Investment Rating - The report maintains a "BUY" rating for the company with a new target price of HK$52.00, implying a 57.6% upside from the current price of HK$33.00 [21][24]. Core Insights - The company reported a decline in OPAT by 19.7% to RMB 118.0 billion, primarily due to a net loss of RMB 20.7 billion from asset management. Despite this, the company sustained dividend per share (DPS) growth to RMB 2.43, reflecting a 37.3% payout on shareholders' OPAT [21][24]. - The life and health (L&H) value of new business (VNB) amounted to RMB 39.3 billion, representing a 36.2% year-on-year increase, driven by stable VNB margins [21][24]. - Economic assumptions were adjusted, lowering the long-term investment return from 5.0% to 4.5% and the risk discount rate from 11% to 9.5%, which resulted in a significant impact on the embedded value (EV) and VNB [21][24]. Financial Summary - For FY23, net profit attributable to shareholders was RMB 85.7 billion, down 22.8% from the previous year, with a reported EPS of RMB 4.84 [29][30]. - The company’s total assets are projected to grow from RMB 11,583.4 billion in FY23 to RMB 13,760.7 billion by FY26, indicating a steady increase in asset base [11]. - The return on equity (ROE) is expected to improve from 9.7% in FY23 to 14.3% by FY26, reflecting enhanced profitability [30]. Valuation Metrics - The stock is currently trading at 0.45x FY24E P/EV, with a target valuation of 1.0x FY24E P/EV and 0.9x FY24E P/B [24][28]. - The company’s dividend yield is projected to increase from 6.9% in FY23 to 8.7% by FY26, indicating a strong return to shareholders [3][30]. Embedded Value and Sensitivity Analysis - The Group's embedded value is estimated at RMB 1,390.1 billion for FY23, reflecting a decrease of 6.7% due to the revised economic assumptions [21][25]. - The sensitivity analysis indicates that a 50 basis point decrease in long-term investment return could lead to a 7.6% decline in Group EV [8][21].

Investment Rating - The report maintains a "BUY" rating for New Hope Services with a target price of HK$2.79, reflecting an upside potential of 86.9% from the current price of HK$1.49 [1][3]. Core Insights - New Hope Services reported a net profit (NP) increase of 6% year-on-year (YoY) for FY23, with earnings slightly below expectations. The company achieved revenue growth of 10.7% YoY, totaling RMB1,261 million [1][6]. - The company raised its dividend payout ratio to 60% from 48% in FY22, resulting in a dividend yield of 12%, which positively impacted the share price by 6% following the announcement [1][6]. - New Hope Services has a strong cash position, with a cash balance of RMB1.15 billion, exceeding its market capitalization of HK$1.21 billion, indicating robust cash collection capabilities [1][3]. Financial Performance - FY23 revenue was RMB1,261 million, up 10.7% YoY, while net profit reached RMB215 million, reflecting a 6% increase YoY. The net profit margin slightly decreased to 17.1% [1][6]. - The gross profit margin narrowed to 34.9%, down 2.9 percentage points, attributed to increased competition in the third-party market and the exit from higher-margin non-owner value-added services [1][6]. - The company anticipates revenue growth of 10-20% and net profit growth of 5-10% in the upcoming periods [1][6]. Operational Highlights - The Basic Property Management segment's revenue contribution increased to 37.9% in FY23 from 31.3% in FY22, with expectations to stabilize around 40% [1][6]. - The catering services business experienced significant growth, achieving a 44% YoY revenue increase in FY23 and securing three new contracts valued at RMB65 million in Q1 2024 [1][6]. Valuation Metrics - The company is currently trading at a price-to-earnings (P/E) ratio of 5x for 2024E, while the target price is based on a P/E of 8x for 2024E [1][3]. - The report indicates a projected P/E of 4.6 for FY23, with a forecasted P/E of 4.8 for FY24 [2][12].

