Investment Rating - Maintain BUY rating for Tuhu Car, indicating potential for significant returns despite short-term profit adjustments [1][8] Core Insights - Tuhu Car is positioned as a beneficiary of industry consolidation, focusing on market share gains rather than immediate profit growth, which is seen as a strategic move amid evolving after-sales service landscapes [1][8] - The company plans to add 1,000 new stores in FY26E, with over 90% of stores that have been open for more than six months being profitable, and the average payback period for new stores has shortened to 30 months [8] - Despite a projected decline in gross profit margin (GPM) due to aggressive pricing strategies, Tuhu is expected to improve operational efficiency and maintain a competitive edge over peers [1][8] Financial Summary - Revenue projections show growth from RMB 13,601 million in FY23A to RMB 19,992 million in FY27E, with year-on-year growth rates of 17.8%, 8.5%, 11.5%, 11.1%, and 9.3% respectively [2][12] - Adjusted net profit is expected to rise from RMB 481.3 million in FY24A to RMB 939.8 million in FY27E, reflecting a significant recovery after a dip in FY24A [2][12] - The target price has been adjusted from HK$23.00 to HK$19.00, representing a 39.2% upside from the current price of HK$13.65 [3][8] Earnings and Valuation - The adjusted net profit for FY26E is projected to be RMB 738 million, a 5% increase year-on-year, while FY27E is expected to see a 27% growth in adjusted net profit [8][10] - The company’s P/E ratio is projected to decrease from 22.8x in FY25A to 14.5x in FY27E, indicating improved valuation metrics over time [2][12] - Gross margin is expected to stabilize at around 24.2% in FY26E, with a slight increase to 24.5% in FY27E [10][12]

Investment Rating - The report maintains a BUY rating for Giant Biogene, expecting earnings pressure to ease progressively through 2026E and injectables to drive medium- to long-term growth [1][8]. Core Views - Giant Biogene reported revenue of RMB5,519 million in 2025, a slight decline of 0.4% YoY, and an attributable net profit of RMB1,915 million, down 7.2% YoY, which was in line with expectations given external headwinds and competition [1][2]. - The gross margin decreased by 1.8 percentage points YoY to 80.3%, primarily due to changes in product mix [1]. - For 2026E, sales growth is expected to recover gradually, driven by stronger brand promotion for KOMFYMED and Collgene, an expanded product portfolio, and the commercialization of newly approved Class III injectables [1][8]. - The target price has been lowered to HK$38.70 from HK$53.89, reflecting a revised revenue and net profit CAGR forecast from 18%/17% to 11%/8% for 2025-28E due to intensified competition [1][3]. Financial Summary - Revenue projections for FY26E, FY27E, and FY28E are RMB6,073 million, RMB6,809 million, and RMB7,522 million respectively, with YoY growth rates of 10.1%, 12.1%, and 10.5% [2][12]. - Attributable net profit is expected to be RMB1,964 million in FY26E, RMB2,201 million in FY27E, and RMB2,432 million in FY28E, with corresponding YoY growth rates of 2.6%, 12.1%, and 10.5% [2][12]. - The P/E ratio is projected to be 14.7x for FY26E, 13.1x for FY27E, and 11.9x for FY28E [2][12]. Product and Market Insights - KOMFYMED's revenue was RMB4,470 million in 2025, down 1.6% YoY, while Collgene grew by 9.2% YoY to RMB918 million [1][8]. - The company plans to launch several key products in 2026E, including KOMFYMED Focus Cream 2.0 and new additions to the Focus and Regular series, to support recovery [1][8]. - Offline direct sales increased by 32% YoY to RMB225 million in 2025, contributing 4.1% to total revenue, driven by the expansion of KOMFYMED offline stores [1][8]. Regulatory and Commercialization Developments - Giant Biogene received NMPA approvals for two Class III injectables in late 2025 and early 2026, with commercialization expected to begin in 2Q26E [1][8]. - The company is preparing for commercialization through market research and distributor selection, leveraging its nationwide sales network [1][8].

