Investment Rating - The report maintains a BUY rating for Alibaba, with a target price of US$203.7 per ADS, slightly adjusted from the previous target of US$206.4, indicating a potential upside of 63.1% from the current price of US$124.90 [2][21]. Core Insights - Alibaba's 3QFY26 revenue was RMB284.8 billion, reflecting a 1.7% year-over-year increase, but 2% below Bloomberg consensus. Adjusted EBITA for the quarter was RMB23.4 billion, down 57% year-over-year and below consensus expectations [1]. - The cloud business is highlighted as a growth driver, with revenue growth accelerating to 36% year-over-year, surpassing consensus by 2 percentage points. Management anticipates achieving US$100 billion in external cloud revenue within five years, implying a compound annual growth rate (CAGR) of over 40% [1][7]. - The report notes a recovery in customer management revenue (CMR), with growth improving to more than the mid-single-digit range in the first quarter of FY26 [1]. Financial Performance - For FY26, revenue is projected at RMB1,031.2 billion, with a year-over-year growth of 3.5%. The adjusted net profit is expected to be RMB83.1 billion, reflecting a significant decline of 47.4% year-over-year [8][18]. - The adjusted EBITA for the Cloud Intelligence Group (CIG) was RMB3.9 billion in 3QFY26, up 25% year-over-year, with an adjusted EBITA margin of 9.0% [15]. - The revenue from Alibaba's China E-commerce Group (ACEG) was RMB159.3 billion in 3QFY26, up 5.8% year-over-year, with quick commerce (QC) revenue reaching RMB20.8 billion, up 56% year-over-year [9][10]. Segment Updates - The CIG segment, which accounts for 14.0% of 3QFY26 revenue, reported a 36% year-over-year revenue growth, driven by strong public cloud performance and AI-related product adoption [14]. - The ACEG segment saw a 1% year-over-year growth in CMR for 3QFY26, with management forecasting a 6% growth in 4QFY26 due to improved consumption sentiment [9][10]. - The AIDC segment generated RMB39.2 billion in revenue, up 3.8% year-over-year, with international commerce retail revenue increasing by 2.5% [12]. Valuation Adjustments - The report revises FY26-28E revenue forecasts down by 0.5-2.1%, primarily due to lower expectations for CMR and international commerce retail, partially offset by increased forecasts for CIG and All Others [18]. - The adjusted non-GAAP net profit estimates for FY26-28E have been reduced by 20-34% to account for wider-than-expected losses from the QC business and increased investments in e-commerce and AI applications [18][19].

Investment Rating - The report maintains a BUY rating for Chuangxin Industries with a target price of HK$32, representing a potential upside of 25.4% from the current price of HK$25.52 [3][4]. Core Insights - The post-results analyst meeting highlighted that the aluminium capacity construction project in Saudi Arabia is progressing well without disruptions. The expected all-in production cost in Saudi Arabia is US$1,900 per ton, which is approximately RMB1,000 lower than production costs in China [1][7]. - Concerns regarding additional capital expenditures for the coal mine acquisition and rising aluminium inventory in the market contributed to a 10% drop in Chuangxin's share price. However, the report views this pullback as an entry opportunity due to the limited scale of the coal mining business and the overall tight supply of aluminium [1][7]. - The coal mine acquisition is projected to require RMB3 billion in capital expenditures, to be spent between 2027 and 2028 [1][7]. Financial Summary - Revenue is expected to grow from RMB15,163 million in FY24 to RMB20,120 million by FY28, with a year-on-year growth rate of 9.8% in FY24 and declining to 0.8% by FY28 [2][13]. - Adjusted net profit is forecasted to increase from RMB2,056 million in FY24 to RMB5,083 million by FY28, reflecting a significant growth trajectory [2][13]. - The P/E ratio is projected to decrease from 16.3x in FY24 to 9.1x by FY28, indicating an improving valuation over time [2][13]. Segment Performance - The revenue from electrolytic aluminum is expected to show a slight decline in the coming years, while alumina and related products are projected to experience substantial growth, particularly in FY25 with a growth rate of 138.8% [8]. - The overall gross profit margin is anticipated to improve significantly, reaching 36.7% in FY26 before stabilizing around 36.1% by FY28 [8][14]. Capital Expenditure and Projects - The Saudi Arabian project is expected to commence operations in the first half of 2027, with an initial production capacity of 500,000 tons [1][7]. - In China, a total capital expenditure of RMB1.5 billion is budgeted for 2026, primarily focused on renewable power capacity construction [7]. Shareholding and Market Data - The major shareholder, Cui Lixin, holds 72.3% of the company [5]. - The market capitalization of Chuangxin Industries is approximately HK$38.28 billion [4]. Price Performance - The stock has shown a 1-month absolute performance of 11.3% and a 3-month performance of 32.6% [5].

