Market Overview - On March 26, the Hang Seng Index rose by 139 points or 0.6% to close at 23,483 points, while the Hang Seng Tech Index increased by 1.0% to 5,573 points[1] - Market turnover decreased to HKD 199.8 billion, the lowest since February 6, indicating a wait-and-see approach from investors[1] - The net inflow from the Hong Kong Stock Connect was HKD 8.4 billion, contributing to market liquidity[1] Earnings Performance - Haidilao (6862 HK) and Shenzhou (2313 HK) saw stock price increases of 6.1% to 12.6% post-earnings, while China Telecom (728 HK) rose by 1.2%[1] - China Merchants Bank (3968 HK) experienced a significant drop of 5.5% following its earnings report[1] Sector Analysis - Earnings growth forecasts for the Hang Seng Index and MSCI China Index have been slightly downgraded, with technology, healthcare, materials, and financial sectors seeing upward revisions[2] - The 10-year Chinese government bond yield has decreased by 10 basis points to 1.8%, indicating potential economic instability[2] - The short-term outlook for the Hong Kong market suggests a sideways trading phase, with a potential buying opportunity around 22,500 points for consumer internet and AI infrastructure stocks[2] Industry Dynamics - Pop Mart (9992 HK) reported a 107% year-on-year revenue increase for 2024, driven by international market expansion, with overseas sales up 375%[3] - Nongfu Spring (9633 HK) reported a modest revenue increase of 0.5%, with a net profit growth of only 0.4%, leading to an 8.3% decline in stock price post-earnings[3] Real Estate Market Insights - New home transaction volume in 30 major cities fell by 0.9% year-on-year, contrasting with a 22.7% month-on-month increase[6] - The cumulative transaction volume for new homes in first-tier cities showed mixed results, with Beijing down 14.6% and Guangzhou up 44.6% year-on-year[7] - The land transaction volume in 100 major cities increased by 2.5% year-on-year, indicating a slight recovery in the real estate sector[9] Policy and Regulatory Environment - The People's Bank of China indicated a potential for interest rate cuts to stabilize the real estate market and improve liquidity[10] - Recent government policies have emphasized the need for more concrete support for the real estate sector to encourage market recovery[12]

Market Overview - On March 25, the Hang Seng Index fell by 561 points or 2.4%, closing at 23,344 points, while the Hang Seng Tech Index dropped by 3.8% to 5,517 points[1] - Market turnover increased to HKD 285.3 billion, with net inflow from the Hong Kong Stock Connect at HKD 13.9 billion[1] - Year-to-date, Hong Kong stocks have raised HKD 115.3 billion through placements or rights issues, with HKD 93.65 billion raised since early March, primarily from BYD and Xiaomi[1] Company Highlights - Xiaomi announced a placement of 800 million new shares at HKD 53.25 per share, raising approximately HKD 42.5 billion, aimed at R&D and business expansion[3] - BYD's 2024 revenue is expected to grow by 29% year-on-year, with a net profit increase of 34%[3] Economic Indicators - Recent U.S. economic data, including retail sales and industrial production, showed positive trends, with the 10-year U.S. Treasury yield rebounding to 4.3%[2] - The U.S. recession narrative is temporarily fading, contributing to a liquidity drain from Hong Kong stocks[2] Sector Performance - The pharmaceutical sector saw mixed results, with Hansoh Pharmaceutical's stock rising by 3.7% post-earnings announcement, while other companies like Sinopharm experienced slight declines[4] - The energy and utilities sectors showed a lack of direction, with some companies underperforming against market expectations[5] Water Price Adjustment - Shenzhen plans to increase water prices by 13.1%, with the comprehensive price rising from HKD 3.449 to HKD 3.8991 per cubic meter[6] - The adjustment reflects a broader trend of price increases across various regions in China, aligning with market-oriented policies[7] Investment Recommendations - China Water Affairs (855 HK) is favored due to its high revenue proportion from water supply operations, expected to benefit from the price increase[8] - Hansoh Pharmaceutical (3692 HK) is rated as a "Buy" with a target price of HKD 25.00, reflecting strong growth in its oncology drug segment[10][15]

