Investment Rating - The report assigns an "Overweight" (OW) rating to Huaming Equipment with a price target of Rmb19.00 by December 2025 [3][19]. Core Insights - Huaming Equipment is recognized as an under-appreciated player in the global transformer market, currently trading at a valuation discount of over 10% compared to peers [2][4]. - The company has a strong market position with over 60% market share in tap changers for transformers in China and has made gradual gains globally, achieving over 15% market share [19]. - The report highlights the favorable competitive landscape for Huaming, with only two major overseas competitors and a gross margin exceeding 60% [4][19]. - Continued strength in transformer demand and positive export data from Asia are expected to bolster investor confidence in Huaming's overseas momentum [4][19]. Summary by Sections Recent Performance - Huaming has outperformed its peers and the index by over 10% in the past month, while peers have averaged a decline of 1% [2][4]. - The report notes that the earnings cutting cycle is likely over, supported by strong first-quarter results and the announcement of a share incentive scheme [4]. Market Dynamics - The transformer market is experiencing a supply tightness, benefiting companies like Huaming, which is positioned to capitalize on this trend [4]. - The report anticipates that Huaming's overseas revenue growth will accelerate, particularly with high voltage transformer capacity expansion expected to begin in 2026 [4][19]. Valuation - The price target of Rmb19.00 is based on a 21x 2025E-26E P/E ratio, which aligns with the average valuation of regional transformer companies [20]. - The report emphasizes that Huaming's valuation discount to peers is unjustified given its growth prospects and market position [4][19].

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 maintains a "Hold" rating for both H and A shares of Dongfang Electric, with target prices raised to HKD12.30 and RMB19.30 respectively [5][9]. Core Insights - Dongfang Electric-H has significantly outperformed Dongfang Electric-A, with a year-to-date increase of 50% compared to 6% for A shares, attributed to improved sentiment towards global power equipment, particularly nuclear [2][9]. - The report indicates that the current share price has largely priced in the positive outlook for global nuclear investment, suggesting limited upside potential without meaningful earnings growth [2][5]. - The company anticipates a steady increase in revenue from nuclear equipment, projecting RMB5 billion in 2025, RMB6 billion in 2026, and RMB7 billion in 2027, which will account for 11% of total revenue by 2027 [3][22]. Summary by Sections Nuclear Power - Global nuclear investment is gaining momentum, with China expected to approve the construction of 10 nuclear plants annually from 2026 to 2030, leading to a projected revenue increase from nuclear equipment [3][22]. - The gross profit margin for nuclear equipment is expected to be between 18-20% from 2025 to 2027, down from previous estimates of 20-30% [3][22]. Coal Power - Orders for coal power equipment are expected to peak in 2026, with a decline in tender sizes from 100GW in 2023 to an anticipated average of 50GW from 2026 to 2030 [4][22]. - The company expects thermal equipment margins to gradually recover, reaching approximately 20% in 2025 [22]. Financial Estimates - Earnings estimates for 2025 have been cut by 9%, while estimates for 2026 and 2027 have been raised by 6% and 14% respectively, reflecting the latest order cycle for thermal and nuclear power equipment [5][25]. - The report highlights that the earnings estimates for 2025 are 12% below consensus, indicating a potentially overly optimistic market outlook [5][9]. Market Performance - The H/A discount for Dongfang Electric has reached a 10-year low of 26%, reflecting the strong performance of H shares compared to A shares [2][5]. - The report notes that the buoyant expectations for global nuclear investment have likely been factored into the recent rally in share prices, suggesting a cautious outlook moving forward [5][9].

Flash | 19 Jun 2025 10:02:24 ET │ 12 pages Beijing Roborock (688169.SS) Model Update CITI'S TAKE We update our model to reflect its better-than-expected sales and weaker-than-expected NP in 1Q25. We have lifted our sales forecasts by 33%/44% and trimmed NP forecasts by 20%/10% in 25E/26E, to reflect Roborock's plans to accelerate investment into its branding and new categories in 25E. After our earnings revision, we expect its 25E topline to surge 53% YoY and 25E NP to edge up 2% YoY. While we expect NP to ...

