Investment Rating - The report maintains a "Buy" rating for VeriSilicon, with a 12-month target price of Rmb119, indicating an upside potential of 35.9% from the current price of Rmb87.59 [11][9]. Core Insights - VeriSilicon is experiencing strong order momentum, with orders on hand reaching Rmb2.46 billion as of the end of Q1 2025, up from Rmb2.41 billion at the end of 2024. Approximately 80% of these orders are expected to be delivered within one year, supporting growth from Q2 2025 onwards [2][8]. - The company is expanding its capabilities in Chiplet and GPU/AI IP, supported by private placement funding approved by the CSRC in April 2025. This funding will primarily focus on developing high-performance, low-power Chiplet platforms for AI and autonomous driving applications [3][8]. - Revenue from turnkey solutions, which include chipset design and mass production services, has seen significant growth, increasing by 41% year-over-year [4][7]. - The investment thesis highlights VeriSilicon's leading position in the semiconductor IP market in China, with a 2% share in the global IP market. The company is well-positioned to capitalize on the rising demand for computing power, particularly in AI and autonomous driving applications [8][9]. Summary by Sections Orders and Revenue - Orders on hand reached Rmb2.46 billion at the end of Q1 2025, supporting anticipated growth. The product mix is shifting towards more advanced projects (14nm and above), which carry higher value [2][8]. Funding and Expansion - The company plans to utilize private placement funding for R&D in Chiplet and GPU IP/AI IP, focusing on local client needs for high-performance chipsets [3][8]. Turnkey Solutions - The revenue growth from turnkey solutions has increased significantly, indicating strong demand in consumer electronics and a diversified client base across various sectors [4][7]. Market Position and Valuation - VeriSilicon is recognized as a leading semiconductor IP and design service provider in China, with a target P/E multiple of 31x for 2029E, suggesting that the shares are currently undervalued [8][9].

Investment Rating - The report assigns an "Overweight" (OW) rating to Chow Tai Fook (CTF), an "Equal Weight" (EW) rating to Laopu Gold, and an "Underweight" (UW) rating to both Lao Feng Xiang (LFX) and Chow Tai Seng (CTS) [8][11]. Core Insights - A milder rise in gold prices is expected to support a recovery in gold jewelry demand, particularly for weight-based gold jewelry products, which constitute over 70% of the gold jewelry market. There is an anticipated return of pent-up demand due to a recent decline in gold prices, which fell by 10% from its peak in late April [3][4]. - CTF is projected to benefit the most due to its high exposure to weight-based gold products (over 50%) and a higher proportion of self-operated stores (approximately 30% of sales). The company is seen as having better flexibility in switching between weight-based and fixed-price strategies [4][11]. - Laopu is expected to see solid demand growth, although the growth momentum may moderate due to stabilization in gold prices and a higher year-over-year comparison base. The brand is still in the early stages of consumer penetration, and demand for high-end heritage gold products is structural [5][11]. Summary by Company Chow Tai Fook (CTF) - Price target raised from HK$10.5 to HK$13, with an increase in target PE from 14x to 16x, reflecting the stock's average since 2016. The bull and bear case prices have also been adjusted to HK$17 and HK$7, respectively [6][32]. - Revenue forecasts for 2025-27 have been slightly cut by 2-3% due to macroeconomic uncertainties, while earnings for 2025 are reduced by 4% but increased for 2026 and 2027 by 3% and 0%, respectively, due to better margin outlook [31][32]. Laopu Gold - Price target lowered from HK$980 to HK$865, with a decrease in target PE from 37x to 33x, reflecting a normalization in growth outlook and recent equity fundraising. The bull and bear case prices are now HK$1345 and HK$395, respectively [6][34]. - Revenue estimates for 2025-27 have been slightly adjusted, with a projected revenue of Rmb23,118 million for 2025, reflecting a year-over-year growth of 171.8% [34]. Lao Feng Xiang (LFX) - Price target reduced from Rmb45 to Rmb36, with revenue forecasts for 2025-27 cut by 20-25% and earnings forecasts by 16%, due to severe revenue declines and store closures [6][35]. Chow Tai Seng (CTS) - Price target lowered from Rmb9.5 to Rmb9, with revenue forecasts for 2025-27 cut by 21% and earnings forecasts by 14-25%, reflecting a more severe decline than previously anticipated [6][35].

