Investment Rating - The report initiates coverage on China Reinsurance Group with an "Overweight" rating, highlighting its dominant position in the Chinese reinsurance market with a projected market share of nearly 50% in 2024 [1][9][14]. Core Insights - China Reinsurance Group is positioned as a benchmark in the Chinese reinsurance industry, benefiting from unique product offerings that help alleviate capital pressure on life insurance companies. The company is expected to experience growth rates higher than direct insurance companies throughout economic cycles [1][9][14]. - The demand for financial reinsurance contracts is anticipated to increase due to macroeconomic pressures, particularly from life insurance companies facing solvency challenges. This positions China Re as a critical player in the market [1][4][29]. - The company has a significant overseas business exposure, contributing approximately 15% to its total premium income, which helps diversify business risks and provides foreign exchange hedging benefits [1][4][14]. Summary by Sections Investment Rationale - The overall reinsurance industry in China is projected to see a rise in gross written premiums (GWP) to RMB 228 billion in 2024, with China Re holding a market share of about 50% [13][14]. - The report emphasizes the company's unique business model and its ability to maintain lower volatility in underwriting performance compared to direct insurers, which typically experience more significant fluctuations [13][14]. Financial Performance - China Re's consolidated GWP is expected to reach approximately RMB 178 billion (USD 25 billion) in 2024, with a five-year compound annual growth rate (CAGR) of 4.2% from 2019 to 2024 [13][14]. - The report forecasts a net profit growth of 87% for 2024, driven by strong underwriting performance and favorable investment results [38]. Valuation - The report employs a price-to-earnings (P/E) valuation method, suggesting a target price of HKD 1.40 by December 2025, based on a P/E ratio of 5 times the expected earnings for fiscal year 2025 [9][14][23]. - The valuation is considered conservative compared to the average P/E ratios of 6-8 times for global reinsurance peers, reflecting China Re's market dominance and growth potential [9][14][23]. Overseas Business Strategy - The acquisition of Bridge Insurance in 2018 has significantly enhanced China Re's overseas business, with this segment now contributing 15% to total premium income, up from 3% in 2018 [46][48]. - The report highlights the advantages of having a diversified overseas business, including risk mitigation from regional catastrophes and improved asset-liability management [46][48].

Investment Rating - The report reinstates a Buy rating on CATL-A with a target price of Rmb323, implying a 31.3% upside, and initiates a Buy rating on CATL-H with a target price of HK$343, implying a 13.2% upside [1][9][27]. Core Insights - The report forecasts a 25% EPS CAGR for CATL from 2024 to 2030, driven by robust volume growth, product mix improvement, and unit profit expansion [2][22][27]. - CATL is expected to maintain a global market share of approximately 40% through 2025E-2030E, supported by supply consolidation in the Chinese market and strong positioning in Europe and the Rest of World [2][22]. - The blended unit gross profit (GP) is projected to increase from Rmb152/kWh in 2025E to Rmb169/kWh in 2030E, with a key driver being the recovery of the domestic battery market and stronger growth in the higher-margin overseas EV battery market [1][22][35]. Summary by Sections Financial Forecasts - Revenue is projected to grow from Rmb362 billion in 2024 to Rmb588 billion in 2027, with EBITDA increasing from Rmb77.5 billion to Rmb143 billion over the same period [4][14]. - EPS is expected to rise from Rmb11.58 in 2024 to Rmb22.49 in 2027, reflecting a strong growth trajectory [4][14]. Market Positioning - CATL's ability to maintain a global market share of ~40% is underpinned by supply consolidation in the domestic market and strong positioning in Europe and RoW, effectively offsetting headwinds in the US market [2][22]. - The report highlights that CATL's market share resilience is crucial for sustaining its growth and profitability [2][22]. Unit GP Analysis - The report presents a detailed analysis of unit GP decomposition by geography and product, indicating a recovery in domestic battery unit GP from Rmb120/kWh to Rmb130/kWh and overseas EV battery unit GP stabilizing at Rmb275/kWh [35][39]. - The domestic ESS unit GP is expected to recover from Rmb90/kWh to Rmb125/kWh by 2030E, reflecting a cyclical recovery [39][43]. Valuation - The target price for CATL-A is derived from a combination of near- and long-term valuations, applying a three-month average P/E of 15.6x for 2025-26E and a long-term P/E of 15x for 2030E [17][27]. - The report indicates that CATL is trading at a significant discount compared to peers, enhancing its valuation appeal [1][17].

