Investment Rating - The report assigns a Neutral rating to Ascletis Pharma Inc. with a 12-month target price of HK$4.92, indicating a potential downside of 46.0% from the current price of HK$9.10 [6]. Core Insights - The management has outlined a clearer development strategy for ASC30, which includes both oral and subcutaneous formulations of GLP-1RA, with a focus on achieving more weight loss and better tolerability compared to competitors [2][5]. - The emergent metabolism pipeline includes ASC47 and ASC50, with key data readouts expected in the second half of 2025, which could unlock further value in the anti-obesity and broader metabolism franchise [5]. Summary by Sections ASC30 Development Strategy - The oral formulation of ASC30 has shown a competitive preliminary drug profile in safety and weight loss, positioning it among the top tier of oral GLP-1 drug candidates [2]. - The subcutaneous formulation of ASC30 has a 36-day half-life, allowing for potential monthly dosing, which is competitive compared to other long-acting candidates [2][5]. - Management plans to initiate a Phase 2a study for ASC30 with topline data expected by the end of 2025 [2]. Emergent Metabolic/Autoimmune Pipeline - ASC47, targeting lean mass maintenance while reducing fat mass, has begun a Phase 2a trial in combination with semaglutide, with data expected by Q4 2025 [5]. - ASC50, an oral small molecule targeting IL-17, has shown promising pharmacokinetic data and is currently in a Phase 1 study for plaque psoriasis, with results anticipated in Q1 2026 [5]. - ASC40 has completed a Phase 3 study in acne in China, and management plans to file for NMPA NDA in the next six months [5].

Investment Rating - The report assigns a Buy rating to Kelun Biotech with a 12-month price target of HK$284.14, indicating a downside potential of 12.6% from the current price of HK$325.00 [7]. Core Insights - The management of Kelun Biotech is shifting the focus of sac-TMT from China to global trials, highlighting the significant commitment from Merck (MRK) with 14 ongoing global phase 3 trials across various tumor types [5][6]. - The early-stage pipeline is progressing steadily, with notable developments in SKB315 and SKB410, and a focus on radio-drug conjugates (RDC) as a promising area of research [6]. - Key catalysts expected in the second half of 2025 include NMPA approvals and data readouts for sac-TMT and other assets, with projected sales ramp-up for sac-TMT aiming for RMB 800 million to 1 billion for FY25 [6]. Summary by Sections Sac-TMT Global Trials - Sac-TMT (TROP2 ADC) is entering a mature R&D stage in China with two approved indications and two under NDA, while five phase 3 trials are ongoing [5]. - The strategy involves leveraging global trials for smaller indications in China, which are deemed less appealing from a return on investment perspective [5]. Early-Stage Pipeline - The early-stage pipeline includes SKB315 (CLDN18.2) for gastric cancer and SKB410 (Nectin4), which is licensed to Merck, showing complementary effects compared to existing therapies [6]. - Several phase 1 assets are under dose-escalation without a data sharing plan for 2025 [6]. Radio-Drug Conjugates (RDC) - RDCs are highlighted for their potential in tumors with strong encapsulation, offering a more straightforward payload release mechanism compared to traditional methods [6]. - The management emphasizes the need for target-specific delivery mechanisms in RDC development [6]. Key Catalysts - Anticipated catalysts in 2H25 include NMPA approval for sac-TMT in 2L EGFRmut NSCLC, A166 (HER2 ADC) approval, and phase 1 data readout for SKB315 [6].

Investment Rating - The report assigns a "Buy" rating for Sino Biopharmaceutical with a 12-month price target of HK$3.92, indicating a downside potential of 24.1% from the current price of HK$5.17 [7][8]. Core Insights - The company is on track for double-digit year-on-year growth in product sales for the first half of the year, driven by strong performance in innovative drugs and a stable generic drug portfolio [3][6]. - A major business development deal is anticipated in the near term, which is expected to contribute to sustainable revenue through licensing and collaboration [2][3]. - The company has a robust R&D pipeline with several assets poised for global opportunities, including TQC3721, TQ05105, TQA2225, TQB3616, TQB2102, and TQB2922, among others [2][3]. Summary by Sections Product Sales and Growth - Management reported that product sales growth in the first half of the year aligns with previous guidance of double-digit year-on-year growth, supported by innovative drug sales and a positive trajectory in the generic drug portfolio [3][6]. - The company expects to benefit from volume gains in the context of the Value-Based Procurement (VBP) policy, which is anticipated to start at the provincial level in 2026 and nationwide by 2027 [3][6]. Business Development and R&D Pipeline - The company is preparing for a significant licensing-out deal, which is expected to enhance collaboration income as a sustainable revenue source [2][3]. - The R&D pipeline includes multiple assets with global potential, such as TQC3721, TQ05105, and TQA2225, which are in various stages of clinical development and show promising efficacy [2][3]. Financial Projections - The report forecasts revenue growth from HK$28.87 billion in 2024 to HK$37.42 billion by 2027, with EBITDA increasing from HK$6.33 billion to HK$9.42 billion over the same period [8]. - The company’s market capitalization is noted at HK$97.6 billion, with a P/E ratio projected to decrease from 27.2x in 2024 to 22.3x by 2027 [8].

