18 Oct 2024 Earnings Summary CMB International Global Markets | Equity Research | Company Update DPC Dash (1405 HK) Our view on placement by Domino's Pizza What is new? Sales of shares by the 2nd largest shareholder of DPC Dash (1405 HK). Domino's Pizza (DPZ US), the 2nd largest shareholder of DPC Dash (1405 HK), has sold 10mn shares (about 7.66% of total shares issued), at the price of HK$ 65.0 per share, with a 12.8% discount to last closing price of HK$ 74.55. After this trade, Domino's Pizza's ownership ...

Investment Rating - The investment rating for the company is "Outperform the Market" [2][3][10] Core Views - The company reported a year-on-year decline of 21% in overall retail value for the period of July to September 2024, with a 19.4% decline in the Chinese market (excluding Hong Kong, Macau, and Taiwan) and a 31% decline in Hong Kong, Macau, and other markets [2][3] - Same-store sales in the Chinese market (excluding Hong Kong, Macau, and Taiwan) decreased by 24.3%, a slight improvement from the 26.4% decline in the previous quarter [2][4] - The sales structure has improved, with the proportion of high-margin priced gold jewelry products increasing from 5% in the same period last year to 12.8% this quarter, supporting the company's gross margin resilience [2][4] - The company continues to optimize store efficiency, closing a net of 142 stores during the quarter, bringing the total number of stores to 7,346 [2][4] - The company expects a decline in overall revenue of 18%-22% and a net profit decline of 42%-46% for the first half of the 2025 fiscal year, primarily due to high base effects from last year's post-pandemic demand and high gold prices suppressing end-user demand [3][4] - Despite short-term challenges, the long-term outlook for the gold jewelry industry remains stable, supported by consumer demand for value preservation and continuous improvement in product design [3][4] Summary by Sections Retail Performance - The overall retail value decreased by 21% year-on-year, with specific declines of 19.4% in the Chinese market and 31% in Hong Kong and Macau [2][3] - Same-store sales in the Chinese market fell by 24.3%, while Hong Kong and Macau saw a consistent decline of 30.8% [2][4] Product Sales Structure - The sales of high-margin gold jewelry products increased significantly, enhancing the company's gross margin [2][4] Store Optimization - The company closed 142 stores, focusing on improving the efficiency of its retail network [2][4] Financial Forecast - The company revised its net profit forecasts for 2025-2027 down to HKD 55.31 billion, 62.36 billion, and 69.26 billion respectively, with corresponding P/E ratios of 13.1, 11.6, and 10.5 [3][4]

Investment Rating - The report maintains a "Buy" rating for Yancoal Australia with a target price of 38.2 HKD [3][6]. Core Insights - The company reported a strong recovery in coal production in Q3 2024, achieving an equity coal production of 10.2 million tons, a year-on-year increase of 10% and a quarter-on-quarter increase of 24% [1]. - The average coal price realized in Q3 was 170 AUD/ton, reflecting a year-on-year decrease of 14% and a quarter-on-quarter decrease of 6% [1]. - The company expects to maintain its production guidance of 35-39 million tons for the full year [1]. - Cash operating costs remain unchanged at 89-97 AUD/ton, with a cash balance increase of 430 million AUD in Q3 [1]. - The report projects EPS for 2024 and 2025 to be 0.78 AUD and 0.98 AUD respectively, with a 2025 P/E ratio of 7.5x [1]. Summary by Sections Production and Sales - Q3 equity production was 10.2 million tons, with sales of 10.4 million tons, showing a year-on-year increase of 10% and a quarter-on-quarter increase of 24% [1]. - The company expects Q4 production to continue at Q3 levels, with total equity production for the first nine months of 2024 at 27.2 million tons, a 15% increase year-on-year [1]. Pricing - The average sales price for coal in Q3 was 170 AUD/ton, with a significant drop in prices for both thermal coal (157 AUD/ton, down 29% year-on-year) and metallurgical coal (259 AUD/ton, down 22% year-on-year) [1]. - The report anticipates stable coal prices in Q4 due to balanced supply and demand dynamics [1]. Cost and Capital Expenditure - The cash operating cost guidance remains at 89-97 AUD/ton, with expectations for unit costs to decrease as production increases [1]. - Capital expenditure guidance is set at 650-800 million AUD, likely at the lower end of the range [1]. Dividend Policy - The company maintains a dividend policy of distributing at least 50% of net profit after tax or free cash flow, excluding non-recurring items [1]. Financial Projections - Revenue projections for 2024 and 2025 are 6.588 billion AUD and 6.919 billion AUD respectively, with net profit estimates of 1.030 billion AUD and 1.297 billion AUD [2][10].