Investment Rating - The report assigns a "Buy" rating to Hansoh Pharma with a 12-month price target of HK$22.71, indicating a downside potential of 20.6% from the current price of HK$28.60 [8][9]. Core Insights - Management emphasizes encouraging progress in ex-China development for out-licensed assets, including B7H3 ADC, B7H4 ADC, and oral GLP-1, with a reiterated product sales guidance of double-digit growth in 2025 [1][2]. - The key product Ameile is projected to achieve peak sales of Rmb8 billion, with additional upside potential from combination therapies [1][3]. - The company anticipates deal-making opportunities from early-stage ADCs and next-generation disease modifiers for immunology diseases [1][7]. Summary by Sections Ex-China Development Progress - HS-20093 (B7H3 ADC) has received two breakthrough designations from the FDA for SCLC and osteosarcoma, with GSK planning pivotal studies by Q4 2025 [2]. - HS-20089 (B7H4 ADC) is set to commence pivotal trials in 2026 for gynecological cancers [2]. - HS-10535 (oral GLP-1) is expected to enter phase 1 trials in 2025, targeting multiple cardiovascular and metabolic diseases [2]. - HS-20094 (GLP-1/GIP) will focus on weight reduction strategies in combination with Regeneron's internal pipeline assets [2]. Sales Growth and Commercialization - Management guides for double-digit sales growth in 2025, driven by innovative drugs, particularly Ameile, which has a revised sales target of Rmb6 billion for 2025 [3][6]. - The potential for collaboration income is highlighted as a sustainable revenue driver, supported by a growing R&D pipeline with 8-10 new INDs each year [6]. Licensing and Deal-Making Opportunities - Potential licensing-out opportunities include early-stage pre-clinical assets and several ADCs that have entered clinical stages [7]. - Specific assets with deal-making potential include HS-20122 (EGFR/cMET ADC), HS-10370 (KRAS G12D), and others targeting immunology diseases [7].

Investment Rating - The investment rating for Genscript Biotech Corp. is "Buy" with a 12-month price target of HK$27.34, indicating an upside potential of 84.5% from the current price of HK$14.82 [8]. Core Insights - Management highlighted that ProBio revenues are expected to bottom out, driven by the LaNova deal, with a projected revenue of US$95 million in FY24, reflecting a 13% year-over-year decline [5]. - The protein segment is anticipated to become the second growth engine for the life science group, with a significant increase in revenue contribution from 23% in 2023 to nearly 30% [6]. - The company expects a steadily improving bottom line, with share buybacks and dividends under consideration as profitability improves starting from 2025 [6]. Summary by Sections ProBio Performance - ProBio revenues are projected to recover, with management confident that the revenue is bottoming out due to factors such as improved funding for biotech clients and stabilizing pricing in China [5]. - The LaNova/Merck deal is expected to contribute significantly, with US$235 million booked in the first half and an additional US$75 million milestone expected in 2H25 [5]. Life Science Group Growth - The life science group has shown steady growth of 10-20% over the years, with gene synthesis having a total addressable market (TAM) of US$1-2 billion, while customized protein synthesis is expected to have a TAM 10 times larger [6]. - The company is reallocating resources to enhance growth in the protein synthesis sector, which is expected to be a major growth driver in the coming years [6]. Financial Outlook - Excluding the impact from Legend deconsolidation, the adjusted net profit for the ex-Legend businesses is expected to reach US$60 million in FY24, with consistent profitability anticipated starting in 2025 [6]. - Management expects the EBITDA break-even point for ProBio to be achieved when revenues reach US$150-200 million, with Bestzyme remaining at break-even until 2027 [6].

