Investment Rating - The report maintains a "Buy" rating for the company, with target prices set at $15.2 for XPEV.US (potential upside of 22%) and HKD 59.3 for 9868.HK (potential upside of 18%) [1][6]. Core Insights - The company is entering a strong product cycle, with expected vehicle deliveries reaching 30,000 units in November, supported by strong order performance for models M03 and P7+. This positions the company for significant sales growth in 2024 and 2025, with revised sales forecasts of 188,000 units and 400,000 units respectively [1][2]. - The automotive gross margin has shown continuous improvement, reaching 8.6% in Q3 2024, benefiting from product mix enhancements and supply chain cost reductions. The company anticipates a 21% year-over-year revenue growth in Q4 2024 [2][4]. - The company plans to launch four new models and several refreshed versions next year, aiming to sustain sales growth. Additionally, overseas sales have increased by approximately 70% quarter-over-quarter, contributing to 15% of total sales [2][3]. Financial Performance and Forecast - Revenue projections for the company are as follows: RMB 40.53 billion in 2024, RMB 74.5 billion in 2025, and RMB 140.165 billion in 2026, with corresponding year-over-year growth rates of 32%, 84%, and 88% respectively [4][16]. - The gross margin is expected to improve to 14.2% in 2024, 15.6% in 2025, and 16.9% in 2026, reflecting the positive impact of new platform models [4][16]. - The company reported a net loss of RMB 18.5 billion in Q3 2024, although this represents a significant year-over-year decrease [2][4]. Valuation - The report employs a sum-of-the-parts valuation method, assigning a sales multiple of 1.3x for automotive sales and 2.1x for services and other revenues, leading to a target price of $15.2 for XPEV.US and HKD 59.3 for 9868.HK [3][19].

Investment Rating - The report initiates coverage on Shangmei Co., Ltd. with a "Buy" rating and sets a target price of HKD 44.0, indicating a potential upside of 41.9% from the current price of HKD 31.0 [1][4][5]. Core Insights - Shangmei Co., Ltd. is a leading domestic cosmetics company that has successfully implemented a multi-brand strategy, with its flagship brand, Han Shu, achieving significant growth through targeted marketing on platforms like Douyin [1][2][3]. - The company has a strong focus on the lower-tier markets, which is expected to drive future growth, supported by its diverse product offerings across skincare, baby care, and hair care segments [1][2][3]. - The report highlights the successful alignment of Han Shu's consumer profile with Douyin's user demographics, leveraging innovative marketing strategies such as short dramas to enhance brand visibility and sales [3][4][5]. Summary by Sections Multi-Brand Strategy - Shangmei Co., Ltd. has been practicing a multi-brand strategy for nearly 20 years, with its main revenue coming from the Han Shu brand, which has recently dominated the Douyin platform [2][3][4]. - The company aims to develop multiple brands across different consumer segments, from mass to premium, enhancing its market influence [2][3][4]. Channel and Consumer Alignment - Han Shu's success on Douyin is attributed to its alignment with the platform's user demographics, particularly targeting consumers aged 18-34 in lower-tier cities [3][4][5]. - The brand has effectively utilized short drama marketing to regain consumer attention and drive sales, achieving significant viewership and engagement [3][4][5]. Growth Potential - Despite concerns about reliance on a single channel and brand, the report suggests that Shangmei's strategies, including expanding into other channels and enhancing its product lines, will support long-term growth [3][4][5]. - The company is expected to continue benefiting from the growing lower-tier market, which represents a significant portion of China's population and consumer spending [3][4][5]. Financial Projections - Revenue is projected to grow significantly, with estimates of RMB 7,031 million in 2024, reflecting a year-on-year increase of 67.8% [6][11][141]. - The report anticipates improvements in profit margins, with gross margins expected to reach 74.7% by 2026 [6][11][141]. Valuation and Target Price - The target price of HKD 44.0 is based on a 15x PE ratio for 2025, reflecting a discount compared to leading domestic cosmetics brands [4][5][118].