Investment Rating - The report maintains a "Buy" rating for Gigadevice Semiconductor and raises the target price to RMB149.50 from RMB140.20, implying approximately 24% upside from the current share price of RMB121.01 [5][12][36]. Core Insights - The report highlights favorable supply-demand dynamics for DDR4, which are expected to continue, benefiting Gigadevice's specialty DRAM business [3][12]. - The 3D DRAM business is progressing well and is anticipated to start generating revenue in the second half of 2025, particularly in mid-end smartphones [4][12]. - The report introduces 2027 estimates, projecting a revenue of RMB14,611 million and a net profit of RMB2,659 million [31]. Summary by Sections Investment Rating - Maintain "Buy" rating and raise target price to RMB149.50 from RMB140.20 [5][12][36]. Financial Performance - The report lowers 2025-26 EPS estimates by 2% and 1% respectively, while still being above consensus by 6% for 2025 [31][32]. - Revenue estimates for 2025-26 are raised by 22% and 28% respectively, driven by expected ASP increases due to supply constraints [33][34]. Market Dynamics - Anticipated 35% increase in specialty DRAM ASP in 2025 due to supply-demand disparity as major suppliers phase out DDR4 products [3][12]. - The total addressable market (TAM) for other DDR4 suppliers is projected to be RMB12 billion, RMB45 billion, and RMB46 billion for 2025-27 [3][12]. Growth Drivers - The 3D DRAM business is expected to be a significant growth engine, with initial revenue generation anticipated in 2H25 [4][12]. - The report emphasizes the stable relationship with CXMT, which will support Gigadevice's capacity expansion in DDR4 [3][12]. Valuation Metrics - The report estimates a net profit CAGR of 34% from 2024-27, adopting a target PE multiple of 52.3x, which is 16% below the historical average [5][36].

Investment Rating - The industry investment rating is Attractive [4]. Core Insights - Solar glass prices have dropped below cash cost levels, with reported prices in June for 2.0mm products at Rmb12-12.5/sqm and actual executed prices ranging from Rmb10.8-11/sqm, indicating industry-wide losses at cash levels [2][7]. - The rebound in solar glass prices in March and April led to the initiation of 11.3kt/d new capacities and the resumption of one 850/t line in the past three months, with the industry operating capacity at approximately 100kt/d, supporting around 54GW monthly production [7]. Summary by Sections Price Trends - Solar glass prices rebounded in March and April to Rmb14-14.5/sqm due to better-than-expected demand, but have since fallen to Rmb12-12.5/sqm in June, with actual prices for smaller players even lower [2][7]. Production Capacity - Approximately 97% of the operating capacity commenced production in 2021 and later, making it difficult to suspend production quickly. There are still around 10kt/d of smaller lines that may exit the market first due to higher costs [3]. Market Dynamics - The lower profit margins are expected to trigger production line blockages or suspensions, with companies like CNBM, Flat Glass, IRICO, and Almaden planning maintenance in the near term [3].

Investment Rating - The industry investment rating is "In-Line" [4]. Core Insights - The report indicates solid growth in the industrial robot sector, with China's industrial robot production growing by 36% year-on-year in May, up from 34% in the previous four months [7]. - Global players such as ABB, Fanuc, Kuka, and Yamaha saw a combined shipment increase of 3% year-on-year in May, compared to a 2% increase in the first four months of 2025 [7]. - The growth is primarily driven by demand from the automotive sector, consumer electronics (3C), and exports, with expectations of intense competition and sustained market share gains for domestic brands like Estun and Inovance [7]. Summary by Sections Industry Overview - The industrial robot operations in China are experiencing robust growth, with significant contributions from various sectors [7]. Production and Shipment Data - China's industrial robot production increased by 36% year-on-year in May, supported by strong demand from the automotive and consumer electronics sectors [7]. - The report highlights that Fanuc's inventory levels have normalized, allowing for continuous shipments to key customers such as Li Auto and Xiaomi [7]. Market Dynamics - The competition in the industrial robot market remains intense, with domestic brands expected to maintain their market share gains [7].