Investment Rating - The report initiates coverage on Sunshine Insurance with a "Reduce" rating, setting a target price of HKD 2.10 by December 2025 [1][2]. Core Insights - The Chinese insurance industry is on a strong growth trajectory driven by economic expansion and increased insurance awareness. Sunshine Insurance, one of the few companies with a comprehensive license (both life and property insurance), has seen slow market share growth over the past decade, with 2024 market shares at 1.9% for life insurance and 2.8% for property insurance, compared to 1.3% and 2.8% in 2014 [1][9]. - The visibility of the company's performance is high due to the attractive growth prospects of its Contractual Service Margin (CSM), indicating a stable profit outlook. However, the company requires time to expand its business scale and establish a leading position in the industry, comparable to peers like Ping An and China Pacific Insurance [1][9]. Summary by Sections CSM Growth and Profitability - CSM growth is expected to be robust, with a projected increase of 8% in 2025, 9% in 2026, and 11% in 2027, driven by a recovery in new life insurance sales and an increase in agent productivity [4][14]. - The CSM balance for Sunshine Life was reported at a year-on-year growth of 13% in 2024, benefiting from a smaller historical policy scale compared to peers [4][15]. Investment Risks - The company has a high equity asset exposure, with a net asset ratio of 1.1 times, which poses significant profit volatility risks in a fluctuating stock market. A 10% drop in the Shanghai Composite Index could lead to a 32% decline in profits [4][20]. - The distribution channel is heavily reliant on bancassurance, contributing 56% of new business value in 2024, which may hinder market share growth and new business value expansion [4][24]. Valuation and Target Price - The target price of HKD 2.10 is based on a valuation of 4x expected 2025 P/E for life insurance, 3x for property insurance, and 0.3x P/B for other businesses, reflecting a total expected P/E of 5x [4][46]. - The valuation multiples are close to historical lows, with the industry average P/E ranging from 4x to 9x in recent years [4][46]. Company Overview - Sunshine Insurance was founded in May 2004 and is one of the seven major insurance groups in China, listed on the Hong Kong Stock Exchange in December 2022 [51][52]. - The company primarily operates through Sunshine Life for life insurance and Sunshine Property for property insurance, with life insurance being the main profit source [54].

Investment Rating - The investment rating for Giant Biogene Holding is "Buy" with a 12-month price target of HK$71, representing an upside of 31.7% from the current price of HK$53.90 [12]. Core Insights - Despite recent uncertainties, Giant Biogene has reiterated its FY25 guidance, expecting sales and net income to grow by 25-28% and 21-24% year-on-year, respectively, with projected figures of RMB6.9-7.1 billion in sales and RMB2.5-2.6 billion in net income [1][3]. - The company is focusing on customer acquisition and retention through enhanced marketing strategies, including increased sample gifts and differentiated product bundles [10]. - Management anticipates a gradual recovery in KOL livestreaming, which has been a significant factor in recent sales pullbacks, and plans to enhance consumer trust through transparency initiatives [1][10]. Summary by Sections Financial Performance - FY25 guidance remains unchanged with sales expected to be between RMB6.9-7.1 billion and net income between RMB2.5-2.6 billion, reflecting a year-on-year growth of 25-28% and 21-24% respectively [1][3]. - The stock is currently trading at 20x 2025E PE based on the company's guidance, which is considered attractive given the expected recovery in the latter half of FY25 [2]. Sales Drivers - The company has reported strong performance in offline sales channels, with 1H25 growth exceeding initial expectations, and minimal impact from recent allegations on overall sales [9][10]. - Specific sales initiatives include increasing sample gifts and providing exclusive benefits to enhance customer loyalty [10]. Market Position and Strategy - Giant Biogene is actively working on improving brand perception through transparency initiatives, public welfare activities, and partnerships with medical institutions [10]. - The approval processes for medical aesthetics (MA) are proceeding smoothly and are not expected to be affected by recent uncertainties [10].

