Investment Rating - The report maintains a "Buy" rating for the company [6] Core Views - The issuance of convertible bonds and the establishment of a call option spread are aimed at obtaining low-cost financing while controlling dilution risk [2] - The funds from the convertible bonds will be used for overseas store expansion, supply chain development, and shareholder return plans, with each area accounting for 50% of the total [3] - The company is expected to continue its high growth trajectory, particularly in overseas markets, with significant improvements in profitability [4] Summary by Sections Convertible Bonds and Call Options - The company plans to issue $550 million in convertible bonds with a 7-year term and a coupon rate of 0.5%, with a conversion price set at HKD 64.395, representing a 26.14% premium over the closing price on January 6 [1] - The call option spread includes a lower call option and an upper warrant, with exercise prices set at HKD 64.395 and HKD 102.1, respectively [1][2] Use of Proceeds - The proceeds from the convertible bonds will primarily support overseas store expansion and supply chain enhancements, as well as a shareholder return plan focused on share buybacks [3] - As of Q3 2024, the company has opened 183 new overseas stores, bringing the total to 2,936, a year-on-year increase of 623 stores [3] Financial Projections - Revenue projections for 2024-2026 are estimated at CNY 171.7 billion, CNY 205.7 billion, and CNY 240.6 billion, respectively, with net profits of CNY 25.3 billion, CNY 32.0 billion, and CNY 40.0 billion [4][5] - The company is expected to maintain a strong return on equity (ROE) of around 21% over the next few years [5]

Investment Rating - The report maintains an "Outperform" rating for Xtep International (01368 HK) [1][6] Core Views - Xtep's main brand achieved high single-digit retail sales growth in Q4 and full year 2024, with online sales growing over 20% and offline sales growing low single-digit [2][3] - Saucony brand achieved over 60% growth in 2024, exceeding management guidance [2][3] - KP brand's divestiture is expected to enhance Xtep Group's profitability, with 2024 net profit target highly achievable [6] - 2024-2026 net profit forecast is adjusted to 1 25/14 0/15 6 billion yuan, representing year-over-year growth of 20 9%/12 5%/10 9% [6] Operational Performance - Xtep main brand's Q4 retail discount improved to 7-7 5折 compared to 7折 in the same period last year [3] - Year-end inventory-to-sales ratio improved to 4 months, down from 4-4 5 months in the same period last year [3] - Saucony achieved approximately 50% growth in Q4 2024 [3] - January trends show positive momentum with main brand achieving double-digit growth, partly driven by earlier Chinese New Year [3] Financial Projections - 2024-2026 revenue forecast: 13 738/14 902/16 196 billion yuan [7] - 2024-2026 net profit margin forecast: 9 1%/9 4%/9 6% [7] - 2024-2026 ROE forecast: 13 1%/13 8%/14 2% [7] - 2024-2026 PE ratio forecast: 11 3x/10 0x/9 0x [7] Valuation - Maintains reasonable valuation range of 6 1-6 6 HKD, corresponding to 11-12x 2025 PE [6] - Comparable company valuation shows Xtep trading at lower PE multiples than Anta and Li Ning [8] Strategic Focus - Company focuses on running category expertise, with main brand targeting mass market and Saucony targeting "dual elite" segment [6] - KP brand's divestiture expected to improve profitability, as it incurred annual operating losses of around 180 million yuan in 2022-2023 [6]

