Investment Rating - The investment rating for Bank of China Limited is Equal-weight [1][2][11]. Core Views - The report indicates that while there is good progress in the business transition of Bank of China, its valuation is less attractive compared to its Hong Kong counterpart [2][3]. - The earnings forecasts for Bank of China have been revised downwards due to the impact of mortgage rate cuts and LPR cuts, leading to a projected net interest margin (NIM) contraction [1][4]. - The report maintains a long-term view on the bank's performance, with a price target derived from a dividend discount model (DDM) remaining unchanged [1][4]. Summary by Sections Earnings Forecasts - EPS forecasts for Bank of China are adjusted to 0.74, 0.75, and 0.76 RMB for fiscal years 2024, 2025, and 2026 respectively [1]. - NIM forecasts have been revised to 1.42%, 1.36%, and 1.39% for 2024, 2025, and 2026 [4]. - The net profit growth forecasts are lowered to 0.5%, 0.4%, and 1.6% for 2024, 2025, and 2026 [1]. Key Drivers - The report highlights the drivers of growth for Bank of China, including the transition towards wealth management and asset management amid business reforms [5]. - Total asset growth is projected at 12.2% for 2023, decreasing to 6.4% in 2024 and stabilizing at 6.1% for 2025 and 2026 [4]. Risk and Reward Analysis - The risk-reward analysis indicates a positive outlook for Bank of China, despite the challenges posed by external economic factors [3][5]. - The consensus price target distribution shows a mean target of 4.20 RMB, with Morgan Stanley's price target at 4.50 RMB [3].

Investment Rating - The investment rating for Agricultural Bank of China Limited is Overweight [1][3]. Core Views - The report highlights a play on the government's economic rebalancing, with continuously improving asset quality and the highest NPL coverage ratio among the Big 5 banks [5]. - The bank has a strong deposit franchise, particularly in rural areas, leading to a stable funding structure, with deposits accounting for 78% of total liabilities in FY2023 [5]. - The valuation is attractive, with a projected 2024E dividend yield of 7.7%, compared to 5.3% for ABC-A [5]. Earnings Forecasts - Earnings forecasts for Agricultural Bank of China Limited have been revised following 2Q24 results, with net interest margin (NIM) forecasts adjusted to 1.43%/1.39%/1.42% for 2024/25/26 [1]. - Loan growth estimates have been raised to 9.2%/7.7%/6.3% for the same periods, leading to higher net interest income growth forecasts of 2.3%/5.1%/9.6% in 2024/25/26 [1]. - Net profit forecasts have been slightly revised up to 2.2%/2.7%/2.5% for 2024/25/26, with EPS estimates increased by 1.1%/1.1%/0.7% for the same years [1]. Price Target and Valuation - The price target for Agricultural Bank of China Limited is set at HK$4.40, with a bull case price target of HK$6.59 and a bear case of HK$1.55 [3][4]. - The report employs a three-stage dividend discount model with a probability-weighted approach, assigning 60% to the base case, 20% to the bull case, and 20% to the bear case [6]. Risk Reward Themes - The risk-reward chart indicates a 94% Overweight rating, with 0% Equal-weight and 6% Underweight [6]. - Key themes include pricing power being negative, with various scenarios outlined for bull, base, and bear cases reflecting different economic conditions [6][7].

