Investment Rating - The report maintains a "BUY" rating for Chuangxin Industries with an unchanged target price of HK$32, indicating a potential upside of 17% from the current price of HK$27.34 [3][4]. Core Insights - Chuangxin Industries reported a net profit growth of 33% year-on-year to RMB2.73 billion in 2025, which is 5% above expectations but 2% below Bloomberg consensus [1]. - The company proposed a final dividend of HK$0.77 per share, representing a payout ratio of approximately 54%, which exceeded prior expectations [1]. - Chuangxin announced two acquisitions: (1) acquiring the remaining 41.5% interest in Shandong Chuangyuan for RMB526 million, and (2) acquiring a coal mining business for RMB1 billion. The alumina exposure increase is viewed positively, while the coal mining acquisition is seen as slightly negative due to the company's shift towards renewable energy [1][9]. Financial Performance Summary - Revenue for 2025 grew by 23.2% year-on-year to RMB18.68 billion, driven by a 6% increase in aluminium and a 139% increase in alumina and alumina hydroxide [9][10]. - The gross margin for the aluminium business expanded by 3.3 percentage points year-on-year to 30.2%, while the blended gross margin narrowed by 3.4 percentage points to 24.8% due to higher low-margin alumina revenue [9][10]. - The net debt to equity ratio improved significantly to 56% by the end of 2025, down from 466% at the end of 2024, aided by strong earnings and an IPO in Hong Kong [9]. Earnings Forecast - The adjusted net profit is projected to reach RMB4.54 billion in 2026, with a growth rate of 66.4% compared to 2025 [2][15]. - Revenue is expected to continue growing, with estimates of RMB19.67 billion in 2026 and RMB20.12 billion in 2028, reflecting a gradual slowdown in growth rates [2][15]. Valuation Metrics - The price-to-earnings (P/E) ratio is projected to decrease from 13.6 in 2025 to 9.8 by 2028, indicating an attractive valuation as earnings grow [2][15]. - The price-to-book (P/B) ratio is expected to decline from 5.2 in 2025 to 2.3 by 2028, further supporting the investment case [2][15].

Investment Rating - The report maintains a "Buy" rating for the company, considering its attractive valuation and sustainable growth prospects in the music business [3][7]. Core Insights - TME reported a total revenue growth of 16% year-on-year to RMB 86.4 billion in Q4 2025, exceeding Bloomberg's forecast by 3%, driven by a strong performance in non-subscription music business, which grew by 41% [3]. - Non-IFRS net profit increased by 9% year-on-year to RMB 24.9 billion, aligning with expectations. For the fiscal year 2025, total revenue and non-IFRS net profit grew by 16% and 25% year-on-year, reaching RMB 329 billion and RMB 95.9 billion, respectively [3]. - For fiscal year 2026, total revenue is expected to grow by 10%, with music subscription and non-subscription revenues projected to increase by 6% and 25%, respectively [3][5]. - The management anticipates short-term competitive pressure on music subscription revenue and plans to increase investments in content and marketing to strengthen its competitive edge [3][5]. Revenue Summary - Online music revenue in Q4 2025 grew by 22% year-on-year to RMB 71 billion, with subscription revenue increasing by 13% to RMB 45.6 billion, accounting for 53% of total revenue [4]. - Non-subscription music revenue surged by 41% to RMB 25.3 billion, driven by strong growth in offline performances and advertising revenue [4]. - The company hosted 20 concerts for G-DRAGON in 2025, attracting over 260,000 attendees, including 25 sold-out shows in Q4 [4]. Financial Projections - For Q1 2026, total revenue is projected to grow by 7% year-on-year to RMB 79 billion, supported by growth in both subscription and non-subscription revenues [5]. - The overall gross profit margin in Q4 2025 increased by 1.1 percentage points year-on-year to 44.7%, primarily due to operational leverage and strict cost control [5]. - The company announced an annual dividend of USD 0.24 per American Depositary Share (ADS), representing a yield of approximately 2% [5]. Long-term Sustainability - The target price has been adjusted from USD 28.0 to USD 20.0 based on a discounted cash flow (DCF) valuation method [3][18]. - The current stock price is USD 11.37, indicating a potential upside based on the revised target price [7].

