Investment Rating - The report maintains a "Buy" rating for the company, indicating a potential upside of over 15% in the next 12 months [16]. Core Views - The company has shown strong operational growth, with a 25% year-on-year increase in patient visits in Q3 2024, and a 13.5% quarter-on-quarter increase [1]. - The management has raised the target for new store openings in 2024 to between 18 and 25, reflecting an aggressive expansion strategy [1]. - The company is benefiting from favorable government policies that support private healthcare institutions, which is expected to enhance its growth prospects [1]. - The company plans to increase shareholder returns, targeting a dividend and buyback ratio of 30-50% of net profit over the next 3-5 years [1]. Financial Performance - For FY24E, the company expects revenue of RMB 3,031 million, a 30.5% increase year-on-year, with adjusted net profit projected at RMB 388 million, reflecting a 27.4% growth [2][11]. - The adjusted earnings per share (EPS) for FY24E is forecasted to be RMB 1.59, with a projected adjusted P/E ratio of 21.1 [2][14]. - The company has achieved a significant increase in store openings, with 19 new stores added in 2024, compared to 9 in the previous year [1]. Market Position and Strategy - The company is positioned as a leader in the private traditional Chinese medicine sector, with a robust internal control system that supports sustainable growth amid regulatory scrutiny [1]. - The management has indicated that the acquisition cost for new stores is decreasing, with current P/S valuations around 0.8x, which is expected to remain below 1.0x for future acquisitions [1]. - The company has expanded its presence to 74 offline traditional Chinese medicine institutions across 20 cities, significantly increasing its market density in economically strong regions [1].

Investment Rating - Maintain BUY rating with a target price of US$218.0 based on 24x FY25E PE [1][6] Core Viewpoints - Alphabet's 3Q24 results beat expectations with total revenue up 15% YoY to US$88.3bn and net income growing 34% YoY to US$26.3bn [1] - Google Cloud revenue surged 35% YoY to US$11.4bn, driven by GenAI adoption and improved efficiency [1] - AI integration in search and shopping ads is unlocking new monetization opportunities, with AI Overviews serving over 1bn users monthly [1] - Alphabet's operating margin expanded by 4.5ppts YoY to 32.3% in 3Q24, supported by effective cost management [1] Financial Performance - FY24E revenue is projected at US$349.7bn, with YoY growth of 13.8%, and FY26E revenue is expected to reach US$437.6bn [2][4] - Net profit for FY24E is forecasted at US$99.2bn, with a YoY increase of 34.4%, and FY26E net profit is estimated at US$126.1bn [4][10] - Gross margin is expected to improve from 58.0% in FY24E to 59.1% in FY26E, while operating margin is projected to rise from 31.4% to 33.1% over the same period [4][13] Google Cloud Performance - Google Cloud's operating profit margin (OPM) reached a record high of 17% in 3Q24, up 14ppts YoY and 6ppts QoQ [1] - Vertex AI, the enterprise AI platform, saw a 14x growth in Gemini API calls over a six-month period [1] AI and Search Integration - Google Search & other revenue grew 12% YoY to US$49.4bn in 3Q24, driven by AI-enhanced search experiences [1] - Circle to Search is now available on over 150mn Android devices, further enhancing user engagement [1] Capital Expenditure - Total capex in 3Q24 increased 62% YoY to US$13.1bn, primarily focused on servers and data centers [1] - Management expects capex to remain stable QoQ in 4Q24E and increase YoY in 2025E, albeit at a slower rate [1] Valuation - Alphabet is valued at US$218.0 per share based on 24x 2025E P/E, reflecting its leadership in the global advertising market and AI potential [6][7] - The target P/E multiple represents a premium to the sector average of 23x [6]

