Investment Rating - The report maintains a "Buy" rating for the company, with a potential dividend yield of 8.2% for FY2025, which is considered attractive [5] Core Views - The company's FY25Q3 performance showed a mid-single-digit decline in total sales for retail and wholesale businesses, with a 2.1% QoQ and 4.4% YoY reduction in direct-operated store gross sales area [3] - E-commerce promotions helped narrow the sales decline in FY25Q3 compared to FY25Q2, with online pre-tax sales estimated to grow by double digits YoY, contributing to a mid-single-digit decline in overall channel sales [3] - Retail channel performance slightly outperformed the wholesale channel, with both showing similar sales trends [3] - Inventory management remains a priority, with direct-operated discounts deepening YoY in FY25Q3, consistent with the trend in FY25H1 [4] - The company continues to optimize its store network, with a high single-digit YoY reduction in store count by the end of FY25Q3, while average store area increased [4] - New store formats, such as the FOS (Future of Style) and HALO concept stores, have been introduced to enhance the retail experience and capabilities [4] Financial Projections - FY25/26/27 net profit attributable to shareholders is projected at RMB 1.40 billion, RMB 1.53 billion, and RMB 1.67 billion, respectively, representing YoY changes of -36.7%, +9.3%, and +9.2% [5] - Revenue for FY2024 is estimated at RMB 28.93 billion, with a 6.9% YoY growth, while FY2025E revenue is projected at RMB 26.41 billion, reflecting an 8.7% YoY decline [6] - Gross margin for FY2024 is 41.8%, expected to slightly decrease to 40.0% in FY2025E, and then recover to 40.4% and 40.6% in FY2026E and FY2027E, respectively [6] - Net profit margin is projected to decline from 7.6% in FY2024 to 5.3% in FY2025E, before recovering to 5.7% and 6.0% in FY2026E and FY2027E [6] - ROE is expected to decrease from 22.5% in FY2024 to 14.2% in FY2025E, then gradually recover to 15.5% and 17.0% in FY2026E and FY2027E [6] Market Data - The company's closing price on December 17, 2024, was HKD 2.96, with a total share capital of 6,201 million shares and a net asset value of RMB 9.5 billion [2] - Total assets stood at RMB 14.9 billion, with net assets per share at RMB 1.53 [2]

Investment Rating - The report upgrades the investment rating of the company to "Buy" [2][17]. Core Insights - The WeChat e-commerce ecosystem is gradually improving, and leading service providers are expected to benefit first. The company is positioned as a key service provider within the Tencent ecosystem, which is likely to enhance its growth prospects [17]. - The introduction of the "Gift" feature in WeChat stores is anticipated to increase the diversity of brands and products available on the supply side, potentially attracting more merchants to the platform [3][18]. - The company has taken the lead in integrating mini-programs with WeChat stores, which is expected to drive merchant onboarding and boost Gross Merchandise Volume (GMV) [4][18]. Financial Projections - Revenue projections for the company from 2024 to 2026 are set at 1.81 billion, 2.11 billion, and 2.39 billion CNY, respectively, with year-over-year growth rates of -18.9%, 17.1%, and 13.0% [5]. - Adjusted net profit forecasts for the same period are -0.5 million, 1.3 million, and 3.0 million CNY, with corresponding adjusted diluted EPS of -0.02, 0.05, and 0.11 CNY [5]. - The company is expected to achieve a turnaround to profitability in 2025, following cost reduction and efficiency improvement measures [17]. Market Position - The current stock price is 2.48 HKD, with a price-to-sales ratio projected at 4.3, 3.7, and 3.3 for the years 2024 to 2026 [17][22]. - The company has a total market capitalization of 8.328 billion HKD and a three-month turnover rate of 258.57% [22].

