Investment Rating - The report maintains a "BUY" rating for Intron Tech with a new target price (TP) of HK$5.53, based on a 12x FY24E P/E valuation methodology [13][14][21]. Core Insights - Intron's FY23 revenue was RMB 5.8 billion, reflecting a 20% year-over-year (YoY) growth, while net income decreased by 23.5% YoY to RMB 317 million. The gross profit margin (GPM) was 18.7%, down 2.8 percentage points YoY, attributed to intensified price competition [21][32]. - The company expects solid growth in the New Energy Vehicle (NEV) and Hybrid Electric Vehicle (HEV) segments, driven by increasing demand and export opportunities in China. However, margin pressure may persist due to heightened competition [21][32]. - The report highlights a significant increase in R&D expenses, which reached 9.0% of revenue due to talent recruitment and upfront investments. Management anticipates a normalization of these expenses in FY24E [21][32]. Revenue Forecasts - Revenue is projected to grow from RMB 6,975 million in FY24E to RMB 10,805 million in FY26E, with a YoY growth rate of 20.2% in FY24E and 24.2% in FY25E [21][26]. - The breakdown of revenue by segment shows strong growth in New Energy (131.6% YoY in 2021, 91.0% in 2022) and Automation & Connectivity (151.3% YoY in 2022) [21][26]. Earnings Summary - The earnings forecast for FY24E includes a revenue estimate of RMB 6,975 million, a gross profit of RMB 1,298 million, and a net profit of RMB 441 million, indicating a 39% YoY growth in net profit [21][26][32]. - The report notes that the EPS for FY24E is expected to be RMB 0.41, with a consensus estimate of RMB 0.55 for FY25E [21][26]. Valuation Metrics - Intron is currently trading at 4.5x FY24E P/E, significantly lower than the average P/E of 22.8x for its peers, indicating that it is undervalued [14][21]. - The report emphasizes the attractive risk/reward profile of Intron, especially in light of potential catalysts such as favorable NEV policies and increasing penetration of Advanced Driver Assistance Systems (ADAS) [14][21].

Investment Rating - The report maintains a "BUY" rating for Prudential Plc with a target price adjusted to HK$137.8, reflecting a potential upside of 81.9% from the current price of HK$75.75 [2][3]. Core Insights - Prudential reported a strong FY23 performance with new business profit (NBP) increasing by 45% year-over-year (YoY) to US$3.13 billion, surpassing consensus estimates by 6.4% [2]. - The NBP margin expanded by 3 percentage points to 53% for the full year, with a notable improvement in the second half of FY23, where the margin reached 57% [2]. - The board approved a full-year dividend of US$0.2 per share, indicating a 9% increase from FY22, and expects continued dividend per share (DPS) growth of 7%-9% in FY24 [2]. Summary by Sections Financial Performance - FY23 net profit was US$1.7 billion, a significant recovery from a loss of US$1.0 billion in FY22 [3]. - The adjusted operating profit for FY23 grew by 8% YoY to US$2.9 billion, driven by lower central costs and restructuring expenses [2][3]. - The Group's total assets increased to US$174.1 billion in FY23, with a projected growth to US$198.6 billion by FY24 [8]. Business Segments - Agency NBP surged by 75% YoY to US$2.1 billion, supported by a 37% growth in Health & Protections (H&P) and a 59% increase in agent productivity [2]. - The bancassurance segment saw a decline of 8% to US$793 million, primarily due to poor performance in China and Vietnam [2]. - The NBP of the China joint venture, CITIC Prudential Life, fell by 43% YoY to US$222 million, impacted by a 40% decline in APE sales [2]. Valuation Metrics - The stock is currently trading at a price-to-embedded value (P/EV) of 0.54x for FY24E, close to historical lows, reflecting concerns over China exposure and trading liquidity [2][3]. - The expected return on equity (ROE) is projected to improve from 9.8% in FY23 to 12.5% by FY26 [9]. - The dividend yield is anticipated to rise from 1.6% in FY23 to 2.7% by FY26 [9].

