Investment Rating - The report maintains a "Buy" rating for the company, with a target price adjusted to HKD 22.17, reflecting a potential upside of 32.3% from the current price of HKD 16.76 [2][4]. Core Insights - The company's revenue for the first half of 2024 increased by 2.9% year-on-year to RMB 62.5 billion, while net profit grew by 4.8% to RMB 5.7 billion. The operator business faced challenges due to reduced domestic telecom capital expenditure, but non-operator business segments showed double-digit growth [2]. - The report highlights that the Chinese 5G network construction has made significant progress, leading to a decrease in capital expenditure from domestic telecom operators, which poses challenges for the company's operator business. However, the non-operator business is expected to continue its double-digit growth, alleviating some pressure from the operator segment [2][7]. - The company's gross margin remained stable at 40.5% in the first half of 2024, despite a decline in the operator business's revenue and a shift in product mix affecting margins [2][9]. Financial Summary - For FY22A to FY26E, the company is projected to see revenue growth from RMB 122.95 billion in FY22A to RMB 153.50 billion in FY26E, with a compound annual growth rate (CAGR) of approximately 9.5% [1][9]. - The operating profit is expected to increase from RMB 10.56 billion in FY22A to RMB 16.05 billion in FY26E, reflecting a strong growth trajectory [1][9]. - Net profit is forecasted to rise from RMB 8.08 billion in FY22A to RMB 14.42 billion in FY26E, indicating a robust growth outlook [1][9]. - The report notes a decrease in the company's projected revenue for FY24 and FY25 by 3% and 2%, respectively, due to ongoing challenges in the operator business [2][7].

16 Aug 2024 CMB International Global Markets | Equity Research | Company Update BaTeLab (2149 HK) Strong 1H24 results signal brighter days ahead BaTeLab posted strong 1H24 earnings. Revenue grew by 42.1% YoY to RMB291mn driven by 1) continued launch of new industrial products (SKUs reached over 500 in 1H24 from ~400 in FY23), 2) strengthened partnership with key customers (new energy revenue contributed 30% of total revenue in 1H24, and 3) an expanded distribution network (partnership with several new distr ...

21 Aug 2024 CMB International Global Markets | Equity Research | Company Update Giant Biogene (2367 HK) Sales of Comfy brand surpass expectations 1H24 earnings beat, fueled by the rapid growth of Comfy brand. Giant Biogene reported 1H24 revenue of RMB2,540mn, up 58% YoY and 12% above Bloomberg consensus estimates, accounting for 55% of our full-year estimate. Attributable net profit increased by 48% YoY to RMB983mn, which was 13% ahead of Bloomberg consensus estimates, accounting for 57% of our full-year es ...

12 Aug 2024 CMB International Global Markets | Equity Research | Company Update Hua Hong Semi (1347 HK) Slowly but surely, gradual recovery is in play Hua Hong Semi announced 2Q24 results. Revenue was down 24.2% YoY but up 4.0% QoQ to US$479mn, slightly missing Bloomberg consensus by 2.0% and our estimates by 1.6%. The moderate sequential growth was a result of growing wafer shipments (+8.4% QoQ) partially offset by continued downward ASP (-3.5% QoQ). GPM increased QoQ to 10.5% (vs. 6.4%/27.7% in 1Q24/2Q23) ...

Investment Rating - The report upgrades the investment rating for J&T Express to BUY from Hold [2]. Core Insights - J&T Express achieved a net profit of US$31 million in 1H24, a significant improvement from a loss of US$264 million in 1H23 and US$168 million in 2H23, indicating a clearer path to sustainable profitability [2]. - The revenue in 1H24 grew by 22% year-on-year to US$1.52 billion, driven by a 42% increase in parcel volume, although this was offset by a 14% decline in average selling price (ASP) [2]. - The company is expected to see full-year volume growth of 30% year-on-year, despite a projected double-digit decrease in ASP [2]. - In China, revenue grew by 36% year-on-year to US$3 billion, supported by a 37% increase in parcel volume and stable ASP [2]. - The report anticipates a slowdown in revenue growth in new markets due to regulatory changes affecting cross-border e-commerce in Brazil [2]. Summary by Sections Financial Performance - J&T Express reported a revenue of US$4.86 billion in 1H24, a 20.6% increase from US$4.03 billion in 1H23 [7]. - The gross profit surged to US$536 million, reflecting a 176.8% increase year-on-year [7]. - The adjusted net profit is forecasted to be US$186.5 million for FY24, a significant recovery from a loss of US$432.3 million in FY23 [4]. Market Analysis - In Southeast Asia, the market share expanded by 2 percentage points year-on-year to 27.4%, with a unit gross margin of US$0.14 [2]. - In China, the market share increased by 1.1 percentage points year-on-year to 11%, with a unit gross profit of US$0.02 [2]. - The report highlights a strong competitive edge for J&T in Southeast Asia, with a target multiple of 15x for valuation, reflecting a premium over global integrated logistics operators [10]. Valuation - The target price is revised down to HK$10 from HK$12.8, reflecting a more conservative approach following sector pullbacks [2][10]. - The valuation methodology for the China segment has shifted to EV/EBITDA, applying a target multiple of 10x, which is approximately a 50% premium to local peers [10]. - The total equity value is estimated at US$11.1 billion, with a target price of HK$10.00 [11].