Investment Rating - Maintain BUY rating for WuXi Biologics with a target price of HK$18.32, down from HK$39.65, reflecting geopolitical uncertainties [2][3]. Core Insights - WuXi Biologics reported 2023 revenue of RMB17.03 billion, an increase of 11.6% year-over-year, while attributable net income decreased by 23.1% to RMB3.40 billion [2]. - Excluding COVID-related revenue, total revenue would have increased by 37.7% year-over-year, with late-stage and CMO project revenue surging by 101.7% [2]. - The company anticipates total revenue growth of 5-10% year-over-year and non-COVID revenue growth of 8-14% for 2024 [2]. - The backlog stood at US$20.59 billion at the end of 2023, with a 6.4% year-over-year increase in backlog within three years [2]. Revenue and Profitability - Revenue from the European market grew by 101.9% year-over-year, contributing 30.2% to total revenue, indicating a strong demand from clients [2][3]. - Non-COVID revenue from Europe, North America, and other regions (excluding China) grew by 172.4%, 20.2%, and 37.7% year-over-year, respectively [2]. - Non-COVID revenue in China slightly declined by 1.2% year-over-year due to biotech funding constraints [2]. Financial Projections - Revenue projections for 2024E, 2025E, and 2026E are RMB17.91 billion, RMB20.35 billion, and RMB23.19 billion, respectively, with year-over-year growth rates of 5.2%, 13.6%, and 13.9% [3][7]. - Adjusted net profit is expected to increase to RMB5.05 billion, RMB5.78 billion, and RMB6.59 billion for 2024E, 2025E, and 2026E, with growth rates of 7.5%, 14.5%, and 13.9% [3][7]. Share Buyback - WuXi Biologics initiated a share repurchase plan valued at up to US$600 million, with 34.8 million H-shares repurchased by the end of 2023 [2][3]. - The company has the capacity to repurchase shares valued at approximately US$346 million, representing about 4.6% of its latest market capitalization [2].

Investment Rating - The report maintains a "BUY" rating for Zhihu with a target price adjusted to US$1.8, reflecting a potential upside of 153.5% from the current price of US$0.71 [4][24]. Core Insights - Zhihu's 4Q23 results exceeded expectations with a revenue increase of 2.2% YoY, driven by strong performance in marketing services and vocational training, while the adjusted net loss narrowed to RMB91 million [2][3]. - For FY24E, the management is prioritizing margin improvement and has set a breakeven target for 4Q24E, despite forecasting a 10% decline in total revenue [2][3]. - The company is expected to leverage its user data and analytics capabilities to benefit from AIGC trends, while focusing on high-margin vocational training subjects [2][3]. Financial Summary - Revenue for FY23 was RMB4,199 million, with a forecasted decline to RMB3,798 million in FY24E, followed by a slight recovery to RMB4,089 million in FY25E [20]. - Adjusted net profit is projected to improve from a loss of RMB659.1 million in FY23 to a loss of RMB226.1 million in FY24E, with a return to profitability expected in FY25E [20][21]. - The gross margin is expected to remain stable at around 54.6% in FY24E, with operating margins improving as the company focuses on cost discipline [20][22]. Revenue Breakdown - The revenue forecast for FY24E includes a 20% decline in marketing services, while membership revenue is expected to remain flat and vocational training revenue is projected to grow by 5% [2][3]. - The company has repurchased 26.3 million Class A ordinary shares for US$58.5 million as part of its buyback program [2][3]. Market Position - Zhihu is well-positioned to capture growth opportunities in the AIGC sector, leveraging its extensive user data and analytics capabilities [2][3]. - The company is focusing on strategic adjustments to its business model, particularly in its marketing services and vocational training segments, to enhance profitability [2][3].

Investment Rating - The report maintains a "BUY" rating for Kelun-Biotech [2][4][17]. Core Insights - Kelun-Biotech recorded RMB1.54 billion in revenue for FY23, primarily from licensing and collaboration agreements with MSD, with a significant upfront payment of RMB1.21 billion received in March 2023 [2][11]. - The company expects to receive over US$100 million in payments from MSD in FY24, indicating strong future revenue potential [2]. - The net loss for FY23 decreased to RMB574 million from RMB616 million in FY22, showing improvement in financial performance [2][11]. - SKB264 is anticipated to unlock commercial value upon approval in China in the second half of 2024, with ongoing clinical trials expected to validate its global potential [2][3]. - The company is preparing for domestic commercialization by building a commercial team, expected to grow to approximately 500 employees by the end of 2024 [2][4]. Financial Summary - Revenue for FY23 was RMB1.54 billion, a 91.6% increase year-over-year, while FY24 revenue is projected to decline by 40.4% to RMB918 million [3][11]. - R&D expenses increased by 21.9% year-over-year to RMB1.03 billion in FY23, reflecting the company's commitment to advancing its clinical trials [2][11]. - The company had a cash balance of RMB2.53 billion at the end of 2023, providing a solid financial foundation for ongoing operations [2][11]. Clinical Development - SKB264's NDA for 3L+ TNBC has been under review since December 2023, with approval expected in 2H24 [2]. - The company has initiated a Phase 3 trial for SKB264 in 1L TNBC treatment and plans to start pivotal trials in various indications, including NSCLC and HR+/HER2- BC [2][6]. - MSD is actively registering multiple global Phase 3 trials for SKB264, enhancing its development prospects [2][6]. Valuation - The report revises the DCF-based target price from HK$189.25 to HK$200.77, reflecting a potential upside of 25% from the current price of HK$160.60 [4][9].

