23 Oct 2024 CMB International Global Markets | Equity Research | Company Update Baidu (BIDU US) Awaiting recovery of ads revenue growth We expect Baidu Core business to deliver broadly inline-with-consensus revenue, and slightly better-than-consensus non-GAAP operating profit for 3Q24E. Although proactive business adjustments to embed more GenAI-related results in search results weigh on short-term monetization, we view the adjustments as vital for Baidu's long-term business development and monetization imp ...

18 Oct 2024 Earnings Summary CMB International Global Markets | Equity Research | Company Update DPC Dash (1405 HK) Our view on placement by Domino's Pizza What is new? Sales of shares by the 2nd largest shareholder of DPC Dash (1405 HK). Domino's Pizza (DPZ US), the 2nd largest shareholder of DPC Dash (1405 HK), has sold 10mn shares (about 7.66% of total shares issued), at the price of HK$ 65.0 per share, with a 12.8% discount to last closing price of HK$ 74.55. After this trade, Domino's Pizza's ownership ...

Investment Rating - The report maintains a "Buy" rating for WuXi AppTec (药明康德) and raises the target price to 67.72 RMB, reflecting reduced uncertainty from the biosecurity bill and growth in backlog orders [2][4][11]. Core Insights - The impact of the biosecurity bill is expected to be limited, with the company's U.S. operations likely to remain stable despite potential legislative changes [2][13]. - WuXi AppTec has a significant capacity advantage over its peers in India and the U.S. in the chemical drug CDMO sector, making it unlikely for foreign competitors to take over market share in the near term [2][10]. - The company's business is poised for recovery, driven by strong growth in its peptide business and an increase in backlog orders, which grew by 22.4% compared to the end of 2023 [2][12][21]. Financial Performance - The projected revenue growth for WuXi AppTec is -4.4% in 2024E, followed by +10.9% in 2025E and +13.2% in 2026E [2][3]. - Adjusted non-IFRS net profit is expected to decline by 8.4% in 2024E, then increase by 11.5% in 2025E and 14.4% in 2026E [2][3]. Market Position - WuXi AppTec's revenue for its chemical segment in 2023 was 4.14 billion USD, significantly higher than the combined revenue of 10 comparable Indian companies, which totaled 3.15 billion USD [21][22]. - The company has a robust R&D and capital expenditure strategy, with its R&D spending far exceeding that of its Indian counterparts, indicating a strong commitment to innovation and capacity expansion [21][22][24]. Growth Drivers - The peptide business has emerged as a key growth engine, with increasing demand for innovative drugs in metabolic disease areas [2][12]. - The anticipated decline in interest rates by the Federal Reserve is expected to boost global early-stage pharmaceutical financing, further enhancing WuXi AppTec's growth prospects [2][12].

Investment Rating - The report reiterates a BUY rating for BaTeLab with an unchanged target price of HK$49.80, corresponding to a 20.4x 2024E P/E [2]. Core Insights - BaTeLab's management emphasizes the industrial market's lower R&D costs and long-tail characteristics, allowing for cost efficiency through proprietary EDA software and a reusable IP library [2]. - The company is focusing on patterned wafers, which are believed to provide higher marketing efficiency while keeping operational costs low [2]. - Management acknowledges concerns regarding high revenue reliance on distributor channels, stating that customer concentration is channel-specific and the actual customer base is diverse [2]. - Future revenue growth is expected to be driven by semiconductor localization, with plans to expand the product portfolio by approximately 100 SKUs annually [2]. - Management anticipates a gradual recovery in market demand and expects accelerated growth in the analog IC market over the next 5-10 years [2]. - The company's gross profit margin is projected to remain stable within the range of 53-55%, despite a lower-than-expected GPM of 51.3% in 1H24 due to increased inventory provisions [2]. Financial Summary - Revenue is forecasted to grow from RMB 464 million in 2023 to RMB 650 million in 2024, representing a year-on-year growth of 40.2% [3]. - The gross profit margin is expected to be 53.8% in 2024, down from 55.4% in 2023 [3]. - Operating profit is projected to increase from RMB 113 million in 2023 to RMB 154 million in 2024, with a year-on-year growth of 36.1% [3]. - Net profit is anticipated to rise from RMB 146.3 million in 2023 to RMB 210.5 million in 2024, reflecting a year-on-year growth of 43.9% [3]. - The company reported a P/E ratio of 10.8x for 2024E, which is considered attractive compared to the industry [2][3]. Market Position - BaTeLab's market capitalization is approximately HK$396.8 million, with a current share price of HK$26.45, indicating an upside potential of 88.3% to the target price [4]. - The company has a diverse shareholding structure, with the largest shareholders holding 53.5% and 39.5% of the shares [4]. - The stock has shown a 1-month performance of -3.5% and a 3-month performance of 7.7% [4].

