Investment Rating - The report maintains a "Buy" investment rating for BYD Company Limited (01211) with a target price of 470 HKD [1] Core Views - The report forecasts BYD's sales at 5.25 million units for the year and an annual increase of 4% in the average selling price (ASP) of new energy vehicles [1] - The estimated profit for the year remains unchanged at 57.5 billion RMB [1] - BYD's management emphasizes that all business operations are under the listed company [1] Financial Overview - BYD's accounts payable and notes payable for 2024 are projected to total 244 billion RMB, with approximately 98% of other payables (around 143 billion RMB) related to supplier debts, totaling about 387 billion RMB [1] - The report suggests that this level of accounts payable is manageable compared to BYD's projected annual revenue of 777 billion RMB and net cash of 74 billion RMB [1] Sales Projections - Management anticipates overseas sales to exceed 900,000 units this year, with total sales expected to maintain over 20% growth [1] - BYD's long-term overseas sales target is set between 4 to 6 million units, while domestic sales targets range from 6 to 7 million units, based on an 80-90% market share in the domestic new energy vehicle sector, where BYD holds approximately 30% [1] - BYD's Chairman Wang Chuanfu stated that the goal of selling 10 million units annually will be achieved "not too long" from now [1]

Investment Rating - The industry investment rating is "Outperform the Market," indicating that the industry is expected to perform better than the market benchmark over the next 12 months [7]. Core Insights - The semiconductor sector is experiencing robust growth driven by AI-related demand, with significant revenue increases reported by key players like Broadcom [2][4]. - Broadcom's AI business is a core growth driver, with AI-related revenue reaching $4.4 billion, accounting for 29.3% of total revenue, and expected to grow by 60% year-over-year [4]. - The demand for AI infrastructure is rapidly increasing, with projections that major cloud providers will deploy millions of accelerator clusters by 2027, aligning with the company's market serviceable target of $60-90 billion for AI accelerators [4]. Summary by Sections Semiconductor Industry Overview - The semiconductor industry is witnessing a strong performance, with Broadcom reporting record revenues of $15 billion in Q2 FY2025, a 20.2% year-over-year increase [2]. - The gross margin for Broadcom improved to 79.4%, reflecting operational efficiency and strong demand in AI semiconductor and software infrastructure [2]. AI Business Impact - Broadcom's AI-related revenue is projected to grow significantly, with management forecasting a 60% increase in AI business revenue this year, driven by rising demand for XPU and network solutions [2][4]. - The AI network business saw revenue growth exceeding 170%, indicating a strong market for AI-related infrastructure [4]. Future Projections - Broadcom anticipates Q3 FY2025 revenue to reach $15.8 billion, with semiconductor business expected to grow by 25% to $9.1 billion [2]. - The company is also focusing on custom chip development in collaboration with major clients, which could further enhance revenue streams in the future [4]. Investment Recommendations - The report maintains "Buy" ratings for several companies within the semiconductor supply chain, including Zhongji Xuchuang, Shengyi Technology, and Shenzhen South Circuit, with target prices set at RMB 151, RMB 34.5, and RMB 146.81 respectively [4].

Company Analysis - SANY International is expected to return to a growth trajectory in 2025, driven by stable demand for tunneling machines, strong growth in large port equipment, and better-than-expected performance in domestic wide-body vehicles [5] - The emerging business segments, including photovoltaic, lithium energy, and intelligent mining, are projected to have manageable losses, estimated at approximately 200 to 250 million RMB this year, alleviating market concerns [5] - The target price for SANY International has been raised to HKD 8.7, maintaining a 2025 P/E ratio of 11 times, consistent with the average since 2017, indicating an attractive buying point at the current valuation of 8 times [5] - BYD's management emphasizes that all business operations are under the listed company, with controllable liquidity risks regarding accounts payable totaling 244 billion RMB for FY24 [6] - The company aims for overseas sales to exceed 900,000 units this year, with total sales expected to maintain over 20% growth [6] - BYD's long-term sales targets include 4-6 million units overseas and 6-7 million units domestically, with a market share of 30% in the domestic new energy vehicle market [6] Industry Analysis - The semiconductor industry is witnessing strong performance, with Broadcom reporting record revenue of USD 15 billion for Q2 2025, a year-on-year increase of 20.2% [4] - The revenue guidance for Q3 2025 is set at USD 15.8 billion, with semiconductor business expected to grow by 25% to USD 9.1 billion, driven by AI semiconductor and software infrastructure [4] - The Asian markets are experiencing a resurgence in foreign investment, with net inflows of USD 10.65 billion in May, the highest monthly net inflow since February of the previous year [3]

