ONTO/ Quanta Services/ Wharf

Industry Investment Rating - The report maintains an "Outperform" rating for Onto Innovation (ONTO US) and raises the target price by 6% [3] - Array Technologies (ARRY US) maintains an "Outperform" rating but cuts the target price by 6% due to project delays [3] - Bloom Energy (BE US) maintains an "Outperform" rating with strong execution and confidence in FY2024 guidance [4] - Quanta Services (PWR US) maintains an "Outperform" rating but cuts the target price by 6% [5] - Wharf Holdings (4 HK) is upgraded from "Underperform" to "Neutral" and raises the target price by 30% [7] Core Views - Onto Innovation is expected to benefit from GAA adoption and CoWoS/HBM expansion, with revenue forecasted to grow 31.9% YoY in 2025 [3] - Array Technologies faces significant project delays, leading to a 30-40% reduction in FY2024 guidance [3] - Bloom Energy has strong execution and expects larger business share in H2 2024, with data center-related power capacity agreements exceeding 300MW [4] - Quanta Services shows double-digit growth in multiple indicators in Q2 2024, driven by renewable generation and power grid infrastructure updates [5] - Wharf Holdings sees better recovery prospects in Hong Kong compared to Mainland China, with underlying profit up 9% YoY [7] Sector Summaries Technology - Onto Innovation's GAA orders are accelerating, with GAA expected to represent 50%/70% of advanced logic revenue in Q3/Q4 2024 [3] - Array Technologies' Q3 2024 revenue guidance is significantly below consensus due to project delays, with a backlog of over $2 billion [3] - Bloom Energy's Q2 2024 revenue exceeded expectations, driven by strong performance in product and service segments [4] Energy - Quanta Services' Electric Power Infrastructure segment performed well in Q2 2024, with a backlog of$17.2 billion, driven by AI adoption [5] - Bloom Energy continues to focus on domestic markets, with 83% of Q2 2024 revenue coming from domestic sales [5] Real Estate - Wharf Holdings' revenue from investment properties declined 5% YoY, with contracted sales in Mainland China dropping 48% YoY [7] - The company's gearing ratio remains low at 6.2%, with average interest costs declining from 4.9% in H1 2023 to 3.9% in H1 2024 [7] Financials - The report highlights the importance of building a financial system that supports technological innovation, with a focus on early-stage and long-term investments [11][12] - The Chinese government is accelerating the construction of a financial system that aligns with technological innovation, emphasizing the need for diversified financial services [11][12] Healthcare IT - Medical IT orders in Q2 2024 showed significant growth, with large orders frequently appearing, driven by policy support for healthcare informatization [16] - The "Public Medical Institutions Economic Management Year" activity is expected to further boost medical IT construction [16] Low-altitude Economy - Local governments in China are actively promoting the low-altitude economy, with Shenzhen aiming to build over 1,000 low-altitude aircraft takeoff and landing points by the end of 2025 [15] - Shanghai plans to develop a low-altitude economy industrial system, with a core industry scale exceeding 50 billion yuan by 2027 [15]