Investment Rating - The report maintains a "Buy" rating on Nari Tech and other domestic China opportunities, while downgrading Sungrow to "Neutral" [3][24]. Core Views - The report indicates a preference for domestic China opportunities, particularly in the grid technology sector, with a strong outlook for 2025E grid investment [2][3]. - The overall sector results for 1Q25 were largely in-line, with a median revenue change of -0% and net profit change of -6% compared to Goldman Sachs estimates [1][10]. - The report revises target prices by -14% to +13% based on 1Q25 results and forward-looking trends, rolling over the valuation base year to 2026E [1][43]. Summary by Sections 1Q25 Results Summary - 1Q25 sector results were largely in-line with 14 companies missing earnings, 13 in-line, and 5 beating expectations [1][10]. - The median gross profit margin (GPM), operating profit margin (OPM), and net profit margin (NPM) were -0.9pp, -1.7pp, and -0.5pp compared to Goldman Sachs estimates [11]. Demand Outlook - The report expects a weaker demand outlook for industrial automation in 2H25, lowering the growth expectation from flat to -4% year-on-year due to tariff impacts and uncertainties [12][16]. - Despite the challenges, a deep decline in demand is not anticipated, with government policies potentially providing support [14][20]. Domestic Opportunities - Nari Tech is highlighted as a preferred investment due to its strong growth guidance of 12% year-on-year for 2025, attributed to a robust backlog and favorable market conditions [24][46]. - The report emphasizes the potential benefits from government stimulus and the structural needs for smart grid investments in China [3][25]. AI Beneficiaries - The report continues to favor AI beneficiaries, particularly in the AI Data Centre (AIDC) space, with companies like Kstar and Envicool rated as "Buy" due to strong demand growth [2][34]. - The humanoid robot sector is also noted for its rapid R&D advancements, with companies like Sanhua being preferred for their product certainty and reasonable valuations [38][39]. Target Price Revisions - Target prices for the sector have been revised downwards by an average of -14% to +13%, reflecting the 1Q25 results and anticipated market trends [1][43].

Investment Rating - The report has lowered the average 2025 net profit growth forecast for covered banks to -5%, reflecting a decrease of 1 percentage point from previous estimates [15]. Core Insights - Negative net profit growth in 1Q25 for large SOE banks and CMB has led to stock price declines, prompting a reassessment of profit forecasts and target prices [1]. - Despite negative net profit growth, banks may still attract long-term funds due to limited downside on dividend yields compared to government bond yields [2][3]. - The report emphasizes the increasing importance of net profit growth in 1Q25, as investors have heightened expectations for shareholder returns following two years of excess returns [3][4]. - The report indicates that banks are facing challenges in achieving positive net profit growth in 2025 due to lower-than-expected net interest income (NII) and loan growth [11][15]. Summary by Sections Net Profit Growth - The average net profit growth forecast for covered banks is now -5% for 2025, with small banks BONB and BONJ expected to achieve 7% growth [15]. - Most banks are still releasing provisions, but not sufficiently to drive positive profit growth, and the potential for further provision releases is limited [5][15]. Dividend Payout Ratios - Banks may need to increase their dividend payout ratios to maintain stable dividends per share (DPS) amidst negative EPS growth [22][30]. - The report suggests that banks have the capacity to increase dividends, but their willingness remains uncertain [22][26]. Loan Growth and NIM - Loan growth for major banks is projected to be lower than previously expected, with NIM also declining more than anticipated [11][13]. - The report notes that while credit growth is expected to accelerate, overall loan demand remains weak due to external factors such as tariffs [13][40]. Fee Income and Consumer Finance - Some banks have reported better-than-expected growth in fee income, driven by bancassurance and fund sales [33]. - A potential recovery in consumer finance is anticipated in the second half of 2025, influenced by low base effects and banks seeking new business opportunities [31][34]. Stock Selection and Recommendations - Among large and medium-sized banks, CMB is viewed as having the least EPS dilution and the lowest required increase in dividend payout ratio, making it more capable of maintaining stable DPS [41]. - BONB is favored for its high growth potential relative to larger banks, while BONJ is rated Neutral due to ongoing convertible bond conversion processes [41].

