Investment Rating - The report maintains a HOLD rating for NIO Inc. with a target price reduced from US$5.60 to US$5.10, indicating a potential upside of 5.2% from the current price of US$4.85 [2][3]. Core Insights - NIO's 2Q24 earnings were mixed, with a quarter-over-quarter rise in gross profit offset by increased R&D and SG&A expenses, leading to a net loss of RMB5.1 billion [2]. - The company is projected to see significant sales volume growth in FY25/26, with estimates of 324,000 and 400,000 units respectively, driven by new brands Onvo and Firefly [2]. - Despite the anticipated sales growth, the report expresses skepticism about NIO's ability to achieve breakeven due to high ongoing expenses related to R&D and SG&A, particularly with the introduction of new brands [2]. Financial Summary - Revenue projections for FY24E are set at RMB66,730 million, with a year-over-year growth of 20.0%, and for FY25E at RMB89,501 million, reflecting a 34.1% increase [3][7]. - Gross margin is expected to improve from 5.5% in FY23A to 9.7% in FY24E and further to 11.1% in FY25E [3][7]. - The net profit forecast for FY24E is a loss of RMB18,693 million, improving to a loss of RMB16,734 million in FY25E [3][7]. Earnings Revision - The report revises FY24E revenue upwards by 7.6% and FY25E revenue by 12.1% compared to previous estimates [6]. - Gross profit estimates for FY24E and FY25E have been increased significantly, reflecting a 38.6% and 30.8% rise respectively [6]. - Operating and net profit forecasts remain negative, with operating losses projected at RMB19,909 million for FY24E and RMB17,991 million for FY25E [6]. Sales Volume and Margins - NIO's sales volume for 2Q24 was reported at 57,373 units, a 143.9% increase year-over-year, although the average selling price (ASP) decreased by 18.5% [6]. - The gross profit for 2Q24 was RMB1.689 billion, marking a significant year-over-year increase of 1842.0% [6]. - The report anticipates that even with a projected sales volume of 400,000 units annually, NIO may still struggle to achieve profitability due to high costs [2][6].

Investment Rating - The report maintains a "BUY" rating for FIT Hon Teng with a new target price of HK$ 4.25, indicating an upside potential of 88.1% from the current price of HK$ 2.26 [4][12]. Core Insights - FIT Hon Teng reported strong 2Q24 results, with revenue of US$ 1,102 million, reflecting a 20% year-over-year increase, and a net profit of US$ 22.3 million, a significant improvement from US$ 0.35 million in 2Q23 [2][6]. - The company has raised its FY24E guidance for networking business revenue to high double-digit year-over-year growth, up from a previous estimate of 5-15% [2][12]. - The earnings growth is driven by the networking business and the EV segment, which saw a remarkable 231% year-over-year increase due to the Voltaira merger [2][6]. Financial Summary - Revenue projections for FY24E are set at US$ 4,677 million, with expected growth of 11.5% year-over-year, and net profit is projected to reach US$ 183.5 million, reflecting a 41.6% increase [3][10]. - The gross profit margin (GPM) is expected to improve to 20.6% in FY24E, with operating profit margin (OPM) targeted at 7.0% [8][10]. - The company anticipates a rebound in revenue and net profit for FY24E, with expectations of 12% and 42% year-over-year growth, respectively [2][12]. Segment Performance - The EV segment's revenue surged by 231% year-over-year, while the networking segment grew by 29% year-over-year, driven by strong AI demand [2][6]. - The smartphone segment also performed better than expected, benefiting from key customer shipment improvements [2][6]. Earnings Revision - The report indicates that FY25-26E EPS estimates are 13-23% above consensus, reflecting confidence in the company's growth trajectory [2][10]. - Adjustments to FY24-26E EPS have been made to account for higher gross profit margins, offset by increased operating expenses for new products [2][10]. Valuation - The stock is currently trading at 11.2x FY24E P/E and 6.9x FY25E P/E, which is considered attractive given the projected 42% and 63% year-over-year EPS growth for FY24 and FY25, respectively [2][12].

