Investment Rating - The report gives a "Strong Buy" investment rating for the company [3]. Core Viewpoints - The company is a leading provider of digital transformation services with a comprehensive stack of capabilities, including consulting, R&D, delivery, integration, operation, decision-making, and service [12][8]. - The company has a significant market share in the telecom BOSS software market, holding 35.5% domestically and ranking second globally [8]. - The AI large model delivery business is gaining momentum, with over 30 signed orders for 2024, showcasing the company's ability to leverage AI in high-value scenarios [8]. - The company is focusing on enhancing its data-driven operations and has seen substantial growth in its smart operation business across various industries [8]. - Future profit forecasts indicate a rebound in net profit from 2025 onwards, with expected growth rates of 56% in 2026 and 16% in 2027 [8]. Financial Data and Valuation - Total revenue for 2023 is projected at 7,913 million, with a year-on-year growth of 2% [2]. - The company expects a decline in revenue in 2024 to 6,646 million, a decrease of 16% [2]. - Net profit for 2023 is estimated at 533 million, reflecting a significant drop of 36% compared to the previous year [2]. - The company’s PE ratio is projected to decrease from 14.9 in 2023 to 9.7 by 2027, indicating an improving valuation over time [2]. Business Overview - The company operates in various sectors, including telecommunications, government, finance, energy, and transportation, providing end-to-end digital transformation services [12][13]. - The BSS business accounts for 60.9% of the revenue, while the OSS and smart operation businesses contribute 12.3% and 16.6%, respectively [13]. - The company has a strong focus on vertical industry digitalization, particularly in finance, energy, and transportation [13][14]. Historical Development - The company has evolved from a telecom software leader to a digital transformation pioneer since its establishment in 1993 [23]. - Significant milestones include its listing on the Hong Kong Stock Exchange in 2018 and the acquisition of iResearch Consulting in 2022, enhancing its digital capabilities [24][23]. Governance Structure - The company has a concentrated and stable shareholding structure, with AsiaInfo Security becoming the largest shareholder in 2024 [25]. - The governance framework is designed to ensure long-term stability and strategic alignment with its parent company [25].

Investment Rating - The report maintains a "Buy" rating for Meituan (3690.HK) [1][4][6] Core Views - Meituan's long-term ecological investment priority is emphasized over short-term profit performance, with a 1% and 13% beat on revenue and adjusted profit expectations respectively for Q1 [1][2] - The core local business operating profit increased by 39% year-on-year, surpassing market expectations by 10% [1][2] - Active user and merchant numbers reached new highs, indicating strong growth potential [1][2] Financial Performance Summary - Q1 total revenue reached 86.6 billion yuan, a year-on-year increase of 18%, slightly exceeding expectations [2] - Adjusted net profit for Q1 was 10.9 billion yuan, up 46% year-on-year, also exceeding expectations [2] - Core local business revenue grew by 18% year-on-year, with operating profit margin improving by 3 percentage points to 21% [2][4] Business Segment Analysis - The core local business showed robust growth with delivery, commission, and online marketing revenues increasing by 22%, 20%, and 15% respectively [3] - The food delivery segment saw an increase in user order frequency, particularly among high-frequency users, with daily order volume growth estimated at around 10% [3] - Instant retail competition is being addressed with a planned investment of 100 billion yuan over the next three years to enhance supply chain and merchant digital transformation [3] Financial Forecast and Valuation - For Q2, total revenue is expected to grow by 13% year-on-year, with core local business and new business revenues projected to increase by 10% and 21% respectively [4] - The full-year revenue forecast for 2025 is adjusted to a 15% year-on-year increase, with core local business and new business expected to grow by 13% and 20% respectively [4] - The target price is set at 177 HKD, representing a 34% upside potential from the recent closing price [4][6]

