Anta Sports (2020 HK) A moderate outlook and buybacks announced We are satisfied by the 1H24 results, where the one-off gains and dividends have more than offset the slow core profit growth. Going forward, even though the growth outlook has kind of moderated, we do think the impressive share buyback programme should more than compensate for that. Maintain BUY but trim TP to HK$ 97.05, based on 18x FY25E P/E (rolled over from 20x FY24E P/E). It is trading at 14x FY25E P/E. Anta brand's FY24E guidance reitera ...

Investment Rating - The report maintains a target price of HK$1.36 for SenseTime, reflecting a 15.3% upside from the current price of HK$1.18 [4]. Core Insights - SenseTime's total revenue for 1H24 grew by 21% YoY to RMB1.74 billion, with an adjusted net loss narrowing by 3% YoY to RMB2.33 billion, indicating improved net loss margin [2][3]. - The generative AI (Gen AI) business is identified as the key growth driver, with revenue increasing by 256% YoY to RMB1.05 billion, accounting for 60% of total revenue in 1H24 [2][3]. - The report anticipates total revenue growth to accelerate to 33% YoY in 2H24, driven by robust demand in the Gen AI sector [2][3]. Financial Performance Summary - Revenue projections for FY24E, FY25E, and FY26E are RMB4.36 billion, RMB5.48 billion, and RMB6.60 billion respectively, with adjusted net losses expected to be RMB3.51 billion, RMB2.52 billion, and RMB1.72 billion [3][5]. - The gross profit margin (GPM) for 1H24 was 44.1%, with expectations of a gradual decline to 38% by FY26E due to increased operational costs [2][5]. - The adjusted net margin improved by 33 percentage points YoY to -134% in 1H24, reflecting operational leverage and cost control [2][5]. Market Position and Competitive Edge - SenseTime has become the third largest AIDC service provider in China with a market share of 15.4% as of 2H23 [2]. - The company has a strong AI infrastructure with operational computing power exceeding 20,000 PetaFLOPS, expected to surpass 25,000 PetaFLOPS by the end of FY24 [2][3]. - The report highlights SenseTime's independence from direct competition with suppliers and clients, enhancing its competitive edge in the Gen AI market [2].

Investment Rating - The report reiterates a "BUY" rating for Trip.com Group (TCOM) with a target price of US$65.80, indicating a potential upside of 55.4% from the current price of US$42.34 [2][10]. Core Insights - Trip.com Group reported a net revenue of RMB12.8 billion for 2Q24, reflecting a year-over-year growth of 13.6%, which aligns with Bloomberg consensus estimates. The non-GAAP operating income was RMB4.2 billion, exceeding consensus forecasts by 6% due to effective cost control in R&D [2][3]. - The company is expected to experience resilient revenue growth driven by strong travel demand from its high-end customer base during the summer peak season, despite facing macroeconomic challenges and tougher comparisons in 3Q24 [2][3]. - The management anticipates a reacceleration in year-over-year revenue growth in 4Q24 as the impact of business adjustments diminishes and comparisons become easier [2][3]. Financial Performance Summary - For FY24E, Trip.com is projected to achieve revenue of RMB52.8 billion, representing an 18.5% year-over-year growth. The adjusted net profit is expected to reach RMB16.4 billion, with a year-over-year growth of 25.8% [3][8]. - The non-GAAP operating profit margin (OPM) for 2Q24 was reported at 33.1%, which is 1.9 percentage points higher than consensus estimates, driven by better-than-expected R&D expense ratios [2][3]. - The company achieved a gross profit margin of 81.8% for FY24E, with an operating margin of 27.5% and a non-GAAP net margin of 31.2% [8][9]. Revenue Breakdown - Domestic hotel reservations grew approximately 20% year-over-year in 2Q24, with double-digit growth continuing in 3Q24. Outbound air and hotel reservations have recovered to 110%-120% of 2019 levels, outperforming the market by 20-30% [2][3]. - Revenue from inbound travel accounted for 25% of total revenue in 2Q24, up from 20% in 1Q24, contributing approximately 2.6% to the total group-level revenue [2][3]. Future Projections - For 3Q24E, Trip.com is estimated to record revenue of RMB15.6 billion, reflecting a 13% year-over-year increase, consistent with Bloomberg consensus [2][3]. - The company expects to maintain a non-GAAP OPM of 33.1% for 3Q24E, with projections for FY25E showing continued growth in revenue and profitability [2][3].

