Investment Rating - Maintain BUY rating with a target price of HK$525 0, implying a 34 7% upside from the current price of HK$389 80 [1][3] Core Views - Tencent is expected to deliver solid earnings performance in 4Q24, driven by strong games revenue growth and resilient marketing business [1] - Total revenue is forecasted to grow by 8% YoY to RMB167 6bn, with non-IFRS net income growing by 29% YoY to RMB55 2bn in 4Q24 [1] - Long-term growth initiatives like Weixin e-commerce and AI are viewed positively, with management optimistic about Weixin's role in the e-commerce ecosystem and AI as a key growth driver for the marketing business [1][8] Earnings Summary - Revenue is expected to grow from RMB554 6bn in FY22 to RMB755 8bn in FY26, with adjusted net profit increasing from RMB115 6bn in FY22 to RMB257 6bn in FY26 [2] - Adjusted EPS is projected to rise from RMB12 13 in FY22 to RMB26 60 in FY26 [2] - P/E ratio is expected to decline from 55 2x in FY22 to 17 4x in FY26, reflecting improved earnings growth [2] Business Forecasts and Valuation - Revenue forecasts for FY24-26E are largely unchanged, with slight downward revisions of -0 1% to -0 3% [9] - Gross margin is expected to improve from 53 1% in FY24E to 54 4% in FY26E, driven by higher-margin games and marketing businesses [9] - Operating margin is projected to increase from 31 9% in FY24E to 33 7% in FY26E [9] - The SOTP-derived target price of HK$525 0 includes valuations for games (HK$199 9), SNS (HK$29 4), marketing (HK$110 3), fintech (HK$82 5), cloud (HK$22 0), strategic investments (HK$68 4), and net cash (HK$12 7) [10][11][12][13][14] Key Takeaways from NDR - Weixin e-commerce is positioned as a connector in the ecosystem, leveraging third-party services and technology to reduce transaction frictions [8] - AI remains a key growth driver for the marketing business, with Tencent maintaining leadership due to its large user base and use cases [8] - Tencent's inclusion in the US CMC list and removal from the USTR "Notorious Markets List" are seen as positive developments [8] Peer Comparison - Tencent's gaming business is valued at an 18x 2025E PE, in line with global peers like NetEase and Electronic Arts [16] - The marketing business is valued at a 20x 2025E PE, reflecting its resilient ad revenue growth supported by Weixin Video Account and Mini Program [16] - Fintech and cloud businesses are valued at premiums to peers, reflecting Tencent's strong market position and growth potential [16][17] Strategic Investments - Tencent's strategic investments are valued at HK$68 4 per share, with significant stakes in companies like PDD Holdings (14 1%), Sea Ltd (18 2%), and Spotify (8 4%) [19] - A 30% holding company discount is applied to the fair value of equity investments [19]

