Investment Rating - The report initiates coverage with a "Buy" rating for the company, setting a target price of HKD 9.56, which corresponds to an 11x P/E ratio for 2024 [4][25]. Core Insights - The company is a pioneer in China's biopharmaceutical industry, with core products such as recombinant human thrombopoietin Tevaz (特比澳) and the OTC hair loss treatment product Mandi (蔓迪). The growth of Tevaz is expected to be steady due to expanded indications and increased penetration in the oncology field [1][15]. - The hair loss and acne treatment markets present significant demand, with Mandi and the investigational acne treatment expected to continue driving growth for the company [2][15]. - The company's innovative pipeline is approaching a harvest period, with multiple blockbuster products expected to be approved between 2025 and 2027 [2][21]. Financial Overview - The company achieved revenue of RMB 7.816 billion in 2023, representing a year-on-year growth of 13.8%. The revenue compound annual growth rate (CAGR) from 2019 to 2023 was 10.1% [3][15]. - The net profit for 2023 was RMB 1.586 billion, showing a decline of 16.9% year-on-year, primarily due to the impact of zero-coupon convertible bonds and changes in fair value of financial assets [3][18]. - The company maintains a robust gross margin above 80%, reaching 85% in 2023, while the adjusted net profit margin was 25% [17][18]. Product and Market Analysis - Tevaz has a dominant position in the Chinese thrombocytopenia treatment market, with a market share of 65% in 2023. The sales revenue for Tevaz grew by 23.8% year-on-year to RMB 4.2 billion [1][16]. - Mandi leads the domestic minoxidil market with a 72.6% market share, achieving sales revenue of RMB 1.12 billion in 2023, reflecting a year-on-year growth of 25.8% [2][15][29]. - The company has a diverse product matrix around the Mandi brand, including various formulations and delivery systems, which are expected to enhance brand value and market penetration [30]. Research and Development Pipeline - The company has a rich R&D pipeline with 29 products under development, of which 15 are in late-stage clinical trials. Key upcoming products include long-acting EPO SSS06 and several monoclonal antibodies targeting various conditions [21][22][24]. - The company is focusing on expanding its presence in the hematology/oncology, nephrology, and dermatology sectors, with several products expected to be launched in the coming years [21][22][23]. Market Potential - The hair loss treatment market in China is substantial, with over 250 million individuals affected. The market for hair loss treatment and care products is projected to grow from RMB 106.9 billion in 2021 to RMB 203.5 billion by 2030, with a CAGR exceeding 7% [27][30]. - The company is well-positioned to capitalize on the growing demand for hair loss treatments, particularly with the increasing acceptance of minoxidil products among consumers [2][27].

Investment Rating - The report initiates coverage with a "Buy" rating for the company, with a target price of HKD 9.56, representing a potential upside of 53.4% from the current price of HKD 6.23 [1][3][24]. Core Insights - The company is a pioneer in China's biopharmaceutical industry, with robust growth in core products such as recombinant human thrombopoietin Tevaz (特比澳) and the OTC hair loss treatment product Mandi (蔓迪) [1][14]. - Tevaz is expected to maintain steady revenue growth due to expanded insurance reimbursement coverage and ongoing indication expansions, with a 23.8% year-on-year sales increase in 2023 [1][15]. - The hair loss treatment market is significant, with Mandi capturing a 72.6% market share in the minoxidil market, and the company is expanding its product matrix to include various hair loss treatment options [1][14][29]. - The innovation pipeline is entering a harvest phase, with multiple blockbuster products expected to be approved between 2025 and 2027, including long-acting EPO SSS06 and various monoclonal antibodies [1][20][24]. Financial Summary - The company achieved a revenue of RMB 7.816 billion in FY23, reflecting a 13.8% year-on-year growth, with projections for continued growth in the coming years [2][14]. - The net profit for FY23 was RMB 1.586 billion, a decrease of 16.9% year-on-year, primarily due to specific financial impacts, but adjusted operating net profit showed a 17.7% increase [2][17]. - The company expects a revenue compound annual growth rate (CAGR) of 10.9% and a net profit CAGR of 13.4% from 2023 to 2026 [1][24]. Market Position - Tevaz holds a dominant position in the Chinese thrombocytopenia treatment market, with a 65.0% market share, and is expanding its indications to include treatment for chronic liver disease-related thrombocytopenia [1][15][30]. - Mandi leads the OTC hair loss treatment market, with a strong brand recognition and a significant growth trajectory, supported by a diverse sales strategy across online and offline channels [1][14][29]. Innovation Pipeline - The company has a rich pipeline focusing on various therapeutic areas, with 29 products in development, including 15 in late-stage clinical trials [20][23]. - Key products in the pipeline include Tevaz for new indications, long-acting EPO SSS06, and several monoclonal antibodies targeting autoimmune diseases [20][21][23].