Investment Rating - The investment rating for the company is "Buy" [9] Core Insights - The core recommendation logic is that the company benefits from domestic subsidies and is increasing its market share overseas [2] - The black appliance industry is experiencing a stabilization in profitability and a valuation recovery due to improvements in the panel cycle and the impact of national subsidies [3][5] - The company is leveraging its leading product capabilities domestically and expanding its overseas channels, resulting in continuous market share growth [4] Summary by Sections Company Overview - The company is a subsidiary of TCL Industries, focusing on display business and has distribution capabilities for other products [22][26] - The company has a strong distribution network and has seen significant growth in its innovative business segments, including solar energy [27] Industry Dynamics - The black appliance industry is benefiting from a shift towards larger screens and improved competition among leading brands [47] - National subsidies are driving the growth of the MiniLED segment, leading to an increase in market demand [64] Financial Projections - Revenue projections for 2024-2026 are HKD 93.4 billion, HKD 109.2 billion, and HKD 118 billion, with corresponding growth rates of 18%, 17%, and 8% [7][108] - Expected net profit for the same period is HKD 1.3 billion, HKD 1.7 billion, and HKD 2 billion, with growth rates of 80%, 27%, and 16% [7][108] Market Positioning - The company is positioned as a leading brand in the global market, with significant growth in both North America and Europe [3][4] - The company has established partnerships with major retailers and is leveraging sports marketing to enhance brand recognition [80][84] Competitive Advantages - The company has a strong technological edge in MiniLED displays and has been proactive in product innovation [69][70] - The company is expanding its market share in emerging markets while maintaining a competitive edge against traditional brands [89][90]

Investment Rating - Buy (Maintained) [6] Core Views - Anta Sports' main brands (Anta and FILA) showed steady growth, while other brands continued to experience high growth [1] - Anta brand achieved high single-digit growth in 2024, driven by online sales and new business formats [2] - FILA brand returned to high single-digit growth in Q4 2024, with its trendy sub-brand achieving high double-digit growth [3] - Other brands grew 40%-45% in 2024, with Q4 growth accelerating to 50%-55%, driven by strong performance in winter sports brands [4] - Anta Sports' core competitive advantages remain significant, with long-term growth potential in brand elevation, retail operations, and outdoor sports segments [5] Financial Forecasts - Revenue is expected to grow by 11%/9%/8% in 2024/2025/2026 to RMB 695/757/820 billion [4] - Net profit attributable to shareholders is expected to grow by 33%/-0.5%/+11% in 2024/2025/2026 to RMB 136/135/150 billion, excluding a one-time gain of RMB 15.8 billion from AmerSports' IPO [4] - EPS is forecasted to be RMB 4.80/4.77/5.28 in 2024/2025/2026, with a P/E ratio of 14.5/14.5/13.1X [4][5] Brand Performance - Anta brand: Q4 2024 online sales grew nearly 20%, with overall high single-digit growth for the year [2] - FILA brand: Q4 2024 growth returned to high single digits, with trendy sub-brand achieving high double-digit growth [3] - Other brands: Descente grew 45%-50% and KOLON grew 60%-65% in Q4 2024 [4] Strategic Initiatives - Anta Sports is actively repurchasing shares, with over 21.55 million shares repurchased as of January 7, 2025 [5] - The company is focusing on brand elevation through product innovation, channel operations, and leveraging Olympic resources [5]