Macro Overview - The impact of tariffs on the Chinese economy is less than expected, with GDP growth projected to decline from 5.4% in Q1 to 4.9% in Q2 and 4.7% in the second half of the year [9][10] - The Chinese economy shows resilience, with stock and currency markets expected to remain stable during the US-China trade negotiation window [11] - The US economy is experiencing slight stagflation, with GDP growth forecasted to drop from 2.8% last year to 1.5% this year due to tariff impacts [12] Technology Sector - The technology sector remains cautiously optimistic, with leading companies in the domestic and overseas supply chains reporting better-than-expected Q1 performance, driven by domestic subsidies and stable demand for smartphones and PCs [1][2] - For Q2, revenue and gross margin guidance are mixed, with a slowdown in overseas demand for consumer electronics, but a strong outlook for AI server shipments [1] - Key companies to watch include Xiaomi, Apple, and Qualcomm, with expected revenue growth of 5-15% for Apple’s supply chain and 10-15% for Android brands [1] Semiconductor Industry - The trend of domestic substitution in the semiconductor industry is expected to accelerate, with a focus on AI-related self-sufficiency [1] - Major cloud providers are maintaining high capital expenditures for AI infrastructure, indicating strong growth potential for AI applications and semiconductor companies [1] - Recommended stocks include Horizon Robotics, Hezhong Technology, and Weir Group, which are expected to benefit from the AI demand surge [1][8] Internet Sector - Most internet companies reported Q1 earnings that met or exceeded expectations, although competition in transaction-based platforms is raising concerns about profit growth visibility [2] - Companies with strong business models and high barriers to entry are likely to outperform in a competitive environment [2] - Recommended stocks include NetEase and Tencent Music, which are expected to see stable profit growth [2] Automotive Sector - Several automakers reported strong Q1 earnings, with Geely's net profit nearing the upper limit of forecasts and XPeng turning profitable for the first time [3] - The automotive sector is experiencing a new price war, but the impact on overall profitability is expected to be manageable [5] - Recommended stocks include Geely and XPeng, which are anticipated to benefit from new product cycles and strong sales [5][8] Real Estate Sector - The real estate sector shows optimism, with major developers reporting contract sales that align with expectations [5] - Policy support is expected to release pent-up demand, with a stable housing sentiment observed since March [5] - Recommended stocks include China Resources Land and Longfor Group, which are expected to benefit from improved market conditions [5][8] Insurance Sector - The insurance sector is expected to see stable growth in new business value, driven by improvements in value rates [6] - The property and casualty insurance sector is experiencing a slowdown in premium growth, particularly in auto insurance [6] - Recommended stocks include China Pacific Insurance and AIA Group, which are expected to perform well due to their strong fundamentals [7][8] Consumer Goods - The essential consumer goods sector is expected to see marginal improvements, with consumer behavior becoming more cautious yet slightly more willing to spend [4] - Recommended stocks in the food and beverage sector include Nongfu Spring, which is expected to benefit from a rebound in consumer spending [4][8] - The discretionary consumer sector is showing strong performance, particularly in tea, coffee, and travel-related industries [4]

Macro Commentary - The US economy is facing stagflation risks as the May services PMI unexpectedly contracted, indicating a significant drop in demand and the highest inflation rate in 22 years [5][4] - The manufacturing PMI also showed a widening contraction, with delivery times lengthening and tariffs disrupting both demand and supply chains [5] - A slight stagflation is expected in the US economy in the second half of the year, with the policy environment remaining unfriendly for the next three months [5][4] Industry Commentary - In the Chinese automotive industry, the average discount rate in May expanded by 0.7 percentage points to approximately 15%, primarily driven by German brands [5] - Major Chinese brands maintained relatively stable average discounts, with the exception of NIO, which saw an increase in its discount rate [6] - BYD's average discount rate in May increased by 1.9 percentage points to 8.2%, raising concerns about its promotional activities amid high inventory levels [6] Company Commentary - DualityBio is positioned to become a global leader in ADC (Antibody-Drug Conjugate) technology, with a diverse product pipeline and strategic collaborations [11][12] - The company has established multiple strategic partnerships, with total transaction amounts exceeding $6 billion, enhancing its global market presence [11] - The projected total revenue for DualityBio is expected to reach RMB 2 billion, RMB 1.5 billion, and RMB 1.5 billion in 2025E, 2026E, and 2027E respectively, primarily from licensing and collaboration income [12] Company Commentary (Continued) - Innovent Biologics' IBI363 shows significant potential as a next-generation immunotherapy, with promising survival benefits in NSCLC [12][13] - IBI363 demonstrated a median progression-free survival (mPFS) of 9.3 months in squamous NSCLC, outperforming other candidates in the same category [12] - The company plans to initiate a Phase III clinical trial for IBI363 in the second half of 2025, targeting IO-treated squamous NSCLC [13]

