Investment Rating - The investment rating for Meituan-W (03690.HK) is maintained at "Outperform the Market" [4][11]. Core Views - JD's entry into the food delivery market is seen as a supportive business for JD Daojia, with limited resource allocation from the group, which will not significantly impact Meituan's core competitiveness in food delivery [3][5]. - Meituan's strong market position in the food delivery sector is highlighted, with no significant competitors observed at present [4][11]. Summary by Sections Company Overview - JD's food delivery service launched a recruitment campaign for "quality dine-in restaurant merchants," offering zero commission for merchants who join by May 1, 2025 [2]. Market Analysis - JD's food delivery is primarily targeting top chain merchants, which have limited impact on Meituan's overall advertising and commission contributions [3][11]. - The penetration rate of JD's main platform and Daojia is significantly lower compared to Meituan's, indicating a weaker user mindset towards near-field retail and food delivery [3][7]. Financial Forecasts - Revenue forecasts for Meituan for 2024-2026 are adjusted to CNY 338.2 billion, CNY 391.4 billion, and CNY 445.7 billion, reflecting a slight decrease of -0.1% for 2024 and increases of +0.6% for 2025 and 2026 [4][11]. - Adjusted net profit forecasts for the same period are CNY 43 billion, CNY 52.2 billion, and CNY 58.5 billion, with minor adjustments of 0.0%, -0.2%, and -0.3% respectively [4][11]. Valuation - The target price for Meituan is set between HKD 185 and HKD 203, indicating an upside potential of 20% to 32% from the current price [4][11].

Investment Rating - The report suggests a positive outlook for the company, indicating that it is advisable to actively monitor the stock due to its potential for long-term growth [4]. Core Insights - The company reported a sales revenue of over $2.2 billion in Q4 2024, with a quarter-on-quarter growth of 1.7% and a gross margin of 22.6%, which is an increase of 2.1 percentage points [1]. - For the full year 2024, the company achieved a sales revenue of $8.03 billion, representing a year-on-year growth of 27%, with a gross margin of 18% [1]. - The company’s capital expenditure for 2024 was $7.33 billion, with an end-of-year capacity of 948,000 8-inch wafers and a total shipment of over 8 million wafers, resulting in an average capacity utilization rate of 85.6% [1]. Summary by Sections Sales and Revenue Outlook - The company expects a sales revenue growth of 6-8% quarter-on-quarter for Q1 2025, with gross margins projected between 19% and 21% [2]. - Factors contributing to this growth include domestic subsidies for consumer electronics, a shift towards localized semiconductor production, and efforts by downstream companies to mitigate global tariff risks [2]. Automotive Segment Growth - The automotive product line is anticipated to become a significant revenue contributor, potentially accounting for 10% of the company's total revenue, which corresponds to about one-third of the domestic automotive market demand [3]. Long-term Growth Potential - The report emphasizes the strengthening trend of localized semiconductor production in China, driven by substantial demand in sectors such as electric vehicles, mobile phones, home appliances, and robotics [4]. - The company has made significant investments in supply chain stability and technology upgrades, enhancing its ability to meet domestic demand and positioning itself for sustained long-term growth [4].

Investment Rating - The investment rating for the company is downgraded to Neutral [1][6][38] Core Views - The stock price may have fully reflected the upside potential, leading to the downgrade in rating. Despite a positive outlook on the domestic substitution trend in wafer foundry and the company's leading position in the industry, investors should consider high capital expenditures, downstream demand uncertainties, and increased competition in mature processes [6][7][9] - The target price is raised to HKD 48, reflecting a 2.25x price-to-book ratio for 2025, accounting for improved market liquidity and a reassessment of technology stocks [6][9][12] Financial Overview - Revenue projections for the company are as follows: - 2023: USD 6,322 million - 2024: USD 8,030 million - 2025E: USD 9,414 million (up from previous estimate of USD 9,094 million) - 2026E: USD 10,291 million - 2027E: USD 11,238 million [5][20][40] - Net profit estimates are: - 2023: USD 903 million - 2024: USD 493 million - 2025E: USD 1,055 million - 2026E: USD 1,348 million - 2027E: USD 1,778 million [5][20][40] - The company’s gross margin is projected to improve to 20.9% in 2025, up from 20.1% previously estimated [20][40] Market Performance - The stock has increased approximately 200% since the second half of 2024, driven by improved fundamentals and increased market liquidity [6][7][9] - The company’s market capitalization is approximately HKD 287,213 million, with a 52-week high of HKD 47.95 and a low of HKD 14.02 [3][6] Capital Expenditure - The company has guided for capital expenditures of USD 7.33 billion in 2024, with expectations to maintain similar levels in 2025, which is higher than previous market expectations [6][7][9] - The capital expenditure as a percentage of revenue is projected to remain high, indicating a focus on expansion despite potential impacts on gross margins [6][7][9] Valuation Metrics - The company’s price-to-book ratio is currently at 2.2x, which is significantly above the historical average of 1.0x, indicating a high valuation relative to its peers [6][9][12] - The relative premium of the A-shares over H-shares is currently at 142%, which is at the historical lower bound compared to an average of 199% [6][9][19]