Market Overview - The Hong Kong stock market showed a significant rise in the afternoon of March 24, with the Hang Seng Index increasing by 0.9% or 215 points, closing at 23,905 points. The Hang Seng Tech Index rose by 1.7% or 97 points, closing at 5,736 points. The total market turnover was HKD 233.1 billion, which is a decrease compared to the average turnover of the previous week [1] - Major tech stocks performed well, with Xiaomi (1810 HK) rising over 4%, and both NetEase (9999 HK) and Baidu (9888 HK) increasing by over 2%. Meituan (3690 HK) initially dropped over 5% post-earnings but later narrowed its loss to 1.1%, indicating support at lower levels [1] Economic Dynamics - The valuation of the Hong Kong market has significantly recovered, but further upward momentum requires positive contributions from fundamentals, earnings, and policies. The Chinese economy in January-February exhibited characteristics of "demand-driven recovery and accelerated supply-side structural upgrades," although internal demand still needs strengthening [2] - The real estate sector saw a year-on-year decline in new home sales, with a total transaction volume of 2.03 million square meters in 30 major cities, down 3.7% year-on-year. The performance varied across city tiers, with first-tier cities showing a 23.1% increase, while second and third-tier cities experienced declines of 14.7% and 18.8%, respectively [3] Industry Dynamics - The consumer sector, particularly home appliances, is showing strength as the national home appliance consumption season kicks off. The Ministry of Commerce plans to enhance the effectiveness of the "old-for-new" policy, which is expected to boost consumer spending in this area. Companies like Midea Group (300 HK) and Haier Smart Home (6690 HK) saw stock increases of 3%-6% [4] - The AI sector is also gaining traction, with Inspur Digital Enterprise (596 HK) forecasting a net profit range of HKD 350-390 million for 2024, representing a year-on-year growth of 74%-93%. This growth is attributed to a significant increase in cloud service revenue, leading to a 15.8% rise in stock price [4] Healthcare Sector - The Hang Seng Healthcare Index fell by 0.5%. Hansoh Pharmaceutical (3692 HK) reported a revenue increase of 21.3% and a net profit increase of 33.3% year-on-year. The innovative drug Ameluz is expected to drive significant revenue growth in the oncology segment [5] - The company has established collaborations with global giants like GSK and Merck in oncology and weight-loss drugs, which are progressing well. The target price for Hansoh has been raised to HKD 25.0, maintaining a "buy" rating [5] Utilities Sector - The utilities sector saw a rise in water stocks, with China Water Affairs (885 HK) surging by 9.8%. The Shenzhen Development and Reform Commission announced a public hearing on water price adjustments, which is expected to benefit water supply operators [6]

Investment Rating - The report maintains a "Buy" rating for China Water Affairs Group (中国水务) with a target price of HKD 7.22 [4] Core Insights - The report highlights that major Chinese tech companies, including Tencent, are significantly increasing their capital expenditures related to AI, which is expected to drive demand in upstream sectors such as servers and data centers [2] - The beer sector is showing signs of recovery, with companies like China Resources Beer (华润啤酒) experiencing growth in sales and gross margins in the first two months of the year, despite a slight decline in annual revenue and profit [3] - The healthcare sector, particularly biopharmaceuticals, is being bolstered by government initiatives aimed at enhancing the industry, with Guangzhou planning to develop significant biopharmaceutical parks by 2030 [3] Summary by Sections Market Performance - On March 19, the Hang Seng Index reached a new high for the year at 24,874 points, closing at 24,771 points, with a slight increase of 0.1% [1] - The Hang Seng Tech Index fell by 1.1%, and total market turnover decreased to HKD 271.9 billion [1] Sector Analysis - The public utility sector saw a general rise, particularly in thermal power, gas, and water supply stocks, with China Water Affairs Group increasing by 3.4% [4] - The healthcare index rose by 1.2%, driven by significant gains in companies like Rongchang Bio [3] Real Estate Insights - New home sales in major cities showed a mixed performance, with a 4.0% year-on-year increase in sales volume, but a decline in the growth rate compared to previous weeks [6] - The report notes a continued decline in land transaction volumes, with a 60.1% year-on-year drop in the area sold across 100 major cities [9] Company-Specific Updates - China Construction International (中国建筑国际) reported a 12.0% increase in net profit for FY24, although it fell short of market expectations [14] - The company’s new contract value decreased by 4.2%, but there was a significant increase in new contracts from mainland China, up 33.2% [15]

