Investment Rating - The report maintains a "BUY" rating for Thermo Fisher, indicating a potential return of over 15% over the next 12 months [15]. Core Insights - Thermo Fisher reported a revenue increase of 0.2% year-over-year to US$10.4 billion in 1Q25, with adjusted EPS rising 0.8% year-over-year to US$5.15, both exceeding Bloomberg consensus estimates [1]. - The company has revised its full-year revenue guidance to project growth between 1.0% and 3.1% for 2025, while adjusting its EPS guidance downward, expecting a range from a 0.6% decline to 4.4% growth due to macroeconomic factors [1][7]. - Management anticipates a US$500 million reduction in revenue guidance due to US policy changes affecting equipment sales, alongside a projected US$400 million revenue reduction from elevated tariffs between the US and China [7]. Financial Summary - For FY25E, revenue is estimated at US$43.806 billion, reflecting a 2.2% year-over-year growth, with adjusted net profit expected to be US$8.461 billion, a 2.5% increase [2][12]. - The adjusted EPS for FY25E is projected at US$22.42, with a P/E ratio of 19.3x [2][12]. - The company plans to invest US$2 billion over the next four years to expand its US manufacturing and R&D facilities, aiming to support long-term growth and market share expansion [7]. Valuation - The target price for Thermo Fisher has been revised down from US$690.00 to US$526.00, representing a 21.9% upside from the current price of US$431.64 [3]. - The DCF valuation indicates a total present value of US$226 billion, with an equity value of US$198.5 billion, leading to a price per share of US$526.00 [10].

Core Insights - The report highlights a significant rebound in global markets, particularly in Hong Kong stocks, driven by consumer discretionary, information technology, and financial sectors, while raw materials and telecommunications services faced declines [3] - The report indicates that the U.S. market experienced volatility, with early gains reversing due to comments from Treasury Secretary suggesting no immediate tariff reductions on China, impacting market sentiment [3] - The report emphasizes the ongoing impact of tariff shocks on the U.S. economy, predicting risks of stagflation in the short term and recession in the long term due to rising import costs and declining demand [3] Company Analysis - New Oriental (EDU US) reported a 2% year-on-year decline in net revenue to $1.18 billion, with a forecasted growth of 10%-13% in the next quarter, reflecting pressures from its overseas business [4] - ZTE Corporation (763 HK) showed an 8% year-on-year revenue growth to RMB 33 billion, driven by strong performance in its enterprise business, although net profit fell by 11% due to declining gross margins [4] - The report provides a list of focus stocks with target prices and potential upside, including Geely Automobile (175 HK) with a target price of HKD 23.00, indicating a 43% upside [5] Market Performance - The Hang Seng Index closed at 22,073, up 2.37% for the day and 29.48% year-to-date, while the Hang Seng Tech Index rose by 3.07% [1] - The report notes that European markets rebounded, particularly Germany's DAX, which increased by 3.14%, reflecting a recovery from tariff impacts [3] - The report highlights the performance of various sectors within the Hong Kong market, with the Hang Seng Financial Index up 2.15% and the Hang Seng Industrial Index up 2.68% [2]

Investment Rating - The report maintains a "BUY" rating on Innolight, indicating a potential return of over 15% over the next 12 months [1][18]. Core Insights - Innolight reported a strong 1Q25 performance with revenue increasing by 38% year-over-year (YoY) to RMB6.7 billion, driven by global cloud capital expenditures and demand for 400G/800G optical transceivers [1]. - The net profit (NP) rose by 57% YoY to RMB1.6 billion, attributed to growth in orders and improved margins, with a gross profit margin (GPM) of 36.7%, significantly above the Bloomberg consensus of 31.9% [1]. - The target price (TP) has been revised to RMB151 based on a 21.5x 2025E P/E, reflecting rising geopolitical uncertainties and lower sector sentiment [1][3]. Financial Performance - Revenue projections for FY25E are set at RMB35,008 million, representing a 46.7% YoY growth, following a 122.6% growth in FY24A [2][8]. - The gross margin is expected to improve to 35.3% in FY25E, with net profit projected at RMB7,721.8 million, a 49.3% increase YoY [2][8]. - The company's earnings per share (EPS) for FY25E is estimated at RMB7.02, with a P/E ratio of 11.6x [2][8]. Market Position and Outlook - Innolight is positioned as a key beneficiary of AI infrastructure investments, with expectations of solid demand for 400G/800G products from both domestic and overseas cloud service providers [7]. - The management anticipates a recovery in 400G shipments supported by rising domestic cloud capital expenditures, despite a temporary decline [7]. - The company has mitigated tariff risks through its offshore manufacturing capacity in Thailand, which benefits from zero-tariff treatment under current trade rules [7].

