Investment Rating - The report initiates coverage on Kolun Botai (6990.HK) with a "Buy" rating and recommends it as a top pick in the ADC industry, setting a target price of HKD 230 [3][6][15]. Core Insights - Kolun Botai is recognized as a leader in the Chinese ADC industry, with significant international collaboration, particularly with Merck, which has resulted in multiple licensing agreements totaling over USD 10 billion [4][15]. - The company's core asset, SKB264 (TROP2 ADC), is positioned as a global best-in-class product with promising clinical data and a robust pipeline, including several NDA submissions expected in the near future [5][39][44]. - The anticipated commercialization of multiple products in the domestic market is set to begin, with approvals expected for SKB264 and other key products by late 2024 and early 2025 [6][39][45]. Financial Projections - Revenue projections for Kolun Botai are estimated at RMB 1.895 billion for 2024, RMB 1.675 billion for 2025, and RMB 2.877 billion for 2026, with net losses expected to be RMB 351 million, RMB 1.042 billion, and RMB 255 million for the respective years [6][11][13]. - The report utilizes a DCF valuation model with a WACC of 10.8% and a perpetual growth rate of 3%, leading to a target market capitalization of HKD 51.3 billion [6][11]. Product Pipeline - Kolun Botai has over 10 products in clinical stages, with four products, including SKB264 and A166, expected to receive market approval in the near term [39][44]. - The company is actively conducting multiple Phase III clinical trials for its key products, indicating a strong commitment to advancing its pipeline [44][45]. Shareholder Structure - The major shareholder, Kolun Pharmaceutical, holds a 67.4% stake in Kolun Botai, while Merck is the second-largest shareholder with a 6.0% stake [23][24]. Management Team - The management team includes experienced professionals from various pharmaceutical backgrounds, with a strong focus on strategic planning and operational decision-making [26][30][36].

Investment Rating - The report initiates coverage on WuXi AppTec (2268.HK) with a "Buy" rating and a target price of HKD 35, indicating a potential upside of 33% from the current price of HKD 26.4 [2][10]. Core Insights - The ADC market is experiencing rapid growth, with a projected compound annual growth rate (CAGR) of 30% from USD 7.9 billion in 2022 to USD 64.7 billion by 2030, significantly outpacing the overall biopharmaceutical market [10][11]. - WuXi AppTec is positioned as a leading global ADC outsourcing service provider, benefiting from a high outsourcing rate of approximately 70% in the ADC sector, compared to 34% in the biopharmaceutical sector [10][11]. - The company has a robust project pipeline with 167 projects as of June 30, 2024, including 91 preclinical projects and 12 in Phase 3, indicating strong revenue growth potential [10][71]. Summary by Sections Company Overview - WuXi AppTec was established in 2013 and has grown into a leading integrated research, development, and manufacturing platform for bioconjugates, ranking second globally in ADC outsourcing services by revenue [25][34]. Market Analysis - The ADC market is expected to grow from USD 7.9 billion in 2022 to USD 64.7 billion by 2030, with China’s market projected to reach RMB 66.2 billion, reflecting a CAGR of 72.8% [10][11]. - The global ADC outsourcing market is projected to expand from USD 1.5 billion in 2022 to USD 11 billion by 2030, with a CAGR of approximately 28% [10][15]. Financial Projections - Revenue forecasts for WuXi AppTec are RMB 3.4 billion in 2024, RMB 4.9 billion in 2025, and RMB 6.7 billion in 2026, with adjusted net profits expected to reach RMB 820 million, RMB 1.12 billion, and RMB 1.53 billion respectively [4][87]. - The company’s revenue CAGR from 2020 to 2023 was 180%, with a 68% year-over-year growth in the first half of 2024 [87][95]. Operational Efficiency - WuXi AppTec has reduced the average development timeline from 24-30 months to 13-15 months for projects moving from antibody DNA sequence to IND submission, significantly enhancing operational efficiency [35][66]. - The company operates three facilities within a 200 km radius in China, facilitating coordinated development and production, which further reduces costs and time [66][71]. Client Base and Growth Strategy - The client base has expanded to 419 as of June 30, 2024, with 13 of the top 20 global pharmaceutical companies contributing to 29% of revenue [80][84]. - The "Empower, Follow, and Win Molecules" strategy is expected to drive continuous revenue growth as projects advance through clinical phases [71][75].

