Investment Rating - The investment rating for New Hope Liuhe is maintained at OVERWEIGHT with a target price of RMB10.55, indicating an expected outperformance compared to the benchmark [1][6][7]. Core Insights - The report highlights that the private placement plan, revised to raise RMB3.8 billion, aims to enhance biosecurity at pig farms and repay bank debts, which is expected to improve the company's debt-to-asset ratio and support high-quality growth [2][3]. - The company has seen a reduction in pig farming costs and improved profitability in its feed operations, leading to an upward revision of the profit forecast for 2024 to RMB1.14 billion [1][3]. - The anticipated recovery in the balance sheet is supported by strategic investments and divestments from non-core segments, contributing significantly to profits [2][3]. Summary by Sections Financial Performance - Revenue for 2024 is projected at RMB120.13 billion, reflecting a decrease of 15.22% from 2023, while net profit is expected to rise to RMB1.14 billion, a significant increase of 356.27% compared to 2023 [5][12]. - The earnings per share (EPS) is forecasted to be RMB0.25 for 2024, with a return on equity (ROE) of 4.49% [5][12]. Cost Management - The total breeding cost is estimated to decrease to RMB15.5 per kilo in 2Q24, down RMB1.9 per kilo quarter-on-quarter, driven by lower feed prices and improved farming performance [3][12]. - The domestic feed segment is expected to contribute RMB700-1,000 million in annual profit over the next two years, with overseas feed output projected to exceed 6 million tonnes [3][12]. Market Position - The company is strategically focusing on hog and feed segments, aiming for high-quality growth, which is expected to yield good profits in pig farming for the second half of 2024 [3][12]. - The stock is valued at 1.85 times the estimated book value for 2024, which is above the average of its peers at 1.22 times [1][6].

Investment Rating - The report assigns a 12-month rating of "Buy" for Centre Testing International (CTI) with a price target of Rmb16.60, while the current price is Rmb11.60 [5][17]. Core Insights - Centre Testing International reported a revenue increase of 9% year-over-year (YoY) to Rmb2.79 billion and a recurring net profit (NP) increase of 5% YoY to Rmb0.4 billion in H124, aligning with market expectations [2][4]. - The gross profit margin (GPM) improved by 1.6 percentage points YoY to 52.7% in Q224, attributed to a low base in Q124 and improvements in specific segments [2][3]. - The life science segment contributed 45% to H1 revenue, growing 22% YoY, driven by the third soil census, while the industrial product testing segment grew 14% YoY, contributing 20% to H1 revenue [3]. - The company did not provide new guidance, and investor reaction is expected to be neutral [4]. Financial Performance - H1 revenue contributions by segment include: - Life Science: 45% with a 22% YoY increase - Industrial Product Testing: 20% with a 14% YoY increase - Trade Assurance: 13% with a 9% YoY increase - Consumer Goods Testing: 17% with a 4% YoY decline - Pharma and Clinical Services: 5% with a 34% YoY decline [3]. - Forecasted revenues are projected to grow from Rmb5.571 billion in 2023 to Rmb6.319 billion in 2024, with net earnings expected to rise from Rmb787 million in 2023 to Rmb908 million in 2024 [6]. Valuation Metrics - The report indicates a forecast price appreciation of 43.1% and a forecast dividend yield of 0.9%, leading to a total forecast stock return of 44.0% [7]. - The company's market capitalization is Rmb19.5 billion (approximately US$2.72 billion) with an average daily trading volume of 16,783,000 shares [5][6]. Company Overview - Established in 2003 and headquartered in Shenzhen, China, Centre Testing International is a leader in third-party testing, inspection, and certification (TIC) services, operating over 150 labs in more than 90 cities worldwide [8].

22 July 2024 | 6:28PM BST 公众平：永木论委 Precious Analyst China's Structurally Resilient Gold Demand ■ The gold price set a new all-time high of $2,483/toz on Wednesday (Julys17) as expected Fed cuts are poised to bring Western capital back into:the gold market. Following rising interest from Western investors, and ounanalysis of structurally higher demand from central banks, we dive into the third major component of global gold demand: Chinese households. Jaan Struyyen man Sachs & Co. LLC ■ Physical Demand Domin ...

