Investment Rating - Reiterate BUY with a SOTP-based target price of HK$22 19 [2][10] Core Views - Xiaomi's SU7 sales target of 100k units in 2024 and 10k monthly deliveries in June exceeded market expectations [2] - SU7 gross profit margin (GPM) target of 5-10% in 2024 is above expectations, with breakeven expected at 300-400k sales per year [2] - Xiaomi's unique "Human-car-home" ecosystem is a major competitive edge over peers [2] - Near-term catalysts include the Beijing Auto Show (25-27 Apr), 1Q24 results in May, and 10k SU7 monthly shipments in June [2] SU7 Sales and Expansion - SU7 non-refundable orders reached 70k, with a higher share of the high-end SU7 MAX model [2] - Xiaomi aims to expand its smart driving team to 1 5k/2k by 2024/25 from 1k currently [2] - EV sales/service centers are targeted to cover 46/82 cities by the end of 2024 [2] 2024 Guidance - Revenue guidance of RMB300bn for core business, with RMB24bn in R&D expenses (including RMB11-12bn for EV-related) [2] - Smartphone shipments target an increase of 15-20mn in 2024 compared to 146mn in 2023 [2] - 1Q24 smartphone shipments grew 34% YoY to 40 8mn [2] Financial Forecasts - FY24E revenue is projected at RMB321 495mn, with an 18 6% YoY growth [3] - Adjusted net profit for FY24E is estimated at RMB17 321mn, a 10 1% YoY decline [3] - FY24E EPS is forecasted at RMB0 70, with a P/E ratio of 21 5x [3] Valuation - SOTP-based valuation assigns 13x/10x/15x FY24E P/E to smartphone/AIoT/internet businesses, and 0 75x FY25E P/S to the EV business [10] - The target price of HK$22 19 implies a 37 2% upside from the current price of HK$16 18 [3][10] Peer Comparison - Xiaomi's FY24E P/E of 20 7x is higher than peers like BYD (8 8x) and Sunny Optical (25 9x) [12] - The company's market cap stands at HK$329 133 6mn, with a 3-month average turnover of HK$1 534 9mn [4] Financial Performance - FY23 revenue declined 3 2% YoY to RMB270 970mn, while adjusted net profit increased 126 3% YoY to RMB19 272 8mn [3] - FY23 ROE improved to 11 3%, up from 1 8% in FY22 [3] - FY24E gross profit margin is expected to be 19 0%, slightly lower than FY23's 21 2% [3]

M N 24 Apr 2024 CMB International Global Markets | Equity Research | Company Update Jiangsu Hengli (601100 CH) 4Q23 & 1Q24 earnings not exciting; but more positive drivers to come Target Price RMB64.00 Hengli’s net profit in 2023 was +7% YoY to RMB2.5bn, which is -5%/+3% versus (Previous TP RMB83.00) our/consensus estimates. Net profit in 1Q24 dropped 4% YoY to RMB602mn, Up/Downside 24.9% due to weak demand for excavators’ hydraulic components and an increased Current Price RMB51.24 expense ratio. We trim o ...

M N 24 Apr 2024 CMB International Global Markets | Equity Research | Company Update InnoLight (300308 CH) 1Q24 results set stage for accelerated growth in 2024 Innolight has recently released results for FY23 and 1Q24, exceeding both our Target Price RMB183.00 and market’s expectations. For FY23, the company's revenue grew by 11.2% (Previous TP RMB136.00) YoY to RMB10.7bn, with net profit soaring by 77.6% YoY to RMB2.2bn. 1Q saw Up/Downside 15.6% even more impressive growth, with revenue up by 163.6% YoY to ...