Investment Rating - The investment rating for China Medical System Holdings is "Buy" with a 12-month price target of HK$12.57, indicating an upside potential of 2.4% from the current price of HK$12.28 [8][16]. Core Insights - The company anticipates double-digit sales growth for 2025 and positive topline growth for 2026 following the spin-off of its dermatology subsidiary, Dermavon [1][2]. - Key drivers for growth include the expected doubling of new drug sales post NRDL listing, resumption of growth for Xinhuosu, and stable performance of three core drugs [2][6]. - Two potential blockbuster products are highlighted: Y-3 for stroke with peak sales potential exceeding Rmb3 billion and ABP-671 for gout, which is expected to have better safety profiles compared to current standards of care [2][6]. Summary by Sections Sales Growth and Spin-off - The company maintains its guidance for double-digit sales growth in 2025, with positive growth expected in 2026 after the completion of Dermavon's spin-off by the end of 2025 [1][2]. - Growth drivers include new drug sales, diversified hospital coverage for Xinhuosu, and stable performance of core drugs [2][6]. Product Pipeline - The dermatology portfolio has a peak sales potential exceeding Rmb15 billion, with specific products like tildrakizumab targeting Rmb2 billion and ruxolitinib cream targeting at least Rmb6 billion [3][6]. - Other notable products include povorcitinib and comekibart, both with significant sales potential in their respective indications [6]. Financial Projections - Revenue projections for the upcoming years are as follows: Rmb7,469 million for 2024, Rmb8,244 million for 2025, and Rmb9,580 million for 2026 [8]. - The company is expected to maintain a stable EBITDA margin, with projected EBITDA of Rmb2,193 million in 2024 and Rmb2,982 million in 2026 [8].

Investment Rating - The report assigns a "Buy" rating to AIA Group with a 12-month price target of HK$90, indicating an upside potential of 30.5% from the current price of HK$68.95 [11][12]. Core Insights - AIA Group is focused on share buybacks, with a decision to shorten the buyback period to three months to capitalize on low share prices. The next buyback decision is expected to align with FY25 results [5]. - The company anticipates limited impact from interest rate changes, with a positive translation effect from the weakness of the USD. The business in mainland China and Thailand is negatively affected by lower rates, while operations in Hong Kong, Singapore, and Malaysia benefit from them [5][10]. - AIA is actively expanding its footprint in mainland China, aiming to grow agent numbers in new branches and maintain a similar product mix to established operations. The company expects to receive approvals for 1-2 new provinces each year [10][11]. Summary by Sections Share Buybacks - AIA Group has decided to shorten the buyback period to three months to take advantage of low share prices, with the next review of capital position and free surplus generation expected at FY25 results [5]. Market Movements - The report discusses the impact of foreign exchange, interest rates, and equity market movements, noting that the USD weakness primarily affects translation metrics rather than direct business impact. The company has seen a year-to-date decline in bond yields in China and the US, while rates in Thailand have decreased, potentially leading to negative impacts if current levels persist [5][6]. Sales and Growth in Mainland China - AIA reported a -7% year-over-year decline in Value of New Business (VONB) in mainland China, attributed partly to a strong base effect from 1H24. The company expects easier comparisons in 2H25. The sales mix has shifted towards participating products, which have lower margins compared to non-participating products, but traditional products remain unaffected [10][11]. Footprint Expansion - AIA aims to grow agent numbers in new branches to over 1,000 within the first 1.5-2 years and plans to expand to other cities in the provinces of the new branches. The product mix in new branches is similar to established operations, although average ticket sizes are smaller due to lower income levels in these areas [10][11].

