Investment Rating - The report maintains a "BUY" rating for Adobe, with a target price of US$634.50, reflecting a potential upside of 15.4% from the current price of US$549.93 [2][17]. Core Insights - Adobe's total revenue for 4QFY24 grew by 11% YoY to US$5.61 billion, aligning with consensus estimates, while non-GAAP net income increased by 9% YoY to US$2.13 billion [1]. - The company is experiencing a deceleration in Digital Media net new ARR growth, which was up 2% YoY to US$578 million in 4QFY24, raising investor concerns about the monetization pace of AI applications [1]. - Adobe plans to accelerate AI monetization in FY25 by introducing higher-priced AI services, with management guiding total revenue growth of 8-10% YoY to US$23.30-23.55 billion for FY25E [1][5]. Financial Performance - For FY25E, Adobe's revenue is projected to reach US$23.5 billion, with adjusted net profit expected at US$8.86 billion, translating to an adjusted EPS of US$19.83 [1][10]. - The company reported a stable non-GAAP operating profit margin (OPM) of 46% in 4QFY24, with guidance for a similar margin in FY25E [1][4]. - Digital Experience revenue grew by 10% YoY to US$1.4 billion in 4QFY24, driven by Adobe Experience Manager and Adobe Journey Optimizer [1]. Growth and Valuation - Adobe's revenue growth is expected to slow, with projections of 9.4% for FY25E and further declines in subsequent years [14]. - The valuation of Adobe is set at US$284 billion, based on a target P/E of 32x for FY25E, which is below the sector average of 41x [5][6]. - The company has a strong cash position, with cash and equivalents expected to reach US$11.88 billion by the end of FY25E [12].

Investment Rating - The report maintains a positive outlook for the internet industry, suggesting a focus on companies with strong business moats and growth potential, particularly in mature sectors and overseas expansion [1][12][14]. Core Insights - The report emphasizes that the introduction of substantial consumption-boosting policies will be a key driver for structural valuation improvement in the sector, while the industry may experience volatility before these policies are enacted [1][12]. - It identifies three main investment themes: 1) Companies with strong business moats and new growth opportunities, such as Tencent, NetEase, Alibaba, and Meituan; 2) Sectors with rapid profit growth that may see valuation recovery, including OTA, short video, and education, with a focus on Ctrip, Kuaishou, and New Oriental; 3) Companies with overseas expansion potential, particularly in e-commerce and OTA [1][12][14]. Summary by Sections Consumption Boost and AI - The report anticipates that the main growth drivers for 2025 will include consumption-boosting policies, generative AI opportunities in cloud and advertising, and overseas market expansion [1][12][14]. - It highlights that the online travel agency (OTA) sector is expected to maintain strong revenue growth due to low overseas online penetration and established supply chains [1][12]. Shareholder Returns - The average net cash to market value ratio for Chinese internet companies has reached 26%, indicating a strong focus on sustainable shareholder returns as a support for valuation [1][12][14]. - Companies like Alibaba, Tencent, and NetEase are recommended for their robust shareholder return strategies [1][12]. Sector Performance Expectations - Local services, online gaming, and online travel are favored sectors due to their resilience and growth potential, while the e-commerce sector faces challenges from weak retail sales [1][12][14]. - The online advertising sector is expected to see differentiated performance across platforms, with short video platforms maintaining revenue growth [1][12][14]. Specific Company Insights - Tencent and NetEase are expected to benefit from new game releases and overseas revenue growth, with projected revenue increases of 8% and 7% respectively for FY25 [22]. - The report projects a 10% growth in domestic tourism revenue, with OTA revenue expected to grow even faster due to increased online penetration [22]. - E-commerce is projected to grow by 7.1% in 2025, driven by consumption recovery and potential policy support [23]. Profit Elasticity - Companies such as Bilibili, New Oriental, and Beike are noted for their high profit elasticity, indicating that they could see significant profit increases with revenue growth [17][18].