M N 22 Mar 2024 CMB International Global Markets | Equity Research | Company Update Sunny Optical (2382 HK) Expectations reset on conservative guidance; Maintain HOLD Target Price HK$47.31 Sunny Optical (Sunny)’s FY23 net profit was largely in-line with profit warning, but (Previous TP HK$50.71) 2H23 GPM of 14.1% (vs 19% in 2H22) was below expectations due to more intense Up/Downside 1.0% competition despite spec upgrade and more high-end models in 2H23. For 2024 Current Price HK$46.85 guidance, while mgmt. ...

Investment Rating - The report maintains a BUY rating for FriendTimes, with a target price of HK$1.8, indicating an upside potential of 80% from the current price of HK$1.00 [13][29]. Core Insights - FriendTimes reported a significant revenue decline of 31% YoY for FY23, with an adjusted net loss of RMB 133 million, which was largely in line with expectations. The decline was attributed to existing games' grossing decline and increased sales and marketing expenses [29]. - The new game "Twist of the Fate 2" (ToF2) has shown promising performance, ranking in the top 50-70 for iOS grossing in Q1 2024. The company expects ToF2 to maintain stable grossing and is focusing on expanding to Android and overseas markets [29]. - Management is prioritizing cost discipline in FY24, with adjustments in personnel and careful development of high-R&D projects. The report anticipates that mini-games will unlock additional grossing potential [29]. Financial Summary - For FY22, revenue was RMB 1,524 million, which decreased to RMB 1,056 million in FY23, with a projected recovery to RMB 1,474 million in FY24, and further growth to RMB 1,933 million in FY25 and RMB 2,048 million in FY26 [1][23]. - Adjusted net profit is expected to recover from a loss of RMB 131.8 million in FY23 to a profit of RMB 180.3 million in FY24, increasing to RMB 256.9 million in FY25 and RMB 299.4 million in FY26 [1][23]. - The report indicates a significant drop in diluted EPS from 1.90 cents in FY22 to a loss of 6.10 cents in FY23, with a forecasted recovery to 8.27 cents in FY24 and further increases in subsequent years [1][23]. Valuation Metrics - The P/E ratio is projected to decrease from 50.7 in FY22 to 11.1 in FY24, indicating a more favorable valuation as earnings recover [1][25]. - The gross margin is expected to stabilize around 68% from FY24 onwards, while the operating margin is projected to improve gradually [30][25]. - The report highlights a current ratio of 4.1 in FY23, indicating strong liquidity, which is expected to improve to 5.4 in FY24 [25].

Investment Rating - The report maintains a "BUY" rating for CSPC Pharmaceutical, with a target price revised to HK$7.76 from HK$8.16, indicating a potential upside of 21.1% from the current price of HK$6.41 [2][4]. Core Insights - CSPC reported FY23 revenue of RMB31.45 billion, reflecting a 1.7% year-over-year growth, and an attributable net profit of RMB5.87 billion, down 3.6% year-over-year. The adjusted net profit increased by 2.8% year-over-year to RMB6.28 billion [2]. - The company expects new products to significantly contribute to revenue in 2024, forecasting an additional RMB3.5-3.6 billion from these products [2]. - CSPC's R&D expenses rose by 21.2% year-over-year to RMB4.83 billion, indicating a strong commitment to innovation [2]. Financial Performance Summary - **Revenue**: FY23 revenue was RMB31.45 billion, with projections of RMB34.80 billion for FY24E, representing a 10.6% growth [3][9]. - **Net Profit**: FY23 attributable net profit was RMB5.87 billion, with expectations of RMB6.68 billion in FY24E, a 13.7% increase [3][9]. - **Gross Profit Margin**: The gross profit margin decreased to 70.5% in FY23 from 71.9% in FY22, with expectations of 70.3% in FY24E [3][10]. Sales Performance - **Finished Drugs**: Sales of finished drugs increased by 4.6% year-over-year to RMB25.64 billion, although there was a slight decline in the second half of FY23 due to anticorruption measures in China [2]. - **CNS Products**: CNS products saw a 12.1% year-over-year growth, primarily driven by strong sales of NBP [2]. - **Oncology Products**: Sales of oncology products fell by 16.4% year-over-year, largely due to a significant price cut for Keaili [2]. New Product Pipeline - CSPC has several new products expected to drive sales growth, including Mingfule, Yiluoda, and Anfulike, with management forecasting substantial revenue contributions from these products in 2024 [2][3]. - The company has had four drugs added to the National Reimbursement Drug List (NRDL) since early 2024, enhancing market access [2]. Valuation Metrics - The report provides a DCF valuation of RMB7.76 per share, with a WACC of 11.78% and a terminal growth rate of 2.0% [4][10]. - The P/E ratio is projected to decrease from 13.0x in FY23 to 10.5x in FY24E, indicating potential undervaluation [3][10].