Investment Rating - The investment rating for Dongyue Group is "Outperform the Market" [1] Core Views - Dongyue Group is a leading enterprise in the fluorosilicone industry, primarily engaged in fluorosilicone chemical business across five segments, including high polymer materials, refrigerants, organic silicon, dichloromethane, PVC, and caustic soda [5][6] - The company experienced a decline in net profit in 2024H1, amounting to 233 million yuan, a year-on-year decrease of 6.70%. The revenue for 2021-2024H1 was 15.847 billion yuan, 20.036 billion yuan, 14.554 billion yuan, and 7.285 billion yuan, reflecting year-on-year changes of +57.48%, +26.43%, -27.36%, and +1.07% respectively [5] - The company benefits from rising refrigerant prices, with R22's market average price increasing by 56.41% since January 29, 2024, and R32's price rising by 126.87% year-on-year [5] Summary by Sections Financial Performance - The company reported a net profit of 708 million yuan in 2023, with projections of 907 million yuan, 1.476 billion yuan, and 2.012 billion yuan for 2024, 2025, and 2026 respectively, indicating a significant recovery in profitability [7][11] - Revenue for 2023 is projected at 14.493 billion yuan, with expected growth to 15.940 billion yuan in 2024, 17.979 billion yuan in 2025, and 20.378 billion yuan in 2026, reflecting a year-on-year growth of 10.0%, 12.8%, and 13.3% [7][11] Market Position and Innovation - The company introduced 101 new product grades in 2023, enhancing its competitive edge and market position. It holds a total of 620 authorized patents and has published 127 various standards [6] - Research and development expenditures were approximately 935 million yuan in 2023, accounting for 6.45% of total revenue [6] Earnings Forecast - The forecasted net profits for 2024-2026 are 907 million yuan, 1.476 billion yuan, and 2.012 billion yuan, with corresponding EPS of 0.52 yuan, 0.85 yuan, and 1.16 yuan [6][11] - The estimated PE ratio for 2024 is between 16-18 times, leading to a reasonable value range of 8.32-9.36 yuan, which translates to 9.04-10.17 HKD based on the exchange rate [6]

Investment Rating - The report maintains a "Buy" rating for Li Ning (02331.HK) [1] Core Views - The company reported a decline in overall retail sales for Q3 2024, with a year-on-year decrease in sales volume, particularly in offline channels, while e-commerce showed moderate growth [2] - Li Ning established a joint venture to develop international business, with a total investment of HKD 200 million, aiming to leverage international expertise while focusing on domestic market growth [2] - The company anticipates a sales improvement in Q4 2024, driven by a recovery in the e-commerce environment and positive trends during the National Day holiday [2][3] Summary by Sections Financial Performance - Total revenue for 2022 was CNY 25,803 million, with a year-on-year growth of 14.31%. For 2023, revenue is projected at CNY 27,598 million, reflecting a growth of 6.96% [1] - The net profit attributable to shareholders for 2022 was CNY 4,064 million, with a decline of 21.58% expected in 2023, bringing it to CNY 3,187 million [1] - The report forecasts net profits of CNY 3,129 million, CNY 3,556 million, and CNY 3,911 million for 2024, 2025, and 2026 respectively, with corresponding P/E ratios of 12, 11, and 10 [3] Sales and Inventory - Q3 2024 saw a mid-single-digit year-on-year decline in overall sales, with offline channels experiencing a higher decline compared to e-commerce, which grew in the mid-single digits [2] - Inventory pressure increased, with a stock-to-sales ratio of around 5 months, and the company aims to reduce this to 4-5 months by year-end [2] - Discounts in offline sales deepened slightly year-on-year, while e-commerce discounts improved marginally [2] Guidance and Outlook - The company maintains its guidance for low single-digit year-on-year revenue growth and a low double-digit net profit margin for the full year [2] - The report highlights a positive trend in sales since October, suggesting potential for improved performance in Q4 [3]