Macro Commentary - The Chinese economy started well in 2026, with retail sales, fixed asset investment, and industrial output strengthening due to factors like post-Spring Festival consumption, new fiscal funds, and a surge in exports [2] - However, the real estate market continues to decline, and durable goods consumption, such as automobiles, has significantly shrunk, raising doubts about the sustainability of the early recovery [2] - Energy price increases may alleviate deflation by raising upstream and input costs, but this is more cost-driven than demand-driven, potentially squeezing downstream profits and weakening household purchasing power [2] Industry Commentary - The automotive industry is seeing a structural optimization driven by new hydrogen energy policies, with significant subsidies for high-power heavy-duty trucks, indicating a shift towards "self-sustaining" models [5] - The policy aims to reduce hydrogen prices to 25 RMB/kg by 2030, which is crucial for the total cost of ownership (TCO) of fuel cell vehicles, suggesting a transition from reliance on government subsidies to market-driven growth [5] Company Commentary - Leap Motor (9863 HK) reported a 56% year-on-year revenue increase to RMB 21 billion in Q4 2025, with a gross margin expanding to a historical high of 15.1%, meeting expectations [6] - The D series models are expected to be key for 2026, with a projected sales volume of 900,000 units, contributing significantly to gross margin improvements despite rising component prices [6][7] - Beike (BEKE US) experienced a 28.7% year-on-year revenue decline to RMB 22.2 billion in Q4 2025, but is expected to recover in 2026 due to cost optimization and improved profitability in new business segments [8] - Qutai Technology (1478 HK) reported a 29% year-on-year revenue increase and a 435% net profit increase in FY25, driven by non-mobile camera modules and improved operations [9]

Investment Rating - Maintain BUY rating for Leapmotor, indicating potential for significant returns over the next 12 months [1][3]. Core Insights - Leapmotor's 4Q25 earnings are largely in line with expectations, with management guidance appearing optimistic. The upcoming D-series models are anticipated to be crucial for improving margins and overall valuation, while the A-series is expected to drive higher sales volume [1][6]. - The forecast for FY26E sales volume is maintained at 0.9 million units, with expectations for revenue and profit from collaborations with other automakers to exceed market expectations [1][6]. - The target price has been revised down from HK$73.00 to HK$60.00, reflecting a 34.6% upside from the current price of HK$44.56 [3][6]. Financial Performance Summary - Revenue is projected to grow from RMB 16,747 million in FY23A to RMB 98,999 million in FY26E, representing a CAGR of 52.9% [2][10]. - Gross margin is expected to improve from 0.5% in FY23A to 14.8% in FY26E, with net profit forecasted to rise from a loss of RMB 4,216.3 million in FY23A to a profit of RMB 3,586.5 million in FY26E [2][10]. - The operating profit is anticipated to increase significantly, from RMB 177.4 million in FY25A to RMB 2,961 million in FY26E [2][10]. Sales and Profitability Metrics - Leapmotor's sales volume for 4Q25 reached 201,039 units, a 66.3% increase year-over-year, with a gross profit margin of 15.1% [7][6]. - The D-series models are expected to contribute significantly to vehicle gross profit margin growth, with a forecasted vehicle GPM lift from 12.2% in FY25 to 12.7% in FY26E [6][8]. - Revenue from R&D support, CO2 credits, and component sales is projected to be RMB 3.5 billion, contributing to a blended gross profit margin of 70% [6][8]. Earnings Revisions - FY26E net profit forecast has been increased by 20% to RMB 3.6 billion, while FY27E is revised up by 2% to RMB 4.6 billion [6][8]. - The revenue forecast for FY26E has been adjusted to RMB 98,999 million, reflecting a 3.9% increase from previous estimates [8][9]. Valuation Metrics - The valuation method has shifted from P/S to P/E, with a target price based on a P/E of 21x for FY26E, aligning with a target price of HK$60.00 [6][8]. - The P/E ratio is expected to decrease from 101.4 in FY25A to 15.6 in FY26E, indicating improved profitability outlook [2][10].