Investment Rating - The report maintains a "Buy" rating for BeiGene, with a target price adjustment from $269.73 to $288.93 [2][18]. Core Insights - BeiGene's product sales exceeded expectations, recording $921 million in Q2 2024, representing a 23% quarter-over-quarter growth and a 66% year-over-year increase [1][2]. - The company achieved non-GAAP profitability, with a significant reduction in net loss to $120 million in Q2 2024 from $251 million in Q1 2024 [2][3]. - Strong sales momentum for Zanubrutinib (Zanu) was noted, with Q2 sales reaching $637 million, a 30% increase quarter-over-quarter and a 107% increase year-over-year [1][2]. Financial Performance - Total product sales for the first half of 2024 reached $1.67 billion, accounting for 51.4% of the previously estimated total for fiscal year 2024 [1][2]. - The gross profit margin increased to 85.0% in Q2 2024 from 83.3% in Q1 2024, driven by a higher proportion of high-margin sales [2][3]. - The SG&A ratio decreased to 48% in Q2 2024 from 57% in Q1 2024, indicating improved operational efficiency [2][3]. Market Position and Growth Potential - Zanu captured approximately 24% of the global BTK inhibitor market in Q2 2024, up from 20% in Q1 2024, with expectations to reach $2.6 billion in sales for FY24, a 102% year-over-year increase [2][3]. - The report highlights the potential of upcoming clinical trials for Sonrotoclax and BGB-16673, which are expected to drive future growth [2][3]. Future Projections - The company is projected to achieve breakeven in FY25E, supported by strong sales growth and improving operating margins [2][3]. - Revenue estimates for FY24E, FY25E, and FY26E are $3.87 billion, $5.49 billion, and $6.99 billion, respectively, with a focus on continued product sales growth [3][12].

Investment Rating - The report assigns a "Buy" rating for the company [14]. Core Insights - Horizon CD's core net profit for the first half of 2024 decreased by 16% year-on-year to RMB 268 million, which aligns with expectations. The company proposed an interim dividend of HKD 0.04 per share, marking its first since listing [1]. - The company is returning to a capital expenditure growth model to achieve product diversification and overseas expansion, with capital expenditures increasing 3.6 times year-on-year to RMB 4.4 billion in the first half of 2024 [1]. - Revenue for the first half of 2024 grew by 16% year-on-year to RMB 4.9 billion, while gross margin contracted by 2.1 percentage points to 32% [1][4]. - The target price has been slightly adjusted from HKD 3.70 to HKD 3.60, based on a 10x 2024E P/E ratio, indicating limited downside risk [1][3]. Summary by Sections Financial Performance - Revenue for FY22 was RMB 7.878 billion, with a year-on-year growth of 28.3%. For FY23, revenue is projected at RMB 9.611 billion, reflecting a growth of 22.0% [2]. - Adjusted net profit for FY22 was RMB 944.8 million, with a year-on-year growth of 28.2%. The forecast for FY24 is RMB 1.186 billion, indicating a growth of 13.7% [2]. - The company reported a net debt-to-equity ratio of 164% as of June 2024, up from 147% at the end of 2023 [1]. Segment Performance - The operating leasing segment, which accounts for 39% of revenue, saw a 24% decline year-on-year to RMB 1.896 billion, primarily due to rental rates and overall utilization [3]. - Engineering and technical services, making up 40% of revenue, experienced a 71% increase year-on-year to RMB 1.946 billion, with gross margin improving by 6.3 percentage points to 27% [3]. - Asset management and other services, contributing 21% of revenue, grew by 84% year-on-year to RMB 1.031 billion, with asset management service revenue increasing 150% to RMB 744 million [3]. Valuation Metrics - The company’s P/E ratio for FY24 is projected at 3.7x, with a P/B ratio of 0.4x. The dividend yield is expected to be 8.2% in FY24 [2][13]. - The net asset return rate is forecasted to be 10.4% for FY24, with a net debt-to-equity ratio of 151.4% [2][6]. Cash Flow and Capital Expenditure - Operating cash flow for the first half of 2024 increased by 4% year-on-year to RMB 13.5 billion, while investment cash outflow was RMB 3.1 billion [1]. - Capital expenditures are expected to remain significant as the company focuses on expanding its equipment portfolio and overseas presence [1][12].