May 20, 2025 06:21 AM GMT 中国医药板块正处于国内政策环境、创新管线的开发验证阶 段和全球化布局的三重拐点。在传统估值框架下，以上利好 因素仍然被低估。我们认为行业可持续的结构性增长和未来 丰富的催化剂会继续推动板块价值重估。建议超配：翰森制 药、中国生物制药、石药集团。 要点 国内政策变得更加友好；相对远离地缘政治风险。自2024年下半年以来，中国医 药行业迎来了一系列支持性政策，包括对创新药的全链条支持、VBP指引的微调以 及商业保险公司更多参与的支付改革。此外，大多数中国制药公司对美国的出口 敞口较低，这使得该行业能够更好地免受多变的地缘政治/美国药品定价动态的影 响。 创新药资产的催化效应将释放产品管线潜在价值⋯⋯ 根据我们的 SOTP 分析，尽 管传统产品组合仍继续拖累许多公司的短期增长，但对股票估值的贡献已经很 小。主要旧药的销售的下滑和触底可被视为相关股票的清算事件，以便投资者重 新审视管线价值和催化剂。 ⋯⋯以及来自全球领军企业的更多外部认可。全球医药市场规模是中国国内市场 的6.6倍。鉴于许多中国制药公司渴望最终成为真正的全球参与者，他们通过将对 外授权、新公司和直接 ...

Investment Rating - The investment rating for Foxconn Industrial Internet is "Buy" with a 12-month price target of Rmb23.80, indicating an upside potential of 24.9% from the current price of Rmb19.06 [9]. Core Insights - The management of Foxconn Industrial Internet remains optimistic about growth in 2025, driven by generative AI, which is expected to significantly boost the company's AI servers and high-speed networking equipment [1][3]. - The company has demonstrated strong growth in cloud computing revenues, which increased by over 50% year-on-year in Q1 2025, with revenues from cloud service providers (CSPs) growing by over 60% year-on-year [3]. - The company is well-positioned to navigate geopolitical tensions due to its global production capabilities and strong management across various operational aspects [3]. Summary by Sections AI Servers Outlook - Management is positive about the AI servers and networking business, expecting continued growth throughout the year. The company has competitive strengths in R&D, automated production, and a comprehensive product offering [3]. - The cloud computing segment's revenue growth is attributed to both AI servers and general servers, with brand customers also showing a growth of over 30% year-on-year [3]. Global Production Sites - The company emphasizes its global production capabilities, which allow it to meet client needs amid geopolitical uncertainties. It has established production sites in the US, including Wisconsin, California, and Texas, capable of producing various AI server models [3]. - The focus on high-value products and automated production in the US enhances yield rates and production efficiency [3]. Switch Business Growth - Management is optimistic about the growth of the switch business, particularly high-speed switches, with revenue growth for 400G and 800G switches projected to be in triple digits for 2024 [4][7]. - The company's 800G switch is already in shipment, contributing to rising revenue, and it serves leading brand customers such as Cisco, Arista, and NVIDIA [4][7].

