Investment Rating - The investment rating for the report is "Overweight" [3][16]. Core Insights - The report highlights the technology and leadership position of Contemporary Amperex Technology Co. Ltd (CATL) in the global electric vehicle (EV) and energy storage system (ESS) battery markets, emphasizing its ability to maintain resilient profits despite pricing pressures in the supply chain [11][16]. - The price target for CATL is set at Rmb370.00 for June 2026, based on a projected P/E ratio of 20x for 2026E-27E, which is at the lower end of the company's historical trading range due to slower industry growth compared to earlier stages [12][17]. Financial Estimates - For FY25E, net sales are projected at Rmb404,942 million with a year-over-year growth of 12% [5]. - The gross profit for FY25E is estimated at Rmb99,220 million, maintaining a gross margin of 25% [5]. - The adjusted net income for FY25E is forecasted to be Rmb61,861 million, reflecting a net profit growth of 22% year-over-year [5][20]. Performance Drivers - The report identifies various performance drivers, including market factors contributing 27%, regional factors at 23%, and macroeconomic factors at 13% [13]. - The correlation of CATL's performance with the MSCI Asia Pacific ex-Japan index is noted at 0.62 over six months and 0.53 over one year [13]. Valuation Metrics - The report provides valuation metrics, indicating an expected revenue growth of 19.7% for FY26E and an EBITDA margin of 25.5% for the same year [14]. - The adjusted P/E ratio is projected to decrease from 21.8 in FY24A to 12.4 in FY27E, reflecting a more favorable valuation over time [14][20].

V i e w p o i n t | 27 Jun 2025 05:08:50 ET │ 26 pages China K12 Educational Services U/G EDU, D/G TAL; Initiate Pair Trade to OW EDU's K12 Operating Leverage vs. UW TAL's Content Solutions Drag CITI'S TAKE We are initiating a pair trade to capitalize on the diverging operational trajectories and valuation dynamics within China's K-12 education sector as we upgrade EDU to Buy (TP US$77/HK$60, +54%/+54%) and downgrade TAL to Neutral (TP US$11.54, -14%). We expect the earnings momentum gap between the two com ...

Investment Rating - The report maintains a "Buy" rating for CATL A/H shares, with a 12-month price target of Rmb323.00 for CATL A shares and HK$343.00 for CATL H shares, indicating an upside potential of 27.8% and 5.7% respectively [1][4][20]. Core Insights - The launch of Xiaomi's YU7, equipped with CATL batteries, is expected to bolster CATL's product mix improvement and drive growth in Qilin battery penetration starting in the second half of 2025 [2][26]. - Xiaomi has become CATL's largest high-end battery customer, contributing approximately 50% of Qilin and Shenxing installations in Q1 2025, with projections indicating significant growth in battery supply to Xiaomi in the coming years [3][31]. - The report emphasizes that product mix improvement is crucial for CATL's unit profit expansion, which has been undervalued by the market [4][38]. Summary by Sections Market Overview - CATL's market capitalization is Rmb1.2 trillion (approximately $160.7 billion), with an enterprise value of Rmb881.8 billion (approximately $123.0 billion) [5]. Financial Projections - Revenue is projected to grow from Rmb362 billion in 2024 to Rmb588 billion by 2027, with EBITDA increasing from Rmb77.5 billion to Rmb143 billion over the same period [5][18]. - EPS is expected to rise from Rmb11.58 in 2024 to Rmb22.49 in 2027, reflecting a strong growth trajectory [5][18]. Growth and Margins - Total revenue growth is forecasted at -9.7% in 2024, followed by a recovery with 20.4% growth in 2025 and 22.1% in 2026 [13]. - EBITDA margin is expected to improve from 21.4% in 2024 to 24.3% by 2027, indicating enhanced profitability [13]. Competitive Position - CATL is projected to maintain a significant market share in the EV battery sector, with Xiaomi closing the gap with top competitors like Tesla and Geely [28][30]. - The report highlights that CATL's high-end NCM battery, Qilin, is expected to see a resurgence in penetration, alleviating pressures from lower-priced LFP battery competition [2][24].

