Investment Rating - Maintain BUY rating for Great Wall Motor with a target price increase from HK$13.00 to HK$14.00, reflecting a revised FY24E EPS multiple of 11x [2][5]. Core Views - Great Wall Motor's 1Q24 net profit of RMB3.2 billion exceeded forecasts, leading to a 25% increase in the FY24E net profit forecast to RMB9.9 billion, representing a 41% year-on-year growth [2]. - The company needs a high-volume New Energy Vehicle (NEV) to enhance investor confidence in its electrification strategy, especially after previous PHEV model failures [2]. - The introduction of a lower-priced PHEV is anticipated to drive sales, while the pricing strategy for the new Wey Lanshan AD version is considered crucial [2]. Financial Summary - FY24E revenue is projected at RMB202.33 billion, a 16.8% increase year-on-year, with net profit expected to reach RMB9.92 billion [4][9]. - The gross profit margin for FY24E is revised to 18.9%, up 0.3 percentage points from previous estimates, due to better-than-expected performance in 1Q24 [2][9]. - The company’s sales volume forecast for FY24E remains at 1.35 million units, reflecting a 10% year-on-year growth [2]. Quarterly Performance - In 1Q24, Great Wall Motor reported a revenue of RMB42.86 billion, a 47.6% increase year-on-year, with a gross profit margin of 20% [2][8]. - The net profit for 1Q24 was RMB3.23 billion, marking a significant increase of 1,752.5% year-on-year [2][8]. Market Position and Strategy - Despite strong performance in off-road SUVs and overseas markets, the company lacks a competitive NEV to validate its electrification capabilities [2]. - The upcoming Beijing Auto Show is highlighted as a key event for investors to monitor developments in the NEV sector [2].

25 Apr 2024 Earnings Summary CMB International Global Markets | Equity Research | Company Update Zhejiang Dingli (603338 CH) 4Q23 & 1Q24 earnings in line; Staying positive on overseas growth Zhejiang Dingli (Dingli)'s net profit in 2023 grew 49% YoY to RMB1.87bn, in line with the pre-announced profit of RMB1.86bn in Jan. In 1Q24, the adjusted net profit (excluding fair value loss of RMB101mn) grew 27% YoY to RMB404mn, which is in line with our expectation. During the post results call, management revealed t ...

M N 24 Apr 2024 CMB International Global Markets | Equity Research | Company Update Li Ning (2331 HK) Healthy outlook after a beat in retail discounts Li Ning may not be our top pick in the sportswear sector. But thanks to potential Target Price HK$22.17 sequential acceleration in sales growth and decent margin improvement (better (Previous TP HK$24.86) discounts and operating leverage), we are still positive on Li Ning and maintain Up/Downside 19.9% BUY with TP of HK$ 22.17, based on 15x FY24E P/E. Current ...

Investment Rating - Reiterate BUY with a SOTP-based target price of HK$22 19 [2][10] Core Views - Xiaomi's SU7 sales target of 100k units in 2024 and 10k monthly deliveries in June exceeded market expectations [2] - SU7 gross profit margin (GPM) target of 5-10% in 2024 is above expectations, with breakeven expected at 300-400k sales per year [2] - Xiaomi's unique "Human-car-home" ecosystem is a major competitive edge over peers [2] - Near-term catalysts include the Beijing Auto Show (25-27 Apr), 1Q24 results in May, and 10k SU7 monthly shipments in June [2] SU7 Sales and Expansion - SU7 non-refundable orders reached 70k, with a higher share of the high-end SU7 MAX model [2] - Xiaomi aims to expand its smart driving team to 1 5k/2k by 2024/25 from 1k currently [2] - EV sales/service centers are targeted to cover 46/82 cities by the end of 2024 [2] 2024 Guidance - Revenue guidance of RMB300bn for core business, with RMB24bn in R&D expenses (including RMB11-12bn for EV-related) [2] - Smartphone shipments target an increase of 15-20mn in 2024 compared to 146mn in 2023 [2] - 1Q24 smartphone shipments grew 34% YoY to 40 8mn [2] Financial Forecasts - FY24E revenue is projected at RMB321 495mn, with an 18 6% YoY growth [3] - Adjusted net profit for FY24E is estimated at RMB17 321mn, a 10 1% YoY decline [3] - FY24E EPS is forecasted at RMB0 70, with a P/E ratio of 21 5x [3] Valuation - SOTP-based valuation assigns 13x/10x/15x FY24E P/E to smartphone/AIoT/internet businesses, and 0 75x FY25E P/S to the EV business [10] - The target price of HK$22 19 implies a 37 2% upside from the current price of HK$16 18 [3][10] Peer Comparison - Xiaomi's FY24E P/E of 20 7x is higher than peers like BYD (8 8x) and Sunny Optical (25 9x) [12] - The company's market cap stands at HK$329 133 6mn, with a 3-month average turnover of HK$1 534 9mn [4] Financial Performance - FY23 revenue declined 3 2% YoY to RMB270 970mn, while adjusted net profit increased 126 3% YoY to RMB19 272 8mn [3] - FY23 ROE improved to 11 3%, up from 1 8% in FY22 [3] - FY24E gross profit margin is expected to be 19 0%, slightly lower than FY23's 21 2% [3]

M N 24 Apr 2024 CMB International Global Markets | Equity Research | Company Update Jiangsu Hengli (601100 CH) 4Q23 & 1Q24 earnings not exciting; but more positive drivers to come Target Price RMB64.00 Hengli’s net profit in 2023 was +7% YoY to RMB2.5bn, which is -5%/+3% versus (Previous TP RMB83.00) our/consensus estimates. Net profit in 1Q24 dropped 4% YoY to RMB602mn, Up/Downside 24.9% due to weak demand for excavators’ hydraulic components and an increased Current Price RMB51.24 expense ratio. We trim o ...

