Investment Rating - The report initiates a BUY rating on 361 Degrees with a target price (TP) of HK$6.23, based on a 10x FY24E P/E ratio, indicating a potential upside of 43.5% from the current price of HK$4.34 [4]. Core Insights - The report highlights a turnaround driven by star products and sponsorships, forecasting a 16% sales CAGR and a 20% net profit CAGR from FY22 to FY25, compared to previous growth rates of 7% and 20% from FY19 to FY22 [2][27]. - 361 Degrees is positioned as the 4th-largest domestic sportswear brand in China, with a market share of 3.1% in 2022 and a robust store network of approximately 5,480 adult stores and 2,288 kids stores [2][19]. Summary by Sections Company Overview - 361 Degrees is recognized as the 4th-largest domestic sportswear company in China, established in 2003 and listed on the HKEX in 2008, with significant sales and net profit figures of RMB7.0 billion and RMB747 million in FY22 [19][23]. Key Positives and Growth Drivers - The brand's successful rebranding strategy initiated in 2019 has led to improved market share and financial performance, with retail sales growth accelerating since FY21 [27][28]. - Significant improvements in product offerings, particularly in running and basketball segments, have been noted, with a focus on R&D and innovative designs [41][53]. - The e-commerce segment has shown remarkable growth, with a sales CAGR of 23% from FY19 to FY22, and is expected to continue its upward trajectory [38][35]. Financial Forecast - Revenue is projected to grow from RMB6.96 billion in FY22 to RMB10.97 billion by FY25, with net profit expected to increase from RMB747 million to RMB1.27 billion over the same period [3][9]. - The report anticipates a P/E ratio decline from 9.0x in FY22 to 6.2x by FY25, indicating an attractive valuation compared to industry averages [3][4]. Market Position and Strategy - The company has effectively utilized sponsorships and endorsements to enhance its professional image and connect with younger consumers, which is crucial for market share expansion [59][60]. - The strategic focus on lower-tier cities has been beneficial, as these markets are expected to show resilience in consumer spending [20][22].

Investment Rating - The report initiates coverage on Walt Disney Co with a BUY rating and a target price of US$142, implying a 28.7% upside from the current price of US$110.3 [4][5]. Core Insights - The report highlights that Disney is expected to benefit from streaming and sports industry tailwinds, alongside cost control initiatives. The company has shown significant improvement in streaming losses and operational efficiency, with management guiding for an EPS of US$4.6 (+22% YoY) and free cash flow of US$8 billion in FY24E. Streaming profitability is anticipated by 4QFY24E, with projected revenue and earnings CAGR of 5% and 16% respectively from FY24-26E [2][3][28]. Company Overview - Established in 1923, Disney is a global entertainment and media conglomerate with a diversified portfolio that includes film production, theme parks, and streaming services. The company is currently prioritizing its streaming and ESPN segments, supported by cash flow from its Experiences business [12][17]. Streaming and Sports Growth - Disney+ has reached 150 million paid subscribers as of 1QFY24, with expectations for continued growth driven by strong content, AVOD initiatives, and paid-sharing strategies. The report forecasts a 4% CAGR in Disney+ subscribers from FY24-26E, with net adds of 5.5-6 million expected in 2QFY24E [2][20][38]. Parks and Experiences - The Parks segment is projected to be a significant cash generator, contributing approximately two-thirds of the Group's operating income in FY24E, with an expected 10% CAGR in operating income from FY24-26E. Revenue from US parks is anticipated to accelerate in the second half of FY24E [2][3][9]. Financial Performance - For FY24E, Disney's revenue is expected to reach US$91.8 billion, with a YoY growth of 3.3%. Adjusted net profit is projected at US$8.5 billion, reflecting a 23.9% increase YoY. The diluted EPS is forecasted to be US$4.62, a 23.4% increase YoY [3][4]. Valuation Metrics - The report sets a target price based on a sum-of-the-parts (SOTP) valuation, implying a P/E ratio of 30.7x for FY24E, which is 14% below Netflix's valuation but slightly above the industry average [2][4]. Key Catalysts - The report identifies several key catalysts for Disney's growth, including the upcoming breakeven on streaming, strong net subscriber additions, resilient performance in parks, and progress in the sports segment [2][3][4].