Investment Rating - The report does not explicitly provide an investment rating for Shanghai Pudong Development Bank (SPDB) [1]. Core Insights - Revenue and profit growth are expected to accelerate in the remaining quarters of 2025, with ambitious targets set for full-year growth [3]. - The net interest margin (NIM) change in 2025 is anticipated to outperform peers [3]. - Loan growth in 2025 is projected to exceed Rmb 370 billion recorded in 2024 [3]. - Positive growth in mortgage loans is expected for the full year, despite a slower pace compared to previous quarters [3]. - Non-interest income is targeted to achieve positive growth in 2025 [3]. - The company aims to control credit costs while maintaining a stable or higher non-performing loan (NPL) coverage ratio with a decline in the NPL ratio [3]. - A 30% dividend payout ratio is expected to be maintained [3]. Revenue and Profit Growth - The company achieved 1%+ revenue and profit growth in 1Q25 and is confident in accelerating growth for the remaining quarters of 2025 [11]. - The ambitious targets for revenue and profit growth in 2025 are set despite a high base and weak bond market performance [11]. Net Interest Margin (NIM) - NIM saw marginal improvement in 1Q25, with a limited year-over-year decline, outperforming peers [7]. - The NIM is expected to remain stable in 2Q25 and outperform peers throughout 2025 [7]. - Factors contributing to NIM improvement include accelerated loan growth and optimized liability structure [7]. Loans - Loan growth in 2025 is expected to exceed Rmb 370 billion, with a balanced growth pace throughout the year [7]. - New loan growth in 1Q25 was Rmb 250 billion, significantly faster than peers [7]. - The focus will be on five key areas: technology finance, supply chain finance, inclusive finance, cross-border finance, and wealth management [7]. Mortgages - Mortgage loans are expected to achieve positive growth in 2025, particularly in tier 1 and 2 cities [7]. - Both 1Q25 and 2Q25 saw positive mortgage growth, although less significant than in 4Q24 [7]. - The mortgage NPL ratio increased slightly in 1Q25 but remains under control [7]. Non-Interest Income - Non-interest income is targeted for positive growth in 2025, with future growth drivers identified [11]. - Fee income growth was negative in 1Q25 due to a decline in corporate underwriting income, while agency sales and custody income grew [11]. - Positive investment income growth in 1Q25 was attributed to opportunistic bond investment gains and growth in precious metals and FX derivatives trading income [11]. Asset Quality - The company aims to achieve a decline in the NPL ratio while maintaining a stable or higher NPL coverage ratio [11]. - The main asset quality risk lies in retail, with the NPL ratio for developer loans decreasing quarter-over-quarter in 1Q25 [11].

Investment Rating - The investment rating for Sunny Optical is Equal-weight [6] Core Insights - Vehicle-related businesses are identified as the key growth driver, while smartphone-related businesses are focusing on margin improvement [1] - Vehicle lens demand is projected to increase from 317 million units in 2024 to 552 million units by 2030, representing a 10% CAGR [1] - Smart lamp shipments are expected to achieve a 55% CAGR from 2025 to 2030, while AR-HUD shipments are anticipated to grow at a 38% CAGR from 2023 to 2030 [2] - LiDAR shipments are also projected to reach a CAGR of 55% from 2023 to 2030 [2] - The smartphone camera module market size is expected to grow from RMB 240 billion in 2024 to RMB 293 billion in 2028, driven by high-end products [2] - The margin recovery for smartphone business lines is likely to continue due to new product innovations and vertical integration [3] - The company is actively investing in R&D to gain a competitive edge in XR and robotic businesses [4] Summary by Sections Vehicle Lens Market - The global vehicle lens market is expected to grow significantly, with demand projected to rise from 317 million units in 2024 to 552 million units by 2030, indicating a 10% CAGR [1][9] Smart Lamp and AR-HUD - Smart lamp shipments are forecasted to grow at a 55% CAGR from 2025 to 2030, while AR-HUD shipments are expected to achieve a 38% CAGR from 2023 to 2030 [2] Smartphone Camera Module - The smartphone camera module market is projected to expand from RMB 240 billion in 2024 to RMB 293 billion in 2028, supported by growth in high-end products [2] Margin Recovery - The recovery of margins in smartphone business lines is anticipated to continue, driven by innovations and vertical integration [3] R&D Investments - The company is making proactive R&D investments to establish a competitive advantage in XR and robotic sectors [4]