Investment Rating - The report maintains a "Buy" rating for several companies including Geely Automobile, Xpeng Motors, and others, while holding a "Hold" rating for NIO [4][41]. Core Insights - The Chinese passenger car market is expected to show resilience in 2025, with retail sales projected to decline by 2% to 23.08 million units due to demand being pulled forward by the trade-in subsidy policy in 2024 [45][48]. - The wholesale sales of passenger cars in China are anticipated to increase by 3.8% in 2025, supported by rising overseas sales and inventory replenishment [45]. - The market share of new energy vehicles (NEVs) is expected to reach 57.8% in retail sales by 2025, with a significant increase in the number of new models from domestic brands [1][3]. Summary by Sections 2025 Outlook - The report predicts that the retail and wholesale sales of NEVs in China will grow by 22% year-on-year, reaching 13.35 million and 14.90 million units respectively in 2025 [3]. - Domestic brands are expected to significantly outnumber foreign brands in new vehicle launches, with NEVs accounting for 84% of new car sales [3]. Investment Strategy - The report emphasizes that 2024 will be a year of maturation for the NEV industry in China, with price competitiveness and brand strength becoming crucial as differentiation strategies become harder to implement [2][37]. - Recommended stocks include Geely and Xpeng, which have shown potential for successful new model launches and improved profitability [41][42]. Market Dynamics - The report highlights that the penetration rate of NEVs in lower-tier cities has reached 38%, indicating a broadening market base [2][37]. - The competitive landscape is expected to intensify, with a focus on profitability and a reduction in tolerance for losses among investors [2][38]. Key Company Projections - Geely is projected to achieve a 10% increase in wholesale sales to 2.38 million units in 2025, with 55% being NEVs, and a core net profit growth of 36% to 12.5 billion RMB [41][42]. - Xpeng is expected to see a significant sales increase of 110% in 2025, reaching 390,000 units, with a path to profitability anticipated by 2026 [42].

2024 年 12 月 12 日 招银国际环球市场 | 睿智投资 | 行业研究 互联网 2025 展望：逆风前行，但可以有更多期待 三条投资主线：关注成熟业务护城河及新发展空间、估值提升空间、出海。展 望 2025，增量实质性促消费政策的出台或仍是板块估值结构性提升的关键驱动 因素，而在此之前板块或维持震荡，股东回报水平、盈利增速及确定性或为估 值的关键支撑。我们建议关注三条主线：1）成熟业务的护城河及新发展空 间，或有望驱动业绩及估值的双升：如受益新游发布的游戏板块、核心业务仍 有进一步线上渗透空间的本地生活、AI 技术赋能下广告效果提升及 GPU 云业 务带来新增量的广告和云、变现率有提升空间且有望受益于增量促消费政策的 电商；建议关注腾讯、网易、阿里巴巴、美团；2）盈利快速增长已较为充分 被预期、但估值或有望进一步修复带来投资机会的板块：如 OTA、短视频、教 育，建议关注携程、快手、新东方；3）出海有望在中长期带来盈利和估值增 量的板块，如电商、OTA。 观存量：确定性或仍为短期重点。回顾 2024，宏观逆风仍存的情况下，市 场的主要关注点聚焦核心业务盈利增速和确定性、股东回报水平、及新业 务扩张带来 ...

Investment Rating - The report maintains a "Buy" rating for the company, with a target price raised to HKD 22.88, reflecting a potential upside of 24.2% from the current price of HKD 18.42 [3][21]. Core Insights - The report anticipates that the Biosecurity Act is likely to fail in legislation, which would benefit the company by providing a more stable operating environment for continued performance growth [1]. - The global biopharmaceutical financing is showing signs of recovery, which is expected to drive the company's valuation and performance recovery [1]. - The company is expanding its global production network to mitigate geopolitical risks and enhance its ability to meet diverse global client needs [1]. - The management aims to add 110 new projects in 2024, benefiting from the resurgence in financing and increased demand for early-stage clinical research [1]. - Milestone revenues are expected to significantly enhance the company's net profit, with projected milestone income reaching approximately RMB 500 million in the second half of 2024 [1]. Financial Summary - For FY24E, the company expects sales revenue of RMB 18,236 million, a year-on-year growth of 7.1% [2]. - Adjusted net profit for FY24E is projected at RMB 4,739 million, reflecting a slight increase of 0.8% year-on-year [2]. - The adjusted earnings per share for FY24E is estimated at RMB 1.15, with a non-IFRS P/E ratio of 14.8 times [2][18]. - The company anticipates revenue growth of 12.4% and 13.9% for FY25E and FY26E, respectively [2]. Market Context - The report highlights a 1.1% year-on-year increase in global healthcare financing for the first 11 months of 2024, indicating a recovery from a 21% decline in 2023 [1][9]. - The company has secured significant contracts, including four Phase 3 clinical and commercialization production contracts with a multinational pharmaceutical company [1]. - The expansion of production capacity in Germany and the upcoming factory in Singapore are part of the company's strategy to meet increasing overseas client demands [1].

