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 ...

M N 18 Apr 2024 CMB International Global Markets | Equity Research | Company Update Anta Sports (2020 HK) An inline 1Q24 plus an improving outlook Retail sales growth in 1Q24 was slow, but it was widely expected. We see Target Price HK$101.73 FY24E growth supported by: 1) healthy momentum in late Mar, 2) an exciting (Previous TP HK$101.73) product launch pipeline, 3) further segmentation by Anta in terms of products Up/Downside 24.7% and store format, and 4) gradual improvement in retail discounts (rather C ...

Investment Rating - The report maintains a BUY rating for FIT Hon Teng with a target price (TP) of HK$ 2.42, indicating a potential upside of 12.6% from the current price of HK$ 2.15 [5][13]. Core Insights - Recent stock price corrections are viewed as overdone, primarily driven by investor concerns regarding Apple's TWS order allocation. Management has confirmed that the first production line of AirPods in Vietnam began shipments in February 2024, expected to contribute 5-7% of sales in FY24E. By 2025, additional production lines will be added in India, positioning FIT and Luxshare as the two largest AirPods suppliers with a projected market share of 30% and 70% respectively [2][3]. - The management has reiterated a solid outlook for 2024, projecting high-teens revenue growth, over 15% gross profit (GP) and operating profit (OP) growth year-on-year, driven by AirPods, AI server connectors, and the auto business [3][4]. Financial Summary - Revenue is projected to grow from US$ 4,196 million in FY23A to US$ 4,715 million in FY24E, reflecting a year-on-year growth of 12.4%. Net profit is expected to increase significantly from US$ 129.6 million in FY23A to US$ 201.2 million in FY24E, representing a growth of 55.3% [4][11]. - The earnings summary indicates a consistent improvement in profitability metrics, with gross profit margins expected to rise from 19% in FY23A to 20% in FY24E, and operating profit margins increasing from 6.3% to 7.5% over the same period [11][18]. Growth Drivers - Key growth drivers identified include the AirPods production ramp-up, AI server product launches, and consolidation in the auto business, with expected contributions of 5-7% from AirPods, 7-9% from AI server products, and 8% from the auto business in FY24E [3][4]. - The report highlights that the recent share price correction presents a buying opportunity, with the stock trading at attractive valuation multiples of 9.7x and 7.6x for FY24E and FY25E P/E respectively, compared to a historical average of 15x [3][13].

Investment Rating - The report maintains a "BUY" rating for Tencent with a target price of HK$445.0, reflecting a potential upside of 43.7% from the current price of HK$309.60 [10][11]. Core Insights - Tencent is expected to achieve solid earnings growth and enhance shareholder returns in FY24, with a forecasted total revenue increase of 6% YoY to RMB158.6 billion in 1Q24E and a non-IFRS net income growth of 31% YoY to RMB43.1 billion [10][11]. - The company is navigating short-term headwinds in its games business but anticipates recovery in revenue growth in 2Q24E due to new game launches [10][11]. - Advertising revenue is projected to grow by 16% YoY in 1Q24E, driven by strong demand for Video Account ads and improved ad technology [10][11]. Financial Summary - Revenue (RMB million) for FY22A was 554,552, FY23A was 609,015, and is expected to reach 655,548 in FY24E, reflecting a YoY growth of 7.6% [2]. - Adjusted net profit (RMB million) is forecasted to grow from 157,688 in FY23A to 185,358 in FY24E, representing a YoY growth of 17.5% [2]. - The gross margin is expected to improve from 48.1% in FY23A to 49.9% in FY24E [2]. Business Segment Valuation - The valuation for the online games business is set at HK$160.3 based on a 17x 2024E PE, aligning with the average PE of global gaming peers [5]. - The fintech business is valued at HK$85.4 based on a 4.0x 2024E PS, reflecting Tencent's strong position in China's digital payment market [6]. - The advertising business is valued at HK$79.4 based on a 19x 2024E PE, consistent with industry averages [14]. Strategic Investments - Tencent's strategic investments are valued at HK$62.0, applying a 30% holding company discount to the fair value of its equity investments [15]. - The report highlights Tencent's significant stakes in various companies, contributing to its overall valuation [19].

Investment Rating - The report maintains a "BUY" rating for Anta Sports with a target price of HK$128.8, indicating an upside potential of 51.3% from the current price of HK$85.15 [5][3]. Core Insights - Anta Sports reported FY23 results that exceeded expectations, with revenue of RMB62.4 billion and net profit of RMB10.236 billion, reflecting year-on-year growth of 16.2% and 34.9% respectively. This growth was attributed to improved store productivity, disciplined retail discounting, and increased interest income [1][3]. - The company has set ambitious targets for FY24, aiming for revenue growth of 10-15% for both Anta and Fila brands, and over 20% for Descente and Kolon brands. Operating profit margins are expected to be around 20% for Anta and 25% for Fila [3][5]. Financial Performance - FY23 key highlights include: - Overall online sales increased by 11% year-on-year, with FILA and Descente brands growing by over 10% and 30-40% respectively [2]. - Monthly store productivity reached RMB280-290k, up more than 10% year-on-year, with Fila and Descente nearing RMB1 million and RMB2 million respectively [2]. - Operating cash flow grew by 61% to RMB19.6 billion, driven by a reduction in inventory turnover days from 138 to 123 [2][3]. Future Outlook - The management anticipates a retail sales value (RSV) growth of 4-5% year-on-year for Q1 2024, despite facing some pressure due to a high base and unfavorable weather conditions post-Chinese New Year [2]. - The company plans to maintain inventory levels at 5 times or below for various brands and has set modest store expansion targets, prioritizing productivity [3][5]. - The payout ratio is targeted at 50% for FY24 onwards, supporting continuous expansion through a multi-branded strategy [3][5]. Market Position - Anta Sports is recognized as a leading player in the PRC sporting goods market, with a retail network comprising 9,831 ANTA brand points of sale and 1,972 FILA stores as of December 2023 [6].

