Investment Rating - The report assigns a Neutral investment rating for Goertek [1][17][18] Core Insights - Goertek is recognized as the global leading assembler for VR headsets, with expectations of a year-over-year revenue decline in 2025, followed by growth resuming in 2026 due to anticipated market share growth for new AirPods [11][17] - The revenue and earnings compound annual growth rates (CAGRs) are projected at 6% and 18% respectively for the period from 2024 to 2027, driven more by improved cost structure than top-line growth [11][17] - The earnings contribution from AR/AI glass is expected to be limited [11][17] Financial Estimates - Adjusted EPS for FY25 is revised down from Rmb0.95 to Rmb0.89, and for FY26 from Rmb1.11 to Rmb1.08 [2] - Quarterly forecasts for FY25 show Q1 at Rmb0.13, Q2 at Rmb0.16, Q3 at Rmb0.33, and Q4 at Rmb0.26, leading to an annual adjusted EPS of Rmb0.89 [3] - Revenue estimates for FY25 are adjusted to Rmb94,474 million, down from Rmb99,125 million, reflecting a 5% decrease [15] Valuation - The price target for June 2026 is set at Rmb22.50, based on a 19x one-year forward P/E, aligning with the average of peers [12][18] - The current market cap is approximately $9,959 million, with a share price of Rmb20.83 as of April 22, 2025 [10] Performance Metrics - Year-to-date performance shows a decline of 19.3%, with a 12-month performance increase of 39.8% [10] - The adjusted net income for FY25 is projected at Rmb3,090 million, with a net margin of 3.3% [21]

Investment Rating - The report initiates coverage of Aier Eye with a Neutral (N) rating and a price target (PT) of Rmb13.00 for December 2025 [1][4][32]. Core Insights - Aier Eye is positioned as a leader in the expanding ophthalmology market, driven by an aging population and increasing quality of life demands. The company benefits from resilient demand for cataract and eye disease therapies, ensuring steady industry growth despite a sluggish consumer economy in China [1][8][36]. - The report estimates an 18% compound annual growth rate (CAGR) for earnings per share (EPS) from 2024 to 2027, but notes that the stock is reasonably priced at a 28x FY25E price-to-earnings (PE) ratio, suggesting a wait for a pullback or signs of recovery in discretionary procedures [1][8][32]. Market Overview - The ophthalmic services market in China is projected to grow from Rmb73 billion in 2015 to Rmb286 billion by 2030, with an annual growth rate of approximately 11% [5][37]. - The demand for age-related conditions, particularly cataracts affecting around 150 million patients, and a large base of over 700 million myopic patients, is expected to drive growth in refractive surgery and medical optometry services [5][38]. Company Positioning - Aier Eye operates over 900 hospitals and clinics, holding approximately 8% of the total market share, and is expected to achieve a gross margin of 50% by 2024, which is 5-10% higher than its peers [5][17]. - The company’s physician partnership model and equity incentive programs are crucial for talent retention and clinical innovation, which are essential for maintaining service quality [5][8]. Financial Projections - Revenue is expected to grow from Rmb20.37 billion in FY23 to Rmb27.18 billion in FY26, with an adjusted EBITDA margin projected to stabilize around 32% [7][8]. - The report forecasts a 25% revenue growth for high-margin refractive surgery from FY25 to FY27, although growth in this segment is expected to be flat in FY24 [5][8]. Valuation - The price target of Rmb13.00 is based on a discounted cash flow (DCF) valuation, assuming a market risk premium of 6.2% and a risk-free rate of 3.8% [9][32]. - Aier Eye's valuation is considered reasonable compared to its peers, with a forward-looking PE ratio of 28x, which is in line with the average PE of comparable private specialty hospitals [23][28].

Investment Rating - The report maintains a "Neutral" rating for the company [2][11][15]. Core Insights - The company reported Q1 2025 revenue of 6.3 billion yuan, a year-on-year increase of 1% but a quarter-on-quarter decrease of 36%. Net profit was 653 million yuan, showing a year-on-year increase of 16% and a quarter-on-quarter increase of 81% [11][15]. - The long-term outlook anticipates a gradual recovery in government projects, increased corporate demand, expansion of innovative businesses, and growth in overseas markets. However, concerns regarding profitability may persist [11][15]. - The projected compound annual growth rates for revenue and profit from 2025 to 2027 are 8% and 24%, respectively [11][15]. Summary by Sections Financial Forecasts - Revenue projections for FY 2025 are 33.67 billion yuan, with adjusted net profit expected to be 3.09 billion yuan and adjusted earnings per share at 0.94 yuan [10][18]. - The company is expected to achieve a revenue growth rate of 4.6% in 2025, with a net profit margin of 9.2% [10][18]. Valuation - The target price of 17.5 yuan is based on a 12x forward P/E ratio, which is approximately one standard deviation below historical valuations [12][16]. - The adjusted earnings per share for FY 2026 is projected to be 1.31 yuan, with a further increase to 1.66 yuan in FY 2027 [10][18]. Stock Performance - The stock has shown a year-to-date performance of -1.3%, with a 12-month performance of -8.7% [8]. - The stock price as of April 21, 2025, was 15.79 yuan, with a target price of 17.50 yuan set for June 2026 [3][12].

