Investment Rating - The report maintains a "Buy" rating for the company, with a target price (TP) raised to HKD 25.39 from the previous HKD 23.77, indicating a potential upside of 34% from the current price of HKD 18.94 [2][3][17]. Core Insights - The company reported a strong first quarter with revenue and net profit growth of 27% and 101% year-on-year, respectively, driven by improved gross profit margins (GPM) and a better revenue mix [2][12]. - The company aims to deliver 120 electric vehicles (EVs) annually, up from a previous target of 100, and plans to expand its retail strategy significantly in China [2][12]. - The report anticipates continued growth in smartphone market share, AIoT sales strength, and overseas internet revenue, contributing to profit growth through FY24E - FY26E [2][12][13]. Financial Summary - Revenue is projected to grow from HKD 270,970 million in FY23A to HKD 337,161 million in FY24E, reflecting a year-on-year growth of 24.4% [3][16]. - Adjusted net profit is expected to increase from HKD 19,273 million in FY23A to HKD 22,974 million in FY24E, representing a growth of 19.2% [3][16]. - The adjusted earnings per share (EPS) is forecasted to rise from RMB 0.77 in FY23A to RMB 0.92 in FY24E, with a price-to-earnings (P/E) ratio of 19.0x for FY24E [3][16]. Segment Performance - Smartphone revenue is expected to reach HKD 185,020 million in FY24E, with a year-on-year growth of 18% [12][16]. - AIoT and lifestyle products are projected to generate HKD 93,264 million in FY24E, reflecting a growth of 16% [12][16]. - Internet services are anticipated to contribute HKD 32,856 million in FY24E, with a year-on-year growth of 9% [12][16]. Valuation and Catalysts - The report assigns a valuation multiple of 15x FY24E P/E for the smartphone, AIoT, and internet businesses, while the EV business is valued at 0.75x FY25E P/S [17]. - Upcoming catalysts include progress in EV deliveries and growth in smartphone market share [2][17].

Investment Rating - The report maintains a "Buy" rating for Ke Holdings with a target price adjusted to $22.00 from the previous $23.00, reflecting a potential upside of 16.6% from the current price of $18.87 [2][3]. Core Insights - The report highlights a rebound in sentiment and a gradual recovery in the fundamentals of Ke Holdings, despite a 19% year-over-year decline in revenue to RMB 16.4 billion in Q1 2024. This decline was less severe than expected, aided by stronger-than-anticipated growth in new business revenues [2][6]. - The existing home transaction (EHT) gross transaction value (GTV) fell by 32% year-over-year to RMB 453 billion, while new home transaction (NHT) GTV dropped 45% to RMB 152 billion. However, the report anticipates a recovery in GTV starting in Q2 2024, driven by supportive policies [2][6]. - New business segments, particularly home renovation and furniture, showed significant growth, with revenues reaching RMB 2.4 billion in Q1 2024, a 71% increase year-over-year. The management expects operational efficiency to improve in 2024, leading to a reduction in net loss margins from -10% in 2023 to -5% in 2024 [2][6]. Financial Summary - For FY24E, total revenue is projected to be RMB 90.2 billion, reflecting a 15.9% year-over-year growth. Adjusted net profit is expected to be RMB 9.4 billion, with a decrease of 13.1% compared to the previous year [7][9]. - The report outlines a gradual improvement in profitability metrics, with gross profit margins expected to stabilize around 26.1% in FY24E, while operating profit margins are projected at 5.6% [9][10]. - The company has committed to enhancing shareholder returns, having allocated $220 million for stock buybacks in Q1 2024, representing approximately 1% of its market capitalization [2][6]. Market Outlook - The report suggests that recent policy changes regarding down payment ratios and mortgage rates may stimulate real estate sales, although challenges remain due to high housing inventory and a long-term demographic outlook that may not support significant price recovery [2][6]. - The anticipated total GMV for Ke Holdings in Q2 2024 is projected at RMB 79.6 billion, with a 2% year-over-year increase, and total revenue expected to reach RMB 21.5 billion, a 10% increase [2][6].