Investment Rating - The report does not provide a specific investment rating for Espressif (688018.SS) as it is categorized as "Not Covered" [1]. Core Insights - Espressif is a local Wi-Fi chipset firm focusing on AIoT, energy, and industrial clients, leveraging RISC-V architecture for its products. The company is optimistic about growth in 2025, driven by product diversification and strong software capabilities [1][3][10]. - The company is expanding its product line to include Wi-Fi 7 and AI edge chipsets, aiming to capture a larger market share. A recent private placement plan was announced to fund this development [1][11]. - Espressif's products are primarily based on RISC-V architecture, which allows for lower royalty costs and in-house IP development. This aligns with a broader positive outlook on the RISC-V ecosystem in China [2][9]. Summary by Sections Company Overview - Espressif (688018.SS) is a fabless company providing Wi-Fi chipsets/modules for various applications, including consumer electronics and smart home solutions. The company integrates Bluetooth functionality and offers a comprehensive range of Wi-Fi SoC solutions [3][4]. Product Development and Market Outlook - The management is positive about the growth outlook for 2025, with expectations of a gross margin above 40% and plans to increase headcount by 10% to 15% for new product development [10]. - The company is focusing on upgrading its product offerings towards Wi-Fi 7, which features high throughput and low latency, suitable for high-end applications like AR/VR and HD video [11]. Competitive Positioning - Espressif's RISC-V based architecture provides a competitive edge with a broad product line that offers high performance and a favorable price-to-performance ratio. The company is also expanding into high-end solutions [2][4].

Investment Rating - The report indicates a stable investment outlook for the wealth management market, with an expected growth rate of approximately 8% for 2025, consistent with 2024 [1][9]. Core Insights - The wealth management market has shown signs of recovery in Q2, with a year-to-date growth rate nearing 5%, although this is weaker compared to previous years. Short-term indicators are trending towards normalization [1][2]. - Fixed-income products dominate the market, accounting for 75% of the total, with a total value of approximately 21.7 trillion. Short-term fixed-income products have seen significant growth, now representing 40.2% of the total [1][5]. - Regulatory scrutiny on valuation smoothing mechanisms is increasing, with expectations for compliance and market-based valuation systems to be established by the end of 2025 [1][7]. - The concentration of the wealth management market is rising, with the top 15 institutions holding 88% of the market share, reflecting a trend towards dominance by a few key players [3][15]. Summary by Sections Market Performance - The overall performance of the wealth management market in 2024 is expected to show a trend of lower growth initially, followed by recovery in Q2 due to improved liquidity and a recovering bond market [2]. - The growth rate for state-owned banks' wealth management is projected at 16.6%, outpacing joint-stock banks, while regional banks are expected to achieve the highest growth rate of 19.6% [1][12]. Product Structure and Risk Management - The reliance on valuation smoothing mechanisms has helped stabilize product performance, with a recent improvement in net asset values following a peak in March [4][6]. - The market is witnessing a shift towards short-term fixed-income products, which are becoming more prevalent, while the sales of structured products are declining [5][10]. Regulatory Environment - Regulatory bodies are emphasizing the need for fair and market-based valuation practices, with a focus on reducing risks associated with shadow banking [7][8]. - The anticipated regulatory changes are expected to enhance transparency and accountability in the wealth management sector [6][8]. Client Preferences and Trends - There is a notable preference among investors for low-volatility, stable products, with a significant increase in the popularity of wealth management products compared to traditional savings [27][29]. - High-value clients are growing at a faster rate than retail clients, indicating a shift in focus towards wealthier segments [29][30]. Future Outlook - The wealth management sector is expected to continue evolving, with a focus on enhancing digital capabilities and personalized advisory services to meet client needs [35][36]. - The overall trend indicates a gradual recovery in the wealth management market, driven by regulatory improvements and a more favorable economic environment [9][26].