Investment Rating - Maintains a **Buy** rating for SenseTime with a target price of **HK$2.00**, up from HK$1.36, based on a 9.0x EV/Sales multiple for FY25E [1][18] Core Views - SenseTime has completed a strategic reorganization, adopting a "1+X" structure to focus on its core AI cloud services, large models, and AI applications, while other ecosystem businesses (smart cars, home robots, smart healthcare, smart retail) operate independently with flexible incentives and financing [1] - The reorganization is expected to accelerate SenseTime's path to breakeven, with breakeven now projected in FY26E (previously expected adjusted net loss of RMB 1.7 billion) [1] - The core AI cloud and Gen AI businesses grew 256% YoY in H1 2024, contributing 60% of total revenue, with significant cost reductions expected as core business headcount is reduced to less than 2,000 (50% of pre-reorganization total) [2] - SenseTime's Gen AI business is expected to grow at a 68% CAGR from FY24 to FY26, driven by increasing computing power and strong demand for AI computing [5] - SenseTime's total operational computing power reached over 20,000 PetaFLOPS in August 2024 (up 233% YoY), with management targeting over 25,000 PetaFLOPS by the end of FY24 [5] Financial Summary - Revenue is projected to grow from RMB 4,541 million in FY24E to RMB 7,498 million in FY26E, with adjusted net profit turning positive at RMB 84.1 million in FY26E [4] - Gross margin is expected to improve from 42.8% in FY24E to 39.0% in FY26E, while adjusted net profit margin is forecasted to turn positive at 1.0% in FY26E [15] - Operating cash flow is expected to improve significantly, turning positive at RMB 199 million in FY24E and reaching RMB 2,798 million by FY26E [25] Valuation - SenseTime's target EV/Sales multiple of 9.0x for FY25E is higher than the industry average of 7.8x, reflecting its leading position in China's Gen AI cloud services market and strong AI infrastructure [18] - The company's EV/Sales multiple is expected to decline from 9.8x in FY24E to 6.8x in FY26E, indicating improving profitability and valuation [25] Market Position - SenseTime ranks third in China's Gen AI IaaS market with a 15% market share as of Q2 2023 [5] - The company's strong AI infrastructure positions it to benefit from the growth of Gen AI, with significant investments in computing power and large models [5]

Investment Rating - The report maintains a "BUY" rating for SenseTime, with a target price raised to HK$2.00, reflecting a potential upside of 17.0% from the current price of HK$1.71 [3][10]. Core Insights - SenseTime has completed a strategic organizational restructuring to focus on its generative AI business, which is expected to accelerate its path to breakeven by FY26E [1]. - The revenue from the core AI Cloud and generative AI businesses grew by 256% year-over-year, accounting for 60% of total revenue in 1H24 [1]. - The restructuring is anticipated to lead to significant expense reductions, with the core business headcount reduced to below 2,000, representing less than 50% of the total group headcount prior to restructuring [1]. Financial Summary - Revenue projections for FY24E, FY25E, and FY26E are RMB4,541 million, RMB5,955 million, and RMB7,498 million respectively, indicating a growth trajectory [2][13]. - Adjusted net profit is expected to improve from a loss of RMB3,615.9 million in FY24E to a profit of RMB84.1 million in FY26E [2][13]. - The adjusted net margin is forecasted to improve from -79.6% in FY24E to +1.1% in FY26E, driven by robust growth in the generative AI business and a significant decline in operating expenses [1][2]. Market Position - SenseTime is positioned as the third largest generative AI IaaS service provider in China, holding a market share of 15% as of 2H23 [1]. - The company’s total operating computing power exceeded 20,000 PetaFLOPS in August 2024, with expectations to surpass 25,000 PetaFLOPS by the end of FY24 [1]. Valuation - The target price of HK$2.00 is based on a valuation of 9.0x FY25E EV/Sales, which is at a premium to the sector average of 7.8x, reflecting SenseTime's leadership in the generative AI cloud services market [10].