Investment Rating - The report maintains a "Buy" rating for ZTO Express (02057.HK) [1] Core Views - ZTO Express reported a revenue of 31.36 billion yuan for the first three quarters of 2024, representing a year-on-year increase of 12.8%. The net profit for the same period was 6.44 billion yuan, a slight decline of 1.6% year-on-year. In Q3 2024, the company achieved a revenue of 10.68 billion yuan, with a year-on-year growth of 17.6%, and a net profit of 2.38 billion yuan, up 1.3% year-on-year [1] - The customer structure continues to optimize, leading to an increase in revenue per package. In Q3 2024, the revenue per package was 1.20 yuan, a year-on-year increase of 1.8%, driven by an increase in direct customer revenue [1] - The company has adjusted its full-year package volume growth forecast to between 11.6% and 12.3%, corresponding to 33.7 billion to 33.9 billion packages, due to current market conditions [1] Summary by Sections Performance Overview - For Q1-Q3 2024, ZTO Express achieved a revenue of 31.36 billion yuan, a 12.8% increase year-on-year, and a net profit of 6.44 billion yuan, down 1.6% year-on-year. Q3 2024 revenue was 10.68 billion yuan, up 17.6% year-on-year, with a net profit of 2.38 billion yuan, up 1.3% year-on-year [1] Operational Analysis - The company saw a 15.9% year-on-year increase in business volume in Q3 2024, reaching 8.72 billion packages. The market share decreased by 0.7 percentage points to 20% year-on-year but increased by 0.4 percentage points quarter-on-quarter [1] - The cost per package remained stable at 0.82 yuan, with transportation costs decreasing to 0.39 yuan and transfer costs to 0.25 yuan, contributing to a gross margin increase of 1.4 percentage points to 31.2% [1] Profit Forecast and Valuation - The net profit forecasts for 2024-2026 have been revised down to 9.5 billion yuan, 11.5 billion yuan, and 13.1 billion yuan, respectively, from previous estimates of 10.5 billion yuan, 12.1 billion yuan, and 13.6 billion yuan. The "Buy" rating is maintained despite these adjustments [1]

Investment Rating - The report upgrades the investment rating of the company to "Buy" with a target price of HKD 4.04, indicating a potential upside of 22.8% from the current closing price of HKD 3.29 [1][5][10]. Core Insights - The supply-side reform is expected to accelerate industry consolidation, benefiting leading companies like the report's subject due to its lower energy consumption in production [2][3]. - Despite a significant drop in photovoltaic glass prices, the company is positioned to maintain profitability and expand production while competitors struggle with losses [3][4]. - The company’s valuation metrics, such as a 2025 P/E ratio of 10.8 and P/B ratio of 0.84, are significantly lower than its peers, indicating a valuation advantage [3][4]. Financial Summary - Revenue projections for the company are as follows: HKD 20,544 million in 2022, HKD 26,629 million in 2023, and expected to decline to HKD 23,254 million in 2024, before rising to HKD 24,926 million in 2025 and HKD 28,965 million in 2026 [4][12]. - Net profit is projected to be HKD 3,820 million in 2022, HKD 4,187 million in 2023, with a decline to HKD 2,732 million in 2024, and then slightly recovering to HKD 2,715 million in 2025 and HKD 3,988 million in 2026 [4][12]. - The company’s earnings per share (EPS) is expected to be HKD 0.43 in 2022, HKD 0.47 in 2023, dropping to HKD 0.31 in 2024, and then stabilizing at HKD 0.30 in 2025 and increasing to HKD 0.45 in 2026 [4][12]. Market Position - The company has a significant market position with a current market capitalization of HKD 29,868.10 million and a 52-week high of HKD 6.68 and a low of HKD 2.79 [5][10]. - The company’s production capacity has decreased from 25,800 tons at the beginning of the year to 25,200 tons, reflecting strategic adjustments in response to market conditions [2][3].

Investment Rating - The report maintains a "Buy" rating for NIO Inc. (蔚来汽车) with a target price of HKD 59.88, indicating a potential upside of 64.5% from the current price of HKD 36.40 [4][12]. Core Insights - NIO's fourth-quarter sales guidance is below expectations, with anticipated deliveries of 72,000 to 75,000 vehicles, representing a year-on-year growth of 43.9% to 49.9%. Revenue guidance for the fourth quarter is set between RMB 196.8 billion and RMB 203.8 billion, reflecting a year-on-year increase of 15.0% to 19.2% [2][3]. - The decline in average selling price (ASP) is more significant than expected, with the ASP dropping to RMB 270,000, below market expectations and previous guidance of RMB 280,000 for the third quarter. This is attributed to increased promotional efforts by NIO [1][2]. - The report highlights that revenue for the third quarter is expected to be RMB 18.7 billion, slightly below expectations, with a gross margin of 10.7%, which is slightly above market expectations. The automotive gross margin improved to 13.1% due to lower battery costs and increased sales volume [1][3]. Financial Summary - For the fiscal year ending December 31, 2024, NIO's revenue is projected to reach RMB 62.847 billion, reflecting a year-on-year growth of 13.0%. However, net losses are expected to be RMB 16.867 billion, with a core loss per share of RMB 9.92 [7][15]. - The report indicates that NIO's sales and R&D expenses increased by 9.4% and 3.1% respectively, with sales expenses surpassing RMB 40 billion for the first time due to channel expansion and promotional activities [1][3]. - The report anticipates that the growth in sales volume next year will primarily come from the launch of new models under the NIO brand and the introduction of the lower-priced sub-brand, Firefly [2][3].

