Core Insights - The report predicts that overseas Chinese stocks will experience a concentrated disclosure period for mid-2025 earnings in late August, with an expected earnings growth rate of 13% for the first half of 2025, up from 8% in 2024 [1][2][4] - The materials sector is expected to see significant improvement in earnings growth, while technology and healthcare sectors are likely to maintain high growth. However, consumer discretionary and energy sectors may face downward pressure on earnings growth [1][3][4] - As of July 30, 2025, the earnings forecast disclosure rate for overseas Chinese stocks is approximately 17%, with a current overall positive forecast rate of 60%, particularly strong in utilities, finance, and healthcare sectors [1][5] Industry Analysis - The materials sector, particularly construction and chemicals, is showing signs of earnings recovery due to easing capacity pressures and cost optimization. The technology and healthcare sectors continue to exhibit high growth [3][4] - Consumer discretionary and energy sectors are under pressure, with intense competition in e-commerce and automotive sectors potentially dragging down short-term earnings. The energy sector, dominated by industry giants, shows resilience against short-term fluctuations [3][4] - The telecommunications, consumer staples, finance, and utilities sectors are maintaining stable earnings, with notable sub-sectors such as diversified finance and transportation expected to see earnings acceleration [3][4] Tactical Allocation Recommendations - The report suggests increasing allocations to high-growth and value stocks in the gaming and internet e-commerce sectors, as these sectors are expected to benefit from improving market conditions and valuations [7][8] - Despite high valuations, innovative pharmaceuticals and non-bank financials are highlighted for their high earnings forecast rates and potential for upward revisions [8]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of JPY 31,880, slightly down from the previous target of JPY 32,000 [6][4]. Core Views - The company has adjusted its FY26 revenue and operating profit guidance downwards by 9.6% to JPY 2.35 trillion and by 21.6% to JPY 570 billion, respectively, primarily due to changes in customer capital expenditure plans [2][4]. - Despite the downward revision in revenue and profit forecasts, the company remains optimistic about the demand for AI-related chips and the potential positive impact of the Rubin series on global semiconductor equipment performance [2][4]. - The company expects the global wafer fab equipment (WFE) market size for CY2025 to increase from USD 110 billion to USD 115 billion, reflecting the impact of currency fluctuations and the anticipated growth in AI server module capabilities [3][4]. Summary by Sections Financial Performance - For FY26Q1, the company's revenue was JPY 549.5 billion, a year-on-year decrease of 1.0% and a quarter-on-quarter decrease of 16.1%, which was below Bloomberg consensus expectations by 5.4% [1]. - Operating profit for the same period was JPY 144.6 billion, down 12.7% year-on-year and 21.3% quarter-on-quarter, also missing consensus expectations by 7% [1]. - Net profit attributable to shareholders was JPY 117.8 billion, a decline of 6.6% year-on-year and 17.6% quarter-on-quarter, falling short of consensus expectations by 11% [1]. Revenue and Profit Forecasts - The company has revised its FY26 revenue forecast down by 9.6% to JPY 2.35 trillion and operating profit down by 21.6% to JPY 570 billion, citing several factors including adjustments in capital expenditure by leading logic customers and reduced investments by emerging Chinese chip manufacturers [2][4]. - The report anticipates a continued strong demand for AI chips, particularly from companies like NVIDIA, which may drive performance in semiconductor equipment [2][4]. Capital Expenditure and R&D - The company maintains its capital expenditure guidance for FY26 at JPY 240 billion, significantly up from JPY 162.1 billion in FY25, with R&D expenses set at JPY 295 billion, reflecting ongoing investments in next-generation etching, deposition, and bonding equipment [3][4]. - The report highlights that the demand for advanced logic foundry services is expected to grow, particularly as TSMC continues to increase its capital expenditures while Intel and Samsung face challenges [2][4]. Valuation Metrics - The report projects a decline in FY26/27/28 operating revenue by 11.7%/11.9%/12.0% and a decrease in net profit attributable to shareholders by 17.1%/15.8%/16.1%, with diluted EPS expected to be JPY 1,073/1,208/1,342 [4][10]. - The company is valued at approximately 26.4 times FY27E PE, based on an average PE of 22.4 times for comparable companies [4][10].