Investment Rating - The report assigns a "Buy" rating to Zai Lab's H shares/ADS, with a 12-month DCF-based target price of HK$41.24/US$52.91, indicating an upside potential of 43.2% for the US shares and 39.8% for the HK shares [6][7]. Core Insights - Zai Lab management reiterated FY25 guidance, expecting total sales between US$560 million and US$590 million, with cash profitability anticipated in Q4 [5][6]. - The company has received FDA approval for the pivotal trial design for ZL-1310, which includes a sample size of 300-400 patients and an option for accelerated approval [6][7]. - Strong phase 3 data for bemarituzumab is expected within the next three months, with three key readouts anticipated [5][6]. Summary by Sections FY25 Guidance and Financial Outlook - Management observed a recovery in efgar sales in Q2 after a soft Q1, with confidence in achieving FY25 sales guidance [5]. - Gross Profit Margin (GPM) is expected to improve, with a target to reduce GPM by two-thirds by 2027 compared to 2024 [5]. Drug Development Updates - Positive feedback was received for SUL-DUR, with larger sales expected in 2026 [5]. - KarXT is on track for approval by the end of 2025 or early 2026, with recruitment for key commercial positions ongoing [5]. FDA and Business Development - The FDA has approved the pivotal trial design for ZL-1310, allowing for conditional approval based on interim data [6]. - Management indicated no immediate financing plans, stating sufficient resources to support the pivotal trial [6].

Investment Rating - The report assigns a "Buy" rating to key companies involved in the AI / AR glasses industry, including Xiaomi, Lenovo, and others [27]. Core Insights - The AI / AR glasses market is expected to grow significantly, with a projected CAGR of 56% from 2024 to 2030, reaching a total addressable market (TAM) of US$1 billion by 2030, equating to approximately 7 million units sold [3][12]. - The report highlights the increasing consumer interest in AI / AR glasses, driven by new product launches from major tech companies like Xiaomi, Meta, and Apple, as well as affordability and enhanced use cases [1][2]. - Xiaomi's recent product launch is anticipated to stimulate consumer interest and support the growth of the AI / AR glasses supply chain [2]. Market Forecasts - The report forecasts that AI glasses sales in China will reach 341,000 units by 2025, supported by new product launches and expanding use cases [3]. - The total shipments of AI / AR glasses in China are expected to grow from 365,000 units in 2023 to 894,000 units in 2025, with a strong growth trajectory continuing through 2030 [12][14]. Supply Chain Overview - Key companies in the AI / AR glasses supply chain include Will Semi, Lingyi, AAC, Largan, and major brands like Lenovo, Apple, and Xiaomi [4]. - The report outlines a robust pipeline of upcoming AI / AR glasses products from various companies, indicating a healthy competitive landscape [2][11]. Product Specifications - Xiaomi's AI glasses feature a 12MP camera, 8.6 hours of battery life, and are priced competitively between US$280 and US$419, comparable to other leading products in the market [8][9]. - The report provides a detailed comparison of specifications for various AI / AR glasses models, highlighting advancements in technology and features across different brands [9][11].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - China's industrial profits fell by 9.4% year-over-year in May, while revenue increased by 0.7% year-over-year, indicating a decline in profitability despite slight revenue growth [1][5] - Sequentially, industrial profits and revenue decreased by 9.7% and 1.0% non-annualized in May, contrasting with increases in April [1][5] - Downstream industries experienced a profit decline of 3.0% year-over-year in May, while upstream industries saw a more significant drop of 27.6% year-over-year [5] Summary by Sections Industrial Profits - Year-over-year, industrial profits decreased by 9.4% in May compared to a growth of 3.2% in April [2][5] - Sequentially, profits fell by 9.7% non-annualized in May after seasonal adjustment, reversing from a 4.0% increase in April [5] Industrial Revenue - Year-over-year, industrial revenue rose by 0.7% in May, down from 2.6% in April [2][5] - Sequentially, revenue fell by 1.0% non-annualized in May, compared to a decrease of 0.6% in April [5] Profit Margins - Overall profit margins remained stable in May on a 12-month average basis, with downstream profit margins outperforming upstream [5] Sector Performance - The broad equipment manufacturing sector contributed 2.4 percentage points to the year-over-year growth of industrial profits in the first five months of the year [5] - Within this sector, profits in electrical machinery and general equipment grew by 11.9% and 11.6% year-over-year, respectively [5] PMI Forecasts - The report forecasts the NBS manufacturing PMI to be 49.4 in June, slightly down from 49.5 in May [6] - The Caixin manufacturing PMI is expected to be 49.1 in June, an increase from 48.3 in May, reflecting a delayed response to US-China tariff reductions [6]