Investment Rating - The report maintains a BUY rating for Dmall Inc, indicating a potential return of over 15% over the next 12 months [13]. Core Insights - Dmall Inc reported a total revenue growth of 20% YoY to RMB2.23 billion for FY25, with adjusted net profit increasing by 583% YoY to RMB203 million, surpassing estimates due to operating leverage and effective cost control [1]. - The company is focusing on integrating AI technology into its R&D and retail solutions to drive growth in both retail sales revenue and operational efficiency [1]. - Dmall's revenue from AI business reached RMB64.4 million in FY25, and the company plans to shift unutilized net proceeds of RMB194 million from blockchain to AI to accelerate AI development in 2026 [1][2]. Financial Performance - Revenue projections for FY26E are set at RMB2.62 billion, with a YoY growth of 17.7%, and adjusted net profit is expected to reach RMB338 million, reflecting a 66.2% increase [2][7]. - The gross profit margin is projected to be 40.5% in FY26E, with operating profit margins improving to 13.7% [7][11]. - The target price for Dmall is set at HK$10.80, based on a valuation of 3.0x FY26E EV/sales, reflecting a decrease from the previous target price of HK$16.00 [3][8]. Business Strategy - Dmall plans to leverage AI to enhance its R&D system and operational efficiency, implement AI agents for new growth opportunities, and expand into overseas markets while deepening its domestic presence [6][7]. - The company has deployed 10 major retail AI applications in 2025, contributing to revenue growth and internal efficiency improvements [6][7]. Market Position - Dmall's market capitalization is approximately HK$6.91 billion, with a current share price of HK$7.62, indicating a potential upside of 41.7% to the target price [3][4]. - The company has seen a significant increase in revenue from AI retail solutions, with AI Retail Core Solution revenue growing by 22% YoY to RMB1.06 billion [6].

Investment Rating - The report assigns a BUY rating to Horizon Robotics, indicating a positive outlook for the company's stock performance [1]. Core Insights - Horizon Robotics has raised its revenue CAGR guidance from 50% to 60% due to the rollout of Horizon SuperDrive (HSD), positioning the company favorably in the city NOA solutions market and other advanced driving technologies [1]. - The company is expected to achieve significant sales growth, with HSD sales volume projected to increase 18 times YoY to 0.4 million units in FY26E, and more than double in FY27E and FY28E [8]. - Horizon Robotics is also targeting pilot operations of robotaxis by Q3 2026, showcasing its comprehensive autonomous driving capabilities [8]. - The management's revenue projections indicate a strong growth trajectory, with expected revenues of RMB 5.9 billion in FY26E and RMB 9.8 billion in FY27E, driven by increased shipments and higher contributions from HSD [2][11]. Financial Summary - Revenue is projected to grow from RMB 2.4 billion in FY24A to RMB 15.6 billion in FY28E, reflecting a YoY growth rate of 53.6% in FY24A and 59.6% in FY28E [2][11]. - Gross margin is expected to decline from 77.3% in FY24A to 60.8% in FY28E, indicating potential cost pressures as the company scales [2][11]. - Operating profit is forecasted to improve from a loss of RMB 3.3 billion in FY25A to a profit of RMB 1.6 billion in FY28E, suggesting a path to profitability [2][11]. - Adjusted net profit is anticipated to turn positive by FY28E, reaching RMB 2.5 billion [8][11]. Valuation - The target price for Horizon Robotics is set at HK$10.00, representing a 37.9% upside from the current price of HK$7.25 [3]. - The valuation is based on a price-to-sales (P/S) ratio of 13x for FY27E, which is considered justified given the company's unique position in the autonomous driving and robotics sectors [8].