Investment Rating - The report assigns a "Buy" rating to several companies in the automotive sector, indicating a potential upside of over 15% in the next 12 months [8]. Core Insights - The new hydrogen policy aims to stimulate the hydrogen energy industry by extending the application trial period and focusing on high-power fuel cell heavy-duty trucks, which is expected to significantly reduce hydrogen refueling costs and promote self-sustainability in the industry [2][3]. - The maximum subsidy for fuel cell vehicles has been increased, with the highest subsidy for heavy-duty trucks reaching 352,000 yuan, which is expected to exceed previous expectations due to continuous cost reductions and potential local government support [3]. - The policy emphasizes the importance of hydrogen pricing, targeting a reduction to 25 yuan per kilogram by 2030, which is crucial for the competitiveness of fuel cell vehicles [3]. Summary by Sections Investment Ratings for Companies - Xpeng Motors (XPEV US): Buy, Target Price 29 - Xpeng Motors (9868 HK): Buy, Target Price 113 - Geely Automobile (175 HK): Buy, Target Price 25 - Great Wall Motors (2333 HK): Buy, Target Price 20 - BYD (1211 HK): Buy, Target Price 125 - GAC Group (2238 HK): Buy, Target Price 4.3 - Li Auto (LI US): Hold, Target Price 18 - NIO (NIO US): Hold, Target Price 6 [2]. Hydrogen Policy Insights - The new hydrogen policy extends the trial period for hydrogen applications by four years and focuses on creating a comprehensive hydrogen ecosystem [2]. - The maximum subsidy for fuel cell systems has increased from 110 kW to 280 kW, reflecting a shift towards market-oriented development [3]. - The total subsidy amount is capped at 8 billion yuan, which is lower than previous expectations, indicating a focus on quality over quantity in the industry [3]. Cost and Pricing Dynamics - The report highlights that the current hydrogen refueling cost of over 35 yuan per kilogram is a major barrier to commercialization, and the new policy aims to drive down costs through subsidies [3]. - The anticipated reduction in hydrogen prices is expected to make fuel cell vehicles more competitive with diesel vehicles by 2027 [3]. - The report suggests that companies with integrated capabilities in the hydrogen supply chain, such as Refire (2570 HK), are likely to benefit from the new policy [3].

Investment Rating - The report maintains a "BUY" rating for Ke Holdings (Beike) with a target price of US$23.00, reflecting a 36.1% upside from the current price of US$16.90 [3][6]. Core Insights - Ke Holdings' 4Q25 revenue declined by 28.7% year-over-year to RMB22.2 billion, aligning with forecasts, while non-GAAP net profit fell 61.5% year-over-year to RMB0.5 billion, exceeding the forecast of RMB0.4 billion [1]. - For 2025, total revenue is projected to grow by 1% year-over-year, but non-GAAP net profit is expected to decline by 30% due to industry challenges [1]. - The company anticipates a recovery in earnings for 2026, with a forecasted non-GAAP net income of RMB7.0 billion, indicating a 39% year-over-year growth [1]. Financial Performance - In FY25, Ke Holdings reported total revenue of RMB94.58 billion, with a slight growth of 1.2% year-over-year, while net profit decreased to RMB2.99 billion, down 26.4% [2]. - The adjusted net profit for FY25 was RMB5.02 billion, reflecting a 30.4% decline year-over-year [2]. - The company expects revenue for FY26 to be RMB89.98 billion, a decrease of 4.9% year-over-year, with a projected recovery in FY27 and FY28 [2]. Operational Efficiency - The report highlights improvements in operational efficiency, with total non-GAAP operating expenses decreasing from RMB5.6 billion in 4Q24 to RMB4.5 billion in 4Q25 [1]. - The contribution margin for home renovation and furnishing services improved to 31.4% in 2025, indicating enhanced operating efficiency [1]. Market Position - Ke Holdings continues to gain market share in the existing home transaction (EHT) business, with a 17% year-over-year decline in orders, which is better than the overall market performance [1]. - The company’s emerging businesses, including home renovation and furnishing, contributed significantly to total revenue, accounting for 43% in 4Q25 compared to 29% in 4Q24 [1]. Industry Outlook - The report notes that while sales in the new home and secondary home markets are improving, a full recovery remains challenging due to ongoing demand issues and high unsold inventory [7]. - For FY2026, new home sales are expected to decline by 6% year-over-year, while secondary home sales are projected to fall by 11% [7].

