Investment Rating - The report does not explicitly state an investment rating for the industry or specific companies within it Core Insights - Capital expenditure (Capex) for AI infrastructure is expected to remain strong, driven by tier-2 clouds and large enterprises diversifying their spending on data center equipment [2][3] - The transition to 800G networking is anticipated to dominate through 2026, with Ethernet potentially scaling up in networking opportunities [2][5] - Data center equipment spending is diversifying across more cloud players, with a forecasted growth rate of approximately 18% CAGR from 2024 to 2029, reaching around $925 billion [3] Summary by Sections Data Center Equipment Spending - Cloud Provider capex is projected to grow significantly, with more cloud players expected to spend over $5 billion annually, enhancing vendor customer base diversity [3] - Hyperscalers are likely to continue favoring best-of-breed networking providers, while tier-2 cloud providers will prefer full-stack solutions [3] Networking Trends - The transition to 800G is ongoing, with AI players at various stages, and the revenue recognition timeline for networking vendors has lengthened from 1-2 quarters to 2-4 quarters [5] - Vendor diversity for switching silicon is becoming increasingly important for AI workloads, with Cisco and Juniper expected to gain market share [5] Market Dynamics - The report highlights relative strength in Asia and Middle Eastern sovereign AI initiatives, indicating a robust market for data center equipment [3] - Concerns regarding data center switching market share, particularly for Arista, are viewed as somewhat exaggerated [2]

Investment Rating - The report maintains a "Buy" rating for Giant Biogene Holding (2367.HK) with a 12-month price target of HK$71.00, indicating a potential upside of 25.1% from the current price of HK$56.75 [1][15][34]. Core Insights - Giant Biogene is expected to achieve a year-on-year sales growth of 23% to RMB3,116 million and a net income growth of 20% to RMB1,183 million for 1H25, with an adjusted net profit of RMB1,205 million, reflecting a 17% increase year-on-year when excluding ESOP expenses [1][18][20]. - The company is positioned to benefit from the upcycle in China's functional skincare market, leveraging its strengths in recombinant collagen and expanding its online presence through key brands Comfy and Collgene [37][38]. Summary by Sections Financial Performance - Revenue forecasts for 2025-2027 have been revised upwards by 0-2% due to more resilient margins and faster sales recovery than previously estimated [15][34]. - The expected gross profit margin (GPM), operating profit margin (OPM), and net profit margin (NPM) for 1H25 are projected at 81.7%, 41.3%, and 38.0% respectively [25][26]. Market Trends - Online gross merchandise volume (GMV) has shown a recovery trajectory, increasing by 58% year-on-year on Douyin as of July, significantly outperforming peers [2][31]. - The report highlights a minimal contribution from KOL livestreaming, which accounted for approximately 10% of sales on Douyin in July, down from 20% in the same period last year [2]. Brand Performance - The Comfy brand is anticipated to deliver 21% growth in online sales and 16% growth in offline sales for 1H25, while the Collgene brand is expected to grow by 70% online but decline by 5% offline [23][28]. - The report emphasizes the company's strategies to revitalize brand momentum, particularly in preparation for the Double 11 shopping festival [2].

Investment Rating - The report maintains a "Buy" rating on GCE, EMC, and TUC, with target prices revised upwards to NT$420, NT$1,080, and NT$330 respectively, reflecting a 13-28% upward revision in earnings estimates for 2026-2027 [12][20][76]. Core Insights - The AI server CCL/PCB total addressable market (TAM) is projected to grow significantly, reaching US$2.3 billion for CCL and US$5.3 billion for PCB in 2025, and expanding to US$8 billion and US$17.4 billion by 2027, indicating a compound annual growth rate (CAGR) of 88% and 80% respectively from 2024 to 2027 [14][25][33]. - The demand for high-end technology is expected to increase, benefiting first-tier suppliers like GCE, EMC, and TUC, as they are likely to maintain high utilization rates and improve their product mix due to the inability of first-tier suppliers to meet solid client demand [2][32][40]. - The report anticipates that the market share of EMC and TUC in the ASIC AI server CCL market will rise from 42% in 2024 to 85% by 2027, driven by proactive capacity expansion and increasing M8 grade CCL penetration [3][37][40]. Summary by Sections AI Server Market Outlook - The overall AI server CCL TAM is expected to account for approximately 71% of EMC's total revenue in 2025, increasing to 230% by 2027, while for GCE, the AI server PCB TAM will represent 230% of its total revenue in 2025 and 500% in 2027 [2][32]. - The report highlights that the ASIC AI server CCL/PCB TAM is projected to reach US$3.8 billion and US$9.1 billion in 2027, with GCE and EMC expected to gain significant market share [37][46]. Pricing and Profitability - There is a favorable outlook for average selling price (ASP) expansion for Taiwan CCL/PCB suppliers, with expectations of ASP increases of 19%, 11%, and 10% for GCE, EMC, and TUC respectively from 2024 to 2027 [8][64]. - The gross margins (GM) for GCE, EMC, and TUC are projected to improve significantly, with ASIC AI server average GM expected to be over 45% compared to the companies' average levels [63][74]. Capacity and Supply Dynamics - The report notes that the high-end CCL industry is expected to grow at a CAGR of 40% from 2024 to 2027, driven by increasing demand for M7+ grade CCL, while capacity expansion for high-end CCL is only expected to increase by 21% during the same period, leading to a supply-demand gap [15][26][58]. - The tightening supply conditions for high-end CCL and high layer count PCB are anticipated to lead to longer lead times and potential pricing hikes, benefiting key players in the industry [54][57].

