31 Mar 2025 CMB International Global Markets | Equity Research | Company Update Great Wall Motor (2333 HK/601633 CH) Wey could be key to FY25 earnings growth Maintain BUY. Great Wall's 4Q24 earnings were a mixed bag, in our view, as revenue missed but GPM and SG&A expenses beat our prior estimates. We believe a stronger model cycle in FY25E than FY24 could be a positive catalyst for its share price. In particular, new Wey-brand models could be key to Great Wall's sales volume and profit growth in FY25E. We ...

Company Insights - Weichai Power (2338 HK/000338 CH) is expected to see a strong expansion in engine profit margins in 2024, with a projected net profit growth of 27% year-on-year to RMB 11.4 billion, aligning with expectations [2] - The company plans to distribute a final dividend of RMB 0.347 per share, resulting in a historical high payout ratio of 55%, up from 50% in 2023 [6] - The target prices for Weichai Power have been adjusted to RMB 18.7 and HKD 18.0, reflecting an increase from previous estimates [6] Market Performance - The Hang Seng Index closed at 23,579, up 0.41% for the day and 38.31% year-to-date [3] - The Hang Seng Tech Index rose by 0.29%, with a year-to-date increase of 48.48% [3] - The Shanghai Composite Index saw a slight increase of 0.15%, with a year-to-date growth of 13.41% [3] Sector Analysis - The healthcare, consumer staples, and energy sectors led gains in the Hong Kong market, while materials, information technology, and real estate sectors faced declines [5] - In the U.S. market, defensive sectors such as consumer staples and healthcare outperformed, while energy and information technology sectors experienced declines [5] - European markets saw declines in information technology, materials, and healthcare, with defensive sectors like utilities and consumer staples performing better [5] Future Outlook - Haidilao (6862 HK) is expected to accelerate store openings in FY2025, with a projected net increase of approximately 40 stores, reflecting a 3% year-on-year growth [7][9] - The company anticipates an improvement in profit margins, driven by a stable gross margin and operational efficiency enhancements [8] - Atour (ATAT US) plans to open around 500 new hotels in FY2025, aiming for a 30% year-on-year growth in hotel numbers, while closing about 60 underperforming locations [12]

Investment Rating - The report maintains a "BUY" rating for Giant Biogene, indicating a potential return of over 15% over the next 12 months [3][12]. Core Insights - Giant Biogene reported strong performance in 2024, with revenue increasing by 57% year-over-year (YoY) to RMB 5.5 billion. Revenue from skincare products and medical dressing rose by 62.5% YoY and 41.5% YoY, respectively [1][2]. - The gross profit margin (GPM) declined from 83.6% in 2023 to 82.1% in 2024 due to the increased revenue proportion from skincare products and rising marketing costs [1]. - Online revenue surged by 70% YoY, contributing 71.6% to total revenue, which led to an increase in the selling expense ratio by 3.2 percentage points to 36.3% in 2024. Consequently, the attributable net profit margin (NPM) decreased by 4 percentage points to 37.2% [1][2]. Financial Summary - For FY24, revenue is projected at RMB 5,539 million, with a YoY growth of 57.2%. The adjusted net profit is expected to be RMB 2,152 million, reflecting a YoY growth of 48.2% [2][13]. - The earnings estimates for FY25, FY26, and FY27 are RMB 7,138 million, RMB 9,320 million, and RMB 11,944 million, respectively, with corresponding YoY growth rates of 28.9%, 30.6%, and 28.2% [2][13]. - The price-to-earnings (P/E) ratio is projected to decrease from 42.4x in FY23 to 30.0x in FY24, indicating improved valuation metrics as earnings grow [2][13]. Target Price and Valuation - The target price for Giant Biogene is set at HK$ 79.96, representing an upside of 18.5% from the current price of HK$ 67.45 [3][10]. - The valuation is based on a discounted cash flow (DCF) model with a weighted average cost of capital (WACC) of 10.9% and a terminal growth rate of 3.0% [8][10]. Share Performance - The market capitalization of Giant Biogene is approximately HK$ 69.87 billion, with a 52-week high of HK$ 72.80 and a low of HK$ 35.70 [3][4]. - The stock has shown strong performance, with a 1-month increase of 5.8% and a 6-month increase of 39.6% [5].

