Macro Economic Overview - Recent policy shift in China towards strong monetary easing has led to a significant rebound in economic activity, with high-frequency economic activity index rising from 0.87 in September to 1.02 in October, and GDP growth rate expected to increase from 4.8% in the first three quarters to 5% in the fourth quarter [7][11] - The manufacturing and services PMI have returned to expansion, indicating improved business activity and demand, while deflationary pressures have slightly eased [7][9] Technology Sector - The technology sector has seen a mild rebound, driven by new AI terminal products and increased capital expenditure from cloud service providers, with recommendations to focus on supply chains related to smartphones, AI PCs, and MR terminals [1][6] - Notable companies recommended for investment include Xiaomi Group (1810 HK), BYD Electronics (285 HK), and AAC Technologies (2018 HK) [1][6] Semiconductor Industry - The semiconductor sector remains cautiously optimistic, with strong demand related to AI continuing, while non-AI demand is in a slow recovery phase [1][6] - Recommendations include Zhongji Xuchuang (300308 CH) and Northern Huachuang (002371 CH), with a focus on companies benefiting from AI capital expenditure growth [1][6] Healthcare Sector - The healthcare sector is expected to outperform the market due to macroeconomic improvements and supportive policies for innovative drugs and medical equipment [2][6] - Recommended companies include WuXi AppTec (2359 HK), BeiGene (BGNE US), and Innovent Biologics (1801 HK) [2][6] Consumer Goods Sector - The consumer goods sector is anticipated to recover gradually, supported by new product launches and market share growth, with recommendations for companies like China Resources Beer (291 HK) and Proya Cosmetics (603605 CH) [2][6] - The food and beverage sector shows signs of recovery, with beer production experiencing positive growth for the first time since early 2023 [2][6] Automotive Industry - The automotive sector is experiencing a positive seasonal trend, with increased foot traffic and orders, and expectations for continued sales growth leading up to the Lunar New Year [4][6] - Recommended companies include Geely Automobile (175 HK) and Li Auto (LI US) [4][6] Real Estate Sector - The real estate sector shows optimism with a significant increase in contract sales among key developers, with a 72% month-on-month increase in October [4][6] - Recommended companies include China Resources Land (1109 HK) and Greentown Service (2869 HK) [4][6] Insurance Sector - The insurance sector is expected to see continued growth in net profits and new business value, with a focus on life insurance companies benefiting from policy expectations [5][6] - Recommended companies include China Life (2628 HK) and Ping An Insurance (2318 HK) [5][6] Capital Goods Sector - The capital goods sector is viewed positively, with engineering machinery companies maintaining a positive outlook for exports and capacity expansion [5][6] - Recommended company is Zoomlion Heavy Industry (1157 HK) [5][6]

