12 May 2025 | 7:53AM CST NARI Technology (600406.SS) 1Q25 order intake 50%+ yoy, expecting UHV revenue to double in 2025E; Buy (on CL) Following Nari Tech's results announced on Apr 28, in-line FY24 and above-expectation 1Q25 results (report link), we attended the company's earnings call on May 9. We expect 13% revenue yoy growth in 2025E, above its target of 12% yoy growth, which marks the first time in eight years when the company has guided only 10% revenue yoy growth. This is reinforced by its current b ...

Shenzhen Longsys Electronics Co Ltd | Asia Pacific China BEST Conference 2025 Feedback Key Takeaways Conclusion: We remain OW and continue to like Longsys for its self-help story on enterprise business growth and overseas expansion. It has demonstrated highly efficient synergies across its newly acquired assets. The company is trading at 4.4x 12M Fwd P/B, -1s.d. compared to its historical average, indicating market concerns on the overall NAND cycle amid macro uncertainties. We believe major suppliers' util ...

10 May 2025 | 5:55AM HKT China Semis: Maxio (688449.SS): Local memory controller IC, expanding to PCIe 5.0 solution and enterprise market We talked to Maxio (688449.SS, Not Covered) management recently. Maxio is a local memory controller IC supplier, expanding from consumer electronics to enterprise market. Overall, management is positive on company's product migration from PCIe 4.0 to PCIe 5.0 memory controller IC, and expects revenue contribution to start from this year, capturing opportunities from risin ...

Investment Rating - The report maintains an "Underweight" (UW) rating for SMIC with a price target of HK$32.00 for December 2025, reflecting concerns over weak revenue guidance and gross margin pressures [1][11][35]. Core Insights - SMIC's 1Q25 revenues were below expectations, with a 5% shortfall compared to guidance, attributed to yield challenges and a decline in average selling prices (ASP) [7][11]. - The company experienced a 15% quarter-over-quarter growth in shipments, particularly in 12" wafers, driven by customer demand pull-ins and restocking in the automotive sector [1][7]. - The 2Q25 guidance indicates a revenue decline of 4-6% quarter-over-quarter, with management expressing caution regarding demand visibility beyond 3Q [1][11]. - Adjustments to revenue growth estimates for 2025 have been made, reducing the forecast from 16% to 10-11% due to a weaker outlook for the second half of the year [1][11]. Summary by Sections Financial Performance - 1Q25 revenue was reported at US$2,247.2 million, with gross margins at 22.5%, exceeding consensus estimates by 170-190 basis points [16][11]. - The adjusted net income for 2025 is revised down to US$705 million from US$788 million, while the revenue estimate is adjusted to US$8,877 million from US$9,284 million [2][24]. Quarterly Forecasts - For 2025, the quarterly forecasts show a decline in revenues for 2Q25 to between US$2,112 million and US$2,157 million, down 4-6% quarter-over-quarter [17][22]. - The gross margin for 2Q25 is expected to be between 18-20%, indicating continued pressure on profitability [17][22]. Valuation Metrics - The price target of HK$32 is based on a price-to-book ratio of approximately 1.5x, reflecting concerns over revenue and gross margin trajectories [11][36]. - The report anticipates that gross margins will remain in the range of 20-22% with return on equity (ROE) staying below 5% in the coming years [1][11].