Investment Rating - The report maintains a cautious outlook for oil prices, expecting a decline by 2026, while noting potential upside risks for 2025H2 [65]. Core Insights - Brent oil price has increased over 10% to $70 due to a shift in market focus from recession risks to supply disruption risks, low OECD stocks, and declining perceived spare capacity [8][10]. - The 2025H2 Brent price forecast has been raised by $5 to $66, while the 2026 forecast remains unchanged at $56 for Brent and $52 for WTI, reflecting a balance between higher long-dated prices and a wider surplus [19][34]. - The normalization of spare capacity is expected to lead to a rebound in prices after 2026, driven by low oil reserve life, declining capital expenditures, and anticipated demand growth over the next decade [61][62]. Summary by Sections Price Forecasts - The Brent price forecast for 2025H2 is increased to $66, and WTI is raised to $63, while the 2026 averages are maintained at $56 for Brent and $52 for WTI [19][34]. - The report anticipates a 1.0 million barrels per day (mb/d) surplus in 2025 and a wider 1.7 mb/d surplus in 2026, influenced by OPEC+ production adjustments [41][68]. Supply and Demand Dynamics - Global oil demand is projected to grow by 0.7 mb/d in 2025 and 0.9 mb/d in 2026, with notable increases in non-OECD demand [41][68]. - OECD commercial stocks are expected to remain lower than anticipated, impacting short-term price dynamics more than global stocks [21][22]. Market Risks and Scenarios - Price risks are more balanced, with potential upside scenarios including reduced Iranian supply, which could push Brent prices to a peak of $90 [49][53]. - Conversely, a full unwind of OPEC cuts could lead to Brent prices falling to around $40 in a recession scenario [49][54]. Long-Term Outlook - The report expresses confidence in a price rebound post-2026 due to tightening supply drivers, including low oil reserve life and a lack of new non-OPEC projects [61][62]. - The normalization in spare capacity is expected to support higher prices later in the decade, despite short-term excess supply [60][61].

Investment Rating - The report maintains a Neutral rating for Haidilao International Holding with a 12-month price target of HK$15.30, implying an upside potential of 8.4% from the current price of HK$14.12 [1][2][26]. Core Insights - The earnings forecasts for Haidilao have been revised down by 13%-16% for 2025-27, primarily due to lower-than-expected performance in 1H25, slower store expansion, and the company's strategy to offer better value to customers [2][23][27]. - The company is expected to experience a revenue decline of 4% year-on-year in 1H25, driven by weaker table turn performance and a decrease in party size, although a slight improvement in average selling price (ASP) may provide some offset [20][21]. - Despite the challenges in 1H25, the second half is anticipated to show a recovery in same-store sales growth (SSSG) due to an easier comparison base, which could lead to slight positive growth in average sales per store [2][22]. Summary by Sections Earnings Forecasts - The report projects a revenue of Rmb20.6 billion for 1H25, reflecting a 4% decline year-on-year, with restaurant revenue expected to drop by 6% [20][21]. - For 2025, total revenue is estimated at Rmb43.09 billion, down from the previous estimate of Rmb44.62 billion, marking a 3.4% reduction [25]. Margin Analysis - The gross profit margin (GPM) is expected to contract to 60.7% in 1H25, down from 61.0% in 1H24, due to increased food cost ratios and operating deleverage [1][21]. - Operating profit margin (OPM) is projected to decrease by 0.8 percentage points year-on-year to 11.8% [21]. Store Expansion and Performance - The company is expected to close 8 net stores in 1H25, indicating a cautious approach to expansion amid fluid consumption trends [20]. - The total store count for Haidilao is projected to decrease by 30 stores in 2025, with a total of 1,415 stores expected [25]. Valuation Metrics - The report provides a valuation of 16X for the 2025 estimated price-to-earnings (P/E) ratio, with a projected dividend yield of 6% [2][13]. - The adjusted EBITDA for 2025 is forecasted at Rmb8,063.4 million, reflecting a decline from previous estimates [25]. Key Focus Areas for Investors - Investors are advised to monitor the trends in table turn performance, store expansion plans, margin outlook, and the impact of delivery subsidies on overall performance [22][23].