Investment Rating - The report maintains a "Buy" rating for WuXi AppTec, with a target price raised to 78.51 RMB, reflecting a potential upside of 42.2% from the current price of 55.22 RMB [2][6]. Core Insights - The failure of the Biosecure Act to be included in the 2025 NDAA indicates significant legislative hurdles, reducing the likelihood of its passage in the near term. This is expected to positively impact WuXi AppTec's competitive position in the global pharmaceutical R&D industry [1][6]. - The company is anticipated to maintain its leading position in the global chemical drug CDMO market, with overseas competitors lagging significantly in revenue and capacity [1][6]. - A recovery in global biopharmaceutical financing is expected to drive rapid growth in orders for WuXi AppTec, with a reported 35% year-on-year increase in backlog orders as of September, including a remarkable 196% increase in TIDES orders [1][6]. Financial Summary - Revenue projections for WuXi AppTec are as follows: 38,906 million RMB in FY24E, 43,332 million RMB in FY25E, and 49,225 million RMB in FY26E, with expected year-on-year growth rates of -3.6%, +11.4%, and +13.6% respectively [1][9]. - Adjusted net profit is projected to be 10,427 million RMB in FY24E, 11,668 million RMB in FY25E, and 13,474 million RMB in FY26E, with corresponding growth rates of -3.9%, +11.9%, and +15.5% [1][9]. - The adjusted earnings per share are forecasted to be 3.61 RMB in FY24E, 4.04 RMB in FY25E, and 4.67 RMB in FY26E, with growth rates of -3.9%, +11.9%, and +15.5% respectively [1][9]. Valuation Metrics - The report utilizes a DCF model with a WACC of 9.42% and a perpetual growth rate of 2.0%, resulting in a calculated equity value of 226,740 million RMB and a per-share value of 78.51 RMB [6][9]. - The adjusted P/E ratio is projected to decrease from 15.3 in FY24E to 11.8 in FY26E, indicating an improving valuation as earnings grow [13].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price raised to HKD 26, indicating a potential upside of 24.7% from the current price of HKD 20.85 [4][18]. Core Insights - The company is positioned to benefit from the increasing average vehicle age in China and a shift towards more rational consumer spending habits. Its proprietary systems enhance supply chain and store management, leading to standardized products and services that cater to younger consumers, resulting in lower customer acquisition costs and higher user retention [1][2]. - The company is expected to capture market share from traditional 4S dealerships as consumers downgrade their spending. Its self-controlled products offer high cost-performance ratios, potentially yielding higher gross margins than branded products, thus creating a positive cycle for customer acquisition and profit growth [2]. - The expansion of the store network is anticipated to offset potential growth pressures at individual store levels. The management reported a 22% year-on-year increase in new store applications in the first half of the year, with expectations to grow from approximately 6,300 stores to about 7,000 by year-end and around 7,900 next year [2][3]. Financial Summary - Revenue projections for the current and next year have been adjusted upwards by 1-2% to RMB 14.936 billion and RMB 17.127 billion, respectively, with gross margins improving to 26.0% and 26.8% [2][10]. - Adjusted net profit estimates have been raised by 3-5% to approximately RMB 634 million and RMB 1.029 billion for the current and next year [2][10]. - The company’s financial metrics indicate a significant recovery, with a projected net profit margin of 4.2% for FY24E and 6.0% for FY25E, alongside an increase in return on equity to 18.4% by FY25E [12][15].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 9.81, representing a potential upside of 54.5% from the current price of HKD 6.35 [4][30]. Core Insights - The company is expected to experience rapid growth in its key product, Tevazo, with projected revenues of RMB 5.11 billion in 2024, accounting for 58% of total revenue. The penetration rate of Tevazo among CTIT patients is anticipated to increase from 29% in 2023 to 35% in 2024 [8][9]. - The company has successfully renewed multiple products in the national medical insurance directory, including Tevazo and HER2 monoclonal antibody, which will help stabilize prices and support steady growth [2][3]. - The company has a robust pipeline with several innovative products entering NDA or Phase III clinical trials, expected to be approved between 2025 and 2027, providing new growth momentum [2][3]. Financial Summary - Revenue is projected to grow by 12.8% in 2024 and 12.2% in 2025, with corresponding revenues of RMB 8.82 billion and RMB 9.89 billion respectively [3][20]. - The net profit attributable to shareholders is expected to increase by 23.7% in 2025, reaching RMB 2.18 billion, with a basic earnings per share of RMB 0.90 [3][20]. - The current market capitalization corresponds to a PE ratio of 6.6 times for 2025, indicating an attractive valuation [2][3]. Pipeline and Product Development - The company is advancing its pipeline with several products, including long-acting EPO and IL-17, which are expected to be submitted for approval in 2025 [2][17]. - The introduction of new products, such as the oral solution of paclitaxel and other late-stage clinical products, is anticipated to become significant growth drivers starting in 2026 [2][17]. - The company is also expanding its product offerings in dermatology and hair loss, with promising products like Winlevi and semaglutide in Phase III clinical trials [16][17]. Market Position and Competitive Advantage - The company has established a strong marketing team and channel advantages in the autoimmune field, which will help capture market share for new autoimmune drugs post-launch [15][17]. - Tevazo is positioned as a leading treatment option for chemotherapy-induced thrombocytopenia (CIT), with evidence supporting its efficacy over competitors [10][13].