Investment Rating - The report maintains a "Buy" rating for the company [5][4][12] Core Views - The company reported Q1FY26 revenue of $575 million, a year-over-year increase of 38.8%, slightly below Bloomberg's consensus estimate of 39.8% [1][5] - Non-GAAP operating profit for Q1 was $25.11 million, corresponding to an operating profit margin (OPM) of 4.4%, exceeding Bloomberg's consensus estimate by 2.3 percentage points [1][2] - The company announced a new stock repurchase plan, expecting to buy back up to $600 million of its common stock over the next 12 months [1][4] Summary by Sections Q1 Performance - Q1 learning service revenue is estimated at approximately $405 million, with a year-over-year growth of 40% in RMB terms [2] - The tutoring and online school business revenue is expected to grow by 46% and 50% year-over-year, respectively [2] - Overall gross margin for Q1 increased by 3.2 percentage points to 54.9%, surpassing Bloomberg's consensus estimate by about 3.5 percentage points [2] Future Outlook - Q1 deferred revenue grew by approximately 50.8% year-over-year but showed a sequential decline [3] - Q2 learning service revenue growth is expected to decline to around 25% year-over-year [3] - The company anticipates total revenue growth of 22% year-over-year for Q2, with a non-GAAP OPM of 8.57% [3] Financial Projections - Revenue estimates for FY26, FY27, and FY28 have been adjusted to $2.834 billion, $3.459 billion, and $4.075 billion, respectively [4][9] - Non-GAAP net profit estimates for FY26, FY27, and FY28 are projected at $220 million, $373 million, and $544 million, respectively [4][9] - The target price based on the sum-of-the-parts (SOTP) valuation method is set at $13.89, down from a previous estimate of $14.82 [4][12]

Investment Rating - The report maintains a "Buy" rating for the company [6][5] Core Insights - The company reported a 22% year-over-year revenue growth in Q2, reaching $47.5 billion, exceeding consensus expectations by 6% [1] - Net profit increased by 36% year-over-year to $18.3 billion, surpassing expectations by 20% [1] - Advertising revenue grew by 21% to $46.6 billion, with significant acceleration in international growth [1] - The company is increasing its investment in AI, which is expected to enhance advertising efficiency and drive revenue growth [1][2] Financial Performance - Q2 revenue of $47.5 billion, up 22% year-over-year, and net profit of $18.3 billion, up 36% year-over-year [1] - Q3 revenue guidance is set between $47.5 billion and $50.5 billion, above the consensus estimate of $46.3 billion [1] - The company raised its 2025 capital expenditure guidance from $64-72 billion to $66-72 billion [1] Advertising and AI Developments - The company is accelerating the commercialization of advertising on WhatsApp and has launched Business AI for automated customer interactions [2] - AI technologies are being continuously optimized to improve advertising ROI, with Instagram and Facebook ad conversion rates increasing by approximately 5% and 3% respectively [3][13] - New AI tools have been introduced to enhance ad creation and targeting, including embedded AI advertising agents and automated content generation [15][16] Future Projections - Revenue forecasts for 2025-2027 have been raised by 5.5%, 7.4%, and 7.8% respectively, with expected revenues of $196.7 billion, $226.1 billion, and $255.3 billion [5] - Net profit forecasts for the same period have been adjusted to $73.4 billion, $75.9 billion, and $86.2 billion, reflecting increased revenue growth expectations [5] Valuation - The target price for the company has been raised to $871, corresponding to a 30.4x PE ratio for 2025, compared to the previous target of $633 [5][6] - The valuation has shifted from a slight discount to a 2% premium, driven by stronger-than-expected growth in the advertising business [5]