Investment Rating - Maintain BUY rating with a target price of US$565.0 based on 27x FY24 PE [1][3] Core Views - Meta's 2Q24 earnings beat consensus estimates with total revenue increasing by 22% YoY to US$39.1bn and net income growing by 73% YoY to US$13.5bn [1] - Management expects 3Q24 revenue to grow by 13-20% YoY to US$38.5-41.0bn, in line with consensus estimates [1] - FY24 full-year total expenses guidance remains unchanged at US$96-99bn, easing investor concerns on margin expansion [1] - Meta's ad business maintained solid growth with Family of Apps' ad revenue increasing by 22% YoY to US$38.3bn in 2Q24 [1] - Meta AI is on track to become the most used AI assistant by end-FY24, with billions of queries since its launch [1] - Operating profit margin (OPM) expanded by 9ppt YoY to 38.0% in 2Q24, driven by efficiency gains [1] Financial Performance - FY24E revenue is forecasted at US$159.7bn, with a net profit of US$53.1bn [2][11] - FY24E EPS is projected at US$20.93, representing a 4.6% increase from previous estimates [11] - Gross margin is expected to remain stable at 81.0% for FY24E, while operating margin is forecasted to expand to 38.6% [11] - Net income CAGR is projected at 21% over FY24-26E [1] Ad Business - Total number of ad impressions and average price per ad both grew by 10% YoY in 2Q24, driven by enhanced user engagement and improved ad performance [1] - Meta launched a full-screen video player and unified video recommendation systems, increasing engagement on Reels and creating opportunities for ad inventory growth [1] - US advertisers saw a 22% higher ROI after adopting Advantage+ Shopping campaigns [1] AI Initiatives - Meta AI has received billions of queries since its launch and is expected to become the most used AI assistant by end-FY24 [1] - Meta launched AI Studio, enabling millions of creators to create their own AI agents, which is expected to improve user experience and create monetization opportunities [1] Capex and Margin Outlook - FY24 capex guidance has been raised to US$37-40bn, representing a 36-47% YoY increase [1] - Significant capex growth is expected in FY25 to support AI development [1] - OPM expansion is expected to slow down meaningfully from FY25 onward [1] Valuation - Meta is valued at US$565.0 per share based on 27x FY24E P/E, reflecting its strong leadership in the global social media space [3] - The current valuation of 20x FY25E PE remains attractive [1]

Investment Rating - Initiate at BUY with a target price of HK$7.25, representing an upside of 24.8% from the current price of HK$5.81 [1]. Core Insights - The report highlights QuantumPharm as a leading company leveraging quantum physics, AI, and robotics to accelerate drug and material discovery, with a focus on integrated technology platforms [4][9]. - The company has established significant collaborations, including a strategic partnership with Pfizer, to enhance its drug R&D capabilities [42][72]. - The report identifies substantial market opportunities in AI-powered R&D service industries, with projected growth rates across various sectors [7][24]. Summary by Sections Investment Thesis - QuantumPharm is positioned to capitalize on the growing demand for AI-powered R&D services, with a well-established integrated technology platform [3]. - The company has entered into approximately 159 agreements for drug discovery solutions, with a notable increase in collaboration programs from 18 in 2021 to 81 in 2023 [5]. Market Opportunities - The global drug R&D outsourcing service market is expected to grow at a CAGR of 14.9%, from US$12.3 billion in 2023 to US$32.5 billion in 2030 [7]. - The solid-state R&D service market is projected to increase at a CAGR of 27.7%, from US$3.8 billion in 2023 to US$20.9 billion in 2030 [7]. - The automated R&D lab market is anticipated to grow at a CAGR of 39.6%, from US$5.9 billion in 2023 to US$60.7 billion in 2030 [7]. - The material science R&D market is expected to expand at a CAGR of 12.8%, from US$76.3 billion in 2023 to US$177.9 billion in 2030 [7]. Business Model - QuantumPharm's business model integrates AI and robotic automation to enhance drug and material discovery processes, focusing on solid-state R&D and automated chemical synthesis [13][14]. - The company has developed a proprietary integrated technology platform that combines cloud supercomputing, quantum physics-based computation, and AI to optimize R&D efficiency [35][36]. Collaborations and Partnerships - The strategic collaboration with Pfizer aims to develop hybrid physics and AI-powered technologies to accelerate drug R&D [43][72]. - QuantumPharm has also partnered with CK Life Sciences to create an AI-powered tumor vaccine R&D platform [23][44]. Financial Analysis - The company's R&D expenditure has increased significantly, from RMB214.4 million in 2021 to RMB480.3 million in 2023, reflecting its commitment to growth [75]. - The customer base has expanded from 75 in 2021 to 187 in 2023, indicating strong demand for its services [77].