Investment Rating - Maintain BUY rating with a target price of RMB52, implying a 56.6% upside from the current price of RMB33.20 [1][3] Core View - Wingtech is transitioning to a semiconductor-focused company, positioning itself for long-term value creation despite short-term financial setbacks [1] - The company expects a net loss of RMB3.5-4.55bn in FY24, primarily due to one-off impairments related to the sale of its ODM business, write-down on deferred tax assets, and goodwill impairments [1] - The semiconductor business showed resilience in FY24, with sequential revenue growth in 2Q and 3Q, and single-digit YoY growth in 4Q despite seasonal softness [7] - Wingtech's ODM business improved in 4Q, turning profitable excluding impairments, but remains a low-margin segment [7] Financial Performance - Revenue is expected to grow 18.1% YoY in FY24 to RMB72.3bn, with further growth of 10.9% and 5.8% projected for FY25 and FY26, respectively [2] - Gross margin declined to 10.4% in FY24E from 16.1% in FY23A, but is expected to recover to 13.2% and 14.8% in FY25E and FY26E [2] - Net profit is forecasted to rebound strongly in FY25E, growing 186.4% YoY to RMB2.61bn, followed by 45.0% growth in FY26E to RMB3.78bn [2] - Operating profit is expected to increase 155.6% YoY in FY25E to RMB4.18bn, driven by the company's transformation and semiconductor focus [2] Business Segments - The ODM business accounted for 17% market share in 1H24, ranking third among top players in China, down 3ppts YoY [7] - Semiconductor revenue grew sequentially in FY24, with 2Q and 3Q showing 10% and 15% QoQ growth, respectively [7] - China contributed ~40% of total semiconductor revenue in FY24, offsetting overseas weakness due to inventory correction [7] - Auto revenue currently accounts for 60% of total semiconductor revenue, with overseas OEMs expected to resume restocking in 2025 [7] Valuation and Outlook - Wingtech's valuation is expected to benefit from increasing semiconductor revenue share, robust domestic auto demand, and a re-rating opportunity as it transforms into a semi-centric company [7] - The target price of RMB52 corresponds to 24.8x FY25E P/E, based on unchanged financial forecasts [7] - The company's market cap stands at RMB41.26bn, with an average 3-month turnover of RMB1.68bn [3]

Investment Rating - The report maintains a "BUY" rating for JD.com, with a target price of US$53.20, indicating a potential upside of 36.4% from the current price of US$39.00 [3][11]. Core Insights - JD.com is expected to report solid results for 4Q24, with total revenue projected at RMB334.6 billion, reflecting a 9.3% year-over-year growth, which is 3% above Bloomberg consensus. This growth is attributed to the nationwide home appliance trade-in program, JD's strong GMV exposure in the home appliance category, and robust supply chain capabilities [1][8]. - Non-GAAP net profit is anticipated to grow by 13.2% year-over-year, exceeding consensus estimates by 16%, driven by gross margin expansion and optimized sales and marketing costs [1][8]. - The report emphasizes that JD.com is well-positioned to benefit from the trade-in program in the short term, while long-term growth will depend on sustainable earnings and enhanced shareholder returns [1][8]. Financial Performance Summary - For FY24E, JD.com is projected to achieve revenue of RMB1,146.4 billion, a 5.7% increase from FY23A, with non-GAAP net profit expected to reach RMB46.1 billion [2][9]. - The adjusted net profit for FY24E is forecasted at RMB46.1 billion, with an adjusted EPS of RMB29.05 [2][9]. - Revenue growth is expected to continue into FY25E at RMB1,218.0 billion, representing a 6.2% increase, and further to RMB1,278.0 billion in FY26E, with a growth rate of 4.9% [2][9]. Segment Performance - The Electronics and Home Appliance (E&HA) segment is projected to see a 10% year-over-year revenue growth in 4Q24, supported by the trade-in program [7][8]. - JD Retail (JDR) is expected to report segment revenue of RMB294.0 billion in 4Q24, up 9.8% year-over-year, with operating profit anticipated to increase by 28% year-over-year [7][8]. Forecast Revisions - The revenue forecast for 2024-2026 has been revised upward by 1-2%, and non-GAAP net profit forecasts have been increased by 2-8%, primarily due to improved expectations for the E&HA segment and better gross margin forecasts [8][9]. - The gross margin for FY24E is projected at 15.9%, with non-GAAP net margin expected to be 4.0% [9][10]. Valuation Metrics - The report indicates a P/E ratio of 11.1x for FY24E, decreasing to 9.1x by FY26E, reflecting a favorable valuation compared to historical levels [2][9]. - The DCF-based target price of US$53.20 is based on a WACC of 11.8% and a terminal growth rate of 1.5% [11][12].

