Roborock(SH:688169) Zhong Guo Yin Hang·2024-07-01 04:37Investment Ratings - TSMC: Buy with a target price of NT$1,160/US$218, expecting 24% YoY revenue growth for 2024 [2] - China Education: Buy for EDU and TAL, with a robust revenue and profitability outlook driven by favorable market dynamics [3] - Yum China: Buy, forecasting +3.5% YoY sales growth despite SSSG pressure [3] - Roborock: Buy, with robust sales momentum and positive surprises from US offline channel expansion [3] - China Autos: Buy for BYD, Li Auto, and XPeng, monitoring potential inflection points in the industry [3] - Japan Industrial Electronics: Buy for Hitachi and Fujikura, focusing on growth and financial strategies [4] Core Insights - The Third Plenary Session is expected to focus on gradual reforms rather than major structural changes, with an emphasis on fiscal and tax reforms [2] - TSMC's revenue growth is supported by pricing strategies and AI cycle visibility, with expectations of a low single-digit price hike for advanced nodes starting in 2025 [2] - The China education sector is expected to maintain a stable regulatory environment, supporting the profitability outlook for key players [3] - Yum China's store expansion remains solid, with expectations of 400 net store openings in 2Q24 despite margin pressures [3] - Roborock's expansion into US offline channels is projected to significantly contribute to revenue growth, with a total expected growth of over 70% in 2024 [3] - The China auto industry is still above cash cost for many companies, indicating potential for profitability recovery despite some conservative outlooks [3] - Japan's industrial electronics sector is focusing on growth strategies, with Hitachi and Fujikura highlighted for their comprehensive approaches [4] Summary by Sections Third Plenary Session Preview - The focus will be on gradual reforms in the "post-property era," with expectations for fiscal and tax reforms to be signaled [2] TSMC Earnings Preview - TSMC is expected to maintain its full-year guidance with a revenue growth forecast of 24% YoY for 2024, despite a projected decline in gross margin due to N3 ramp dilution [2] China Education Sector - The sector is expected to see robust revenue and profitability driven by favorable supply-demand dynamics and a stable regulatory environment [3] Yum China Earnings Preview - Forecasts indicate a +3.5% YoY sales growth, with KFC and Pizza Hut facing SSSG pressures but maintaining a solid pace of store expansion [3] Roborock Sales Momentum - The company has exceeded expectations in US offline channel expansion, contributing significantly to its projected revenue growth [3] China Autos Analysis - The report indicates that while some companies are cutting capacity, many remain above cash cost and optimistic about profitability recovery [3] Japan Industrial Electronics Insights - Companies like Hitachi and Fujikura are highlighted for their effective growth and financial strategies, despite challenges faced by others in the sector [4]