M N 27 Mar 2024 CMB International Global Markets | Equity Research | Company Update Weichai Power (000338 CH) Key takeaways from post-results call Target Price RMB20.40 During the post-results call yesterday, Weichai expected the industry HDT (Previous TP RMB20.40) demand in 2024E will be ~900k units (-2% YoY). Of this, China demand is Up/Downside 23.6% expected to fall by 10% YoY to 600k units while exports are expected to grow Current Price RMB16.51 20% YoY to 300k units. Weichai expects the LNG price to ...

M N 27 Mar 2024 CMB International Global Markets | Equity Research | Company Update Weichai Power (000338 CH) Key takeaways from post-results call Target Price RMB20.40 During the post-results call yesterday, Weichai expected the industry HDT (Previous TP RMB20.40) demand in 2024E will be ~900k units (-2% YoY). Of this, China demand is Up/Downside 23.6% expected to fall by 10% YoY to 600k units while exports are expected to grow Current Price RMB16.51 20% YoY to 300k units. Weichai expects the LNG price to ...

Economic and Debt Challenges - China is facing significant debt and economic problems, with falling real estate prices, equity and asset prices, employment, and employee compensation contributing to a dour economic mood[26] - The average retirement age in China is 53, while the average age of death is 84, creating a 31-year gap where retirees must be supported, adding financial strain to families and the government[27] - The leadership needs to engineer a "beautiful deleveraging" to balance deflationary debt reduction with inflationary monetary easing, or risk a Japanese-style "lost decade"[10] Internal Wealth and Political Dynamics - The internal wealth gap has intensified, leading to government actions perceived as anti-capitalist, such as common prosperity initiatives and arbitrary wealth redistribution, which are fear-inducing for capitalist elites[28] - Xi Jinping's leadership has shifted towards stricter control and autocratic policies, with purges and crackdowns on corruption, particularly in the military, creating a more oppressive environment[28][29] Geopolitical and Trade Tensions - The US-China great-power conflict is causing foreign and domestic investors to diversify or leave China, with trade and capital flows becoming a geopolitical cat-and-mouse game[30] - China's economic model, based on increasing global manufacturing share, is under threat due to rising tariffs and protectionism, particularly in industries like electric vehicles, batteries, and green energy[30] Technological and Environmental Pressures - Technology development is a critical battleground, with China and the US competing in areas like AI, quantum computing, and clean energy, with significant geopolitical and economic implications[15] - Climate-related issues, including droughts, floods, and pandemics, are top-of-mind threats that will likely impose significant costs and hardships on China[31]

M N 26 Mar 2024 CMB International Global Markets | Equity Research | Company Update Weichai Power (000338 CH) 4Q23 net profit +58% YoY; Payout increased to 50%; Higher earnings forecast on margin Target Price RMB20.40 Weichai’s net profit in 2023 surged 84% YoY to RMB9bn, which is in line with (Previous TP RMB17.80) the profit range of RMB8.58-9.32bn announced in Jan. In 4Q23, net profit grew Up/Downside 25.4% 58% YoY to RMB2.5bn. It’s worth noting that Weichai has declared a final Current Price RMB16.27 di ...

+M N 26 Mar 2024 CMB International Global Markets | Equity Research | Company Update Jiumaojiu (9922 HK) Resilient margin in 2H23 with positive outlook Target Price HK$8.39 Maintain BUY and raise TP to HK$8.39 (we now assume a gradual improvement in SSS recovery rate onwards as the group is rolling out more new initiatives (Previous TP HK$7.05) this year). We are still cautious about catering sector, but JMJ’s numbers have Up/Downside 49.9% stabilized lately. A rebound in share price is possible given undem ...