Investment Rating - The investment rating for the company is "Outperform the Market" [6] Core Views - The company reported a significant improvement in gross margin and a reduction in net loss for Q3 2024, with a gross margin of 8.1%, up 6.9 percentage points year-on-year and 5.3 percentage points quarter-on-quarter [5][6] - The company achieved record-high vehicle deliveries in Q3 2024, with 86,000 units delivered, representing a 94% year-on-year increase and a 62% quarter-on-quarter increase [7] - The company is expanding its global presence, having launched models in Europe and established a comprehensive partnership with Stellantis [8] Summary by Sections Financial Performance - For Q3 2024, the company reported revenue of 9.86 billion yuan, a 74% increase year-on-year and an 84% increase quarter-on-quarter [6] - The net loss for Q3 2024 was 690 million yuan, down from 990 million yuan in Q3 2023 and 1.2 billion yuan in Q2 2024, indicating a narrowing loss [5][6] Sales and Delivery - The sales structure improved, leading to a quarter-on-quarter increase in average revenue per vehicle, estimated at approximately 114,000 yuan, which is a 1.4% increase from the previous quarter [7] - The sales volume for different models in Q3 2024 was as follows: T03 (17,000 units), C10 (5,000 units), C11 (21,000 units), C16 (22,000 units), and others [7] Global Expansion - The company has completed EU WVTA certification for models C10 and T03, officially launching in Europe in September 2024 [8] - As of October 2024, the company has opened 339 dealerships in Europe, all equipped for sales and after-sales services, with plans to expand into Asia-Pacific, the Middle East, Africa, and South America by 2025 [8] Profitability Forecast - The company forecasts sales of 287,000 and 518,000 units for 2024 and 2025, respectively, with projected revenues of 33.3 billion and 59.1 billion yuan [9] - The estimated net profit for 2024 is projected to be -3.4 billion yuan, improving to -213 million yuan in 2025, and turning positive with a net profit of 1.3 billion yuan in 2026 [10][12]

Investment Rating - The report maintains a "Buy" rating for Xiaomi Group-W (1810 HK) with a target price of HKD 36.00 [4][9][12] Core Views - Xiaomi's stock price has risen 85% year-to-date, significantly outperforming the Hang Seng Tech Index by 67 percentage points [4] - The company's revenue is expected to grow 28% YoY in 3Q24, driven by its automotive and IoT businesses [4] - Xiaomi's SUV launch in 2025Q1 is anticipated to sustain rapid revenue growth, with Non-GAAP profit projected to increase by 55% in 2025 [4] - The new target price of HKD 36 includes an estimated valuation of HKD 8.7 per share for Xiaomi's automotive business [4][12] Smartphone/IoT/Internet Business - Xiaomi's smartphone shipments reached 42.8 million units in 3Q24, a 3.3% YoY increase, with a global market share of 13.5% [5] - Smartphone gross margin is expected to be 11.8% in 3Q24, pressured by rising raw material costs [5] - IoT revenue is projected to grow 20% YoY in 3Q24, with gross margin exceeding 20%, the highest since its IPO, driven by strong overseas and wearable product sales [5] - Internet business revenue is expected to grow 9.8% YoY in 3Q24, with gross margin remaining strong at 75% [5] Automotive Business - Xiaomi's automotive revenue is forecasted to exceed RMB 9 billion in 3Q24, a 42.8% QoQ increase [6] - Automotive shipments in 3Q24 are estimated to be close to 40,000 units, with gross margin improving to 