Investment Rating - The report maintains a "BUY" rating for Ping An, with a target price (TP) unchanged at HK$52.0, implying a 0.6x FY24E P/EV [1]. Core Insights - Ping An reported resilient 1H24 results with a year-on-year (YoY) increase in new business value (NBV) of 11% to RMB 22.3 billion, surpassing forecasts by 3.6% and market consensus by 9.5% [1]. - The report anticipates a turnaround in Group operating profit after tax (OPAT) in FY24, driven by improved operating efficiency and a low base effect from the previous year [1]. - The NBV margin improved to 24.2%, reflecting a 6.5 percentage point increase YoY, indicating a focus on margin expansion rather than volume growth [1]. Summary by Sections New Business Value (NBV) - Ping An's NBV for 1H24 reached RMB 22.3 billion, an 11% increase YoY, with 2Q24 stabilizing at RMB 9.43 billion [1][3]. - The agency and bancassurance channels contributed significantly, with NBV growth of 10.8% and 17.3% YoY, respectively [1][3]. - The NBV margin increased to 24.2%, up 6.5 percentage points YoY, indicating improved profitability [1][3]. Operating Profit After Tax (OPAT) - Group OPAT declined by 0.6% YoY in 1H24, with core business lines showing a 1.7% YoY increase to RMB 79.6 billion [1]. - The report expects full-year Group OPAT to grow by 3.9% YoY, supported by stabilized life and health (L&H) OPAT and enhanced property and casualty (P&C) underwriting profit [1]. Property and Casualty (P&C) Performance - The P&C combined ratio (CoR) was 97.8% in 1H24, a slight improvement of 0.2 percentage points YoY, with a notable scale-back in high-loss guarantee business [1][10]. - P&C underwriting profits increased by 15.3% YoY to RMB 3.5 billion, driven by higher insurance revenue [1][10]. Valuation Metrics - The stock is currently trading at 0.42x FY24E P/EV and 0.61x FY24 P/BV, with a dividend yield of 7.6% and an average ROE of 12.3% over three years [1][19]. - The report highlights a positive outlook for the Group's OPAT turnaround, particularly in the asset management and technology segments [1][19].

Investment Rating - The report maintains a "Hold" rating for China Tower (788 HK) with a target price adjusted to HKD 0.95, reflecting a potential downside of 3.2% from the current price of HKD 0.98 [1][3]. Core Insights - The three major telecom operators in China have reduced capital expenditures by 5.4% in 2024, shifting their investment focus from 5G deployment to high-growth areas like cloud computing and computing power [1]. - Traditional communication business revenue growth is slowing, with China Mobile, China Unicom, and China Telecom reporting growth rates of 2.5%, 2.1%, and 4.3% respectively in the first half of 2024 [1]. - Cost control measures have led to a decrease in operating costs as a percentage of revenue for the telecom operators, which is expected to impact China Tower's traditional communication business [1]. - China Tower's traditional tower revenue is projected to grow at a modest rate of around 1% year-on-year for 2024 and 2025, while its indoor distribution and two wings businesses (Smart Connection and Energy) are expected to achieve double-digit growth [1]. Financial Summary - Revenue for FY24 is estimated at RMB 97,865 million, with a year-on-year growth of 4.1%, and projected to reach RMB 101,661 million in FY25 with a growth of 3.9% [2][7]. - Net profit for FY24 is forecasted to be RMB 10,543 million, reflecting an 8.1% increase, and is expected to grow to RMB 12,302 million in FY25, representing a 16.7% increase [2][7]. - Earnings per share (EPS) is projected to be RMB 6.03 for FY24 and RMB 7.04 for FY25, with respective growth rates of 8.1% and 16.7% [2][7]. Business Segments - Tower business accounted for 79% of China Tower's total revenue in the first half of 2024, maintaining stability with quarter-on-quarter growth rates of 1.7% and 0.3% in the first two quarters [1]. - The Smart Connection business saw a revenue increase of 17.6% year-on-year, while the Energy business grew by 2.4% in the same period, with the tower's Smart Connection revenue growing by 20.9% to RMB 2.5 billion [1].