Investment Rating - The report maintains a BUY rating for Li Auto Inc. with a target price raised from US$25.00 to US$30.00, indicating a potential upside of 20% from the current price of US$25.01 [2][4]. Core Insights - Li Auto's 3Q24 earnings are considered strong, driven by an increase in average selling price, gross margin, and effective operating cost control. The main drag on earnings was attributed to share-based payments and fair value losses from investments [2]. - Despite limited information on new BEVs for 2025, the company is believed to be establishing a solid foundation with comprehensive charging infrastructure, larger showrooms, and advancements in autonomous driving technologies [2]. - The report suggests that the recent drop in share price following the 3Q24 results may present an opportunity for investors to accumulate shares [2]. Financial Performance Summary - In 3Q24, Li Auto achieved a non-GAAP net profit of RMB3.8 billion, marking the highest in its history, and an operating margin of 8%, the highest recorded [2][9]. - The company’s gross profit margin (GPM) in 3Q24 was 22.2%, which is 1.6 percentage points higher than previous forecasts, aided by effective cost-cutting measures [2][9]. - For FY24E, the sales volume forecast remains at 0.51 million units, with an expected GPM increase of 0.7 percentage points QoQ for 4Q24 [2][7]. Earnings Forecast Adjustments - The report revises up the earnings estimates for 4Q24 and FY25E following a strong performance in 3Q24. The FY25E net profit estimate is raised by 7% to RMB13.2 billion [2][8]. - The FY25E sales volume forecast is adjusted from 0.65 million units to 0.66 million units, reflecting stronger-than-expected sales of the L6 model [2][8]. Valuation Metrics - The report highlights a projected operating margin of 9.1% for 4Q24, which would drive a net profit of RMB4.3 billion for that quarter [2][9]. - Key valuation metrics include a P/E ratio of 15.0 for FY24E and a projected P/E of 10.0 for FY26E, indicating a favorable valuation outlook [3][12].

Investment Rating - The report maintains a "BUY" rating for the company, with a revised 12-month target price of HK$35.5, implying a 0.5x FY24E P/Group EV and 1.1x FY24E P/BV [1][4]. Core Insights - The company reported a significant increase in NPAT, up 65.5% YoY to RMB38.3 billion, with 3Q NPAT growing 173.6% YoY to RMB13.2 billion, driven by increased investment income and net fair value gains [1]. - Headline NBV rose 37.9% YoY to RMB14.2 billion in 9M24, with 3Q NBV on a like-for-like basis surging 75.3% YoY to RMB5.2 billion, attributed to margin expansions and a recovery in regular-paid new business sales [1][4]. - The company expects strong par sales momentum to continue into FY25, with participating policy sales gaining traction prior to a settlement rate cut [1][4]. Financial Performance - For FY24, the company anticipates a 37% YoY increase in headline NBV and NPAT/OPAT growth of 57%/3% YoY [1]. - EPS forecasts for FY24-26 have been revised up by 29%/6%/3% to RMB4.45/3.93/4.25, reflecting a more certain outlook for profitability and NBV growth [1][4]. - The NBV margin is expected to rise to 23.0% in 3Q24, up 5.9 percentage points YoY, driven by elevated sales of floating interest rate products and strengthened regular-paid new sales [1][4]. Investment Income - The company reported net fair value gains of RMB21.2 billion in 3Q24, a significant recovery from a net loss of RMB7.25 billion in 3Q23, benefiting from a rally in the equity market [1][4]. - The net investment yield landed at 3.9% in 9M24, with total investment yield at 6.3%, showing a positive trend driven by the equity market performance [1][4]. Valuation Metrics - The stock is currently trading at 0.4x FY24E P/EV and 0.9x FY24E P/BV, which is above the 3-year historical average [1][4]. - The report indicates a target valuation of RMB260.6 billion, with an implied P/EV of 0.55x and an implied P/BV of 1.12x [5].