Investment Rating - The report assigns a "Buy" rating for Kweichow Moutai (600519.SS) with a 12-month price target of Rmb2,244.00, indicating an upside potential of 52.9% from the current price of Rmb1,467.39 [80]. Core Insights - Recent volatility in wholesale prices is attributed to deeper seasonal discounts via online platforms, waning speculative demand, increased direct sales, and weak retail sentiment during the Dragon Boat Festival [105][106]. - Moutai's wholesale prices have historically rebounded after significant drawdowns, indicating resilience in consumer demand despite current price fluctuations [106]. - The report highlights that Moutai offers the highest distribution profits among Chinese baijiu brands, with channel gross profits exceeding Rmb1,000 per bottle compared to less than Rmb100 for other spirits [106]. - The affordability ratio of Moutai's original-case wholesale price is at 41% of urban disposable income, aligning with the 10-year average, suggesting long-term support for price levels as urban incomes grow [106]. Summary by Sections Wholesale Price Trends - Recent measures by Moutai, including ceasing the open-case policy and controlling shipments, have led to a 10% increase in wholesale prices for unpacked and original case Feitian Moutai [115]. - The report notes that Moutai's shares have declined by 9.3% in June, contrasting with MSCI China's decline of 2.7% and CSI300's decline of 3.3% [105]. Online Sales and Market Penetration - Online sales in the spirits category remain under-penetrated, accounting for approximately 11% of total spirits retail sales in 2023 [5][126]. - Moutai's online sales have increased significantly, contributing 16.1% of its total revenue, while other brands like Wuliangye and Laojiao have lower online sales percentages [126]. Channel Actions and Market Dynamics - Moutai has implemented various channel actions to stabilize prices, including suspending direct sales to enterprise group-buy channels and controlling prepayments [115][143]. - The report emphasizes that the current market dynamics, including the actions taken by Moutai, are expected to enhance its valuation and provide a better investment opportunity [108].

Investment Ratings - TSMC: Buy with a target price of NT$1,160/US$218, expecting 24% YoY revenue growth for 2024 [2] - China Education: Buy for EDU and TAL, with a robust revenue and profitability outlook driven by favorable market dynamics [3] - Yum China: Buy, forecasting +3.5% YoY sales growth despite SSSG pressure [3] - Roborock: Buy, with robust sales momentum and positive surprises from US offline channel expansion [3] - China Autos: Buy for BYD, Li Auto, and XPeng, monitoring potential inflection points in the industry [3] - Japan Industrial Electronics: Buy for Hitachi and Fujikura, focusing on growth and financial strategies [4] Core Insights - The Third Plenary Session is expected to focus on gradual reforms rather than major structural changes, with an emphasis on fiscal and tax reforms [2] - TSMC's revenue growth is supported by pricing strategies and AI cycle visibility, with expectations of a low single-digit price hike for advanced nodes starting in 2025 [2] - The China education sector is expected to maintain a stable regulatory environment, supporting the profitability outlook for key players [3] - Yum China's store expansion remains solid, with expectations of 400 net store openings in 2Q24 despite margin pressures [3] - Roborock's expansion into US offline channels is projected to significantly contribute to revenue growth, with a total expected growth of over 70% in 2024 [3] - The China auto industry is still above cash cost for many companies, indicating potential for profitability recovery despite some conservative outlooks [3] - Japan's industrial electronics sector is focusing on growth strategies, with Hitachi and Fujikura highlighted for their comprehensive approaches [4] Summary by Sections Third Plenary Session Preview - The focus will be on gradual reforms in the "post-property era," with expectations for fiscal and tax reforms to be signaled [2] TSMC Earnings Preview - TSMC is expected to maintain its full-year guidance with a revenue growth forecast of 24% YoY for 2024, despite a projected decline in gross margin due to N3 ramp dilution [2] China Education Sector - The sector is expected to see robust revenue and profitability driven by favorable supply-demand dynamics and a stable regulatory environment [3] Yum China Earnings Preview - Forecasts indicate a +3.5% YoY sales growth, with KFC and Pizza Hut facing SSSG pressures but maintaining a solid pace of store expansion [3] Roborock Sales Momentum - The company has exceeded expectations in US offline channel expansion, contributing significantly to its projected revenue growth [3] China Autos Analysis - The report indicates that while some companies are cutting capacity, many remain above cash cost and optimistic about profitability recovery [3] Japan Industrial Electronics Insights - Companies like Hitachi and Fujikura are highlighted for their effective growth and financial strategies, despite challenges faced by others in the sector [4]