Investment Rating - The report assigns a "Buy" rating for the company, Kuaishou (1024 HK), with a target price of HKD 64.00, indicating a potential upside of 31.3% from the current price of HKD 48.75 [1][24]. Core Insights - The first quarter performance of Kuaishou met expectations, with total revenue and adjusted net profit reaching RMB 32.6 billion and RMB 4.6 billion respectively, reflecting year-on-year growth of 11% and 4% [5]. - The report highlights that Kuaishou's overseas operations have turned profitable, accelerating commercialization efforts [2]. - The company is expected to maintain a steady growth trajectory, with projected revenues of RMB 142.3 billion in 2025, representing a year-on-year growth of 12.2% [25]. Financial Overview - Revenue projections for Kuaishou are as follows: RMB 113.5 billion in 2023, RMB 126.9 billion in 2024, RMB 142.3 billion in 2025, RMB 155.6 billion in 2026, and RMB 168.2 billion in 2027, with corresponding growth rates of 20.5%, 11.8%, 12.2%, 9.3%, and 8.1% [25]. - The net profit is expected to grow from RMB 10.3 billion in 2023 to RMB 28.5 billion in 2027, with significant growth in the coming years [25]. - The report notes that the adjusted net profit margin is projected to remain stable at around 14% for 2025, with a slight increase in profitability expected due to enhanced operational efficiencies [5][20]. Segment Performance - E-commerce GMV (Gross Merchandise Volume) grew by 15% year-on-year, with a notable increase in daily active merchants [5]. - Online marketing revenue growth has slowed to 8%, primarily due to high base effects from previous periods and increased support for merchants [5]. - Live streaming revenue has resumed growth, increasing by 14% year-on-year, supported by a rise in contracted agencies and streamers [5]. Market Position - Kuaishou's market capitalization is approximately HKD 173.7 billion, with a 52-week high of HKD 66.35 and a low of HKD 38.15 [4]. - The company has shown resilience in user engagement, with daily active users (DAU) and monthly active users (MAU) maintaining growth trends [7][8].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 75.52 HKD based on a 38x PE valuation for 2026 [3][10]. Core Insights - The company achieved record high revenue and adjusted net profit in Q1 2025, with revenue reaching 111.3 billion CNY, a 47% year-on-year increase, and adjusted net profit of 10.7 billion CNY, up 64% year-on-year [9]. - The smartphone segment showed significant growth, with a 9% increase in revenue to 50.6 billion CNY and a global market share of 14.1%, ranking among the top three globally [9]. - The IoT and lifestyle products segment also saw strong performance, with revenue of 32.3 billion CNY, a 59% increase, and a gross margin of 25.2% [9]. - The internet services segment reported revenue of 9.1 billion CNY, a 13% increase, with a gross margin of 76.9% [9]. - The electric vehicle segment generated 18.6 billion CNY in revenue, with a gross margin of 23.2%, and the company continues to expand its sales network [9]. Financial Summary - Revenue projections for 2025-2027 are 477.67 billion CNY, 575.30 billion CNY, and 690.22 billion CNY, respectively, with year-on-year growth rates of 31%, 20%, and 20% [5][10]. - Adjusted net profit forecasts for the same period are 35.12 billion CNY, 47.32 billion CNY, and 59.00 billion CNY, with growth rates of 48%, 35%, and 25% [5][10]. - The company’s gross margin is expected to improve from 22.5% in 2025 to 23.1% in 2027, while net profit margin is projected to increase from 7.4% to 8.5% [5][10]. - The earnings per share (EPS) forecast for 2025-2027 is 1.35 CNY, 1.82 CNY, and 2.27 CNY, respectively [5][10].

Investment Rating - The investment rating for the company is "Buy" (maintained) [6] Core Views - The company is expected to experience a gradual alleviation of performance pressure, with same-store sales showing signs of improvement. The focus is on high-quality development and strategic store network optimization [12][13] - Revenue projections for 2025-2027 are estimated at 20.54 billion, 24.60 billion, and 29.55 billion yuan, with corresponding growth rates of 20.9%, 19.7%, and 20.2%. Adjusted net profits are projected at 2.86 billion, 3.68 billion, and 4.56 billion yuan, with growth rates of 4.97%, 28.74%, and 24.04% respectively [4][15] Summary by Sections Financial Performance - For Q1 2025, the company achieved revenue of 4.43 billion yuan, a year-on-year increase of 18.9%, with a gross margin of 44.2%, up 0.8 percentage points. Adjusted net profit was 590 million yuan, down 4.8% year-on-year [12] - The company’s domestic same-store sales have shown significant improvement, with a notable reduction in the decline rate compared to previous quarters. The total number of stores reached 4,275, with a net closure of 111 stores [13] Revenue and Profit Forecast - The company’s revenue is projected to grow at a compound annual growth rate (CAGR) of approximately 20% over the next three years, with adjusted net profit margins expected to stabilize and improve [15][16] - The adjusted net profit corresponding price-to-earnings (PE) ratios are forecasted to be 14X, 11X, and 9X for the years 2025, 2026, and 2027 respectively [4][15] Market Strategy - The company is focusing on enhancing its supply chain advantages and IP transformation capabilities while continuing its global expansion strategy [15] - The overseas business saw revenue of 1.59 billion yuan in Q1 2025, a year-on-year increase of 30.3%, despite facing high base pressure from the previous year [14]