Investment Rating - The report assigns a "Buy" rating to the company, indicating an expected strong performance relative to the market [7][245]. Core Insights - The company is experiencing a turning point in performance, with profit improvements exceeding expectations due to trends in acoustic upgrades, enhanced penetration of high-end speakers, and a slowdown in industry competition since H2 2023 [7][8]. - The company is expected to benefit from the AI smartphone trend, which will drive hardware innovation across multiple product lines [9]. Financial Forecast - The projected net profits for 2024, 2025, and 2026 are 1.67 billion, 2.17 billion, and 2.57 billion RMB respectively, with corresponding year-on-year growth rates of 125.9%, 29.5%, and 18.7% [7][221]. - The expected earnings per share (EPS) for the same years are 1.40, 1.81, and 2.15 RMB, with the current stock price of 37.05 HKD corresponding to price-to-earnings (P/E) ratios of 24.9, 19.3, and 16.2, slightly below the average of comparable companies [7][245]. Business Segments Acoustic Business - The acoustic segment is benefiting from the upgrade of mid-to-high-end Android speakers, with significant improvements in average selling price (ASP) and gross margins [8][9]. - The acquisition of PSS, a leading global provider of high-end automotive sound systems, is expected to open a second growth curve for the company [8][123]. Optical Business - The optical segment has seen a significant recovery in gross margins due to improved product structure and yield rates, with expectations for further improvements in 2024 [8][107]. - The company anticipates that the gross margin for plastic lenses will exceed 25% in H2 2024, driven by the increasing penetration of glass-plastic hybrid lenses [8][137]. Electromagnetic Transmission and Precision Structural Components - The company is expanding its precision structural components business, which includes hinges, heat dissipation solutions, and laptop casings, contributing to revenue growth [151][202]. - The electromagnetic transmission segment is expected to see significant growth due to the increasing demand for linear motors and the penetration of high-end models [189][240]. MEMS Microphone Business - The MEMS microphone market is projected to grow at a compound annual growth rate (CAGR) of 5% from 2023 to 2029, with the company positioned to benefit from the rising demand for high signal-to-noise ratio microphones in AI smartphones [43][125]. Market Trends - The global smartphone market is expected to see a significant increase in AI smartphone shipments, with a projected CAGR of 78.4% from 2024 to 2028 [184][207]. - The automotive acoustic system market is anticipated to exceed 90 billion RMB by 2025, driven by the increasing penetration of electric vehicles [99][123].

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings (00700 HK) [3] Core Viewpoints - Tencent's AI strategy focuses on "industrial practicality" with a dual emphasis on large models and applications The company has been investing in AI since 2012 and has developed a comprehensive AI ecosystem including the Hunyuan large model and various AI tools and applications [3] - Tencent's AI layout covers both B2B and B2C sectors with applications integrated into existing products and new AI-native applications The company's AI capabilities are ranked first in 8 out of 11 core tasks in the SuperCLUE Chinese Large Model Benchmark [21] - The report predicts Tencent's adjusted net profit for 2024-2026 to be 2174 2406 and 2653 billion yuan respectively with corresponding PE (Non-IFRS) ratios of 17 15 and 14 times [21] Development History - Tencent began its AI journey in 2012 with the establishment of the YouTu Lab focusing on computer vision technologies [13] - In 2016 Tencent established the AI Lab which focused on computer vision speech recognition natural language processing and machine learning [14] - In 2018 Tencent upgraded its AI strategy to focus on general AI research and established the Robotics X lab [15] - In 2022 Tencent publicly disclosed the development of its Hunyuan large model which covers NLP CV and multimodal capabilities [17] - By 2024 Tencent's Hunyuan large model had been tested in over 600 internal business scenarios and launched AI-native applications like Tencent Yuanqi and Tencent Yuanbao [18] AI Layout and Applications - Tencent's AI ecosystem includes both B2B and B2C applications with B2B focusing on large models cloud services and PaaS while B2C includes AI-enhanced existing applications and AI-native applications [20] - The Hunyuan large model developed by Tencent has trillion-scale parameters and excels in multimodal capabilities including text-to-image and video generation [25] - Tencent has integrated AI into various internal applications such as Tencent Meeting WeChat and QQ with nearly 700 business scenarios already using the Hunyuan model [26] - Tencent's AI applications in advertising have significantly improved ad targeting and efficiency with the new ad system 3 0 covering 95% of Tencent's ad placements and improving stability by 26% [53] - In gaming Tencent's AI engine GiiNEX has reduced the time required for city modeling from 5 days to 25 minutes [55] Financial Projections - The report forecasts Tencent's operating income for 2024-2026 to be 658160 716550 and 782730 million yuan respectively with year-on-year growth rates of 8 07% 8 87% and 9 24% [24] - Tencent's adjusted net profit for 2024-2026 is expected to be 217396 240603 and 265288 million yuan with year-on-year growth rates of 38% 11% and 10% respectively [24] - The PE (Non-IFRS) ratios for 2024-2026 are projected to be 17 15 and 14 times [21]