Investment Rating - The report maintains a "Buy" rating for CATL, Miniso, Hitachi Construction Machinery, and TBO Tek, indicating a positive outlook for these companies [4][6][7]. Core Insights - Listed Chinese corporates returned over Rmb2 trillion to shareholders in the past three years through dividends and buybacks, supported by strong policy initiatives and low payout ratios [2][8]. - CATL is positioned to benefit from the global electrification trend due to its upgraded battery product mix and resilient market share, despite facing cost inflation in Europe [4][6]. - Miniso's management is focused on consistent entrepreneurship and long-term growth, with a year-to-date same-store sales growth tracking around 100% [6][7]. - TBO Tek is expected to achieve a 21% CAGR in revenues from FY24 to FY30, driven by a large and fragmented total addressable market (TAM) [6][7]. Summary by Sections China Shareholder Returns - The report emphasizes the strong position of Chinese companies to return cash to shareholders, with a focus on improving payout ratios and fiscal revenue [2][8]. - The construction of a China Shareholder Returns Portfolio includes three equity cohorts: Stable Cash Cows, Dividend/Buyback Surprise Candidates, and Select Central/Local SOEs [2]. CATL Insights - CATL's efficient production lines and supply-chain advantages are expected to sustain its cost competitiveness in the European market [4][6]. - The company has a 12-month target price of Rmb304, reflecting its growth potential in the battery sector [4]. Miniso Insights - Miniso's store upgrades are driving sales growth, with management optimistic about performance despite challenging consumption conditions [6][7]. - The 12-month target price for Miniso is set at US$31.20/HK$61 [6]. Hitachi Construction Machinery Insights - Hitachi Construction Machinery is expected to see growth in mid-sized and large construction machinery, particularly in the Americas [6][7]. - The company has a 12-month target price of ¥5,250, indicating a bullish outlook [6]. TBO Tek Insights - TBO Tek's business model is characterized by strong execution, asset-light balance sheet, and low competition risks, positioning it as a steady earnings compounder [6][7]. - The 12-month target price for TBO Tek is Rs1,970, reflecting its growth potential in the travel distribution sector [6].

Investment Rating - The report assigns a "Buy" rating to Enphase Energy Inc. (ENPH) with a target price of $106.67 and First Solar Inc. (FSLR) with a target price of $258.87 [15]. Core Insights - The report highlights mixed signals regarding solar demand in Europe, with residential demand appearing weaker than expected due to political and regulatory uncertainties, while commercial and utility-scale segments show more positive trends [3]. - In contrast, the U.S. residential solar market is showing signs of improvement, with sequential trends improving significantly since February/March 2024, particularly in California [4]. - The potential for domestic content requirements is expected to positively impact U.S. residential solar volume growth starting in Q4 2024, with Enphase Energy positioned favorably due to its U.S.-manufactured products [6]. - Utility-scale projects in the U.S. are still facing delays, primarily due to domestic content requirements and uncertainty surrounding anti-dumping and countervailing duties [4]. - Module pricing in the U.S. is on the rise, driven by uncertainties related to tariffs, with price increases ranging from $0.05 to $0.10 per watt depending on the sourcing jurisdiction [5][7]. Summary by Sections European Market Insights - Demand in Europe remains uncertain, with residential solar demand weaker than expected due to various factors, while commercial and utility-scale segments are more constructive [3]. U.S. Market Developments - Positive trends are emerging in the U.S. residential solar market, with improvements noted in inventory levels and market dynamics [4]. - Domestic content requirements are expected to drive volume growth in the U.S. residential solar sector starting in Q4 2024, benefiting companies like Enphase Energy [6]. Pricing and Supply Chain - Utility-scale projects in the U.S. are experiencing pushouts, but the overall backlog remains healthy [4]. - Module pricing is increasing in the U.S. due to tariff uncertainties, with suppliers raising prices to mitigate risks [5][7].

Investment Rating - The report highlights a Buy rating for BONB and CCB, a Sell rating for ICBC and ABC, and a Neutral rating for CMB due to full valuation [46]. Core Insights - The report discusses the impact of recent property funding support measures in China, which are expected to stimulate local government debt financing to address refinancing needs and reduce housing inventory [46]. - It updates FY24-26E PPOP/net profit estimates, reflecting higher government lending in bank portfolios, which positively affects capital through an expansion of lower risk-weighted assets [46]. - The report anticipates a continued reduction in Net Interest Margin (NIM) to 1.4% by 2026, down from 1.7% in 2023, alongside an increase in property loans to RMB 4.5 trillion to aid in housing inventory reduction [46]. - An annual capital release of RMB 0.7 trillion is projected for the covered banks [46]. Summary by Sections Section: NIM Forecast - The report provides a forecast of the average NIM for covered banks, indicating a decline from 1.7% in 2023 to 1.4% in 2026 [46]. Section: Property Loans - It estimates a higher balance of RMB 4.5 trillion in property loans to facilitate the reduction of housing inventory [46]. Section: Capital Release - The report projects an annual capital release of RMB 0.7 trillion for the covered banks, indicating a positive outlook on capital management [46].