Investment Rating - The investment rating for the company is upgraded to "Buy" [2] Core Views - The company is expected to experience a profitability inflection point driven by a rich model matrix in 2025, cost reduction through platformization, and increased export volume [6][7] - Revenue estimates for 2024 have been slightly adjusted down to 41.03 billion yuan, while 2025 and 2026 revenue estimates have been raised to 95.56 billion yuan and 122.06 billion yuan respectively [6] - Non-GAAP net profit estimates for 2024-2026 have been adjusted to -5.38 billion yuan, -2.23 billion yuan, and 339 million yuan respectively, indicating a significant improvement in profitability [6] Financial Summary and Valuation Metrics - Revenue (in million yuan) is projected to grow from 30,676 in 2023 to 95,558 in 2025, reflecting a year-over-year growth of 132.9% [7] - Non-GAAP net profit is expected to improve from -9,444 million yuan in 2023 to -2,231 million yuan in 2025, with a return to profitability in 2026 [7] - Gross margin is projected to increase from 1.5% in 2023 to 14.3% in 2025, indicating improved cost management and operational efficiency [7] - The company is expected to achieve a quarterly breakeven point by the end of 2025, supported by new model launches and export growth [7]

Investment Rating - The report maintains a "Buy" rating for ZTO Express (02057.HK) [1] Core Views - ZTO Express reported a revenue of 31.36 billion yuan for the first three quarters of 2024, representing a year-on-year growth of 12.8%, while net profit decreased by 1.6% to 6.44 billion yuan. In Q3 2024, revenue reached 10.68 billion yuan, up 17.6% year-on-year, with net profit of 2.38 billion yuan, a 1.3% increase [1] - The company continues to optimize its customer structure, leading to an increase in average revenue per package. In Q3 2024, the average revenue per package was 1.20 yuan, up 1.8% year-on-year, driven by a higher proportion of direct customer revenue [1] - The company has adjusted its full-year package volume growth forecast to between 11.6% and 12.3%, corresponding to 33.7 billion to 33.9 billion packages, due to current market conditions [1] Summary by Sections Performance Overview - For Q1-Q3 2024, ZTO Express achieved a revenue of 31.36 billion yuan, a 12.8% increase year-on-year, and a net profit of 6.44 billion yuan, down 1.6%. Q3 alone saw revenue of 10.68 billion yuan, up 17.6%, and net profit of 2.38 billion yuan, up 1.3% [1] Operational Analysis - The company’s package volume reached 8.72 billion in Q3 2024, a 15.9% year-on-year increase, although market share slightly declined by 0.7 percentage points to 20% [1] - The cost per package remained stable at 0.82 yuan, with transportation costs decreasing to 0.39 yuan and transfer costs to 0.25 yuan, contributing to a gross margin increase of 1.4 percentage points to 31.2% [1] Profit Forecast and Valuation - The net profit forecasts for 2024-2026 have been revised down to 9.5 billion yuan, 11.5 billion yuan, and 13.1 billion yuan respectively, from previous estimates of 10.5 billion yuan, 12.1 billion yuan, and 13.6 billion yuan [1]

Investment Rating - The report assigns a "Buy" rating for Alibaba (BABA.US/9988.HK) with a target price of $112.00 USD / 109.00 HKD, indicating a potential upside of approximately 29% from the current price [4][6]. Core Insights - Alibaba's e-commerce business is focusing on enhancing user experience and retention through competitive pricing and improved customer service, which is expected to strengthen market share and monetization in the long term despite short-term uncertainties [1][2]. - Alibaba Cloud is positioned as a leading cloud provider in China, expected to drive demand related to AI, contributing to future growth and profitability [1][3]. - The company is actively reducing losses in underperforming segments and has repurchased shares worth $4.1 billion, resulting in a 2.1% reduction in the number of shares outstanding this quarter [2][3]. Financial Performance Summary - For the fiscal quarter ending September 30, 2024, Alibaba reported revenues of RMB 236.5 billion, a year-on-year increase of 5%. Operating profit also grew by 5% to RMB 35.2 billion, while net profit surged by 63% to RMB 43.5 billion, primarily due to changes in equity investments [2][3]. - Adjusted net profit decreased by 9% to RMB 36.5 billion, with operating cash flow down 36% and free cash flow down 70%, attributed to increased investments in Alibaba Cloud and other operational adjustments [2][3]. - The Tmall Group's revenue grew by 1% to RMB 98.99 billion, with customer management revenue increasing by 2% to RMB 70.36 billion, while the EBITA margin improved by 2 percentage points [3][4]. Segment Performance - The overseas e-commerce segment saw a 29% revenue increase to RMB 31.67 billion, although it reported an EBITA margin of -9% [3]. - The Cloud Intelligence Group's revenue grew by 7% to RMB 29.61 billion, with public cloud services achieving double-digit growth and AI revenue increasing by triple digits [3]. - The local services segment, including platforms like Ele.me, reported a 14% revenue increase to RMB 17.73 billion, indicating strong order growth [3]. Future Projections - Revenue forecasts for FY2025 to FY2027 are projected at RMB 1,003.4 billion, RMB 1,091.4 billion, and RMB 1,205.5 billion respectively, with operating profits expected to reach RMB 147.8 billion, RMB 153.9 billion, and RMB 173.7 billion [4][5]. - The diluted earnings per share are anticipated to be $6.9, $7.2, and $8.2 for FY2025, FY2026, and FY2027 respectively, reflecting a significant growth trajectory [4][5].

