Investment Rating - The report assigns a "Buy" rating to AIA Group with a 12-month price target of HK$90, indicating an upside potential of 30.5% from the current price of HK$68.95 [11][12]. Core Insights - AIA Group is focused on share buybacks, with a decision to shorten the buyback period to three months to capitalize on low share prices. The next buyback decision is expected to align with FY25 results [5]. - The company anticipates limited impact from interest rate changes, with a positive translation effect from the weakness of the USD. The business in mainland China and Thailand is negatively affected by lower rates, while operations in Hong Kong, Singapore, and Malaysia benefit from them [5][10]. - AIA is actively expanding its footprint in mainland China, aiming to grow agent numbers in new branches and maintain a similar product mix to established operations. The company expects to receive approvals for 1-2 new provinces each year [10][11]. Summary by Sections Share Buybacks - AIA Group has decided to shorten the buyback period to three months to take advantage of low share prices, with the next review of capital position and free surplus generation expected at FY25 results [5]. Market Movements - The report discusses the impact of foreign exchange, interest rates, and equity market movements, noting that the USD weakness primarily affects translation metrics rather than direct business impact. The company has seen a year-to-date decline in bond yields in China and the US, while rates in Thailand have decreased, potentially leading to negative impacts if current levels persist [5][6]. Sales and Growth in Mainland China - AIA reported a -7% year-over-year decline in Value of New Business (VONB) in mainland China, attributed partly to a strong base effect from 1H24. The company expects easier comparisons in 2H25. The sales mix has shifted towards participating products, which have lower margins compared to non-participating products, but traditional products remain unaffected [10][11]. Footprint Expansion - AIA aims to grow agent numbers in new branches to over 1,000 within the first 1.5-2 years and plans to expand to other cities in the provinces of the new branches. The product mix in new branches is similar to established operations, although average ticket sizes are smaller due to lower income levels in these areas [10][11].

Investment Rating - The report does not explicitly provide an investment rating for Shanghai Pudong Development Bank (SPDB) [1]. Core Insights - Revenue and profit growth are expected to accelerate in the remaining quarters of 2025, with ambitious targets set for full-year growth [3]. - The net interest margin (NIM) change in 2025 is anticipated to outperform peers [3]. - Loan growth in 2025 is projected to exceed Rmb 370 billion recorded in 2024 [3]. - Positive growth in mortgage loans is expected for the full year, despite a slower pace compared to previous quarters [3]. - Non-interest income is targeted to achieve positive growth in 2025 [3]. - The company aims to control credit costs while maintaining a stable or higher non-performing loan (NPL) coverage ratio with a decline in the NPL ratio [3]. - A 30% dividend payout ratio is expected to be maintained [3]. Revenue and Profit Growth - The company achieved 1%+ revenue and profit growth in 1Q25 and is confident in accelerating growth for the remaining quarters of 2025 [11]. - The ambitious targets for revenue and profit growth in 2025 are set despite a high base and weak bond market performance [11]. Net Interest Margin (NIM) - NIM saw marginal improvement in 1Q25, with a limited year-over-year decline, outperforming peers [7]. - The NIM is expected to remain stable in 2Q25 and outperform peers throughout 2025 [7]. - Factors contributing to NIM improvement include accelerated loan growth and optimized liability structure [7]. Loans - Loan growth in 2025 is expected to exceed Rmb 370 billion, with a balanced growth pace throughout the year [7]. - New loan growth in 1Q25 was Rmb 250 billion, significantly faster than peers [7]. - The focus will be on five key areas: technology finance, supply chain finance, inclusive finance, cross-border finance, and wealth management [7]. Mortgages - Mortgage loans are expected to achieve positive growth in 2025, particularly in tier 1 and 2 cities [7]. - Both 1Q25 and 2Q25 saw positive mortgage growth, although less significant than in 4Q24 [7]. - The mortgage NPL ratio increased slightly in 1Q25 but remains under control [7]. Non-Interest Income - Non-interest income is targeted for positive growth in 2025, with future growth drivers identified [11]. - Fee income growth was negative in 1Q25 due to a decline in corporate underwriting income, while agency sales and custody income grew [11]. - Positive investment income growth in 1Q25 was attributed to opportunistic bond investment gains and growth in precious metals and FX derivatives trading income [11]. Asset Quality - The company aims to achieve a decline in the NPL ratio while maintaining a stable or higher NPL coverage ratio [11]. - The main asset quality risk lies in retail, with the NPL ratio for developer loans decreasing quarter-over-quarter in 1Q25 [11].