Investment Rating - Maintain "Overweight" rating with a target price of HKD 1.32 [49][50] Core Views - The company is undergoing a period of adjustment and reform, with profitability under pressure and high uncertainty in the actual results of the reforms [2] - The target price is adjusted to HKD 1.32 based on a 5X 2025E EV/EBITDA, reflecting a discount due to the company's consecutive losses and ongoing adjustments [2][49] - The company is expected to achieve a turnaround in 2026, with a projected net profit of RMB 2.49 million [6][20] Financial Projections Revenue and Profit - Revenue for 2024-2026 is projected at RMB 4.913 billion, RMB 4.630 billion, and RMB 4.719 billion, with YoY changes of -17%, -6%, and +2% respectively [6][30] - Net profit attributable to shareholders for 2024-2026 is projected at RMB -451 million, RMB -229 million, and RMB 2.49 million [6][20] - EBITDA for 2024-2026 is projected at RMB 321 million, RMB 827 million, and RMB 1.257 billion [6][19] Costs and Margins - Gross margin is expected to improve to 64.1%, 64.6%, and 65.6% for 2024-2026, driven by supply chain optimization [34] - Labor costs as a percentage of revenue are expected to decline slightly to 37.26% and 35.82% in 2025 and 2026, respectively [20] - Depreciation and amortization as a percentage of revenue are expected to decrease to 17.83%, 17.52%, and 16.24% for 2024-2026 [20] Store Performance Xiabu Xiabu - Average single-store revenue for Xiabu Xiabu is projected at RMB 3.07 million, RMB 3.03 million, and RMB 3.09 million for 2024-2026, with YoY changes of -17%, -1.4%, and +2% [1] - The brand is focusing on cost-effectiveness and optimizing its store model, with a target of achieving profitability across all stores by 2H24 [44] Coucou - Average single-store revenue for Coucou is projected at RMB 9.37 million, RMB 9.56 million, and RMB 9.85 million for 2024-2026, with YoY changes of -15%, +2%, and +3% [1] - Coucou is expanding into lower-tier markets and reducing store sizes, which may impact average spending per customer [1] Store Expansion and Closure - Xiabu Xiabu is expected to close 50 stores in 2024 and 5 stores in 2025, with a net addition of 6 stores in 2026, bringing the total to 784 stores [43] - Coucou is expected to close 37 stores in 2024 and 35 stores in 2025, with no net additions in 2026, maintaining a total of 215 stores [43] Valuation Metrics - The company's EV/EBITDA for 2024-2026 is projected at 10.14X, 4.41X, and 3.14X [38] - The PE ratio for 2026 is projected at 421.34X, reflecting the expected turnaround in profitability [38] Industry and Market Context - The company faces intense competition and a challenging consumer environment, with both Xiabu Xiabu and Coucou experiencing declines in same-store sales [45] - The company is focusing on membership value and supply chain optimization to improve long-term profitability [42][45]

Investment Rating - The report initiates coverage on China Resources Beverage with a "Buy" rating and sets a target price of HKD 15.97 based on a 25-year PE of 18x [3][10][137]. Core Views - China Resources Beverage is a leading player in the domestic bottled water industry, leveraging multi-category expansion, full-channel layout, and national expansion to build competitive advantages in packaged water business, remaining resilient against short-term industry competition fluctuations [3][4][26]. - The company is at a critical juncture, transitioning from OEM to self-production in bottled water and actively developing its non-water beverage segment, which is expected to contribute to revenue growth [3][5][21]. Summary by Sections Industry Overview - The bottled water industry in China is projected to reach a market size of RMB 226.6 billion in 2023, with a CAGR of 3.6% from 2019 to 2023. The demand for bottled water is relatively inelastic, indicating a stable long-term growth trajectory [4][24][30]. - The competitive landscape is evolving, with the top three players' market share increasing from 35% in 2005 to 68% in 2023, indicating a trend towards industry consolidation [6][57][72]. Company Analysis - China Resources Beverage's revenue from bottled water accounted for 92% in 2023, with significant growth potential in both bottled water and non-water beverage segments. The company aims to enhance its self-production ratio from 33% in 2023 to approximately 70% by 2027, which is expected to improve profit margins [5][21][98]. - The company has a robust product matrix, with a focus on large-sized bottled water products, which are expected to capture market growth in various consumption scenarios [27][81][86]. Financial Projections - The report forecasts the company's revenue to grow from RMB 135.2 billion in 2023 to RMB 163.2 billion by 2026, with a corresponding increase in net profit from RMB 1.33 billion to RMB 2.3 billion during the same period [7][163][184]. - The projected EPS for 2024-2026 is expected to be RMB 0.70, RMB 0.83, and RMB 0.96, respectively, with a target price based on a PE ratio of 18x for 2025 [7][137][184]. Competitive Positioning - China Resources Beverage has established a strong distribution network with over 200,000 terminal points, enhancing its market penetration and brand visibility [90][112][115]. - The company is strategically positioned to leverage its parent company, China Resources Group, for additional support in channel development and resource allocation [77][110][112]. Growth Catalysts - The company is focusing on expanding its non-water beverage segment, which has shown significant growth potential, with a revenue CAGR of over 40% from 2021 to 2023 [81][97][103]. - The ongoing national expansion strategy, particularly in high-potential markets like Jiangsu and Sichuan, is expected to drive future revenue growth [99][115][116].