Investment Rating - The report initiates coverage with a "Buy" rating for the company, setting a target price of 44.21 RMB, indicating a potential upside of 47.2% from the current price of 30.03 RMB [3]. Core Insights - The company focuses on a dual strategy of integrating raw materials and formulations, combining generic and innovative drugs, with a strong emphasis on complex formulations and original new drugs. The company has seen rapid revenue growth, achieving 1.18 billion RMB in revenue for 2023, a year-on-year increase of 15.9% [1][12]. - The innovative drug BGM0504, a dual GLP-1/GIP receptor agonist, is positioned as a leading product in the domestic market, with promising clinical data for weight loss and diabetes treatment. The company has initiated Phase III clinical trials for weight loss and is expected to start Phase III trials for diabetes soon [1][26][31]. Company Overview and Development Strategy - The company was founded in 2001 and listed on the STAR Market in November 2019. It operates a business model that balances international and domestic markets, focusing on first-generic, difficult-to-generate, and specialty raw materials, as well as complex formulations and original new drugs [9][10]. - The company has a comprehensive product range covering antiviral, antifungal, immunosuppressive, respiratory, and oncology treatments, with a focus on high-tech and clinically valuable pipelines [10][11]. Financial Performance - In 2023, the company reported a revenue of 1.18 billion RMB, with raw material product revenue of 885 million RMB, and a significant increase in antiviral product revenue due to heightened demand [12][13]. - The company’s net profit for 2023 was 173 million RMB, a decrease of 18.0% from the previous year, primarily due to lower gross margins and increased R&D expenses [16][22]. R&D Investment - The company emphasizes R&D, with R&D expenses reaching 249 million RMB in 2023, accounting for 21.1% of revenue. The focus is on innovative drugs and inhalation formulations, with a significant increase in R&D investment for BGM0504 [22][23]. - BGM0504 has shown promising results in clinical trials, demonstrating significant weight loss and blood sugar control compared to competitors [26][32]. Product Pipeline - The company has multiple products in various stages of clinical trials, including BGM0504 for diabetes and weight loss, and BGC0228 for oncology, indicating a robust pipeline for future growth [24][25][30]. - The company is also advancing its inhalation and iron supplement products, which are expected to contribute to future revenue streams [24][25].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 162.81 RMB, indicating a potential upside of 24.6% from the current price of 130.62 RMB [3][16]. Core Insights - The company is actively expanding its global business, showcasing advanced self-developed ultrasound platforms and prototypes, aiming for comprehensive clinical coverage across various medical fields [1]. - The company has successfully signed contracts or installed nearly 300 high-end machines in over 40 countries this year, with expectations to exceed 3,000 overseas installations by the end of 2024 [1]. - Ongoing research collaborations with top global clinical experts are driving innovation and enhancing the company's brand image in international markets [1]. - The company is building a resilient global supply chain and production network to mitigate geopolitical challenges, with plans for new production bases in Southeast Asia and Latin America by 2025-2027 [1]. Financial Summary - The company’s revenue is projected to grow from 10,852 million RMB in FY24E to 17,448 million RMB in FY26E, with a notable increase in adjusted net profit from 1,541 million RMB in FY24E to 2,740 million RMB in FY26E [5][10]. - The adjusted net profit margin is expected to improve from 14.20% in FY24E to 15.70% in FY26E, reflecting operational efficiency [5][10]. - The company’s DCF analysis indicates a present value of equity at 134,183 million RMB, with a calculated DCF per share value of 162.81 RMB [7][6].

2024 年 11 月 8 日 招银国际环球市场 | 宏观研究 | 宏观视角 美国经济 美联储如期降息 美联储会议将政策利率目标从 5%-5.25%下降 25 个基点至 4.5%-4.75%，符合 市场预期。会议声明删去对通胀趋近2%更有信心的表述，显示美联储认为通胀 达标时间的不确定性上升。鲍威尔暗示将继续降息，但降息节奏和速度可能调 整，对 12 月是否再次降息持开放态度。鲍威尔表示总统大选结果不会影响美联 储决策，新总统上任后无权立即将他解职，意在维护美联储的独立性与公信 力。特朗普政策效应将推升美国通胀和短期经济增长，美联储未来降息空间明 显下降。未来两个月美国经济可能延续超预期，通胀可能小幅反弹，我们预计 美联储 12 月可能保持利率不变，明年或进一步降息 75 个基点，明年末联邦基 金利率可能降至 3.75%-4%。美国 10 年国债收益率可能从今年末的 4.1%降至 明年末的 3.9%。 降息符合预期，通胀达标时间更不确定。美联储将政策利率目标从 5%- 5.25%下降 25 个基点至 4.5%-4.75%，符合市场预期。芝商所（CME）工具 显示此次会议之前期货市场预计降息 25 个基点的概率 ...

Economic Impact - Trump's policies may boost U.S. economic growth in the short term but lead to stagflation in the long term[2] - Estimated GDP growth reduction for China could be between 0.95% and 1.55% if a new trade war begins[1] - In a pessimistic scenario, U.S. imports, Chinese exports, and China's GDP could decrease by approximately 14.1%, 10.5%, and 3.1% respectively over two years[4] Trade and Investment - Trump's aggressive tariff policies could include a 20% tariff on all imports and a 60% tariff on Chinese goods, potentially igniting a new trade war[3] - The IMF estimates that a new trade war could lower global GDP growth by 0.8% in 2025 and 1.3% in 2026[3] - China's direct investment in ASEAN, Mexico, and Hungary may increase as companies seek to diversify markets[4] Policy Responses - China may increase its fiscal deficit by 2-3 trillion yuan to support domestic consumption in response to trade tensions[7] - The People's Bank of China could lower the reserve requirement ratio by 0.5 to 1 percentage points and reduce the Loan Prime Rate (LPR) by 20-40 basis points[7] Market Reactions - Trump's policies are expected to favor U.S. stocks in the short term due to tax cuts and deregulation, but the long-term impact on stocks is uncertain[8] - The dollar may strengthen against other currencies, with projections suggesting a rise of 4%-10% against the yuan by the end of 2025 depending on tariff scenarios[8]