Investment Rating - The report assigns an "Overweight" rating to Tesla Inc, with a price target of $410.00, while the stock was priced at $349.98 as of May 16, 2025 [7]. Core Insights - Investors currently value Tesla's core automotive business between $50 and $100 per share, but this valuation does not account for the broader potential of the company, similar to how Amazon and Apple were initially undervalued [1]. - The installed base of Tesla vehicles is projected to reach approximately 50 million units by the mid-2030s, with each $100/month of Average Revenue Per User (ARPU) contributing an estimated $80 to $100 per share to Tesla's valuation [2]. - Tesla's energy storage business is highlighted as the fastest-growing and highest-margin hardware segment, valued at $67 per share, excluding potential recurring service revenue from stationary storage infrastructure [3]. - The humanoid robot market, represented by Tesla's Optimus, is seen as having a much larger total addressable market (TAM) than the automotive sector, with significant implications for labor substitution and valuation [4]. - The report emphasizes that Tesla's market cap of $1.1 trillion is largely based on businesses with limited disclosure or those not yet launched, presenting challenges for public investors [5]. Summary by Sections Automotive Business - The core automotive business is valued at $75 per share in the base case, with projections of 4.7 million units sold by 2030 and an EBITDA margin of 16.1% [13]. Energy Business - Tesla Energy is valued at $67 per share, with a projected 20-year revenue CAGR of 25.4% and a gross margin of 26.5% by 2030 [13]. Mobility and Network Services - The mobility and ride-sharing segment is valued at $90 per share, with a fleet of 7.5 million vehicles by 2040 and an EBITDA margin of 29% [13]. - Network Services are projected to contribute $160 per share, with a 65% attach rate at $200 ARPU by 2040 [13]. Overall Valuation - The total valuation in the base case is estimated at $410 per share, with a bull case reaching $800 and a bear case at $200 [13].

Investment Rating - The investment rating for Kweichow Moutai is "Buy" with a 12-month price target of Rmb2,017, indicating an upside potential of 27.7% from the current price of Rmb1,578.98 [8][10][19]. Core Insights - Kweichow Moutai's management expressed confidence in achieving a 9% year-on-year sales growth by 2025, supported by a diversified channel strategy and strong brand equity [2][6]. - The company has implemented a "4+6" channel layout to enhance consumer reach, consisting of 4 key direct sales channels and 6 wholesale channels [2][11]. - The product strategy focuses on maintaining pricing stability and a structured product portfolio, with Classic Feitian Moutai as the cornerstone [2][11]. - Long-term strategies include globalization efforts, with early progress noted in Southeast Asia and Japan, and targeting the younger generation through product and technological innovations [6][11]. - Kweichow Moutai has initiated share buybacks exceeding Rmb4 billion, aiming to fulfill its buyback commitment of Rmb3-6 billion soon, with plans for a new round of buybacks in progress [2][6]. Financial Targets and Strategies - The company aims for a sales growth of 9% year-on-year by 2025, supported by a diversified channel strategy and brand equity [2][6]. - The pricing system and product portfolio structure will remain stable, focusing on various product sizes and types, including cultural Moutai spirits and vintage collections [11]. - The management sees a rational spending sentiment emerging in the macro environment, which they believe will benefit leading brands during industry transitions [6][11].

Investment Rating - The investment rating for iFlytek is Neutral, with a 12-month price target of Rmb55.30, indicating an upside potential of 15.9% from the current price of Rmb47.70 [9]. Core Insights - iFlytek has initiated a diverse AI monetization strategy targeting ToC, ToB, and ToG clients, focusing on API token fees, industry-specific AI solutions, and SOE/government projects [2][3]. - The company launched an "On-Prem LLM All-in-One solution" for enterprises, allowing clients to deploy multiple AI models on a single machine, enhancing operational efficiency [3]. - iFlytek's AI models are being integrated into automotive solutions, with applications in smart cockpits and audio systems, showcasing the company's expansion into the automotive sector [4][6]. Summary by Sections AI Monetization Strategy - iFlytek's AI monetization strategy includes the Spark LLM API token fee, industry solutions in education, healthcare, and automotive, and customized AI model services for SOE/government projects [2]. - The upgraded Spark reasoning model X1 was released in April 2025, with plans for continued in-house development of AI foundation models to optimize performance [2]. Enterprise Solutions - The "On-Prem LLM All-in-One solution" launched in April 2025 supports multiple AI foundation models for enterprise clients, allowing for customized solutions across various industries [3]. - Key features of the solution include Spark Insight for sales conversation analysis, OceanDoc for presentation generation, and Spark Wallex for integrating AI into hotel software applications [3]. Automotive Applications - iFlytek showcased its smart cockpit and smart audio solutions at the Autoshow Shanghai, with AI models adopted by over 16 automotive brands [4][6]. - The AI agents in the smart cockpit can summarize user-generated content and provide tailored recommendations, enhancing the passenger experience [6]. Financial Projections - Revenue projections for iFlytek indicate growth from Rmb23.34 billion in 2024 to Rmb41.02 billion by 2027, with EBITDA expected to rise from Rmb2.53 billion to Rmb6.39 billion in the same period [9]. - The company is expected to achieve an EPS of Rmb0.24 in 2024, increasing to Rmb1.95 by 2027, reflecting strong growth potential [9].