Investment Rating - Maintains an "Outperform" rating for Huazhu Group-S (1179 HK) [1][16] Core Views - Q3 2024 revenue increased slightly by 2 4% to RMB 6 44 billion, within the lower range of the guidance (2-5% growth) [1][7] - Adjusted net profit declined by 10 8% YoY to RMB 1 37 billion, and adjusted EBITDA decreased by 9 5% to RMB 2 11 billion, slightly below Bloomberg consensus estimates [1][7] - Domestic hotel RevPAR declined by 7 9% YoY to RMB 256, impacted by high base effects and weather disruptions [1][8] - Overseas hotel revenue grew by 8 9% YoY to RMB 1 28 billion, with a net loss of RMB 89 million due to restructuring costs [1][11] Domestic Hotel Operations - Domestic hotel RevPAR for mature stores decreased by 10 3% YoY to RMB 258, with ADR down 8 4% and occupancy rate down 1 8 percentage points [1][8] - 774 new hotels opened in Q3 2024, with a net increase of 557 hotels, bringing the total domestic hotel count to 10,707 by the end of Q3 2024 [1][8] - Domestic revenue grew by 1 0% YoY to RMB 5 162 billion, with franchised revenue up 14 7% and direct-operated revenue down 10 4% [1][8] Overseas Hotel Operations - Overseas DH RevPAR increased by 3 7% YoY, driven by a 2 5% increase in ADR and a 0 8 percentage point increase in occupancy rate [1][11] - The company exited 14 self-operated hotels in Denmark and fully took over the Zleep brand, with restructuring costs of RMB 81 million [1][11] Future Outlook - Q4 2024 revenue is expected to grow by 1-5%, with RevPAR expected to decline in the mid-single digits but with a narrowing YoY decline [1][12] - The company plans to accelerate its expansion in lower-tier cities, upgrade its mid-to-high-end hotel brands, and strengthen direct sales capabilities [1][12] - Overseas operations are expected to improve in 2025 due to ongoing asset-light optimization and operational enhancements [1][12] Financial Forecasts - Revenue for 2024E is projected at RMB 23 305 billion, with adjusted net profit of RMB 3 935 billion [4] - Adjusted EPS for 2024E is forecasted at RMB 1 23, with a PE ratio of 19 8x [4] - ROE is expected to be 25 2% in 2024E, with an EBIT margin of 16 9% [4]

Investment Rating - The report maintains a "Recommend" rating for the company, citing its strong educational capabilities and potential for growth in its for-profit high school business [4][7] Core Views - The company's FY24 revenue reached 3.32 billion yuan, a 44% year-over-year increase, with net profit attributable to shareholders of 560 million yuan, up 66% year-over-year [2] - The company's student enrollment grew by 30% year-over-year to 130,000 students, with high school students accounting for 41.5% of the total, up 46% year-over-year [2] - The company's educational business revenue increased by 43% year-over-year to 1.74 billion yuan, driven by tuition fees and growth in study tours and quality education services [2] - The company's product sales revenue surged by 66% year-over-year to 920 million yuan, benefiting from optimized supply chain layout [2] - The company's for-profit high school business shows strong growth potential, with a 55% first-tier university admission rate in mature schools, significantly higher than the Sichuan provincial average [2] - The company's light-asset transformation is progressing smoothly, with ROE increasing by 8.5 percentage points to 24.3% in FY24 [3] Financial Projections - The company's revenue is projected to grow to 4.00 billion yuan in FY25, 4.74 billion yuan in FY26, and 5.46 billion yuan in FY27, with growth rates of 21%, 19%, and 15% respectively [5] - Net profit attributable to shareholders is expected to reach 735 million yuan in FY25, 949 million yuan in FY26, and 1.14 billion yuan in FY27, with growth rates of 28%, 29%, and 21% respectively [5] - The company's diluted EPS is forecasted to be 0.35 yuan in FY25, 0.45 yuan in FY26, and 0.54 yuan in FY27 [5] - The company's PE ratio is expected to decrease from 15.74 in FY24 to 12.20 in FY25, 9.45 in FY26, and 7.84 in FY27 [5] Market Data - The company's stock price on November 26, 2024, was 4.09 HKD, with a total market capitalization of 8.7 billion HKD [7] - The company's total shares outstanding are 2.116 billion, with all shares being tradable [7]