2025 年 6 月 6 日 招银国际环球市场 | 宏观研究 | 宏观视角 美国经济 服务 PMI 预警滞涨风险 美国 5 月服务业 PMI 意外收缩，需求大幅走弱，物价扩张速度创 22 年以来新 高，经济面临滞涨风险。制造业 PMI 收缩幅度扩大，交付时间变长，关税同时对 需求和供应链产生扰动。进口指数大幅下跌，自有库存转向收缩，美国企业为规 避关税而提前囤货的影响可能逐渐消退。下半年美国经济预计将小幅滞涨。未来 3 个月，政策环境仍不友好，白宫可能延续施压交易对手，美联储可能继续暂停 降息。第 4 季度政策环境可能改善，美国与主要贸易伙伴可能达成协定，通胀见 顶回落，美联储重启降息，白宫重心转向减税去监管。 刘泽晖 (852) 3761 8957 frankliu@cmbi.com.hk 叶丙南, Ph.D (852) 3761 8967 yebingnan@cmbi.com.hk 敬请参阅尾页之免责声明 请到彭博 (搜索代码: RESP CMBR )或 http:// www.cmbi.com.hk 下载更多招银国际环球市场研究报告 1 MN 服务业 PMI 近 1 年来首次收缩，价格指数扩张幅度创 2 ...

2025 年 6 月 6 日 招银国际环球市场 | 宏观研究 | 宏观视角 美国经济 服务 PMI 预警滞涨风险 2025 年 6 月 6 日 美国 5 月服务业 PMI 意外收缩，需求大幅走弱，物价扩张速度创 22 年以来新 高，经济面临滞涨风险。制造业 PMI 收缩幅度扩大，交付时间变长，关税同时对 需求和供应链产生扰动。进口指数大幅下跌，自有库存转向收缩，美国企业为规 避关税而提前囤货的影响可能逐渐消退。下半年美国经济预计将小幅滞涨。未来 3 个月，政策环境仍不友好，白宫可能延续施压交易对手，美联储可能继续暂停 降息。第 4 季度政策环境可能改善，美国与主要贸易伙伴可能达成协定，通胀见 顶回落，美联储重启降息，白宫重心转向减税去监管。 刘泽晖 (852) 3761 8957 frankliu@cmbi.com.hk 叶丙南, Ph.D (852) 3761 8967 yebingnan@cmbi.com.hk 敬请参阅尾页之免责声明 请到彭博 (搜索代码: RESP CMBR )或 http:// www.cmbi.com.hk 下载更多招银国际环球市场研究报告 1 MN 服务业 PMI 近 1 年来首 ...

Market Performance - The Hang Seng Index closed at 23,654, up 0.60% for the day and 38.75% year-to-date [1] - The Hang Seng Tech Index rose by 0.57%, with a year-to-date increase of 38.65% [1] - The Shanghai Composite Index increased by 0.42%, reflecting a 13.49% rise year-to-date [1] Sector Performance - The Hang Seng Financial Index increased by 0.36% with a year-to-date gain of 38.86% [2] - The Hang Seng Industrial Index rose by 0.88%, showing a year-to-date increase of 44.95% [2] - The Hang Seng Real Estate Index decreased by 0.74%, with a year-to-date decline of 9.95% [2] Company Analysis - China General Nuclear Power Corporation (中广核矿业) announced a new pricing mechanism for its uranium sales, reducing the fixed price proportion from 40% to 30% and setting the 2026 fixed price at $94.22 per pound, significantly higher than the previous year's price of $61.78 per pound [4] - The new pricing mechanism is expected to alleviate market concerns regarding pricing uncertainty, leading to a 17% and 23% upward revision in profit forecasts for 2026 and 2027, respectively [4] Investment Focus - Geely Automobile (吉利汽车) is rated as a "Buy" with a target price of 24.00 HKD, representing a potential upside of 30% [5] - Xpeng Motors (小鹏汽车) is also rated as a "Buy" with a target price of 28.00 USD, indicating a potential upside of 37% [5] - Luckin Coffee (瑞幸咖啡) is rated as a "Buy" with a target price of 40.61 USD, showing a potential upside of 14% [5]