Investment Rating - The report maintains a "BUY" rating for Q-Tech, with a target price of HK$13.39, representing a 46.5% upside from the current price of HK$9.14 [3][14]. Core Insights - Q-Tech reported FY25 revenue and net profit growth of 29% and 435% YoY, respectively, driven by significant increases in non-handset CCM sales and mobile CCM ASP [1][7]. - The company anticipates continued growth in FY26, with management guiding for 5% YoY volume growth in handset CCM and 50% YoY growth in non-handset CCM, supported by advancements in technology and expansion into new markets [1][7]. - The report highlights upcoming catalysts, including increased shipments to India and new orders in the non-handset CCM segment, which are expected to drive further growth [1][14]. Financial Summary - FY25 revenue is projected at RMB 20,877 million, with a YoY growth of 29.3%, while net profit is expected to reach RMB 1,494 million, reflecting a 435% increase [2][11]. - The gross profit margin for FY25 is estimated to be 7.8%, up from 6.1% in FY24, indicating improved profitability [8][11]. - For FY26, revenue is forecasted to grow to RMB 22,563 million, with a net profit of RMB 853 million, showing a decrease from FY25 but still reflecting strong performance [2][11]. Earnings Revision - Estimates for FY26 revenue have been adjusted upwards by 5% to RMB 22,563 million, while net profit estimates have been increased by 2% to RMB 853 million [9][10]. - The report indicates a significant increase in operating profit for FY25, projected at RMB 1,739 million, a 168% increase YoY [8][11]. Valuation - The target price of HK$13.39 is based on a P/E ratio of 17x for FY26E, reflecting the company's strong growth potential in the non-mobile business segment [13][14]. - The report emphasizes that non-mobile business is expected to become a major growth driver, with a projected revenue CAGR of 57% from FY25 to FY27E [13].

Investment Rating - The report assigns a "Buy" rating to several companies in the automotive sector, indicating a potential upside of over 15% in the next 12 months [8]. Core Insights - The new hydrogen policy aims to stimulate the hydrogen energy industry by extending the application trial period and focusing on high-power fuel cell heavy-duty trucks, which is expected to significantly reduce hydrogen refueling costs and promote self-sustainability in the industry [2][3]. - The maximum subsidy for fuel cell heavy-duty trucks has increased from 110 kW to 280 kW, reflecting a positive policy direction towards long-range and high-power applications [3]. - The total subsidy amount is limited to 8 billion yuan, indicating a shift from blind expansion to high-quality, self-sustaining applications [3]. - The target hydrogen price is set to drop to 25 yuan/kg by 2030, which is crucial for the competitiveness of fuel cell vehicles [3]. - The report highlights that companies with comprehensive industry chain integration, such as Refire (2570 HK), are expected to benefit significantly from the new policies [3]. Company Summaries - Xpeng Motors (XPEV US, 9868 HK): Buy rating with a target price of 29 and 113 respectively [2]. - Geely Automobile (175 HK): Buy rating with a target price of 25 [2]. - Great Wall Motors (2333 HK, 601633 CH): Buy rating with target prices of 20 and 28 respectively [2]. - BYD (1211 HK, 002594 CH): Buy rating with a target price of 125 [2]. - GAC Group (2238 HK, 601238 CH): Buy rating with target prices of 4.3 and 10 respectively [2]. - Leap Motor (9863 HK): Buy rating with a target price of 73 [2]. - Ideal Automotive (LI US, 2015 HK): Hold rating with target prices of 18 and 70 respectively [2]. - NIO (NIO US): Hold rating with target prices of 6 and 47 respectively [2].