Investment Rating - The report assigns a "Buy" rating to 361 Degrees (1361 HK) with a target price of HKD 5.67, indicating a potential upside of 26.3% [14][17]. Core Insights - The report highlights that 361 Degrees achieved a revenue of RMB 10.07 billion for FY24, representing a year-on-year increase of 19.1%, with net profit rising by 15.4% to RMB 1.15 billion [14][17]. - The company plans to expand its "super product store" concept, aiming to increase the number of such stores from 5 to 100 by the end of 2025, which is expected to enhance customer shopping experience and help manage inventory [16][17]. - The report notes that the company's inventory increased by 56.2% year-on-year, leading to a rise in inventory turnover days from 93 to 107 days, which has impacted operating cash flow [15]. Summary by Sections Market Overview - The Hong Kong stock market showed mixed performance, with the Hang Seng Index rising by 0.8% to 24,145 points, while the Hang Seng Tech Index fell by 0.1% [1]. - The report indicates a decrease in market trading volume to HKD 244.8 billion, reflecting lower investor enthusiasm [1]. Consumer Dynamics - The "Special Action Plan to Boost Consumption" aims to enhance income and optimize supply, with short-term measures including stock market stabilization and employment promotion [2]. - Retail sales in January-February grew by 4.0% year-on-year, indicating a recovery in consumer spending [3][11]. Real Estate Trends - New home sales in 30 major cities showed a 2.4% year-on-year increase, with a notable improvement in inventory turnover [4]. Automotive Sector - Ideal Automotive (2015 HK) reported a 6.1% year-on-year revenue increase for Q4 2024, but its gross margin fell short of market expectations [5]. Healthcare Sector - The Hang Seng Healthcare Index experienced a slight decline, but key companies like Rongchang Bio (9995 HK) saw significant stock price increases due to positive clinical trial results [6]. Energy and Utilities - The renewable energy and utilities sector saw overall gains, driven by strong performance from companies like Honghua Wisdom Energy (1083 HK) [7]. Strategic Recommendations - The report suggests focusing on undervalued stocks for potential rebounds and emphasizes the importance of monitoring consumer credit policies and their impact on market sentiment [8].

Investment Rating - The report maintains a "Buy" rating for China State Construction International (830 HK) with a target price of HKD 2.10, reflecting a potential upside of 28.8% based on a projected P/E ratio of 6.0 times for FY25 [4][5][14]. Core Views - The company's FY24 net profit attributable to shareholders increased by 12.0% year-on-year to HKD 650 million, although this was below market expectations of HKD 780 million and HKD 770 million, primarily due to a slowdown in the Hong Kong office building curtain wall projects and a decrease in general contracting revenue [1][4]. - Despite a temporary slowdown in profit growth, the long-term development outlook remains solid, with a target to achieve new contract amounts, revenue, and net profit of at least HKD 35 billion, HKD 25 billion, and HKD 3 billion respectively by 2030 [4][5]. Financial Performance Summary - FY24 total revenue decreased by 6.5% year-on-year to HKD 8.1 billion, with curtain wall revenue in Hong Kong and Macau growing only 8.4% to HKD 4.97 billion, compared to a 27.4% increase in FY23 [1][5]. - New contract value for FY24 fell by 4.2% year-on-year to HKD 11.5 billion, with a significant decline of 28.3% in the Hong Kong and Macau regions, while mainland new contracts rose by 33.2% to HKD 4.2 billion [2][5]. - The company has identified significant growth potential in its BIPV (Building-Integrated Photovoltaics) business, which has begun to generate electricity in various projects, aligning with national carbon reduction goals and international ESG requirements [3][4]. Financial Data Overview - Key financial metrics for FY24 include: - Revenue: HKD 8.1 billion - Net profit: HKD 650 million - Earnings per share: HKD 0.29 - Dividend per share: HKD 0.10, with a dividend yield of 6.0% [5][12]. - Forecasts for FY25 and FY26 project revenues of HKD 9.9 billion and HKD 11.6 billion, respectively, with net profits expected to reach HKD 789 million and HKD 964 million [5][12].