Investment Rating - The report maintains a "Buy" rating for Chow Tai Fook (CTF) despite lowering the target price by 31% to HK$10.00, which corresponds to a price-to-earnings ratio of 20 times for FY25E [3][5][16]. Core Insights - Chow Tai Fook reported a 20.4% year-on-year decline in revenue for the first half of FY25, amounting to HK$39.4 billion, which aligns with market expectations. However, net profit fell by 44.4% to HK$2.5 billion, missing market expectations by 20% due to weak consumer confidence and fair value losses on gold loans due to rising gold prices [1][2]. - The company announced a share buyback plan of up to HK$2 billion and declared a dividend of HK$0.2 per share for the second half of FY25, down from HK$0.25 in the previous year [3][4]. Revenue and Profit Forecasts - Revenue for FY25E is projected to decline by 16.2%, with further declines of 2.4% and a slight recovery of 3.2% in FY26E and FY27E, respectively [2][7]. - Net profit forecasts have been adjusted downwards by 20-30%, with expected profits of HK$4.99 billion, HK$6.40 billion, and HK$6.83 billion for FY25E, FY26E, and FY27E, respectively [2][10]. Financial Performance Metrics - The report highlights a gross margin increase of 6 percentage points to 31.6% due to higher gold prices and a doubling of fixed-price product sales [1]. - The company’s operating cash flow is expected to improve in the second half of FY25, which will support the share buyback plan [3][10]. Market Context - The report notes that the global environment remains uncertain, with potential continued volatility in gold prices impacting the company's performance [2][3]. - The share price has seen a significant decline of 29.9% over the past six months, indicating market challenges [5].

Investment Rating - The report maintains a "Buy" rating for Chow Tai Fook (1929 HK) despite a downward revision in profit forecasts [4] Core Views - Chow Tai Fook's 1HFY2025 revenue decreased by 20 43% YoY to HKD 39 408 billion, with net profit attributable to shareholders dropping by 44 40% YoY to HKD 2 53 billion [1] - The company's gross margin improved significantly by 6 49 percentage points to 31 41%, driven by higher gold prices and an increased proportion of fixed-price gold products [2] - Retail sales value for the period from October 1 to November 18, 2024, declined by 15% YoY, with mainland China down 14 2% and Hong Kong, Macau, and other markets down 20% [1] Financial Performance - Operating expenses ratio increased by 2 87 percentage points to 15 95%, with selling/distribution, administrative, and financial expense ratios rising by 1 71, 1 04, and 0 11 percentage points respectively [2] - The company revised its FY2025/FY2026/FY2027 net profit forecasts downward by 34%/23%/20% to HKD 4 944 billion, HKD 6 26 billion, and HKD 7 014 billion respectively [4] Operational Highlights - Total number of stores decreased by 240 to 7,346 as of September 30, 2024, with mainland China stores down by 239 to 6,968 and Hong Kong/Macau/other markets remaining flat at 145 [3] - The company launched its first new concept experience store in Central, Hong Kong in September 2024 and plans to open its first mainland flagship store in Shanghai in 2025 [3] - The "Chow Tai Fook Official Mall" mini-program introduced AR technology for virtual jewelry try-ons starting April 2024 [3] Market Position - Chow Tai Fook maintains strong channel and brand competitiveness in the industry, with continuous optimization of its high-end product lines [4] - The company's retail value composition shows mainland China accounting for 86 1% of total retail value, with Hong Kong, Macau, and other markets making up 13 9% [13] Valuation Metrics - The report provides forward-looking P/E ratios of 14x, 11x, and 10x for FY2025E, FY2026E, and FY2027E respectively [5] - P/B ratios are projected at 2 6x, 2 5x, and 2 4x for the same periods [5]

