Investment Rating - The report maintains a "Buy" rating for Laopu Gold (6181.HK) with a target price of HK$1,090, based on a 25x target P/E for 2027E [9][27]. Core Insights - Laopu Gold is expected to report significant growth in sales and net profit for 1H25, with forecasts of 268% and 284% year-over-year growth, respectively, reaching RMB12,963 million in sales and RMB2,259 million in net profit [1][17]. - The company is focusing on several key strategies for 2H25, including gross profit margin (GPM) management, store optimization, high ticket size SKU launches, and overseas expansion, particularly in Singapore [2][8]. - The GPM is projected to contract by 2.1 percentage points year-over-year to 39.3% due to raw material cost pressures, despite a price hike of less than 10% implemented earlier [8][24]. Summary by Sections Financial Performance - Laopu Gold's revenue is forecasted to grow from RMB8,505.6 million in 2024 to RMB27,121.8 million in 2025, with EBITDA expected to increase from RMB2,123.6 million to RMB6,603.5 million over the same period [4][28]. - The adjusted net profit for 1H25 is expected to be RMB2,409 million, reflecting a 294% increase year-over-year when excluding ESOP expenses [1][17]. Market Position and Strategy - The company is experiencing strong sales per store, with an average of RMB300 million, and a same-store sales growth (SSSG) of 150% [8]. - Laopu Gold plans to expand its store network, with new openings in key locations such as Shanghai and Singapore, which are anticipated to support additional SSSG [2][8]. Valuation Metrics - The report outlines various valuation metrics, including a P/E ratio of 14.1 for 2024, increasing to 29.6 for 2025, and a projected dividend yield of 5.2% for 2024 [4][9]. - The company’s financial returns are highlighted by a CROCI of 50.1% for 2024, indicating strong profitability relative to capital employed [4][9]. Growth Projections - The report anticipates continued growth in net income, projecting RMB4,733 million for 2025 and RMB6,623 million for 2026, with year-over-year growth rates of 221% and 40%, respectively [29]. - The expected margins for 1H25 include a gross profit margin of 39.3%, operating profit margin of 23.6%, and net profit margin of 17.4% [17][24].

Investment Rating - The report initiates coverage of Hengrui Pharma's H-shares and resumes coverage of A-shares, both with an Overweight (OW) rating, with H-shares being the preferred stock [1][43]. Core Insights - Hengrui Pharma is positioned to benefit from an improving domestic policy environment and accelerated globalization, which has not yet been fully reflected in the market [1]. - The company is recognized for its extensive and balanced product portfolio, with a strong pipeline across various therapeutic areas, including oncology, metabolic and cardiovascular diseases, immunology, and respiratory diseases [3][12]. - Hengrui is expected to receive approvals for 5, 5, and 11 new drugs in 2025, 2026, and 2027, respectively, totaling 47 NDA/BLA approvals from 2025 to 2027 [3][10]. Summary by Sections Market Potential - The global pharmaceutical market is valued at $1.47 trillion, approximately 6.6 times the size of the Chinese domestic market, with a projected CAGR of 5.7% from 2023 to 2028 [3][32]. - Hengrui has completed 14 licensing deals since 2018, with a total transaction value of $15 billion, indicating strong interest from global biopharma companies in assets from China [3][32]. Financial Projections - The target price for H-shares is HK$78, representing a 45% upside, while the target price for A-shares is RMB 71, representing a 37% upside [7][43]. - Revenue and net profit are projected to grow at CAGRs of 18% and 24%, respectively, from 2024 to 2027 [4][37]. - Innovative drug sales are expected to grow at a CAGR of 34% from 2024 to 2027, contributing to 74% of total drug sales by 2027 [38][40]. Product Pipeline - Hengrui has developed a comprehensive pipeline of innovative drugs, with a focus on key disease areas and a one-stop solution for various subtypes and treatment needs [19][21]. - The company is advancing multiple GLP-1 products targeting the $100 billion global diabetes market, with competitive clinical data supporting their efficacy [19][20]. Valuation Analysis - The DCF valuation method yields a target price of HK$78 for H-shares and RMB 71 for A-shares, with a reasonable premium due to Hengrui's leading position and growth potential [4][43]. - The SOTP analysis indicates that the contribution of globalization opportunities to total value is still conservative, accounting for only 13% of the total estimated value [4][43].

