5 Aug 2024 Amazon (AMZN US) Amazon released (2 Aug HKT) 2Q24 results: revenue was US$148.0bn, up 10% YoY, and was largely inline with Bloomberg consensus, and total operating profit was US$14.7bn, up 70% YoY, 7% better than consensus, driven by OPM margin beat for AWS aided by efficient cost control. In view of this, customers are more careful with their spending. Management also turns more cautious, and guided for revenue of US$154.0bn-158.5bn for 3Q24E, the mid-point of which is 1% lower than consensus. A ...

5 Aug 2024 CMB International Global Markets | Equity Research | Company Update Xiaomi (1810 HK) 2Q24E preview: expect resilient core earnings with better EV profitability; Reiterate BUY Xiaomi will report 2Q24 results in late August. We estimate 2Q revenue/adj. net income of RMB 89.2bn/5.1bn (+30%/flattish YoY), 6%/15% above consensus, mainly driven by strong smartphone sales, strength in AIoT/internet and better EV sales with improving profitability. Looking ahead into 2H24E, we are positive on Xiaomi's gl ...

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 24.29, reflecting a potential upside of 51.0% from the current price of HKD 16.08 [2][3][13]. Core Insights - The company is expected to report resilient core earnings and improved profitability in its electric vehicle (EV) segment, driven by strong smartphone sales and growth in AIoT and internet services [2][10]. - The global smartphone market share for the company has increased to 15%, with a year-on-year shipment growth of 27%, outperforming the industry average of 12% [2][3]. - The company anticipates a 30% year-on-year revenue growth for Q2 2024, with total revenue estimated at RMB 89.226 billion and adjusted net profit at RMB 4.459 billion [2][8]. Revenue and Profitability Summary - Revenue projections for FY24E are RMB 343.507 billion, with a year-on-year growth of 26.8%. Adjusted net profit is expected to reach RMB 21.785 billion, reflecting a 13% increase [3][10]. - The gross profit margin (GPM) for smartphones is projected to remain between 9% and 13%, while the GPM for AIoT is expected to be around 19.6% [2][10]. - The company’s adjusted earnings per share (EPS) for FY24E is estimated at RMB 0.88, with a consensus EPS of RMB 0.74, indicating a 19% higher projection than consensus [10][12]. Market Performance and Valuation - The company’s stock has shown a 31.8% increase over the past six months, outperforming the market [5]. - The report highlights that the current price-to-earnings (P/E) ratio is attractive at 17.0x for FY24E and 14.8x for FY25E [2][10]. - The valuation is based on a sum-of-the-parts (SOTP) approach, assigning a P/E of 15x for its smartphone, AIoT, and internet businesses, and a P/S of 0.75x for its EV business [13][14].

Investment Rating - The report maintains a "Buy" rating for Amazon with a target price of $207.00, down from a previous target of $211.00, reflecting a potential upside of 23.3% from the current price of $167.90 [1]. Core Insights - Amazon's Q2 earnings exceeded expectations, with revenue of $148 billion, a 10% year-over-year increase, and operating profit of $14.7 billion, up 70% year-over-year, driven by AWS's operating profit margin and effective cost control [1]. - Management has provided cautious guidance for Q3 2024, projecting revenue between $154 billion and $158.5 billion, slightly below market expectations, and operating profit guidance of $11.5 billion to $15 billion, also below consensus [1]. - Despite potential short-term challenges in operating profit margin expansion, the long-term growth trend remains intact due to higher-margin services and increased contributions from AWS [1]. Financial Summary - For FY24E, revenue is projected at $629.8 billion, with a year-over-year growth rate of 9.6%. Net profit is expected to reach $51.3 billion, reflecting a significant increase of 68.5% compared to FY23A [3][7]. - The report outlines a decrease in EBITDA forecast by 1% for FY24E, alongside slightly higher-than-expected capital expenditures to support cloud business expansion [1][7]. - The report highlights a strong performance in AWS, with Q2 revenue of $26.3 billion, representing an 18.7% year-over-year growth, and operating profit margin of 35.5% [1][5]. Segment Performance - North America (NA) business revenue reached $90 billion in Q2, a 9% year-over-year increase, with operating profit margin improving by 1.7 percentage points to 5.6% [1]. - International business revenue was $31.7 billion, up 6.6% year-over-year, with operating profit margin increasing by 3.9 percentage points to 0.9% [1]. - Advertising services revenue grew by 20% year-over-year to $12.8 billion, contributing 8.6% to total revenue, up from 7.9% in the previous year [1].