Investment Rating - The report reinstates CATL-A and initiates CATL-H at a Buy rating [5] Core Insights - CATL is projected to achieve a 25% EPS CAGR from 2024 to 2030, driven by strong volume growth, product mix improvement, and unit profit expansion [5] - The blended unit gross profit (GP) is expected to improve from Rmb 152/kWh in 2025 to Rmb 169/kWh in 2030, with a detailed analysis of unit GP by geography and product [5] - CATL is anticipated to maintain a global market share of approximately 40% from 2025 to 2030, supported by supply consolidation in the Chinese market and strong positioning in Europe and the Rest of World (RoW) [5] - The launch of new EV models, such as Xiaomi YU7, is expected to boost CATL's Qilin battery penetration, contributing significantly to sales volume growth [5] - The upcoming 2Q25 results are expected to focus on unit GP, CAPEX, and the US market, with a projected blended battery unit GP of Rmb 150/kWh [5] Summary by Sections Unit GP Expansion - CATL's unit GP is projected to rise from Rmb 152/kWh in 2025E to Rmb 169/kWh in 2030E, indicating a path for unit GP expansion [5] Market Share - CATL is expected to maintain a global market share of around 40% through 2025E-2030E, aided by consolidation in the domestic market and strong international positioning [5] Product Launch Impact - The introduction of new EV models, particularly from Xiaomi, is likely to enhance CATL's battery sales, with significant contributions from the Qilin battery [5] Financial Projections - The report forecasts a 25% EPS CAGR for CATL from 2024 to 2030, driven by robust growth and improved product mix [5]

Investment Rating - The report maintains a "Buy" rating for JD Health International (6618.HK) [1][21]. Core Insights - JD Health's share price has increased by 60% year-to-date, outperforming the Hang Seng Index and peers [1]. - The company is focusing on on-demand initiatives, market share growth, and disciplined capital allocation as key areas of interest [1][20]. - JD Health is expected to achieve 18% year-on-year topline growth for 2Q25, with a stable profit margin despite increased investments [20][24]. Summary by Sections On-Demand Initiatives - JD Health is rapidly expanding its preposition warehouses in tier-1 cities, targeting around 200 warehouses by the end of FY25 [2]. - The competition in the on-demand space remains disciplined, with JD Health focusing on quality and variety rather than aggressive sales volume increases [2][19]. - Higher investments and promotions are anticipated in the second half of FY25 to drive online-to-offline (O2O) growth [2][28]. Market Share and Growth - JD Health is gaining market share in the online drug category, with strong user engagement expected to drive traffic and transactions [3][19]. - The competitive landscape is evolving, with ongoing debates about B2C versus O2O competition in the pharmaceutical sector [3][19]. - The company is projected to outperform peers, with a diverging sales growth trend compared to competitors [21][27]. Financial Projections - Revenue forecasts for JD Health are set at RMB 58,159.9 million for FY24, increasing to RMB 88,638.8 million by FY27 [6][17]. - EBITDA is expected to grow significantly, with projections of RMB 1,684.2 million for FY24 and RMB 3,601.3 million for FY27 [6][17]. - The report anticipates a net profit of RMB 4,161.8 million for FY24, increasing to RMB 6,608.1 million by FY27 [17][39]. Capital Allocation - JD Health has over RMB 50 billion in net cash, representing approximately 50% of its market capitalization, which will be a focus in upcoming results [20][21]. - The company is expected to maintain a disciplined spending pattern while exploring opportunities for investments and shareholder returns [21][39].