Investment Rating - The report assigns a "Buy" rating to Laopu Gold with a target price of HKD 235 [1][1]. Core Insights - Laopu Gold is a pioneer in the ancient gold concept, focusing on high-end gold jewelry with significant growth potential in the domestic market. The company reported revenues of RMB 3.28 billion and RMB 3.52 billion for the full year of 2023 and the first half of 2024, respectively, reflecting year-on-year growth of 145% and 148%. Net profits were RMB 416 million and RMB 587 million, showing year-on-year increases of 342% and 198% [1][1][14]. Company Overview - Laopu Gold, established in 2009, is a chain enterprise specializing in the processing and sale of gold jewelry, promoting the ancient gold concept. The company operates 33 stores across 14 cities in China, focusing on high-end markets [1][14]. - The company has a concentrated shareholding structure, with the largest shareholders being the Xu family, holding 67.6% of the shares [16]. Financial Performance - The company has shown rapid revenue growth, with a compound annual growth rate of 58.6% from 2021 to 2023. The gross profit margin has remained stable at around 41.9% [25][25]. - For the years 2024 to 2026, net profit forecasts are RMB 1.12 billion, RMB 1.45 billion, and RMB 1.78 billion, respectively, with corresponding EPS of HKD 7.1, HKD 9.3, and HKD 11.3 [1][1]. Market Position and Strategy - Laopu Gold has positioned itself in the high-end jewelry market, with 90% of its sales coming from products priced above RMB 10,000. This is significantly higher than competitors, where such products typically account for less than 20% of sales [1][1][36]. - The company has a unique product offering, utilizing complex craftsmanship to create intricate gold jewelry, and has been recognized as one of the top ten jewelry brands favored by high-net-worth individuals in China [1][1][36]. Industry Insights - The gold jewelry market in China is projected to grow, with the ancient gold segment experiencing a compound annual growth rate of 64.6% from 2018 to 2023, reaching RMB 157.3 billion [1][1]. - The report highlights that the gold price has been on an upward trend, currently at RMB 623 per gram, which has increased by 28.9% since the beginning of the year. This trend supports the demand for gold jewelry [1][55].

Investment Rating - The report maintains an "Outperform" rating for Tianli International Holdings (01773 HK) [3][4] Core Views - Tianli International Holdings achieved a 56% YoY growth in adjusted net profit in FY2024, exceeding expectations [3] - The company's revenue increased by 44 2% YoY to RMB 3 321 billion, with net profit rising 66 3% to RMB 556 million [3] - Adjusted net profit reached RMB 577 million, a 56 4% increase, surpassing the previously disclosed guidance of 56% growth [3][8] - The company's ROE hit a new high of 24 3%, driven by a combination of heavy and light asset strategies [3] Business Segment Analysis - Integrated education business revenue grew 43% YoY, accounting for 53% of total revenue [3][11] - Product sales revenue increased 66% YoY, contributing 28% of total revenue [3][11] - Comprehensive logistics revenue rose 23% YoY, making up 18% of total revenue [3][11] - Hosting business revenue grew 53% YoY, representing 2% of total revenue [3][11] Financial Performance - Gross margin slightly decreased by 0 1pct to 33 7% due to higher contribution from lower-margin product sales [3][17] - Operating expense ratio decreased by 2 2pct to 12 5%, reflecting strong cost control [3][17] - Adjusted net profit margin improved by 1 4pct to 17 4% [3][17] - Capital expenditure decreased by 32 2% YoY to RMB 407 million [3][18] Future Outlook - The company is expected to achieve revenue of RMB 4 55/6 17/8 29 billion in 2025-2027, with net profit of RMB 780 million/1 06 billion/1 48 billion [3][25] - The PE ratio is projected at 10 5x/7 7x/5 5x for 2025-2027 [3][25] - The company plans to maintain a 30% dividend payout ratio [3][18] Strategic Initiatives - The company is