17% [6] - The company's second-phase automotive factory is expected to be completed by June 2025, with total annual capacity potentially reaching 400,000 units [6] - Xiaomi's automotive business is projected to achieve breakeven in 2025, benefiting from economies of scale and reduced expense ratios [6] Financial Projections - Xiaomi's revenue for 2024E, 2025E, and 2026E is forecasted at RMB 348.2 billion, RMB 471.6 billion, and RMB 574.1 billion, respectively, representing YoY growth of 28.5%, 35.4%, and 21.8% [8] - Non-GAAP net profit for 2024E, 2025E, and 2026E is projected at RMB 24.7 billion, RMB 38.3 billion, and RMB 47.2 billion, respectively, with YoY growth of 27.9%, 55.4%, and 23.3% [8] - The company's PE ratio for 2025E is estimated at 16.69x, with a PB ratio of 3.03x [8] Valuation Methodology - The target price of HKD 36 is based on a SOTP valuation method, assuming a forward HKD/RMB exchange rate of 0.92 [12] - Xiaomi's existing businesses are valued at 17.3x 2025E PE, equivalent to HKD 27.3 per share, while the automotive business is valued at 2x 2025E PS, equivalent to HKD 8.7 per share [12][13] Industry Comparison - Xiaomi's 2025E PE ratio of 16.69x is lower than the industry average of 18.56x for comparable companies [14] - The company's automotive business valuation multiple of 2x 2025E PS is higher than the industry average of 0.86x, reflecting expectations of rapid growth and synergies with its smartphone business [14]

Investment Rating - The investment rating for Hua Hong Semiconductor is maintained as "Buy" with a target price of HKD 29.40 [3][6]. Core Insights - Hua Hong Semiconductor reported Q3 revenue of USD 526 million, a 10.0% increase quarter-on-quarter, and a gross margin of 12.2%, exceeding previous guidance [3][13]. - The company expects Q4 revenue to grow by 1.7% quarter-on-quarter, with a gross margin forecasted to remain stable between 11% and 13% [3][5]. - ASP (Average Selling Price) has stabilized after six consecutive quarters of decline, with Q3 ASP increasing by 1.2% to USD 415 [4][17]. Revenue and Profitability - Q3 revenue was USD 526 million, a decrease of 7.4% year-on-year but an increase of 10.0% quarter-on-quarter, surpassing the company's prior guidance [13][17]. - The gross margin for Q3 was 12.2%, which is a 1.7 percentage point increase from the previous quarter, driven by improved capacity utilization [3][17]. - The company anticipates Q4 revenue to be in the range of USD 530-540 million, with a gross margin of 11%-13% [18]. Capacity Utilization and ASP - The capacity utilization for 8-inch and 12-inch wafers improved to 113.0% and 98.5%, respectively, in Q3 [4][17]. - The ASP for Q3 was USD 415, reflecting a recovery after a prolonged decline [4][17]. Future Outlook - For Q4, Hua Hong expects overall market growth to slow, with specific pressure on the automotive and industrial sectors [5][18]. - The company is set to commence operations at its Wuxi Phase II facility in December, which is expected to gradually ramp up production capacity [5][19]. - The forecast for 2024 includes a slight revenue increase driven by modest price increases, with expectations for ASP to recover gradually [18][19]. Financial Projections - Revenue projections for 2024, 2025, and 2026 have been adjusted to USD 1.996 billion, USD 2.030 billion, and USD 2.296 billion, respectively [6][15]. - Net profit forecasts for the same years are adjusted to USD 0.893 billion, USD 0.713 billion, and USD 0.520 billion, respectively [6][15].

