Investment Rating - The report maintains a "Buy" rating for the company, with a target price adjusted to HKD 22.17, reflecting a potential upside of 32.3% from the current price of HKD 16.76 [2][4]. Core Insights - The company's revenue for the first half of 2024 increased by 2.9% year-on-year to RMB 62.5 billion, while net profit grew by 4.8% to RMB 5.7 billion. The operator business faced challenges due to reduced domestic telecom capital expenditure, but non-operator business segments showed double-digit growth [2]. - The report highlights that the Chinese 5G network construction has made significant progress, leading to a decrease in capital expenditure from domestic telecom operators, which poses challenges for the company's operator business. However, the non-operator business is expected to continue its double-digit growth, alleviating some pressure from the operator segment [2][7]. - The company's gross margin remained stable at 40.5% in the first half of 2024, despite a decline in the operator business's revenue and a shift in product mix affecting margins [2][9]. Financial Summary - For FY22A to FY26E, the company is projected to see revenue growth from RMB 122.95 billion in FY22A to RMB 153.50 billion in FY26E, with a compound annual growth rate (CAGR) of approximately 9.5% [1][9]. - The operating profit is expected to increase from RMB 10.56 billion in FY22A to RMB 16.05 billion in FY26E, reflecting a strong growth trajectory [1][9]. - Net profit is forecasted to rise from RMB 8.08 billion in FY22A to RMB 14.42 billion in FY26E, indicating a robust growth outlook [1][9]. - The report notes a decrease in the company's projected revenue for FY24 and FY25 by 3% and 2%, respectively, due to ongoing challenges in the operator business [2][7].

Investment Rating - The report maintains a BUY rating on BaTeLab with an unchanged target price (TP) of HK$49.8, based on a 19x 2024E P/E ratio [1][3]. Core Insights - BaTeLab reported strong 1H24 earnings with revenue growth of 42.1% YoY to RMB291 million, driven by new product launches, strengthened partnerships, and an expanded distribution network [1]. - Net profit for 1H24 increased by 46.3% YoY to RMB67 million, with revenue and net profit accounting for 45% and 46% of full-year estimates, respectively [1]. - The company is recognized as a leading provider of industrial-grade analog IC patterned wafers in China, supported by proprietary EDA tools and a reusable IP library [1]. Financial Summary - Revenue projections for FY24 are set at RMB650 million, reflecting a YoY growth of 40.2%, with further growth expected at 37.8% in FY25 and 36.1% in FY26 [2][8]. - Gross margin is expected to stabilize between 53% and 55% for 2024-2026, despite a decline to 51.3% in 1H24 due to higher inventory provisions [1][2]. - The company’s operating profit for FY24 is estimated at RMB154.4 million, with a net profit of RMB146.3 million, indicating a YoY growth of 34% [2][8]. Market Position and Strategy - BaTeLab has expanded its SKU offerings to over 500 in 1H24, confirming its R&D capabilities and management execution [1]. - The company has strengthened its partnerships with distributors, with 90% of revenue coming from distributor sales in 1H24, up from 87.5% in FY23 [1]. - The stock is currently trading at a P/E of 10x for 2024E, which is considered attractive compared to its semiconductor peers [1][3].

21 Aug 2024 CMB International Global Markets | Equity Research | Company Update Giant Biogene (2367 HK) Sales of Comfy brand surpass expectations 1H24 earnings beat, fueled by the rapid growth of Comfy brand. Giant Biogene reported 1H24 revenue of RMB2,540mn, up 58% YoY and 12% above Bloomberg consensus estimates, accounting for 55% of our full-year estimate. Attributable net profit increased by 48% YoY to RMB983mn, which was 13% ahead of Bloomberg consensus estimates, accounting for 57% of our full-year es ...

12 Aug 2024 CMB International Global Markets | Equity Research | Company Update Hua Hong Semi (1347 HK) Slowly but surely, gradual recovery is in play Hua Hong Semi announced 2Q24 results. Revenue was down 24.2% YoY but up 4.0% QoQ to US$479mn, slightly missing Bloomberg consensus by 2.0% and our estimates by 1.6%. The moderate sequential growth was a result of growing wafer shipments (+8.4% QoQ) partially offset by continued downward ASP (-3.5% QoQ). GPM increased QoQ to 10.5% (vs. 6.4%/27.7% in 1Q24/2Q23) ...