Investment Rating - The report maintains a "Buy" rating for the company [4][3]. Core Insights - ASC47, in combination with semaglutide, shows superior weight loss effects in preclinical studies compared to semaglutide alone, with weight reductions of 36.2% and 35.9% for the 3 mg/kg and 9 mg/kg groups respectively [1]. - The company is actively advancing clinical trials for ASC47 in Australia, with a Phase I single ascending dose study showing good tolerability and a half-life of 21 days [2]. - The company is also progressing multiple obesity-related drug candidates, including ASC30, which is undergoing Phase I trials in the US [8]. Financial Forecasts and Valuation - The company has adjusted its net profit forecasts for 2024 and 2025 to -261 million and -313 million CNY respectively, improving from previous estimates of -284 million and -340 million CNY [3]. - The net profit for 2026 is projected at -322 million CNY, reflecting effective cost control measures [3]. Market Data - The total market capitalization of the company is approximately 28.15 billion HKD, with a total share capital of 1.013 billion shares [19]. - The stock has experienced a 1-year high of 2.93 HKD and a low of 0.76 HKD [19]. Earnings Performance - The company reported a revenue of 54 million CNY in 2022, with a projected revenue of 0 CNY for 2024 and beyond [11]. - The earnings per share (EPS) is forecasted to be -0.26 CNY in 2024, worsening to -0.32 CNY by 2026 [11]. Cash Flow Analysis - The operating cash flow is expected to decline from -142 million CNY in 2022 to -292 million CNY by 2026 [21]. - The cash and cash equivalents are projected to decrease from 404 million CNY in 2022 to 98 million CNY by 2026 [21].

Investment Rating - The report gives a "Buy" rating for the company, with expected PE ratios of 24x, 18x, and 15x for 2024, 2025, and 2026 respectively [7][10] Core Views - The company's acoustic business achieved revenue of RMB 3.46 billion in H1 2024, up 4.1% YoY, with gross margin improving by 4.4 percentage points to 29.9% [2] - The optical business saw significant growth, with revenue increasing 24.9% YoY to RMB 2.21 billion in H1 2024, and gross margin improving by 21.7 percentage points to 4.7% [2] - The company's MEMS microphone business continues to lead the industry, with high-value products accounting for over 60% of Android shipments, up 15 percentage points YoY [11] - The PSS automotive and consumer acoustic business achieved revenue of RMB 1.52 billion with a gross margin of 25.0%, showing increasing synergies with the group [2] Financial Performance - Revenue is expected to grow from RMB 26.03 billion in 2024 to RMB 33.00 billion in 2026, with net profit attributable to shareholders increasing from RMB 1.71 billion to RMB 2.70 billion [7][33] - EPS is projected to rise from RMB 1.43 in 2024 to RMB 2.25 in 2026, with P/E ratios declining from 23.87x to 15.12x over the same period [33] - Gross margin is forecast to improve from 21.55% in 2024 to 22.49% in 2026, driven by product mix optimization and cost control [30] Business Segments Acoustic Business - SLS master-level speakers maintained rapid growth, with shipments exceeding 12 million units, up nearly 200% YoY [2] - The innovative Combo series of acoustic and electromagnetic products shipped close to 4.5 million units [2] - The company launched industry-leading thin speakers for foldable devices, gaining major share in multiple customers' foldable models [2] Optical Business - 6P lens shipments maintained over 15% of total plastic lens shipments, with 1G6P hybrid lens shipments reaching 1.4 million units, up nearly 40% YoY [29] - The company's WLG process received positive feedback from smartphone manufacturers for its efficiency and precision [29] - Optical module revenue grew 29% YoY in H1 2024, driven by both volume and price improvements [29] MEMS Microphone Business - The company has shipped over 7 billion MEMS microphones, maintaining its position as a top-three global manufacturer [11] - High-value MEMS microphone products accounted for over 60% of Android shipments, up 15 percentage points YoY [11] - The company is well-positioned to benefit from AI-driven demand for advanced voice interaction technologies [11] Automotive and Consumer Acoustic Business - PSS products cover a wide range of high-performance automotive speakers, with the company expanding its presence among global top-tier automakers [2] - The business is expected to benefit from the rapid growth of the new energy vehicle market, with domestic NEV sales up 32% YoY in H1 2024 [2] Electromagnetic and Precision Components - Revenue from this segment reached RMB 3.66 billion in H1 2024, with gross margin improving by 3.6 percentage points to 22.9% [29] - High-end motor products and optimized product structure contributed to margin improvement [29] - The company shipped nearly 500,000 hinge products in H1 2024, with innovative foldable screen hinge solutions setting industry benchmarks [29]