Investment Rating - The report maintains a "BUY" rating for PICC P&C, with a revised target price of HK$14.00, representing a 15.9% upside from the current price of HK$12.08 [1][4]. Core Insights - The company's net profit after tax (NPAT) grew 38.0% year-on-year to RMB26.75 billion for the first nine months of 2024, with a record high NPAT of RMB8.26 billion in Q3 2024, driven by significant fair value gains of RMB7.4 billion [1]. - The combined ratio (CoR) for non-auto insurance deteriorated to 100.5% in the first nine months of 2024, with Q3 CoR reaching 105.3%, attributed to increased catastrophic losses from non-auto claims [1][3]. - Auto CoR improved to 96.8% in the first nine months of 2024, contributing to a 30.6% year-on-year growth in auto underwriting premium (UWP) to RMB71.2 billion [1][3]. Financial Performance - Total investment income surged 70.4% year-on-year to RMB27.5 billion in the first nine months of 2024, with a significant increase in Q3 investment income driven by fair value gains [1][6]. - The report forecasts EPS for FY24E at RMB1.44, with subsequent years projected at RMB1.51 for FY25E and RMB1.60 for FY26E, reflecting an upward revision of 8% for FY24E [2][3]. - The combined ratio is expected to be 97.7% for FY24E, slightly improving to 97.4% in FY25E and 97.2% in FY26E [3][9]. Valuation Metrics - The stock is currently trading at 1.0x FY24E P/B, which is above the historical average, indicating a premium valuation [1][5]. - The dividend yield is projected to increase to 5.2% in FY24E, with further growth expected in subsequent years [2][9]. - The report highlights a long-term ROE of 13.5% and a target valuation of RMB275.7 billion for FY24E [5][9].

Investment Rating - The report maintains a "BUY" rating for Mindray, indicating a potential return of over 15% over the next 12 months [9][21]. Core Insights - Mindray reported a revenue of RMB 29.5 billion for the first nine months of 2024, reflecting an 8.0% year-on-year growth, while the attributable net profit increased by 8.2% year-on-year to RMB 10.6 billion [2][5]. - The domestic market is under pressure, with a notable decline in revenue from public hospitals and IVD testing, particularly in lower-tier hospitals, leading to a 9.7% year-on-year drop in domestic revenue in Q3 2024 [2][5]. - The overseas business showed healthy growth, with a 18.6% year-on-year increase in overseas revenue in Q3 2024, driven by strong performances in Europe, APAC, and Latin America [5][9]. Financial Summary - Revenue projections for FY24E, FY25E, and FY26E are RMB 37.4 billion, RMB 43.6 billion, and RMB 49.7 billion respectively, with year-on-year growth rates of 7.1%, 16.5%, and 14.0% [3][17]. - Attributable net profit estimates for FY24E, FY25E, and FY26E are RMB 12.8 billion, RMB 14.7 billion, and RMB 16.8 billion, with corresponding growth rates of 10.7%, 14.8%, and 14.3% [3][17]. - The adjusted net profit for FY24E is projected at RMB 12.7 billion, with an adjusted EPS of RMB 10.58 [3][17]. Market Performance - The current market capitalization of Mindray is approximately RMB 336.7 billion, with a target price adjusted to RMB 328.81, indicating a 21.6% upside from the current price of RMB 270.50 [6][7]. - The stock has experienced a relative performance decline of 5.5% over the past month and 18.4% over the past six months [6]. Business Segments - The IVD segment saw domestic revenue growth of 17% year-on-year in 9M24, although the overall demand in lower-tier hospitals was negatively impacted by nationwide DRG implementation [5]. - The MIS segment reported over 10% year-on-year growth in domestic revenue in 9M24, driven by the strong uptake of the Resona A20 ultrasound system [5]. - Emerging businesses such as minimally invasive surgery and animal medical have shown significant growth, contributing over 10% to overseas revenue [5].