Investment Rating - The report maintains a "BUY" rating for Shennan Circuit, with a target price adjusted to RMB288, reflecting a 15.1% upside from the current price of RMB250.23 [3][7]. Core Insights - Shennan Circuit's FY25 revenue increased by 32% YoY to RMB23.6 billion, slightly above forecasts, with a gross profit margin (GPM) improvement to 28.3% [1][2]. - Net profit rose 75% YoY to RMB3.3 billion, slightly below consensus but above internal estimates, indicating strong operational performance [1][2]. - The company is expected to benefit from robust demand for multilayer PCBs driven by AI infrastructure capital expenditures, while the substrate business is anticipated to improve gradually due to tight supply conditions [1][7]. Financial Performance Summary - Revenue projections for FY26E, FY27E, and FY28E are RMB30.7 billion, RMB37.8 billion, and RMB46.4 billion, respectively, with YoY growth rates of 29.8%, 23.2%, and 22.8% [2][8]. - Gross profit margins are expected to improve to 30.1% in FY26E, 31.1% in FY27E, and 31.6% in FY28E, reflecting enhanced cost efficiency and product mix [2][8]. - Net profit forecasts for FY26E, FY27E, and FY28E are RMB5.05 billion, RMB6.84 billion, and RMB8.69 billion, with significant YoY growth rates of 54.1%, 35.5%, and 27.0% [2][8]. Market Position and Shareholding - Shennan Circuit has a market capitalization of approximately RMB166.8 billion, with a significant shareholding of 64% held by AVIC International Holdings Ltd [4][5]. - The stock has shown strong performance, with a 30.1% increase over the past three months [6]. Growth Drivers - The company is positioned to capitalize on the growing demand for PCBs, particularly from AI data centers, which account for about 25% of PCB revenue, and telecom, which represents around 40% [7]. - The substrate segment is expected to see gradual improvement, supported by resilient demand for BT substrates and increasing domestic demand for ABF/FC-BGA products [7].

Macro Commentary - Credit demand in China is slowing down, with monetary liquidity remaining ample until February 2026, but internal demand for credit is weak. Social financing has slightly rebounded, supported mainly by corporate bonds and bank acceptance bills [2] - The growth rate of new RMB loans continues to decline, driven by increased household deleveraging and shrinking demand for consumer credit and mortgages. Enterprises are still inclined towards short-term loans rather than long-term capital expenditures [2] - The central bank is expected to shift focus towards lowering credit costs to stimulate demand, with a forecasted LPR reduction of 10-15 basis points and a 50 basis point cut in RRR by the end of Q2 2026 [2] Industry Commentary - Aluminium prices are expected to rise due to a 19% production cut by Aluminium Bahrain, which will reduce its annual output by approximately 308,000 tons. This cut represents about 0.4% of global production [5] - The total confirmed production cuts, including a previous 40% reduction by Qatalum, amount to nearly 590,000 tons, or about 0.8% of global capacity. The production status in the Middle East remains highly uncertain [5] Company Commentary - Adobe reported a 12% year-on-year revenue increase to $6.4 billion for Q1 FY26, with a non-GAAP net profit also up 12% to $2.49 billion, aligning with Bloomberg consensus expectations. However, total ARR growth slowed to 10.9% year-on-year, impacted by weak traditional Adobe Stock business [6] - Adobe's management reaffirmed its FY26 financial targets, expecting total revenue growth of 9-10% and total ARR growth of 10.2%. The company's AI-native ARR grew over 200% year-on-year [6] - Futu Holdings reported a 45% year-on-year increase in total revenue to HKD 6.44 billion for Q4 FY25, exceeding expectations. The improvement in profit was driven by enhanced cost control, with operating expenses down 8.3% [7][8] - Deep South Circuit's revenue grew 32% year-on-year to RMB 23.6 billion, benefiting from product structure optimization and increased capacity utilization. The net profit rose 75% to RMB 3.3 billion, slightly below Bloomberg consensus [10] - The company expects to benefit from strong demand for multilayer boards driven by AI infrastructure capital expenditures, with a target price adjustment to RMB 288, corresponding to a 38x FY26E P/E ratio [10] - BYD Electronics anticipates flat performance for the second half of FY25, with revenue and net profit expected to decline by 3% and 8% year-on-year, respectively, due to headwinds in the smartphone and automotive sectors [11]