Investment Rating - The report reiterates a "Buy" rating on both SK Hynix and Samsung Electronics, with Hynix being on the APAC Conviction List [2][4][5]. Core Insights - The report highlights that Korean memory suppliers, SK Hynix and Samsung Electronics, are expected to experience stronger growth in 3Q24 in terms of average selling price (ASP) and bit shipment compared to Nanya Technology, primarily due to a higher mix of high-end products like HBM and DDR5 [2][3]. - Nanya Technology reported a mid-single-digit percentage increase in ASP for 3Q24, while its bit shipment decreased by low-twenties percent. In contrast, Hynix and SEC are expected to see DRAM ASP growth of 12% and 9%, respectively, with bit shipment growth of +2% and -2% [2][3]. - The pricing outlook for 4Q24 is challenging for Nanya, as it anticipates minimal contribution from DDR5, while Hynix and SEC are expected to see blended DRAM ASP growth of 9% and 6%, respectively, due to continued improvement in product mix towards HBM and DDR5 [2][3]. - Nanya has lowered its capital expenditure guidance for the year from NT$26 billion to NT$20 billion, representing a ~3% decline from peak levels in 2022. In contrast, DRAM capex for Hynix and SEC is expected to grow year-over-year, primarily focused on HBM capacity and fab construction [2][3]. Summary by Sections Nanya Technology Performance - Nanya's 3Q24 ASP increased by mid-single-digit percentage quarter-over-quarter, while bit shipment decreased by low-twenties percent [2]. - The company faces challenges in 4Q24 due to minimal DDR5 output and elevated inventory levels in the DDR3&4 market [2][3]. SK Hynix and Samsung Electronics Outlook - Hynix and SEC are positioned to benefit from stronger demand for high-end products, with expected ASP growth of 12% and 9% for Hynix and SEC, respectively, in 3Q24 [2][3]. - Both companies are expected to see solid pricing growth in 4Q24, driven by a favorable product mix towards HBM and DDR5 [2][3]. Capital Expenditure Trends - Nanya has significantly reduced its capex guidance for the year, while Hynix and SEC are expected to increase their DRAM capex, focusing on HBM and fab construction [2][3].

8 October 2024 | 6:08PM CST revenue recognition will likely accelerate per mgmt as ocean freight congestion eases) and we forecast +28% yoy revenue into 2H24E. Shenzhen Inovance Technology Co. (300124.SZ): Sept IA orders slightly down yoy/up mom | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---- ...

Investment Ratings - Daqo ADR: Buy rated, Daqo A: Neutral rated [3] - GCL Tech: Neutral rated [5] - TZE: Sell rated [7] - Tongwei: Sell rated [9] - LONGi: Neutral rated [11] - Hangzhou First: Buy rated [13] Core Insights - The report reflects minor adjustments to solar coverage estimates, with an average fine-tuning of 2% for book values and a -1% tweak for EBITDA of Hangzhou First [1] - The investment thesis for Daqo highlights its leading position in poly production and strong balance sheet, suggesting it can navigate downturns effectively [3] - GCL Tech is positioned to increase market share significantly by 2030, but faces liquidity pressures [5] - TZE is expected to encounter significant challenges due to a shrinking addressable market and high inventory risks [7] - Tongwei's unfavorable supply/demand dynamics for poly lead to a sell rating, despite its rapid rise in the solar industry [9] - LONGi's strong balance sheet is offset by operational challenges, leading to a neutral rating [11] - Hangzhou First is expected to achieve high net income growth due to its market position and capacity expansion [13] Summary by Company Daqo - Leading poly producer with 14% global market share by end-2023, rated Buy due to undervaluation concerns [3] - Target price of US$21.6 based on 0.4X 2024E P/B [3] GCL Tech - Positioned at the lowest end of the cost curve, aiming for 40% market share by 2030, rated Neutral [5] - Target price of HK$1.2 based on 0.7X 2024E P/B [6] TZE - Largest solar wafer producer facing headwinds, rated Sell due to market contraction [7] - Target price of Rmb6.1 based on 0.7X 2024E P/B [8] Tongwei - Rapid growth but unfavorable dynamics for poly, rated Sell [9] - Target price of Rmb13.7 based on 1.1X 2024E P/B [9] LONGi - World leader in solar PV solutions but facing operational headwinds, rated Neutral [11] - Target price of Rmb16.1 based on 2.0X 2024E P/B [11] Hangzhou First - Largest solar film producer with significant market share, rated Buy due to growth potential [13] - Target price of Rmb23.1 based on 13X 2027E EV/EBITDA [13]