Investment Ratings - CICC-H: Buy [1] - FUTU: Neutral [1] - Hundsun: Buy [1] - East Money: Sell [2] Core Insights - Broker and fintech stocks have shown strong performance since May, with average returns of +27% for brokers and +9% for fintech, compared to +8% and +3% for the H/A share index [1] - Positive changes in Average Daily Trading Volume (ADTV) and turnover rates, along with growth in the Hong Kong market, are expected to drive earnings improvement [1][4] - Earnings forecasts for CICC, Hundsun, FUTU, GFS, and CITICS have been revised upwards by an average of 7% for 2025 [1][31] Summary by Sections Stock Selection Preferences - Preference for brokers with greater exposure to the Hong Kong market, such as CICC-H, while maintaining a Neutral rating on FUTU due to limited excess earnings growth [2] - For fintech, Hundsun is preferred over East Money due to fundamental factors, including recovery in non-core revenue supported by investments [2][26] Market Trends and Revisions - ADTV and turnover rates have recovered since June, primarily due to the easing of tariff shocks [4][12] - Continued increase in ETF market share is expected to impact East Money's profitability negatively [26] Earnings Forecasts - CICC's net profit forecast for 2025 has been raised by 13%, reflecting anticipated growth in Hong Kong investment banking revenue [17][22] - FUTU's earnings forecast has been slightly raised by 1% for 2025, driven by reduced customer acquisition costs [21][22] - Hundsun's net profit forecast for 2025 has been increased by 13% due to higher investment income [31] Valuation and Price Targets - CICC-H has a target price of HK$ 17.58 based on a 10x 2026E P/E [36] - FUTU's target price is set at US$ 111.79 based on an 18x 2026E P/E [36] - Hundsun's target price is Rmb 32.04, reflecting its market presence and sustainable customer relationships [46]

Investment Rating - The report assigns a Neutral rating to China Pacific Insurance (CPIC) with a 12-month price target of HK$23.50 for H-shares and Rmb26.50 for A-shares, indicating a downside of 6.0% and 24.0% respectively [9][13]. Core Insights - Strong sales momentum has been observed in the first quarter of FY25, continuing into the second quarter, with the mix of participating product sales increasing to over 30% by the end of May, compared to approximately 20% in 1Q25 [5]. - CPIC's agency headcount has stabilized year-to-date, with plans to increase recruitment starting in the second half of FY24, focusing on improving agent productivity [5]. - The bancassurance channel has shown strong growth in value of new business (VONB) for FY24, with expectations of similar momentum in FY25, particularly in tier 1-2 cities [5]. - Investment in equity and funds remains stable at around 12% of total investment assets, with a new money yield of approximately 2.5% [12]. Sales Momentum - The sales momentum in 1Q25 has continued into 2Q25, with a notable increase in the sales mix of participating products [5]. - The agency channel aims to promote health and protection products to improve margins and diversify the product mix [5]. - The bancassurance channel strategy focuses on tier 1-2 cities to access mid-to-high-end customers, maintaining key partnerships with banks [5]. Asset and Liability Management - CPIC's current effective duration gap is 3-4 years, with an asset duration of 11.6 years [12]. - The blended guaranteed cost of liability is around 2.8%, expected to be lower than 2.5% when including positive expense and risk margins [12]. Shareholders' Return - CPIC will maintain its annual payout policy and has not proposed a detailed plan for share buybacks, despite receiving authorization from the AGM [12]. - The company emphasizes total payout ratio over more frequent dividend payments, indicating a focus on long-term shareholder returns [12].

Investment Rating - The report does not explicitly provide an investment rating for the telecom sector or satellite broadband technology Core Insights - Satellite broadband technology has advanced significantly in the last 3-5 years, but it remains uncompetitive against traditional 4G/5G broadband due to cost and speed considerations [2] - The most common business model involves telecom companies partnering with satellite providers to enhance broadband coverage, often leading to premium pricing for consumers [2] - Future developments to watch include the use of mid-band spectrum to improve speed, the evolution of satellite-to-cell technology, and a projected decline in satellite costs by 20-50% [2][4] Technology Overview - Satellite constellations include Geostationary Earth Orbit (GEO), Medium Earth Orbit (MEO), and Low Earth Orbit (LEO), with varying altitudes affecting communication methods [3] - Current satellite broadband operates on low-band frequencies (400-800MHz), with potential to transition to mid-band frequencies to enhance latency and speed, potentially reaching up to 400Mbps [3] Cost Structure - Key cost components for satellite broadband include satellite manufacturing (US $250k-500k per LEO satellite), satellite launch costs, ground station expenses, and management/maintenance costs [4] - The manufacturing process is currently labor-intensive, but advancements are expected to reduce costs by 20-50% [4] Market Dynamics - Telecom companies can monetize satellite-to-cell services by bundling them into premium mobile plans, particularly in remote areas where reliability is crucial [6] - The deployment of these services is accelerating, driven by the need for emergency services and the limited availability of launch vehicles [6]