Investment Rating - The investment rating for the company is "Buy" and it is maintained [7]. Core Views - The company achieved a sales volume of 51,443 units in October 2024, representing a year-on-year growth of 27.3% but a month-on-month decline of 4.2% [4]. - The company has maintained the top sales position among new energy vehicle brands in China for 27 consecutive weeks [4]. - The company expects a total delivery volume of 160,000 to 170,000 units for 2024, which translates to a year-on-year growth of 21.4% to 29.0% [4]. - Cumulative sales from January to October 2024 reached 393,000 units, reflecting a year-on-year increase of 38.2% [4]. - The company is implementing a "dual energy strategy" with rapid expansion of supercharging stations and enhancements in smart technology to improve user experience [5]. - The product lineup includes four range-extended electric vehicle models and one high-voltage pure electric model, covering a market segment above 200,000 [5]. - The company has established 475 retail centers across 144 cities and 444 after-sales service centers, indicating ongoing optimization of its distribution network [5]. Summary by Sections Sales Performance - In October 2024, the company sold 51,443 vehicles, marking a 27.3% increase year-on-year and a 4.2% decrease month-on-month [4]. - The company has been the leading new energy vehicle brand in China for 27 weeks [4]. Future Outlook - The company anticipates a total delivery volume of 160,000 to 170,000 units for 2024, with a year-on-year growth of 21.4% to 29.0% [4]. - Cumulative sales from January to October 2024 reached 393,000 units, a 38.2% increase year-on-year [4]. Strategic Initiatives - The "dual energy strategy" includes the deployment of supercharging stations and advancements in smart technology [5]. - The company has launched 1,004 supercharging stations and 4,910 charging piles as of October 31, 2024 [5]. - The product matrix is designed to cover a market segment above 200,000, with a strong new car cycle expected to drive sales growth [5]. Retail and Service Network - The company operates 475 retail centers in 144 cities and 444 after-sales service centers, enhancing its market presence [5]. Financial Projections - The projected net profit for 2024-2026 is estimated at 81.0 billion, 146.8 billion, and 200.8 billion respectively, with corresponding PE ratios of 21.5X, 11.8X, and 8.7X [6].

Investment Rating - Buy rating maintained for Leapmotor (9863 HK) [8] Core Views - Leapmotor's Q3 2024 results exceeded expectations, with gross margin improvement and record high per-vehicle profitability driven by product mix optimization and economies of scale [1][3][4] - The company achieved revenue of RMB 9 86 billion in Q3 2024, up 74 3% YoY, with net loss narrowing to RMB -6 9 billion [3] - Q3 2024 sales reached 86,000 units, approaching H1 2024 cumulative sales, with monthly sales hitting new highs [3] - Gross margin improved to 8 1% in Q3 2024, up 6 9pct YoY and 5 3pct QoQ, with per-vehicle gross profit reaching RMB 0 9 million, a historical high [4] - The company is entering a strong new product cycle globally, with plans to launch 2-3 new models annually over the next three years [5] Business Performance - Q3 2024 sales increased 94 4% YoY and 61 7% QoQ to 86,000 units, with July-September sales of 22,000, 30,000, and 34,000 units respectively [3] - Revenue per vehicle was RMB 114,000 in Q3 2024, down RMB 13,000 YoY but up RMB 14,000 QoQ due to increased C-series contribution (78 3% of sales) [3] - October 2024 orders exceeded 40,000 units, indicating strong momentum for Q4 2024 [3] - Sales and administrative expense ratio decreased to 9 0% in Q3 2024, down 2 5pct YoY and 5 4pct QoQ [4] - R&D expense ratio was 7 9% in Q3 2024, down 0 5pct YoY and 5 2pct QoQ [4] Product and Market Strategy - Leapmotor covers the RMB 50,000-200,000 price segment and has expanded internationally with T03 and C10 models [5] - The company plans to launch 3 B-series models in 2025, priced between RMB 100,000-150,000, including the compact SUV B10 in Q1 2025 [5] - Domestic sales network includes 493 sales outlets and 362 service centers across 204 cities as of September 2024 [5] - International presence includes 339 European outlets as of October 2024, with plans to exceed 500 global outlets by 2025 [5] - The company is accelerating autonomous driving development, planning to expand its team to 500 by end-2024 and introduce advanced ADAS features on the LEAP 3 5 platform in H1 2025 [5] Growth Outlook - Domestic growth driven by strong new product cycle and competitive pricing, with scale effects and product mix optimization expected to boost profitability [6] - International expansion through partnership with Stellantis enables asset-light overseas growth with low initial investment and rapid deployment [6] - Sales forecasts: 300,000 units in 2024, 500,000 units in 2025, and 750,000 units in 2026 [6]

零跑汽车（09863.HK） 乘用车 证券研究报告/公司点评报告 2024 年 11 月 14 日 国内基本盘毛利率大幅改善，出海进程加速 | --- | --- | --- | --- | --- | --- | --- | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ...