Investment Rating - The report upgrades the investment rating for J&T Express to BUY from Hold [2]. Core Insights - J&T Express achieved a net profit of US$31 million in 1H24, a significant improvement from a loss of US$264 million in 1H23 and US$168 million in 2H23, indicating a clearer path to sustainable profitability [2]. - The revenue in 1H24 grew by 22% year-on-year to US$1.52 billion, driven by a 42% increase in parcel volume, although this was offset by a 14% decline in average selling price (ASP) [2]. - The company is expected to see full-year volume growth of 30% year-on-year, despite a projected double-digit decrease in ASP [2]. - In China, revenue grew by 36% year-on-year to US$3 billion, supported by a 37% increase in parcel volume and stable ASP [2]. - The report anticipates a slowdown in revenue growth in new markets due to regulatory changes affecting cross-border e-commerce in Brazil [2]. Summary by Sections Financial Performance - J&T Express reported a revenue of US$4.86 billion in 1H24, a 20.6% increase from US$4.03 billion in 1H23 [7]. - The gross profit surged to US$536 million, reflecting a 176.8% increase year-on-year [7]. - The adjusted net profit is forecasted to be US$186.5 million for FY24, a significant recovery from a loss of US$432.3 million in FY23 [4]. Market Analysis - In Southeast Asia, the market share expanded by 2 percentage points year-on-year to 27.4%, with a unit gross margin of US$0.14 [2]. - In China, the market share increased by 1.1 percentage points year-on-year to 11%, with a unit gross profit of US$0.02 [2]. - The report highlights a strong competitive edge for J&T in Southeast Asia, with a target multiple of 15x for valuation, reflecting a premium over global integrated logistics operators [10]. Valuation - The target price is revised down to HK$10 from HK$12.8, reflecting a more conservative approach following sector pullbacks [2][10]. - The valuation methodology for the China segment has shifted to EV/EBITDA, applying a target multiple of 10x, which is approximately a 50% premium to local peers [10]. - The total equity value is estimated at US$11.1 billion, with a target price of HK$10.00 [11].

16 Aug 2024 CMB International Global Markets | Equity Research | Company Update Samsonite (1910 HK) 2Q24 results slowed by soft demand, guidance revised downward The company reported 2Q24 results below market expectations, with net sales down 1.7% YoY (+1.6% in constant currency) given softened consumer demand in China and North America, and increased competition in India. The GPM remained high at 60.0%, supported by channel and product mix optimization, Adjusted net profit declined by 3.4% YoY. The company ...

2024 年 8 月 16 日 招银国际环球市场 | 宏观研究 | 宏观视角 美国经济 零售超预期缓解衰退担忧 7月零售环比增速大幅反弹并超预期，首次领取失业金人数降至 7月以来低位， 某零售超市龙头公司上调全年业绩指引，显示美国消费和就业仍有韧性。市场 对美国衰退风险担忧大幅缓解，美债收益率、美元指数和美股均显著回升。美 国经济从过去两年过热状态逐步放缓，但仍稳健扩张，上半年经济增速趋近潜 在增速，非农就业稳步增长，通胀大幅下降但仍高于目标水平，尤其是服务通 胀仍超过4%。考虑到实际利率升至历史高位、失业率升至自然均衡水平和货币 政策时滞，美联储将很快在 9 月开启降息。但由于经济和通胀仍未大幅冷却， 我们认为美联储实施非常规紧急降息或大幅降息的可能性较小。我们维持今年 两次降息合计 50 个基点和明年 4 次降息合计 100 个基点的预测。 零售增速大超预期，汽车销售低位反弹。7 月零售和食品服务销售季调后环 比增速从 6 月的-0.2 反弹至 1%，大幅超出市场预期的 0.4%。6 月环比增速 从初值的 0%下调至-0.2%，连续 2 月初值下修。分品类来看，汽车及零部件 销售从 6 月的-3.4%大幅 ...

Investment Rating - The report maintains a "BUY" rating for ZTE, with an adjusted target price of RMB32.86, reflecting a potential upside of 26.2% from the current price of RMB26.04 [2][3]. Core Insights - ZTE reported mixed results for 1H24, with revenue increasing by 2.9% YoY to RMB62.5 billion and net profit growing by 4.8% YoY to RMB5.7 billion. The carrier business faced challenges due to declining capex from domestic telecom companies, while non-carrier segments showed strong growth [2][3]. - The carrier segment's revenue fell by 8.6% YoY to RMB37.3 billion, primarily due to reduced spending from domestic telecoms as the 5G network build-out reached significant milestones. However, the gross profit margin (GPM) for the carrier segment remained robust at 54.3% [2][3]. - Non-carrier businesses, particularly in consumer and government/enterprise segments, experienced double-digit growth, with increases of 14.3% and 56.1% YoY, respectively. This growth was driven by strong demand in the FTTR market and recovering consumer electronics demand [2][3]. Financial Summary - For FY24E, revenue is projected at RMB130.034 billion, reflecting a 4.7% YoY growth, while net profit is expected to reach RMB10.478 billion, a 12.4% increase YoY. The gross margin is anticipated to be 39.8% [3][6]. - The report revises down revenue forecasts by 3% for FY24 and 2% for FY25 due to ongoing headwinds in the domestic telecom market, particularly in the RAN business. Net profit forecasts were also trimmed by 3% for FY24 and 7% for FY25, although this was partially offset by improved operating efficiency [2][6]. - The earnings summary indicates a stable GPM of 40.5% in 1H24, compared to 41.5% in FY23, while the net profit margin (NPM) improved to 9.4% in 2Q24 [2][3][6].