Investment Rating - The report assigns a "Sell" rating to New China Life Insurance (NCI) with a 12-month price target of HK$20.50 and Rmb28.50, indicating a downside potential of approximately 47.6% and 49.3% respectively [7][9]. Core Insights - Recent sales momentum has shifted towards participating products, which accounted for over half of new premiums in the agency channel during April and May. The company aims for a 30% participating product mix by FY25 [5][6]. - NCI's investment strategy includes maintaining a stable equity allocation of approximately 16% as of FY24, with plans to increase high dividend investments in FY25. The company is also focusing on long-duration bonds to enhance investment income [6][8]. Sales Momentum and NBV Outlook - Participating product sales have increased since April, moving away from traditional products. The company expects a gradual shift towards participating products over the next 2-3 years [5]. - NCI aims to achieve above-industry NBV growth in FY25, despite the lower margin nature of participating products compared to traditional ones [5][6]. Investment Allocation - NCI's new investments are projected to be around Rmb200-300 billion per year, with a new money yield of 2-3% for fixed income investments. The asset allocation strategy is primarily focused on fixed income (70-80%) and equity (20%) [8]. - The current cost of liability is above 3%, but NCI anticipates a decrease as new policies guarantee lower costs in 2024 and 2025 [8].

Investment Rating - The report assigns a "Buy" rating to Eastroc Beverage, Kweichow Moutai, Luzhou Laojiao, Nongfu Spring, Shanxi Xinghuacun Fen Wine, and Wuliangye Yibin [30]. Core Insights - The ongoing impact of China's anti-extravagance regulations is significantly affecting spirits consumption, particularly in the sub-premium segment, with estimated sell-through declines of approximately 30% to 50% in June [7][8]. - The intensity of future policy implementation will be crucial, especially during peak seasons like Mid-Autumn Festival and National Day, which could lead to further disruptions in retail demand if regulations remain strict [8]. - Brand performance is diverging, with Moutai expected to withstand regulatory pressures better due to its brand power and stable distributor confidence, while Wuliangye and Laojiao are facing more significant challenges [10][16]. Summary by Category Spirits - June sales experienced a short-term demand shock due to heightened scrutiny on civil servants' consumption, with sub-premium spirits being the most affected [7]. - The expert estimates that government and commercial-related banquets account for 30%-40% of sub-premium spirits' demand, while Moutai relies more on gifting, which constitutes over 50% of its demand [7]. - Prepayment for Moutai and Wuliangye is tracking at 56% and 50% of full-year targets, respectively, while Laojiao and Fen Wine are lagging at around 45% and 50% [9]. Brand Performance - Moutai is expected to maintain its growth target due to its strong brand power and stable distributor confidence, with a critical wholesale price level around Rmb1,800 for profitability [10]. - Wuliangye has seen a decline in wholesale prices, returning to levels last seen in 4Q24, leading to hesitance among distributors regarding prepayments [16]. - Laojiao faces greater pressure with a projected 50% decline in sell-through in Hunan Province, indicating a challenging environment for the brand [16]. Beverages - Nongfu Spring's sell-through for Oriental Leaf and bottled water has shown growth of approximately 33% year-on-year, while Tea Pie has seen a decline [16]. - Eastroc is projected to achieve 20%-25% sales growth in 2025, indicating strong retail demand for its products [16].

Investment Rating - The report maintains a cautious view on the European Oils sector despite raising the Brent oil price assumption due to higher geopolitical risk premium [1][2]. Core Insights - The report highlights differentiated growth stories, resilient cash returns, and asset monetization optionality as key themes for the sector [1]. - It emphasizes the importance of strong balance sheets and value crystallization through disposals, with specific companies like Saudi Aramco, Equinor, Shell, and Galp noted for their financial strength [3][6]. - The report identifies potential divestment opportunities among EU Big Oils, particularly for Repsol, BP, and ENI, which could significantly impact their equity value [69][70]. Summary by Sections Commodity Price Outlook - Brent oil prices dipped to the low $60s/bbl but recovered to approximately $75/bbl, while EU gas prices saw a significant drop quarter-over-quarter [2][30]. - The report adjusts the Brent price assumption for 2H25 to $65/bbl and maintains a negative outlook on oil despite a higher long-term price forecast [31][39]. Financial Performance and Cash Returns - The sector is expected to see a 20% quarter-over-quarter decrease in operating cash flow (OCF) due to higher seasonal tax payments, with average gearing projected to increase modestly [3][64]. - EU Big Oils are projected to offer a total cash return to shareholders of 11.7% in 2025, combining a 5.4% dividend yield and 6.3% from buybacks [6][26]. Growth and Capital Expenditure - Companies like Galp and Shell are highlighted for their differentiated cash flow growth and capital expenditure flexibility, with Galp expected to see over 20% production growth from the Bacalhau start-up in 2025 [7][48]. - TotalEnergies is forecasted to have the strongest production growth among the Big Oils, exceeding 3% in 2025, while Repsol and Shell also show promising growth profiles [49][55]. Divestment Strategies - Major EU Big Oils are adopting diverse divestment strategies to streamline portfolios, focusing on high-return projects [69]. - BP is noted for its significant divestment pipeline, targeting $20 billion in disposals by 2027, while Repsol has already announced substantial asset rotations in renewables [73][76].