Investment Rating - The investment rating for Anta Sports (2020.HK) is "Strong Buy" with an expectation that the stock will outperform the market by over 20% within the next six months [15]. Core Views - Anta's brand operations are stable, with FILA brand revenue exceeding expectations. The company is expected to achieve double-digit revenue growth in 2025, particularly in the children's segment [4][10]. - The overall retail performance for Anta and FILA brands showed high single-digit growth year-on-year in Q4 2024, with other brands experiencing a 50-55% increase [4][9]. - The report maintains a positive outlook on the company's growth in professional sports, fashion sports, and outdoor sports segments, benefiting from industry trends [10]. Summary by Sections Company Overview - Anta Sports is primarily engaged in the textile and apparel industry, with a total market capitalization of HKD 212.448 billion and a share price of HKD 75.25 [1]. Financial Performance - Revenue projections for Anta Sports are as follows: - 2022A: 53,651 million - 2023A: 62,356 million (YoY growth of 16.2%) - 2024E: 71,329 million (YoY growth of 14.4%) - 2025E: 81,204 million (YoY growth of 13.8%) - 2026E: 91,805 million (YoY growth of 13.1%) [6][13]. - Net profit projections are: - 2022A: 7,590 million - 2023A: 10,236 million (YoY growth of 34.9%) - 2024E: 11,875 million (YoY growth of 16.0%) - 2025E: 13,801 million (YoY growth of 16.2%) - 2026E: 15,389 million (YoY growth of 11.5%) [6][13]. Brand Performance - Anta brand retail sales in Q4 2024 showed high single-digit growth, with a healthy inventory turnover of approximately five months [9]. - FILA brand retail sales also demonstrated high single-digit growth, with strong performance in FILA Kids and FILA's trendy products [9]. - Other brands, excluding those added after January 1, 2023, saw a revenue increase of 50-55%, with Descente and KOLON brands maintaining high growth rates [9]. Future Outlook - The report anticipates that Anta's revenue will achieve double-digit growth in 2025, driven by improved store efficiency and strong e-commerce performance [10]. - FILA is expected to continue its growth trajectory, particularly in trendy and children's segments, with a projected mid to high single-digit revenue growth in 2025 [10]. - Other brands, especially Descente and KOLON, are expected to contribute significantly to overall profitability [10].

Investment Rating - The report initiates coverage with a "Buy" rating for the company [4][145]. Core Insights - Horizon Robotics is a leading supplier of ADAS and AD solutions, having established a significant market presence since its founding in 2015. The company went public on the Hong Kong Stock Exchange in October 2024 [1][25]. - The smart driving industry is expected to grow significantly, with increasing penetration rates for ADAS and AD technologies. By 2030, the market for high-level autonomous driving in China is projected to exceed 400 billion RMB [2][54]. - The company focuses on "soft and hard synergy" in the high-barrier smart driving chip sector, leveraging its first-mover advantage to enhance market share [3][4]. Summary by Sections Company Overview - Horizon Robotics is recognized as a top-tier provider of advanced driver-assistance systems (ADAS) and high-level autonomous driving (AD) solutions, serving major OEMs and Tier 1 suppliers in the automotive industry [25][27]. - The company has achieved a leading market share in L2 and below (33.73%) and L2+ and above (14.7%) chip markets in China [27][29]. Industry Outlook - The smart driving industry has vast potential, with policies from various countries promoting automotive intelligence. The penetration rate for L3 autonomous driving is expected to increase significantly with the introduction of relevant regulations [2][54]. - The global market for smart vehicles is projected to reach 81.2% penetration for ADAS and AD by 2026, with sales expected to reach 20.4 million units [2][54]. Competitive Advantages - The company has a strong product lineup, including the "Journey" series of chips, which cater to a wide range of driving scenarios from L2 to L4 [3][77]. - Horizon Robotics has established a flexible business model that includes product solutions, algorithm licensing, and technical services, which are becoming the main revenue sources [30][31]. Financial Projections - Revenue forecasts for 2024-2026 are projected at 23.76 billion, 35.60 billion, and 53.58 billion RMB, respectively, with year-on-year growth rates of 53%, 50%, and 51% [4][126]. - The company is expected to narrow its losses over the same period, with net profits projected at -64.37 million, -17.58 million, and -3.00 million RMB [4][126]. Valuation - The company's current market valuation is 475 billion HKD, with projected price-to-sales (P/S) ratios of 19x, 13x, and 8x for 2024-2026, indicating a valuation below that of comparable companies [4][145]. - The report suggests that the company possesses a certain level of scarcity and premium potential due to its leading position in the ADAS and AD solution market [4][145].

