Investment Rating - The report initiates coverage on the company with a "Buy" rating and sets a target price of HKD 49.80, indicating a potential upside of 97.6% from the current price of HKD 25.20 [3][11]. Core Insights - The company is recognized as a leading supplier of analog IC patterned wafers in China, with a unique full-stack design platform that integrates EDA, IP, and design processes. This positions the company favorably in the industrial-grade analog IC market, which is expected to support long-term profitability [7][20]. - The company is projected to achieve a robust revenue growth rate of 38.0% from 2023 to 2026, with stable profit margins expected to maintain at 54% gross margin and 23% net margin in 2024/25 [7][11]. - The valuation appears attractive, with a projected P/E ratio of 10.3x for 2024/25 compared to the industry average of 30.8x for Hong Kong-listed peers [7][11]. Financial Overview - Revenue is expected to grow from RMB 353 million in FY22 to RMB 1,220 million by FY26, reflecting a compound annual growth rate (CAGR) of 38% [2]. - Gross margin is projected to remain stable, with estimates of 53.8% in FY24 and 54.3% in FY25 [2]. - Net profit is forecasted to increase from RMB 95.3 million in FY22 to RMB 305.2 million by FY26, with a CAGR of 45% [2]. Market Position and Strategy - The company holds a 1.7% market share in the analog IC patterned wafer market, ranking first in revenue according to Frost & Sullivan [7][20]. - The industrial-grade analog IC market is characterized as a long-tail market with diverse downstream demand and lower competition compared to consumer-grade markets. The market is expected to grow at a CAGR of 9.5% from 2024 to 2027, reaching RMB 242 billion [9][29]. - The company has established strong partnerships with distributors, with 87% of its revenue in 2023 coming from distribution channels, indicating a strategic approach to leverage partner resources for growth [32]. Competitive Advantages - The company possesses three key differentiators: being a leading supplier of analog IC patterned wafers, focusing on the industrial-grade analog IC market, and having the only full-stack analog IC design platform in China [22][20]. - The full-stack design platform enhances efficiency in IC design and wafer delivery, reduces geopolitical risks, and provides cost advantages [10][20]. - The company has developed over 400 models of industrial-grade analog IC patterned wafers, with a projected CAGR of 23.4% in product variety from 2023 to 2026 [7][20].

Investment Rating - The report maintains a "BUY" rating for FIT Hon Teng with a new target price of HK$ 4.25, indicating an upside potential of 88.1% from the current price of HK$ 2.26 [4][12]. Core Insights - FIT Hon Teng reported strong 2Q24 results, with revenue of US$ 1,102 million, reflecting a 20% year-over-year increase, and a net profit of US$ 22.3 million, a significant improvement from US$ 0.35 million in 2Q23 [2][6]. - The company has raised its FY24E guidance for networking business revenue to high double-digit year-over-year growth, up from a previous estimate of 5-15% [2][12]. - The earnings growth is driven by the networking business and the EV segment, which saw a remarkable 231% year-over-year increase due to the Voltaira merger [2][6]. Financial Summary - Revenue projections for FY24E are set at US$ 4,677 million, with expected growth of 11.5% year-over-year, and net profit is projected to reach US$ 183.5 million, reflecting a 41.6% increase [3][10]. - The gross profit margin (GPM) is expected to improve to 20.6% in FY24E, with operating profit margin (OPM) targeted at 7.0% [8][10]. - The company anticipates a rebound in revenue and net profit for FY24E, with expectations of 12% and 42% year-over-year growth, respectively [2][12]. Segment Performance - The EV segment's revenue surged by 231% year-over-year, while the networking segment grew by 29% year-over-year, driven by strong AI demand [2][6]. - The smartphone segment also performed better than expected, benefiting from key customer shipment improvements [2][6]. Earnings Revision - The report indicates that FY25-26E EPS estimates are 13-23% above consensus, reflecting confidence in the company's growth trajectory [2][10]. - Adjustments to FY24-26E EPS have been made to account for higher gross profit margins, offset by increased operating expenses for new products [2][10]. Valuation - The stock is currently trading at 11.2x FY24E P/E and 6.9x FY25E P/E, which is considered attractive given the projected 42% and 63% year-over-year EPS growth for FY24 and FY25, respectively [2][12].