Investment Rating - The investment rating for Shenzhen Inovance Technology is Equal-weight [5] Core Insights - The automation orders in April showed high single-digit year-on-year growth, although some industries like PIMM experienced a year-on-year decline. Conversely, sectors such as battery, machine tool, logistics machinery, packaging, and air conditioners for data centers maintained solid order levels [1] - Management is optimistic about maintaining stable gross profit margins (GPM) for automation in 2025, expecting a contraction of less than 1 percentage point year-on-year in Q1 2025, with no significant adjustments in average selling prices (ASP) year-to-date [2] - The top five clients in the New Energy Vehicle (NEV) sector contributed 50-60% of total EV powertrain revenue, with Li Auto leading at 20-30% [3] Summary by Sections Automation Orders - April automation orders showed high single-digit year-on-year growth, with weaker momentum in industries like PIMM, textile, solar, 3C, and air compressors. However, demand remained solid in battery, machine tool, logistics machinery, packaging, and air conditioners for data centers [1] Gross Profit Margin - Management expects the full-year GPM for automation to remain stable compared to a decline of 2 percentage points in 2024, with Q1 2025 showing a contraction of less than 1 percentage point year-on-year [2] Client Contributions - The top five NEV clients accounted for 50-60% of total EV powertrain revenue, with Li Auto contributing 20-30%, followed by GAC and Chery. Foreign auto OEM clients contributed 5-6% in aggregate [3] Product Pipeline - Inovance plans to launch significant humanoid products in the second half of 2025, including motors, screws, and modules, and aims to introduce a collaborative robot (cobot) product for public sale soon [3]

Investment Rating - Stock Rating: Overweight [4] - Industry View: Attractive [4] - Price Target: Rmb28.94 [4] Core Insights - LONGi expects a 10% global demand growth in 2025 under an optimistic scenario, with uncertain domestic demand in the second half of 2025 [2][7] - The company anticipates single-digit increases in Europe and the US, while robust demand is expected from emerging markets in the Middle East and India [2] - Oversupply may persist until a turning point, potentially in 4Q25 or 1Q26, as industry players navigate around profit break-even levels [2][7] - Despite mild demand and large supply, significant fluctuations in average selling prices (ASP) are not expected, indicating a more rational industry environment [2][7] - Financing channels are tightening, leading to rising financing costs across the industry [2] Summary by Sections Demand and Supply Dynamics - LONGi's cell production facility in Malaysia is capable of supplying the US market, which currently lacks solar cell supply, with anti-dumping and countervailing duty (AD/CVD) tariff rates at approximately 41% [2][7] - As of the end of 2024, LONGi acknowledged a valid cell capacity of 60GW (TOPCon and BC), with BC Gen II capacity projected to reach 50GW by the end of 2025 following capacity upgrades [2] Shipment Performance - In 1Q25, BC module shipments reached 4.3GW, driven by a rush in installations, particularly in the distributed solar sector, comprising 1.2GW of BC Gen II and 3.1GW of BC Gen I [3]

Investment Ratings - Zhaowei Machinery & Electronic: Not rated [1] - Honor Electronics: Not rated [2] - Kingdee: Buy [3] - Marketing Force: Not rated [5] Core Insights - Zhaowei Machinery & Electronic is expected to achieve over 20% year-on-year sales growth in 2025, driven by the electric vehicle (EV) segment and localization trends, despite potential softness in consumer electronics [1] - Honor Electronics anticipates over 30% year-on-year revenue growth from its data center power supply segment in 2025, following an 80% year-on-year growth in 2024, primarily due to high-power products for GPU servers [2] - Kingdee aims for breakeven in FY25E with low-teen year-on-year top line growth, supported by strong order momentum in the large enterprise segment, while facing uncertainties in the SME segment [3] - Marketing Force's "All-in-one" machine and AI agents are expected to be key growth drivers, with AI agents potentially increasing average revenue per user (ARPU) by 10-20% for SME customers [5][6] Summary by Sections Zhaowei Machinery & Electronic - Management projects over 20% sales growth in 2025, supported by partnerships with domestic OEMs in the EV segment and advancements in humanoid robots, although consumer electronics demand may soften [1] Honor Electronics - The company achieved 80% year-on-year revenue growth in 2024 for its data center power supply segment, with a forecast of over 30% growth in 2025, and holds approximately 30% market share in GPU server power supplies [2] Kingdee - Kingdee's management reiterated a target for breakeven in FY25E, with expectations of low-teen year-on-year growth and improved gross and operating profit margins, while the SME segment faces uncertainties [3][4] Marketing Force - The "All-in-one" machine powered by DeepSeek's LLM is seeing strong demand, and AI agents are expected to enhance revenue streams significantly for both SME and key account customers [5][6] AI Industry Trends - The LLM industry is focusing on improving reasoning models and developing AI agents, which are anticipated to drive demand for computing power significantly [7][8] - The introduction of standardized protocols like MCP is expected to support the ecosystem for AI agents, with hardware supply chains preparing for market growth [8] Liquid Cooling Industry - The liquid cooling market in China is experiencing intense competition, with a shift towards more sustainable technology solutions expected to benefit market leaders [9][10][11] Cloud Computing Industry - The non-AI cloud market remains competitive, while AI cloud services are identified as a key growth engine for leading tech companies [12][13]