Investment Rating - The report maintains a **Buy** rating for Bilibili (BILI US) with a target price of **$20.50** per ADS, implying a 49.2% upside from the current price [2][5] Core Views - Bilibili reported **Q1 revenue growth of 12% YoY** to RMB 5.67 billion, in line with expectations, while adjusted net loss narrowed by **56% YoY** to RMB 456 million, better than expected due to stronger-than-expected GPM expansion [2] - The company is on track to achieve **non-GAAP operating breakeven in Q3 2024**, supported by robust GPM expansion and efficiency improvements [2][3] - FY24 adjusted net loss forecast has been revised down to **RMB 710 million** from RMB 896 million, reflecting improved operating leverage and efficiency gains [2] Revenue Breakdown - **Advertising revenue** grew **31% YoY** to RMB 1.67 billion in Q1, driven by strong performance-based advertising growth (over 50% YoY). Q2 advertising revenue is expected to grow **27% YoY** [3] - **VAS revenue** increased **17% YoY** to RMB 2.53 billion in Q1, supported by resilient live streaming and innovative VAS services. Q2 VAS revenue is expected to grow **16% YoY** [3] - **Mobile gaming revenue** declined **13% YoY** to RMB 983 million in Q1 but is expected to grow **5% YoY** in Q2, driven by strong performance of legacy games and new game launches [3] User and Ecosystem Growth - Average DAU grew **9% YoY** to 102.4 million in Q1, with average daily time spent increasing **9% YoY** to 105 minutes [3] - Bilibili expanded collaborations with e-commerce platforms, with management expecting **over 30% YoY growth** in total e-commerce advertising budgets during the 618 shopping festival, which is expected to drive Q2 advertising revenue growth [3] Profitability and Margins - Gross margin expanded **6.6 ppts YoY** and **2.2 ppts QoQ** to **28.3%** in Q1, driven by favorable revenue mix shifts and effective cost control. Q2 gross margin is expected to further improve to **29.4%** [3] - Adjusted net loss margin improved **12.5 ppts YoY** to **-7.8%** in Q1, with the company on track to achieve non-GAAP operating breakeven in Q3 2024 [3] Financial Forecasts - FY24 revenue is forecasted at **RMB 25.49 billion**, with gross profit expected to reach **RMB 7.64 billion** (30.0% gross margin). Adjusted net loss is projected at **RMB 710 million** [9] - FY25 revenue is expected to grow to **RMB 27.66 billion**, with gross profit reaching **RMB 8.99 billion** (32.5% gross margin). Adjusted net profit is forecasted at **RMB 1.16 billion** [9] SOTP Valuation - The **SOTP-derived target price of $20.50** includes: - **Advertising business** valued at $8.5 (41.3% of total valuation), based on 15x 2024E PE [11] - **VAS business** valued at $7.5 (36.7% of total valuation), based on 2.0x 2024E PS [11] - **Mobile gaming business** valued at $4.3 (20.8% of total valuation), based on 15x 2024E PE [11] Peer Comparison - Bilibili's valuation multiples are compared to peers in online gaming and advertising, with average PE multiples of **18x** for online gaming and **15x** for online advertising [12] - In the online video segment, Bilibili's PS multiple is compared to peers like iQiyi and Mango Excellent Media, with average PS multiples of **2.0x** for FY24E and **1.8x** for FY25E [13]

Investment Rating - The report maintains a "BUY" rating for the company, with a target price of US$131.50, representing a potential upside of 38.8% from the current price of US$94.74 [4][5]. Core Insights - The company reported a total revenue increase of 7% year-over-year to RMB26.9 billion in 1Q24, aligning with estimates. Non-GAAP net income grew by 12% year-over-year to RMB8.5 billion, exceeding consensus estimates due to strong performance in the games and music business [5]. - The forecast for FY24-26 non-GAAP net income has been raised by 2-5% to reflect better-than-expected gross profit margin (GPM) expansion [5]. - Game revenue is expected to accelerate in the second half of 2024, supported by a strong game pipeline, despite potential short-term volatility from game adjustments and competition [5]. Financial Summary - Revenue projections for FY24E, FY25E, and FY26E are RMB111.2 billion, RMB119.4 billion, and RMB126.9 billion, respectively, with a slight decrease of 0.7% from previous estimates [1]. - Gross profit is expected to reach RMB70.3 billion in FY24E, with a gross margin of 63.2%, reflecting a 1.5% increase from prior estimates [1]. - Adjusted net profit is projected at RMB33.9 billion for FY24E, with an adjusted net margin of 30.5% [1]. - The company’s cash flow from operations is expected to grow from RMB35.3 billion in 2023A to RMB34.9 billion in 2024E, indicating strong operational efficiency [3]. Growth and Profitability - Revenue growth rates are projected at 7.5% for FY24E, 7.3% for FY25E, and 6.3% for FY26E, with adjusted net profit growth rates of 4.1%, 7.3%, and 7.9% for the same periods [19]. - The overall gross profit margin is anticipated to improve to 63.4% in 1Q24, driven by strong GPM expansion in the games and music sectors [5]. Valuation - The sum-of-the-parts (SOTP) valuation methodology indicates a valuation of US$122.2 billion for the online game business, which constitutes 92.9% of the total valuation [26]. - The valuation for the Cloud Music business is estimated at US$3.0 billion, based on a multiple of 2.9x 2024E EV/revenue, aligning with industry averages [6][27].