Investment Rating - The report maintains a "BUY" rating for CGN Mining, with a target price revised to HK$2.61 from HK$2.18, indicating a potential upside of 57.5% from the current price of HK$1.66 [1][3]. Core Insights - CGN Mining has introduced a new pricing mechanism for its off-take agreement with its parent company, reducing the fixed pricing proportion from 40% to 30%. The fixed price for 2026 is set at US$94.22/lb, significantly higher than the current price of US$61.78/lb for 2023, which is expected to increase by 3.5% annually [1][7]. - The new pricing is approximately 18% higher than the latest industry contract price published by Cameco, which is seen as a positive development that alleviates market concerns regarding pricing uncertainty [1]. - Following the adjustment in the pricing mechanism, the earnings forecast for 2026E and 2027E has been revised upwards by 17% and 23%, respectively [1]. Financial Summary - Revenue projections show significant growth, with FY23A at HK$7,363 million, expected to rise to HK$12,371 million by FY27E, reflecting a year-on-year growth of 101.8% in FY23A and 11.4% in FY27E [2][20]. - Adjusted net profit is forecasted to increase from HK$497.1 million in FY23A to HK$985.7 million in FY27E, with a notable growth of 71.2% in FY26E [2][20]. - The report indicates a P/E ratio decline from 25.4 in FY23A to 12.8 in FY27E, suggesting improved valuation metrics over the forecast period [2][20]. Share Performance - The market capitalization of CGN Mining is reported at HK$12,617.1 million, with a 52-week high of HK$2.94 and a low of HK$1.24 [3][4]. - The stock has shown a 1-month absolute performance of 11.4% and a 3-month performance of 16.1% [5]. Valuation Methodology - The valuation of CGN Mining is based on a Net Present Value (NPV) methodology, applying a target multiple of 3x NPV to reflect the potential conversion from resources to reserves amid rising uranium prices [18][19]. - Long-term assumptions include a 1.5% annual increase in uranium prices from US$91/lb during 2027-31, stabilizing at US$96 thereafter [18]. Shareholding Structure - The major shareholder is China General Nuclear Power Corporation, holding 56.9% of the shares, followed by China Chengtong Holding Group with 10.0% [4].

Investment Rating - The report assigns a "Buy" rating to several companies in the pharmaceutical sector, indicating a potential upside of over 15% in their stock prices over the next 12 months [31]. Core Insights - The MSCI China Healthcare Index has increased by 27.6% since the beginning of 2025, outperforming the MSCI China Index by 14.5% [2]. - The international competitiveness of Chinese innovative drugs is being demonstrated through significant overseas licensing deals, reflecting a strong market presence [2]. - The report anticipates a valuation recovery in the pharmaceutical industry by 2025, driven by factors such as overseas licensing transactions, optimization of domestic procurement policies, and the implementation of new medical insurance categories [5]. Summary by Sections 1. **Industry Research - Medical Insurance Negotiations** - Continued support for innovation and recovery in overseas R&D demand [5]. 2. **Industry Research - Medical Equipment** - Expected recovery in bidding for medical devices and fruitful outcomes from innovative drug overseas transactions [5]. 3. **Industry Research - Medical Insurance Directory** - The results of adjustments to the medical insurance directory are expected to continuously support innovation [5]. 4. **Industry Research - Ongoing Policy Efforts** - Positive outlook for valuation rebound due to sustained policy support [5]. 5. **Industry Research - New Medical Insurance Categories** - The introduction of new medical insurance categories is expected to open up domestic payment space for innovative drugs [5]. 6. **Industry Research - Valuation Recovery** - The industry is poised for a valuation recovery, with several companies recommended for purchase [5]. 7. **Industry Research - Drug Pricing Policies** - Drug pricing policies are expected to be optimized, with accelerated commercialization of medical AI [5]. 8. **Industry Research - Anticipated Drug Procurement Policy Optimization** - Expectations for the implementation of an "innovative drug directory" [5]. 9. **Industry Research - 2024 Performance Review** - Innovative drugs are expected to dominate the market [5].