27 Aug 2024 CMB International Global Markets | Equity Research | Company Update Jiumaojiu (9922 HK) Transforming despite tough macro backdrop HOLD (Maintain) The 1H24 results were inline but the underlying was slightly positive (e.g. resilient GP margin, as well as the restaurant-level OP margin). We agree that both Tai Er and Song are making loads of efforts to transform, but under such a tough industry and macro environment, we would not be able to turn positive, unless we can really see a compelling impr ...

27 Aug 2024 PDD Holdings (PDD US) 27 Aug 2024 PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE 2 | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |---------------------------------------|-------|-----------------|-------|-------|-------------------|-------|-------------|----------------|---------| | RMB bn | 2024E | Current 2025E | 2026E | 2024E | Consensus 2025E | 2026E | 2024E | Diff (%) 2025E | 2026E | | Revenue 413.0 544.5 678.3 | | | | 419.9 | 551.9 | | 678.9 -1 ...

Investment Rating - The report maintains a BUY rating for Greentown Service with a target price (TP) revised up by 3% to HK$ 6.13, reflecting a better outlook than peers, representing a 25x 2024E P/E [2][4]. Core Views - Greentown Service's revenue and core operating profit increased by 11% and 26% YoY in 1H24, respectively, driven by stable parent company support, robust third-party expansion, and a diversified value-added services (VAS) business [2][3]. - The company anticipates core operating profit growth exceeding 20% and cash growth over 15% for 2024E, indicating strong operational performance despite industry challenges [2][3]. - The net increase in managed gross floor area (GFA) from Greentown Real Estate surged 227% YoY, contrasting with a -42% decline from third parties, enhancing the company's competitive position [2][8]. Financial Performance Summary - In 1H24, Greentown Service achieved a revenue of RMB 9,068 million, a 10.6% increase YoY, and a core operating profit of RMB 893 million, reflecting a 25.8% growth YoY [7][9]. - The gross profit margin improved to 19.2%, up 0.6 percentage points YoY, while the core operating margin expanded to 9.8%, an increase of 1.2 percentage points YoY [7][9]. - The company expects a cash balance of RMB 4.3 billion by the end of 2024, anticipating a 15% YoY increase in cash on hand [2][3]. Growth Projections - Revenue is projected to grow from RMB 17,393 million in FY23A to RMB 19,364 million in FY24E, representing an 11.3% growth rate [3][11]. - Net profit is expected to rise from RMB 605.4 million in FY23A to RMB 724.6 million in FY24E, indicating a 19.7% growth [3][11]. - The company has lifted its full-year core operating profit growth guidance from over 15% to over 20% for FY24E [2][3]. Valuation Metrics - The report highlights a P/E ratio of 13.3x for FY24E, which is competitive compared to peers in the property management sector [3][15]. - The dividend yield is projected to increase from 4.5% in FY23A to 5.3% in FY24E, reflecting a commitment to returning value to shareholders [3][15].