M N 24 Apr 2024 CMB International Global Markets | Equity Research | Company Update InnoLight (300308 CH) 1Q24 results set stage for accelerated growth in 2024 Innolight has recently released results for FY23 and 1Q24, exceeding both our Target Price RMB183.00 and market’s expectations. For FY23, the company's revenue grew by 11.2% (Previous TP RMB136.00) YoY to RMB10.7bn, with net profit soaring by 77.6% YoY to RMB2.2bn. 1Q saw Up/Downside 15.6% even more impressive growth, with revenue up by 163.6% YoY to ...

Investment Rating - The report maintains a "BUY" rating for Netflix, with a target price of US$644.50, reflecting a potential upside of 16.1% from the current price of US$555.04 [2][3]. Core Insights - Netflix reported strong 1Q24 results, with revenue growth of 15% YoY, surpassing estimates by 1%, and an operating profit margin (OPM) of 28.1%, which is 2 percentage points above estimates [2][3]. - The management has guided an increase in FY24E OPM to 25% from the previous 24%, indicating confidence in continued profitability despite a moderate revenue guidance for FY24E [2][3]. - The report highlights Netflix's initiatives in AVOD and paid sharing as positive drivers for future growth, with an expected earnings upside from efficient content spending and reduced competition [2][3]. Financial Summary - **Earnings Summary**: - FY24E revenue is projected at US$38.428 billion, reflecting a 14% YoY growth, with net profit expected to reach US$7.978 billion [3][18]. - The report anticipates EPS growth of 52.8% in FY24E, with a reported EPS of US$18.71 [3][18]. - **Operating Performance**: - The operating profit for FY24E is estimated at US$9.597 billion, with an operating margin of 25% [3][15]. - The report indicates a significant increase in operating profit from US$6.954 billion in FY23A to US$9.597 billion in FY24E, representing a growth of 38% [3][18]. - **Cash Flow**: - Net cash from operations is projected to be US$7.389 billion in FY24E, with a notable increase in cash at the end of the year expected to reach US$8.934 billion [19][19]. Market Position and Guidance - Netflix's management has expressed confidence in achieving double-digit revenue growth in the medium term, supported by a strong content pipeline for 2Q24E and 2H24E [2][3]. - The company is expected to benefit from increased engagement and monetization strategies, despite the removal of quarterly subscriber and ARM disclosures starting 1Q25 [2][3].

M N 22 Apr 2024 CMB International Global Markets | Equity Research | Company Update Bosideng (3998 HK) From winter clothing to all seasons clothing We think the guidance raise is a key moment for the company, as the success Target Price HK$5.34 that Bosdieng has achieved in the sun-protective product series shows that it is (Previous TP HK$3.86) capable of generating sales in all seasons (other than just fall and winter). Also, Up/Downside 23.5% despite our raises in estimates and TP, we still think our num ...

Investment Rating - The report maintains a BUY rating for Xtep with a target price of HK$6.31, indicating a potential upside of 41.4% from the current price of HK$4.46 [4]. Core Insights - Xtep's retail sales in 1Q24 increased by high single digits year-over-year, aligning with market expectations, and showing signs of acceleration in growth due to new product launches and e-commerce support [2][3]. - The company expects improved retail sales growth, better discounts, and inventory levels from 2Q24E onward, supported by the popularity of new products like the 360X running shoes [2][3]. - The stock is currently trading at an undemanding valuation of 9x FY24E P/E, which is attractive compared to its 8-year average of 15x [2][4]. Earnings Summary - Xtep's revenue for FY24E is projected at RMB 15,913 million, with a year-over-year growth of 10.9% [12]. - The net profit for FY24E is estimated at RMB 1,230 million, reflecting a net profit margin of 7.7% [12]. - The company anticipates a compound annual growth rate (CAGR) of 10% for sales and 18% for net profit during FY23-26E [2][4]. Retail Performance - Retail sales growth for offline, online, and kids segments was reported at low single digits, over 25%, and 10% respectively in 1Q24 [2]. - Retail discounts narrowed to 25%-30% in 1Q24, showing improvement from 30% in 4Q23, with expectations for further reduction in 2Q24E [2][3]. Market Position - Xtep's new products, particularly the 360X running shoes, have been well-received, with over 500,000 pairs sold in just one month [2]. - The e-commerce segment is expected to rebound as the company increases the supply of entry-level and value-for-money products [2]. Financial Projections - The report conservatively estimates a revenue of RMB 17,587 million for FY25E and RMB 19,322 million for FY26E, maintaining the same growth expectations as previous estimates [8][9]. - Gross profit margin is projected to improve to 42.7% in FY25E and 43.1% in FY26E [12].

M N 18 Apr 2024 CMB International Global Markets | Equity Research | Company Update Anta Sports (2020 HK) An inline 1Q24 plus an improving outlook Retail sales growth in 1Q24 was slow, but it was widely expected. We see Target Price HK$101.73 FY24E growth supported by: 1) healthy momentum in late Mar, 2) an exciting (Previous TP HK$101.73) product launch pipeline, 3) further segmentation by Anta in terms of products Up/Downside 24.7% and store format, and 4) gradual improvement in retail discounts (rather C ...