Investment Rating - The report initiates coverage with a "Buy" rating and sets a target price of 44.21 CNY [4] Core Insights - The company has experienced stable growth in its raw materials and formulations business, achieving a revenue of 1.18 billion CNY in 2023, a year-on-year increase of 15.9% [1] - The company is focusing on complex formulations and innovative drugs, with R&D expenses reaching 249 million CNY in 2023, a 20.1% increase, accounting for 21.1% of revenue [2] - The innovative drug BGM0504 has shown promising results in clinical trials, with a significant weight loss of 18.5% in the 15mg dosage group during the second phase of clinical trials [3] Summary by Sections Revenue Growth - The company reported a revenue of 1.18 billion CNY in 2023, with a 15.9% year-on-year growth, and a revenue of 977 million CNY in the first three quarters of 2024, reflecting a 6.8% increase [1] - The revenue from formulation products reached 110 million CNY in the first half of 2024, marking a 30.4% increase, with formulation products accounting for 17.9% of total sales [1] R&D Focus - The company is prioritizing R&D in inhalation agents and GLP-1 class drugs, with 53.0% of R&D expenses directed towards innovative drugs and inhalation formulations in the first half of 2024, a 105.3% increase year-on-year [2] Clinical Development - BGM0504, a dual agonist for GLP-1/GIP, is in the first tier of domestic formulations, with a 2.76% reduction in HbA1c levels observed in diabetes patients during the second phase of clinical trials [3] - The company has initiated the third phase of clinical trials for BGM0504 for weight loss, with IND approval obtained in the U.S. [3] Financial Projections - Revenue is projected to grow steadily, with expected increases of 9.6%, 11.5%, and 14.5% from 2024 to 2026, reaching 1.29 billion CNY, 1.44 billion CNY, and 1.65 billion CNY respectively [4] - Net profit is forecasted to be 200 million CNY, 230 million CNY, and 290 million CNY for the same period, with growth rates of 13.7%, 16.3%, and 27.9% respectively [4]

Investment Rating - The report maintains a "BUY" rating for the company and raises the target price to HK$20.00 from HK$15.50, implying a 21.8% upside from the current price of HK$16.42 [1]. Core Insights - The company's 3Q net profit after tax (NPAT) increased significantly by 17.7% year-on-year to RMB66.2 billion, driven by net fair value gains, which surged 80 times year-on-year [1]. - The report revises FY24-26E EPS forecasts upward by 148%, 38%, and 31% to RMB4.45, RMB2.58, and RMB2.61 respectively, reflecting improved fundamentals and investment performance [1][3]. - The company is expected to achieve a 17% growth in new business value (NBV) for FY24, supported by margin expansions and a favorable product mix [1][3]. Summary by Sections Financial Performance - The company reported a total investment income (TII) of RMB261.4 billion in 9M24, a 152% increase year-on-year, with 3Q TII soaring 5.28 times year-on-year to RMB139.1 billion [1]. - In 9M24, NBV grew by 25.1% year-on-year, indicating strong growth momentum, particularly in 3Q24, where new business sales surged [1][3]. Valuation Metrics - The stock is currently trading at FY24E 0.41x P/EV and 0.91x P/BV, which are above the respective 3-year historical averages [1][4]. - The report indicates a fair value per share of HK$20.00 based on P/EV and P/B methodologies, reflecting a robust valuation outlook [4][13]. Growth Drivers - The company is expected to benefit from a favorable equity market environment, with a significant allocation to high-dividend yield stocks anticipated to smooth out profit volatility [1][10]. - The report highlights a stable agency force with improved productivity, contributing to the positive outlook for new business sales [1][3]. Future Outlook - Management anticipates a shift in product mix towards higher sum-assured whole life and participating products for FY25, which is expected to drive sales growth [1]. - The report projects continued margin expansion and a resilient NBV growth trajectory, supported by regulatory changes and improved underwriting product mix [1][3].