Investment Rating - Maintain BUY rating for BeiGene, reflecting strong product growth momentum and near-term profitability [1][2][9] Core Insights - BeiGene's product sales in 2Q24 reached US$921 million, a 23% increase quarter-over-quarter and a 66% increase year-over-year, exceeding expectations [1] - The company achieved non-GAAP profitability with a net loss narrowed to US$120 million in 2Q24, compared to US$251 million in 1Q24, marking a significant milestone [1] - Forecasts indicate that BeiGene's zanubrutinib (zanu) will generate US$2.6 billion in sales for FY24, representing a 102% year-over-year increase, with peak sales projected at US$5.6 billion by 2031 [1] Summary by Sections Sales Performance - Total product sales for 1H24 reached US$1.67 billion, representing 51.4% of the previous FY24 estimate [1] - Zanubrutinib sales increased by 30% quarter-over-quarter and 107% year-over-year to US$637 million, capturing approximately 24% of the global BTK inhibitor market [1][2] Profitability Metrics - Gross profit margin improved to 85.0% in 2Q24 from 83.3% in 1Q24, driven by high-margin product sales and economies of scale [1] - The SG&A ratio decreased to 48% in 2Q24 from 57% in 1Q24, while the R&D ratio shrank to 49% from 62% in the previous quarter [1] Future Growth Potential - The company is advancing clinical trials for sonrotoclax and BGB-16673, which are expected to become future blockbusters [1] - Phase 3 trials for sonrotoclax in R/R CLL and R/R MCL are anticipated to start in late 2024 and early 2025, respectively [1] Financial Projections - Revenue projections for FY24E are set at US$3.87 billion, with net profit expected to turn positive in FY25E at US$53.4 million [2][10] - Target price raised from US$269.73 to US$288.93, indicating a potential upside of 57.9% from the current price of US$183.03 [2][9]

Investment Rating - The report maintains a target price of HK$3.60, slightly reduced from HK$3.70, indicating a potential upside of 143.2% from the current price of HK$1.48 [4]. Core Insights - Horizon CD's core net profit for 1H24 decreased by 16% YoY to RMB268 million, aligning with expectations. The company declared an interim dividend of HK$0.04 per share, marking its first dividend since listing [2]. - The company is shifting back to a capital expenditure growth model to diversify its product offerings and expand overseas, with capex increasing 3.6 times YoY to RMB4.4 billion in 1H24 [2]. - Revenue for 1H24 grew by 16% YoY to RMB4.9 billion, driven by significant growth in engineering and technical services, which surged 71% YoY to RMB1.95 billion [2][7]. - The operating lease services segment, which constitutes 39% of total revenue, saw a decline of 24% YoY to RMB1.9 billion due to reduced rental rates and utilization [2][8]. Summary by Sections Earnings Summary - Core net profit in 1H24 dropped 16% YoY to RMB268 million, while revenue increased by 16% YoY to RMB4.9 billion [2][7]. - Gross margin contracted by 2.1 percentage points YoY to 32%, influenced by mixed performance across segments [2][8]. Revenue Breakdown - Operating lease services revenue fell 24% YoY to RMB1.9 billion, while engineering and technical services revenue rose 71% YoY to RMB1.95 billion [2][8]. - Asset management and other services revenue surged 84% YoY to RMB1 billion, with asset management service revenue increasing 1.5 times YoY to RMB744 million [2][8]. Financial Forecasts - The earnings forecast for 2024E, 2025E, and 2026E has been revised down by 2%, 10%, and 12% respectively, primarily due to higher finance expense projections [2][9]. - The net debt/equity ratio is expected to rebound in 2024E, reflecting increased capital expenditures [2][9]. Valuation Metrics - The company is currently trading at less than 4 times the 2024E P/E ratio, suggesting limited downside risk [2][4]. - The adjusted net profit is projected to grow steadily, with estimates of RMB1,186 million for 2024E, RMB1,321 million for 2025E, and RMB1,512 million for 2026E [11].