Investment Rating - The report maintains a "BUY" rating for FIT Hon Teng with a target price of HK$ 4.24, indicating a potential upside of 14.0% from the current price of HK$ 3.72 [5][14]. Core Insights - The acquisition of Auto-Kabel Group for EUR 72.5 million is viewed positively, as it is expected to enhance FIT's product portfolio and client base in the automotive connector market, particularly in electromobility [3]. - The deal is anticipated to close by the end of 2024, pending regulatory approval, and is expected to add 8% to FIT's revenue in FY25E [3]. - The financial metrics of Auto-Kabel, including a gross profit margin (GPM) of 34% and a revenue of EUR 430 million in FY24, suggest potential margin support for FIT [3][9]. - The report highlights the long-term synergies expected from the integration of Auto-Kabel and FIT Voltaria, which will strengthen FIT's global automotive client base and expand its presence [3]. Financial Summary - Revenue for FIT is projected to grow from US$ 4,531 million in FY22 to US$ 7,497 million in FY26, reflecting a compound annual growth rate (CAGR) of approximately 18.4% [17]. - Net profit is expected to increase from US$ 170.1 million in FY22 to US$ 373.4 million in FY26, with a notable growth rate of 25.2% in FY25E [17]. - The report indicates a significant improvement in gross profit margin, expected to rise from 19.2% in FY23 to 20.6% in FY25E [19]. Valuation Metrics - The report notes that FIT is trading at a P/E ratio of 17.4x for FY24E and 11.4x for FY25E, which is considered attractive compared to its peers [14]. - The P/B ratio is projected to decrease from 1.3x in FY24E to 1.0x in FY26E, indicating a potential undervaluation [19]. - The report emphasizes the attractive risk-reward profile of FIT, particularly with upcoming catalysts such as AirPods progress and AI server product updates [14].

Investment Rating - The report maintains a "BUY" rating for FIT Hon Teng, with a target price (TP) raised to HK$4.24 based on a rolled-over 13x FY25E P/E, up from the previous 11x P/E [2][13]. Core Insights - FIT Hon Teng has announced a positive profit alert for 1H24, projecting earnings between US$28-33 million, a significant recovery from a net loss of US$9 million in 1H23, primarily driven by stronger demand in the computing and networking segments [2][7]. - The stock price has faced pressure due to concerns regarding the pace of earnings recovery in 2024 and increased operating expenses (OPEX) related to AirPods and Voltaira businesses. However, the report suggests that the recent stock correction is overdone, and the company is expected to benefit from multiple product launches and operating leverage in the second half of 2024 [2][8]. - The management has maintained a core operating profit margin (OPM) estimate of 5.5% for FY24, up from 4.9% in 2023, indicating improved operational efficiency [2][7]. Financial Summary - Revenue is projected to grow from US$4,196 million in FY23 to US$5,108 million in FY24, reflecting a year-on-year growth of 21.8%. This growth is expected to continue, reaching US$6,332 million in FY25 and US$7,497 million in FY26 [3][16]. - Net profit is forecasted to rebound significantly, from US$131.8 million in FY23 to US$194.3 million in FY24, representing a 47.4% year-on-year increase. The net profit is expected to further rise to US$298.3 million in FY25 and US$373.4 million in FY26 [3][16]. - The report revises FY25 and FY26 EPS estimates upward by 12% and 10%, respectively, reflecting stronger demand for AI servers and progress in AirPods production [2][8]. Market Outlook - The management has expressed optimism regarding the outlook for FY24, driven by recovery in the PC market, networking demand, and AirPods shipments. The company anticipates a 48% and 54% year-on-year increase in net profit for FY24 and FY25, respectively [2][8]. - Near-term catalysts include the progress of AirPods shipments, potential auto mergers and acquisitions, and updates on AI server products, which are expected to enhance earnings visibility [2][13].

Investment Rating - The report maintains a "BUY" rating for FIT Hon Teng with the target price currently under review [2][9][10]. Core Insights - The company is expected to benefit from multiple growth drivers in FY24/25, including AI server connectors, AirPods production ramp-up, and new opportunities in the electric vehicle (EV) sector [2][9]. - Management has indicated that revenue and gross profit margin (GPM) guidance for Q2 2024 is on track, with potential upside in the smartphone and networking segments [2][9]. - The report highlights a positive outlook for the iPhone replacement cycle and potential order wins in AI server connectivity, which could significantly enhance revenue in the networking segment [2][9]. Revenue and Profit Forecasts - Revenue is projected to grow from US$4,196 million in FY23 to US$4,715 million in FY24, representing a year-over-year growth of 12.4% [3][12]. - Net profit is expected to increase from US$132 million in FY23 to US$200 million in FY24, reflecting a growth rate of 51.5% [3][12]. - The earnings per share (EPS) is forecasted to rise from 2.81 cents in FY23 to 3.73 cents in FY24 [3][12]. Growth Drivers - Key growth drivers identified for 2025 include AirPods, AI server connectors/cables, and the auto business, particularly through a new joint venture in the EV charger market [2][9]. - The company is expected to ramp up production in Vietnam and India for AirPods, with management anticipating six additional production lines in India by 2025 [2][9]. Valuation Metrics - The company is trading at a price-to-earnings (P/E) ratio of 14.3x for FY24 and 10.8x for FY25, which is considered attractive given the expected EPS growth of 51% and 33% for FY24 and FY25, respectively [2][9][10]. - The report notes that the valuation remains appealing compared to the anticipated recovery in the AI server and smartphone markets [2][9].