Investment Rating - The report maintains a "BUY" rating for Innovent Biologics with a target price of HK$55.21, representing a 39.6% upside from the current price of HK$39.55 [3][19]. Core Insights - Innovent Biologics has demonstrated strong fundamentals supported by significant R&D catalysts and a commitment to corporate governance, as evidenced by the cancellation of a related-party transaction to protect investor interests [1][5]. - The company has shown robust product sales growth, with total product sales increasing over 40% year-on-year to more than RMB2.3 billion in Q3 2024, and a total of over RMB6.0 billion in the first nine months of 2024 [6][11]. - Innovent's product portfolio is expanding, with 11 marketed products and the anticipated approval of additional products, aiming for RMB20 billion in sales by 2027 [11][12]. Financial Performance - For FY24E, Innovent is projected to achieve revenue of RMB8.219 billion, reflecting a year-on-year growth of 32.4% [2][18]. - The company expects to narrow its non-IFRS EBITDA loss significantly, projecting a loss of RMB731 million for FY24E, with a target to achieve EBITDA breakeven by 2025 [11][19]. - R&D expenses are forecasted to be RMB2.795 billion in FY24E, indicating a continued investment in innovation [2][19]. Product Pipeline and Market Potential - Innovent's leading product, sintilimab, achieved sales of US$150 million in Q3 2024, with expectations to reach RMB3.69 billion in 2024, a 34% increase year-on-year [6][11]. - The company is advancing several innovative drug candidates, including IBI363 and IBI343, which have shown promising results in clinical trials and are expected to create significant out-licensing opportunities [13][14]. - The anticipated approval of mazdutide for obesity and diabetes in 2025 is expected to enhance Innovent's position in the cardiovascular and metabolic sector [12][15]. Market Outlook - Innovent aims to leverage its strong commercial capabilities and broad product portfolio to drive growth in both domestic and international markets [1][11]. - The company is well-positioned to capture market share in the rapidly growing sectors of oncology and metabolic diseases, with a focus on innovative therapies that address unmet medical needs [12][15].

Employment Data - In October 2024, non-farm payrolls increased by only 12,000, significantly below the expected 100,000[1] - The previous two months' data was revised down by 112,000, with August and September figures adjusted to 78,000 and 223,000 respectively[1] - Private sector employment experienced its first month-on-month decline since December 2020, decreasing by 28,000 jobs[1] Labor Market Trends - The unemployment rate rose slightly from 4.05% to 4.14%, despite a small drop in the labor force participation rate from 62.7% to 62.6%[1] - The average duration of unemployment increased to 22.9 weeks, the highest in nearly 31 months[1] - The labor force participation rate for the prime working age group (25-54 years) fell from 84% in July to 83.5% in October[1] Sector-Specific Insights - Job losses in goods-producing sectors totaled 37,000, with durable goods manufacturing alone losing 47,000 jobs due to strikes[1] - Service sector job growth plummeted from 169,000 to just 9,000, marking the lowest level since December 2020[1] - Healthcare job growth slowed significantly, with new jobs dropping from 80,000 in September to 51,000 in October[1] Economic Outlook - The Federal Reserve is expected to lower interest rates by 25 basis points in November and December, with a further reduction of 100 basis points anticipated next year[1] - The overall employment data suggests a continued slowdown in the labor market, supporting a gradual easing of monetary policy by the Federal Reserve[1]

1 Nov 2024 CMB International Global Markets | Equity Research | Company Update United Imaging (688271 CH) Anticipating a rapid rebound in domestic business United Imaging's 9M24 revenue declined by 6.4% YoY to RMB6,954mn, with 3Q24 revenue down by 25.0% YoY to RMB1.6bn. This downturn was primarily due to a challenging domestic market environment, marked by stringent industry regulations and delays in equipment renewal projects. Attributable net profit in 9M24 decreased by 36.9% YoY to RMB671mn, with net pro ...