2024 年 8 月 13 日 招银国际环球市场 | 市场策略 | 招财日报 每日投资策略 ` 公司点评 公司点评 贝壳（BEKE US，买入，目标价：21.5 美元）- 在不确定环境中稳固市场份 额增长 贝壳公布 2Q24 业绩：收入同比增长 20%，达到 234 亿元人民币，较招银预 期和彭博一致预期均高 9%，这得益于新房交易和二手房交易的 GTV 超出预 期，以及在行业强劲的去库存需求下新房交易的费率扩张超出预期。季度 non-GAAP 净利润为 27 亿元人民币，较招银预期及市场一致预期均高 48%， 得益于收入超出预期和运营费用支出相较预期更为优化。我们对贝壳在其核 心业务的市场份额扩张持积极态度，这得益于其完备的基础设施和灵活的业 务运营能力，并看好贝壳新业务的发展前景。我们基于 SOTP 的目标价微调 至 21.5 美元（前值：22.0 美元），包括贝壳核心业务的 20.6 美元和圣都的 0.9 美元，对应 20.8x 2024E non-GAAP PE。维持"买入"评级。（链接） 361 度 （1361 HK ，买入，目标价：5.15 港元） - 行业压力仍在，但估值足 够合理 24 年上半 ...

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 24.00, indicating a potential upside of 32.7% from the current price of HKD 18.08 [1][2]. Core Insights - The company has shown a gradual recovery in market demand, with capacity utilization nearing full capacity. The second quarter revenue was USD 479 million, a year-on-year decline of 24.2% but a quarter-on-quarter increase of 4.0% [2]. - The gross margin for the second quarter improved to 10.5%, significantly higher than the previous quarter's 6.4% and above market expectations [2]. - The company is expected to benefit from the trend of self-sufficiency in China's semiconductor industry, with a forecasted revenue guidance for the third quarter of USD 510 million, reflecting a year-on-year decline of 10.3% but a quarter-on-quarter increase of 6.6% [2]. Financial Summary - The company's financial performance shows a projected revenue of USD 1.983 billion for FY24, a decrease of 13.3% year-on-year, with a gross margin of 11.4% [5][6]. - Net profit is expected to drop to USD 134.7 million in FY24, a decline of 51.9% year-on-year, but is projected to recover in FY25 with an increase to USD 244 million [5][6]. - The company’s cash flow analysis indicates a net operating cash flow of USD 692 million for FY25, reflecting a positive trend in cash generation [10]. Market Position - The company’s market share in the consumer electronics segment has shown signs of recovery, contributing 62% to total revenue in the latest quarter [2]. - The management anticipates maintaining high capacity utilization rates, with projections of 84% in Q4 2023 and 98% in Q1 and Q2 2024 [2]. - The company’s stock performance has been volatile, with a 52-week high of HKD 24.60 and a low of HKD 13.86, indicating significant market fluctuations [3]. Valuation Metrics - The report values the company at 0.8 times the projected 2024 price-to-book ratio, which is above the historical average forward P/E ratio by 10% [2]. - The expected earnings per share for FY24 is USD 0.08, with a projected P/E ratio of 29.5 [5][6]. Conclusion - The report concludes that despite challenges in average selling prices, the company is well-positioned to capitalize on the recovery in the semiconductor market and maintain a balanced approach between average selling prices and capacity utilization to maximize revenue [2].

13 Aug 2024 CMB International Global Markets | Equity Research | Company Update 361 Degrees (1361 HK) The cautious outlook is likely priced in We are certainly cautious about the sportswear sector. However, brands like Anta, Xtep and 361 Degrees have outperformed in 1H24 and we think this should sustain into 2H24E. For 361, supported by stepped-up efforts in 2H24E and its fairly undemanding valuation at 6x FY24E P/E and 7% FY24E yield, we maintain BUY. FY24E guidance maintained but we are more cautious on m ...

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 24.00, indicating a potential upside of 32.7% from the current price of HKD 18.08 [1][2]. Core Insights - The company has shown signs of recovery in market demand, with capacity utilization rates nearing full capacity. The second quarter revenue was USD 479 million, a year-on-year decline of 24.2% but a quarter-on-quarter increase of 4.0% [2]. - The gross margin for the second quarter improved to 10.5%, up from 6.4% in the previous quarter, despite a year-on-year decline from 27.7% [2]. - The company is expected to benefit from the trend of self-sufficiency in China's semiconductor industry, with a forecasted revenue of USD 510 million for the third quarter, reflecting a year-on-year decline of 10.3% but a quarter-on-quarter increase of 6.6% [2]. Financial Data Summary - For FY24E, the company is projected to have sales revenue of USD 1,983 million, a year-on-year decline of 13.3%. The gross margin is expected to be 11.4%, with a net profit of USD 135 million, reflecting a 51.9% year-on-year decline [5][6]. - The company’s capacity utilization rates are projected to remain high, with expectations of 84% in Q4 2023 and 92% and 98% in Q1 and Q2 2024, respectively [2]. - The company’s financial outlook includes a slight downward adjustment of revenue forecasts by 3% and 4% for FY24 and FY25, respectively, while gross margin forecasts have been increased by 0.5 percentage points [2].