Investment Rating - The report maintains a "Buy" rating for CATL A/H shares with a 12-month price target of Rmb 323.00 for A-shares and HK$ 411.00 for H-shares, indicating an upside of 19.3% and 6.8% respectively [8][15]. Core Insights - The report highlights three key focuses for CATL: unit gross profit (GP) expansion, upward trend in capital expenditures (CAPEX), and progress in the US market which may enhance the total addressable market (TAM) [15][16]. Summary by Sections Earnings Preview - CATL is expected to report revenue of Rmb 104.7 billion and net profit of Rmb 15.6 billion in 2Q25, with unit GP anticipated to increase to Rmb 150/kWh from Rmb 147/kWh in 1Q25, driven by strong overseas shipments [1][41]. Unit GP Expansion - The blended battery unit GP is projected to expand due to improved product mix, with overseas EV sales in Europe showing a 28% year-over-year growth in the first five months of 2025 [1][19]. CATL is estimated to account for about 70% of Europe's battery imports from China [1][20]. CAPEX Trends - The report revises up CAPEX forecasts for 2025-2027 by 25%-5%, expecting CATL's relative CAPEX share to rise from approximately 13% in 2024 to around 24% in 2025, which is expected to drive market share gains [16][30]. US Market Progress - Recent developments regarding Ford's Michigan LFP battery factory, which utilizes CATL's technology, suggest improved market access for CATL in the US, potentially increasing its TAM [16][19]. Financial Projections - Revenue projections for CATL are set at Rmb 362 billion for 2024, Rmb 436 billion for 2025, and Rmb 532 billion for 2026, with EBITDA expected to grow significantly over the same period [3][13]. EPS is forecasted to increase from Rmb 11.58 in 2024 to Rmb 22.45 by 2027 [3][13]. Market Position - CATL's market capitalization is noted at Rmb 1.2 trillion, with a strong enterprise value of Rmb 972.5 billion, indicating robust financial health and market positioning within the battery industry [3][5].

Investment Rating - The report does not explicitly provide an investment rating for Time Interconnect (1729.HK) Core Insights - Time Interconnect is expected to experience revenue growth in 2025 driven by rising AI demand, production site diversification, and exposure to various end markets [1][8] - The company reported revenues of HK$7.4 billion in 2024, with a gross margin of 14.6% [3] - The revenue from server ODM business reached HK$3.2 billion in 2024, accounting for 43% of total revenue [7] Summary by Sections Industry Overview - Time Interconnect specializes in customized copper and optical fiber cables, as well as servers ODM, with production sites in mainland China, Japan, and Mexico [3] - Key applications include telecommunications, data centers, industrial equipment, medical equipment, and automotive wiring harnesses [3] Growth Drivers - AI demand is driving the adoption of high-speed cables, with a reported 208% year-over-year growth in high-speed cable revenues in 2024 [4] - 42% of cable assembly revenues were derived from data center clients in 2024, indicating strong demand from this sector [4] Business Outlook - Management is optimistic about revenue growth in 2025, supported by the expansion of the Mexican production site and increasing capex spending from Chinese CSP clients [8] - The planned acquisition of Leoni AG is expected to diversify the business into automotive cables and wiring harnesses [8]

Investment Rating - The report maintains a Neutral rating for Hua Hong, with a 12-month target price of HK$40.9, indicating a relatively lower upside potential from the current price of HK$35.65, which translates to an upside of 14.7% [1][12]. Core Insights - Hua Hong's management is optimistic about operations, reporting that utilization (UT) rates across major fabs are at 100% or above, driven by strong demand in power discrete, microcontrollers (MCUs), and power management integrated circuits (PMICs) [1][3]. - The company has begun to implement price increases for both 8-inch and 12-inch products, anticipating that this will enhance gross margins in the upcoming quarters [2][11]. - Capacity expansion is ongoing, with plans to ramp up the second 12-inch fab to 83,000 wafers per month (wpm) and potential future capacities at 28nm and 22nm [4][11]. Pricing Outlook - The pricing strategy is set to improve, with management confident in the ability to raise prices due to solid demand, which is expected to positively impact gross margins [2][11]. Utilization Rates - Management reports full loading across its fabs, except for the new fab that is in the ramp-up phase, with a noted recovery in demand for power discrete products and sustained demand for PMICs related to AI applications [3][11]. Capacity Expansion Plans - The second 12-inch fab is being ramped up, with expectations to achieve positive gross margins once it surpasses 50,000 wpm of loading, while the first 12-inch fab is already achieving positive gross margins [4][8]. Financial Projections - Revenue projections for the next few years indicate growth, with expected revenues of $2,004 million in 2024, increasing to $3,910.5 million by 2027 [12].