Investment Rating - The report downgrades the investment rating for the company to Neutral from Buy, indicating that the stock price may have fully reflected the potential upside [6][7][19]. Core Views - The report highlights that while the company's performance may continue to improve, the stock price has already anticipated these changes. The long-term outlook remains positive due to the trend of domestic substitution in the wafer foundry industry and the company's leading position in the market [6][7][19]. - The report emphasizes the high capital expenditure and its potential impact on profit margins, as well as uncertainties in downstream demand and increased competition in mature processes affecting product pricing [6][7][19]. Financial Overview - Revenue projections for the company are as follows: - 2023: $6,322 million - 2024: $8,030 million - 2025E: $9,414 million - 2026E: $10,291 million - 2027E: $11,238 million - Year-on-year growth rates are projected at -13.1% for 2023 to 2024, 27.0% for 2024 to 2025, and 17.2% for 2025 to 2026 [5][39]. - Net profit estimates are: - 2023: $903 million - 2024: $493 million - 2025E: $1,055 million - 2026E: $1,348 million - 2027E: $1,778 million - The report notes a significant drop in earnings per share (EPS) for 2024, with a recovery expected in subsequent years [5][39]. Market Performance - The company's stock price has increased approximately 200% since the second half of 2024, driven by improved fundamentals and increased market liquidity [6][7][19]. - The target price for the company's stock is raised to HKD 48, reflecting a price-to-book (P/B) ratio of 2.25 times for 2025, which is considered high compared to historical averages [6][7][19]. Capital Expenditure - The company has guided for capital expenditures of $7.33 billion for 2024, with expectations for 2025 to remain at similar levels, which is higher than previous market expectations [6][7][19]. - The report indicates that the company plans to expand its 12-inch wafer capacity by 50,000 pieces annually, despite the high capital expenditure [6][7][19]. Valuation Comparison - The report compares the company's valuation metrics with peers, noting that the company's P/B ratio is above the industry average, indicating a premium valuation despite lower return on equity (ROE) compared to competitors [6][7][19]. - The report also highlights that the premium of the company's A-shares over H-shares is currently at 142%, which is at the historical lower end of the range [6][7][19].

Investment Rating - The report assigns a "Buy" rating for Sinopec Engineering Group (SEG) with a target price of 8 HKD, based on a 12x PE for 2025 [5]. Core Insights - Sinopec Engineering Group is a leading energy and chemical engineering company in China, providing comprehensive solutions across various sectors including oil refining, petrochemicals, and clean energy [12][16]. - The company has demonstrated stable profitability with a gross margin around 10% and a net margin of approximately 5% from 2019 to 2023, alongside a consistent dividend payout ratio of 65% [16][22]. - The domestic market is experiencing a trend of upgrading and transformation in refining, with significant projects underway by major oil companies [3][16]. - The international market, particularly in the MENA region, is witnessing unprecedented growth in oil and gas projects, contributing to a 32.7% increase in overseas orders for SEG [4][16]. Summary by Sections Company Overview - Sinopec Engineering Group, a subsidiary of Sinopec, is a prominent player in the energy and chemical engineering sector, listed in Hong Kong since May 2013 [12][16]. - The company operates 12 subsidiaries, offering a wide range of services including engineering consulting, project management, and construction [12][16]. Industry Landscape - The energy and chemical engineering industry has high barriers to entry due to complex processes, high specialization, and significant capital and technical requirements [2][32]. - SEG's main competitors in the domestic market include China Petroleum Engineering, China Huanqiu Engineering, and China Chemical Engineering [2][29]. Domestic Market Dynamics - The refining sector in China is undergoing structural adjustments, with major projects in ethylene production being implemented by both Sinopec and PetroChina [3][16]. - The coal chemical industry is poised for significant growth, with numerous projects planned through 2025 [3][16]. International Market Opportunities - The MENA region is becoming a focal point for global refining projects, with a total contract value reaching 94 billion USD, significantly higher than previous years [4][16]. - SEG's overseas orders have shown robust growth, continuing from a high growth rate in 2023 [4][16]. Financial Performance and Valuation - The report forecasts net profits for 2024, 2025, and 2026 to be 2.525 billion, 2.757 billion, and 2.943 billion RMB respectively, with corresponding EPS of 0.57, 0.63, and 0.67 RMB [5]. - The company has maintained stable revenue above 50 billion RMB annually from 2019 to 2023, with a notable increase in overseas revenue by 34.1% in 2023 [16][22].