Investment Rating - The report maintains a "Buy" rating for Zhejiang Dingli and Zoomlion, while holding a "Hold" rating for Sany Heavy Industry [1]. Core Insights - The overall sales data for September indicates strong growth in exports, particularly for tower cranes, truck cranes, and forklifts. However, domestic sales for major products, excluding excavators, have declined due to a weak overall economy, especially in real estate construction [1]. - The report highlights a favorable outlook for Zhejiang Dingli due to its high overseas sales ratio, but suggests waiting until after the U.S. presidential election to invest, to avoid potential tariff risks if Trump wins [1]. - There are concerns regarding Zoomlion, as domestic crane demand deterioration may offset overseas growth, leading to some downside risks [1]. - A conservative view is held for Sany Heavy Industry, primarily due to high market consensus expectations [1].

Investment Rating - Maintains a **Buy** rating for JD com with a target price of **USD 53 50**, up 3% from the previous target of **USD 51 90** [1][10] Core Views - JD com is expected to achieve **5% YoY revenue growth** in Q3 2024, in line with Bloomberg consensus, driven by improved consumer sentiment and the nationwide appliance trade-in program [1] - Non-GAAP net profit is anticipated to exceed expectations, with a **7% YoY increase** to **RMB 11 4 billion**, supported by effective cost control and service revenue growth [1] - The company is shifting focus from investment returns and cost control to **GMV and revenue growth**, which is expected to drive further stock price appreciation [1] - JD Retail (JDR) is projected to achieve **RMB 223 6 billion in revenue**, a **5% YoY increase**, with non-GAAP operating profit rising **3% YoY** to **RMB 11 4 billion** [1] Revenue and Profit Forecasts - For Q3 2024, JD com is estimated to generate **RMB 260 billion in revenue**, with **4% YoY growth in net product revenue** and **8% YoY growth in net service revenue** [1] - Non-GAAP net profit for Q3 2024 is forecasted at **RMB 114 billion**, a **7% YoY increase**, surpassing market expectations by **1%** [1] - The 2024 full-year revenue forecast remains largely unchanged, but the non-GAAP net profit forecast is revised upward by **1 4%** due to better-than-expected cost control [2] Valuation and Shareholder Returns - The target price of **USD 53 50** is based on a DCF model with a WACC of **11 8%** and a terminal growth rate of **1 5%**, implying a **14x P/E ratio** for 2024 [10] - JD com announced a new **USD 5 billion share repurchase program**, effective from September 2024 to August 2027, representing **2 6% of the current market cap annually**, which is expected to support valuation [2] Segment Performance - JD Retail (JDR) is expected to see a **5% YoY revenue growth** in Q3 2024, driven by a rebound in the **Home Appliances and Home Goods (EH&A) segment** and steady growth in general merchandise [1] - The **Marketplace and Advertising revenue** is projected to grow **8% YoY**, benefiting from improved ad revenue and positive commission growth [1] Financial Metrics - JD com's **gross margin** is expected to improve slightly to **15 3%** in 2024, with non-GAAP net profit margin at **3 7%** [8][9] - The company's **ROE** is forecasted to rise to **14 9%** in 2024, reflecting improved profitability [16] Market and Industry Context - The report highlights JD com's ability to capitalize on **improved consumer sentiment** and government initiatives like the **appliance trade-in program**, which are expected to drive growth in the coming quarters [1]

Investment Rating - The report maintains a "BUY" rating for JD.com, with a target price revised up by 3% to US$53.5, indicating a potential upside of 22.1% from the current price of US$43.83 [2][4][7]. Core Insights - JD.com is expected to achieve inline revenue growth for 3Q24, with a better-than-expected non-GAAP net profit driven by efficient cost control and increased revenue from services. The company is shifting focus from ROI and cost control to GMV and revenue growth due to improving consumption sentiment [2][5]. - The retail segment is projected to see a sequential recovery in year-over-year revenue growth, with estimated revenue of RMB223.6 billion for JD Retail in 3Q24, reflecting a 5% year-over-year increase [2][3]. - The report highlights a revision in revenue and earnings forecasts, maintaining the 2024 revenue forecast while increasing the non-GAAP net profit forecast by 1.4% due to better-than-expected cost control impacts [2][5]. Revenue and Profit Forecast - For FY24E, JD.com is expected to generate revenue of RMB1,138.9 billion, representing a 5% year-over-year growth, with non-GAAP net profit projected at RMB42.3 billion [3][6]. - The adjusted net profit for FY24E is estimated at RMB42.3 billion, with an adjusted EPS of RMB26.66, translating to a P/E ratio of 13.1x [3][14]. Financial Summary - JD.com reported a revenue of RMB1,084.7 billion for FY23A, with a net profit of RMB24.2 billion. The company is expected to continue its growth trajectory with projected revenues of RMB1,138.9 billion for FY24E and RMB1,204.8 billion for FY25E [3][10]. - The gross profit margin is expected to improve to 15.3% in FY24E, with a non-GAAP net margin of 3.7% [5][12]. Valuation Metrics - The DCF-based target price of US$53.5 is based on a WACC of 11.8% and a terminal growth rate of 1.5%, translating into a 14x 2024E PE [7][8]. - The report indicates a significant improvement in profitability metrics, with an expected return on equity (ROE) of 14.9% for FY24E [12][13].