Investment Rating - The report maintains a "Buy" rating for Sanhua, Shuanghuan, and a "Neutral" rating for LeaderDrive, Best Precision, and Moons' Electric [1][42][45][46][49]. Core Insights - The humanoid robot industry is experiencing rapid product iterations and increased R&D focus across various players, indicating a strong long-term total addressable market (TAM) potential despite uncertainties in near-term technological breakthroughs [1]. - The report forecasts 20,000 units of humanoid robots to be shipped in 2025 and 1.4 million units globally by 2035 [1]. - Domestic players are accelerating commercialization efforts, with several auto OEMs like Tesla, XPENG, and Xiaomi testing humanoid robots in their factories, aiming for mass production by 2025-2026 [2]. - The shift in R&D focus from hardware to robotic AI development is evident, with startups introducing various AI models trained on real data to enhance performance [2]. Product Progress - A small scale of commercialization is expected in 2025, with domestic players speeding up public sales of humanoid robots [2]. - Companies like ENGINEAI have started selling humanoid robots at competitive prices, with some models priced below RMB 200,000 [2]. - Major players are establishing production lines with capacities ranging from 10,000 to 50,000 units annually, adjusting expansion based on actual customer orders [6]. Software Development - High-quality real data is crucial for training robotic AI models, with startups focusing on developing their own AI systems [2]. - UBTech is optimizing its training strategy by combining real and simulated data to improve efficiency and reduce costs [2]. Hardware Innovations - The report highlights the emergence of new players in the humanoid robot component market, focusing on product differentiation [7]. - Companies like LeaderDrive and Shuanghuan are developing new reducer products and enhancing their manufacturing capabilities [7][29][31]. Supply Chain Dynamics - The supply chain for humanoid robots is expanding, with various component manufacturers reporting progress in R&D and sample testing [10]. - Companies like Sanhua and Tuopu are preparing for mass production of actuators and other components, targeting significant market shares [26][27]. Market Outlook - The humanoid robot market is projected to grow significantly, with various companies aiming to capture substantial market shares in their respective segments [42][45][46]. - The report emphasizes the importance of continuous innovation and adaptation in the rapidly evolving humanoid robot industry [2][6].

6 May 2025 | 1:27AM HKT Cambricon (688256.SS): 2025 private placement on AI chips and Software platform; R&D commitment to support long term growth; Buy Cambricon announced a 2025 private placement on May 1 (link), aiming to issue within 21m shares, or no more than 5% of current shares in exchange of no more than Rmb4,980m (US$685m) cash, to develop: (1) AI chips for generative AI, 58% of the funding, (2) Software for generative AI, 32% of the funding, and (3) supplement working capital, 10% of the funding. ...

Investment Rating - The report maintains an Overweight (OW) rating for Zhejiang Supor with a price target (PT) of Rmb61, revised down from Rmb63 [2][20][21]. Core Insights - Supor's 1Q25 sales and earnings increased by 7.6% and 5.8% year-over-year, respectively, aligning with market expectations. The company is expected to outperform peers due to lower US sales exposure, a diversified production base, and fixed profit margins for OEM orders from Groupe SEB [2][10][20]. - The small appliance industry in China is anticipated to face uncertainties in both domestic and overseas demand in 2025. However, Supor's sales and earnings growth is forecasted to be 3.9% and 5.8% year-over-year, respectively, for 2025 [2][10][20][16]. Summary by Sections Financial Performance - Supor's 1Q25 results showed domestic sales growth of approximately 3% year-over-year, driven by an extended trade-in policy for small appliances. Export sales increased by 16% year-over-year due to front-loaded orders ahead of US tariff increases [7]. - The gross profit margin improved by 0.1 percentage points year-over-year to 23.9%, while the operating profit margin increased by 0.4 percentage points to 9.9% [7][9]. 2025 Outlook - Supor aims for positive growth in both revenue and earnings in 2025, targeting a stable net margin despite weak domestic consumption demand. The company anticipates a slowdown in export sales growth starting from 2Q25, maintaining a full-year growth target of around 5% [7][10]. - The impact of US tariffs is expected to be limited, as most products exported to the US are now produced in Vietnam, which benefits from a 90-day waiver period for tariff hikes [7][10]. Valuation - The report employs a DCF model to derive a price target of Rmb61, implying an 18x forward P/E ratio, with an assumed WACC of 8.0% and a terminal growth rate of 1.0% [11][21][22]. - Supor's strong cash-generating capability and low capital expenditure requirements (<1% of sales) support a high dividend payout ratio, estimated to be over 90% for 2025-26, translating to a 5% dividend yield [10][20].

