Q24, improving from previous quarters, driven by AI GPU-related revenue [7][8]. Valuation Metrics - The SOTP-based target price of US$144.6 per ADS translates to a 14x 2025E non-GAAP PE, or 7x if excluding net cash [11][12]. - The valuation breakdown includes US$49.1 for Baidu Core, US$0.3 for Apollo ASD, and US$32.6 for Baidu Cloud [11][12]. Cash Position - As of the end of 3Q24, Baidu had approximately RMB144.5 billion in cash on hand, equating to about US$57 per ADS [1][7].

Investment Rating - The report maintains a "Buy" rating for the company and raises the target price to HKD 69.19, up from HKD 66.15, indicating a potential upside of 33.8% from the current price of HKD 51.70 [1][3]. Core Insights - The company has shown impressive online growth in 2024, with a projected revenue increase of over 50% and a net profit growth of around 40%. The GMV for its brands, 可复美 and 可丽金, reached RMB 5.4 billion, a year-on-year increase of 57% across major online platforms [1][6]. - The report highlights the strong performance of 可复美 on Tmall and Taobao, with a GMV growth of 42%, ranking second in the market. The anticipated approval of a new collagen injection product is expected to further drive growth in 2025 [1][6]. - 可丽金 is also experiencing rapid growth, with a GMV of RMB 660 million in 2024, reflecting a 103% year-on-year increase, driven by key product launches [1][6]. Financial Summary - The company’s revenue is projected to grow from RMB 3,524 million in FY23 to RMB 5,406 million in FY24, representing a growth rate of 53.4%. The adjusted net profit is expected to increase from RMB 1,451.8 million in FY23 to RMB 2,108.6 million in FY24, a growth of 45.2% [2][36]. - The report provides a detailed financial outlook, with revenue estimates for FY25 and FY26 at RMB 7,288 million and RMB 9,729 million, respectively, indicating continued strong growth [2][36]. - The company’s net debt ratio is projected to increase, reflecting a shift towards a more leveraged capital structure as it invests in growth opportunities [2][36].

Group 1: IPO Overview - Beijing Saimo Technology Co., Ltd. successfully listed on the Hong Kong Stock Exchange on January 15, 2025, under the stock code 2571.HK[1] - The company issued 33,333,400 H-shares, representing approximately 25.0% of the total issued shares post-global offering, at a price of HKD 12.99 per share, raising approximately HKD 433 million[2] Group 2: Company Profile - Saimo Technology specializes in simulation testing technology for intelligent connected vehicles (ICV), focusing on the design and development of ICV simulation testing products[2] - The company holds a market share of approximately 5.9% in China's ICV simulation testing software and platform market, making it the largest market participant based on 2023 revenue[2] Group 3: Innovation and Recognition - Saimo Technology has launched several innovative products, including the SimPro testing toolchain and the SafetyPro analysis tools for ICV[3] - The company has received multiple recognitions from Chinese government departments, including being designated as a key software enterprise and a "little giant" enterprise by the Ministry of Industry and Information Technology[3] Group 4: Underwriting and Advisory - CMB International acted as the joint bookrunner and lead manager for the IPO, showcasing strong client service capabilities and resource advantages[4] - CMB International has established itself as a leading financial institution in providing advisory services for overseas capital markets, participating in significant IPOs and refinancing projects in Hong Kong over the past five years[5]

Macroeconomic Strategy - Recent policy stimulus has led to a rebound in government bond net financing and sales of housing and durable goods, with credit growth starting to recover from a low point[1] - Social financing stock, household medium-to-long term loans, and M2 growth have all shown improvement, but corporate credit demand remains weak[1] - Monetary policy is expected to remain accommodative, with a potential 50 basis point cut in the reserve requirement ratio in the first half of the year[1] - By the end of 2025, social financing scale and RMB loan balance growth may slightly increase to 8% and 8.1%, respectively[1] Industry Commentary - Global smartphone shipments in Q4 2024 grew by 2.4% year-on-year to 332 million units, driven by promotional activities and new model releases in China[2] - Xiaomi and Vivo outperformed competitors with shipment growth of 4.8% and 12.7%, while Apple and Samsung saw declines of 4.1% and 2.7%[2] - Global smartphone shipments are projected to grow by 3% in 2025, benefiting from the iPhone 17 cycle and AI integration[2] Company Analysis - BeiGene expects to achieve GAAP operating profit breakeven by 2025, with non-GAAP operating profit reaching $66 million in Q3 2024[4] - The company reported $188 million in operating cash flow for Q3 2024, marking its first positive quarterly cash flow[4] - BeiGene is advancing 13 new molecules into clinical trials in 2024, with promising early data expected for BGB-43395 in H1 2025[5] Product Pipeline and Market Position - Zebrutinib's global sales reached $690 million in Q3 2024, capturing approximately 25% of the market share[6] - Zebrutinib is the leading BTK inhibitor for new patients in the U.S. for first-line and relapsed/refractory chronic lymphocytic leukemia (CLL)[6] - The company plans to initiate a head-to-head trial for BGB-16673 in late 2025, demonstrating confidence in its pipeline[7] Growth Projections - Giant Bio has raised its 2024 revenue growth guidance to over 50%, with net profit expected to grow around 40%[9] - The GMV for its brands on major online platforms is projected to reach 5.4 billion yuan, reflecting a 57% year-on-year increase[10] - The company anticipates strong growth in its collagen injection products, with approvals expected in Q1 2025[11]