Investment Rating - The report maintains a "Buy" rating for China State Construction International (830 HK) with a target price raised from HKD 3.07 to HKD 3.12, indicating a potential upside of 54.7% based on a 9.0x FY24 target P/E ratio [2][3]. Core Insights - The company achieved a significant operational profit increase of 128.4% year-on-year in Q3 2024, with total revenue for the first three quarters of 2024 rising by 2.0% to HKD 6.54 billion, driven by a 26.4% increase in revenue from the Hong Kong and Macau regions [1][2]. - New contract signings in Q3 2024 increased by 4.6% year-on-year to HKD 2.50 billion, despite a 5.2% decline in new contracts for the first three quarters [2]. - The Hong Kong government's recent policy initiatives are expected to create long-term opportunities for the construction sector, including plans for 80,000 new private housing units and the commencement of the New Territories Science Park project [2]. Financial Summary - For FY24, total revenue is projected to reach HKD 9.82 billion, with a growth rate of 13.0% in FY25 and 12.7% in FY26 [4]. - Shareholder net profit is forecasted to grow to HKD 783 million in FY24, with subsequent increases to HKD 1.018 billion in FY25 and HKD 1.204 billion in FY26, reflecting growth rates of 34.9% and 18.3% respectively [4]. - The company’s operating profit margin improved by 2.6 percentage points to 12.9%, exceeding expectations [1][2].

Investment Rating - The investment rating for the company is "Outperform the Market" [4][11]. Core Views - The company is expected to provide an additional cash return of $180 million over the next three years, with a total return rate of 11.1% anticipated for 2024. The company plans to maintain a 70% dividend payout ratio and return up to $60 million annually through special dividends or buybacks, totaling $180 million [4]. - The company has shown stable order growth in Q3 2024, with a revenue increase of 0.6% to $390 million. Manufacturing revenue grew by 0.2% to $380 million, with a shipment volume increase of 5.7% to 12.9 million pairs, although the average selling price (ASP) decreased by 4.9% to $29.3 [4][5]. - The company’s gross margin and EBIT margin reached a ten-year high in 2023, indicating improved production efficiency and profitability for 2024 [4]. Financial Performance Summary - Revenue for 2023 is projected at $1,493 million, with a slight increase to $1,497 million in 2024, followed by $1,563 million in 2025 and $1,640 million in 2026. Year-over-year growth rates are expected to be -8% in 2023, 0% in 2024, 4% in 2025, and 5% in 2026 [5][7]. - Net profit is forecasted to grow from $141 million in 2023 to $166 million in 2024, $186 million in 2025, and $205 million in 2026, reflecting year-over-year growth rates of 20%, 17%, and 12% respectively [5][7]. - The company’s gross margin is expected to improve from 24.6% in 2023 to 25.3% in 2024, and further to 25.9% by 2026 [5][7]. Market Position and Valuation - The company has been included in the Hang Seng Composite Index and Hong Kong Stock Connect since September 9, leading to improved liquidity and significant net inflows from southbound funds [4]. - The estimated price-to-earnings (P/E) ratio for 2024 is projected to be between 10-11 times, with a corresponding fair value range of HKD 15.80 to 17.38 per share [4][5].

Investment Rating - The report assigns a "Buy" rating to Pop Mart (9992 HK) with a target price of HKD 63 6 [2] Core Views - The global and Chinese trendy toy markets are experiencing rapid growth with CAGRs of 22 8% (2015-2019) and 32 8% (2015-2021) respectively The Chinese market is expected to reach RMB 76 4 billion by 2024 [2] - Pop Mart has established a comprehensive trendy toy industry chain platform with strong IP mining and operation capabilities Its domestic business is entering a high-quality development phase while overseas markets are becoming a second growth curve [2][3] - The company's revenue and net profit are expected to grow significantly from 2024 to 2026 with projected CAGRs of 39 6% and 51 9% respectively [3] Industry Overview - The trendy toy industry has evolved from a niche luxury market to a mass-market phenomenon driven by blind box products and expanding IP boundaries The global market size grew from $8 7 billion in 2015 to $19 8 billion in 2019 [10] - China's trendy toy market is still in a high-growth phase with significant room for penetration and concentration improvement The market size increased from RMB 6 3 billion in 2015 to RMB 34 5 billion in 2021 [12] - Z generation consumers aged 18-35 are the main driving force behind the trendy toy market accounting for 55% of purchases [13][14] Company Analysis Business Model - Pop Mart operates a full industry chain platform covering artist discovery IP operation consumer reach and trendy toy promotion It has established a leading sales network with 374 retail stores and 2 189 robot stores in mainland China and 92 retail stores (including joint ventures) and 162 robot stores in overseas markets as of June 2024 [2] - The company has developed a robust IP matrix including artist IPs (MOLLY DIMOO SKULLPANDA) and licensed IPs (Disney Marvel) In 2023 it had 10 artist IPs with sales exceeding RMB 100 million [30] Financial Performance - In H1 2024 Pop Mart achieved revenue of RMB 4 56 billion (+62 0% YoY) and net profit of RMB 921 million (+93 3% YoY) Overseas revenue grew 259 6% YoY accounting for 29 7% of total revenue [2] - The company's gross margin improved to 64 0% in H1 2024 driven by supply chain optimization and product structure improvement [44] Growth Drivers - Domestic growth is supported by store upgrades product category expansion and new channel development particularly on Douyin [47] - Overseas markets are becoming a key growth driver with revenue contribution increasing to 30% in H1 2024 The company is accelerating DTC strategy implementation and local market penetration [47] Future Outlook - Pop Mart is expected to maintain strong growth momentum with projected revenue of RMB 10 24 billion (+62 5% YoY) and net profit of RMB 2 11 billion (+95 3% YoY) in 2024 [3] - The company's PE ratios for 2024-2026 are estimated at 37X 28X and 22X respectively based on the closing price of HKD 63 95 on October 18 2024 [3]