Investment Rating - The report assigns a "Buy" rating to Zai Lab's H shares/ADS, with a 12-month DCF-based target price of HK$41.24/US$52.91, indicating an upside potential of 43.2% for the US shares and 39.8% for the HK shares [6][7]. Core Insights - Zai Lab management reiterated FY25 guidance, expecting total sales between US$560 million and US$590 million, with cash profitability anticipated in Q4 [5][6]. - The company has received FDA approval for the pivotal trial design for ZL-1310, which includes a sample size of 300-400 patients and an option for accelerated approval [6][7]. - Strong phase 3 data for bemarituzumab is expected within the next three months, with three key readouts anticipated [5][6]. Summary by Sections FY25 Guidance and Financial Outlook - Management observed a recovery in efgar sales in Q2 after a soft Q1, with confidence in achieving FY25 sales guidance [5]. - Gross Profit Margin (GPM) is expected to improve, with a target to reduce GPM by two-thirds by 2027 compared to 2024 [5]. Drug Development Updates - Positive feedback was received for SUL-DUR, with larger sales expected in 2026 [5]. - KarXT is on track for approval by the end of 2025 or early 2026, with recruitment for key commercial positions ongoing [5]. FDA and Business Development - The FDA has approved the pivotal trial design for ZL-1310, allowing for conditional approval based on interim data [6]. - Management indicated no immediate financing plans, stating sufficient resources to support the pivotal trial [6].

Asia Pacific Equity Research 23 June 2025 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. S.F. Holding Co. Ltd - A/H How the leader stays ahead? May operation data sheds some light SF Holdings has defied expectations with its remarkable performance in the lo ...

Investment Rating - The investment rating for 3SBio Inc. is Neutral with a 12-month price target of HK$9.37, indicating a downside potential of 58.2% from the current price of HK$22.40 [8][7]. Core Insights - The management of 3SBio Inc. highlighted the successful execution of the licensing-out deal for SSGJ-707 with Pfizer, which was negotiated in less than two months. The initiation of global clinical trials is expected to begin in the third or fourth quarter of 2025 after the deal closes [2][1]. - The company is actively seeking business development opportunities with a growing pipeline that includes assets such as TL1A, BDCA2, and multiple early-stage antibodies, as well as a pre-clinical candidate for weight loss [2][1]. - Product sales in the first half of 2024 are anticipated to be soft due to a challenging industry environment and a high sales base from key drugs, particularly TPO, which saw a growth of 23% year-on-year in the first half of 2024 [3][1]. Summary by Sections Licensing and Business Development - The licensing-out deal for SSGJ-707 is a significant milestone, with the first overseas study expected to start in late 2025. The phase 3 clinical trial for SSGJ-707 as a monotherapy has already commenced in China [2][1]. - The company is focusing on sourcing late-stage assets to enhance its product portfolio, including a recently licensed oral paclitaxel expected to drive growth in 2026 [6][1]. Financial Performance - The company anticipates earnings growth to outperform revenue growth due to savings in operating expenses, despite the soft product sales outlook for the first half of 2024 [3][1]. - The financial forecasts indicate a revenue increase from RMB 9,108 million in 2024 to RMB 11,112.7 million by 2027, with an expected EBITDA growth from RMB 2,922.2 million to RMB 3,856.6 million over the same period [8][7].