Investment Rating - The report maintains a "Buy" rating for the company [2][6]. Core Insights - The company achieved a revenue of 7.306 billion yuan in Q3 2024, representing a year-on-year growth of 26%. The net profit attributable to shareholders was -0.08 billion yuan, a 94% year-on-year reduction, and the adjusted net profit was 0.236 billion yuan, marking the first time the company turned profitable under non-GAAP standards [1][2]. - The gross margin for Q3 2024 was 34.9%, an increase of nearly 5 percentage points year-on-year, with nine consecutive quarters of sequential growth [1]. - The new game "Three Kingdoms: Strategy Determination" performed well, ranking second in the App Store's game sales chart after its launch, contributing positively to the company's gaming business [1][2]. - Daily Active Users (DAU) and Monthly Active Users (MAU) reached historical highs of 107 million and 348 million, respectively, with average daily usage time also hitting a record of 106 minutes [2]. - Advertising revenue for Q3 2024 was 2.094 billion yuan, a year-on-year increase of 28%, driven by product optimization and efficiency improvements [2]. Financial Projections - The company is expected to see revenue growth rates of 19.3%, 14.9%, and 8.4% for the years 2024, 2025, and 2026, respectively, reaching revenues of 26.876 billion yuan, 30.886 billion yuan, and 33.494 billion yuan [2][6]. - The forecasted Non-GAAP net profit for 2024 is projected to be -0.068 billion yuan, turning positive in 2025 with 0.531 billion yuan and further increasing to 1.392 billion yuan in 2026 [6][7].

Investment Rating - The report initiates coverage with a "Buy" rating for Tongcheng Travel [4]. Core Views - Tongcheng Travel is positioned as a leading OTA in the lower-tier market, focusing on strengthening its own supply chain to enhance competitive advantages [1][2]. - The online travel market in China is expected to reach a scale of 2.2 trillion yuan in 2024, recovering to 120% of the 2019 level, with an online penetration rate of 45.2%, indicating significant growth potential [2][31]. - The company benefits from strong backing by Tencent and Ctrip, which enhances its competitive edge through resource sharing and flow support [2][14]. Summary by Sections Company Overview - Tongcheng Travel was formed through the merger of Tongcheng and eLong, ranking among the top three online travel platforms in China, with a focus on the lower-tier market and supply chain development [1][9]. Industry Analysis - The online travel market is projected to grow significantly, with a stable competitive landscape dominated by a few major players. The penetration rate for online travel remains lower compared to other sectors, suggesting room for growth [2][26][34]. - The company is actively expanding its user base in lower-tier cities, with 87% of registered users from non-first-tier cities as of Q2 2024 [2][34]. Competitive Advantages - Tongcheng Travel leverages Tencent's traffic and Ctrip's inventory to enhance its market position. The company is also diversifying its traffic channels and strengthening its app development [2][3][14]. - The company has established a robust supply chain, including partnerships with travel agencies and hotel management companies, to enhance its service offerings [2][3]. Financial Performance and Forecast - The company reported a revenue of 11.896 billion yuan in 2023, with a growth rate of 81%. The adjusted net profit for 2023 was 1.554 billion yuan, marking a significant recovery post-pandemic [3][17]. - Forecasts for adjusted net profits from 2024 to 2026 are 2.6 billion yuan, 3.1 billion yuan, and 3.6 billion yuan, respectively, with corresponding P/E ratios of 14, 12, and 10 [3][4].