Investment Rating - The report maintains a "Buy" rating for GDS and VNET, with target prices set at US$42/HK$41 for GDS and US$13 for VNET, indicating upside potentials of 65% and 118% respectively [8][64]. Core Insights - The growth outlook for the China data center sector remains unchanged, with expectations for GDS and VNET to report revenue growth of +16% and +18% year-over-year respectively for 1Q25 [1][61]. - The industry-wide utilization rate is projected to improve from approximately 60% in 2024 to over 70% by 2026, driven by increasing demand from AI and cloud services [20][22]. - Recent developments in domestic chips and AI technologies are expected to sustain wholesale data center demand in the mid-term, while retail demand may recover in the near term [37][41]. Summary by Sections 1. Company Performance Expectations - GDS is expected to report 1Q25 revenue of Rmb2.8 billion (+16% YoY) and adjusted EBITDA of Rmb1.3 billion (+18% YoY), aligning with consensus data [60]. - VNET is anticipated to report 1Q25 revenue of Rmb2.2 billion (+18% YoY) and adjusted EBITDA of Rmb610 million (+13% YoY), slightly below consensus expectations [61]. 2. Demand-Supply Dynamics - The report highlights a dual scenario of supply tightness and oversupply in China's data center market, with utilization rates expected to rise significantly by 2026 [20][36]. - Demand for data center capacity is projected to grow at a CAGR of 21% from 2024 to 2027, reaching 26GW by 2027 [22][25]. 3. Financing Developments - GDS and VNET have made significant progress in financing, enabling them to meet their capital expenditure requirements for 2025, with GDS needing Rmb4.3 billion and VNET Rmb10-12 billion [50][55]. - GDS has completed an ABS issuance, monetizing data center assets and generating Rmb1.2 billion in net cash proceeds [51]. 4. Market Outlook - The report anticipates that AI will account for 24% of the market demand by 2027, up from 11% in 2024, indicating a substantial shift in demand drivers [28]. - The upcoming results from major cloud players like Tencent and Alibaba are expected to provide insights into capital expenditure trends, which are crucial for the data center sector [38][59].

Ningbo Joyson Electronic Corp | Asia Pacific May 9, 2025 03:15 PM GMT China BEST Conference 2025 Feedback A-DCU project wins: Joyson recently secured an A-DCU (autonomous domain control unit) order based on Black Sesame's C1296 AD chip, and Joyson would become the exclusive DCU supplier for Dongfeng's multiple models to be launched within 2025. Humanoid potential: Joyson can supply up to Rmb50k value content per humanoid, including sensors, battery management system and support frame. While its humanoid bus ...

Flash | 08 May 2025 12:20:00 ET │ 12 pages GoerTek (002241.SZ) New ESOP Announced; Restated Same KPI For 2025/26 CITI'S TAKE GoerTek released 2025 ESOP (Draft) on 8th May. We noted that: (1) the 2025/2026 financial performance target is the same with the 2023 ESOP. (2) 2025 revenue target is 41%/35% higher than CitiE/VAe, and NP target is 26%/22% below CitiE/VAe. (3) 2026 revenue target is 59%/46% higher than CitiE/VAe, and NP target is 26%/17% below CitiE/VAe. (4) The exercise price is set to be Rmb22.10, ...