Investment Rating - The report assigns a "Neutral" rating with a total score of 69 out of 100 [3][14]. Core Insights - The company has a promising pipeline with products that, if approved, could meet significant demand in the Chinese market, particularly for conditions like Pediatric Growth Hormone Deficiency (PGHD) and Hypoparathyroidism [2][8][10]. - The company is positioned as the first endocrine drug manufacturer in the Hong Kong market, which may provide a competitive edge [14]. Industry Outlook - PGHD is prevalent among children under 18, accounting for 41.5% of short stature cases in China, with only 5.3% treatment rate in 2023, indicating a substantial unmet need [2]. - The market for achondroplasia treatment is currently limited, with only two products in clinical trials, suggesting a strong first-mover advantage for the company's product, Navepegritide [6]. - The demand for drugs treating Hypoparathyroidism is expected to grow, with the patient population projected to increase from 410,100 in 2023 to 495,600 by 2030 [7]. Company Operations - The company has not yet launched any products, resulting in no sales revenue. The net loss for shareholders in 2023 was approximately 250 million RMB, a 13.5% reduction year-on-year [8]. - Research and development costs have decreased significantly, contributing to the reduced net loss, while cash flow from operating activities remains healthy with no bank loans [8]. - The company has a robust pipeline with core products already approved in Europe and the U.S., with expectations for approval in China by 2025 [5][10]. Valuation Level - The company's valuation is considered reasonable, with a market capitalization range of 77.0 to 84.6 billion HKD, slightly lower than comparable companies in the biotech sector [10][12]. - The price-to-book ratio for the company's IPO price is estimated at 18.3 to 20.2 times, which is competitive compared to peers [10]. Market Sentiment - The recent market atmosphere has improved, with a higher percentage of newly listed companies experiencing price increases on their debut [13]. - The presence of notable cornerstone investors, such as WuXi Biologics, indicates confidence in the company's research capabilities [14].

Group 1 - The report suggests focusing on undervalued rebound stocks while waiting for a correction to position in the technology sector, indicating that the Hang Seng Index is approaching a reasonable valuation around 25,000, but further valuation upgrades require strong fundamental data and earnings support [1][16][31] - Key sectors to focus on include infrastructure benefiting from local debt acceleration, high dividend defensive sectors, stable consumer brands, and leading companies in AI and the internet post-differentiation [1][16] - The report highlights that the consumer credit policy introduced will help lower short-term financing costs for residents, but the root cause of credit contraction needs to be addressed through boosting medium to long-term income expectations and confidence [1][16] Group 2 - The report notes that the U.S. stock market saw a record high in put option trading volume, indicating extreme pessimism, while the S&P 500 and Nasdaq indices have completed double-top measured declines, suggesting a potential for a short-term rebound [2] - The report indicates that the 10-year U.S. Treasury yield has risen to 4.3%, with inflation concerns easing slightly, but uncertainties regarding Trump's policies continue to affect consumer confidence [3][18] - The report mentions that the Chinese retail sales growth for January-February was 4.0%, showing a recovery, but the overall credit environment remains weak, with M1 growth at a historical low [4][13][10] Group 3 - The report states that the Hang Seng Index and MSCI China Index have forecasted P/E ratios of 10.5x and 11.6x, respectively, which are at 60.1% and 63.7% of their seven-year percentiles, indicating that current valuations are approaching historical highs [31][32] - The report emphasizes that the current risk premium for the Hang Seng Index is at 5.2%, which is the lowest since 2018, suggesting that further valuation improvements will depend on sustained earnings growth and supportive internal policies [31][32] - The report highlights that the net inflow of southbound funds into Hong Kong stocks remains strong, with a net inflow of 61.6 billion HKD last week, indicating continued interest in sectors like consumer discretionary and non-bank financials [25][26]