Investment Rating - The report maintains a "Buy" rating for Anta Sports [1]. Core Views - Anta's 4Q24 performance exceeded market expectations, with significant improvement in Fila's sales, alleviating concerns about its growth slowdown. This is expected to stimulate a short-term rebound in stock price [1]. - The company's 2024 performance is largely determined, aligning with previous forecasts, and despite challenges in 2025, Anta is expected to achieve higher sales growth than peers through continuous store upgrades and product adjustments [1][2]. - The report highlights the potential for acquisitions in 2025, which could further enhance growth amid uncertain market demand [2]. Financial Performance Summary - Anta's 4Q24 total revenue increased by a high single-digit percentage year-on-year, with Fila's revenue also showing a significant recovery compared to 3Q24 [10]. - The forecast for 2024 anticipates a 12% year-on-year revenue growth, with Anta brand revenue expected to grow nearly 10% and Fila brand revenue projected to increase by 6% [10]. - The report predicts a core net profit of RMB 11.886 billion for 2024, reflecting a 16.1% year-on-year increase [12][15]. - The target price for Anta is set at HKD 93.0, indicating a potential upside of 23.5% from the current price of HKD 75.3 [4][5]. Brand Performance Insights - Fila's 4Q24 revenue growth was significantly better than the previous quarter, with a year-on-year increase in the high single digits [10]. - Descente and Kolon are expected to maintain high growth rates in 2025, contributing to overall group profitability [2]. - The report notes that Anta's online discount levels improved slightly, while offline discounts remained stable, indicating effective inventory management [10]. Market Position and Strategy - Anta is recognized as one of the best-performing domestic brands in the Chinese sportswear market, attributed to management's proactive store renovations and expansion into emerging e-commerce channels [2]. - The report emphasizes the importance of maintaining a stable inventory turnover ratio and discount levels to support profitability [10]. Financial Projections - Revenue projections for 2024 are set at RMB 69.627 billion, with a gross profit margin expected to remain stable at around 62.6% [12][21]. - The report outlines a gradual increase in net profit and earnings per share over the next few years, with a projected core net profit of RMB 14.240 billion in 2025 [12][15].

Investment Rating - The report maintains a "Buy" rating for the company [4][6]. Core Views - The company is expected to achieve high-quality growth across multiple brands in 2025, with a slight downward adjustment in profit forecasts due to uncertainties in the consumption environment [4]. - Retail sales for all brands improved sequentially in Q4 2024, with FILA, Descente, and KOLON exceeding expectations [4][3]. - The company is focusing on differentiated store formats and expanding overseas, which is anticipated to drive growth [4][3]. Summary by Sections Brand Performance - In Q4 2024, retail sales for Anta brand, FILA, and other brands saw year-on-year growth in high single digits to 50-55% [1][2]. - Anta brand maintained a healthy inventory turnover ratio of around 5 months, with retail discounts at approximately 72% [1]. - FILA brand's retail sales performance exceeded expectations, with discounts stable at 74-75% and a similar inventory turnover ratio [2]. Multi-Brand Strategy - The company is leveraging a multi-brand strategy, with Anta's offline stores evolving towards more refined service offerings for different consumer segments [3]. - The launch of popular products, such as the PG7 running shoes and Storm甲 jackets, has contributed to strong sales [3]. - Descente and KOLON brands achieved significant sales growth, with respective year-on-year increases of 45-50% and 60-65% in Q4 2024 [2]. Financial Forecasts - The company has slightly adjusted its profit forecasts for 2024-2026, with net profit estimates reduced by 2%/4%/4% respectively [4]. - Projected earnings per share (EPS) for 2024-2026 are 4.78, 4.85, and 5.42 RMB, with corresponding price-to-earnings (P/E) ratios of 15, 14, and 13 [4][5]. - Revenue is expected to grow from 69.39 billion RMB in 2024 to 76.38 billion RMB in 2025, with a growth rate of 10.1% [5][13].