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 3.9 per share, indicating a potential upside of 22% from the current price of HKD 3.2 [5][10]. Core Insights - The company's total electricity sales volume for the first four months of 2025 increased by 0.33% year-on-year, with significant growth in wind and solar power generation, while hydropower saw a decline due to seasonal factors [7][8]. - The integration of hydropower assets is progressing smoothly, with the company expected to hold a 55.13% stake in Yuanda Environmental Protection post-restructuring, enhancing asset value and ensuring long-term control [3][8]. - The company has committed to a dividend payout ratio of no less than 50%, with a projected dynamic dividend yield of approximately 6% for 2025, reflecting a strong focus on shareholder returns [4][9]. Summary by Sections Financial Performance - For FY2023, the company reported revenues of RMB 44,262 million, with projections of RMB 54,213 million for FY2024 and RMB 55,346 million for FY2025, indicating a growth rate of 1.3% and 22.5% respectively [6][16]. - The net profit attributable to shareholders is expected to grow from RMB 2,660 million in FY2023 to RMB 4,338 million in FY2025, reflecting a compound annual growth rate of 28.9% [6][16]. Asset Management - The restructuring plan includes a significant increase in the company's stake in hydropower assets, with the National Power Investment Corporation planning to complete further asset integrations within three years [3][8]. - The estimated price-to-book (PB) ratio for the hydropower and new energy assets is 1.87, with a projected price-to-earnings (PE) ratio of approximately 20 for 2024 [3][8]. Dividend Policy - The company has a historical commitment to shareholder returns, achieving a dividend payout ratio of 60% in 2024 and aiming for a minimum of 50% in the future [4][9]. - The recent increase in shareholding by major stakeholders indicates confidence in the company's long-term investment value [4][9].

Investment Rating - The report assigns a "Buy" rating for the company, Kuaishou (1024 HK), with a target price of HKD 64.00, indicating a potential upside of 31.3% from the current price of HKD 48.75 [1][24]. Core Insights - The first quarter performance of Kuaishou met expectations, with total revenue and adjusted net profit reaching RMB 32.6 billion and RMB 4.6 billion respectively, reflecting year-on-year growth of 11% and 4% [5]. - The report highlights that Kuaishou's overseas operations have turned profitable, accelerating commercialization efforts [2]. - The company is expected to maintain growth in e-commerce GMV and advertising revenue, with projections for the second quarter indicating a 14% year-on-year increase in e-commerce GMV and a 12% growth in advertising revenue [5]. Financial Overview - Revenue projections for Kuaishou are as follows: RMB 113.47 billion in 2023, RMB 126.90 billion in 2024, RMB 142.34 billion in 2025, RMB 155.56 billion in 2026, and RMB 168.17 billion in 2027, with year-on-year growth rates of 20.5%, 11.8%, 12.2%, 9.3%, and 8.1% respectively [25]. - The adjusted net profit is forecasted to grow from RMB 10.27 billion in 2023 to RMB 28.50 billion in 2027, with significant growth in the years 2024 and 2025 [25]. - The report notes that the adjusted net profit margin is expected to stabilize around 14% for 2025, maintaining similar levels to 2024 [5]. Segment Performance - E-commerce GMV grew by 15% year-on-year, with the MAU penetration rate at 19% and average spending per user increasing by 7% [5]. - Online marketing revenue growth has slowed to 8% year-on-year, primarily due to high base effects from external advertising and support for merchants [5]. - Live streaming revenue has resumed growth, increasing by 14% year-on-year, with a significant rise in the number of contracted agencies and streamers [5]. Valuation - The report maintains the 2025 profit expectation at RMB 20.3 billion, corresponding to an adjusted net profit margin of 14% [5]. - A valuation premium is applied due to Kuaishou's leading video generation capabilities and commercialization potential, with a target price based on a 13x P/E ratio for 2025 [5].