Investment Rating - The report assigns a "Buy" rating for the company, indicating an expected relative increase in stock price of over 20% compared to the benchmark index within six months [21][31]. Core Insights - The company has solidified its leading position in the ADAS (Advanced Driver Assistance Systems) market by developing innovative products such as heated ADAS vehicle lenses and 300-megapixel side-view glass-plastic hybrid lenses, which significantly reduce costs [4]. - The smartphone market is recovering, leading to a rapid increase in revenue, with a reported revenue of approximately RMB 188.60 billion for the first half of 2024, a year-on-year increase of about 32.1% [20]. - The company has made significant advancements in optical instruments, including the development of a high-performance 40X water immersion objective lens, enhancing its capabilities in life sciences applications [12][20]. Summary by Sections Company Overview - The company is a leader in optical technology, focusing on automotive, smartphone, and XR (Extended Reality) markets, with a total market capitalization of RMB 726 billion [19][28]. Financial Performance - For the first half of 2024, the company reported a net profit of approximately RMB 11.11 billion, a year-on-year increase of about 142.0%, with a net profit margin of 5.9% [20]. - The gross profit for the same period was approximately RMB 32.47 billion, reflecting a gross margin of 17.2%, an increase of 2.3 percentage points from the previous year [20]. Market Position - The company continues to hold the largest market share in smartphone camera modules, with a shipment volume of approximately 634.4 million units, representing a year-on-year increase of about 23.7% [4]. - In the automotive lens sector, the company achieved a shipment volume increase of approximately 13.1% to 53.23 million units in the first half of 2024 [20]. Research and Development - The company has increased its R&D expenditure to approximately RMB 14.68 billion, accounting for 7.8% of its revenue, focusing on automotive and XR-related business innovations [20]. - The company has successfully developed multiple high-end optical products, including a one-inch main camera lens and various periscope camera modules, enhancing its competitive edge in high-value products [12][20].

Investment Rating - The report initiates coverage on Topsports International (6110) with an "Outperform" rating and a target price of HKD 3.79 per share, based on a FY2026 PE of 12x [5][23] Core Views - FY25Q3 sales showed sequential improvement, with total retail and wholesale sales declining mid-single-digit YoY, compared to a 10-20% low-end decline in FY25Q2 [2][15] - Inventory reduction is progressing smoothly, with inventory expected to return to healthy levels by FY25 end (Feb 2025) [3][22] - Nike FY25Q2 performance slightly exceeded expectations, with revenue of USD 12.35 billion, down 9% YoY (currency neutral), and net profit of USD 1.16 billion, down 26% YoY [4][16] - Nike plans to clear inventory by the first half of next year and focus on professional sports, extending partnerships with NFL, NBA, and PSG [5][17] Financial Performance and Forecast - FY2025-FY2027 net profit attributable to shareholders is forecasted at RMB 1.325/1.800/2.152 billion, with FY2026 EPS of RMB 0.29 [5][23] - FY25H1 inventory was RMB 6.12 billion, up 6.4% YoY, with inventory turnover days at 148 days, up 7 days YoY [3][22] - FY25H1 gross profit margin was 41.1%, down 3.6% YoY, due to deeper discounts to optimize inventory [3][22] Industry and Market Context - Nike's CEO emphasized strengthening ties with core partners like Topsports International and Pou Sheng International, and repositioning NIKE DIGITAL to focus on full-price models [4][16] - Nike plans to accelerate inventory clearance in H2 (Dec 2024-May 2025) and focus on professional sports, launching new products like Vomero 18 and Pegasus Premium [5][17] Valuation and Peer Comparison - The report values Topsports International at a FY2026 PE of 12x, translating to a target price of HKD 3.79 per share [5][23] - Comparable companies include JD Sports Fashion, Fraser, and Pou Sheng International, with median PE ratios of 9.1x, 10.3x, and 9.2x for 2024E, 2025E, and 2026E respectively [8]