Investment Rating - The investment rating for Anta Sports is "Outperform the Market" (maintained) [1][4][10] Core Views - In Q4 2024, Anta's main brand recorded high single-digit growth, while FILA achieved high single-digit growth, and other brands saw a growth of 50-55%. For the entire year of 2024, Anta's main brand also recorded high single-digit growth, FILA achieved mid-single-digit growth, and other brands grew by 40-45% [2][4][5] - The new retail model and multi-brand matrix are expected to drive the brand to maintain industry-leading growth rates. Despite a high base in Q4, the group's various brands still maintained sequential growth, outperforming peers, with stable discount rates and healthy inventory levels [4][8][10] Summary by Sections Q4 and Full Year Performance - Q4 2024 saw a sequential increase in revenue growth despite a high base, with FILA performing better than expected and outdoor brands maintaining rapid growth. Inventory levels across brands are healthy, and discount rates remain stable [3][5] - Anta's Q4 revenue growth was high single-digit, with nearly 10% growth for the full year. The inventory-to-sales ratio remained around 5, indicating a healthy level, and online retail discounts narrowed [5][9] - FILA's Q4 revenue growth was high single-digit, with mid-single-digit growth for the full year, maintaining a healthy inventory-to-sales ratio and stable discount levels [5][6] Brand Performance - Other brands recorded a revenue growth of 50-55% in Q4, with annual growth of 40-45%, particularly notable for the high growth rates of Descente (45-50%) and Kolon (60-65%) [6][10] - The "Super Anta" new retail format, launched in mid-2024, is expected to further drive growth in 2025, with plans to open 160 stores, significantly increasing store efficiency [7][8] Financial Forecasts - The profit forecast for Anta Sports estimates net profits of 135 billion, 134 billion, and 147 billion yuan for 2024-2026, respectively. Adjusted net profits, excluding one-time gains from Amer Sports' listing, are expected to be approximately 120 billion, 134 billion, and 147 billion yuan, reflecting year-on-year growth of 16.8%, 11.8%, and 9.9% [4][10][11] - The reasonable valuation range is maintained at 103-112 HKD, corresponding to a PE ratio of 20-22x for 2025 [4][10]

Investment Rating - Tencent Holdings (00700 HK) maintains an "Outperform" rating [1] Core Views - Tencent being added to the US Department of Defense's Chinese Military Companies (CMC) list does not impact its core business [1][3] - The CMC list is relatively mild compared to other sanctions lists and primarily affects US Department of Defense procurement matters [3][7] - Tencent's overseas revenue, mainly from gaming, accounts for 29% of its gaming revenue and 9% of total revenue in 2024 [3][7] - Tencent has increased its share buybacks, repurchasing HKD 1 5 billion on January 7 and 18 2025, signaling confidence in its business [4][15] Business Analysis Overseas Gaming - Tencent's overseas gaming revenue heavily relies on acquired subsidiaries such as Supercell (Finland), Riot Games (US), and Miniclip (Europe) [3][7] - Key acquisitions include Riot Games (100% ownership, acquired in 2008 2011 2015), Supercell (84 3% ownership, acquired in 2016), and Miniclip (largest shareholder since 2015) [8] Growth Potential - Tencent has significant growth potential in areas such as WeChat ecosystem monetization and AI integration [4][16] - E-commerce: Tencent has shown potential in e-commerce and local life services, with the "Gift Sending" feature gaining popularity in 2024 [16] - AI: Increased capital expenditure on AI, with products like "Yuanbao" and "ima" launched, and AI integration into WeChat enhancing advertising business growth [16] Financial Projections - Adjusted net profit for 2024 2026 is projected to be RMB 2198 billion, RMB 2482 billion, and RMB 2729 billion, respectively [16] - PE valuations for 2024 2026 are 16x, 14x, and 13x, indicating historically low valuations [16] Historical Context - Similar cases like Xiaomi and SMIC show that companies removed from the CMC list often experience stock price recovery [13] - Xiaomi was removed from the CCMC list within 4 months of filing a lawsuit, leading to a 9 04% stock price increase over four days [13]