Investment Rating - The report maintains a "BUY" rating for JD.com with a target price of US$52.00, indicating a potential upside of 142.5% from the current price of US$21.44 [1][6][23]. Core Insights - JD.com reported better-than-expected results for 4Q23, with revenue of RMB306.1 billion, up 3.6% year-over-year, and non-GAAP net income of RMB8.4 billion, surpassing estimates [6]. - The company aims to enhance user experience and market share in 2024, with a focus on reinvesting profits to drive user acquisition amid intensified market competition [6]. - JD's net product revenue for 4Q23 was RMB246.5 billion, reflecting a 3.7% year-over-year increase, with electronics and home appliance revenue growing by 6.1% [6][27]. - The new share repurchase program and increased dividends are expected to support valuation and drive a rerating of the stock [6][23]. Financial Performance Summary - For FY23, total revenue reached RMB1.1 trillion, up 3.7% year-over-year, with non-GAAP net income of RMB35.2 billion, a 25% increase [6][7]. - The forecast for FY24 estimates total revenue of RMB1,160.3 billion, with a gross profit of RMB173.6 billion and a non-GAAP net profit of RMB36.1 billion [5][22]. - JD's gross margin is projected to be 15.0% in FY24, with a non-GAAP net margin of 3.1% [5][22]. Revenue Breakdown - JD Retail generated RMB267.6 billion in revenue for 4Q23, up 3.4% year-over-year, driven by better-than-expected growth in electronics and home appliances [6]. - Net services revenue for 4Q23 was RMB59.6 billion, up 3.0% year-over-year, although marketplace and advertising revenues declined by 4% [6][27]. Future Outlook - The management's focus for 2024 includes enhancing merchant support and user acquisition strategies, with expectations for commission revenue to return to growth by 3Q24 [6]. - The company anticipates an 8% year-over-year growth in JD Retail's revenue and a 4% increase in non-GAAP operating profit for FY24 [6].

M N 8 Mar 2024 CMB International Global Markets | Equity Research | Company Update Bilibili (BILI US) Steady progress towards a sustainable business model Target Price US$20.50 Bilibili announced its 4Q23 results on 7 Mar: total revenue grew by 3% YoY to (Previous TP US$24.00) RMB6.35bn, in line with our/consensus estimate; adjusted net loss narrowed by Up/Downside 89.6% 58% YoY to RMB556mn, beating our/consensus estimate of RMB677/633mn, Current Price US$10.81 mainly attributable to the better-than-expecte ...

M N 11 Mar 2024 CMB International Global Markets | Equity Research | Company Update ZTE (000063 CH) Improved margins in 2023 Target Price RMB34.20 ZTE released its FY23 results. Revenue grew by 1.1% YoY to RMB124bn, in line with consensus and 3% higher than our forecast. Net profit increased by 15.4% (Previous TP RMB36.90) YoY to RMB9.3bn, 5% lower than consensus and in line with our forecasts. Gross Up/Downside 13.3% margin for 2023 was 41.5%, representing a 434bps increase from FY22. NPM Current Price RMB ...

Investment Rating - The report maintains a BUY rating on Prada SpA, indicating a potential return of over 15% over the next 12 months [2][16]. Core Insights - Prada's 4Q23 net revenue grew by approximately 18.1% year-over-year, driven by a remarkable 82% growth in the Miu Miu brand, surpassing expectations [2]. - The company reported strong growth across all regions, particularly in Japan (cFX +38%) and APAC (cFX +32%), while the US showed sequential improvement [2]. - Management confirmed positive sales momentum has continued into 2024, with expectations of sustained growth despite challenging market conditions [2]. - Prada plans to implement routine price hikes of 4-8% in 2024, focusing on clothing and leather goods, which is expected to support long-term margin expansion [2]. - The closure of outlet stores is progressing, with this segment contributing only about 10% to overall sales, set to be phased out in the next 2-3 years [2]. Financial Summary - Revenue is projected to grow from EUR 4,726 million in FY23A to EUR 5,091 million in FY24E, reflecting a year-over-year growth of 7.7% [3]. - Net profit is expected to increase from EUR 671 million in FY23A to EUR 739 million in FY24E, with a year-over-year growth of 10.1% [3]. - The report indicates a gross margin of 80.8% for FY24E, with EBIT margin projected at 22.9% [8]. - The target price for Prada is set at HK$65.2, representing a 17.1% upside from the current price of HK$55.7 [4]. Earnings Revisions - The earnings estimates for 2024E have been revised to reflect a revenue increase to EUR 5,091 million, up from EUR 5,008 million previously [7]. - Gross profit estimates for 2024E have been adjusted to EUR 4,113 million, indicating a 2.0% increase from prior estimates [7]. - Net profit for 2024E is now projected at EUR 739 million, a slight increase from the previous estimate of EUR 732 million [7].