Investment Rating - The report maintains a BUY rating for Haidilao and raises the target price to HK$ 20.20, based on an 18x FY25E P/E, up from 16x due to faster expansion and sector re-rating [1][13]. Core Insights - FY24 results showed a small beat primarily driven by robust gross profit margin expansion, with sales increasing by 3% YoY to RMB 42.8 billion, although this was below estimates due to greater-than-expected store closures [1][13]. - The company is expected to experience a mild turnaround in FY25E, supported by potential store expansion acceleration and margin improvements, despite stable same-store sales growth (SSSG) [1][10]. - The "Red Guava" project aims to encourage current store managers to open new restaurants under different brands, with 74 stores already established under 11 new brands as of FY24 [10]. Financial Summary - Revenue is projected to grow from RMB 42,755 million in FY24 to RMB 44,607 million in FY25, reflecting a 4.3% YoY growth [2][15]. - Net profit is expected to increase from RMB 4,700 million in FY24 to RMB 5,213 million in FY25, indicating a 10.3% YoY growth [2][15]. - The gross profit margin is anticipated to remain stable at 62.1% for FY25, supported by improved supply chain capabilities and better input costs [11][16]. Store Expansion and Management - Haidilao opened 59 self-owned stores and 3 franchise stores in FY24, resulting in a net decrease of 19 stores due to 70 closures [10]. - For FY25E, the company expects a net increase of approximately 40 stores, equivalent to about 3% YoY growth, with management estimating around 60-70 new openings [10]. - The adoption of multi-store management and digitalization is expected to enhance operational efficiency and staff productivity [10][11]. Earnings Revision - The FY25E net profit forecast has been cut by 10% to RMB 5,192 million, reflecting greater-than-expected store closures and a more conservative outlook on SSSG [11][13]. - The report indicates a significant improvement in gross profit margin, which is expected to positively impact overall profitability [11][13].

2025 年 3 月 27 日 招银国际环球市场 | 市场策略 | 招财日报 每日投资策略 公司点评 全球市场观察 公司点评 ◼ 药明生物（2269 HK, 买入，目标价：30.94 港元） – 强健需求驱动 25 年加 速增长 药明生物公布亮眼的 24 年业绩，收入同比增长 9.6%，经调整利润（即剔除 XDC 少数股东权益前的利润）同比增长 9.0%，收入和利润增速均接近此前 指引（增长 5-10%）区间的上端。非新冠收入同比增长 13.1%，显示出稳健 的客户需求。管理层预计 25 年收入将增长 12-15%，持续经营（即剔除爱尔 兰疫苗业务）收入同比增长 17-20%。 2H24 业绩展现不俗的改善趋势。24 年下半年收入同比增长 18.3%，相比 24 年上半年的 7.7%的同比增速显著提速。非新冠收入同比增长 13.1%，其中下 半年增长 18.3%。所有业务板块均展现提速趋势，特别是临床前收入下半年 同比强劲增长 54.2%（vs 1H24：同比增长 9.2%）。 招银国际研究部 邮件：research@cmbi.com.hk | 环球主要股市上日表现 | | | | | --- | --- | ...