Investment Rating - The report maintains a "Sell" rating for Huayou Cobalt with a revised target price of Rmb27.00, indicating a downside of 20.2% from the current price of Rmb33.82 [1][2]. Core Insights - Huayou Cobalt reported a net profit of Rmb4.2 billion for 2024, reflecting a 24% year-over-year increase, primarily driven by higher profits from nickel and lithium [1][20]. - The company is facing challenges in the ternary battery materials market, with market share declining to below 20% in Q1 2025 from 27% in 2024 and 32% in 2023, leading to lower shipments and margins [2][31]. - The earnings outlook remains cautious due to depressed prices for lithium, nickel, and cobalt, which are expected to cap earnings improvements [2][31]. Financial Summary - Revenue for 2024 is estimated at Rmb60.5 billion, down 8% from 2023, with a gross profit of Rmb10.1 billion, up 12% year-over-year [28]. - The earnings per share (EPS) for 2024 is reported at Rmb2.50, a 22% increase from the previous year [28]. - The company declared a cash dividend of Rmb0.50 per share, with a payout ratio of 23%, significantly lower than the 69% in 2023 [1][28]. Earnings Estimates - Recurring earnings estimates for 2025-2026 have been revised upward by 44-55% due to higher refined nickel sales volume and lower costs for lithium [2][31]. - The projected EPS for 2025 is Rmb1.89, down from the previous estimate of Rmb1.79, reflecting ongoing market challenges [2][28]. Market Dynamics - The ternary battery materials market is expected to continue facing pressure, with increased competition and declining unit profits anticipated [31]. - The report highlights that Huayou's earnings are likely to remain depressed in 2025 due to weak prices for nickel, cobalt, and lithium [31]. Valuation Analysis - A bottom-of-the-cycle valuation analysis suggests a theoretical valuation range of Rmb7.8 to Rmb14.1 per share for Huayou, compared to the current share price of Rmb33.8 [2][31]. - The report's sum-of-the-parts (SOTP) valuation methodology indicates a valuation of Rmb22.7 per share for the battery material business [26][32].

Investment Rating - The report maintains a "Buy" rating for Zhongji InnoLight with a target price reduced to CNY 125, implying a 54% upside from the closing price of CNY 81.19 on April 21, 2025 [5][26]. Core Insights - The company experienced significant revenue and earnings growth in FY24, with year-on-year revenue growth of 122.6% and earnings growth of 142.6%. However, 1Q25 revenue growth was subdued at 37.8% year-on-year due to a shortage of EML chips, while earnings rose 56.8% year-on-year, driven by better gross profit margins [1][2][19]. - Demand for 800G transceivers is expected to remain strong, while demand for 1.6T transceivers may slow down this year but is anticipated to ramp up next year. The easing of the EML chip shortage is expected to improve shipment volumes in the coming quarters [2][19]. - The report highlights that a temporary tariff exemption is currently easing margin pressure and may boost near-term shipments, although the risk of a tariff hike remains a concern [3][19]. Financial Summary - FY24 revenue was reported at CNY 23,862 million, with a projected revenue of CNY 37,228 million for FY25 and CNY 41,462 million for FY26. The normalized net profit for FY24 was CNY 5,171 million, with projections of CNY 8,202 million for FY25 and CNY 9,373 million for FY26 [4][10]. - The gross profit margin (GPM) is expected to improve slightly, with FY25-26F GPM raised by 0.1 percentage points due to a better product mix [16][19]. - The company is currently trading at a normalized P/E of 9.7x for FY26F, which is below the median P/E range of the China electronic/communication component companies [1][4][19].