2024 年 10 月 15 日 招银国际环球市场 | 睿智投资 | 行业研究 半导体 AMD "Advancing AI" 大会回顾 AMD（AMD US，未评级）在美国当地时间 10 月 10 日举办的 "Advancing AI" 大会上发布了全新的 AI 加速器 Instinct MI325X，该产品旨在对标英伟达 （NVDA US，未评级）的 H200，前者预计将于 2024 年四季度出货。在本次 大会上，AMD 还推出了对标英伟达 Blackwell 系列的 MI350 系列芯片，但该系 列最快在 2H25 实现量产。据 AMD 首席执行官 Lisa Su 称，数据中心 AI 加速 器的潜在市场规模（TAM）将以超过 60% 的复合增长率增长，并于 2028 年达 到 5,000 亿美元，较此前的预测（ Lisa Su 在 2024 年初曾预计 2027 年将达到 4,000 亿美元）大幅上调。总体而言，此次大会并未给投资者带来太多惊喜。 本次会上，我们注意到： 1）Meta 的 Llama 405B 模型已全面在 MI300X 上运 行，意味着 AMD 在 Meta 方面取得了良好的进展；2）A ...

Investment Rating - Maintain BUY rating and raise target price to HK$ 126.68, based on 23x FY25E P/E, revised up from 20x [3][5][11] Core Views - Despite a disappointing 3Q24 performance, the outlook for 4Q24E is positive due to strong retail sales growth during the National Day holidays and government stimulus measures [3] - The company has not revised down its FY24E sales growth guidance, but a more conservative estimate is adopted [3] - Confidence in net profit margin remains high, supported by effective cost control and a resilient gross profit margin [3][6] Revenue and Profit Forecasts - FY24E revenue forecast is RMB 69,483 million, with a slight downward revision of -1.2% from previous estimates [7] - Net profit attributable to shareholders for FY24E is revised up by 4.8% to RMB 12,886 million [7] - Diluted EPS for FY24E is projected at RMB 4.601, reflecting a 4.8% increase from previous estimates [7] Sales Growth Expectations - Retail sales growth for Anta and FILA is expected to turn around in 4Q24E, with estimates of 16% and 10% respectively [3] - The company anticipates high single-digit to mid-single-digit retail sales growth for Anta and FILA in FY24E, compared to the company's guidance of over 10% [3] Market Position and Brand Performance - Anta's brand reforms are yielding positive results, with successful product launches and an expanded customer base through various store formats [3] - FILA is also expected to benefit from store revamps and new product series, although its recent performance has been weaker [3] Valuation Metrics - The stock is currently trading at 18x FY25E P/E, which is considered not demanding compared to its 5-year average of 25x [3] - The target price reflects a potential upside of 26.6% from the current price of HK$ 100.10 [5]

Investment Rating - The report maintains a HOLD rating for the company, indicating a potential return of +15% to -10% over the next 12 months [2]. Core Viewpoints - The earnings forecast for 2024E and 2025E has been revised down by 5% and 2% respectively, reflecting a projected ~20% year-on-year earnings decline in the second half of 2024, with recovery expected in 2025 [2]. - The target price has been adjusted to HK$21.4 from HK$19.5, based on a valuation of 4.5x EV/EBITDA, which aligns with the historical average [2]. - The report suggests that the current share price does not yet reflect the downside risks to earnings, particularly following a recent rally [2]. Financial Summary - Revenue is projected to grow from RMB 85,041 million in FY23A to RMB 91,906 million in FY24E, representing an 8.1% year-on-year growth [3]. - Net profit is expected to increase from RMB 5,318.1 million in FY23A to RMB 5,685.1 million in FY24E, reflecting a 6.9% growth [3]. - The P/E ratio is forecasted to decrease from 10.9x in FY23A to 10.2x in FY24E, indicating a more attractive valuation [3]. Sales Volume and Revenue Projections - The sales volume for heavy-duty trucks (HDT) is expected to decline by 3.7% in 2024E, with a slight recovery projected in 2025E [6]. - The revenue from the truck segment is forecasted to remain stable, with a slight increase from RMB 92,273 million in 2024E to RMB 92,517 million in 2025E [6]. - The report highlights a significant drop in engine sales volume, projected to decrease by 25.5% in 2024E [6]. Profitability Metrics - The gross profit margin is expected to decline from 16.2% in FY23A to 15.0% in FY24E, indicating pressure on profitability [10]. - Operating profit is projected to increase from RMB 6,487 million in FY23A to RMB 7,034 million in FY24E, reflecting an 8.4% growth [8]. - The return on equity (ROE) is expected to remain stable around 13.6% in FY24E [10]. Gearing and Liquidity - The net gearing ratio is projected to worsen from (44.3%) in FY22A to (47.3%) in FY24E, indicating increased leverage [3]. - The current ratio is expected to remain stable at around 1.2 over the forecast period, suggesting adequate liquidity [12].