Investment Rating - The report maintains a "BUY" rating for Kuaishou, with a target price of HK$80.00, indicating a potential upside of 64.1% from the current price of HK$48.75 [3][20]. Core Insights - Kuaishou's 1Q25 results were in line with expectations, showing a total revenue increase of 11% YoY to RMB32.6 billion and an adjusted net profit rise of 4% YoY to RMB4.6 billion [1][2]. - The monetization of Kling AI is accelerating, generating over RMB150 million in 1Q25, and is expected to exceed RMB700 million in FY25E [1][8]. - Revenue growth is forecasted to continue, with an expected 12% YoY increase in total revenue for 2Q25E, driven by online marketing and e-commerce [1][8]. Financial Performance - For FY25E, total revenue is projected at RMB141.85 billion, with adjusted net profit expected to reach RMB20.12 billion [2][9]. - The adjusted net profit margin is anticipated to remain stable at around 14.2% for FY25E [9][18]. - The company is investing heavily in AI, with R&D expenses growing by 16% YoY to RMB3.3 billion in 1Q25, representing 10.1% of total revenue [8][18]. Revenue Breakdown - In 1Q25, online marketing revenue increased by 8% YoY to RMB18.0 billion, accounting for 55% of total revenue [8]. - Other services revenue grew by 15% YoY to RMB4.8 billion, while live streaming revenue rose by 14% YoY to RMB9.8 billion [8][11]. - E-commerce GMV increased by 15% YoY to RMB332.3 billion, supported by growth in both monthly paying users and GMV per user [8]. Valuation Metrics - Kuaishou is currently trading at a non-IFRS PE of 10x for FY25E, which is attractive compared to the sector average of 16x and its 2-year historical average of 15x [1][3]. - The SOTP-derived target price of HK$80.00 is based on valuations of its live streaming, online marketing, and e-commerce businesses, with respective contributions of HK$9.7, HK$23.4, and HK$39.7 per share [12][13][15].

Investment Rating - The report maintains a "Buy" rating for Xiaomi Group with a target price of 75.52 HKD, based on a 38x PE valuation for comparable companies in 2026 [3][10]. Core Insights - The company achieved record high revenue and adjusted net profit in Q1 2025, with revenue reaching 111.3 billion CNY, a 47% year-on-year increase, and adjusted net profit of 10.7 billion CNY, up 64% year-on-year [9]. - Xiaomi's smartphone shipments increased, with a market share of 14.1% globally, ranking among the top three, and a significant return to the top position in China's market with a share of 18.8% [9]. - The IoT and lifestyle products segment also saw strong growth, with revenue of 32.3 billion CNY, a 59% increase year-on-year, and a gross margin of 25.2% [9]. - The internet services segment reported revenue of 9.1 billion CNY, a 13% increase year-on-year, with a gross margin of 76.9% [9]. - The electric vehicle segment generated 18.6 billion CNY in revenue, with a gross margin of 23.2%, and the company continues to expand its sales network [9]. Financial Summary - Revenue projections for 2025-2027 are 477.67 billion CNY, 575.30 billion CNY, and 690.22 billion CNY, respectively, with year-on-year growth rates of 31%, 20%, and 20% [5]. - Adjusted net profit forecasts for the same period are 35.12 billion CNY, 47.32 billion CNY, and 59.00 billion CNY, with growth rates of 48%, 35%, and 25% [5]. - The earnings per share (EPS) estimates for 2025-2027 are 1.35 CNY, 1.82 CNY, and 2.27 CNY, respectively [5][10]. - The gross margin is expected to improve from 22.5% in 2025 to 23.1% in 2027, while the net margin is projected to increase from 7.4% to 8.5% over the same period [5].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 69.5, unchanged from previous assessments [2][10]. Core Insights - The company completed a placement of HKD 120 million on May 21, at a price of HKD 40 per share, to enhance upstream manufacturing capabilities and support general working capital [1][10]. - Revenue growth is projected to be between 27% and 33% from 2025 to 2027, with a gross margin expected to remain between 53% and 54% [2][10]. - The company’s stock price increased by 6.6% to HKD 47.6 as of May 21, following the placement announcement [1]. Financial Summary - **Sales Revenue (in million RMB)**: - FY23A: 464 - FY24A: 579 - FY25E: 770 (33% YoY growth) - FY26E: 1,006 (30.8% YoY growth) - FY27E: 1,284 (27.6% YoY growth) [3][14] - **Net Profit (in million RMB)**: - FY23A: 109.2 - FY24A: 166.6 - FY25E: 216.7 (30.1% YoY growth) - FY26E: 285.1 (31.5% YoY growth) - FY27E: 363.3 (27.4% YoY growth) [3][14] - **Gross Margin (%)**: - FY23A: 55.4 - FY24A: 53.0 - FY25E: 53.8 - FY26E: 53.5 - FY27E: 53.3 [3][14] - **Earnings Per Share (in RMB)**: - FY23A: 2.42 - FY24A: 2.78 - FY25E: 3.61 - FY26E: 4.75 - FY27E: 6.05 [3][14] - **Price-to-Earnings Ratio (P/E)**: - FY25E: 12.9 - FY26E: 9.8 - FY27E: 7.7 [3][14] Market Performance - The company's market capitalization is approximately HKD 3,042 million, with a 52-week high of HKD 51.75 and a low of HKD 23.05 [5][12]. - The stock has shown significant performance, with a 59.4% absolute return over the past three months [7].