Investment Rating - The report maintains an easing bias for the PBOC but adopts a less dovish tone compared to Q1, indicating a cautious approach to monetary policy easing [2][3] Core Insights - The PBOC's assessment of the Chinese economy has shifted to "showing positive momentum, with sustained recovery in sentiment," reflecting a relatively optimistic growth outlook [2] - The PBOC plans to implement a "dual cut" in Q4, anticipating a significant slowdown in year-over-year real GDP growth, which includes a 10 basis point cut in the policy rate and a 50 basis point cut in the RRR [2] - The PBOC has emphasized the importance of executing existing policies, particularly targeted easing measures, to support technology innovation and consumption [2][3] Summary by Sections Monetary Policy Committee Meeting - The PBOC's Q2 MPC meeting highlighted a less dovish tone than in Q1, focusing on the flexibility of policy easing rather than committing to rate cuts [2] - The report notes a shift in language regarding the property sector from "halting the decline and stabilizing the property market" to "sustaining and consolidating the stable momentum," indicating a more optimistic stance [3] Exchange Rate Management - The PBOC has removed "the three firm commitments" and is now focused on "preventing overshooting risks," suggesting a strategy to allow the CNY to gradually appreciate against the USD [3]

Investment Rating - The report indicates a positive outlook for the S&P 500, forecasting a return of +5% over the next 12 months, reaching a target of 6500 [3][44]. Core Insights - The S&P 500 earnings per share (EPS) growth is expected to decelerate to 4% year-over-year in 2Q 2025, down from 12% in 1Q 2025, primarily due to margin contraction [2][7]. - The effective US tariff rate has increased by approximately 10 percentage points to 13%, with expectations of a further rise to 17% [2][14]. - Analysts predict that the S&P 500 will collectively exceed the low EPS growth expectations set for 2Q 2025 [2][7]. Summary by Sections Earnings Season Insights - The 2Q earnings season will commence on July 15, with 73% of S&P 500 companies reporting between July 11 and August 1 [2][4]. - Analysts forecast a modest sales growth of 4% in 2Q, down from 5% in 1Q, with a significant portion of the deceleration attributed to margin pressures [7][9]. Tariff Impact - The report highlights that if companies absorb the tariff costs, it could negatively impact their margins, with consumers expected to bear 70% of the direct costs [2][15]. - Early earnings results have shown mixed signals regarding margin outlooks, with some companies managing to offset tariff impacts through various strategies [20][21]. Sector Performance - Earnings are expected to decline the most in the Energy sector (-28% year-over-year), while Communication Services and Information Technology are projected to see growth of +28% and +18%, respectively [9][10]. - Capex revisions have been positive for AI-exposed sectors, while most other sectors have seen reductions in estimates [32][36]. Future Projections - The report anticipates S&P 500 EPS growth of +7% in 2025, aligning with bottom-up consensus estimates, while projecting a margin expansion of 29 basis points to 12.2% [38][39]. - The consensus expects solid sales growth through 2025, with nominal GDP growth forecasted at 4.5% year-over-year in 2025 [26][28].