Investment Rating - ARK's expected value for Tesla in 2029 is $2,600 per share, with a bull case of $3,100 and a bear case of $2,000 [11][12] Core Thesis - ARK believes Tesla's robotaxi business will drive nearly 90% of its enterprise value and earnings by 2029, with electric vehicles contributing approximately 25% of total sales and -10% of earnings potential [13] - The robotaxi business is expected to have significantly higher margins compared to the electric vehicle segment [13] Business Line Breakdown - Revenue by business line in the expected value case: Electric Vehicles, Robotaxi, Human Driven Ride-hail, Insurance, Stationary Energy Storage [14] - EBITDA by business line in the expected value case: Electric Vehicles, Robotaxi, Human Driven Ride-hail, Insurance, Stationary Energy Storage [14] Example Bear and Bull Outcomes - Example bear outcome for 2029: 14.4 million cars sold, $250 billion electric vehicle revenue, $603 billion autonomous ride-hail revenue, 56% total gross margin, 32% total EBITDA margin, $7,000 billion market cap, $2,000 share price [16] - Example bull outcome for 2029: 14.4 million cars sold, $394 billion electric vehicle revenue, $951 billion autonomous ride-hail revenue, 53% total gross margin, 32% total EBITDA margin, $10,900 billion market cap, $3,100 share price [16] Updates to ARK's 2023 Tesla Model - Updated autonomous driving assumptions: ARK expects Tesla to launch a robotaxi service within the next two years, with a minimal probability of failure within five years [18] - Updated Tesla manufacturing growth rate: Vehicle production is expected to increase by 45% annually through 2029, scaling from 1.8 million units per year to 6-16 million units per year [23] Business Opportunities Not Included in the Model - Tesla Semi: Not expected to contribute significantly to Tesla's value within the five-year investment horizon [27] - Supercharging Network: Unlikely to generate significant revenue compared to the robotaxi business [27] - FSD Licensing: Discussions with one automaker are ongoing, but significant revenue impact is not expected within five years [27][28] - AI-As-A-Service: Distributed AI-inference-as-a-service and Dojo training-as-a-service are likely outside the five-year investment horizon [29] Risks and Limits of the Monte Carlo Model - ARK's model includes 45 independent variables covering plausible outcomes for Tesla over the next five years, but unexpected events could significantly alter these outcomes [30]

Investment Rating - Maintain HOLD rating with a target price reduction from US$6.20 to US$5.60, based on 1.3x revised FY24E revenue estimates [2][3][6]. Core Insights - NIO's average selling price (ASP) in 1Q24 decreased by RMB12,000 QoQ, falling 2% below prior projections, with further guidance indicating a drop of about RMB23,000 in 2Q24 [3][4]. - Vehicle gross profit margin (GPM) in 1Q24 was approximately 1 percentage point lower than forecasted, while GPM for other income exceeded expectations, resulting in an overall in-line GPM for the quarter [3][4]. - The company reported a net loss of RMB5.3 billion in 1Q24, with net cash decreasing by RMB10 billion QoQ, which was worse than previous projections [3][4]. - Management's breakeven assumptions for NIO and Onvo brands, as well as battery swap operations, are viewed as overly optimistic, particularly in the context of a price war [3][4]. - Projected FY24E sales volume is expected to rise 25% YoY to 0.2 million units, with a revised revenue forecast cut by 5% due to faster-than-expected ASP declines [3][4]. - The forecast for FY24E net loss has been adjusted from RMB17.2 billion to RMB17.8 billion, with expectations of net losses exceeding RMB10 billion in FY25E and FY26E [3][4]. Financial Summary - FY24E revenue is projected at RMB62.04 billion, with a gross profit of RMB4.648 billion and a net loss of RMB17.785 billion [4][11]. - Gross margin is expected to be 7.5% in FY24E, improving to 10.1% by FY26E [4][11]. - Operating profit is forecasted to be a loss of RMB19.268 billion in FY24E, narrowing to a loss of RMB14.376 billion by FY26E [4][11]. Earnings Summary - Revenue growth is projected at 11.5% YoY for FY24E, with further growth of 28.7% and 20.1% expected in FY25E and FY26E respectively [4][11]. - The company has seen a significant decline in gross margin from 10.4% in FY22A to an expected 7.5% in FY24E [4][11]. - Adjusted net profit is projected to improve from a loss of RMB18.475 billion in FY23A to a loss of RMB15.475 billion in FY24E [4][11].

CMB International Global Markets | Equity Research | Company Update PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG: RESP CMBR OR http://www.cmbi.com.hk1 PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE 2 Taobao and Tmall Group (38.5% of 4QFY24 revenue) In 4QFY24, revenue generated from Alibaba International Digital Commerce Group (AIDC) was RMB27.4bn, up 45.1% YoY, among which international commerce retail revenue was up ...