2024 年 10 月 22 日 公司研究 深化海内外市场开拓，前三季度新签合同额同比大增 65.6% ——中石化炼化工程（2386.HK）公告点评 要点 事件：公司发布自愿性合同公告， 2024 年前三季度，公司新签订合同总值为 734.57 亿元，同比增长 65.6%。截至 2024 年 9 月 30 日，公司未完成合同量为 1657.73 亿元。 点评： 新签合同额快速增长，海外市场拓展迅速。2024 年前三季度，公司国内新签合 同额 469 亿元，同比增长 32%，境外新签订合同额 266 亿元，同比增长 202%， 海外合同占比从 2023 年前三季度的 20%增至 36%，延续了强劲的发展势头。 公司业务结构更加优化，EPC 合同占比从 2023 年前三季度的 54%增长至 74%， 表明公司总承包施工能力日益增强，得到业主的高度认可。2024 年前三季度， 在国内市场公司代表合同包括芒果乙烯项目（60.81 亿元）、华锦项目（58.07 亿元）等。在境外市场，公司代表性新合同包括哈萨克斯坦 Silleno 乙烷裂解项 目（12.5 亿美元）、沙特 Jafurah 三期项目（9 亿美元）等。 合同 ...

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 2.37, indicating a potential upside of 16.2% from the current price of HKD 2.04 [11]. Core Insights - The impact of the Sichuan hydropower plant's exit from operation is expected to be minor, with compensation payments anticipated to be received in 2025 [1]. - The company forecasts a reduction in hydropower generation by approximately 110 million kWh in 2024, leading to a revenue decrease of about RMB 30 million [1]. - A one-time impairment is expected in 2024, but the core earnings impact for 2025-2026 is projected to be minimal [1]. - The dividend policy for 2024 is expected to remain unchanged, with a forecasted dividend of RMB 0.14 per share [1]. Financial Summary - Revenue projections for the company are as follows: RMB 20,867 million for 2024, RMB 22,696 million for 2025, and RMB 24,982 million for 2026, reflecting growth rates of 2.1%, 8.8%, and 10.1% respectively [2]. - Net profit estimates are RMB 2,932 million for 2024, RMB 3,523 million for 2025, and RMB 4,240 million for 2026, with a projected decline of 7.6% in 2024 followed by a recovery in subsequent years [2]. - The company’s earnings per share (EPS) is expected to be RMB 0.34 for 2024, RMB 0.41 for 2025, and RMB 0.50 for 2026 [2]. - The price-to-earnings (P/E) ratio is projected to be 5.4 for 2024, decreasing to 4.5 for 2025 and 3.7 for 2026 [2]. Operational Insights - The company’s total electricity sales for 2024 are projected to be 40,927 million kWh, with contributions from various energy sources: wind (13,836 million kWh), natural gas (19,424 million kWh), solar (6,066 million kWh), and hydropower (1,600 million kWh) [5]. - The operational profit from the wind and solar segments is expected to be significant, while the hydropower segment's contribution to operating profit is anticipated to be only 1% in 2025-2026 [1].