Investment Rating - The report maintains a "BUY" rating for WuXi Biologics, with a target price raised from HK$22.88 to HK$24.24, indicating a potential upside of 36.6% from the current price of HK$17.74 [3][8]. Core Insights - WuXi Biologics added 151 new projects in 2024, the highest in its history, with over half from the US, showcasing strong global competitiveness and client trust [1][8]. - The company is set to receive US$140 million in near-term payments from enabling discovery services for 7 global projects in 2024, highlighting lucrative milestone income [1][8]. - The Ireland site is on track to achieve breakeven in 2025, and the company plans to expand its drug substance capacity significantly, with a focus on establishing a comprehensive global production network [1][8]. Financial Summary - Revenue is projected to grow from RMB 17,034 million in FY23A to RMB 20,687 million in FY25E, reflecting a year-on-year growth of 13.4% [2][18]. - Adjusted net profit is expected to increase from RMB 4,739 million in FY24E to RMB 5,358 million in FY25E, representing a growth of 13.0% [2][18]. - The adjusted EPS is forecasted to rise from RMB 1.15 in FY24E to RMB 1.30 in FY25E, with a P/E ratio decreasing from 14.3x in FY24E to 12.7x in FY25E [2][18]. Project Pipeline and Growth - The company’s project pipeline now includes 817 projects, with a significant increase in process performance qualification (PPQ) projects expected to grow by 31% YoY to 101 in 2025 [1][8]. - WuXi Biologics completed 77 PPQ projects in 2024, marking a 26% increase year-on-year, indicating strong momentum for future growth in CMO revenue [1][8]. Overseas Operations - The Ireland biologics facility has shown strong client demand trends, successfully completing multiple 16k-liter PPQ batch productions, supporting profitability targets for 2025 [1][8]. - WuXi Biologics is constructing a new 36k-liter drug substance capacity facility in the US, aiming to expand total drug substance capacity to 491k liters, with approximately 49% located overseas [1][8].

Investment Rating - The report maintains a "Buy" rating for WuXi Biologics, reflecting a positive outlook based on demand recovery and growth potential [4][28]. Core Insights - WuXi Biologics achieved a record addition of 151 new projects in 2024, with over half coming from the United States, indicating strong global competitiveness and client trust [2][3]. - The company expects revenue and adjusted profit (excluding minority interests) to grow by 5%-10% in 2024, with accelerated growth anticipated in 2025 [1][4]. - The unique CRDMO business model continues to drive significant milestone revenue, with $140 million in recent payments expected from seven global projects [3][4]. - The company is expanding its global manufacturing network, with a focus on achieving breakeven at its Ireland site in 2025 and increasing drug substance capacity in the U.S. [3][4]. Financial Summary - Revenue is projected to grow from RMB 18,236 million in FY24E to RMB 20,687 million in FY25E, representing a 13.4% increase [5][12]. - Adjusted net profit is expected to rise from RMB 4,739 million in FY24E to RMB 5,358 million in FY25E, reflecting a 13.0% growth [5][12]. - The adjusted earnings per share (EPS) is forecasted to increase from RMB 1.15 in FY24E to RMB 1.30 in FY25E [5][12]. Target Price Adjustment - The target price has been raised from HKD 22.88 to HKD 24.24 based on a discounted cash flow (DCF) model, with a weighted average cost of capital (WACC) of 9.64% and a terminal growth rate of 2.0% [4][6].