Investment Rating - The report maintains a Buy rating for Tencent Music Entertainment Group (TME) and raises the 12-month price target to US$21.00 from a previous US$15.50, indicating an upside potential of 15.4% [1][33]. Core Insights - The report highlights a constructive outlook on TME's faster Super VIP (SVIP) penetration and the long-term potential of its non-subscription business, particularly in live events and artist sponsorships [1][15]. - TME's stock has shown significant growth, rallying 69% year-to-date compared to HSTech's 18% [1]. - The report emphasizes the company's strong growth visibility and pricing power, particularly in the context of ARPU (Average Revenue Per User) growth driven by SVIP membership [1][15]. Summary by Sections Revenue and Growth Projections - TME's revenue is projected to grow from RMB 28,401 million in 2024 to RMB 38,385 million by 2027, with a compound annual growth rate (CAGR) of approximately 10.4% [3][13]. - Non-subscription revenue is expected to outpace subscription revenue in the long run, currently accounting for 30% of total music revenue, with significant growth anticipated in live events and artist agency business [24][30]. ARPU and SVIP Penetration - The report raises ARPU estimates due to faster SVIP penetration, which is expected to increase from low-teen percentages to 19% by 2027, driven by enhanced SVIP privileges [16][18]. - Monthly ARPU for SVIP is forecasted to reach RMB 19.5 by 2025, reflecting a strong upward trend [20][21]. M&A and Strategic Initiatives - TME's recent strategic investments, including a 10% stake in SM Entertainment and a full acquisition of Ximalaya, are aimed at enhancing content offerings and expanding its footprint across the music industry value chain [7][30]. - The report notes that TME's strategy includes diversifying revenue streams through artist merchandising and live events, which aligns with its long-term vision [30][29]. Valuation Metrics - The report adjusts TME's valuation methodology to a sum-of-the-parts (SOTP) approach, reflecting the value of its minority stakes in companies like Spotify and Universal Music [15][33]. - The new price target implies a 22X P/E for 2026, justified by TME's strong growth visibility compared to peers in the Chinese internet sector [15][33].

Investment Rating - The report indicates a positive outlook for the industrial automation sector, particularly in the context of strong demand from the battery terminal market and equipment upgrades in various industries [1][3]. Core Insights - The production of industrial robots in China saw a year-on-year increase of 36% in May, although there was a month-on-month decline of 3% [3]. - The total demand for process automation in the next two years is projected to reach between RMB 10 billion to 20 billion, driven by equipment upgrades in coal chemical, power, nuclear power, and metallurgy sectors [1]. - The order trends for industrial automation companies showed mixed results, with some companies experiencing order growth while others faced deterioration [3]. Summary by Sections Industrial Robot Production - In May, industrial robot production increased by 36% year-on-year, but the month-on-month growth was down by 3%, contrasting with a historical average seasonal growth of 11% [3][33]. Equipment Exports - The export growth rate for major equipment has slowed, with injection molding machine exports growing by 25% in value and 28% in volume year-on-year in April, down from 45% in both metrics in March [3][26]. Order Trends - Among the 32 companies covered, 3 reported improved order trends in May, while 5 experienced a decline. Notably, Yiheda's orders grew due to strong demand from the lithium battery sector, despite a decline in consumer electronics [3][7]. Process Automation Market - The demand for process automation is expected to be supported by equipment upgrades starting in May, with a total projected demand of RMB 10 billion to 20 billion over the next two years [1][3]. Manufacturing and Economic Indicators - The manufacturing PMI for China was reported at 49.5 in May, indicating a slight improvement from 49.0 in April, while the PPI was down by 3.3% year-on-year [38][40].