Investment Rating - The report maintains a "Buy" rating for Meta with a target price of $565.00, reflecting a 5% increase from the previous target price of $542.00 [4][15]. Core Insights - Meta reported a 22% year-over-year revenue growth in Q2 2024, reaching $39.1 billion, exceeding Bloomberg's consensus estimate by 2% [1]. - Net income increased by 73% year-over-year to $13.5 billion, surpassing expectations by 10%, primarily due to effective cost control related to employee expenses [1]. - For Q3 2024, management anticipates revenue growth of 13-20%, aligning closely with consensus expectations despite high base effects [1]. - The report highlights strong advertising demand across verticals, particularly in online commerce, gaming, and entertainment, contributing to a 22% increase in advertising revenue [1]. - The introduction of AI initiatives, such as Meta AI and AI Studio, is expected to enhance user experience and create monetization opportunities [1]. Financial Summary - Revenue projections for FY24, FY25, and FY26 have been increased by 1-2% [1]. - Operating profit margin (OPM) rose by 9 percentage points year-over-year to 38.0% in Q2 2024, driven by lower marketing and restructuring costs [1]. - FY24 capital expenditures are projected to grow by 36-47% year-over-year, reaching $37-40 billion [1]. - The report forecasts a compound annual growth rate (CAGR) of 21% for net income from FY24 to FY26 [1][19]. Valuation Metrics - The estimated P/E ratio for FY24 is 27x, with a target price of $565.00 per share, which is above the industry average of 22x [4][18]. - The report indicates that the current valuation at 20x FY25E P/E remains attractive [1]. Revenue and Profitability Forecasts - Revenue is expected to reach $159.7 billion in FY24E, with net income projected at $53.1 billion [3][19]. - The report anticipates a stable gross margin of 81.0% and an operating margin of 38.6% for FY24E [3][19]. Shareholder Structure - Mark Zuckerberg holds 14.0% of the equity, while Vanguard Group holds 6.9% [2].

Investment Rating - Maintain BUY rating with a target price of US$565.0 based on 27x FY24 PE [1][3] Core Views - Meta's 2Q24 earnings beat consensus estimates with total revenue increasing by 22% YoY to US$39.1bn and net income growing by 73% YoY to US$13.5bn [1] - Management expects 3Q24 revenue to grow by 13-20% YoY to US$38.5-41.0bn, in line with consensus estimates [1] - FY24 full-year total expenses guidance remains unchanged at US$96-99bn, easing investor concerns on margin expansion [1] - Meta's ad business maintained solid growth with Family of Apps' ad revenue increasing by 22% YoY to US$38.3bn in 2Q24 [1] - Meta AI is on track to become the most used AI assistant by end-FY24, with billions of queries since its launch [1] - Operating profit margin (OPM) expanded by 9ppt YoY to 38.0% in 2Q24, driven by efficiency gains [1] Financial Performance - FY24E revenue is forecasted at US$159.7bn, with a net profit of US$53.1bn [2][11] - FY24E EPS is projected at US$20.93, representing a 4.6% increase from previous estimates [11] - Gross margin is expected to remain stable at 81.0% for FY24E, while operating margin is forecasted to expand to 38.6% [11] - Net income CAGR is projected at 21% over FY24-26E [1] Ad Business - Total number of ad impressions and average price per ad both grew by 10% YoY in 2Q24, driven by enhanced user engagement and improved ad performance [1] - Meta launched a full-screen video player and unified video recommendation systems, increasing engagement on Reels and creating opportunities for ad inventory growth [1] - US advertisers saw a 22% higher ROI after adopting Advantage+ Shopping campaigns [1] AI Initiatives - Meta AI has received billions of queries since its launch and is expected to become the most used AI assistant by end-FY24 [1] - Meta launched AI Studio, enabling millions of creators to create their own AI agents, which is expected to improve user experience and create monetization opportunities [1] Capex and Margin Outlook - FY24 capex guidance has been raised to US$37-40bn, representing a 36-47% YoY increase [1] - Significant capex growth is expected in FY25 to support AI development [1] - OPM expansion is expected to slow down meaningfully from FY25 onward [1] Valuation - Meta is valued at US$565.0 per share based on 27x FY24E P/E, reflecting its strong leadership in the global social media space [3] - The current valuation of 20x FY25E PE remains attractive [1]