Investment Rating - The report maintains a BUY rating for iQIYI, with a target price of US$5.00, reflecting a potential upside of 92.3% from the current price of US$2.60 [4][9]. Core Insights - iQIYI's total revenue for 2Q24 decreased by 5% YoY to RMB7.4 billion, with non-GAAP operating income down by 36% YoY to RMB501 million, attributed to intense competition in the long-form video sector [2][12]. - For 3Q24E, total revenue is expected to decline by 9% YoY to RMB7.3 billion, with non-GAAP operating profit forecasted to drop by 63% YoY to RMB335 million [2][8]. - The forecast for FY24-26E non-GAAP net income has been lowered to RMB1.7 billion, RMB2.5 billion, and RMB2.9 billion respectively, down from previous estimates of RMB2.8 billion, RMB3.3 billion, and RMB4.0 billion [2][8]. Revenue and Profitability - Membership services revenue fell by 9% YoY to RMB4.5 billion in 2Q24, primarily due to underperformance of certain drama series and competition [2][12]. - Online advertising revenue decreased by 2% YoY in 2Q24, with fewer variety shows impacting brand ad revenue, although performance-based ad revenue showed YoY growth [2][12]. - Gross margin dropped by 2.3 percentage points YoY to 23.7% in 2Q24, while non-GAAP operating margin declined by 3.4 percentage points YoY to 6.7% [2][12]. Future Outlook - iQIYI anticipates continued short-term headwinds in 3Q24E, with membership services and online ad service revenue expected to decline by 13% and 17% YoY respectively [2][8]. - The company plans to enhance content targeting the female audience, with upcoming titles expected to improve market share and revenue in the long term [2][8]. - The gross profit margin and non-GAAP operating margin are projected to decline further in 3Q24E to 21.7% and 4.6% respectively [2][8].

Investment Rating - The report initiates a "Buy" rating for Hansoh Pharmaceutical with a target price of HKD 22.06, indicating a potential upside of 28% from the current price of HKD 17.24 [2][4][12]. Core Insights - Hansoh Pharmaceutical has successfully transitioned from a traditional generic drug manufacturer to an innovative biopharmaceutical company, with innovative drug sales reaching RMB 6.87 billion in FY2023, a 37.1% year-on-year increase, accounting for 68% of total revenue [1][8][14]. - The company is expected to continue strong revenue growth driven by its innovative drug portfolio, particularly key assets like Aumolertinib (Ameile), Tenofovir Amibufenamide (Hengmu), and Pegmolesatide (Saintrolai) [1][8][14]. - Hansoh's R&D spending has increased significantly, reaching RMB 21 billion in FY2023, representing 21% of total revenue, with ongoing development of over 50 clinical trials across more than 30 innovative drug products [1][11][62]. Summary by Sections Innovative Drug Growth - Hansoh's innovative drug sales are projected to grow by 37% in FY2024, reaching RMB 9.5 billion, which will constitute 79% of total revenue [2][12][129]. - Aumolertinib is expected to maintain strong sales momentum, particularly after being included in the National Reimbursement Drug List (NRDL) for first-line non-small cell lung cancer (NSCLC) [1][17][36]. Diverse Product Pipeline - The company has a robust pipeline with significant potential in areas such as antibody-drug conjugates (ADCs), GLP-1 receptor agonists, and TYK2 inhibitors, with ongoing clinical trials for multiple indications [1][11][62]. - ADC assets like HS-20093 and HS-20089 have gained global recognition through licensing agreements with GSK, enhancing their development prospects [1][12][120]. Global Collaboration - Hansoh is actively seeking global collaboration opportunities to strengthen its product pipeline, having established various exclusive licensing partnerships with both domestic and international entities [2][12][120]. - The company aims to become a leading platform for biotechnology collaborations in China, leveraging its R&D and commercialization capabilities [2][12][120]. Financial Performance - Total revenue for FY2024 is expected to grow by 19% to RMB 12 billion, with oncology-related sales projected to increase by 25% to RMB 7.7 billion [2][12][129]. - The report anticipates organic revenue growth rates of 12% and 14% for FY2024 and FY2025, respectively, with net profit expected to reach RMB 4.1 billion in FY2024 [2][12][129].