Investment Rating - The report does not explicitly provide an investment rating for the semiconductor industry or specific companies involved in EUV technology Core Insights - The US initially played a significant role in semiconductor technology development but has lost its competitive edge, particularly in EUV technology, to ASML and Asian manufacturers [1][2] - ASML Holding NV has established a monopoly on EUV machines, which are critical for advanced chip production, with a market capitalization exceeding $350 billion [2] - The transition to EUV technology was fraught with challenges, requiring substantial investment and collaboration among major chipmakers [5][8] - Intel's misjudgment regarding the viability of EUV technology has led to a significant decline in its market position compared to competitors like TSMC and Nvidia [12] Summary by Sections Industry Background - The semiconductor industry has evolved from using visible light to ultraviolet light for chipmaking, with a focus on achieving near-atomic scale transistors [3][4] - The development of EUV technology began in the 1980s, with significant investment from US national laboratories and private companies [4][5] Technological Challenges - EUV technology involves complex processes, including generating plasma from tin droplets and requires extremely smooth mirrors for effective operation [6][7] - Initial optimism about EUV's commercial viability proved misplaced, delaying its market introduction until 2018 [8] Competitive Landscape - TSMC has overtaken Intel in technological capabilities by successfully implementing EUV technology, while Intel struggled with alternative methods [9][10] - The geopolitical implications of EUV technology are significant, as it has enabled Chinese companies to access advanced chips, raising national security concerns for the US [10][11] Future Directions - Intel is now focusing on the next generation of EUV technology, High Numerical Aperture, to regain its competitive edge [12]

Investment Rating - Maintain BUY rating with a target price of US$131.9 per ADS [1][7] Core Views - Alibaba is expected to deliver in-line-with-consensus revenue growth for 4QFY24, with estimated revenue of RMB221.4bn, up 6% YoY [1] - The company is focusing on long-term growth through investments in international business, cloud, and Taobao and Tmall (T&T) Group, despite short-term margin pressure [1] - Alibaba is committed to improving shareholder return through loss reduction in non-core businesses, enhanced share buyback, and dividend payout [1] - The strategic move to drive an integrated group strategy is expected to enhance long-term value [1] Financial Performance - For 4QFY24, group-level adjusted EBITA is forecasted to decline 5% YoY to RMB24.0bn, with an adjusted EBITA margin of 10.8% [1] - T&T Group's adjusted EBITA is expected to decline 1.5% YoY to RMB38.5bn, implying a margin of 42.1% [1] - Customer management revenue growth is forecasted at 3% YoY in 4QFY24, driven by 7% YoY GMV growth from T&T GMV [1] Revenue and Profit Forecasts - Revenue for FY24E is estimated at RMB940.7bn, with FY25E and FY26E revenues projected at RMB1,027.6bn and RMB1,117.5bn, respectively [2][4] - Adjusted net profit for FY24E is forecasted at RMB155.5bn, with FY25E and FY26E projections at RMB158.2bn and RMB175.2bn, respectively [4] - Gross margin for FY24E is estimated at 37.8%, with FY25E and FY26E margins projected at 38.0% [4] Valuation and Shareholder Return - The SOTP-based target price is US$131.9 per ADS, translating into 15.7x FY24E P/E [7] - Alibaba is enhancing shareholder return through an integrated group strategy, including investments in international business and cloud infrastructure [1] - The next key event for shareholder return will likely be the announcement of annual fiscal year dividends in May [1] Segment Valuation - Taobao and Tmall Group is valued at US$59.1 per ADS, based on 7.0x FY24E EV/adjusted EBITA [8] - Cloud Intelligence Group is valued at US$24.4 per ADS, based on a 4.2x EV/S multiple on FY24E revenue [8] - Cainiao is valued at US$2.6 per ADS, based on the latest valuation given by Alibaba to repurchase Cainiao shares from minority shareholders [8] Financial Summary - Revenue for FY24E is projected at RMB940.7bn, with gross profit of RMB356.0bn [4] - Operating profit for FY24E is forecasted at RMB113.7bn, with net profit of RMB89.9bn [13] - Adjusted net profit for FY24E is estimated at RMB155.5bn, with an adjusted net profit margin of 16.5% [4]

11 Apr 2024 Renewed agreement with Blizzard; expect games revenue growth to reaccelerate in 2H24E NetEase on 10 Apr announced the renewal of publishing agreement with Blizzard Entertainment to bring Blizzard game titles back to China. Popular titles such as World of Warcraft, Hearthstone, and Diablo will return to the Chinese market sequentially starting in summer 2024. NetEase also reached an agreement with Microsoft to bring NetEase titles to Xbox and other platforms. We expect the return of Blizzard game ...

11 Apr 2024 Earnings Summary CMB International Global Markets | Equity Research | Company Update Q-Tech (1478 HK) 1Q24 shipment rebound on track; Auto & IoT as next growth drivers We recently spoke to Q-Tech's mgmt. and we maintain our positive view on high-end Android recovery to drive ASP/shipment upside in FY24E. Q-tech also expected GPM improvement in 1H24E thanks to better product mix and easing competition. For 1Q24, Q-Tech posted impressive growth of 23%/179% YoY in mobile/non-mobile CCM shipment, th ...