2024 年 8 月 2 日 CMB 国际全球市场 | 股票研究 | 公司更新 DPC 短跑 (1405 香港) 在积极的利润警报之后 ， Outlook 保持健康 有什么新消息 ？ DPC Dash 宣布了 1H24 的积极利润预警。对于 1H24 ， 该公司现在预计 ： 1 ） 销售额将同比增长 45 ％ ， 达到 20 亿元人民币 ； 2 ） 净利润为 1, 0mn 人民币 （ 1H23 年为 880 万元人民币 ） ， 3 ） 调整。净利润为 4800 万元人民币 （ 与 1H23 年亏损 1740 万元人民币相比 ） 。此外 ， 该公司已开设了 146 家净新店 （ 12 / 134 家 ） ， 在新兴 市场的总增长率达到了同比增长。 我们的观点 ： 非常稳固的 SSSG ， 在成熟 / 新兴市场的弹性 / 健康表现的支持下 ， 我 们不排除在不久的将来会有更多的好处。 1) SSSG 在第 2 季度仍然是积极的 ， 这是 DPC 连续第 28 个季度取得积极的 SSSG ， 尤其是令人印象深刻。考虑到宏观条件。该数字比许多同行要好得多 （ HDL （ CMBI 估 计 ） 为 - 15 ％ ， Y ...

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 35.61, up from a previous target of HKD 34.31, indicating a potential upside of 20.9% from the current price of HKD 29.45 [3][4]. Core Insights - Hutchmed's oncology/immunology product revenue reached USD 128 million in H1 2024, a year-on-year increase of 59.6%, with USD 43 million coming from overseas sales. The total oncology/immunology revenue, including R&D services and Takeda collaboration, was USD 169 million, representing 48% of the FY24 guidance midpoint of USD 300-400 million [2]. - The strong sales performance of Fruquintinib in the U.S. market, with a quarter-on-quarter growth of 53% to JPY 11.9 billion (approximately USD 80 million), exceeded expectations and reflects robust demand [2]. - The company is expected to maintain strong sales momentum for Fruquintinib and other products in global markets, with anticipated submissions for expanded indications in China [2]. Financial Summary - Revenue projections for FY24E are USD 640 million, with a year-on-year growth rate of 23.6%. Net profit is expected to be USD 35 million, with earnings per share projected at USD 0.04 [12][14]. - R&D expenses are forecasted to decrease to USD 224 million in FY24E, down from USD 302 million in FY23A [12][14]. - The company reported a strong cash position of USD 803 million as of June 2024, providing a solid foundation for future growth [2]. Product Pipeline and Market Position - Fruquintinib is expected to receive a CDE decision for its sNDA for 2L GC in Q3 2024, which could further enhance its market position in China [2]. - Savolitinib is anticipated to become the company's second globally commercialized product, with an NDA submission to the U.S. FDA expected by the end of 2024 [2]. - Sovleplenib shows potential as a best-in-class Syk inhibitor, with a high durable response rate in ITP, and is expected to enter the autoimmune disease market following NDA submission [2].

2 Aug 2024 CMB International Global Markets | Equity Research | Company Update DPC Dash (1405 HK) Outlook stays healthy after positive profit alert What is new? DPC Dash announced a positive profit alert for 1H24. For 1H24, the company is now expecting that:1) sales to increase by 45%+ YoY to RMB 2.0bn, 2) net profit to be at RMB 10.0mn+ (vs RMB 8.8mn in 1H23), 3) adj. net profit to be at RMB 48mn+ (vs RMB 17.4mn losses in 1H23). Also, the company has opened 146 net new stores (12/ 134 in mature/ emerging m ...

2 Aug 2024 CMB International Global Markets | Equity Research | Company Update Hutchmed (13 HK) Fruquintinib's overseas sales beat HCM's oncology/immunology product revenue reached US$128mn in 1H24 (+59.6% YoY), including US$43mn revenue recognised from fruquintinib's sales outside China. The consolidated revenue from oncology/immunology including R&D services and Takeda collaboration revenue, reached US$169mn in 1H24, representing 48% of the midpoint of the FY24 guidance range of US$300-400mn. In 2Q24, fru ...