Economic Indicators - The ISM Services PMI increased from 52.1 in November to 54.1 in December, indicating economic expansion with an annualized GDP growth rate of 1.7%[2] - The Manufacturing PMI rose from 48.4 in November to 49.3 in December, suggesting a slight improvement in manufacturing conditions, corresponding to a GDP growth rate of approximately 1.9%[3] Employment Trends - Job vacancies unexpectedly increased by 259,000 to 8.1 million in November, exceeding market expectations of 7.74 million[3] - The hiring rate decreased by 0.1 percentage points to 3.3%, while the voluntary resignation rate fell by 0.2 percentage points to 1.9%, indicating a balanced labor market[3] Inflation and Market Reactions - The price index in the services sector surged from 58.2 to 64.4, the highest since January 2024, raising concerns about inflation risks[2] - The 10-year U.S. Treasury yield reached 4.68%, the highest in nearly a year, as investors anticipated a delay in interest rate cuts by the Federal Reserve[1] Federal Reserve Outlook - The target federal funds rate is expected to decrease by 50 basis points from a range of 4.25%-4.5% at the end of 2024 to 3.75%-4.0% by the end of 2025[1] - The Federal Reserve may pause rate cuts in January, with potential cuts of 25 basis points in March or May, and another 25 basis points in September[1] Market Valuation Concerns - The S&P 500's price-to-earnings ratio is near the 80th percentile of the past 20 years, indicating high market valuations and increased volatility risks[5] - The yield on BBB-rated corporate bonds at 5.6% is significantly higher than the earnings yield of 3.7% for stocks, suggesting that equities may carry greater risk compared to high-yield bonds[5]

Macro Strategy - The US services PMI accelerated expansion in December, driven by businesses preparing for tariffs, leading to a significant increase in commercial activity[1] - The price index rebounded to a new high since January 2024, potentially due to temporary year-end price fluctuations[2] - The manufacturing PMI continues to contract but shows signs of improvement, with production and demand both improving[1] Inflation Concerns - The surge in the services PMI price index has raised market concerns about inflation rebounding, leading to expectations that the Federal Reserve's rate cut space is narrowing[2] - The US 10-year Treasury yield rose to 4.68%, the highest in nearly a year, putting pressure on US stocks and gold prices[2] - Inflation is expected to decline moderately in the first half of the year due to high year-on-year bases and falling used car and energy prices[2] Industry Insights - The MSCI China Healthcare Index has fallen by 4.7% since the beginning of 2025, underperforming the MSCI China Index by 0.9%[3] - The Chinese government is promoting high-quality development in the pharmaceutical industry, which is expected to benefit innovative drugs and medical devices[4] - The medical device bidding market saw a year-on-year growth of 37% in December, indicating a significant recovery in the sector[5]

宏观策略 策略观点 - 政策观望期 宏观：近期政策刺激提振中国经济，住房销量和耐用消费显著改善。在特朗普关税冲击到来之前，中国政策可 能进入观望防守状态。下半年随着政策刺激效应递减和贸易冲突到来，中国政策可能开启新一轮宽松刺激。美 国经济将延续温和放缓，通胀短期下降，但中期面临特朗普政策效应的扰动。美联储进入对特朗普政策效应的 观察评估期，对降息更加谨慎。随着通胀短期回落，美元实际利率进一步上升，高利率、强美元和高估值可能 推升市场波动性，美联储可能在3月或5月降息1次。在通胀降至更低后，特朗普可能在三季度开启新一轮贸易 战，市场震荡可能促使美联储9月再降息1次。 科技：展望2025年，考虑到全球经济温和复苏、手机/PC需求持续回暖、通用/AI服务器增长延续和端侧AI创新 周期，我们预计科技板块维持高景气度，建议布局两条主线：1）AI终端：各大厂商将于1月CES展会密集发布 AI新品，加上近期苹果Apple Intelligence加快升级，国内手机/平板/智能手表补贴政策，端侧AI创新落地提 速，有望驱动新一轮升级需求（手机/PC/穿戴/眼镜/智能家居/EV）；2）服务器：受益AI算力需求扩张， GB200 ...

2025 年 1 月 8 日 招银国际环球市场 | 策略报告 | 市场策略 策略观点 政策观望期 叶丙南, Ph.D 刘泽晖 伍力恒 刘梦楠 杨天薇, Ph.D 张元圣 贺赛一, CFA 陶冶, CFA 陆文韬, CFA 武煜, CFA 王银朋 黄本晨, CFA 王云逸 张苗 李昀嘉 胡永匡 史迹, CFA 窦文静, CFA 梁晓钧 马毓泽 冯键嵘, CFA 敬请参阅尾页之免责声明 请到彭博 (搜索代码: RESP CMBR )或 http:// www.cmbi.com.hk 下载更多招银国际环球市场研究报告 1 MN 宏观：近期政策刺激提振中国经济，住房销量和耐用消费显著改善。在特朗 普关税冲击到来之前，中国政策可能进入观望防守状态。下半年随着政策刺 激效应递减和贸易冲突到来，中国政策可能开启新一轮宽松刺激。美国经济 将延续温和放缓，通胀短期下降，但中期面临特朗普政策效应的扰动。美联 储进入对特朗普政策效应的观察评估期，对降息更加谨慎。随着通胀短期回 落，美元实际利率进一步上升，高利率、强美元和高估值可能推升市场波动 性，美联储可能在 3 月或 5 月降息 1 次。在通胀降至更低后，特朗普可能在 三季度开 ...