Investment Rating - The report maintains a "Buy" rating for Innolight, with a new target price of RMB 150.76, up from the previous target price of RMB 130.71, reflecting a potential upside of 31.7% from the current price of RMB 114.48 [2][3]. Core Insights - The report highlights strong fundamentals for Innolight, driven by robust capital expenditures from major cloud service providers like Google, Microsoft, Amazon, and Meta, which totaled USD 52.9 billion in Q2 2024, marking a significant increase of 57.1% compared to the previous quarter [2]. - Despite recent market volatility and concerns over the U.S. economy, the long-term outlook for AI investments remains positive, with expectations of continued high capital expenditures from major players in the cloud sector [2][3]. - Innolight is positioned as a primary beneficiary of the increasing demand for AI computing, with an attractive valuation of 22.8x and 15.3x for 2024 and 2025 earnings, respectively [2][3]. Financial Summary - Revenue for FY24E is projected at RMB 23,877 million, representing a year-on-year growth of 122.8%, with further growth expected in FY25E and FY26E [3][9]. - Net profit for FY24E is estimated at RMB 5,462 million, reflecting a substantial increase of 151.3% compared to FY23A [3][9]. - The report indicates an upward revision of revenue forecasts by 6% and 11% for FY24E and FY25E, respectively, due to stronger capital expenditure outlooks from cloud companies [2][3]. Valuation Metrics - The new target price of RMB 150.76 is based on a forward P/E ratio of 30x for FY24E, which is 9% higher than the five-year historical average [2]. - The PEG ratio is close to 1, indicating a balanced valuation relative to the expected earnings growth rate of 32% for FY24-26E [2][3]. Market Context - The report notes that major cloud service providers are expected to continue significant investments in AI infrastructure, which will support Innolight's growth trajectory [2][3]. - The overall sentiment in the technology sector remains cautious due to geopolitical tensions and uncertainties surrounding the upcoming U.S. presidential election, but the report emphasizes the resilience of the AI investment theme [2].

7 Aug 2024 CMB International Global Markets | Equity Research | Company Update Yum China (YUMC US) The best-in-class costs management in 2Q24 Sales growth was indeed a miss in 2Q24, but the net profit was a significant beat. For 2H24E, we are still very cautious about the demand and so as the level of competition. However, thanks to various efforts like Project Fresh Eye, Project Red Eye, rationalizing number of SKUs, more direct sourcing, and rampup of more profitable store formats (e.g. K-coffee and Pizza ...

Investment Rating - The report reiterates a BUY rating for Innolight with a new target price of RMB150.76, up from the previous target price of RMB130.71, indicating an upside potential of 31.7% from the current price of RMB114.48 [2]. Core Insights - Despite recent market volatility, the fundamentals of Innolight remain strong, benefiting from the ongoing heavy investments by major cloud service providers (CSPs) to meet rising AI compute demand [1]. - The report highlights a significant increase in capital expenditures (capex) by the Big Four CSPs, which totaled US$52.9 billion in Q2 2024, representing a 57.1% increase year-over-year [1]. - Innolight's valuation is considered attractive at 22.8x/15.3x P/E for 2024/25E, especially following a market pullback of over 35% since July [1]. - Revenue forecasts for Innolight have been revised upwards by 6% and 11% for 2024 and 2025, respectively, due to a stronger capex outlook from cloud companies [1]. Financial Summary - Innolight's revenue is projected to grow from RMB10,718 million in FY23 to RMB23,877 million in FY24, reflecting a year-over-year growth of 122.8% [4]. - Net profit is expected to increase significantly from RMB2,173.5 million in FY23 to RMB5,462.1 million in FY24, representing a growth of 151.3% [4]. - The gross margin is forecasted to remain stable around 33.2% in FY24, slightly improving from 33.0% in FY23 [4]. - The earnings per share (EPS) is projected to rise from RMB2.00 in FY23 to RMB5.03 in FY24, indicating strong profitability growth [4]. Market Context - The report notes that concerns regarding market turmoil in the tech sector are primarily driven by mixed earnings results, fears of a US recession, and uncertainties surrounding the upcoming US presidential election [1]. - Despite these concerns, the long-term investment theme in AI remains positive, with major CSPs expected to continue their investments in AI infrastructure, which is projected to grow by 39% and 13% in capex for 2024 and 2025, respectively [1].

2024 年 8 月 7 日 招银国际环球市场 | 策略报告 | 市场策略 策略观点 市场期待政策转向促消费 | --- | --- | --- | |-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|----------------| | | | | | | 宏观：中国经济走弱，房地产价跌量升，消费者和企业家信心依然较弱，通 | 叶丙南 , Ph.D | | | 缩压力仍存。三中全会确认政策优先项是支持科技行业和高端制造业发展， | 刘泽晖 | | | 近期政治局会议提出经济政策重点转向提振消费，但仍缺乏具体政策细节， 下半年宏观政策或延续温和放松。美国经济、通胀与就业延续放缓，我们认 | 伍力恒 | | | 为美联储或在 9 月开始降息，年内降息幅度约 50 个基点。 | 李汉卿 | | | 科技：乐观，近期全球科技板块有所回调，主 ...