Investment Rating - The report maintains a "Buy" rating for iQIYI, with a target price adjusted to $3.00 based on a 12x P/E ratio for FY2025 [1][2][13]. Core Insights - iQIYI's total revenue for Q4 2024 is expected to decline by 14% year-on-year to RMB 6.6 billion, primarily due to reduced content offerings and a decrease in transaction offset revenue [1]. - The company anticipates a 7% quarter-on-quarter increase in non-GAAP operating profit for Q4 2024, reaching RMB 395 million, attributed to stringent content cost control [1]. - The competitive landscape in the online video market is expected to remain intense, leading to a cautious outlook on revenue and profit recovery for 2025 [1]. Revenue Breakdown - Membership revenue is projected to decline by 15% year-on-year and 6% quarter-on-quarter to RMB 4.1 billion in Q4 2024 [1]. - Online advertising revenue is expected to decrease by 13% year-on-year but increase by 7% quarter-on-quarter to RMB 1.4 billion, driven by brand advertising growth [1]. - Content distribution revenue is forecasted to drop by 20% year-on-year to RMB 404 million, mainly due to a decline in transaction exchange revenue [1]. Financial Projections - Revenue estimates for FY2024 have been revised down by 7%-10%, with total revenue projected at RMB 29.2 billion for FY2024 and RMB 30.0 billion for FY2025 [11]. - The adjusted net profit for FY2024 is expected to be RMB 1.49 billion, with a projected increase to RMB 1.80 billion in FY2025 [3][11]. - The report indicates a projected operating profit margin of 6.0% for Q4 2024, reflecting a 0.9 percentage point increase quarter-on-quarter [2]. Valuation Metrics - iQIYI's current P/E ratio is estimated at 8x based on FY2025 earnings, significantly lower than the industry average of 23x, indicating substantial downside protection [2][13]. - The target price of $3.00 represents a potential upside of 61.3% from the current price of $1.86 [3].

Investment Rating - The report maintains a "BUY" rating for iQIYI, indicating a potential return of over 15% over the next 12 months [1][18]. Core Views - iQIYI's total revenue for 4Q24E is expected to decline by 14% YoY to RMB6.6 billion, primarily due to a light content slate and a decrease in barter transaction revenue [1]. - Non-GAAP operating profit is forecasted to grow by 7% QoQ to RMB395 million in 4Q24E, attributed to stringent content cost control [1]. - The target price has been lowered to US$3.00 based on a 12x FY25E PE, reflecting a more conservative outlook on future revenue and earnings recovery due to intense competition in the online video sector [1][10]. Financial Performance Summary - Revenue projections for FY24E, FY25E, and FY26E have been trimmed by 7-10% [1]. - For FY24E, total revenue is expected to be RMB29.2 billion, with a gross profit of RMB7.2 billion and an operating profit of RMB1.8 billion [8]. - The adjusted net profit for FY24E is forecasted at RMB1.5 billion, with an adjusted EPS of RMB1.6 [8]. Revenue Breakdown - Membership revenue is estimated to decline by 15% YoY to RMB4.1 billion in 4Q24E, while online advertising revenue is expected to decrease by 13% YoY but grow by 7% QoQ to RMB1.4 billion [7]. - Content distribution revenue is projected to drop by 20% YoY to RMB404 million in 4Q24E [7]. Margin Analysis - Gross margin is expected to improve by 2 percentage points QoQ to 24.0% in 4Q24E, driven by fewer barter transactions and effective cost control [7]. - Non-GAAP operating margin is anticipated to expand by 0.9 percentage points QoQ to 6.0% in 4Q24E [7]. Market Position and Valuation - iQIYI's current valuation of 8x FY25E PE offers a significant safety margin compared to peers' average of 23x [7]. - The report highlights the competitive landscape in China's video streaming sector, which is expected to remain intense [1][10].