Core Insights - The report highlights a positive market sentiment driven by comments from former President Trump regarding trade tensions and the Federal Reserve, which has led to a rebound in U.S. stocks and increased risk appetite among investors [3][4] - The MSCI China Index has seen a recent decline, with an implied earnings downgrade of 4%-6%, while the current index PE stands at 11.4 times and a dividend yield of 2.8%, indicating relatively low valuations [3][4] - European markets are experiencing a rebound, but luxury goods companies are facing pressure due to tariff impacts and a strong euro, which may weaken overseas earnings [3][4] Company Analysis - Zhongji Xuchuang (300308 CH) reported a strong Q1 2025 performance with a revenue increase of 38% year-on-year, reaching RMB 6.7 billion, driven by growth in global cloud vendor capital expenditures and demand for 400G/800G optical modules [4] - The net profit for Zhongji Xuchuang increased by 57% year-on-year to RMB 1.6 billion, with a gross margin improvement to 36.7%, significantly above Bloomberg consensus expectations of 31.9% [4] - The management attributes the profit margin outperformance to product mix optimization, operational efficiency improvements, and better margins from overseas factories [4] Sector Performance - The Hang Seng Financial Index rose by 0.81% with a year-to-date increase of 23.67%, while the Hang Seng Real Estate Index saw a decline of 14.75% year-to-date [2] - The report indicates that sectors such as healthcare, materials, and integrated enterprises led the gains in the Hong Kong market, while telecommunications and discretionary consumption sectors faced declines [3] - In the U.S. market, financials, discretionary consumption, and communication services sectors outperformed, while staples, industrials, and healthcare lagged [3] Investment Recommendations - The report maintains a "Buy" rating for Zhongji Xuchuang with a target price adjusted to RMB 151, based on a 21.5 times expected PE for 2025, reflecting geopolitical uncertainties and weaker sector sentiment [4] - Other recommended stocks include Geely Automobile (175 HK) with a target price of HKD 23.00, XPeng Motors (XPEV US) with a target price of USD 28.00, and Anta Sports (2020 HK) with a target price of HKD 119.08, all rated as "Buy" [5]

Macro Economic Overview - The US retail sales rebounded in March due to preemptive purchases driven by tariff concerns, particularly in durable goods like automobiles and appliances, while home improvement and online shopping saw declines, indicating persistent high interest rates and inflation expectations suppressing housing demand and discretionary spending [2] - Federal Reserve Chairman Powell's hawkish remarks acknowledged the dilemma posed by stagflation risks, denying the existence of a Fed Put, and placing the responsibility for stabilizing financial markets on the White House [2] - The White House has adjusted its strategy in response to market volatility, delaying "reciprocal tariffs" on trade partners outside of China and initiating negotiations with allies, aiming to balance market stability and tariff agendas [2] Company Analysis SANY Heavy Industry (600031 CH) - Projected net profit for 2024 is RMB 5.97 billion, a 32% year-on-year increase, aligning with expectations, with a proposed dividend payout ratio of 51%, the highest since 2017 [5] - Focus on emerging markets in Asia-Pacific, Africa, the Middle East, and Latin America, while maintaining caution towards the US and European markets due to geopolitical factors [5] - Target price raised to RMB 22 based on a 24x target P/E ratio, reflecting the upward profit cycle [5] Zhejiang Dingli (603338 CH) - Expected net profit for 2024 is RMB 1.63 billion, a 13% decline year-on-year, significantly below expectations due to preemptive inventory movements to avoid tariff impacts and increased costs from acquisitions [5] - The company anticipates sufficient inventory to meet US demand until September, but remains cautious about unpredictable US tariff policies affecting demand [5] - Target price lowered to RMB 44 based on a 12x 2025 P/E ratio, reflecting a slowdown in earnings [5] Xtep (1368 HK) - Retail sales growth in Q1 2025 met expectations, with a cautious outlook for Q2, influenced by potential impacts from the US-China trade war and expected benefits from consumer downgrading [6][7] - Strong performance in e-commerce sales, exceeding 20% growth, while offline sales showed low single-digit growth [7] - Target price maintained at HKD 7.20, with a buy rating, as the company is expected to benefit from policy support in the sportswear sector [8] iQIYI (IQ US) - Anticipated total revenue for Q1 2025 is RMB 7.08 billion, an 11% year-on-year decline but a 7% quarter-on-quarter increase, aligning with consensus expectations [9] - Operating profit is expected to grow 6% quarter-on-quarter to RMB 430 million, though below consensus due to increased investments in micro-drama content [9] - Target price adjusted to USD 2.60 based on a 13x FY25 P/E ratio, maintaining a buy rating [9] Boss Zhipin (BZ US) - Recognized as China's largest online recruitment platform, with a projected 10% CAGR in total revenue from FY25-27 driven by online penetration and recovery in white-collar recruitment [9] - Expected adjusted operating profit CAGR of 20% over the same period, initiating coverage with a buy rating and a target price of USD 19.5 based on a 20x FY25E P/E [9] InnoScience (2577 HK) - Leading player in the GaN power semiconductor industry with a 33.7% market share in 2023, focusing on design, development, and manufacturing of GaN products [9] - Projected revenue CAGR of 55.2% from 2024-27, with expectations of breakeven in gross and net margins by 2025 and 2027 respectively [9] - Initiating coverage with a buy rating and a target price of HKD 49 based on a 30x 2030 P/E [9]