Investment Rating - The report assigns a "Buy" rating for Xiaomi Corp. (1810.HK) with a 12-month target price of HK$69.00, representing an upside of 21.3% from the current price of HK$56.90 [1]. Core Insights - The launch of the YU7, a premium electric SUV, exceeded market expectations with 289,000 orders within the first hour, indicating strong consumer demand and solidifying Xiaomi's leadership in the premium auto market in China [1][2]. - The YU7 series is positioned to compete effectively against top premium SUVs like the Tesla Model Y, offering superior size, performance, and range [2]. - Xiaomi is expanding its ecosystem with the introduction of AI Glasses, aiming to capture a significant share of the smart glasses market in China [16]. Financial Projections - Revenue forecasts for Xiaomi are projected to grow significantly, with expected revenues of Rmb365.9 billion in 2024, Rmb481.1 billion in 2025, Rmb624.6 billion in 2026, and Rmb746.4 billion in 2027 [4][14]. - Adjusted net profit estimates for 2025-2027 have been raised by 1-4% due to stronger operating leverage from the EV segment [18]. - The report anticipates a compound annual growth rate (CAGR) of 27% for revenue and 40% for net profit from 2024 to 2027 [18]. Product and Market Positioning - The YU7 is priced competitively at Rmb253.5k for the standard version, Rmb279.9k for the Pro, and Rmb329.9k for the Max, aligning with market expectations and enhancing its competitive edge [2]. - The YU7 series features advanced technology, including an 800V platform and a long-range battery, with the standard version offering an exceptional 835 km range [29][31]. - Xiaomi's strategy includes partnerships with major automotive players to enhance its Human x Car x Home ecosystem, further strengthening brand appeal [32]. Valuation Metrics - The report provides a valuation based on a sum-of-the-parts (SOTP) approach, with a target price of HK$69, reflecting higher valuations attributed to the EV and new initiatives segment [19][26]. - Key financial ratios include a projected P/E of 16.6 for 2024, increasing to 32.5 in 2025, and a P/B of 2.4 in 2024, indicating a strong growth outlook [10]. Market Performance - Xiaomi's stock has shown significant price performance, with an absolute increase of 219.3% over the past 12 months, outperforming the Hang Seng Index [12]. - The YU7's successful launch and the ongoing demand for the SU7 have positioned Xiaomi as a leading player in the premium automotive segment in China [38].

Investment Ratings - Syngene International: Buy [5] - Neuland Labs: Buy [5] - TheraNym Bio (Aurobindo): Buy [5] - Piramal Pharma: Buy [5] - Cohance Lifesciences: Buy [5] - Laurus Labs: Sell [5] - Divi's: Neutral [5] - Sai Life Sciences: Not Covered [5] - OneSource: Not Covered [5] - Dishman Carbogen Amcis: Not Covered [5] - Aragen Life Sciences: Not Listed [5] Core Insights - The report indicates a significant shift towards geographic supply chain diversification, particularly in response to the China+1 strategy, with large pharma companies actively seeking alternatives to reduce dependence on China [4][17][28] - Investment in biologics is increasing, with several companies making substantial investments in new modalities such as ADCs and Oligos, reflecting a broader trend in the industry [7][10][35] - The CRO/CDMO sector is experiencing heightened interest from clients globally, with a notable increase in requests for proposals (RFPs) and pilot projects, particularly from big pharma [4][50][69] Summary by Company Syngene International - Syngene is witnessing a recovery in its discovery business, expecting growth in FY26 driven by increased inquiries from big pharma [16] - The company is focused on expanding its capabilities in mABs, ADCs, and Oligos, with significant investments in new facilities [19][20] - Syngene's guidance for FY26 includes low teens growth in core sales, with margins expected to moderate due to initial costs from new facilities [20] Neuland Labs - Neuland emphasizes its commitment to human health and aims to emulate companies like Lonza, focusing on niche drug development [25][26] - The company is expanding its capabilities in peptides and has secured projects from innovators looking to diversify away from China [31][30] - Neuland expects growth in FY26/27 driven by its CMS business and specialty products [32] TheraNym Bio (Aurobindo) - TheraNym is capitalizing on India's cost advantages in the bio CDMO landscape, with a significant deal with MSD for biologic CMO [38][39] - The company is building integrated bio reactors with a substantial capex plan, expecting to generate significant revenues by 2031 [38] Piramal Pharma - Piramal is optimistic about recovering its CDMO business in FY27, driven by multi-year supply orders and new facility expansions [45] - The company aims to double its CDMO revenues by FY30, focusing on key modalities like ADCs and HPAPIs [45] Cohance Lifesciences - Cohance has seen a significant increase in RFQs, indicating a strong demand for its services as clients seek to diversify supply chains [50] - The company is investing in developing a GMP ADC site and expanding its capabilities in Oligos and small molecules [51][52] Laurus Labs - Laurus is aggressively investing in capacity expansion across its segments, including human health and animal health CDMO [58] - The company is focused on diversifying its customer base and enhancing its capabilities in new modalities [61] Dishman Carbogen Amcis - Dishman has a diverse global presence and is focusing on improving capacity utilization in its Indian facilities [82] - The company expects moderate growth in FY26, with a focus on improving margins over the next few years [85] Aragen Life Sciences - Aragen is expanding its capabilities in peptide discovery and ADCs, with significant investments in new facilities [89] - The company has seen increased business from big pharma, reflecting a shift towards supply chain diversification [90]