Investment Rating - The investment rating for Zoomlion is maintained as BUY, despite a downward revision of the target price to RMB9.9 for A-shares and HK$7.4 for H-shares [1][5][6]. Core Views - The 2024 results of Zoomlion were below expectations, primarily due to a slowdown in overseas revenue growth, a reduction in other income, and an increase in inventory turnover days. The company is still viewed positively for its structural overseas growth strategy, particularly in emerging economies [1][4]. - The management is confident in reducing inventory levels in 2025, and there are buying opportunities following the post-results pullback [1][4]. Financial Performance Summary - For FY24, revenue decreased by 3.4% YoY to RMB45.478 billion, while adjusted net profit slightly declined by 1.3% YoY to RMB3.521 billion. The forecast for FY25 and FY26 earnings has been revised down by 7% and 8% respectively [2][4]. - The revenue breakdown for 4Q24 showed a 4% YoY decline to RMB11.1 billion, with domestic revenue dropping by 18% YoY, while overseas revenue grew by 14% YoY [4][7]. - The blended gross margin improved by 0.6 percentage points YoY to 27.5%, driven by higher margins in overseas markets [4][7]. Revenue and Profitability Outlook - The revenue forecast for FY25 is set at RMB52.999 billion, with expected growth of 16.5% YoY, followed by RMB61.848 billion in FY26 and RMB69.277 billion in FY27 [2][10]. - The adjusted net profit is projected to increase to RMB4.177 billion in FY25, RMB4.705 billion in FY26, and RMB5.229 billion in FY27, reflecting a growth trajectory despite recent challenges [2][10]. Market Position and Strategy - Zoomlion has low exposure to the domestic property sector, with only 13% of total sales in 2024 related to property. The company is focusing on infrastructure, wind power installation, and chemical plant construction for growth [4][6]. - Management plans to accelerate overseas market expansion and continue focusing on earth-working, mining, and agricultural machinery as growth drivers [4][6]. Valuation Metrics - The target price for A-shares is based on a 2025E P/E multiple of 19.5x, reflecting a historical average, while the H-share target price incorporates a 30% discount [5][6]. - The P/E ratio is projected to decrease from 13.5x in FY24 to 11.3x in FY25, indicating a more attractive valuation for investors [2][5].

Investment Rating - The report resumes coverage of China Taiping with a "BUY" rating and a target price (TP) of HK$15, indicating a potential upside of 28.9% from the current price of HK$11.64 [1][2]. Core Insights - China Taiping reported a robust net profit increase of 36.2% year-on-year (YoY) to HK$8.43 billion, although this was 10% to 11% lower than the analyst's and Bloomberg consensus estimates. The increase in income tax charges, which rose approximately six-fold YoY, was a significant factor in this discrepancy [1]. - The new business value (NBV) surged 90% YoY to HK$14.3 billion on a like-for-like basis, driven by strong growth in agency and bancassurance channels, which saw increases of 42% and 400% YoY, respectively [7]. - The report highlights a significant margin expansion across major channels, with the total NBV margin increasing by 17 percentage points YoY to 32.5% in FY24 [1][7]. - The combined ratio for the property and casualty (P&C) segment improved to 98.1%, supporting a remarkable 831% YoY increase in net profit for domestic P&C to HK$804 million [1][7]. - The report projects FY25 NBV to rise by 11% YoY, supported by an improved product mix and solid financial performance [1][7]. Financial Performance Summary - For FY24, net profit is projected at HK$12.8 billion, with an expected increase to HK$14.5 billion in FY25 and HK$16.3 billion in FY26 [8]. - The report indicates a dividend per share (DPS) of HK$0.35 for FY24, reflecting a 16.7% YoY increase, although the payout ratio decreased to 16.9% from 20.1% in FY23 [1][8]. - The return on equity (ROE) is expected to improve from 11.2% in FY24 to 12.9% in FY25, indicating enhanced profitability [8][17]. Valuation Methodology - The valuation is based on a sum-of-the-parts (SOTP) approach, considering various segments including life insurance, domestic and overseas P&C, reinsurance, and asset management [9][12]. - The total fair value of the company is estimated at HK$49.7 billion, leading to a target price of HK$15.0 per share after applying a 10% conglomerate discount [13][14].