Investment Rating - The report maintains a HOLD rating for Zhejiang Dingli with a new target price of RMB44, down from RMB51, reflecting a 11.4% upside potential [1][3]. Core Insights - Zhejiang Dingli's net profit for 2024 is projected at RMB1.63 billion, representing a 13% year-over-year decline, which is significantly below expectations by 20% and 21% compared to the report's and Bloomberg's consensus [1]. - The disappointing earnings are attributed to advanced shipments to the US to avoid tariff hikes and the consolidation of higher costs from the acquisition of CMEC [1]. - The company has sufficient AWP inventory to cover US sales until September 2025, but the unpredictable US tariff policy poses a risk to demand and operational capacity [1][8]. - Earnings forecasts for 2025 and 2026 have been revised down by 13% due to increased cost assumptions [1]. Financial Summary - Revenue for FY24 is expected to be RMB7.8 billion, with a year-over-year growth of 23.6% [2]. - Net profit for FY25 is estimated at RMB1.86 billion, showing a recovery with a 14.4% growth [2]. - The P/E ratio for FY24 is projected at 12.3x, while it is expected to decrease to 10.7x in FY25 [2][22]. Performance Metrics - In 4Q24, Dingli's gross profit fell by 28% to RMB515 million, with a gross margin contraction of 14.9 percentage points to 30.9% [1][9]. - The company’s administrative expenses increased significantly, contributing to a 71% year-over-year decline in net profit for 4Q24 [1][9]. - The current ratio is projected to improve from 2.3 in FY23 to 2.6 in FY25, indicating better liquidity [23]. Shareholding Structure - The largest shareholder, Xu Shugen, holds 45.5% of the company, followed by Deqing Zhongding Equity with 10.8% [4]. Market Performance - The stock has experienced a significant decline, with a 1-month drop of 32.9% and a 3-month decline of 42.6% [5].

Investment Rating - The report maintains a BUY rating for Xtep with a target price of HK$ 7.20, indicating a potential upside of 46.9% from the current price of HK$ 4.90 [3][10][18]. Core Views - The 1Q25 results are generally in line with expectations, with an encouraging trend observed in March 2025. The outlook for 2Q25E remains cautiously optimistic due to potential policy support and brand-specific growth momentum [1][10]. - Xtep is expected to benefit from a consumption trade-down effect amidst macroeconomic risks, with management maintaining positive sales growth guidance for FY25E [10][11]. - The company is focusing on enhancing operational efficiency and preparing for a direct-to-consumer (DTC) transformation, with plans to repurchase stores in the coming years [10][11]. Financial Summary - Revenue projections for FY25E are set at RMB 14,312 million, with a year-on-year growth of 5.4%. The net profit is expected to reach RMB 1,372 million, reflecting a growth of 3.6% [2][11]. - The earnings per share (EPS) for FY25E is projected at RMB 0.48, with a net profit margin of 9.6% [2][11]. - The company’s price-to-earnings (P/E) ratio is currently at 10x, compared to the target P/E of 14x for FY25E, indicating that the stock is undervalued relative to its historical average [10][18]. Market Performance - Xtep's market capitalization is approximately HK$ 12,910.7 million, with an average turnover of HK$ 82.9 million over the past three months [4][10]. - The stock has experienced a decline of 13.9% over the past month and 14.0% over the past three months, indicating a challenging market environment [6][10]. Shareholding Structure - The major shareholder is Mr. Ding Shui Po and family, holding 49.2% of the shares, followed by JPMorgan Chase & Co with 4.6% [5][10].