Investment Rating - The report maintains a BUY rating on Kanzhun Limited, citing resilient earnings growth and decent shareholder return [1][3]. Core Insights - Kanzhun Limited reported a total revenue growth of 14% YoY to RMB2.08 billion for 4Q25, with non-GAAP net income increasing by 25% YoY to RMB906 million, aligning with Bloomberg consensus estimates [1]. - For 1Q26E, the company expects revenue growth of 6-8% YoY, slightly below consensus estimates due to the late start of the Spring Festival affecting revenue recognition [1]. - The company plans to increase investments in AI and sales & marketing in FY26, leading to a slight reduction in adjusted operating profit forecasts by 2-3% for FY26-27 [1]. - Despite this, total revenue growth is expected to remain solid at 12% YoY, with adjusted operating profit margin improving by approximately 1 percentage point YoY due to operating leverage [1]. Financial Performance - Total paid enterprise customers grew by 11% YoY to 6.8 million, and average monthly active users (MAUs) increased by 10% YoY to 58 million in 4Q25 [7]. - The company reported an adjusted operating profit margin improvement of 9 percentage points YoY to 41% in FY25, with expectations for further improvement in FY26E [7]. - Kanzhun Limited plans to allocate at least 50% of prior-year adjusted net income for dividends and share repurchases during FY26-28, translating to an estimated shareholder return of over 4% in FY26E [7]. Business Forecasts and Valuation - The target price for Kanzhun Limited is set at US$24.00, based on a 20x FY26E non-GAAP PE, reflecting a premium to its peers' average [10]. - Revenue forecasts for FY26E, FY27E, and FY28E are RMB9.227 billion, RMB10.233 billion, and RMB11.225 billion respectively, with adjusted net profit expected to reach RMB4.018 billion in FY26E [8][9]. - The company is valued at US$11.5 billion, with a target equity valuation of US$24.00 per ADS [10].

Market Overview - Global markets showed mixed performance, with the Hang Seng Index closing at 26,025, up 0.61% for the day and 1.54% year-to-date [1] - The US markets experienced declines, with the S&P 500 down 1.36% and the Dow Jones down 1.63% [3] - The offshore RMB exchange rate remained weak, closing around 6.9 [3] Industry Insights Semiconductor Industry - The OFC 2026 highlighted structural changes in the industry driven by AI computing expansion, leading to a comprehensive restructuring of data center interconnect architectures [4] - The focus is on diverse interconnect solutions to meet the growing demands for computing power and system efficiency, with pluggable optical modules remaining a core mainstream solution [4] Company Analysis Tencent (700 HK) - Tencent reported a 13% year-on-year revenue growth to RMB 194.4 billion for Q4 2025, with non-IFRS operating profit up 17% to RMB 69.5 billion, aligning with Bloomberg consensus [4] - The company plans to double its AI product investment in FY26 to over RMB 36 billion, which may impact short-term profit growth but is expected to strengthen its core business [4] Kingdee International (268 HK) - Kingdee achieved a revenue of RMB 7 billion in 2025, a 12% increase year-on-year, meeting Bloomberg expectations [5] - The company reported a net profit of RMB 92.9 million, lower than the consensus estimate, but demonstrates its commitment to AI transformation [5] ZTO Express (ZTO US/2057 HK) - ZTO's net profit for 2025 grew by 3% to RMB 9.08 billion, with a guidance for 2026 package volume growth of 10-13% [6] - The company approved a new stock buyback plan with a budget of up to $1.5 billion over the next two years, aiming for shareholder returns of at least 50% of adjusted net profit [7] Geely Automobile (175 HK) - Geely reported a 22% revenue growth to approximately RMB 106 billion for Q4 2025, with a quarterly gross margin of 16.9% [8] - The company expects its gross margin to improve to 17.4% in 2026, supported by scale effects and export growth [8]