Investment Rating - The report maintains an "Outperform" rating for the company, with a target price of HKD 19.35 per share, representing an 11% upside potential [5][16]. Core Insights - The company experienced a 3.5% annual revenue growth, reaching USD 1.55 billion, driven by an 8.2% increase in shipments to 53 million pairs, despite a 4.4% decline in average selling price (ASP) [12][13]. - The company is expanding its production capacity and optimizing its order structure, which is expected to enhance profitability, particularly with new luxury clients and a focus on high-margin products [14][15]. - A significant cash return of USD 180 million is planned for shareholders from 2024 to 2026, with an expected total return per share of 9.7% [16]. Financial Data and Forecast - The company's revenue for 2022 was USD 1.63 billion, with a projected revenue of USD 1.49 billion for 2023, and expected growth to USD 1.64 billion by 2026 [3]. - Net profit is forecasted to grow from USD 141 million in 2023 to USD 205 million by 2026, reflecting a compound annual growth rate (CAGR) of 10.2% [5][9]. - The gross profit margin (GPM) and EBIT margin reached a decade high in 2023, indicating improved operational efficiency [5][16].

Investment Rating - The report does not explicitly state an investment rating for Tencent Holdings [1]. Core Insights - Tencent Cloud has launched the DeepSeek model API, enhancing its competitiveness in AI and cloud computing by providing high-performance services and simplifying development processes [2]. - WeChat's Spring Festival data shows strong demand for digital red envelopes, indicating the growing penetration of WeChat e-commerce in less saturated markets [3]. - WeChat Pay has seen significant growth during the Spring Festival, particularly in cross-border payments, with a 134% year-on-year increase in transaction volume from inbound tourists [4]. - Tencent has announced a new patent for a large language model training method, which improves the model's generalization ability and accuracy, benefiting applications requiring high precision [5]. Summary by Sections Cloud Computing - Tencent Cloud has introduced the DeepSeek model API, becoming the first domestic cloud provider to support this feature along with online search capabilities. This move is expected to attract more enterprises and developers due to its optimized performance and simplified development processes [2]. E-commerce - The WeChat team reported a surge in the use of digital red envelopes during the Spring Festival, with notable growth in gift categories such as snacks and books, indicating a unique competitive advantage in less saturated markets [3]. Payment Services - WeChat Pay experienced a robust performance during the Spring Festival, with over 1 billion custom red envelope designs created by users. The service saw a 134% increase in transaction volume from inbound tourists, particularly in regions like Luxembourg [4]. Artificial Intelligence - Tencent's new patent for a large language model introduces a comparative learning mechanism that enhances the model's ability to distinguish between correct and incorrect expressions, which is crucial for applications like intelligent customer service [5].

Investment Rating - The report maintains an "Outperform" rating for the company, with a target price of HKD 6.65, corresponding to a 12x price-to-earnings ratio for 2025 [4][15]. Core Insights - The main brand's turnover showed improvement in Q4 2024, with a year-on-year growth of over 30% and a healthy inventory turnover of four months. Retail discounts improved to 70-75% in Q4 2024 compared to 70% in Q4 2023 [4][11]. - Saucony's revenue is expected to exceed 1 billion RMB, with a 50% year-on-year growth in Q4 2024 and a 60% increase for the entire year. The brand became profitable in 2023 and is expected to see further profitability improvements with full ownership from January 2024 [4][12]. - The company is expanding its product offerings and upgrading its channels, including new concept stores in major cities and a diverse product range that includes shoes and apparel [4][13]. - The main brand and Saucony have solidified their positions in the marathon shoe market, with the main brand achieving a wear rate of 22.4% in the Shanghai Marathon, surpassing international brands [4][14]. - The company is optimistic about its running product matrix and anticipates a second growth curve with Saucony's profitability. Estimated net profits for 2024 and 2025 are projected at 1.26 billion RMB and 1.39 billion RMB, respectively [4][15]. Financial Data and Forecast - The company's revenue is projected to grow from 14,346 million RMB in 2023 to 18,331 million RMB by 2026, with a compound annual growth rate of approximately 11.64% [3][8]. - Net profit is expected to increase from 1,044 million RMB in 2023 to 1,564 million RMB in 2026, reflecting a year-on-year growth rate of 12.25% [3][8]. - The gross margin is forecasted to improve gradually from 42.17% in 2023 to 43.25% in 2026, indicating enhanced operational efficiency [3][8].