Investment Rating - The investment rating for Ming Yang Smart Energy is Overweight, with an industry view classified as Attractive [6]. Core Insights - The financial results for 2024 showed a net profit of Rmb346 million, representing an 8.1% year-over-year decline, primarily due to gross profit margin pressure, lower-than-expected wind turbine generator (WTG) shipments, and reduced wind farm sales [2][4]. - The guidance for 2025 includes total shipments expected to reach 20GW, with 16GW onshore and 4GW offshore, alongside a projected recovery in WTG gross profit margin by 5-10 percentage points due to improved average selling prices (ASP) and cost reductions [4][8]. Financial Performance Summary - In 2024, the gross profit margin (GPM) was 7.5%, down 0.5 percentage points year-over-year, with recurring net profit decreasing by 14.3% to Rmb175 million [2]. - Revenue for 2024 was Rmb27.2 billion, down 3.4% year-over-year, while total WTG shipments were 10.8GW, which was below guidance [2][8]. - The net loss for the fourth quarter of 2024 was Rmb462 million, compared to a net profit of Rmb148 million in the third quarter of 2024 [3]. Future Outlook - The company anticipates new orders to exceed the 2024 level of 27GW, with offshore projects accounting for 20% and overseas projects for 40% [4][8]. - The expected earnings per share (EPS) for 2025 is projected at Rmb2.36, with revenue forecasted to increase to Rmb76.244 billion [6].

Investment Rating - The report rates Yonyou Network as Neutral with a price target of Rmb12.00 for December 2025, down from a previous target of Rmb13.00, indicating a potential downside of 12% from the current share price [2][12][13]. Core Insights - Yonyou experienced another earnings shock in Q1 2025, reporting a 21% year-over-year revenue decline, the worst in over 30 years, and a net loss of Rmb736 million, resulting in a net profit margin of -53% [8][11]. - Despite the poor financial results, Yonyou's share price has increased by 35% year-to-date and 17% over the past 12 months, contrasting with the SHCOMP index performance [8]. - The company has been adjusting its workforce, reducing staff by 25% over two years, with current employment at 19,600 [8]. - The report suggests that Yonyou's aggressive R&D capitalization policy, which exceeds 50% of total spending, raises concerns about the quality of its earnings [11]. Summary by Sections Financial Estimates - Adjusted EPS for FY25 is revised down to -Rmb0.34 from -Rmb0.22, and for FY26 to -Rmb0.12 from Rmb0.01 [3]. - Revenue forecasts for FY25-26 have been reduced by approximately 4% [8]. Quarterly Forecasts - The adjusted EPS for FY24 is projected at -Rmb0.62, with expectations of gradual improvement leading to a positive EPS of Rmb0.07 by FY27 [4][10]. Performance Metrics - Yonyou's revenue for FY24 is estimated at Rmb9,153 million, with a projected growth of 2.9% in FY25 and 7.5% in FY26 [10]. - The company reported a significant decline in gross profit margin to 39.1% in Q1 2025, down from 41.5% in the previous year [18]. Market Position - Yonyou holds a mid-30% market share in the ERP sector in China, primarily serving state-owned enterprises and government organizations [11]. - The report recommends considering rival Kingdee for ERP investments due to better execution and growth metrics [12].

中国 证券研究 2025 年 4 月 27 日 比亚迪-H&A 2025 年 1 季度业绩强劲；预计未来增长继续 比亚迪 2025 年 1 季度业绩几无意外，因为公司已于 4 月 9 日发布了 超出预期的业绩预报。业绩预报后，我们上调了盈利预测（链接）， 预计 2025 年平均单车利润为 1.05 万元（对比管理层指引为 1 万元， 市场一致预期为 9,800 元）。我们注意到，今年迄今市场对公司 2025 全年的一致预期已上调了 17%；尽管如此，我们的预测依然高于市场 。比亚迪仍是我们的首选股。 分析师声明及重要披露，包括非美国分析师披露，见第 5 页。 摩根大通与其研究报告所覆盖的公司开展业务，或寻求与这些公司开展业务。因此，投资者应意识到其中可能存 在利益冲突，进而可能会影响本报告的客观性。投资者在做出投资决策时，本报告之观点应仅作为投资者的考虑 因素之一。 亚太汽车行业研究主管 证券分析师: 赖以哲 AC (86-21) 6106 6353 nick.yc.lai@jpmorgan.com 登记编号: S1730520030008 证券分析师: 沈佳捷, CFA (86-21) 6106 6352 ...