Investment Rating - The report maintains a "BUY" rating for Kingdee, indicating a potential return of over 15% over the next 12 months [17]. Core Insights - Kingdee reported a revenue of RMB 7.0 billion for 2025, reflecting a year-on-year growth of 12.0%, which aligns with Bloomberg consensus. However, the net profit attributable to ordinary shareholders was RMB 92.9 million, falling short of the consensus estimate of RMB 132 million [1]. - The company is committed to AI transformation, with significant growth in cloud revenue, which increased by 13.2% year-on-year to RMB 5.8 billion, accounting for 82.5% of total revenue [6]. - Kingdee's management anticipates double-digit revenue growth for 2026, with the Kingdee AI Suite revenue expected to exceed RMB 1 billion, driven by AI-native business revenue generation [6]. Financial Performance - For 2025, Kingdee's annual recurring revenue (ARR) grew by 19.2% year-on-year, and subscription-related contract liabilities increased by 20.7% year-on-year [6]. - Key product lines showed robust subscription revenue growth, with Kingdee Cloud Cosmic & Constellation achieving revenue of RMB 1.94 billion, up 28.0% year-on-year, and Kingdee Cloud Galaxy recording subscription revenue of RMB 1.52 billion, up 19.3% year-on-year [6]. - The company has guided for an adjusted net margin to rise to approximately 7% in 2026, up from 3.3% in 2025, which is ahead of Bloomberg consensus [6]. Valuation and Target Price - The target price for Kingdee has been revised to HK$ 15.1 from the previous HK$ 19.2, reflecting a downside of 50.7% from the current price of HK$ 10.02 [2]. - The target EV/Sales multiple has been lowered from 8.4x to 5.4x to align with the two-year mean, indicating a shift in market sentiment [1]. Share Performance - Kingdee's market capitalization stands at HK$ 35.42 billion, with a 52-week high of HK$ 18.82 and a low of HK$ 9.09 [3]. - The stock has experienced a decline of 40.6% over the past six months [5].

Investment Rating - The report maintains a BUY rating for Geely Automobile, indicating a potential return of over 15% over the next 12 months [1][6]. Core Views - Geely is expected to have more resilient gross profit margins (GPM) compared to its peers, supported by sales growth, cost reduction efforts, and overseas sales potential [1]. - Management's positive outlook on GPM enhances confidence despite a miss in the 4Q25 GPM forecast [1]. - The company is well-positioned due to its synergy with the parent company and partnerships, which are not viewed as a valuation drag [1]. Financial Summary - Revenue is projected to grow from RMB 179,204 million in FY23A to RMB 407,506 million in FY27E, reflecting a compound annual growth rate (CAGR) of approximately 34% [2]. - Net profit is expected to increase significantly from RMB 5,308.4 million in FY23A to RMB 21,660.3 million in FY27E, with a notable growth of 213.3% in FY24A [2]. - Earnings per share (EPS) is forecasted to rise from RMB 0.53 in FY23A to RMB 1.96 in FY27E [2]. - The price-to-earnings (P/E) ratio is projected to decrease from 30.2x in FY23A to 8.1x in FY27E, indicating improved valuation over time [2]. Earnings Revision - The net profit forecast for FY26E has been revised down by 3% to RMB 19.4 billion, reflecting better earnings quality than FY25 [8]. - The gross profit margin is expected to rise to 17.4% in FY26E, aided by economies of scale and improved model mix [6][8]. - The revenue forecast for FY25A has been slightly adjusted to RMB 345,232 million, a 0.4% increase from the previous estimate [8]. Share Performance - The current market capitalization of Geely is approximately HK$ 183,656.1 million, with a target price set at HK$ 25.00, indicating a potential upside of 37.7% from the current price of HK$ 18.15 [3][6]. - The stock has shown a 6.5% increase over the past month and an 8.1% increase over the past three months [5]. Shareholding Structure - Mr. Li Shufu holds a significant stake of 44.6% in Geely, indicating strong insider confidence in the company [4].