Investment Rating - The report indicates a negative trend in the property market, with a weighted average property price decline of 2.5% month-over-month annualized in June, following a decline of 2.3% in May [2][7]. Core Insights - The National Bureau of Statistics (NBS) data for 70 cities shows a broad-based decline in property prices across all city tiers, with year-on-year changes reflecting a decrease of 3.1% in June compared to 3.5% in May [2][7]. - Despite easing policies, the property market continues to face challenges, particularly in lower-tier cities, which are experiencing stronger headwinds due to oversupply issues and weaker growth fundamentals [8][7]. - The report highlights that secondary market prices have declined by 5%-15% over the past year, indicating a more severe downturn compared to the primary market [7][8]. Summary by Sections Price Changes - The weighted average property price in the primary market fell by 2.5% month-over-month annualized in June, with Tier-1 and Tier-2 cities experiencing declines of 1.3% and 2.1% respectively [2][7]. - The decline in Tier-3 cities was noted at 3.5% month-over-month annualized, consistent with the previous month [7]. Market Dynamics - The report mentions a 4% year-on-year decline in new home transaction volume across 30 cities in June, with inventory months in major cities increasing slightly to 26.0 in July from 25.5 in June, primarily driven by Tier-2 cities [8][7]. - Policymakers are attempting to stabilize the property market through various measures, including potential cuts to mortgage rates and support for urban village renovation programs [8][7]. Future Outlook - The report anticipates incremental housing easing measures to stabilize home prices, although a repeat of the previous shantytown redevelopment program is deemed unlikely [8][7].

Investment Rating - The report does not explicitly state an overall investment rating for the industry but highlights specific companies with "Buy" and "Sell" recommendations [49][50]. Core Insights - The primary market is experiencing a continued decline, with new home sales volume down 30% week-over-week and 26% year-over-year, while tier-3 and Central & Western cities are outperforming [5][9]. - Secondary market transactions are showing a slight decline, with average sales down 2% week-over-week and 3% year-over-year, indicating negative price appreciation expectations from agents and homeowners [26][28]. - The focus on urban renewal policies is expected to positively impact the market, particularly through demand-side stimulus measures such as urban village redevelopment [2]. Summary by Sections Market Performance - New homes sales volume decreased by 30% week-over-week and 26% year-over-year, with tier-3 and Central & Western cities outperforming [5]. - Secondary transactions were down 2% week-over-week and 3% year-over-year, with negative price expectations from agents and homeowners [26]. - Year-to-date, primary gross floor area (GFA) sold is down 1% year-over-year, while secondary GFA sold is up 16% year-over-year [8][28]. Inventory and Completions - Inventory balance decreased by 0.1% week-over-week and 3.9% from the end of 2024, with inventory months at 26.0 [36]. - Completions are expected to decline by mid-to-high teens year-over-year for June 2025, with a projected 10% decline for the full year [41]. Valuation and Developer Performance - Offshore developers saw an average share price increase of 6% week-over-week, outperforming the MSCI China index [49]. - Onshore developers averaged a 2% increase week-over-week, with specific companies like China Jinmao and Longfor receiving "Buy" ratings [49][50]. - The average price-to-book (P/B) ratio for offshore and onshore coverage is at 0.5X for 2025E, indicating a significant discount to net asset value (NAV) [49].

Investment Rating - The investment rating for Eoptolink is "Buy" with an updated 12-month target price (TP) of Rmb195, increased from Rmb177 [1][10][17]. Core Views - Eoptolink is positioned to benefit from the ramp-up of 400G/800G optical transceivers, driven by key customers' deployments in AI infrastructure expected in 2025 [17]. - The company's strong second-quarter performance, with a net profit of Rmb2.38 billion, represents a 340% year-over-year increase and a 51% quarter-over-quarter increase, exceeding expectations [1][2]. - Eoptolink's valuation is currently at a discount of approximately 20% compared to its larger peer Innolight, which is expected to converge as both companies share similar net profit growth outlooks [2][8]. Summary by Sections Financial Performance - Eoptolink's 2Q net profit was Rmb2.38 billion, significantly above the guidance range of Rmb2.13 billion to Rmb2.63 billion, driven by strong 800G shipments and margin expansion [1]. - Revenue estimates for 2025-2027 have been revised upwards by 6% to 14%, and net profit estimates have been increased by 9% to 20% following the better-than-expected 2Q results [10][11]. Market Position - Eoptolink is a key player in the optical transceiver market in China, with products that include up to 1.6T optical transceivers [17]. - The stock has underperformed relative to peers recently, but the strong profit beat is expected to act as a catalyst for share price recovery [3][2]. Valuation Metrics - The current 12-month forward P/E for Eoptolink is seen as attractive in a historical context, with expectations for further convergence in valuation with Innolight [8][10]. - The updated target price of Rmb195 is based on a 17x multiple of the 2026 estimated earnings [10][17].