Investment Rating - The report maintains a "BUY" rating for Baidu, indicating a potential return of over 15% over the next 12 months [3][20]. Core Insights - Baidu is expected to experience a 4.8% year-over-year decline in total revenue for 4Q24, with a non-GAAP net income of RMB4.7 billion, influenced by a one-off impact from an equity investee [1][7]. - Cloud revenue growth is anticipated to be a bright spot, driven by strong demand in GPU cloud services, while the recovery pace of advertising revenue remains critical [1][7]. - The target price has been adjusted down by 6% to US$144.6, reflecting a more subdued recovery in the advertising business [1][11]. Revenue and Profitability - For FY24E, total revenue is projected at RMB132.3 billion, a slight decline from FY23A's RMB134.6 billion, with a forecasted growth of 3.2% in FY25E [2][9]. - Adjusted net profit is expected to decrease by 13% in FY24E to RMB25.0 billion, with a recovery to RMB26.0 billion in FY25E [2][9]. - The adjusted EPS for FY24E is forecasted at RMB71.47, with a consensus EPS of RMB72.60 for the same period [2][9]. Segment Performance - Baidu Core is projected to generate revenue of RMB26.9 billion in 4Q24, down 2.3% year-over-year, primarily due to an 8% decline in core advertising revenue [7][8]. - The cloud business is expected to grow by 13% year-over-year in 4Q24, improving from previous quarters, driven by AI GPU-related revenue [7][8]. Valuation Metrics - The SOTP-based target price of US$144.6 per ADS translates to a 14x 2025E non-GAAP PE, or 7x if excluding net cash [11][12]. - The valuation breakdown includes US$49.1 for Baidu Core, US$0.3 for Apollo ASD, and US$32.6 for Baidu Cloud [11][12]. Cash Position - As of the end of 3Q24, Baidu had approximately RMB144.5 billion in cash on hand, equating to about US$57 per ADS [1][7].

Investment Rating - The report maintains a "Buy" rating for the company and raises the target price to HKD 69.19, up from HKD 66.15, indicating a potential upside of 33.8% from the current price of HKD 51.70 [1][3]. Core Insights - The company has shown impressive online growth in 2024, with a projected revenue increase of over 50% and a net profit growth of around 40%. The GMV for its brands, 可复美 and 可丽金, reached RMB 5.4 billion, a year-on-year increase of 57% across major online platforms [1][6]. - The report highlights the strong performance of 可复美 on Tmall and Taobao, with a GMV growth of 42%, ranking second in the market. The anticipated approval of a new collagen injection product is expected to further drive growth in 2025 [1][6]. - 可丽金 is also experiencing rapid growth, with a GMV of RMB 660 million in 2024, reflecting a 103% year-on-year increase, driven by key product launches [1][6]. Financial Summary - The company’s revenue is projected to grow from RMB 3,524 million in FY23 to RMB 5,406 million in FY24, representing a growth rate of 53.4%. The adjusted net profit is expected to increase from RMB 1,451.8 million in FY23 to RMB 2,108.6 million in FY24, a growth of 45.2% [2][36]. - The report provides a detailed financial outlook, with revenue estimates for FY25 and FY26 at RMB 7,288 million and RMB 9,729 million, respectively, indicating continued strong growth [2][36]. - The company’s net debt ratio is projected to increase, reflecting a shift towards a more leveraged capital structure as it invests in growth opportunities [2][36].

Group 1: IPO Overview - Beijing Saimo Technology Co., Ltd. successfully listed on the Hong Kong Stock Exchange on January 15, 2025, under the stock code 2571.HK[1] - The company issued 33,333,400 H-shares, representing approximately 25.0% of the total issued shares post-global offering, at a price of HKD 12.99 per share, raising approximately HKD 433 million[2] Group 2: Company Profile - Saimo Technology specializes in simulation testing technology for intelligent connected vehicles (ICV), focusing on the design and development of ICV simulation testing products[2] - The company holds a market share of approximately 5.9% in China's ICV simulation testing software and platform market, making it the largest market participant based on 2023 revenue[2] Group 3: Innovation and Recognition - Saimo Technology has launched several innovative products, including the SimPro testing toolchain and the SafetyPro analysis tools for ICV[3] - The company has received multiple recognitions from Chinese government departments, including being designated as a key software enterprise and a "little giant" enterprise by the Ministry of Industry and Information Technology[3] Group 4: Underwriting and Advisory - CMB International acted as the joint bookrunner and lead manager for the IPO, showcasing strong client service capabilities and resource advantages[4] - CMB International has established itself as a leading financial institution in providing advisory services for overseas capital markets, participating in significant IPOs and refinancing projects in Hong Kong over the past five years[5]