Investment Rating - The report maintains a BUY rating for the company, BYD, with a revised target price of HK$350, up from HK$262, reflecting improved investor sentiment [2][5]. Core Insights - The company's 3Q24 gross margin of 21.9% exceeded expectations, providing confidence for sales forecasts for 4Q24 and FY25, despite higher SG&A and R&D expenses [2]. - The sales volume forecast for FY24 has been increased by 4% to 4.02 million units, with FY25 projected to rise 13% YoY to 4.55 million units [2]. - The company prioritizes market share and global expansion over rapid earnings growth, which may complicate forecasts for SG&A and R&D expenses [2]. Financial Performance - 3Q24 net profit was RMB11.6 billion, 15% lower than previous forecasts, attributed to unexpected forex losses despite higher government grants and VAT refunds [2]. - Revenue growth from FY21 to FY26 shows a significant increase, with FY24E revenue projected at RMB725.7 billion, up from RMB602.3 billion in FY23 [9]. - The gross profit margin is expected to slightly decrease from 20.6% in FY24E to 20.3% in FY25E, while net profit is projected to rise from RMB36.0 billion in FY24E to RMB47.5 billion in FY25E [7][8]. Valuation Metrics - The company’s P/E ratio is projected to decrease from 21.9x in FY24E to 16.6x in FY25E, indicating a more attractive valuation as earnings grow [14]. - The return on equity (ROE) is expected to remain strong, projected at 25.5% for FY25E, down slightly from 24.0% in FY24E [13]. Market Position - BYD continues to have the best resources to withstand the ongoing price war in the automotive sector, which supports its competitive position [2]. - The company’s aggressive overseas expansion strategy is expected to drive revenue growth, with selling expenses projected to rise in line with revenue growth [2].

31 Oct 2024 Earnings Summary CMB International Global Markets | Equity Research | Company Update GAC Group (2238 HK) 3Q miss; new models, cost cut as key in FY25 GAC posted the largest quarterly net loss (RMB1.4bn) in 3Q24 since at least 2013, partly due to the FX loss and lower government grants. Management is determined to revive its homegrown brands with a plethora of new models in 2025. The market demand for GAC Toyota and GAC Honda has also recovered a bit recently aided by the peak season and stimulus ...

Investment Rating - The report maintains a "BUY" rating for RemeGen, indicating a potential return of over 15% over the next 12 months [12]. Core Insights - RemeGen achieved record product sales in Q3 2024, with revenue of RMB467 million, reflecting a 14% quarter-over-quarter and 35% year-over-year increase, driven by strong sales of RC18 and RC48 [1]. - The company narrowed its net loss to RMB291 million in Q3 2024 from RMB432 million in Q2 2024, indicating improved financial performance [1]. - The gross profit margin improved to 82.1% in Q3 2024, up from 78.3% in the first half of 2024, while the SG&A expense ratio decreased to 68.5% [1]. - RemeGen's total revenue for the first nine months of 2024 reached RMB1,209 million, representing a 57% year-over-year growth and aligning with expectations [1]. - The report anticipates continued strong sales momentum into Q4 2024 and beyond, supporting the company's FY24 sales target of over 50% year-over-year growth [1]. Financial Summary - Revenue projections for FY24 are estimated at RMB1,740 million, with a year-over-year growth of 61.7% [2]. - The net profit for FY24 is projected to be a loss of RMB1,268 million, improving to a loss of RMB967 million in FY25 and further narrowing to RMB275 million in FY26 [2]. - R&D expenses are expected to be RMB1,450 million for FY24, remaining stable in FY25, and slightly increasing to RMB1,502 million in FY26 [2]. - The gross profit margin is projected to be 80.31% for FY24, improving to 81.15% in FY25 and 80.81% in FY26 [7]. Valuation - The report revises the DCF-based target price from HK$19.59 to HK$21.09, reflecting a 28% upside from the current price of HK$16.48 [3][4]. - The DCF per share is calculated at HK$21.09, based on a WACC of 12.93% and a terminal growth rate of 2.0% [4][5]. - The market capitalization of RemeGen is approximately HK$8,970.6 million, with an average three-month turnover of HK$42.5 million [3].

30 Oct 2024 CMB International Global Markets | Equity Research | Company Update Naura Technology (002371 CH) Solid Q3 earnings signal intact growth trajectory Naura announced 3Q24 results. Q3 revenue was RMB8.0bn, up 30.1% YoY and 23.8% QoQ, driven by significant growth in semiconductor equipment sales (up 47.0% in 9M24). NP was RMB1.7bn, up 55.0% YoY and 1.7% QoQ. GPM was 42.3%, up 5.9ppts from 3Q23 but declined 5.1ppts sequentially, mainly due to 1) higher photovoltaic (PV) equipment sales that had a lowe ...