Growth Indicators - The HSBC India Services Business Activity Index rose from 60.6 in February to 61.2 in March, indicating one of the strongest growth rates in over 13-and-a-half years[2] - New export business increased at the fastest rate since the series began in September 2014, with significant gains reported from various regions including Africa, Asia, and Europe[2] - The Composite PMI Output Index increased from 60.6 in February to 61.8 in March, marking the second-strongest upturn in over 13-and-a-half years[27] Employment and Capacity - Employment in the services sector rose at the joint-fastest rate since November 2022, driven by increased demand and capacity pressures[2] - The increase in pending workloads was reported for the twenty-seventh consecutive month, reaching the highest level since early 2023[14] Price Pressures - Input costs rose at a marked rate, faster than in February, contributing to intensified price pressures across the sector[2] - Selling price inflation reached its highest level since July 2017, primarily due to the acceleration in the service economy[14]

Economic Growth Indicators - The HSBC Flash India Composite PMI Output Index rose to 62.2 in April from 61.8 in March, indicating the fastest rate of increase in aggregate business activity since mid-2010[4] - The Manufacturing PMI Output Index was reported at 63.2, slightly down from 63.3 in March, while the Services PMI Business Activity Index increased to 61.7 from 61.2[9] Sector Performance - Economic growth was broad-based, with the manufacturing sector experiencing the sharper increase, although at a softer rate compared to March[4] - Private sector sales expanded for the thirty-third consecutive month, marking the quickest pace in nearly 14 years[4] Employment and Capacity - Job growth was notably stronger in the manufacturing sector, with manufacturers increasing staffing levels to the greatest extent in nearly 18 months[7] - Despite robust increases in new business, pressures on capacity remained mild, with backlogs of work rising for the twenty-eighth month in a row[7] Input Costs and Pricing - Input cost inflation receded for both manufacturing and services, with the rate of increase below its long-run average[7] - Prices charged for goods and services rose at a lesser extent in April, but the inflation rate remained above the long-run average[7] Future Outlook - Business confidence improved, with the composite Future Output Index rising from March's four-month low, indicating expectations for further improvements in demand and productivity over the next 12 months[7]

Investment Rating - The report maintains a "BUY" rating for Netflix, with a target price of US$644.50, reflecting a potential upside of 16.1% from the current price of US$555.04 [2][3]. Core Insights - Netflix reported strong 1Q24 results, with revenue growth of 15% YoY, surpassing estimates by 1%, and an operating profit margin (OPM) of 28.1%, which is 2 percentage points above estimates [2][3]. - The management has guided an increase in FY24E OPM to 25% from the previous 24%, indicating confidence in continued profitability despite a moderate revenue guidance for FY24E [2][3]. - The report highlights Netflix's initiatives in AVOD and paid sharing as positive drivers for future growth, with an expected earnings upside from efficient content spending and reduced competition [2][3]. Financial Summary - **Earnings Summary**: - FY24E revenue is projected at US$38.428 billion, reflecting a 14% YoY growth, with net profit expected to reach US$7.978 billion [3][18]. - The report anticipates EPS growth of 52.8% in FY24E, with a reported EPS of US$18.71 [3][18]. - **Operating Performance**: - The operating profit for FY24E is estimated at US$9.597 billion, with an operating margin of 25% [3][15]. - The report indicates a significant increase in operating profit from US$6.954 billion in FY23A to US$9.597 billion in FY24E, representing a growth of 38% [3][18]. - **Cash Flow**: - Net cash from operations is projected to be US$7.389 billion in FY24E, with a notable increase in cash at the end of the year expected to reach US$8.934 billion [19][19]. Market Position and Guidance - Netflix's management has expressed confidence in achieving double-digit revenue growth in the medium term, supported by a strong content pipeline for 2Q24E and 2H24E [2][3]. - The company is expected to benefit from increased engagement and monetization strategies, despite the removal of quarterly subscriber and ARM disclosures starting 1Q25 [2][3].

M N 22 Apr 2024 CMB International Global Markets | Equity Research | Company Update Bosideng (3998 HK) From winter clothing to all seasons clothing We think the guidance raise is a key moment for the company, as the success Target Price HK$5.34 that Bosdieng has achieved in the sun-protective product series shows that it is (Previous TP HK$3.86) capable of generating sales in all seasons (other than just fall and winter). Also, Up/Downside 23.5% despite our raises in estimates and TP, we still think our num ...