Investment Rating - Maintain BUY rating with an adjusted target price of HK$24.8, based on 10x 2024E P/E, close to its 3-year average [3][4] Core View - ZTE is expected to capitalize on emerging trends in the telecom industry, focusing on the evolution towards 5.5G/6G and AI compute power [3] - The company's profitability improved steadily due to operation optimization and cost reduction, including the use of self-developed components [3] - Revenue growth is projected to be steady, with FY24E revenue expected to reach RMB133.7bn, a 7.6% YoY increase [1][3] Financial Performance - FY23 revenue grew by 1.1% YoY to RMB124.3bn, in line with consensus and 3% higher than forecasts [3] - FY23 net profit increased by 15.4% YoY to RMB9.3bn, 5% lower than consensus but in line with forecasts [3] - Gross margin for FY23 was 41.5%, a 434bps increase from FY22, driven by cost optimization and favorable revenue mix [3] - FY24E net profit is projected to grow by 16.3% YoY to RMB10.8bn, with a net margin of 8.1% [1][3] Segment Performance - Carrier segment revenue increased by 3.4% YoY, driven by domestic market share gains and overseas progress [3] - Consumer segment sales declined by 1.3% YoY due to overseas inventory digestion and intensified competition, partially offset by domestic growth in family network business [3] - Enterprise & government segment sales declined by 7.1% YoY in 2023 due to a slowdown in investment [3] Valuation Metrics - FY24E P/E is projected at 7.3x, with ROE expected to reach 14.3% [1] - FY25E P/E is projected at 6.5x, with ROE expected to reach 14.5% [1] Market Data - Current price is HK$17.92, with an upside potential of 38.4% to the target price of HK$24.8 [4] - Market capitalization is HK$13.5bn, with an average 3-month turnover of HK$162mn [5]

Investment Rating - The report upgrades the investment rating for Contemporary Amperex Technology Co. Ltd. from Equal-weight to Overweight [2][3] - The price target is raised from Rmb184.00 to Rmb210.00, implying a 34% upside potential [2][4] Core Insights - Price competition in the battery market is nearing an end, allowing CATL to enhance cost efficiency and return on equity (ROE) [3][10] - The company is expected to restore EBIT growth year-over-year after a slowdown in the first quarter of 2024 [3][23] - CATL's new generation mega production lines are anticipated to significantly improve cost advantages and ROE [3][12] Financial Performance - Revenue estimates for 2024 and 2025 are raised by 11% and 21%, respectively, to Rmb390.8 billion and Rmb49 billion [23][24] - The report projects a free cash flow yield increasing from 6% in 2024 to 10% in 2026 [4][28] - CATL's market capitalization is currently Rmb779.949 billion, with a share price of Rmb158.00 as of March 8, 2024 [7] Market Share and Competitive Position - CATL maintains a stable market share of approximately 46% in China and 37% globally as of 2023 [10][82] - The company is expected to account for 63% of new models launched in 2024, up from 45% in 2023, indicating strong demand for "CATL Inside" models [58][77] - CATL's market share in the EU rose to 36% in 2023, driven by strong sales from Tesla and other OEMs [60][62] Cost Efficiency and Production Capacity - CATL's new mega production lines are projected to reduce capital expenditures by over 40% while increasing production capacity significantly [12][44] - The company is expected to achieve unit operating expenses of US$55/kWh and capital expenditures of US$30/kWh in the coming years, which are substantially lower than global competitors [12][44] - CATL's R&D expenses are approximately US$3 billion annually, significantly higher than other global battery manufacturers, contributing to its competitive edge [36][37] Future Outlook - The report anticipates a robust growth trajectory for electric vehicle (EV) battery demand, projecting a 22% compound annual growth rate (CAGR) to approximately 3 TWh by 2030 [15][21] - CATL is expected to maintain a market share of 45% in China and 35% in the EU by 2030, with potential growth in the US market if technology licensing opportunities arise [15][72] - The company's bull case scenario values the stock at Rmb320, reflecting its potential as a cash cow or contract manufacturer in the EV supply chain [25][26]