Investment Rating - The report maintains a HOLD rating on Shennan Circuit with a target price adjusted to RMB115, reflecting a 27x 2025E P/E, close to its 3-year average historical forward P/E [2][4]. Core Insights - Shennan Circuit reported a 37.9% year-over-year revenue growth in 3Q24, reaching RMB4.73 billion, which exceeded Bloomberg consensus by 19.7%. However, net profit increased by only 15.3% YoY but declined 17.6% QoQ [2]. - The gross profit margin (GPM) decreased to 25.4% in 3Q24 from 27.1% in 2Q24, attributed to higher sales from lower-margin PCBA business, ramp-up of the Guangzhou factory, and high copper prices [2]. - The company expects PCB revenue to grow by 11% in 2025E, while substrate revenue is projected to grow by 7% in the same year [2]. Financial Summary - Revenue for FY24E is estimated at RMB17,574 million, with a year-over-year growth of 29.9%. For FY25E, revenue is projected to be RMB18,765 million, reflecting a 6.8% growth [3][9]. - The net profit for FY24E is expected to be RMB1,878 million, with a YoY growth of 34.3%, and for FY25E, it is projected to reach RMB2,178 million, indicating a 16.0% growth [3][9]. - The earnings per share (EPS) for FY24E is estimated at RMB3.68, increasing to RMB4.27 in FY25E [3][9]. Market Segmentation - By end market, telecom remains the largest segment, contributing approximately 40% of PCB sales in 3Q24. Other segments include datacom (20%), auto (13%), industrial & medical (10%), and energy (5%) [2]. - The report highlights a strong utilization rate of around 90% for AI-related PCB production, while non-AI production utilization remains between 85-90% [2].

30 Oct 2024 CMB International Global Markets | Equity Research | Company Update WuXi AppTec (603259 CH) Earnings recovery underway WuXi AppTec reported 3Q24 revenue of RMB10.46bn, slightly down 2.0% YoY, and attributable adjusted non-IFRS net profit of RMB2.97bn, down 3.2% YoY. Total non-COVID revenue and non-COVID Chemistry revenue growth rebounded to 14.6% YoY and 26.4% YoY, respectively, in 3Q24. Despite the challenging geopolitical environment, mgmt. reiterated its revenue guidance of RMB38.3- 40.5bn fo ...

30 Oct 2024 CMB International Global Markets | Equity Research | Company Update Zhejiang Dingli (603338 CH) 3Q24 net profit +38% YoY, beat expectations; US remains the most promising market Zhejiang Dingli's (Dingli) EBIT in 3Q24 grew 20% YoY to RMB672mn, driven by a 38% revenue growth (YoY) that offset the 4.8ppt YoY decrease in gross margin due mainly to an exceptional high base in 3Q23. Reported net profit grew 38% YoY to RMB636mn, helped by an increase in net finance income (FX gains). The results sugge ...

Investment Rating - The report maintains a "BUY" rating for Haier Smart Home and raises the target price to HK$ 36.41, reflecting a 22.2% upside from the current price of HK$ 29.80 [1][4]. Core Insights - Haier's 3Q24 results were in line with expectations, with a 1% YoY sales increase to RMB 67.3 billion and a 13% YoY net profit growth to RMB 4.7 billion. The company is expected to see a decent pickup in 4Q24 due to favorable macroeconomic conditions and internal efficiency improvements [1][6]. - The management has set a net profit growth target of 15% per annum, supported by various cost-saving initiatives and operational efficiency gains [1][6]. - The report highlights significant sales growth drivers, including improved sales trends in China, strong demand for the Casarte brand, and positive developments in the US and European markets [1][6]. Financial Summary - Revenue is projected to grow from RMB 271.8 billion in FY24E to RMB 304.8 billion in FY26E, with a CAGR of 5.4% [2][11]. - Net profit is expected to increase from RMB 19.8 billion in FY24E to RMB 24.5 billion in FY26E, reflecting a strong growth trajectory [2][11]. - The report revises FY24E/25E/26E net profit forecasts upward by 1%/3%/2% to account for efficiency gains and cost savings [1][7]. Operational Efficiency - Haier is implementing a series of reforms aimed at enhancing operational efficiency, including digitalization efforts and structural changes in procurement and R&D processes [1][6]. - The acquisition of Goodday, a logistics provider, is expected to yield significant synergies, including a 20-30% reduction in inventory levels and a 10% decrease in total logistics costs [1][6]. Market Position - Haier's stock is currently trading at 13x/11x FY24E/FY25E P/E, which is below its 5-year average of 15x, indicating potential undervaluation [1][4]. - The company is focusing on expanding its direct-to-consumer (DTC) business model and enhancing brand equity through value-added products and services [1][6].