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings with a target price of HKD 513, representing a potential upside of 27.0% from the current price of HKD 403.80 [1][3]. Core Insights - Tencent's Q3 2024 performance showed robust revenue growth of RMB 167.2 billion, up 8% year-on-year and 4% quarter-on-quarter, aligning with market expectations. Key revenue drivers included gaming, social networks, and advertising, with respective growth rates of 13%, 4%, and 17% [1][2][3]. - The adjusted net profit for Q3 2024 reached RMB 59.8 billion, a 33% increase year-on-year, benefiting from high-margin businesses such as domestic gaming and video services [1][3]. - The report anticipates continued growth in Q4 2024, projecting an 8.2% year-on-year revenue increase, driven by domestic gaming and advertising [3]. Revenue and Profitability - Total revenue for Tencent is projected to grow from RMB 609.0 billion in 2023 to RMB 766.8 billion by 2026, with a compound annual growth rate (CAGR) of approximately 8.6% [4]. - The adjusted earnings per share (EPS) is expected to rise from RMB 16.33 in 2023 to RMB 28.35 in 2026, reflecting a strong growth trajectory [4]. - The report highlights a significant improvement in gross margin, which increased to 53% in Q3 2024, driven by cost optimization in cloud services and high-margin business growth [1][3][10]. Segment Performance - The gaming segment saw a 13% year-on-year revenue increase, with domestic games growing by 14% due to the successful launch of new titles and the recovery of existing games [2][6]. - Advertising revenue surged by 17%, fueled by strong demand for video ads and increased spending from the gaming and e-commerce sectors [2][3][15]. - Financial technology and enterprise services remained stable, with slight growth in enterprise service revenue, while payment services faced challenges due to consumer spending impacts [2][14]. Valuation Metrics - The current price corresponds to a price-to-earnings (P/E) ratio of 15.3 times for 2025, which is considered low compared to historical averages [3][4]. - The report suggests that Tencent's strong performance and shareholder returns exceeding RMB 100 billion annually justify the target price of HKD 513, based on a 20 times P/E ratio for 2025 [3][4].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 159.00, indicating a potential upside of 38.0% from the current closing price of HKD 115.20 [7]. Core Insights - The company has shown strong sales growth in Q3 2024, with total revenue increasing by 28.2% year-on-year to USD 1.002 billion, driven primarily by a 66.9% increase in product revenue to USD 993 million [1]. - The sales of the drug Zebutinib reached USD 690 million globally, marking a 93.0% year-on-year increase, with a notable performance in the U.S. market [1][2]. - The adjusted non-GAAP operating profit for Q3 2024 was USD 65.63 million, marking the second consecutive quarter of positive operating profit [1]. - The company is expected to continue facing accelerated depreciation costs in Q4 2024, but profitability is anticipated to improve as product volumes increase in the following year [1]. Financial Forecast Changes - Revenue forecasts for 2024-2026 have been increased by 6-7%, with peak sales for Zebutinib revised up by 4% to USD 5.4 billion [2]. - The new revenue projections for 2024, 2025, and 2026 are USD 3.712 billion, USD 4.630 billion, and USD 5.566 billion, respectively, reflecting a 7% increase for 2024 [3]. - The gross profit for 2024 is projected at USD 3.108 billion, with a gross margin of 83.6% [3]. Key Developments - The report highlights several upcoming catalysts, including potential approvals for additional indications of the drug Tarelizumab in key markets and the initiation of Phase III studies for the Bcl-2 inhibitor sonrotoclax in early 2025 [2]. - The company is also advancing multiple candidates for solid tumors into clinical stages, with eight candidates already in clinical trials this year [2]. Financial Data Overview - The company reported a net loss of USD 698 million for 2024, with expectations of narrowing losses in subsequent years [8]. - Cash and cash equivalents are projected to decrease to USD 2.551 billion in 2024, with a gradual recovery expected in 2025 [8].