16 Aug 2024 CMB International Global Markets | Equity Research | Company Update Samsonite (1910 HK) 2Q24 results slowed by soft demand, guidance revised downward The company reported 2Q24 results below market expectations, with net sales down 1.7% YoY (+1.6% in constant currency) given softened consumer demand in China and North America, and increased competition in India. The GPM remained high at 60.0%, supported by channel and product mix optimization, Adjusted net profit declined by 3.4% YoY. The company ...

2024 年 8 月 16 日 招银国际环球市场 | 宏观研究 | 宏观视角 美国经济 零售超预期缓解衰退担忧 7月零售环比增速大幅反弹并超预期，首次领取失业金人数降至 7月以来低位， 某零售超市龙头公司上调全年业绩指引，显示美国消费和就业仍有韧性。市场 对美国衰退风险担忧大幅缓解，美债收益率、美元指数和美股均显著回升。美 国经济从过去两年过热状态逐步放缓，但仍稳健扩张，上半年经济增速趋近潜 在增速，非农就业稳步增长，通胀大幅下降但仍高于目标水平，尤其是服务通 胀仍超过4%。考虑到实际利率升至历史高位、失业率升至自然均衡水平和货币 政策时滞，美联储将很快在 9 月开启降息。但由于经济和通胀仍未大幅冷却， 我们认为美联储实施非常规紧急降息或大幅降息的可能性较小。我们维持今年 两次降息合计 50 个基点和明年 4 次降息合计 100 个基点的预测。 零售增速大超预期，汽车销售低位反弹。7 月零售和食品服务销售季调后环 比增速从 6 月的-0.2 反弹至 1%，大幅超出市场预期的 0.4%。6 月环比增速 从初值的 0%下调至-0.2%，连续 2 月初值下修。分品类来看，汽车及零部件 销售从 6 月的-3.4%大幅 ...

Investment Rating - The report maintains a "BUY" rating for ZTE, with an adjusted target price of RMB32.86, reflecting a potential upside of 26.2% from the current price of RMB26.04 [2][3]. Core Insights - ZTE reported mixed results for 1H24, with revenue increasing by 2.9% YoY to RMB62.5 billion and net profit growing by 4.8% YoY to RMB5.7 billion. The carrier business faced challenges due to declining capex from domestic telecom companies, while non-carrier segments showed strong growth [2][3]. - The carrier segment's revenue fell by 8.6% YoY to RMB37.3 billion, primarily due to reduced spending from domestic telecoms as the 5G network build-out reached significant milestones. However, the gross profit margin (GPM) for the carrier segment remained robust at 54.3% [2][3]. - Non-carrier businesses, particularly in consumer and government/enterprise segments, experienced double-digit growth, with increases of 14.3% and 56.1% YoY, respectively. This growth was driven by strong demand in the FTTR market and recovering consumer electronics demand [2][3]. Financial Summary - For FY24E, revenue is projected at RMB130.034 billion, reflecting a 4.7% YoY growth, while net profit is expected to reach RMB10.478 billion, a 12.4% increase YoY. The gross margin is anticipated to be 39.8% [3][6]. - The report revises down revenue forecasts by 3% for FY24 and 2% for FY25 due to ongoing headwinds in the domestic telecom market, particularly in the RAN business. Net profit forecasts were also trimmed by 3% for FY24 and 7% for FY25, although this was partially offset by improved operating efficiency [2][6]. - The earnings summary indicates a stable GPM of 40.5% in 1H24, compared to 41.5% in FY23, while the net profit margin (NPM) improved to 9.4% in 2Q24 [2][3][6].

19 Aug 2024 CMB International Global Markets | Equity Research | Company Update Li Ning (2331 HK) We see long-term value but short-term risks In the short run, we are still quite cautious about Li Ning in 2H24E, because of: 1) risks of greater retail discounts or promotion, 2) risks of trade fair orders adjustments, 3) unfavorable channel mix and operating deleverage and 4) relatively fixed opex. However, from the long run prospective, we can still see the value in Li Ning, esp. when we consider its ex-cash ...

19 Aug 2024 CMB International Global Markets | Equity Research | Company Update RemeGen (9995 HK) Strong sales performance in 2Q In 2Q24, RemeGen recorded strong product sales, with revenue reaching RMB411mn (+77% YoY), mainly from the product sales of RC18 and RC48, compared to RMB330mn in 1Q24 (+24% QoQ) and RMB254mn in 2Q23 (+62% YoY). The total product sales were RMB729mn in 1H24 (+75% YoY), representing approximately 47% of our previous FY24 estimate, largely in line with our expectations. We are reass ...