Investment Rating - The investment rating for Angel Yeast is "Sell" with a 12-month target price of Rmb30.3, reflecting a downside of 16.8% from the current price of Rmb36.42 [1][2][15]. Core Insights - The company is expected to achieve 23% year-on-year sales growth in Q3 2024, driven by a rebound in domestic bakery yeast volume and strong overseas demand, which is projected to grow over 20% year-on-year [1][3]. - Despite the sales growth, the company anticipates a contraction in gross profit margin (GPM) and net profit margin (NPM) due to rising logistics costs, with expected GPM/NPM contractions of 1.5 percentage points and 0.7 percentage points year-on-year, respectively [1][2]. - The management has raised the full-year sales growth estimate for 2024 from approximately 10% to 12.5%, with net profit growth now expected to reach 9% year-on-year [1][2][12]. Summary by Sections Sales and Growth - The company reported a year-to-date sales growth of approximately 12% and aims for over 20% sales growth in October [3][4]. - Domestic sales in the baking segment grew 7%-8% year-on-year in September, while overseas sales surged by 40% year-on-year [3][4]. Profitability and Costs - Logistics costs have increased significantly, impacting overseas profitability, although these costs are stabilizing [5][6]. - Raw material prices, particularly for molasses, have shown a downward trend, which may influence pricing strategies moving forward [7][8]. Capacity and Future Outlook - The utilization rate remains high at around 90%, with new production capacity expected from the Egyptian and Russian factories in Q4 2024 [9]. - The company is exploring mergers and acquisitions to enhance growth, although suitable targets are limited [9]. Financial Estimates - Revised financial estimates indicate a 2% increase in net profit estimates for 2024-2026, with expected sales growth of 12.5% and net profit growth of 9% for 2024 [12][14].

Investment Rating - The report assigns a "Buy" rating for Naura (002371.SZ) with a 12-month target price raised to Rmb502, reflecting a 14.6% increase from the previous target of Rmb438 [1][11]. Core Insights - Naura is positioned to benefit from the strong growth in China's semiconductor industry, with expected capital expenditures (capex) rising to US$36 billion in 2024, US$40 billion in 2025, and US$42 billion in 2026, up from US$30 billion in 2023 [1][10]. - The company is expected to achieve a revenue growth of 31% year-over-year (YoY) in Q3 2024, reaching Rmb8.1 billion, driven by increasing demand from domestic foundries and integrated device manufacturers (IDMs) [2][10]. - Naura's competitive advantage lies in its comprehensive product offerings across various semiconductor manufacturing processes, including etching, deposition, and cleaning tools, which positions it well to capture market opportunities [2][10]. Summary by Sections Revenue and Earnings Forecast - The report anticipates Naura's revenues for 2024E to be Rmb30,554 million, with subsequent years showing growth to Rmb41,064 million in 2025E, Rmb50,543 million in 2026E, and Rmb59,447 million in 2027E, reflecting increases of 4%, 11%, and 16% respectively [5][10]. - Net income is projected to grow to Rmb5,991 million in 2024E, Rmb8,581 million in 2025E, Rmb10,727 million in 2026E, and Rmb12,030 million in 2027E, with growth rates of 0%, 11%, 18%, and 19% respectively [5][10]. Margin Analysis - The gross margin is expected to sustain at 43% in Q3 2024, compared to 41% in 2023 and 45% in the first half of 2024 [2][10]. - Operating expenses are projected to decrease, with the operating expense ratio expected to be 22% in Q3 2024, down from 25% in 2023 [2][10]. Market Position and Competitive Landscape - Naura is recognized as a leader in the domestic semiconductor equipment market, benefiting from its technology leadership and strong relationships with first-tier customers [2][10]. - The company is expanding its product line to include high-end tools, which will enhance its market share and competitive positioning within the semiconductor value chain [2][10].

Investment Rating - The investment rating for Guangzhou Automobile Group is Overweight [3][15]. Core Viewpoints - The stock GAC-H rose 19% on October 7, 2024, outperforming the market and H-share peers, driven by potential short position coverage and an expanded A/H share premium of 220% from a previous low of approximately 50% in 2018 [2]. - Key points to monitor include southbound flow due to elevated A/H premium, deepening SOE reform, potential accelerated spin-off of GAC's EV subsidiary Aion, and fundamental vehicle demand supported by capital market rally [2]. Financial Metrics - Price target is set at HK$3.70 with a downside of 3% from the current price of HK$3.81 [3]. - Market capitalization is approximately RMB 72,565 million with an average daily trading value of HK$53 million [3]. - For the fiscal year ending December 2023, net revenue is projected at RMB 129,706 million, with EPS at RMB 0.42 [3]. - The P/E ratio is 7.7, and the dividend yield is 7.4% [3]. Future Projections - Revenue projections for the next few years are as follows: RMB 116,202 million for 2024, RMB 125,991 million for 2025, and RMB 134,303 million for 2026 [3]. - Expected EPS for 2024 and 2025 is RMB 0.31, with a slight increase to RMB 0.35 in 2026 [3]. - The return on equity (ROE) is expected to be 3.9% in 2023, declining to 2.8% in 2024 and 2025, before recovering to 3.1% in 2026 [3].