Investment Rating - The report maintains a "BUY" rating for AIA Group Ltd. with a target price (TP) raised to HK$112 from the previous HK$89, indicating a potential upside of 30.2% from the current price of HK$86.05 [2][12]. Core Insights - AIA Group Ltd. reported a 15% year-over-year growth in Value of New Business (VONB) to US$5.52 billion for FY25, with a notable share buyback of US$1.7 billion announced for FY26, which was a positive surprise [1][8]. - The company's operating profit after tax (OPAT) grew 8% year-over-year to US$7.14 billion, translating to a 12% increase in earnings per share, aligning with the company's target of 9%-11% compound annual growth rate (CAGR) for OPAT per share from 2023 to 2026 [1][12]. - The report highlights strong performance in Hong Kong, with VONB growth of 28% year-over-year, while AIA China showed resilience with VONB growth rebounding in early 2026 [1][8]. Summary by Relevant Sections Financial Performance - FY25 VONB reached US$5,516 million, with a margin of 58.5%, up 3.6 percentage points year-over-year, slightly exceeding estimates [1][13]. - The total shareholder return for FY25 was US$4.7 billion, comprising US$2.4 billion in dividends and US$2.3 billion in buybacks [1][12]. Growth Strategy - AIA's growth strategy in China is on track, with VONB from new regions accelerating significantly in the second half of FY25 [1][8]. - The company aims for a 4.0% total shareholder return in FY26, supported by the new buyback program and consistent capital returns [12][13]. Valuation Metrics - The new target price of HK$112 implies a price-to-embedded value (P/EV) of 1.7x for FY26, compared to the current trading level of 1.3x [12][13]. - Key assumptions include a terminal growth rate of 2% and a VNB multiplier of 9.4x, reflecting varied risk discount rates across markets [12][13].

Investment Rating - Maintain BUY rating for Xpeng Inc. with a target price of US$24.00 for XPEV US and HK$94.00 for 9868 HK, reflecting an upside of 36.8% and 31.3% respectively from current prices [4][9] Core Insights - Xpeng's 4Q25 net profit exceeded expectations due to R&D service income, with revenue rising 38% YoY to RMB22.3 billion, driven by higher-than-expected technical R&D service income from VW and carbon credit trading [9] - Despite a weak 1Q26 outlook, Xpeng's sales volume in 2H26 is projected to double HoH, supported by aggressive export plans and the introduction of four new models, including two Mona SUVs [9] - The mass production of humanoid robots is anticipated to be a significant catalyst for share price appreciation, with a target of producing 2,000 units by the end of this year and an annual sales goal of 1 million units by 2030 [9] Financial Summary - Revenue projections for FY26E are set at RMB94.37 billion, reflecting a 23% YoY growth, with a gross profit margin (GPM) of 18.5% [11] - Adjusted net profit estimates for FY26E and FY27E have been revised down by 59% and 37% to RMB0.9 billion and RMB2.3 billion respectively, due to lower sales volume outlook and increased R&D expenses [9][11] - The operating loss forecast for FY26E has been adjusted from RMB253 million to RMB1.27 billion [9] Earnings Performance - Xpeng's 4Q25 marked its first-ever net profit of RMB383 million, with a gross margin of 21.3%, the highest in its history [9] - The company aims to achieve a domestic sales volume growth of 17% YoY in FY26E, despite a downward revision of its overall sales volume forecast to 0.54 million units [9] Valuation Metrics - The price-to-sales (P/S) ratio is projected to decrease from 1.8x to 1.7x for FY26E, reflecting the earnings cuts [9] - The price-to-earnings (P/E) ratio for FY26E is estimated at 228.7x, decreasing to 20.5x for FY27E [11][14]

Investment Rating - The report maintains a "BUY" rating for AAC Tech, with a target price of HK$55.27, implying a potential upside of 71.5% from the current price of HK$32.22 [3][16]. Core Insights - AAC Tech's FY25 revenue and net profit are projected to grow by 16% and 40% year-over-year, respectively, driven by improved profitability in optics and strong growth in the automotive and thermal segments [1][9]. - The management provided positive guidance for FY26, expecting revenue growth of 16-17% year-over-year and stable gross profit margins, despite challenges in the smartphone market [1][9]. - The company is well-positioned to leverage emerging opportunities in AI, AR/VR, and automotive sectors, with significant growth expected from thermal and optics businesses [1][9][16]. Financial Summary - FY25 revenue is estimated at RMB 31.8 billion, with a year-over-year growth of 16.4%, while net profit is expected to reach RMB 2.51 billion, reflecting a 39.8% increase [2][10]. - The gross profit margin for FY25 is projected at 22.1%, slightly below previous estimates due to changes in the acoustics product mix [9][10]. - For FY26, revenue is expected to grow to RMB 36.7 billion, with net profit reaching RMB 2.90 billion, indicating continued growth momentum [11][12]. Business Segments - The report highlights robust growth in the thermal VC and sensor & semi segments, with year-over-year increases of 400% and 103%, respectively [9][15]. - The optics business has shown significant profitability improvement, with margins increasing to 11.5% from 6.5% in the previous year, supported by gains in high-end lens markets [9][15]. - The automotive segment is expected to grow by 15-20% year-over-year, contributing to overall revenue growth [9][11]. Valuation - The target price of HK$55.27 is based on a sum-of-the-parts (SOTP) valuation, reflecting different growth profiles across business segments, with a weighted-average target P/E multiple of 20.0x for FY26E [3][16]. - The valuation considers near-term headwinds in the automotive and smartphone industries, adjusting P/E multiples accordingly [16][17].