Investment Rating - The investment rating for the company is upgraded to "Buy" [2] Core Insights - The company is expected to experience a profitability turning point driven by a rich model matrix in 2025, cost reduction through platform technology, and increased export volume [6] - Revenue estimates for 2024 have been slightly adjusted down to 41.03 billion yuan, while 2025 and 2026 revenue estimates have been raised to 95.56 billion yuan and 122.06 billion yuan respectively [6] - Non-GAAP net profit estimates for 2024-2026 have been adjusted to -5.38 billion yuan, -2.23 billion yuan, and 339 million yuan respectively, indicating a significant improvement in profitability [6] - The current stock price of 50.35 HKD corresponds to a price-to-sales ratio of 2.2, 0.9, and 0.7 for 2024-2026 [6] Financial Summary and Valuation Metrics - Revenue for 2022 was 26.86 billion yuan, with a year-on-year growth of 28.0%. The revenue for 2023 is projected at 30.68 billion yuan, reflecting a 14.2% growth [7] - The company reported a Non-GAAP net loss of 15.3 billion yuan in Q3 2024, which was better than market expectations [7] - The gross margin for Q3 2024 improved to 15.3%, up 1.3 percentage points from the previous quarter, primarily due to cost reductions in sales [7] - The company aims to achieve a quarterly breakeven point by the end of 2025, supported by new model launches and export growth [7]

Investment Rating - The report maintains a "Buy" rating for the company [6][34]. Core Insights - The company reported Q3 2024 revenue of 26.21 billion yuan, a year-over-year decrease of 4% but a quarter-over-quarter increase of 3%. The gross margin for Q3 was 62.9%, down by 0.09 percentage points [2][13]. - Blizzard's return has driven growth in PC games, while mobile games have declined primarily due to a high base from the previous year. Q3 gaming and related services revenue was 20.864 billion yuan, down 4.2% year-over-year [3][21]. - The company has a strong pipeline of new games, including "Marvel: Contest of Champions" and "Yanyun Sixteen Sounds," expected to launch within the year, indicating robust game development capabilities [4][26]. Financial Summary - Q3 2024 GAAP net profit was 6.538 billion yuan, a decrease of 16.57% year-over-year, while Non-GAAP net profit was 7.499 billion yuan, down 13.26% year-over-year [2][13]. - The company forecasts total revenues of 107.2 billion yuan, 120.3 billion yuan, and 125.6 billion yuan for 2024, 2025, and 2026, respectively, with Non-GAAP net profits of 32.8 billion yuan, 35.6 billion yuan, and 37.4 billion yuan for the same years [4][26]. - The estimated fair value per share is 114.61 USD for ADS and 178.44 HKD for H-shares [6][30]. Business Segment Performance - The gaming and related services segment generated 20.864 billion yuan in Q3 2024, with online game revenue at 20.196 billion yuan, a slight decrease of 1.04% year-over-year. Mobile game revenue accounted for 70.8% of online game revenue, totaling 14.299 billion yuan, down 9.71% year-over-year [3][25]. - The education segment, Youdao, achieved revenue of 1.573 billion yuan in Q3 2024, reflecting a year-over-year growth of 2.19% [24]. - Cloud music revenue was 1.999 billion yuan in Q3 2024, with a gross margin of 33%, up 5.58 percentage points year-over-year [24][25]. Future Outlook - The company is expected to benefit from the return of Blizzard games, which has positively impacted PC game revenue. The mobile segment is anticipated to recover with new game launches [4][26]. - The report highlights the company's strong R&D capabilities and the potential for continued success in game development, with a focus on high-quality game output [4][26].