Investment Rating - The report does not provide a specific investment rating for the company [6]. Core Insights - The company reported a significant increase in FY24 net profit attributable to shareholders, rising by 95.2% to 22.372 billion RMB, driven by higher product prices and lower raw material costs [1][4]. - The average selling prices for aluminum alloy products, alumina products, and aluminum alloy processing products increased by 6.6%, 33.6%, and 2.5% respectively, contributing to improved gross margins [1][8]. - The company has adopted an integrated business model that encompasses upstream, midstream, and downstream operations, ensuring stable production and profit margins [3]. - The dividend per share for FY24 was 1.61 HKD, with the payout ratio increasing from 56.0% in FY23 to 73.3% in FY24, resulting in an attractive dividend yield of 10.7% [4][5]. Summary by Sections Financial Performance - FY24 revenue reached 156.169 billion RMB, reflecting a growth rate of 16.9% compared to FY23 [5][8]. - The gross margin improved from 15.7% to 27.0%, supported by rising selling prices and declining raw material costs [1][8]. - Operating profit for FY24 was 33.299 billion RMB, marking a 94.8% increase year-on-year [8]. Market Demand - The demand for aluminum products is primarily driven by sectors such as construction, electronics, transportation, and durable consumer goods, accounting for approximately 75% of national electrolytic aluminum consumption [2]. - Factors such as ongoing infrastructure development, improvements in the real estate sector, and the growth of the new energy vehicle market are expected to boost aluminum product demand [2]. Business Model - The company's integrated business model includes upstream operations (bauxite, energy, alumina), midstream (electrolytic aluminum), and downstream (aluminum alloy processing), which helps ensure production stability and profit margins [3]. - The utilization of clean energy sources like hydropower and photovoltaics in production lines supports the company's "dual carbon" strategy and cost reduction efforts [3].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 5.67, indicating a potential upside of 26.3% from the current price of HKD 4.49 [4][12]. Core Insights - The company reported a FY24 net profit of RMB 1.15 billion, a year-on-year increase of 15.4%, with a net profit margin of 11.4%, slightly down by 0.4 percentage points from FY23 [1]. - Revenue for FY24 reached RMB 10.07 billion, reflecting a 19.1% year-on-year growth, driven by increases in both adult and children's product sales [1]. - The company plans to expand its store network by adding 124 new outlets in 2024, with a focus on enhancing the shopping experience through the introduction of "super stores" [3]. Financial Performance Summary - FY24 revenue: RMB 10,074 million, up 19.1% from FY23 [5] - FY24 net profit: RMB 1,149 million, up 15.4% from FY23 [5] - FY25 projected revenue: RMB 11,869 million, a 17.8% increase [5] - FY25 projected net profit: RMB 1,332 million, a 16.0% increase [5] - FY24 dividend per share: HKD 0.1, with a payout ratio of 45% [1][5]. Inventory and Cash Flow - As of the end of 2024, inventory rose to RMB 2.11 billion, a 56.2% increase, leading to an increase in inventory turnover days from 93 to 107 days [2]. - Operating cash flow decreased to RMB 56 million due to increased inventory levels [2]. Store Expansion Strategy - The company is set to increase the number of "super stores" from 5 to 100 by the end of 2025, with an expected average store efficiency of RMB 10 million per year [3]. - The product mix in these stores will consist of 30% premium products, 20% off-season products, and 30% cost-effective products [3].