Group 1: Macro Insights - In July, the manufacturing PMI decreased to 49.3% from 49.7% in June, indicating a marginal slowdown and reflecting the initial effects of the "anti-involution" policy and disruptions from extreme weather [2][4][6] - The non-manufacturing business activity index also fell to 50.1% from 50.5% in June, remaining below seasonal levels [2][4] - The "anti-involution" policy has suppressed industrial production in certain sectors, while also pushing up prices for some goods due to reduced capacity utilization [2][4] Group 2: Industry Performance - The equipment manufacturing PMI has maintained expansion for three consecutive months, while high-tech and consumer goods sectors showed a decline [2][4] - High-frequency indicators for July show a rebound in port activity, while real estate sales continue to weaken [4] - The construction sector's performance is mixed, with cement production down 5.3% year-on-year, while coke and blast furnace operating rates are higher than last year [4] Group 3: Corporate Earnings and Forecasts - For overseas Chinese stocks, the earnings growth rate for the first half of 2025 is expected to continue rising, particularly in the materials sector, while technology and healthcare sectors remain robust [5] - As of July 30, the earnings forecast disclosure rate for overseas Chinese stocks is about 17%, with a current overall positive forecast rate of 60% [5] - Tactical allocation suggestions include increasing exposure to leading gaming and e-commerce companies, and focusing on innovative pharmaceuticals and non-bank financials [5] Group 4: Specific Company Insights - China Petroleum & Chemical Corporation is expected to maintain a stable dividend policy, with projected net profits of 158.5 billion, 161.7 billion, and 168.5 billion yuan for 2025-2027 [15] - Meta Platforms reported a 22% year-on-year revenue increase to $47.5 billion for Q2, exceeding expectations, driven by strong advertising revenue [16] - Microsoft achieved a 15% year-on-year revenue growth to $281.7 billion for FY2025, benefiting from increased AI demand [23] Group 5: Sectoral Trends - The commercial real estate sector is experiencing a valuation shift due to low capitalization rates and consumer policy catalysts [14] - The semiconductor industry is facing challenges with customer capital expenditure adjustments, particularly affecting companies like Tokyo Electron [19] - The electric power market in the U.S. is tightening, with significant investments in nuclear energy and infrastructure development expected [8]

Investment Rating - The report maintains an "Overweight" rating for the real estate development and service sectors [5] Core Insights - New home sales in July 2025 experienced seasonal adjustments, with a month-on-month decline of 38.1% and a year-on-year decline of 23.2%, indicating a weakening market momentum [1] - The report highlights an expected acceleration in the implementation of real estate policies, particularly in first-tier cities and core areas, which may exceed expectations [1] - The sales threshold for the top 10 real estate companies increased significantly, while sales amounts for various tiers of companies showed a month-on-month decline [2] - The concentration of top real estate companies has increased, with the top 10 companies accounting for 52.8% of total sales among the top 100 companies, reflecting a trend towards consolidation [3] - Overall market activity in the real estate sector has declined, suggesting a traditional off-season, with a recommendation to focus on companies with advantages in core city layouts [4] Summary by Sections New Home Sales - In July 2025, new home sales saw a month-on-month decrease of 38.1% and a year-on-year decrease of 23.2%, with cumulative sales from January to July down 14.4% year-on-year [1] Sales Thresholds - The