Investment Rating - The investment rating for the company is "Buy" with a target price not specified, maintaining the rating for the next six months [7]. Core Insights - The company reported a total revenue of 2.187 billion RMB for FY25H1, a year-on-year decrease of 21.79%, with a net profit attributable to shareholders of -0.097 billion RMB, compared to 0.249 billion RMB in the same period last year. Excluding the financial impact of the sale of "Yuhui Tongxing," the net profit from continuing operations was 0.033 billion RMB [1]. - The company continues to implement a multi-platform strategy to enhance brand awareness and influence, achieving a total net revenue of 2.2 billion RMB from its continuing operations (self-operated products and live e-commerce) in FY25H1, a year-on-year decrease of 9.3%. The GMV for self-operated products and live e-commerce reached 4.8 billion RMB, down 16.2% year-on-year [2]. - The company has launched 600 SKUs of self-operated products in FY25H1, expanding its product line to more categories, with self-operated products accounting for approximately 37% of total GMV [4]. - The company is focusing on product quality and exploring new live streaming methods to tap into untapped markets, emphasizing high repurchase rates, high quality, and cost-effectiveness [6]. Summary by Sections Financial Performance - FY25H1 total revenue was 2.187 billion RMB, down 21.79% year-on-year; net profit attributable to shareholders was -0.097 billion RMB, compared to 0.249 billion RMB in the previous year [1]. - The company expects revenues for FY25-27 to be 4.1 billion RMB, 5.6 billion RMB, and 7.6 billion RMB respectively, with adjusted net profits of 0.18 billion RMB, 0.27 billion RMB, and 0.41 billion RMB [12]. Business Strategy - The company is enhancing its multi-channel strategy, with significant contributions from platforms like Douyin, where the GMV from self-operated and third-party products reached 0.5 billion orders [2]. - The company has developed a comprehensive app strategy, covering various categories to meet diverse consumer needs, and is actively increasing membership and engagement through marketing activities [3]. Product Development - The company has expanded its product categories beyond fresh food and snacks to include health products, pet food, and new-style clothing, achieving competitive performance [4]. - The company plans to increase its focus on essential household products like rice, flour, and cooking oil to better serve family consumption needs [11].

Investment Rating - The report maintains a "Buy" rating for the company with a target price not specified [5]. Core Insights - The core education business continues to show significant growth, with FY25 Q2 revenue reaching $1.04 billion, a year-on-year increase of 19.4%. Excluding self-operated products and live e-commerce, revenue grew by 31% [1]. - The company reported a strong performance in overseas exam preparation and consulting services, with revenue growth of 21% and 31% respectively. Domestic exam preparation for adults and university students saw a revenue increase of 34.9% [1]. - New educational initiatives maintained robust growth, with a revenue increase of 42.6%. Non-subject tutoring services were launched in approximately 60 cities, attracting around 994,000 registrations this quarter [1]. - The company is focused on improving service quality and operational efficiency while balancing sustainable growth and profitability [1]. Financial Performance Summary - For FY25 H1, the company reported revenue of $2.47 billion, a 25.6% increase year-on-year. Operating profit was $310 million, up 37.9%, while net profit attributable to shareholders was $280 million, reflecting a 41.9% increase [2]. - The Non-GAAP operating profit for FY25 H1 was $330 million, a 10.8% increase, and the Non-GAAP net profit was $300 million, up 25.4% [2]. - The company recorded a Non-GAAP operating profit margin of 3.2% for FY25 Q2, an increase of 12 basis points year-on-year [3]. Future Outlook - The company expects FY25 Q3 revenue (excluding self-operated products and live e-commerce) to be between $1.01 billion and $1.03 billion, representing a year-on-year growth of approximately 18% to 21% [4]. Adjusted Earnings Forecast - The report adjusts revenue forecasts for FY25-27 to $5.2 billion, $6.3 billion, and $7.5 billion respectively. The adjusted net profit forecasts for FY25-27 are $500 million, $620 million, and $750 million respectively [5].