Investment Ratings - PetroChina: Buy with a 12-month target price of HK$8.30/Rmb12.60, reflecting a potential upside of 21.5% [19][24] - CNOOC: Buy with a 12-month target price of HK$20.90, indicating a potential upside of 14.6% [26][29] - Sinopec: Neutral with a 12-month target price of HK$3.70/Rmb4.90, suggesting a downside of 11.7% [30][35] Core Insights - The report emphasizes a preference for free cash flow (FCF) leaders like PetroChina and CNOOC, both expected to achieve double-digit FCF yields in 2026E [2][19] - PetroChina and CNOOC are projected to achieve FCF breakeven at Brent oil prices of US$30-$40/bbl, with attractive FCF yields of approximately 11% for both companies under various oil price scenarios [21][17] - Sinopec is expected to face weak FCF due to prolonged chemical market surplus and elevated capital expenditures, leading to a Neutral rating [30][39] Summary by Sections Earnings Estimates - PetroChina's estimated net income for 2Q is projected to decline by 30% year-on-year, while Sinopec's is expected to drop by 46% [1] - CNOOC's 1H net income is estimated to decrease by 16% year-on-year [1] Valuation Comparisons - PetroChina and CNOOC are trading at discounted valuations of 3.1X-3.2X on 2026 EV/DACF compared to a global average of 5.5X [2][14] - The report highlights that both companies could maintain attractive FCF yields even at lower oil prices, with PetroChina and CNOOC achieving yields of approximately 10% and 9% respectively at US$60/bbl [2][18] Price Sensitivity Analysis - For PetroChina, total EBITDA is projected to range from Rmb351.6 million at US$50/bbl to Rmb542.5 million at US$90/bbl [20] - CNOOC's EBITDA is expected to range from Rmb176.2 million at US$50/bbl to Rmb308.0 million at US$90/bbl [28] Market Dynamics - Recent geopolitical events have supported oil prices, leading to low domestic oil product inventories and robust refining margins despite weak demand [1][2] - The report notes that deep utilization cuts among state-owned refiners have contributed to the current market conditions [2][8]

Investment Rating - The report does not explicitly provide an investment rating for Lens Tech (300433.SZ) as it is categorized as "Not Covered" [1]. Core Insights - Management is optimistic about the demand for foldable phones, driven by differentiation, new use cases, and improved technology that enhances user experience [1][4]. - The company is diversifying its end markets beyond smartphones to include vehicle glass, AI glasses, and robotics, which supports long-term growth [1][8]. Summary by Sections Foldable Phones - Foldable phones are expected to drive significant growth, with management highlighting strong market demand and potential for increased shipments [4][7]. - The global shipment penetration rate for foldable phones is projected to rise from 1.5% in 2024 to 4.1% by 2027, excluding iPhones [2]. Vehicle Glass Expansion - Lens Tech is expanding into vehicle glasses, leveraging its experience in smartphone glass to provide high-precision and lighter-weight solutions for leading car OEMs [8]. - The company is collaborating with over 30 electric vehicle manufacturers, indicating a strategic move into the automotive sector [9]. Long-Term Outlook - Revenue growth in 2025 is anticipated to be bolstered by new smartphone model launches and the increasing trend of foldable phones [9]. - Contributions from vehicle glasses and AI/AR glasses are expected to ramp up over the long term, driven by rising popularity and affordability [9].