Investment Rating - Maintain BUY rating for Minth Group, indicating potential for over 15% return over the next 12 months [1][7][14] Core Views - Minth Group's 2H24 earnings showed mixed results with revenue falling short of expectations while gross profit margin (GPM) exceeded projections. Improved operational efficiency is evident through reduced net debt, lower capital expenditures (capex), and significantly higher free cash flow, which could support future margin enhancements and increased dividend payouts [1][7] - The company is well-positioned for revenue growth in FY25-27E, driven by rapid growth in battery housing revenue and the introduction of new products that are expected to generate substantial income. Battery housing margins are anticipated to improve further in FY25E as capex decreases [1][7] Financial Summary - Revenue is projected to grow from RMB 23,147 million in FY24A to RMB 26,186 million in FY25E, reflecting a year-on-year growth of 13.1% [2][11] - Net profit is expected to increase from RMB 2,319 million in FY24A to RMB 2,719 million in FY25E, representing a 17.2% year-on-year growth [2][11] - The earnings per share (EPS) is forecasted to rise from RMB 2.02 in FY24A to RMB 2.37 in FY25E [2][11] - The projected price-to-earnings (P/E) ratio is expected to decrease from 9.9x in FY24A to 8.5x in FY25E, indicating a more attractive valuation [2][11] Share Performance - The current market capitalization of Minth Group is approximately HK$ 24,982.9 million, with a target price set at HK$ 26.00, suggesting a potential upside of 20.9% from the current price of HK$ 21.50 [3][4] - The stock has shown strong performance, with a 1-month increase of 2.6% and a 6-month increase of 48.9% [5] Operational Efficiency - Free cash flow surged from RMB 131 million in FY23 to RMB 1,363 million in FY24, highlighting significant operational improvements [7] - The net gearing ratio is projected to decrease from 15.4% in FY24A to 6.4% in FY25E, indicating a stronger balance sheet [2][11]

Company Analysis - Kuaishou (1024 HK) reported a total revenue of 35.4 billion yuan for Q4 2024, representing a year-on-year growth of 9%, with adjusted net profit increasing by 8% to 4.7 billion yuan, aligning with market expectations [2] - For FY24, total revenue and adjusted net profit are projected to grow by 12% and 72% respectively [2] - The forecast for FY25 indicates a 12% increase in total revenue, with stable adjusted net profit margins, driven by a higher proportion of high-margin business income and improved operational efficiency, although offset by increased AI-related investments [2] - The target price for Kuaishou has been adjusted down to 80.0 HKD from a previous 85.6 HKD, maintaining a "Buy" rating [2] Market Performance - The Hang Seng Index closed at 23,344, down 2.35% for the day but up 36.94% year-to-date [3] - The Hang Seng Tech Index fell by 3.82% in a single day, reflecting a year-to-date increase of 46.58% [3] - The performance of major global indices showed mixed results, with the S&P 500 and Nasdaq gaining 0.16% and 0.46% respectively, while the DAX in Germany rose by 1.13% [3] Sector Insights - Sunny Optical Technology (2382 HK) is expected to see revenue and net profit growth of 21% and 146% respectively in 2024, benefiting from strong growth across all business segments and improved product mix [6] - The company is focusing on expanding into automotive, XR, and robotics sectors, which are anticipated to drive profit growth in 2025 and 2026 [6] - The target price for Sunny Optical has been slightly adjusted to 101.47 HKD from 102.89 HKD, reflecting a P/E ratio of 30.3 for 2025 [6] Financial Services - China Taiping (966 HK) reported a 36.2% increase in net profit to 8.43 billion HKD for 2024, although this was below market expectations due to increased tax provisions [11] - The company’s new business value (NBV) grew significantly, with a 90% increase to 14.27 billion HKD, driven by improved value rates [12] - The target price for China Taiping has been set at 15 HKD, indicating a potential upside of 29% based on current valuations [15]