13 Aug 2024 CMB International Global Markets | Equity Research | Company Update 361 Degrees (1361 HK) The cautious outlook is likely priced in We are certainly cautious about the sportswear sector. However, brands like Anta, Xtep and 361 Degrees have outperformed in 1H24 and we think this should sustain into 2H24E. For 361, supported by stepped-up efforts in 2H24E and its fairly undemanding valuation at 6x FY24E P/E and 7% FY24E yield, we maintain BUY. ■ FY24E guidance maintained but we are more cautious on ...

Investment Rating - The report assigns a "Buy" rating for Ke Holdings with a target price of $21.50, slightly adjusted from the previous target of $22.00, reflecting a potential upside of 53.2% from the current price of $14.03 [2]. Core Insights - Ke Holdings reported a 20% year-over-year revenue growth in Q2, reaching RMB 23.4 billion, exceeding both the forecast and consensus estimates by 9% [2]. - Non-GAAP net income for the quarter was RMB 2.7 billion, surpassing expectations by 48%, attributed to revenue growth and optimized operating expenses [2]. - The company is expected to maintain its market share growth in core business segments due to strong industry demand and an efficient agency network [2]. Summary by Sections Financial Performance - Q2 revenue reached RMB 23.4 billion, a 20% increase year-over-year, driven by new home transactions (NHT) and existing home transactions (EHT) [2]. - Non-GAAP net income was RMB 2.7 billion, exceeding expectations by 48% [2]. - The company anticipates a revenue growth of 44% year-over-year in the home renovation and furniture business for 2024 [2]. Market Share and Business Outlook - Ke Holdings experienced significant market share growth in both EHT and NHT segments, with EHT online registrations increasing by 16% year-over-year in major cities [2]. - The company’s NHT gross transaction value (GTV) declined by 20% year-over-year, while the overall industry saw a 35% decline, indicating strong competitive positioning [2]. - Management is shifting focus from rapid scale expansion to profit margin improvement in the home renovation segment, with profit margins increasing to 31% in Q2 2024 [2]. Shareholder Returns - The management has repurchased shares worth $480 million, representing 2.75% of shares outstanding as of the end of 2023, and has expanded the buyback program to $3 billion [2]. - The company aims to maintain a shareholder return target of 6-7% annually through buybacks and dividends [2]. Real Estate Market Trends - The report notes a slowdown in sales momentum during the typical summer sales lull, with new home sales in July and August showing a month-over-month decline of 24% and 19%, respectively [2]. - Leading indicators suggest a narrowing decline in new home sales, with expectations for increased project launches in September and October [4].

13 Aug 2024 CMB International Global Markets | Equity Research | Company Update Ke Holdings (BEKE US) Solid market share gains amid uncertain environment Beike reported (12 Aug) 2Q24 results: revenue increased 20% YoY to RMB23.4bn, and was 9% ahead of both our forecast and Bloomberg consensus estimates, thanks to a beat on GTV of both new home transactions (NHT) and existing home transactions (EHT), and stronger-than-expected expansion of NHT aided by strong industry demand. Non-GAAP net income was RMB2.7bn ...

Investment Rating - The report initiates coverage on Sangfor Technologies with a "Buy" rating and a target price of HKD 9.56, indicating a positive outlook for the company's growth potential [2][5]. Core Views - Sangfor Technologies is positioned as a pioneer in China's biopharmaceutical industry, with core products expected to achieve steady revenue growth due to expanded indications and increased penetration in the oncology field [2][5]. - The company is anticipated to enter a harvest period for its innovative pipeline, which will further drive growth [2][5]. - The report forecasts a compound annual growth rate (CAGR) of 10.9% for revenue and 13.4% for net profit attributable to shareholders from 2023 to 2026 [5]. Industry Summary - The Chinese pharmaceutical industry is showing signs of recovery, with supportive policies expected to improve profitability for innovative drug and medical device companies [1]. - The MSCI China Healthcare Index has underperformed, down 22.9% year-to-date, but is currently trading at a dynamic P/E ratio of 23.8, below its historical average [1]. - The report highlights a positive outlook for leading medical device companies and innovative drug firms, driven by policy support and normalization of regulatory environments [1].