Investment Rating - The report maintains a BUY rating for Li Ning, with a trimmed target price of HK$ 16.18, based on a 12x FY24E P/E, down from 15x due to industry de-rating [2][7]. Core Insights - Short-term risks include potential retail discounts, trade fair order adjustments, unfavorable channel mix, operating deleverage, and fixed operating expenses. However, long-term value is still recognized, particularly with an ex-cash FY24E P/E of 5-6x [2][7]. - The FY24E guidance has been revised down to low-single-digit sales growth from mid-single-digit, with a low-teen net profit margin maintained. Retail sales were weak, falling by high-single digits in July to mid-August 2024 [2][7]. - The report indicates a cautious outlook for 2H24E, with retail sales growth forecasts cut to -4% for 3Q24E and +6% for 4Q24E, reflecting a weakening recovery rate compared to 2019 [2][7]. Financial Summary - Revenue for FY24E is projected at RMB 28,162 million, with a YoY growth of 2%. Operating profit is expected to be RMB 3,659 million, and net profit is projected at RMB 3,103 million, reflecting a decrease of 8.8% compared to previous estimates [8][9]. - The gross profit margin is expected to be 49.0% for FY24E, with EBIT margin at 13.0% and net profit margin at 11.0% [9][11]. - The company reported a net profit of RMB 1.96 billion for 1H24, a 7% YoY decline, but beat estimates due to better-than-expected gross profit margin expansion [7][10]. Sales and Channel Performance - In 1H24, sales growth for e-commerce was 11%, while direct retail grew by 3%, and wholesale declined by 2%. The direct retail growth was primarily driven by strong performance in the outlet channel [7][10]. - The report highlights a decline in retail sales, attributed to weaker macro conditions, rising competition, and ineffective marketing strategies. The retail sales to inventory ratio was healthy at 3.9x in 1H24 [7][10]. Earnings Revision - The report revises down FY24E/25E/26E net profit estimates by 9%/12%/13% due to weaker retail sales growth, less improvement in retail discounts, and higher advertising and promotion expenses [7][8]. - The stock is currently trading at 10x FY24E P/E and 9x FY25E P/E, with a long-term positive view maintained despite short-term challenges [7][9].

Investment Rating - The investment rating for the company is maintained as BUY with a target price of HKD 17.90, reflecting a potential upside of 73.4% from the current price of HKD 10.32 [2][19]. Core Insights - The company reported a net profit of RMB 91.6 billion for 1H24, representing a year-on-year increase of 270%, exceeding the previous estimate of 220% [1]. - The strong profit growth is attributed to the unexpected expansion in unit gross margins for aluminum and alumina, with aluminum unit gross margin doubling to RMB 4,277 per ton and alumina unit gross margin increasing by 230% to RMB 748 per ton [1]. - The proposed interim dividend is HKD 0.59 per share, indicating a payout ratio of approximately 57% [1]. Revenue and Profit Breakdown - Aluminum Alloy Products (67% of revenue): Revenue increased by approximately 7% year-on-year to RMB 49 billion, with sales volume up 0.5% to 284 million tons and average selling price (ASP) rising by 7% to RMB 17,379 per ton [1]. - Alumina Segment (22% of revenue): Revenue grew by about 20% year-on-year to RMB 16 billion, with sales volume up 2.4% to 5.5 million tons and ASP increasing by 17% to RMB 2,942 per ton [1]. - Aluminum Processing Products (10% of revenue): Revenue surged by approximately 34% year-on-year to RMB 7.58 billion, with sales volume up 36% to 3.79 million tons, although ASP decreased by 1% to RMB 20,027 per ton [1]. Price Sensitivity and Market Conditions - A 1% increase in aluminum prices is expected to enhance the company's earnings by approximately 4% [1]. - The latest Shanghai aluminum price rebounded from RMB 18,835 per ton to RMB 19,310 per ton since early August, with an average price of RMB 19,500 per ton at the end of the quarter, reflecting a 6% year-on-year increase [1]. Financial Projections - Revenue projections for FY24 are estimated at RMB 142.33 billion, with a year-on-year growth of 6.5% [2]. - Adjusted net profit for FY24 is forecasted to be RMB 16.10 billion, representing a 40.5% increase compared to FY23 [2]. - The company is expected to maintain a P/E ratio of 9.8x for FY24, which is above its historical average of 6x [19].