sales thresholds for the top 10, 20, 30, 50, and 100 real estate companies were 616 billion, 217 billion, 147 billion, 77 billion, and 25 billion respectively, with the top 10 showing a year-on-year increase of 5.0% [2] Company Concentration - The top 10 companies' sales accounted for 52.8% of the total sales of the top 100 companies, indicating a slight increase in concentration compared to the previous year [3] Market Activity - The market activity for new and second-hand homes in 44 cities showed a month-on-month decline of 34.4% and 28.2% respectively, indicating a seasonal downturn [4] Recommendations - The report recommends focusing on real estate developers with strong credit, good city locations, and quality products, as well as top property management companies and REITs benefiting from asset revaluation in Hong Kong [4]

Investment Rating - The report maintains a "Buy" rating for Electronic Arts (EA) with a target price of $179.80 [5][13]. Core Insights - EA reported FY26Q1 net revenue of $1.67 billion, exceeding consensus expectations by 7.4% and showing a year-over-year increase of 0.7% [1][5]. - The net bookings revenue reached $1.3 billion, surpassing consensus expectations by 4% and reflecting a year-over-year growth of 2.9%, primarily driven by stable growth in core products like the global football and rugby series [1][5]. - Despite an increase in new game release investments leading to a decline in net profit margin by 4.9 percentage points to 12%, the company achieved a net profit of $201 million, exceeding expectations by 51.6% [1][5]. Financial Performance - FY26Q1 net bookings revenue was $1.3 billion, higher than the previous guidance of $1.23 billion, with game net bookings revenue at $214 million, up 27.4% year-over-year, driven by the new title "Split Fiction" [2]. - Real-time service net bookings revenue was $1.08 billion, down 0.9% year-over-year, mainly due to stable growth in the "FC" and rugby series, partially offset by a decline in "Apex Legends" [2]. - The core game series saw a modest single-digit year-over-year growth in "FC" series net bookings, with "FC Online" achieving double-digit growth and "FC Mobile" reaching a record high with over 50 million installations [2]. Upcoming Releases - EA released the first trailer for "Battlefield 6" on July 24, with over 7 million views by July 29, and the full game is expected to launch within FY26 on platforms including PS5, Xbox X|S, and PC [3]. - The core football game "FC 26" is anticipated to be released on September 26 across all platforms, including the Switch 2, focusing on enhancing player experience with competitive and realistic gameplay modes [3]. Earnings Forecast and Valuation - The report slightly lowers the FY26-28E net revenue estimates by 1%, 0.8%, and 0.8% to $7.19 billion, $8.11 billion, and $8.36 billion respectively, primarily due to pressure on net bookings revenue from the rugby series [4][11]. - The FY26-28E net profit estimates are also reduced by 4.7%, 2.3%, and 2.6% to $910 million, $1.38 billion, and $1.43 billion respectively, attributed to increased promotional costs for "Battlefield 6" [4][11]. - The valuation is based on a PE of 33 times for FY27, aligning with the average of comparable companies, resulting in a target price of $179.80, down from a previous estimate of $184.60 [4][13].

证券研究报告 固收视角 反内卷拉动价格,需求端牵引息 华泰研究 2025年7月31日|中国内地 吴宇航 研究员 SAC No. S0570518110002 SAC No. S0570521090004 wuyuhang@htsc.com zhangjigiang@htsc.com +(86) 10 6321 1166 吴靖, PhD 研究员 SAC No. S0570523070006 wujing018437@htsc.com +(86) 10 6321 1166 李梓豪 联系人 SAC No. S0570124060040 lizihao@htsc.com +(86) 21 2897 2228 (事件) 中国 7 月官方制造业 PMI 为 49.3, 前值为 49.7。 中国 7月官方非制造业 PMI 为 50.1,前值为 50.5。 (点评) 1、7 月 PMI 为 49.3,较上月下行 0.4pct,可比季节性约为-0.14pct。EMPI 亦有所回落,制造业淡季特征显现,主要 的支撑在于反内卷相关行业,但需求端尤其内需整体上形成拖累。 2、积极的点在于:其一，反内卷对信心的提振作用相对明显,原材料 ...