Investment Rating - The investment rating for Contemporary Amperex Technology Co. Ltd. is Overweight [4] Core Insights - Despite reports suggesting a loss of market share in China, the statistics are misleading due to the increase in EV exports. SNE data indicates that CATL's monthly market share remains stable within historical ranges [2][7] - CATL's ePV battery market share in China has averaged approximately 42% over the past couple of years, while BYD has gained significant share in the car market [7][8] - The report highlights that CATL is gaining market share in Europe year-to-date, contrasting with its performance in China [10] Summary by Sections Market Share Analysis - Battery Alliance data shows CATL's monthly market share was below historical trough levels, but this is misleading due to expanding EV exports. SNE data based on retail sales shows CATL's share remains stable [2][7] - The competition in the ePV battery market is primarily between CATL and BYD, with smaller battery makers not gaining significant share [7] Financial Metrics - Revenue projections for CATL are as follows: Rmb 362,013 million for FY 2024, Rmb 422,167 million for FY 2025, Rmb 497,822 million for FY 2026, and Rmb 600,728 million for FY 2027 [4] - EBITDA estimates are projected at Rmb 91,863 million for FY 2024, Rmb 106,451 million for FY 2025, Rmb 117,557 million for FY 2026, and Rmb 140,292 million for FY 2027 [4] Valuation - The price target for CATL is set at Rmb 355.00, indicating a 35% upside from the closing price of Rmb 262.59 on July 3, 2025 [4] - The valuation methodology used is based on EV/EBITDA, assigning a multiple of 15x to the 2025E EBITDA [13]

Investment Rating - The report does not provide a specific investment rating for Conant Optical (2276.HK) as it is categorized as "Not Covered" [1]. Core Insights - Conant Optical is expanding its business from traditional spectacle lenses to AI/AR glasses, anticipating sustained growth in its core business and increased demand for AI/AR glasses due to their higher dollar content and specific client requirements [1][2]. - The company is positioned to benefit from the growing AI/AR glasses market, with expectations of a 56% CAGR in shipments in China from 2024 to 2030, reaching 7 million units by 2030 [2]. - Conant's customized lenses for AI/AR glasses are designed to be lighter and thinner, with a significant increase in average selling price (ASP) compared to traditional lenses [4]. Summary by Sections Company Profile - Conant Optical is a leading resin lenses manufacturer in China, with 44% of its revenues from standardized lenses, 37% from functional lenses, and 19% from customized lenses, which have a higher gross margin [3]. - The company operates in 90 countries and ranks among the top 10 resin lenses manufacturers globally by revenue [3]. Market Outlook - Management expresses optimism about the AI/AR glasses market's growth potential, indicating that Conant will be a key beneficiary due to its customized lens solutions for both global and local clients [8]. - The company plans to enhance its market presence by partnering with offline stores in China to facilitate the lens ordering process for consumers [8]. Production Capabilities - Conant has demonstrated strong mass production capabilities, allowing it to produce millions of customized lenses quickly, supported by its precision manufacturing skills [7]. - The company is expanding its production capacity with a new plant in Thailand expected to commence operations in 2026 [7].

Investment Rating - The investment rating for China Resources Pharmaceuticals is Neutral with a 12-month price target of HK$6.17, representing an upside potential of 18.8% from the current price of HK$5.19 [8][29]. Core Insights - The company is experiencing soft growth in the first half of the year, leading management to lower previous guidance of double-digit year-on-year sales growth for 2025, pending a recovery in the second half [1][2]. - The distribution business is facing challenges due to a tough industry environment, and there are no clear signals of growth recovery as the national medical reimbursement fund remains tight [2][3]. - Cash collection is under pressure, with hospitals' financial positions still strained, resulting in delayed payments for non-VBP products despite some acceleration in cash collection for VBP products [3]. Summary by Sections Financial Performance - Revenue for 2025 is projected to be HK$271.5 billion, with a 5-year EPS CAGR of 10% for the manufacturing business and 5% for the distribution business [7]. - The company’s market cap is HK$32.6 billion, with an enterprise value of HK$133.8 billion [8]. Business Segments - The manufacturing business is valued at HK$31.4 billion, while the distribution business is valued at HK$4.1 billion [7]. - Specific challenges include slower growth for Sanjiu due to a high base, pressure on Boya from albumin VBP, and a softer growth trajectory for plasma collection [2]. Cash Management - To alleviate cash pressure, the company is managing its cash cycle actively, including de-prioritizing high-risk regions for receivables [3].