Investment Rating - The report assigns a BUY rating to SANY International with a target price of HK$20.60, indicating a potential upside of 72.2% from the current price of HK$11.96 [4][5]. Core Insights - SANY International's after-tax profit for 2025 is expected to grow by 50-73% YoY to RMB1.6-1.85 billion, primarily due to a significant reduction in impairment losses. However, on a recurring basis, profit is projected to decline by 10% to grow by 4% YoY, falling 16-27% below estimates and 19-30% below Bloomberg consensus [1]. - The negative earnings surprise is attributed to one-off expenses related to port equipment and higher-than-expected operating expenses in the solar power segment. Despite the anticipated weak earnings in 2025, a strong recovery is expected in 2026, driven by robust orders for mining trucks and favorable conditions in the oil and gas equipment segment [1]. Financial Summary - Revenue is projected to grow from RMB20.3 billion in FY23 to RMB34.8 billion in FY27, reflecting a CAGR of 16.9% [3][12]. - Adjusted net profit is expected to increase from RMB1.9 billion in FY23 to RMB3.7 billion in FY27, with a notable growth of 30.8% in FY26 [3][12]. - The P/E ratio is forecasted to decrease from 17.3x in FY23 to 9.3x in FY27, indicating a more attractive valuation over time [3][12]. - The company is expected to maintain a dividend yield that increases from 1.7% in FY23 to 4.3% in FY27 [3][12]. Share Performance - The market capitalization of SANY International is approximately HK$38.65 billion, with a 52-week high of HK$15.97 and a low of HK$4.42 [5][6]. - The stock has shown a significant performance increase over the past six months, with a rise of 68.5% [7]. Shareholding Structure - Sany Heavy Equipment holds a 64.9% stake in SANY International, indicating a strong controlling interest [6]. Operating Assumptions - The revenue from mining trucks is expected to grow from RMB4.1 billion in 2025 to RMB5.9 billion in 2027, reflecting a strong demand in this segment [11]. - The oil and gas equipment segment is projected to benefit from high commodity prices, contributing positively to overall revenue growth [1]. Conclusion - SANY International is positioned for growth with a strong outlook for 2026, despite short-term challenges in 2025. The company's strategic focus on mining trucks and oil & gas equipment, along with a favorable valuation, supports the BUY rating [1][3][4].

Investment Rating - The report maintains a "BUY" rating on VSTECS, supported by a solid earnings growth outlook and shareholder return [1][15]. Core Insights - VSTECS reported a total revenue increase of 10% YoY to HK$97.6 billion for FY25, with net profit growing by 29% YoY to HK$1.35 billion, exceeding consensus estimates by 5% [1]. - The management anticipates a net income CAGR of 20% over FY26-28E, driven by operating leverage and increased revenue from self-developed products [1]. - The target price is adjusted to HK$14.00 based on a 12x FY26E P/E, reflecting a potential upside of 77.7% from the current price of HK$7.88 [3]. Financial Performance - FY25 revenue breakdown shows enterprise systems, consumer electronics, and cloud computing revenues growing by 2%, 19%, and 29% YoY, respectively [8]. - Revenue from Southeast Asia increased by 17% YoY to HK$35.8 billion, accounting for 37% of total revenue [8]. - The company plans to double its investment in R&D for self-developed products, expecting revenue growth of approximately 150%, 120%, and 90% YoY for FY26, FY27, and FY28, respectively [8]. Margin and Shareholder Returns - Net profit margin expanded by 0.2 percentage points YoY to 1.5% in FY25, attributed to effective G&A expense control and operating leverage [8]. - An annual dividend of HK$600 million (HK$0.42 per share) was announced, resulting in a dividend yield of 5% [8]. Business Forecasts and Valuation - The revenue forecast for FY26E is set at HK$111.7 billion, with net profit expected to reach HK$1.7 billion, reflecting an 11.9% increase from previous estimates [9]. - The valuation of VSTECS is pegged at HK$14.00 per share, based on a target P/E of 12x for FY26E, aligning with the average P/E of its peers [11].