Investment Rating - The report maintains a "BUY" rating for SANY Heavy, with a target price revised to RMB22 from RMB21, indicating a potential upside of 15.4% from the current price of RMB19.06 [1][3]. Core Insights - SANY Heavy's net profit for 2024 is projected at RMB5.97 billion, reflecting a 32% year-over-year increase, which aligns closely with estimates [1]. - The company is focusing on emerging markets such as Asia Pacific, Africa, the Middle East, and South America, while remaining cautious about the US and European markets due to geopolitical concerns [1]. - The management highlighted the growth potential in large-size and mining excavators, positioning SANY as a key player in the excavator upcycle [1]. Financial Performance - Revenue for FY24 is expected to reach RMB78.38 billion, a 5.9% increase from FY23, with further growth projected to RMB88.84 billion in FY25 and RMB97.80 billion in FY26 [2]. - Adjusted net profit is forecasted to grow to RMB7.72 billion in FY25 and RMB8.88 billion in FY26, with corresponding EPS increasing to RMB0.91 and RMB1.05 respectively [2]. - The proposed dividend for FY24 indicates a 51% payout ratio, up from 41% in FY23, marking the highest payout since 2017 [1]. Regional Revenue Breakdown - In 2024, overseas revenue is expected to grow by 12% year-over-year, contributing 64% of total revenue, with Africa showing a significant 44% increase [6][8]. - The revenue breakdown for overseas markets in 2024 includes Asia Pacific (42%), Europe (25%), America (21%), and Africa (11%) [8]. Earnings Forecast Adjustments - The earnings forecasts for 2025 and 2026 have been slightly revised upwards by 5% and 7% respectively, reflecting the anticipated earnings upcycle [1][13]. - The target price adjustment to RMB22 is based on an unchanged target P/E of 24x, which is 0.5 standard deviations above the average of 20x since 2017 [1][3]. Share Performance - The market capitalization of SANY Heavy is approximately RMB161.74 billion, with an average turnover of RMB1.51 billion over the past three months [3]. - The stock has experienced a 1-month decline of 6.7% but a 3-month increase of 23.6% [5].

Economic Overview - In March, U.S. retail sales rebounded with a month-on-month increase of 1.4%, driven by preemptive purchases due to tariff concerns[5] - Sales of motor vehicles and parts surged by 5.3% month-on-month, while gas station sales fell by 2.5% due to declining oil prices[5] - Excluding motor vehicles and gas stations, retail sales grew by 0.8%[5] Federal Reserve and Monetary Policy - Fed Chair Powell emphasized the importance of achieving inflation targets and acknowledged the conflict between anti-inflation and employment goals, reflecting concerns over stagflation risks[2] - Powell denied the existence of a "Fed Put," indicating that the responsibility for stabilizing financial markets lies with the White House[2] - The Fed is expected to cut interest rates once in June or July and again in September or December due to market volatility and recession risks[1][2] Industrial Production - Industrial production fell by 0.3% month-on-month in March, slightly below the market expectation of -0.2%[5] - Utility output dropped significantly by 5.8%, contributing to the overall decline in industrial production[5] - Manufacturing, which accounts for three-quarters of industrial output, saw a slight decrease from 1% in January to 0.3% in March[5]

Macro Economic Overview - China's GDP growth rate for Q1 was 5.4%, exceeding market expectations, but the GDP deflator indicates significant deflationary pressure [2] - Economic activity data for March significantly surpassed market expectations, driven by the "old for new" policy, leading to a rebound in retail sales and strong industrial output [2] - Fixed asset investment saw a slight increase, benefiting from a recovery in infrastructure investment, while the real estate market showed signs of fatigue with declining sales growth in new and second-hand homes in early April [2] - Trade conflicts may challenge economic growth through reduced exports, suppressed domestic investment, and weakened consumer confidence, exacerbating deflationary pressures [2] Industry Insights - The technology sector is facing supply chain disruptions due to the U.S. government's export restrictions on Nvidia's H20 chips to China and other D5 countries, which could lead to fluctuations in the AI server supply chain [5] - Nvidia's inventory write-down of $5.5 billion corresponds to 1.1 million H20 chips and 138,000 AI servers, indicating a significant impact on the supply chain [5] - The Chinese CSPs are expected to accelerate the procurement of domestic computing power chips and servers in response to these restrictions, potentially leading to a rapid rise of the domestic supply chain [5] Company Analysis - Tongcheng Travel (780 HK) is expected to achieve revenue of RMB 4.35 billion in Q1, a 12% year-on-year increase, and a non-GAAP net profit of RMB 737 million, a 32% increase, aligning with Bloomberg consensus [5] - The strong profit growth outlook for Tongcheng Travel is primarily driven by domestic demand, relatively insulated from tariffs and geopolitical conflicts [5] - The target price for Tongcheng Travel remains at HKD 24, with a projected growth of 25% in core online travel operating profit and 18% in overall non-GAAP net profit from 2025 to 2027 [5] Focus Stocks - Geely Automobile (175 HK) is rated "Buy" with a target price of HKD 23, indicating a potential upside of 49% [6] - Xpeng Motors (XPEV US) is also rated "Buy" with a target price of USD 28, representing a 50% upside [6] - Anta Sports (2020 HK) is rated "Buy" with a target price of HKD 119.08, showing a 36% upside potential [6] - Luckin Coffee (LKNCY US) is rated "Buy" with a target price of USD 38.51, indicating a 28% upside [6] - BYD Electronics (285 HK) is rated "Buy" with a target price of HKD 47.10, reflecting a 48% upside [6]