Investment Rating - The report maintains a "Buy" rating for certain banks, specifically highlighting BONB and CCB, while rating ICBC and ABC as "Sell" and CMB as "Neutral" [128][132]. Core Insights - The total onshore local government debt is estimated at Rmb 102 trillion, reflecting an 8% increase from prior estimates, driven by a net increase of Rmb 6 trillion in official government debt [117][119]. - The report anticipates a continued decline in net interest margins (NIM) for covered banks, projecting a decrease to 1.4% by 2026 from 1.7% in 2023, due to higher local government debt growth and lower yields [127][128]. - A capital shortfall of Rmb 0.3 trillion is expected for covered banks over 2024-26, necessitating new capital to manage losses and maintain dividends [129][132]. Summary by Sections Local Government Debt - Local government debt has increased significantly, with covered banks growing their local government debt by Rmb 4.4 trillion, a 13% increase from previous estimates [119][120]. - The share of local government debt held by large SOE banks has risen to 33%, while non-covered banks have reduced their exposure to 62% [120]. NIM and Capital Requirements - The report projects a further decline in NIM for covered banks, estimating decreases of 16, 7, and 1 basis points for 2024E, 2025E, and 2026E respectively [7][8]. - Covered banks are expected to release Rmb 0.7 trillion in capital annually, positively impacting their CET1 ratio by 18 basis points each year through 2026 [128]. Property Loans and Losses - The report outlines three scenarios for property loan growth, with estimates of Rmb 2.2 trillion, Rmb 4.5 trillion, and Rmb 6.5 trillion in new property loans over the next three years [36][44]. - A projected loss of Rmb 0.3 trillion is anticipated on the Rmb 4.5 trillion in new property loans, with an implied non-performing loan (NPL) ratio of approximately 6% [23][128]. Capital Management - The report indicates that banks may need to lower their target CET1 ratios to release more capital, which could raise concerns about asset quality and leverage [11][47]. - Convertible bonds have been a popular method for banks to raise new capital, comprising 60% of total new capital raised in the past five years [88][129].

Investment Rating - The report maintains a "Buy" rating for CATL, with a 12-month price target of Rmb304.00, while the current price is Rmb188.77 [1]. Core Insights - Concerns regarding downside risks from Tesla's battery price renewal are considered overstated, as CATL is expected to remain a significant earnings contributor to Tesla, with contributions projected to increase to approximately 11% from 2024 to 2026, up from 8%-10% during 2021-2023 [1][12]. - CATL's battery sales to Tesla are reportedly at discounts to average prices, with estimates showing sales at 9%/17%/17% below average prices in 2021/22/23, indicating limited downside risks [2][14]. - The growth of Energy Storage Systems (ESS) is expected to be a key driver for CATL's battery shipments, with a forecasted 58% CAGR for ESS shipments, which will help offset near-term EV battery headwinds [3][24]. Summary by Sections Financial Projections - Revenue projections for CATL are Rmb400.9 billion in 2023, Rmb396.8 billion in 2024E, Rmb500.7 billion in 2025E, and Rmb624.0 billion in 2026E [5][11]. - EBITDA is expected to grow from Rmb66.8 billion in 2023 to Rmb136.3 billion in 2026E [11]. - Net income is projected to increase from Rmb44.1 billion in 2023 to Rmb100.3 billion in 2026E [11]. Market Position and Competitive Landscape - CATL is positioned as a leading player in the battery market, with a market cap of Rmb830.4 billion and an enterprise value of Rmb645.4 billion [4]. - The report highlights CATL's strong partnership with Tesla, which has evolved over the years, focusing on joint R&D in fast-charging batteries as the next area of collaboration [12][14]. Earnings Contribution from Tesla - Tesla is estimated to contribute 10%-12% of CATL's revenue from 2021 to 2023, with projections indicating an increase to approximately 11% in 2024-2026, supported by around 16% of CATL's total battery shipments [26][28]. - The net profit contributions from Tesla are expected to rise significantly, nearly tripling from Rmb4.4 billion in 2023 to Rmb11.1 billion by 2026 [26].