Investment Rating - The industry view for China Utilities is rated as Attractive [3] Core Insights - The report highlights a stable pricing environment for solar products, with polysilicon prices averaging Rmb35/kg, remaining flat week-over-week, while granular polysilicon prices decreased by 1.4% week-over-week [5] - The report notes a downward trend in prices for N-type wafers and TOPCon cells, with decreases of up to 3.1% week-over-week [5] - Year-over-year price changes show significant declines across various solar products, with polysilicon prices down 10.3%, and TOPCon bifacial modules down 20.9% [2][5] Summary by Sections Price Summary - Polysilicon prices averaged Rmb35/kg, with a weekly average of Rmb19.00/kg for polysilicon in USD terms [2] - Wafer prices for 182mm and 210mm were Rmb0.93 and Rmb1.27 respectively, with a year-over-year decline of 15.5% and 23.0% [2] - The average price for TOPCon bifacial modules was Rmb0.68, reflecting a year-over-year decrease of 20.9% [2] Price Changes - The report indicates that solar-grade EVA resin prices decreased by 11.3% year-over-year, while POE resin prices remained stable [2][5] - The price of solar films showed a year-over-year decline of 15.0% for transparent EVA film and 27.3% for POE film [2] Company Ratings - CGN Power Co., Ltd is rated Overweight with a price of HK$2.73 as of June 18, 2025 [59] - China Gas Holdings is rated Equal-weight with a price of HK$7.60 [59] - LONGi Green Energy Technology Co Ltd is rated Overweight with a price of Rmb14.59 [59]

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].

Investment Rating - The report suggests a cautious approach towards various sectors due to the impact of tariffs on GDP and corporate earnings, particularly in Europe and Japan [1][4][12]. Core Insights - Tariffs have a varied impact on GDP and corporate earnings across different regions, with Europe experiencing a GDP impact of approximately 0.2%-0.4% and Japan facing a potential drag of 0.9% on GDP growth for the fiscal year 2025 [1][4][12]. - Most corporate earnings are affected by tariffs in the range of 5%-15%, with companies having high profit margins able to pass on costs through price increases [1][5][8]. - The consumer sector, particularly sportswear, can absorb tariff costs through price hikes, while large appliances are less affected due to local production [1][8][50]. - The technology sector, including companies like Apple and Amazon, faces significant challenges, with potential profit impacts exceeding double digits for Amazon [1][8][42]. Summary by Sections Economic Impact - The static assessment indicates that tariffs will reduce Japan's GDP growth by 0.9% and EPS growth by 5%-7% in 2025 [3][12]. - The EU's new tariffs could suppress GDP growth by 0.2-0.4 percentage points, with additional uncertainty potentially reducing growth by another 0.2 percentage points [1][10]. Sector-Specific Impacts - In the consumer sector, sports footwear can offset tariff costs with price increases of 8%-10%, while luxury goods may require a 3%-5% price increase to maintain margins [1][8][50]. - The technology sector is particularly vulnerable, with Apple facing an 8%-10% negative impact and Amazon potentially experiencing double-digit profit declines [1][8][42]. - The chemical industry shows resilience due to global operations and high local self-sufficiency, although supply chain vulnerabilities remain a concern [29]. Corporate Strategies - Companies with diversified revenue sources, such as those with significant overseas income, are less affected by U.S. tariffs [5][8]. - Firms in the industrial sector are adapting by adjusting pricing strategies to mitigate the impact of tariffs on profit margins [32][36]. - The report highlights the importance of local production and supply chain management in mitigating tariff impacts, particularly for companies in the electrical equipment sector [35][36]. Market Dynamics - The report notes that the European market is currently underweight in terms of investment, with capital inflows remaining low despite the challenges posed by tariffs [11]. - The agricultural sector is facing increased tariffs from China, but the overall impact on U.S. agricultural exports has been limited due to reduced reliance on U.S. soybeans [27][28]. Future Outlook - The report emphasizes the need for companies to remain agile in response to ongoing tariff negotiations and potential retaliatory measures from other countries [6][7]. - Companies in the semiconductor and hardware sectors are advised to closely monitor tariff developments, as they could significantly impact production costs and pricing strategies [42][45].