Investment Rating - Maintain BUY rating for Beike with a target price of US$22.00, down from the previous US$23.00, indicating a potential upside of 16.6% from the current price of US$18.87 [2][3]. Core Insights - Beike reported a 19% year-over-year decline in revenue for Q1 2024, totaling RMB16.4 billion, but this was better than both the forecast and consensus estimates due to strong performance in new business segments [2]. - The company is expected to see growth in Gross Transaction Value (GTV) starting from Q2 2024, driven by supportive policies and a rebound in market sentiment [2]. - Beike's core business continues to gain market share, supported by its established ACN ecosystem, while new business areas like home renovation and rental services are growing rapidly [2]. - The management has committed approximately US$220 million for share repurchase, representing about 1% of the market cap, to enhance shareholder returns [2]. Financial Performance - In Q1 2024, Beike's existing home transaction GTV fell 32% year-over-year to RMB453 billion, while new home transactions dropped 45% to RMB152 billion, compared to a 50% decline for the top 100 developers [2]. - The company generated RMB2.4 billion in revenue from home renovation and furnishing, marking a 71% year-over-year increase [2]. - Forecasts for Q2 2024 include total GTV of RMB796 billion, up 2% year-over-year, and total revenue of RMB21.5 billion, up 10% year-over-year [2]. Earnings Summary - Revenue projections for Beike are set to increase from RMB77.8 billion in FY23 to RMB90.2 billion in FY24, reflecting a year-over-year growth of 15.9% [6]. - Adjusted net profit is expected to reach RMB6.9 billion in FY24, down from RMB10.8 billion in FY23, indicating a decline of 13.1% [6]. - The company anticipates a gradual recovery in profitability, with adjusted net profit margins stabilizing around 10.4% in FY24 [8]. Market Outlook - Recent policy changes regarding down payment ratios and mortgage interest rates are expected to provide a marginal boost to property sales, although the impact may be less significant than in previous downturns [2]. - The overall property market is projected to show positive signs of recovery in the latter half of 2024, supported by demand-side easing and financing policy implementations [5].

Investment Rating - Maintain BUY rating with a target price of US$20.50, implying a 49.2% upside from the current price of US$13.74 [4][2]. Core Insights - Bilibili reported a 12% year-over-year increase in total revenue to RMB5.67 billion in 1Q24, aligning with estimates, while adjusted net loss narrowed by 56% year-over-year to RMB456 million, outperforming expectations [2]. - The company remains on track to achieve non-GAAP operating breakeven in 3Q24, supported by gross margin expansion and operational efficiency improvements [2]. - Advertising revenue surged by 31% year-over-year to RMB1.67 billion, driven by strong performance-based ads, with expectations for continued growth [2]. - Value-added services (VAS) revenue grew by 17% year-over-year to RMB2.53 billion, bolstered by live-streaming and innovative services [2]. - Mobile games revenue declined by 13% year-over-year to RMB983 million, but a recovery of 5% year-over-year is anticipated in 2Q24 due to new game launches [2]. Revenue and Profitability Forecasts - Revenue projections for FY24E are set at RMB25.49 billion, with adjusted net loss expected to narrow to RMB710 million [3][7]. - Gross margin is forecasted to improve to 30.0% in FY24E, with operating margin expected to reach -8.1% [7][12]. - Adjusted net profit is projected to turn positive by FY25E, reaching RMB1.16 billion [3][12]. User and Ecosystem Development - Average daily active users (DAUs) increased by 9% year-over-year to 102.4 million, with average daily time spent on the platform rising to 105 minutes [2]. - The e-commerce ecosystem is expanding, with management expecting a 30% year-over-year increase in total e-commerce ad budgets during the 618 shopping festival [2]. Valuation Breakdown - The target price of US$20.50 is derived from a sum-of-the-parts (SOTP) valuation, with contributions from advertising (US$8.5), VAS (US$7.5), and mobile games (US$4.3) [8][9].

M N 24 May 2024 CMB International Global Markets | Equity Research | Company Update Topsports (6110 HK) This is likely a rocky-road turnaround High bases are tough for both industry and Topsorts and we are cautious about Target Price HK$6.78 1Q25E. However, the turnaround in next few quarters is still an important (Previous TP HK$9.23) catalyst. Also, thanks to the 7% FY2/25E yield, we think the downside is limited. Up/Downside 23.5%  4Q24 retail sales growth was slow and there are still some pressure in C ...

