Investment Rating - The report maintains a BUY rating for Xtep with a target price of HK$6.31, indicating a potential upside of 41.4% from the current price of HK$4.46 [4]. Core Insights - Xtep's retail sales in 1Q24 increased by high single digits year-over-year, aligning with market expectations, and showing signs of acceleration in growth due to new product launches and e-commerce support [2][3]. - The company expects improved retail sales growth, better discounts, and inventory levels from 2Q24E onward, supported by the popularity of new products like the 360X running shoes [2][3]. - The stock is currently trading at an undemanding valuation of 9x FY24E P/E, which is attractive compared to its 8-year average of 15x [2][4]. Earnings Summary - Xtep's revenue for FY24E is projected at RMB 15,913 million, with a year-over-year growth of 10.9% [12]. - The net profit for FY24E is estimated at RMB 1,230 million, reflecting a net profit margin of 7.7% [12]. - The company anticipates a compound annual growth rate (CAGR) of 10% for sales and 18% for net profit during FY23-26E [2][4]. Retail Performance - Retail sales growth for offline, online, and kids segments was reported at low single digits, over 25%, and 10% respectively in 1Q24 [2]. - Retail discounts narrowed to 25%-30% in 1Q24, showing improvement from 30% in 4Q23, with expectations for further reduction in 2Q24E [2][3]. Market Position - Xtep's new products, particularly the 360X running shoes, have been well-received, with over 500,000 pairs sold in just one month [2]. - The e-commerce segment is expected to rebound as the company increases the supply of entry-level and value-for-money products [2]. Financial Projections - The report conservatively estimates a revenue of RMB 17,587 million for FY25E and RMB 19,322 million for FY26E, maintaining the same growth expectations as previous estimates [8][9]. - Gross profit margin is projected to improve to 42.7% in FY25E and 43.1% in FY26E [12].

Investment Rating - The report maintains a BUY rating for Sunny Optical with a target price of HKD 49.37, representing an upside of 31.8% from the current price of HKD 37.45 [1]. Core Insights - Sunny Optical's FY23 results were disappointing, with revenue and net income reported at RMB 31,681 million and RMB 1,099 million, reflecting year-on-year declines of 4.6% and 54.3% respectively. The results were below market consensus and the company's own estimates, primarily due to weak smartphone demand, ASP and GM pressures, and increased interest expenses [1][2]. - The company is focusing on improving its product mix to enhance ASP and GM, with expectations for a gradual recovery in global smartphone shipments in FY24E, driven by flagship models from top-tier clients [3][5]. Company Update - Sunny's high-end product contribution has stabilized, with a notable performance in the 6P+ lens segment, which accounted for 32% of the high-end product mix in FY23. However, overall high-end product shipments declined by 20% year-on-year [2]. - The company provided conservative guidance for FY24E, expecting a 5% year-on-year growth in HLS shipments while HCM shipments are anticipated to remain flat [3]. - Sunny's investment in R&D has increased, with R&D expenses reaching approximately RMB 2.6 billion, accounting for 8.1% of total revenue, and FY24E CAPEX is guided to increase by 20% year-on-year to around RMB 3.0 billion [6][7]. Financial Performance - The report indicates a significant reduction in FY24E-25E EPS estimates by 22.4% and 32.7% respectively, due to lower sales and GM assumptions. Despite this, a mild recovery is expected in FY24E [7][10]. - Revenue for FY24E is projected at RMB 35,823 million, with a gross margin of 22.6%, reflecting a decrease of 590 basis points compared to previous estimates [10]. Market Position and Outlook - Sunny Optical holds a dominant position in the Chinese handset market with approximately 50% market share and is well-positioned to benefit from the increasing adoption of automotive products and non-smartphone segments, which accounted for over 30% of total revenue in FY23 [4][7]. - The automotive segment continues to show strong growth, with vehicle-related product sales increasing by 28.6% year-on-year, and the company expects to reach RMB 2.0 billion in automotive CCM revenue for FY24E, representing a 25% year-on-year growth [6].

h 股 c r 票 a e s e R 研 y [Table_Title] Peter Shao 邵俊樨 究 tiu Company Report: China Power International (02380 HK) (852) 2509 5464 q E 公司报告： 中国电力 (02380 HK) peter.shao@gtjas.com.hk 17 April 2024 S[Ttarbolen_Sgu mFmYa2ry4] Earnings Outlook, "Buy"  2023 earnings missed. CPID (the "Company") reported 2023 earnings of 公 tr o RMB2,660 mn, missing our expectation, primarily due to asset amortisation of [RTaabtlien_gR:a nk] Buy p e RMB650 mn and loss of RMB 826 mn booked by the hydro segment, both Maintained 司 R 报 y ...