PDD Holdings (PDD US) PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG: RESP CMBR OR http://www.cmbi.com.hk1 | --- | --- | --- | --- | --- | --- | |--------------------------------|----------|----------|----------|-----------|-----------| | (YE 31 Dec) | FY22A | FY23A | FY24E | FY25E | FY26E | | Revenue (RMB mn) | 130,558 | 247,639 | 389,619 | 492,359 | 540,111 | | Net profit (RMB mn) | 31,538.1 | 60,026.5 | 83,882.9 | 118,906.4 | 127,694.3 | | Adjust ...

M N 21 Mar 2024 CMB International Global Markets | Equity Research | Company Update Kuaishou (1024 HK) More bullish on margin improvement Target Price HK$97.0 We turn more bullish on Kuaishou’s (KS) margin enhancement ahead, with ads & (Previous TP HK$97.0) ecommerce share gains to continue. KS delivered solid 4Q23 results, with inline Up/Downside 85.6% revenue and upbeat bottom line. For FY24E, we expect total revenue +10.6% YoY, Current Price HK$52.25 with livestreaming/ads/other services revenue -8%/+20% ...

Investment Rating - The report maintains a BUY rating for Kingdee with a target price of HK$15.50, reflecting a potential upside of 66.3% from the current price of HK$9.32 [4]. Core Insights - Kingdee reported a revenue of RMB5.7 billion for 2023, representing a 17% year-over-year growth, and a net loss of RMB210 million, which is a significant reduction from a loss of RMB389 million in 2022 [2][12]. - The company is well-positioned to benefit from the domestic substitution trend, supported by strong product capabilities and an enhanced partner ecosystem [2]. - The cloud segment contributed 79% of total revenue, with cloud revenue growing 21% year-over-year to RMB4.5 billion [2]. Financial Performance - Revenue growth is projected to continue with a compound annual growth rate (CAGR) of 15-20% from 2023 to 2026 [2]. - The annual recurring revenue (ARR) grew by 34% year-over-year, indicating a solid SaaS growth outlook for 2024 [2]. - Kingdee's core SaaS product, Galaxy, achieved revenue of RMB2.0 billion, up 16.3% year-over-year, with a stable dollar retention rate of 97.2% [2]. Business Segments - The Galaxy product line recorded over 39,000 customers by the end of 2023, with a net addition of over 8,000 customers year-over-year [2]. - The Cosmic & Constellation (C&C) segment saw a revenue increase of 40.9% year-over-year, and management expects revenue growth to reaccelerate in 2024 due to strong project pipelines [2]. Financial Guidance - Management has guided for a subscription ARR CAGR of 30% from 2023 to 2026 and aims for at least RMB900 million in operating cash flow in 2024, indicating a growth of at least 38% year-over-year [2].

M N 20 Mar 2024 CMB International Global Markets | Equity Research | Company Update WuXi AppTec (603259 CH) Best effort to ensure business continuity Target Price RMB67.53 WuXi AppTec reported revenue of RMB40.3bn in 2023, up 2.5% YoY, (Previous TP RMB116.01) attributable recurring net income of RMB9.7bn, up 16.8% YoY, and attributable Up/Downside 32.9% adjusted non-IFRS net income of RMB10.9bn, up 15.5% YoY. Revenue was in- Current Price RMB50.81 line with Bloomberg consensus while attributable adjusted no ...

M N 20 Mar 2024 CMB International Global Markets | Equity Research | Company Update Akeso (9926 HK) Expect another fruitful year in 2024 In FY23, Akeso recorded RMB4.53bn in revenue, including RMB1.63bn from Target Price HK$59.61 product sales and RMB2.92bn from license income relevant to AK112 (PD- (Previous TP HK$51.23) 1/VEGF). Cadonilimab/AK104 (PD-1/CTLA-4) achieved RMB1.36bn in sales in Up/Downside 19.3% FY23, surpassing the Company’s initial guidance of RMB1.2-1.3bn. In 2H23, Current Price HK$49.95 A ...