Investment Rating - The report maintains a BUY rating for the company, BYD, with a revised target price of HK$350, up from HK$262, reflecting improved investor sentiment [2][5]. Core Insights - The company's 3Q24 gross margin of 21.9% exceeded expectations, providing confidence for sales forecasts for 4Q24 and FY25, despite higher SG&A and R&D expenses [2]. - The sales volume forecast for FY24 has been increased by 4% to 4.02 million units, with FY25 projected to rise 13% YoY to 4.55 million units [2]. - The company prioritizes market share and global expansion over rapid earnings growth, which may complicate forecasts for SG&A and R&D expenses [2]. Financial Performance - 3Q24 net profit was RMB11.6 billion, 15% lower than previous forecasts, attributed to unexpected forex losses despite higher government grants and VAT refunds [2]. - Revenue growth from FY21 to FY26 shows a significant increase, with FY24E revenue projected at RMB725.7 billion, up from RMB602.3 billion in FY23 [9]. - The gross profit margin is expected to slightly decrease from 20.6% in FY24E to 20.3% in FY25E, while net profit is projected to rise from RMB36.0 billion in FY24E to RMB47.5 billion in FY25E [7][8]. Valuation Metrics - The company’s P/E ratio is projected to decrease from 21.9x in FY24E to 16.6x in FY25E, indicating a more attractive valuation as earnings grow [14]. - The return on equity (ROE) is expected to remain strong, projected at 25.5% for FY25E, down slightly from 24.0% in FY24E [13]. Market Position - BYD continues to have the best resources to withstand the ongoing price war in the automotive sector, which supports its competitive position [2]. - The company’s aggressive overseas expansion strategy is expected to drive revenue growth, with selling expenses projected to rise in line with revenue growth [2].

31 Oct 2024 Earnings Summary CMB International Global Markets | Equity Research | Company Update GAC Group (2238 HK) 3Q miss; new models, cost cut as key in FY25 GAC posted the largest quarterly net loss (RMB1.4bn) in 3Q24 since at least 2013, partly due to the FX loss and lower government grants. Management is determined to revive its homegrown brands with a plethora of new models in 2025. The market demand for GAC Toyota and GAC Honda has also recovered a bit recently aided by the peak season and stimulus ...

Investment Rating - The report maintains a "BUY" rating for RemeGen, indicating a potential return of over 15% over the next 12 months [12]. Core Insights - RemeGen achieved record product sales in Q3 2024, with revenue of RMB467 million, reflecting a 14% quarter-over-quarter and 35% year-over-year increase, driven by strong sales of RC18 and RC48 [1]. - The company narrowed its net loss to RMB291 million in Q3 2024 from RMB432 million in Q2 2024, indicating improved financial performance [1]. - The gross profit margin improved to 82.1% in Q3 2024, up from 78.3% in the first half of 2024, while the SG&A expense ratio decreased to 68.5% [1]. - RemeGen's total revenue for the first nine months of 2024 reached RMB1,209 million, representing a 57% year-over-year growth and aligning with expectations [1]. - The report anticipates continued strong sales momentum into Q4 2024 and beyond, supporting the company's FY24 sales target of over 50% year-over-year growth [1]. Financial Summary - Revenue projections for FY24 are estimated at RMB1,740 million, with a year-over-year growth of 61.7% [2]. - The net profit for FY24 is projected to be a loss of RMB1,268 million, improving to a loss of RMB967 million in FY25 and further narrowing to RMB275 million in FY26 [2]. - R&D expenses are expected to be RMB1,450 million for FY24, remaining stable in FY25, and slightly increasing to RMB1,502 million in FY26 [2]. - The gross profit margin is projected to be 80.31% for FY24, improving to 81.15% in FY25 and 80.81% in FY26 [7]. Valuation - The report revises the DCF-based target price from HK$19.59 to HK$21.09, reflecting a 28% upside from the current price of HK$16.48 [3][4]. - The DCF per share is calculated at HK$21.09, based on a WACC of 12.93% and a terminal growth rate of 2.0% [4][5]. - The market capitalization of RemeGen is approximately HK$8,970.6 million, with an average three-month turnover of HK$42.5 million [3].

30 Oct 2024 CMB International Global Markets | Equity Research | Company Update Naura Technology (002371 CH) Solid Q3 earnings signal intact growth trajectory Naura announced 3Q24 results. Q3 revenue was RMB8.0bn, up 30.1% YoY and 23.8% QoQ, driven by significant growth in semiconductor equipment sales (up 47.0% in 9M24). NP was RMB1.7bn, up 55.0% YoY and 1.7% QoQ. GPM was 42.3%, up 5.9ppts from 3Q23 but declined 5.1ppts sequentially, mainly due to 1) higher photovoltaic (PV) equipment sales that had a lowe ...