Macro Commentary - The Federal Reserve's March meeting signaled a hawkish stance, mentioning geopolitical risks in the Middle East and adjusting economic and inflation forecasts, while maintaining the same rate of interest rate cuts for the year [2] - Market expectations for rate cuts decreased from 26 basis points to 11 basis points post-meeting, but there is a belief that the market may have over-interpreted the Fed's signals [2] - The overall consensus within the Fed appears to be strengthening, with future oil prices potentially influencing monetary policy depending on inflation expectations [2] Global Market Performance - Major global indices showed declines, with the Hang Seng Index down 2.02% and the S&P 500 down 0.27% [3][5] - The performance of various sectors varied, with energy stocks gaining while materials and consumer discretionary sectors faced declines [5] - The Japanese market saw significant drops, with the Nikkei 225 down 3.4%, influenced by the Fed's hawkish signals and high oil prices [5] Industry Commentary Pharmaceutical Industry - The performance of overseas CXO and life sciences upstream companies is expected to improve in 2025, with 8 out of 9 companies showing better revenue and net profit growth compared to 2023-24 [7] - Strong commercial demand continues, with early-stage research showing signs of recovery, particularly benefiting C(D)MO segments [8] - However, there is caution regarding 2026 performance guidance, reflecting high base effects and uncertainties in demand recovery [9] Company Analysis - Alibaba (BABA US) reported a revenue of 284.8 billion RMB for Q3 FY26, a 1.7% year-on-year increase, but fell short of market expectations [11] - BOSS Zhipin (BZ US) showed a 14% revenue growth in Q4 2025, with a non-GAAP net profit increase of 25%, indicating resilience in recruitment demand [11] - Multi-point Smart (2586 HK) achieved a 20% revenue growth in FY25, driven by AI initiatives, with a significant increase in adjusted net profit [11] Horizon Robotics (9660 HK) - Horizon Robotics reported a 51% year-on-year revenue growth in 2H25, supported by high R&D investments [12] - The company anticipates significant sales growth in its HSD solutions, projecting a rise from 22,000 units in 2025 to 400,000 units in 2026 [13] - Management expects a compound annual growth rate of 60% in revenue over the next few years, with a forecasted adjusted net profit of 2.5 billion RMB by 2028 [14]

Group 1: Federal Reserve Policy Signals - The Federal Reserve's March meeting indicated a hawkish stance, mentioning geopolitical risks in the Middle East, which may influence future policy shifts[3] - The dot plot showed an increase in economic and inflation forecasts, with the 2026 PCE inflation forecast raised from 2.4% to 2.7%[4] - Market expectations for rate cuts decreased from 26 basis points to 11 basis points following the meeting, reflecting a potential overreaction to the Fed's hawkish signals[5] Group 2: Economic Projections - The Fed's median GDP growth forecasts for 2026, 2027, and 2028 were adjusted to 2.4%, 2.3%, and 2.1%, respectively, up from previous estimates[4] - The unemployment rate forecast for 2027 was slightly increased from 4.2% to 4.3%[4] - Long-term economic growth expectations were raised from 1.8% to 2.0%, indicating optimism about productivity improvements[4] Group 3: Market Implications - High oil prices are expected to elevate global inflation and delay central bank rate cuts, impacting risk assets negatively[5] - The dollar index is likely to remain strong due to geopolitical risks and high oil prices, while non-dollar currencies may weaken[5] - The current geopolitical tensions may create favorable conditions for quality long-term assets, including technology leaders benefiting from AI trends and precious metals[5]

Investment Rating - The report maintains a "BUY" rating for Xiaomi, with a target price of HK$47.16, implying a 28.8x FY26E P/E ratio [1][19]. Core Insights - Xiaomi's new-gen SU7 electric vehicle (EV) is positioned competitively in the premium EV market, featuring significant upgrades such as an 800V silicon carbide high-voltage platform for ultra-fast charging and an extended range of up to 902 km [1][9]. - The introduction of three new MiMo-V2 models emphasizes Xiaomi's commitment to integrating AI across its devices, enhancing its "Human x Car x Home" ecosystem [1][9]. - Management has reiterated plans for over RMB60 billion in AI R&D investments over the next three years, which is expected to support long-term margin improvements [1][9]. Financial Summary - Revenue projections show a recovery with FY24 expected at RMB365.9 billion, growing to RMB611.4 billion by FY27, reflecting a CAGR of 18.3% [2][25]. - Adjusted net profit is forecasted to increase from RMB27.2 billion in FY24 to RMB45.7 billion in FY27, with a notable growth rate of 41.3% in FY24 [2][25]. - The report adjusts earnings estimates downward by 6-13% for FY25-27 due to increased AI investments and industry headwinds [1][19]. Earnings Revision - The adjusted net profit for FY25 is revised to RMB38.2 billion, down from RMB40.8 billion, reflecting a 6% decrease [15]. - Revenue estimates for FY25 remain unchanged at RMB454.7 billion, while operating profit is revised down by 4% to RMB49.8 billion [15][16]. Valuation - The target price of HK$47.16 is derived using a sum-of-the-parts (SOTP) valuation method, reflecting different growth profiles across Xiaomi's business segments [19][20]. - The valuation assigns multiples of 18x for smartphones, 23x for AIoT, and 25x for internet services, with a 2.0x FY26E P/S for the EV business [19][20]. Share Performance - The current market capitalization of Xiaomi is approximately HK$767.9 billion, with a recent price of HK$36.32, indicating a potential upside of 29.8% to the target price [3][4].