Investment Rating - The report initiates coverage of Topchoice with an Underweight (UW) rating and a price target (PT) of Rmb34 for December 2025 [1][8][23]. Core Insights - The dental services industry in China is facing both short- and long-term challenges, leading to profitability pressure for Topchoice. The company's earnings per share (EPS) estimates for FY25 and FY26 are projected to be 8% and 10% below consensus, respectively [1][8][21]. - Topchoice's revenue is heavily reliant on Zhejiang Province, which accounts for 90% of its total revenue, raising concerns about geographical concentration and expansion momentum [5][8][21]. - The report highlights that the dental services market is fragmented, with only about 3% of dental institutions operating as chains, limiting pricing power and growth potential [5][28][33]. Summary by Sections Company Overview - Topchoice operates 84 medical facilities and has approximately 3,100 dental chairs as of Q3 FY24 [1][8]. - The company has seen flat revenue growth from FY21 to FY24E, with a projected compound annual growth rate (CAGR) of 10% from FY24 to FY27 [5][8]. Financial Performance - Revenue for FY23 was Rmb2,847 million, with projections of Rmb2,938 million for FY24 and Rmb3,125 million for FY25 [7]. - The adjusted net income for FY25 is estimated at Rmb538 million, reflecting a growth of 7% from FY24 [7]. Market Dynamics - The dental services market in China is projected to grow at a CAGR of 7% from 2024 to 2028, reaching Rmb193 billion, but has faced fluctuations in revenue growth due to the pandemic and economic conditions [30][28]. - The report notes that the average price of dental implants has decreased significantly due to government-led procurement policies, but the expected increase in demand has not materialized as anticipated [45][50]. Valuation - The report uses a discounted cash flow (DCF) model to arrive at the price target of Rmb34, assuming a weighted average cost of capital (WACC) of 12% and a terminal growth rate of 2.5% [9][23][25]. - Topchoice's current P/E ratio of 35.5x for FY25 is considered a premium compared to peers, which raises concerns about the sustainability of such valuations given the company's growth outlook [21][8]. Risks and Challenges - The report identifies several risks, including the company's reliance on a single geographic region, challenges in expanding outside Zhejiang, and the competitive landscape of the dental services market [5][21][28]. - The orthodontics segment is also under pressure, with declining treatment volumes and a shift towards more cost-effective options among consumers [54][61].

Investment Rating - The investment rating for China TransInfo Technology is "Sell" with a target price of Rmb5.1, indicating an expected share price return of -38.0% and a total expected return of -37.6% [4][8]. Core Insights - In 4Q24, revenue decreased by 28% year-over-year to Rmb1.8 billion, which was 40% and 25% below CitiE and BBGe estimates respectively [2][6]. - The gross margin for 4Q24 fell by 5.4 percentage points year-over-year to 32.1%, which was 6.1 percentage points below CitiE but 4.5 percentage points above BBGe [2][6]. - Operating expenses increased by 3% year-over-year to Rmb796 million, leading to an operating loss of Rmb206 million compared to an operating profit of Rmb179 million in 4Q23 [2][6]. - The overall net loss for 4Q24 was Rmb1.2 billion, aligning with previous guidance [2][6]. - For FY24, revenue declined by 7% year-over-year, with net losses also at Rmb1.2 billion compared to a net profit of Rmb542 million in FY23 [2][6]. Segment Breakdown - In the second half of 2024, revenue from intelligent transportation fell by 54% year-over-year to Rmb798 million, while the overall FY24 revenue for this segment decreased by 26% year-over-year to Rmb2.2 billion [3]. - The gross margin for the intelligent transportation segment narrowed by 12 percentage points year-over-year to 19.5% in 2H24, and the FY24 gross margin decreased by 7.3 percentage points to 21.1% [3]. - Conversely, revenue from intelligent IoT increased by 7% year-over-year to Rmb2.9 billion in 2H24, with an overall FY24 revenue growth of 5% year-over-year to Rmb5.1 billion [3].

Investment Rating - The investment rating for Wanhua Chemical is Underweight [2][8][76] Core Views - The report indicates that Wanhua Chemical is facing multiple geopolitical headwinds, including US export tariffs on MDI, China's import tariffs on ethane, and an anti-dumping investigation by the US, which are expected to negatively impact volume, price, and earnings [8][12][13] - The price target for Wanhua Chemical has been reduced to Rmb51.00, reflecting a 5% decrease based on updated financial data and a target multiple of 15x 2025e P/E [5][8][12] Summary by Sections Price Target and Earnings Estimates - The price target for Wanhua Chemical is set at Rmb51.00, down from Rmb54.00, based on a target multiple of 15x 2025e P/E [5][8] - The estimated EPS for 2025 is revised to Rmb3.42, down from Rmb3.61 [2][8] Financial Performance and Projections - The report projects a decline in net profit by 5% for 2025 and 6% for 2026, leading to a downward revision of earnings estimates [5][8] - MDI prices are expected to be Rmb12,305 per ton in 2025, with unit gross profit projected at Rmb2,892 per ton [16] Market Conditions and Risks - The geopolitical risks are anticipated to exert downward pressure on MDI prices and spreads, affecting overall earnings visibility for non-MDI products [8][12][13] - The report highlights that the valuation is no longer appealing, contributing to the Underweight rating [8][12]