focusing on a combination of heavy and light asset strategies, primarily using leasing for school expansion [3][18] - Multiple business lines, including diversified education and cloud platform services, are being actively developed and expanded to external schools [3][22][24] - The company has invested approximately HKD 140 million in share buybacks since July 2023 [3][18]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The company is facing significant pressure on its operating performance, with a focus on brand transformation to enhance product strength [2] - The company reported a 20.4% year-on-year decline in revenue and a 44.4% drop in net profit for the first half of FY2025, leading to a downward revision of profit forecasts for FY2025-2027 [3][4] - The company aims to improve overall operational quality and optimize channels, with five strategic guidelines expected to support healthy and stable development [3] Financial Performance - For FY2025H1, the company achieved revenue of HKD 39.408 billion, down 20.4% year-on-year, and a net profit of HKD 2.530 billion, down 44.4% year-on-year [3] - The company declared an interim dividend of HKD 0.20 per share [3] - The company's gross margin for FY2025H1 was 31.4%, an increase of 6.5 percentage points, primarily due to rising gold prices and a higher contribution from priced gold products [4] Market Performance - The company's same-store sales in mainland China for FY2025H1 decreased by 25.4%, with Q1 and Q2 showing declines of 26.4% and 24.3% respectively, mainly due to high gold price volatility affecting end-user sales [4] - The company’s revenue from mainland China and outside mainland China for FY2025H1 decreased by 18.8% and 27.9% respectively, with mainland China accounting for 83.8% of total revenue [4] Strategic Initiatives - The company is actively optimizing store quality and efficiency, closing 239 stores in mainland China during FY2025H1, resulting in a total of 6,968 stores at the end of the period [5] - The launch of the "Chow Tai Fook Chuan Fu" series in April 2024 achieved retail sales exceeding HKD 1.5 billion in FY2025H1, with priced gold products showing significant growth [5]

Investment Rating - The report does not explicitly state an investment rating for the company [2]. Core Insights - The company announced a share incentive plan on November 25, which includes granting 11.93 million restricted shares, accounting for approximately 2.8% of the total shares issued [4][5]. - The performance targets for the incentive plan require net profit growth rates of no less than 21% for 2025, 17% for 2026, and 15% for 2027 [6][11]. - The share vesting period is structured in three phases, with 33% of shares granted after meeting performance targets for 2025 and 2026, and 34% for 2027 [10][8]. - The incentive plan aims to recognize the contributions of qualified individuals, attract talent, and align the interests of employees with the company's long-term goals [18][21]. Summary by Sections Share Incentive Plan - The company plans to grant 11.93 million restricted shares as part of its incentive program, which represents 2.8% of total shares [4][5]. - The performance targets set for net profit growth are 21% for 2025, 17% for 2026, and 15% for 2027, excluding the impact of restricted share unit cost allocation [6][11][12]. - The incentive plan includes four executive directors, three supervisors, and 148 employees, with the latter group receiving 82.9% of the total shares granted [14][15]. Management Confidence - The incentive plan reflects the company's confidence in profit growth, with projected net profit growth of 26% for 2024, which is higher than previous estimates of 25% [25][24]. - The management's confidence in long-term growth and market competitiveness is emphasized through this incentive program [30][33]. Talent Development - The broad scope of the incentive plan, covering 148 employees, highlights the company's commitment to talent development and the connection between employee value and company performance [33].