Investment Rating - The report initiates coverage on China Reinsurance Group with an "Overweight" rating, highlighting its dominant position in the Chinese reinsurance market with a projected market share of nearly 50% in 2024 [1][9][14]. Core Insights - China Reinsurance Group is positioned as a benchmark in the Chinese reinsurance industry, benefiting from unique product offerings that help alleviate capital pressure on life insurance companies. The company is expected to experience growth rates higher than direct insurance companies throughout economic cycles [1][9][14]. - The demand for financial reinsurance contracts is anticipated to increase due to macroeconomic pressures, particularly from life insurance companies facing solvency challenges. This positions China Re as a critical player in the market [1][4][29]. - The company has a significant overseas business exposure, contributing approximately 15% to its total premium income, which helps diversify business risks and provides foreign exchange hedging benefits [1][4][14]. Summary by Sections Investment Rationale - The overall reinsurance industry in China is projected to see a rise in gross written premiums (GWP) to RMB 228 billion in 2024, with China Re holding a market share of about 50% [13][14]. - The report emphasizes the company's unique business model and its ability to maintain lower volatility in underwriting performance compared to direct insurers, which typically experience more significant fluctuations [13][14]. Financial Performance - China Re's consolidated GWP is expected to reach approximately RMB 178 billion (USD 25 billion) in 2024, with a five-year compound annual growth rate (CAGR) of 4.2% from 2019 to 2024 [13][14]. - The report forecasts a net profit growth of 87% for 2024, driven by strong underwriting performance and favorable investment results [38]. Valuation - The report employs a price-to-earnings (P/E) valuation method, suggesting a target price of HKD 1.40 by December 2025, based on a P/E ratio of 5 times the expected earnings for fiscal year 2025 [9][14][23]. - The valuation is considered conservative compared to the average P/E ratios of 6-8 times for global reinsurance peers, reflecting China Re's market dominance and growth potential [9][14][23]. Overseas Business Strategy - The acquisition of Bridge Insurance in 2018 has significantly enhanced China Re's overseas business, with this segment now contributing 15% to total premium income, up from 3% in 2018 [46][48]. - The report highlights the advantages of having a diversified overseas business, including risk mitigation from regional catastrophes and improved asset-liability management [46][48].

25 June 2025 | 2:27AM HKT CATL (300750.SZ) Unlocking value through unit GP expansion; reinstate on A-share and initiate H-share at Buy | 300750.SZ | 12m Price Target: Rmb323.00 | Price: Rmb245.92 | Upside: 31.3% | | --- | --- | --- | --- | | 3750.HK | 12m Price Target: HK$343.00 | Price: HK$303.00 | Upside: 13.2% | 3. Robust earnings growth: We project a robust 25% EPS CAGR from 2024-2030E, driven by a combination of volume growth and unit GP expansion. Catalysts: 1) Positive quarterly earnings that indicat ...

Presenters: Sophia Dong - Investor Relations Director Bottom line: Management highlighted encouraging ex-China development progress of out-licensed assets including B7H3 ADC, B7H4 ADC and oral GLP-1. Product sales guidance of double-digit growth in 2025 was re-iterated, and key product Ameile targets peak sales of Rmb8bn with upsides from combination therapy. We expect potential deal-making opportunities to come from early-stage ADC (EGFR/cMET, CDH6, CDH17), KRAS G12Di and next-generation disease modifiers ...

Investment Rating - The investment rating for Genscript Biotech Corp. is "Buy" with a 12-month price target of HK$27.34, indicating an upside potential of 84.5% from the current price of HK$14.82 [8]. Core Insights - Management highlighted that ProBio revenues are expected to bottom out, driven by the LaNova deal, with a projected revenue of US$95 million in FY24, reflecting a 13% year-over-year decline [5]. - The protein segment is anticipated to become the second growth engine for the life science group, with a significant increase in revenue contribution from 23% in 2023 to nearly 30% [6]. - The company expects a steadily improving bottom line, with share buybacks and dividends under consideration as profitability improves starting from 2025 [6]. Summary by Sections ProBio Performance - ProBio revenues are projected to recover, with management confident that the revenue is bottoming out due to factors such as improved funding for biotech clients and stabilizing pricing in China [5]. - The LaNova/Merck deal is expected to contribute significantly, with US$235 million booked in the first half and an additional US$75 million milestone expected in 2H25 [5]. Life Science Group Growth - The life science group has shown steady growth of 10-20% over the years, with gene synthesis having a total addressable market (TAM) of US$1-2 billion, while customized protein synthesis is expected to have a TAM 10 times larger [6]. - The company is reallocating resources to enhance growth in the protein synthesis sector, which is expected to be a major growth driver in the coming years [6]. Financial Outlook - Excluding the impact from Legend deconsolidation, the adjusted net profit for the ex-Legend businesses is expected to reach US$60 million in FY24, with consistent profitability anticipated starting in 2025 [6]. - Management expects the EBITDA break-even point for ProBio to be achieved when revenues reach US$150-200 million, with Bestzyme remaining at break-even until 2027 [6].