Investment Rating - The report initiates coverage on Tongce Medical with a "Reduce" rating and sets a target price of 34 CNY by December 2025 [1][3][7]. Core Insights - The oral healthcare service industry faces both short-term and long-term challenges, leading to pressure on profitability. The earnings per share (EPS) forecasts for 2025 and 2026 are 8% and 10% lower than market consensus, respectively [1][4][7]. - Tongce Medical's revenue is heavily reliant on Zhejiang Province, with 90% of its income generated from this region. The company has struggled with slow expansion outside the province and lower profitability in those areas [4][7][19]. - The report highlights that the industry is fragmented, with only about 3% of dental institutions operating in a chain model, limiting pricing power. Additionally, weak consumer spending has reduced demand for high-margin orthodontic and implant services [4][24]. Summary by Sections Company Overview - Tongce Medical operates 84 medical institutions and has approximately 3,100 dental chairs as of Q3 2024 [1][7]. - The company was founded in 1995 and is one of the leading dental chains in China [7]. Financial Projections - Revenue is projected to grow from 2,847 million CNY in FY23 to 3,125 million CNY in FY25, with a compound annual growth rate (CAGR) of 10% expected from 2024 to 2027 [6][13]. - Adjusted net profit is forecasted to increase from 500 million CNY in FY23 to 609 million CNY in FY26 [6][13]. Market Dynamics - The report anticipates a 7% CAGR for the domestic oral healthcare service market from 2024 to 2028, reaching 193 billion CNY [25][29]. - The market has seen a decline in growth rates due to the pandemic and changing consumer behavior, with a CAGR of only 0.5% from 2019 to 2023 [25][29]. Competitive Landscape - The report notes that the private sector dominates the oral healthcare market, accounting for over 70% of total revenue, with approximately 92.5% of dental institutions being privately operated [30][31]. - The competitive environment is characterized by price sensitivity among consumers, leading to increased competition from smaller clinics [24][25]. Valuation and Risks - The report finds Tongce Medical's valuation at approximately 35.5 times the expected 2025 earnings, which is considered high compared to peers [19][21]. - The report suggests that the company's growth visibility is low, making the premium valuation unjustifiable [19][21].

Investment Rating - The investment rating for China Tourism Group Duty Free is Equal-weight [8] Core Insights - Hainan's offline duty-free sales showed a year-over-year decline of 5% in March 2025, which is an improvement from a 13% decline in the first two months of 2025. The average daily sales were RMB 94 million [4][11] - The daily shopper count decreased by 26% year-over-year to 17,700, while spending per shopper increased by 28% to RMB 6,500. The growth in average spending per shopper may be attributed to a rise in electronic product sales, although this may not significantly impact margins [4][11] - The macroeconomic outlook remains uncertain, particularly with potential tariff escalations expected to impact the second half of 2025. The performance of Hainan's duty-free market is closely tied to middle-class spending [2][11] - The Hainan government is anticipated to release details regarding the free-trade-zone policy later this year, which could affect duty-free operators [3] Summary by Sections Sales Trends - In March 2025, Hainan's offline duty-free sales were RMB 94 million per day, reflecting a 5% year-over-year decline, which is an improvement from the 13% decline observed in the first two months of 2025. Daily sales were 35% lower than in the first two months of 2025 and 25% lower than the pre-COVID seasonality of March 2015-2019 [4][11] - Assuming that the sales trends from April to December 2025 follow pre-COVID seasonality, the year-over-year decline in sales may remain in the low to mid-single digits for the second and third quarters of 2025. However, a lower year-over-year comparison base in the fourth quarter of 2025 may lead to positive sales growth for the full year [11] Economic Factors - The report highlights that the macroeconomic conditions are critical for Hainan's duty-free market, which is more sensitive to middle-class spending. The uncertainty in the macro outlook and potential tariff impacts are significant considerations for future performance [2][11] - The anticipated free-trade-zone policy from the Hainan government is expected to be released later this year, which could have implications for duty-free operators [3]