M N 18 Apr 2024 CMB International Global Markets | Equity Research | Company Update Anta Sports (2020 HK) An inline 1Q24 plus an improving outlook Retail sales growth in 1Q24 was slow, but it was widely expected. We see Target Price HK$101.73 FY24E growth supported by: 1) healthy momentum in late Mar, 2) an exciting (Previous TP HK$101.73) product launch pipeline, 3) further segmentation by Anta in terms of products Up/Downside 24.7% and store format, and 4) gradual improvement in retail discounts (rather C ...

Investment Rating - The report maintains a BUY rating for FIT Hon Teng with a target price (TP) of HK$ 2.42, indicating a potential upside of 12.6% from the current price of HK$ 2.15 [5][13]. Core Insights - Recent stock price corrections are viewed as overdone, primarily driven by investor concerns regarding Apple's TWS order allocation. Management has confirmed that the first production line of AirPods in Vietnam began shipments in February 2024, expected to contribute 5-7% of sales in FY24E. By 2025, additional production lines will be added in India, positioning FIT and Luxshare as the two largest AirPods suppliers with a projected market share of 30% and 70% respectively [2][3]. - The management has reiterated a solid outlook for 2024, projecting high-teens revenue growth, over 15% gross profit (GP) and operating profit (OP) growth year-on-year, driven by AirPods, AI server connectors, and the auto business [3][4]. Financial Summary - Revenue is projected to grow from US$ 4,196 million in FY23A to US$ 4,715 million in FY24E, reflecting a year-on-year growth of 12.4%. Net profit is expected to increase significantly from US$ 129.6 million in FY23A to US$ 201.2 million in FY24E, representing a growth of 55.3% [4][11]. - The earnings summary indicates a consistent improvement in profitability metrics, with gross profit margins expected to rise from 19% in FY23A to 20% in FY24E, and operating profit margins increasing from 6.3% to 7.5% over the same period [11][18]. Growth Drivers - Key growth drivers identified include the AirPods production ramp-up, AI server product launches, and consolidation in the auto business, with expected contributions of 5-7% from AirPods, 7-9% from AI server products, and 8% from the auto business in FY24E [3][4]. - The report highlights that the recent share price correction presents a buying opportunity, with the stock trading at attractive valuation multiples of 9.7x and 7.6x for FY24E and FY25E P/E respectively, compared to a historical average of 15x [3][13].

CMB International Global Markets | Equity Research | Company Update Expect solid earnings growth and enhancing shareholder return in FY24 | --- | --- | --- | --- | --- | --- | |------------------------------|-----------|-----------|-----------|-----------|-----------| | Earnings Summary (YE 31 Dec) | FY22A | FY23A | FY24E | FY25E | FY26E | | Revenue (RMB mn) | 554,552 | 609,015 | 655,548 | 707,635 | 751,260 | | YoY growth (%) | (1.0) | 9.8 | 7.6 | 7.9 | 6.2 | | Gross margin (%) | 43.1 | 48.1 | 49.9 | 51.1 | ...