Investment Rating - The report maintains a "BUY" rating for Jiangsu Hengli with a target price of RMB64, indicating a potential upside of 14.7% from the current price of RMB55.82 [2][4]. Core Insights - Jiangsu Hengli's EBIT in 3Q24 decreased by 6% YoY to RMB445 million, attributed to a gross margin contraction of 1.9 percentage points YoY, despite an 11% YoY revenue increase to RMB2.1 billion [2]. - The net profit for 3Q24 grew by 6% YoY to RMB504 million, supported by higher net finance income and other gains [2]. - The company is expected to benefit from increasing revenue contributions from non-excavator components and new growth drivers such as electric cylinders and ball screws in 2025 [2]. - The report highlights potential risks related to the upcoming U.S. elections and possible tariff increases under a potential Trump presidency, which could impact exports from Mexico to the U.S. [2]. Financial Summary - Revenue for FY24E is projected at RMB10,033 million, reflecting an 11.7% YoY growth, with further growth expected in FY25E and FY26E [3][13]. - Adjusted net profit for FY24E is estimated at RMB2,756.5 million, with an EPS of RMB2.06, representing a 10.3% YoY increase [3][13]. - The gross margin is expected to improve slightly to 41.9% in FY24E, with a long-term target of 43.0% by FY26E [10][16]. Production and Operational Insights - The production plan for October includes 42,000 units of hydraulic cylinders for excavators, a decrease of approximately 5% YoY, while production of non-standardized cylinders is expected to drop by about 10% YoY [2]. - Positive production trends are noted for small-size pumps and valves, with planned increases of approximately 40% and 90% YoY, respectively [2]. Market Position and Valuation - The company maintains a strong market capitalization of RMB74,844.6 million, with a P/E ratio projected to decrease from 31.1x in FY22A to 21.4x in FY26E [4][10]. - The report indicates a stable financial position with a net gearing ratio improving from (51.9%) in FY22A to (52.4%) in FY26E, suggesting a strong balance sheet [3][10].

Investment Rating - Maintain BUY rating with an adjusted target price of RMB28.75, reflecting a 25.5x 2025E P/E, close to its 3-year historical forward P/E [1][3] Core Views - Shengyi Tech's 3Q24 revenue was RMB5.1bn, up 14.5% YoY but down 1.7% QoQ, in-line with Bloomberg consensus [1] - Gross profit margin (GPM) improved to 22.9%, up 1.1ppts from 2Q24, driven by favorable product mix and lower material costs [1] - Net profit (NP) was RMB440mn, up 27.8% YoY but down 18.6% QoQ, missing Bloomberg consensus by 26% due to SBC cost of RMB150mn (~2.9% of revenue) [1] - Revenue growth is expected at 20%/16% YoY in 2024/25E, with improved margins at 22.1%/23.6% [1] PCB Segment - PCB revenue in 3Q24 was RMB1.2bn, up 49.3% YoY and 10.8% QoQ, driven by strong AI demand, particularly in server revenue (42.5% of PCB sales) [1] - Overseas market outperformed with a 32.1% YoY sales increase [1] - GPM recovered to 24.9% from 20.4%/14.2% in 3Q23/2Q24, and NPM rose to 7.5% vs. -3.4%/6.4% in 3Q23/2Q24 [1] - PCB sales projections raised by 5%/1% for 2024/25E, with expected growth of 35%/20% in 2024/25E [1] CCL Segment - CCL revenue increased YoY but declined QoQ (est. 5-6% lower) due to weaker-than-expected demand in non-AI markets, suppressing ASP recovery [1] - Margin slid sequentially as copper prices remained high (avg. price in 3Q24: ~US$9.9k/t), though Shengyi offset some material cost impacts through pre-procurement activities [1] - Inventory increased by 8% QoQ (RMB365mn) [1] - CCL sales forecasts cut by 8%/6% for 2024/25E, with expected growth of 14%/15% in 2024/25E [1] Financial Projections - Revenue is projected to grow at 19.6%/15.6% in 2024/25E, reaching RMB19.8bn/RMB22.9bn [2][9] - Gross margin is expected to improve to 22.1%/23.6% in 2024/25E [2][9] - Net profit is forecasted to grow at 55.4%/51.4% in 2024/25E, reaching RMB1.8bn/RMB2.7bn [2][9] - EPS is projected to grow at 48.9%/51.4% in 2024/25E, reaching RMB0.74/RMB1.13 [2][9] Valuation - Current P/E stands at 26.5x for 2024E, expected to decrease to 17.5x in 2025E [2][12] - Target price of RMB28.75 implies a 45.8% upside from the current price of RMB19.72 [3] Growth and Profitability - Revenue growth is expected to rebound to 19.6% in 2024E after declines in FY22 and FY23 [12] - Gross profit margin is projected to recover to 22.1% in 2024E, up from 19.2% in FY23 [12] - Return on equity (ROE) is expected to improve to 12.6% in 2024E, rising further to 17.9% in 2025E [12]