Investment Rating - The report maintains a BUY rating for Tencent with a target price of HK$750.00, down from the previous target of HK$760.00, indicating a potential upside of 36.2% from the current price of HK$550.50 [2][11]. Core Insights - Tencent reported in-line 4Q25 results with total revenue increasing by 13% YoY to RMB194.4 billion and non-IFRS operating income rising by 17% YoY to RMB69.5 billion, aligning with Bloomberg consensus estimates [1][2]. - The company is set to double its investment in new AI products in FY26 to over RMB36 billion, which is expected to strengthen its core businesses and capture emerging opportunities in AI, despite potential short-term earnings drag [1][7]. - Revenue growth is projected to be sustainable at 10%/7%/5% over FY26-28E, with adjusted net profit growth expected to decelerate to +6% YoY in FY26E before reaccelerating in FY27/28E [7][8]. Financial Performance - For FY25, Tencent's total revenue was RMB751.8 billion, with adjusted net profit at RMB259.6 billion, and EPS (Adjusted) at RMB28.55 [2][22]. - The company expects FY26 revenue to reach RMB823.5 billion, with adjusted net profit forecasted at RMB276.2 billion and adjusted EPS at RMB30.3 [2][8]. - The gross profit margin is projected to decline slightly to 56.8% in FY26E due to increased AI investments [8][9]. Business Segments - Games revenue grew by 21% YoY to RMB59.3 billion in 4Q25, driven by both domestic and international game sales [7]. - Marketing services revenue increased by 17% YoY to RMB41.1 billion, supported by AI-enhanced ad performance [7]. - Fintech and Business Services revenue rose by 8% YoY to RMB60.8 billion, with business services revenue growth accelerating to 22% YoY in 4Q25 [7]. Valuation Breakdown - The SOTP-derived target price of HK$750.0 includes HK$347.4 for the games business, HK$33.2 for the SNS business, HK$148.5 for marketing services, HK$105.8 for fintech, HK$33.4 for cloud services, and HK$72.7 for strategic investments [11][12][13][14][15].

Industry Commentary - The Chinese insurance industry is rated as outperforming the market, with Sunshine Insurance Group (6963 HK) reporting a strong growth in new business value (NBV) of 48.2% year-on-year to 7.6 billion RMB for FY25, primarily driven by the bancassurance channel, which saw a 65% increase in NBV [2] - The net profit for Sunshine Insurance Group increased by 16% year-on-year to 6.31 billion RMB, with a significant reduction in income tax expenses by 79.1% due to a one-time adjustment under new regulations [2] - The company's weighted return on equity (ROE) improved by 1.6 percentage points to 10.5%, while the net asset value decreased by 6.3% year-on-year to 58.2 billion RMB, but showed a 4.2% increase compared to the first half of the year [2] Company Analysis - Tencent Music (TME US) reported a 16% year-on-year increase in total revenue to 8.64 billion RMB for Q4 FY25, exceeding consensus expectations by 3%, driven by a 41% growth in non-member music services [7] - The non-IFRS net profit for Tencent Music grew by 9% year-on-year to 2.49 billion RMB, aligning with consensus expectations, while the total revenue and non-IFRS net profit for FY25 are projected to increase by 16% and 25% respectively [7] - The company plans to increase investments in content and marketing to strengthen its competitive edge amid intensifying industry competition, leading to a downward revision of FY26-27E earnings forecasts by 4-10% [7] Additional Company Insights - Innovation Industries (2788 HK) reported a 33% year-on-year increase in net profit to 2.73 billion RMB for FY25, surpassing expectations by 5% [8] - The company announced a final dividend of 0.77 HKD per share, with a payout ratio of approximately 54%, which is higher than anticipated [8] - Innovation Industries is pursuing two related transactions, including acquiring the remaining 41.5% stake in its alumina business for 526 million RMB and a 1 billion RMB acquisition of a coal mining business, which may have mixed implications for its long-term strategy [8]