Investment Rating - Maintain HOLD rating for NIO Inc (NIO US) with a revised target price of US$6 20, down from US$6 80 [2] Core Views - NIO's cash burn has accelerated despite the capital injection from CYVN, and the company shows no clear strategy to achieve profitability [2] - The company's 4Q23 earnings missed expectations, particularly in other income and SG&A expenses, with an operating loss of RMB6 6bn, RMB1 9bn higher than projected [2] - Management's FY24E gross profit margin (GPM) guidance of 15-18% is considered overly optimistic, especially given the failure to achieve 15% GPM in 3Q23 and 4Q23 [2] - Even with a 15% vehicle GPM and disciplined R&D and SG&A spending, NIO's FY24E net loss is expected to exceed RMB10bn, far from profitability [2] Financial Performance - 4Q23 revenue and gross profit from vehicles were in line with forecasts, but vehicle GPM of 11 9% missed the guidance of 15% [2] - Gross margin for other revenue was -34%, below the projected -25%, indicating that the elimination of service benefits is impacting margins more than expected [2] - R&D and SG&A expenses in 4Q23 were RMB720mn higher than estimates, contributing to the larger-than-expected operating loss [2] - FY24E sales volume forecast has been cut from 0 21mn units to 0 19mn units due to delayed deliveries of the second brand Alps [2] Earnings and Valuation - FY24E net loss revised from RMB14 7bn to RMB17 2bn, reflecting higher-than-expected costs and lower margins [2] - Target price cut to US$6 20 based on 1 4x revised FY24E revenue estimates, compared to Li Auto's 1 3x FY24E P/S [2] - NIO's profitability remains significantly weaker than peers like Li Auto, which trades at a lower P/S multiple [2] Quarterly Results - 4Q23 sales volume was 50,045 units, down 9 7% QoQ but up 25 0% YoY [7] - Overall ASP in 4Q23 was RMB341,756, down 0 6% QoQ and 14 8% YoY [7] - Gross margin improved to 7 5% in 4Q23, up 3 6ppt YoY but down 0 5ppt QoQ [7] - Operating margin was -38 7% in 4Q23, a decline of 13 3ppt QoQ [7] Financial Summary - FY23E revenue is projected at RMB55,618mn, with a gross margin of 5 5% [9] - FY24E revenue is expected to grow 17 3% to RMB65,239mn, with a gross margin of 8 1% [9] - FY24E operating profit is forecast at a loss of RMB18,814mn, improving from FY23E's loss of RMB22,655mn [9] - Net profit for FY24E is projected at a loss of RMB17,170mn, slightly better than FY23E's loss of RMB21,147mn [9] Cash Flow and Balance Sheet - FY23E net cash from operations is expected to be negative at RMB1,872mn, worsening to RMB10,446mn in FY24E [10] - Cash and equivalents are projected to decline from RMB32,935mn in FY23E to RMB22,783mn in FY24E [9] - Total liabilities are expected to decrease slightly from RMB87,787mn in FY23E to RMB74,228mn in FY24E [9] Growth and Profitability - FY24E revenue growth is forecast at 17 3%, with gross profit growth of 72 8% [10] - Operating margin is expected to improve from -40 7% in FY23E to -28 8% in FY24E [10] - Adjusted net profit margin is projected to improve from -33 2% in FY23E to -23 4% in FY24E [10]

M N 6 Mar 2024 CMB International Global Markets | Equity Research | Company Update Yuexiu Transport (1052 HK) 2023 core profit +91% YoY but below estimates; >7% yield + potential asset injection Target Price HK$7.20 Yuexiu Transport’s net profit in 2023 grew 69% YoY to RMB765mn. Adjusted (Previous TP HK$7.50) for RMB100mn of non-cash impairment on Shantou Bay Bridge, the core net Up/Downside 57.2% profit would be RMB865mn (+91% YoY), 10%/8% below our/consensus Current Price HK$4.58 forecast as the gross mar ...