Investment Rating - The report rates NARI Technology as a "Buy" with a 12-month target price of Rmb31.8, implying a 39% upside based on an unchanged 25X 2026E P/E [1][12][15]. Core Insights - NARI Technology is expected to achieve a revenue growth of 13% year-on-year (yoy) in 2025E, surpassing its target of 12% yoy growth, supported by a backlog of Rmb50.7 billion and a strong order intake of over 50% yoy in 1Q25 [1][2][15]. - The company anticipates that its Ultra-High Voltage (UHV) revenue will double in 2025E, driven by significant project execution and new contracts [1][4][7]. - NARI Technology is positioned to benefit from China's structural smart grid needs, with a focus on overseas markets and new growth drivers such as AI integration and market-based electricity price reform [1][5][10][15]. Summary by Sections Revenue and Growth - The company targets Rmb64,500 million in revenue for 2025E, indicating a 12% yoy increase, marking a shift in guidance to a more conservative growth outlook after eight years [2][15]. - The 1Q25 revenue growth was reported at 16% yoy, with power grid automation growing by 25% yoy, primarily due to UHV revenue recognition [1][4]. Segment Performance - **Grid Automation**: Revenue in this segment was Rmb28.5 billion in 2024, with a growth expectation of over 10% yoy in 2025E, driven by UHV revenue [4]. - **Grid Digitalization**: This segment recorded Rmb12.4 billion in revenue in 2024, with a projected growth of close to 10% in 2025E, supported by national policies promoting AI integration and virtual power plants [5]. - **Power Generation**: Revenue reached Rmb12.2 billion in 2024, with a growth expectation of 14% yoy in 2025E, despite a moderation in installation growth [8]. - **Industrial Internet**: The segment faced a decline of 24% yoy in 2024 but is expected to return to growth in 2025E [9]. Overseas Business - NARI Technology's overseas revenue reached Rmb3.28 billion in 2024, a 135% yoy increase, contributing 6% to total revenue, with expectations for continued growth in 2025E [10][15]. Expense Management - The company guided an expense of Rmb7,741 million for 2025E, indicating a 19.6% yoy increase, primarily due to increased R&D investments [11][15]. Valuation and Financial Metrics - The report maintains earnings forecasts unchanged, with a focus on a stable margin profile supported by necessary investments in R&D and a reclassification of interest income [12][15].

Investment Rating - The report assigns an "Overweight" rating to Shenzhen Longsys Electronics Co Ltd [3] Core Insights - The company is recognized for its self-help story regarding enterprise business growth and overseas expansion, demonstrating efficient synergies across newly acquired assets [2] - The current trading valuation is at 4.4x 12M forward P/B, which is -1 standard deviation compared to its historical average, reflecting market concerns about the NAND cycle amid macro uncertainties [2] - Key catalysts to monitor include major suppliers' utilization rate decisions for the second half of 2025, as continued supply discipline could positively influence pricing trends in the upcoming quarters [2] Financial Overview - The company anticipates its enterprise business (eSSD+RDIMM) revenue to double this year to RMB 2 billion, with a target of RMB 10 billion revenue contribution from this segment by 2027, representing 50% of its estimated revenue for 2025 [5] - Revenue projections for the next few years are as follows: RMB 17,463 million in 2024, RMB 21,830 million in 2025, RMB 29,282 million in 2026, and RMB 34,844 million in 2027 [3] - The earnings per share (EPS) estimates are projected to increase from RMB 1.22 in 2024 to RMB 5.58 by 2027 [3] Market Dynamics - Positive pricing trends are expected into the second and third quarters of 2025, with inventory levels remaining healthy among smartphone customers [5] - The company is focusing on overseas expansion, with Zilia targeting a 50% year-over-year revenue growth and Lexar aiming for a 30% year-over-year increase [5]

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 ...