Investment Rating - The report maintains a BUY rating for Xtep with a target price of HK$6.31, indicating a potential upside of 41.4% from the current price of HK$4.46 [4]. Core Insights - Xtep's retail sales in 1Q24 increased by high single digits year-over-year, aligning with market expectations, and showing signs of acceleration in growth due to new product launches and e-commerce support [2][3]. - The company expects improved retail sales growth, better discounts, and inventory levels from 2Q24E onward, supported by the popularity of new products like the 360X running shoes [2][3]. - The stock is currently trading at an undemanding valuation of 9x FY24E P/E, which is attractive compared to its 8-year average of 15x [2][4]. Earnings Summary - Xtep's revenue for FY24E is projected at RMB 15,913 million, with a year-over-year growth of 10.9% [12]. - The net profit for FY24E is estimated at RMB 1,230 million, reflecting a net profit margin of 7.7% [12]. - The company anticipates a compound annual growth rate (CAGR) of 10% for sales and 18% for net profit during FY23-26E [2][4]. Retail Performance - Retail sales growth for offline, online, and kids segments was reported at low single digits, over 25%, and 10% respectively in 1Q24 [2]. - Retail discounts narrowed to 25%-30% in 1Q24, showing improvement from 30% in 4Q23, with expectations for further reduction in 2Q24E [2][3]. Market Position - Xtep's new products, particularly the 360X running shoes, have been well-received, with over 500,000 pairs sold in just one month [2]. - The e-commerce segment is expected to rebound as the company increases the supply of entry-level and value-for-money products [2]. Financial Projections - The report conservatively estimates a revenue of RMB 17,587 million for FY25E and RMB 19,322 million for FY26E, maintaining the same growth expectations as previous estimates [8][9]. - Gross profit margin is projected to improve to 42.7% in FY25E and 43.1% in FY26E [12].

Investment Rating - The report maintains a BUY rating for Sunny Optical with a target price of HKD 49.37, representing an upside of 31.8% from the current price of HKD 37.45 [1]. Core Insights - Sunny Optical's FY23 results were disappointing, with revenue and net income reported at RMB 31,681 million and RMB 1,099 million, reflecting year-on-year declines of 4.6% and 54.3% respectively. The results were below market consensus and the company's own estimates, primarily due to weak smartphone demand, ASP and GM pressures, and increased interest expenses [1][2]. - The company is focusing on improving its product mix to enhance ASP and GM, with expectations for a gradual recovery in global smartphone shipments in FY24E, driven by flagship models from top-tier clients [3][5]. Company Update - Sunny's high-end product contribution has stabilized, with a notable performance in the 6P+ lens segment, which accounted for 32% of the high-end product mix in FY23. However, overall high-end product shipments declined by 20% year-on-year [2]. - The company provided conservative guidance for FY24E, expecting a 5% year-on-year growth in HLS shipments while HCM shipments are anticipated to remain flat [3]. - Sunny's investment in R&D has increased, with R&D expenses reaching approximately RMB 2.6 billion, accounting for 8.1% of total revenue, and FY24E CAPEX is guided to increase by 20% year-on-year to around RMB 3.0 billion [6][7]. Financial Performance - The report indicates a significant reduction in FY24E-25E EPS estimates by 22.4% and 32.7% respectively, due to lower sales and GM assumptions. Despite this, a mild recovery is expected in FY24E [7][10]. - Revenue for FY24E is projected at RMB 35,823 million, with a gross margin of 22.6%, reflecting a decrease of 590 basis points compared to previous estimates [10]. Market Position and Outlook - Sunny Optical holds a dominant position in the Chinese handset market with approximately 50% market share and is well-positioned to benefit from the increasing adoption of automotive products and non-smartphone segments, which accounted for over 30% of total revenue in FY23 [4][7]. - The automotive segment continues to show strong growth, with vehicle-related product sales increasing by 28.6% year-on-year, and the company expects to reach RMB 2.0 billion in automotive CCM revenue for FY24E, representing a 25% year-on-year growth [6].

h 股 c r 票 a e s e R 研 y [Table_Title] Peter Shao 邵俊樨 究 tiu Company Report: China Power International (02380 HK) (852) 2509 5464 q E 公司报告： 中国电力 (02380 HK) peter.shao@gtjas.com.hk 17 April 2024 S[Ttarbolen_Sgu mFmYa2ry4] Earnings Outlook, "Buy"  2023 earnings missed. CPID (the "Company") reported 2023 earnings of 公 tr o RMB2,660 mn, missing our expectation, primarily due to asset amortisation of [RTaabtlien_gR:a nk] Buy p e RMB650 mn and loss of RMB 826 mn booked by the hydro segment, both Maintained 司 R 报 y ...