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of HKD 112.25 [1][9]. Core Insights - The company reported a revenue growth of 5.7% year-on-year for H1 2025, with a pre-tax profit increase of 5.1% [1]. - The board has approved a second dividend of USD 0.10 per share for 2025 and plans to initiate a share buyback of up to USD 3 billion [1]. - The company is experiencing strong growth in wealth management, with non-interest income increasing by 24.8% year-on-year in H1 2025 [3]. - The company has seen total assets, loans, and deposits grow by 8.0%, 4.5%, and 7.8% year-on-year, respectively, as of June [1]. Financial Performance - The net interest margin for Q2 2025 was 1.56%, down 3 basis points from Q1 2025, primarily due to declining yields in Asia [2]. - The banking net interest income for H1 2025 decreased by 4.0% year-on-year, with a guidance of USD 42 billion for the full year [2]. - Non-interest income from wealth management grew by 22.3% in H1 2025, marking six consecutive quarters of double-digit growth [3]. Asset Quality and Provisions - As of June, the non-performing loan ratio was 2.41%, with a provision coverage ratio of 43% [4]. - The company anticipates credit costs for 2025 to be around 0.40%, reflecting ongoing pressures in the Hong Kong commercial real estate sector [4]. - The company has increased its provisions, with expected credit losses rising to USD 1.1 billion for Q2 2025 [4]. Valuation Metrics - The target price corresponds to a price-to-book (PB) ratio of 1.25 for 2025, with a forecasted earnings per share (EPS) of USD 1.23 for 2025 [9]. - The company's current market capitalization is approximately HKD 1,688,949 million, with a closing price of HKD 96.95 as of July 30 [6].

Investment Rating - The report maintains a "Buy" rating for Electronic Arts (EA) with a target price of $179.80 [1][11]. Core Insights - EA reported FY26Q1 net revenue of $1.67 billion, exceeding consensus expectations by 7.4% and showing a year-over-year increase of 0.7%. Net bookings reached $1.3 billion, surpassing expectations by 4% and reflecting a year-over-year growth of 2.9% [1]. - The growth is primarily driven by the strong performance of core products, particularly the global football and rugby series, while the decline in "Apex Legends" was less severe than anticipated. Despite increased investment in new game releases leading to a 4.9 percentage point drop in net profit margin to 12%, the company achieved a net profit of $201 million, exceeding expectations by 51.6% [1]. - EA plans to release "Battlefield 6" within FY26 and maintains its full-year guidance unchanged [1]. Summary by Sections Financial Performance - FY26Q1 net bookings were $1.3 billion, higher than the previous guidance of $1.23 billion. Game net bookings were $214 million, up 27.4% year-over-year, driven by the new title "Split Fiction" [1]. - Real-time service net bookings were $1.08 billion, down 0.9% year-over-year, impacted by the performance of "FC" and the rugby series, partially offset by the better-than-expected decline in "Apex Legends" [1]. - Key game series performance: 1. "FC" series net bookings showed single-digit growth year-over-year, with "FC Online" achieving double-digit growth and "FC Mobile" surpassing 50 million installations. 2. Rugby series net bookings maintained positive growth year-over-year, although a decline of 8% is expected in Q2 due to high base effects, with a recovery anticipated in H2. 3. "F1 25" launched in Q1, benefiting from the concurrent F1 movie release, resulting in a 27% year-over-year increase in net bookings [1]. Earnings Forecast and Valuation - The report slightly lowers FY26-28E net revenue estimates by 1%, 0.8%, and 0.8% to $7.19 billion, $8.11 billion, and $8.36 billion, respectively, primarily due to pressure on net bookings from the rugby series [3]. - FY26-28E net profit estimates are also reduced by 4.7%, 2.3%, and 2.6% to $911 million, $1.38 billion, and $1.43 billion, respectively, due to rising promotional costs for "Battlefield 6" [3]. - The valuation is switched to FY27, assigning a PE of 33x, consistent with peer averages, leading to a target price of $179.80, down from a previous estimate of $184.60 [3][11]. Upcoming Releases - The first trailer for "Battlefield 6" was released on July 24, with over 7 million views by July 29. The game is expected to launch within FY26 on PS5, Xbox XJS, and PC, with the highest historical investment in its development [2]. - The core football game "FC 26" is set to release on September 26 across all platforms, including Switch 2, focusing on enhancing player experience with competitive and realistic gameplay modes [2].