Investment Rating - The report maintains a **Neutral** rating for COSCO SHIPPING Holdings (601919.SS) with a 12-month price target of Rmb13.80 for A-shares and HK$10.70 for H-shares [1][2][4] Core Views - COSCO SHIPPING Holdings reported a strong 9M24 net profit of Rmb38bn, up 73% YoY, accounting for 87% of the full-year Bloomberg consensus of Rmb43bn [1] - Q3 net profit surged 286% YoY and 110% QoQ to Rmb21.3bn, driven by higher contract rates for Europe routes due to rerouting amid the Red Sea disruption [1][3] - The company's new pricing strategy, which includes more floating adjustments on contract rates, contributed to the earnings beat [1][3] - The FY24 dividend yield of 8.8%/12.0% for A/H-shares is attractive, trading above its historical average [1] Financial Performance - Revenue for 12/24E is projected at Rmb230.3bn, with EBITDA expected to reach Rmb74.2bn [2] - EPS for 12/24E is forecasted at Rmb2.62, with a P/E ratio of 6.0x [2] - The company's net debt/EBITDA ratio is expected to improve to -1.5x by 12/24E [2] Industry and Market Context - The average SCFI (Shanghai Containerized Freight Index) for Europe and Med routes increased by 308% YoY and 86% from March-May, reflecting higher freight rates [1][3] - The Red Sea disruption has led to longer voyage times, delaying revenue recognition for Europe routes, with Q3 revenue reflecting freight rates from June to August [1][3] - Fuel costs, historically 15-20% of total opex, decreased by 2% QoQ in Q3, contributing to higher profits [3] Valuation and Risks - The 12-month price targets are based on 0.8x/1.1x FY25E target P/BV multiples, above historical averages, reflecting higher ROE expectations due to supply chain complexity [7] - Upside risks include unexpected events reducing effective capacity and potential special dividend payouts [7][8] - Downside risks include faster-than-expected new ship deliveries and weaker-than-expected global trade demand [7][8] Freight Rate Analysis - The SCFI Comprehensive index stood at 2,135 as of 27-Sep-24, with Europe and Med routes showing significant YoY increases of 279% and 242%, respectively [6] - US West Coast and East Coast freight rates also saw substantial YoY growth, at 265% and 140%, respectively [6]

Investment Rating - The report maintains a "Buy" rating on Daqo and Flat H/Xinyi, while Longi is rated "Neutral" and GCL/Tongwei/TCL Zhonghuan are rated "Sell" [3][8]. Core Insights - The solar industry is experiencing a re-balancing of supply and demand, with upstream prices for Poly and Wafer seeing moderate increases, while downstream prices for Cell and Module are under intense competition, leading to a decline in profitability for these segments [1][11]. - Cash burn trends for covered companies are diverging, with Daqo expected to improve due to lower production and disciplined capital expenditure, while Tongwei and Longi are facing deterioration due to high capital expenditures and decreasing prices [2][5]. - A potential price rebound of 5%-10% across the solar value chain is anticipated by 2025, driven by continued supply cuts [3][8]. Summary by Sections Pricing Trends - In September, spot prices for Poly/Wafer increased by 1%, while Cell/Module prices decreased by 2% and 2% respectively, indicating a mixed pricing environment across the solar value chain [11][31]. - The average cash gross profit margin (GPM) for Poly improved slightly, while other segments like Wafer, Cell, and Module saw further declines [1][5]. Production and Inventory - Production for Poly, Wafer, Cell, and Glass decreased by 4%, 4%, 4%, and 8% respectively, while Module production remained flat [8][9]. - Inventory levels showed a moderate decline for downstream Cell and Module, but increased for Wafer and Glass, indicating ongoing inventory pressure [8][9]. Demand Dynamics - Demand for solar installations in China showed a sequential decline, with August installations down 22% month-over-month but up 3% year-over-year [31]. - Module exports remained flat month-over-month but increased by 23% year-over-year, with strong demand noted in the Middle East and APAC regions [31].