Investment Rating - The report maintains a "BUY" rating for Xiaomi with a new target price (TP) of HK$25.39, reflecting a 34% upside from the current price of HK$18.94 [2][18]. Core Insights - Xiaomi's 1Q24 results exceeded expectations, with revenue and net profit growing 27% and 101% year-over-year (YoY), respectively, driven by improved gross profit margins (GPM) and a favorable revenue mix [2][14]. - The company has set an ambitious target of 120,000 annual electric vehicle (EV) deliveries, up from the previous guidance of 100,000, indicating strong growth potential in the EV segment [2][18]. - The report anticipates continued earnings growth for Xiaomi, supported by smartphone market share gains, robust AIoT sales, and increasing overseas internet revenue [2][14]. Financial Summary - Revenue for FY24E is projected at RMB 337,161 million, representing a 24.4% YoY growth, with adjusted net profit expected to reach RMB 22,974 million, a 19.2% increase YoY [3][24]. - The adjusted EPS for FY24E is forecasted at RMB 0.92, significantly above consensus estimates [3][16]. - Gross margin is expected to be 21.1% for FY24E, reflecting a slight improvement from previous years [3][15]. Segment Performance - Smartphone revenue is projected to grow by 18% YoY in FY24E, driven by a 33.7% increase in global smartphone shipments in 1Q24 [2][13]. - AIoT and lifestyle products are expected to see a revenue increase of 21% YoY in FY24E, supported by strong sales in various product categories [2][13]. - Internet services revenue is anticipated to grow by 15% YoY in FY24E, indicating a solid performance in this segment [2][13]. Valuation - The report employs a sum-of-the-parts (SOTP) valuation method, assigning a P/E multiple of 15x to Xiaomi's smartphone, AIoT, and internet businesses, while the EV business is valued at 0.75x FY25E price-to-sales (P/S) [18][19]. - The total valuation for Xiaomi is estimated at RMB 581,175 million, translating to a target price of HK$25.39 per share [19][18].

Group 1: Policy Changes and Market Impact - Demand policies are being relaxed, with first-tier cities lowering provident fund loan rates and second-tier cities reducing down payment ratios[1] - As of May 16, 297 cities have established a "white list" mechanism, approving loans totaling CNY 935 billion, which is expected to alleviate liquidity pressure on developers[1] Group 2: Real Estate Sales Trends - New home sales in 30 cities have seen a year-on-year decline of 41% and a month-on-month decrease of 1% as of May 21[10] - The cancellation of purchase restrictions is showing positive effects, with Chengdu's new home sales down 31% year-on-year, an improvement from April's 41%[21] - In the first 20 weeks of 2024, Shenzhen's new home sales exceeded the average weekly level by 19%, indicating strong market performance[16] Group 3: Company Performance and Recommendations - Kuaishou's Q1 2024 revenue grew by 17% year-on-year, exceeding consensus expectations, with adjusted net profit reaching CNY 4.4 billion[24] - Pinduoduo reported a 131% year-on-year revenue increase in Q1 2024, reaching CNY 86.8 billion, driven by domestic monetization and international expansion[17] - Investment recommendations include property management companies and developers with long-term value, such as China Resources Land and Poly Property[15]

Investment Rating - The report maintains a "BUY" rating for PDD Holdings with a target price of US$192.70, which represents a 31.0% upside from the current price of US$147.09 [1]. Core Insights - PDD Holdings reported a strong performance in 1Q24, with revenue increasing by 131% year-over-year to RMB86.8 billion, surpassing Bloomberg consensus estimates by 13% [1]. - The significant revenue growth is attributed to enhanced monetization of the domestic business and accelerated international expansion [1]. - Non-GAAP net profit rose by 202% year-over-year to RMB30.6 billion, exceeding consensus expectations of RMB15.5 billion [1]. - The company is transitioning its valuation method from DCF to SOTP to better reflect the value split between its core domestic and international businesses [1]. Financial Performance Summary - In 1Q24, online marketing services and other revenues increased by 56% year-over-year to RMB42.5 billion, accounting for 48.9% of total revenue [3]. - Transaction services revenue grew by 327% year-over-year to RMB44.4 billion, driven by the Temu business and optimized consumer subsidy spending [1][3]. - Gross profit margin (GPM) decreased to 62.3% in 1Q24 from 70.4% in 1Q23, while operating profit margin (OPM) improved to 29.9% from 18.4% in 1Q23 [3]. - The company aims to build a compliance program to support long-term business development and mitigate geopolitical risks [1]. Revenue and Profit Forecast - Revenue is projected to grow from RMB247.6 billion in FY23A to RMB438.7 billion in FY24E, reflecting a year-over-year growth of 78.8% [2]. - Adjusted net profit is expected to increase from RMB67.9 billion in FY23A to RMB121.4 billion in FY24E, indicating a growth rate of 78.8% [2]. - The report anticipates a continued strong performance with a projected P/E ratio of 12.8x for FY24E [2]. Valuation Breakdown - The SOTP-based target price of US$192.7 includes valuations of US$154.6 for the main app, US$1.9 for Duoduo Grocery, and US$15.6 for Temu, along with US$20.6 for net cash [10].