Investment Rating - The report maintains a "BUY" rating for Anta Sports with a target price of HK$128.8, indicating an upside potential of 51.3% from the current price of HK$85.15 [5][3]. Core Insights - Anta Sports reported FY23 results that exceeded expectations, with revenue of RMB62.4 billion and net profit of RMB10.236 billion, reflecting year-on-year growth of 16.2% and 34.9% respectively. This growth was attributed to improved store productivity, disciplined retail discounting, and increased interest income [1][3]. - The company has set ambitious targets for FY24, aiming for revenue growth of 10-15% for both Anta and Fila brands, and over 20% for Descente and Kolon brands. Operating profit margins are expected to be around 20% for Anta and 25% for Fila [3][5]. Financial Performance - FY23 key highlights include: - Overall online sales increased by 11% year-on-year, with FILA and Descente brands growing by over 10% and 30-40% respectively [2]. - Monthly store productivity reached RMB280-290k, up more than 10% year-on-year, with Fila and Descente nearing RMB1 million and RMB2 million respectively [2]. - Operating cash flow grew by 61% to RMB19.6 billion, driven by a reduction in inventory turnover days from 138 to 123 [2][3]. Future Outlook - The management anticipates a retail sales value (RSV) growth of 4-5% year-on-year for Q1 2024, despite facing some pressure due to a high base and unfavorable weather conditions post-Chinese New Year [2]. - The company plans to maintain inventory levels at 5 times or below for various brands and has set modest store expansion targets, prioritizing productivity [3][5]. - The payout ratio is targeted at 50% for FY24 onwards, supporting continuous expansion through a multi-branded strategy [3][5]. Market Position - Anta Sports is recognized as a leading player in the PRC sporting goods market, with a retail network comprising 9,831 ANTA brand points of sale and 1,972 FILA stores as of December 2023 [6].

11 Apr 2024 Earnings Summary CMB International Global Markets | Equity Research | Company Update Q-Tech (1478 HK) 1Q24 shipment rebound on track; Auto & IoT as next growth drivers We recently spoke to Q-Tech's mgmt. and we maintain our positive view on high-end Android recovery to drive ASP/shipment upside in FY24E. Q-tech also expected GPM improvement in 1H24E thanks to better product mix and easing competition. For 1Q24, Q-Tech posted impressive growth of 23%/179% YoY in mobile/non-mobile CCM shipment, th ...

11 Apr 2024 Renewed agreement with Blizzard; expect games revenue growth to reaccelerate in 2H24E NetEase on 10 Apr announced the renewal of publishing agreement with Blizzard Entertainment to bring Blizzard game titles back to China. Popular titles such as World of Warcraft, Hearthstone, and Diablo will return to the Chinese market sequentially starting in summer 2024. NetEase also reached an agreement with Microsoft to bring NetEase titles to Xbox and other platforms. We expect the return of Blizzard game ...

Investment Rating - The report maintains a "BUY" rating for Baidu with a target price of US$183.20, slightly adjusted from the previous target of US$186.20, indicating a potential upside of 77.8% from the current price of US$103.05 [2][3]. Core Insights - Baidu Core is expected to achieve mild ads revenue growth in 1Q24, primarily driven by strong performance in travel and e-commerce sectors, although this is partially offset by weaker offline verticals due to macroeconomic conditions [2]. - The company is focusing on investing in generative AI opportunities to enhance long-term revenue and earnings growth while improving operational efficiency in non-core businesses [2]. - The pace of monetization for generative AI-related ads and cloud revenue is identified as a key catalyst for future growth [2]. Financial Performance Summary - For 1Q24, Baidu Core is estimated to generate revenue of RMB23.5 billion, reflecting a 2% year-over-year increase, but 3% below Bloomberg consensus estimates [2]. - The forecast for Baidu Core ads revenue is RMB16.9 billion, also up 2% year-over-year, driven by travel and e-commerce, but impacted by weaker offline performance post-Chinese New Year [2]. - Non-GAAP operating profit for 1Q24 is projected at RMB5.1 billion, down 5% year-over-year, resulting in a non-GAAP operating profit margin of 21.8% [2][3]. Revenue and Profit Forecast - Revenue projections for Baidu are as follows: RMB141.6 billion for FY24E, RMB150.9 billion for FY25E, and RMB159.4 billion for FY26E, with slight downward revisions compared to previous estimates [6]. - Non-GAAP net profit is expected to be RMB27.0 billion for FY24E, with a decrease in growth rate due to increased investments in AI [6]. - The adjusted net profit for FY24E is forecasted at RMB27.0 billion, reflecting a 6% decrease from the previous year [3][6]. Valuation Breakdown - The SOTP-based valuation of US$183.2 per ADS includes: - US$68.1 for Baidu Core ads based on a 7.0x 2024E non-GAAP PE - US$1.8 for Apollo ASD based on a 2.0x 2030E revenue - US$35.2 for Baidu Cloud based on a 4.3x 2024E PS - US$65.0 in net cash - US$13.2 for iQIYI and other investments, applying a 30% holding discount [7][9].