Investment Rating - The stock rating for JD Health International Inc. is Underweight [5] - The industry view is Attractive [5] Core Insights - JD Health International Inc. maintained its 2025 targets despite a strong performance in Q1 2025, aiming for mid-teens revenue growth and flat operating profit [3][8] - The company expects over 20% growth in drug sales, mid-teens growth in nutritional products, and high single-digit growth in medical devices for the full year 2025 [3] - The gross profit margin (GPM) is anticipated to improve due to supply chain management efficiencies and increased advertising income, particularly in nutritional products [3] - JD Health's strategic focus includes enhancing B2C drug sales, especially for originator drugs, which currently represent approximately 30% of total drug sales [4] - The company plans to increase offline investments through greenfield projects rather than large-scale mergers and acquisitions [4] Financial Performance - In Q1 2025, JD Health reported revenue of RMB 16.6 billion, reflecting a year-over-year increase of 25.5%, which was 11% above consensus estimates [8] - The adjusted operating profit grew by 73% year-over-year to RMB 1.31 billion, with an adjusted operating profit margin of 7.9%, up 2.2 percentage points year-over-year [8] - Adjusted net profit rose by 47.7% year-over-year to RMB 1.77 billion, with an adjusted net margin of 10.6% [8]

Investment Rating - The investment rating for Giant Biogene Holding Co Ltd is Overweight [6] Core Insights - The report highlights that Giant Biogene (GB) has seen limited positive impact on its P&L from supportive policies and subsidies from online platforms, as some platforms refocus on leading brands over white labels [2] - GB has expanded its product offerings to Hong Kong and Southeast Asia, utilizing social media for branding and adjusting product sizes to match local purchasing power [3] - The Mi Xiu series targets premium customers with an average selling price (ASP) of Rmb500-800, with plans for further expansion into medical aesthetics and online channels [4] - The Collagen Stick 2.0 has received encouraging sales feedback and is a key product for upcoming promotions, with expectations for improved gross profit margins [9] - The company plans to use US$300 million from share issuance primarily for overseas expansion and potential mergers and acquisitions in cosmetics, medical aesthetics, and healthcare [9] Financial Metrics - The price target for Giant Biogene is set at HK$85.00, representing a 7% upside from the current price of HK$79.20 [6] - Projected revenue growth shows an increase from Rmb5,539 million in 2024 to Rmb10,523 million by 2027, with EBITDA expected to rise from Rmb2,502 million to Rmb4,507 million in the same period [6] - The estimated EPS is projected to grow from Rmb2.06 in 2024 to Rmb3.67 in 2027, indicating a strong growth trajectory [6]

Investment Rating - The report assigns an "Overweight" rating to Midea Group Co Ltd. with a price target of Rmb95.00, indicating a potential upside of 27% from the closing price of Rmb75.00 on May 8, 2025 [3][6]. Core Insights - Midea aims for above-guidance sales growth in 2025, targeting a revenue increase of 10% year-over-year, compared to a mid-high single-digit guidance, while maintaining a stable net margin [6]. - The company is optimistic about overseas growth, expecting double-digit growth from its OBM and brand business, while domestic growth is anticipated to be in the mid-single digits due to demand pressure [6]. - Midea's management has noted a deterioration in overall consumption in China year-to-date and plans to focus on the low-end market while expanding in the high-end segment to protect its market share [6]. - The company is also adapting to U.S. tariffs by relocating parts of its supply chain to countries like Brazil and Egypt, aiming to meet U.S. demand from non-China production by June [6]. Financial Projections - For the fiscal years ending December 2024 to December 2027, Midea's projected revenue is expected to grow from Rmb409.1 billion in 2024 to Rmb501.5 billion in 2027 [3]. - The earnings per share (EPS) is projected to increase from Rmb5.44 in 2024 to Rmb7.12 in 2027, reflecting a positive growth trajectory [3]. - The report indicates a decrease in the price-to-earnings (P/E) ratio from 13.9 in 2024 to 9.7 in 2027, suggesting improved valuation over time [3]. Market Position and Strategy - Midea's management expects its B2B business to outgrow its B2C business, with double-digit growth anticipated in 2025 [6]. - The company aims to achieve an average market share of 15% in overseas markets, up from the current 4-5% [6]. - Midea is focusing on its core air conditioner segment, which is expected to have a more resilient margin outlook, while preparing for potential price competition in other segments [6].

Investment Rating - The report assigns an "Equal-weight" rating to Laopu Gold [4] - The industry view is classified as "In-Line" [4] - The price target is set at HK$980.00, indicating a potential upside of 43% from the current price of HK$685.00 [4] Core Insights - The recent equity fund raising of HK$2.7 billion through primary share placement was unexpected, raising concerns among investors despite the necessity due to tight free cash flow [2][3][7] - The company plans to open 8 new stores in 2025, with a total capital expenditure exceeding Rmb400 million [2] - Management previously indicated no immediate capital pressure or fundraising plans, which adds to the surprise of the recent announcement [8] Financial Summary - The company reported an operating cash outflow of Rmb1.2 billion and a free cash flow of -Rmb1.3 billion in the second half of 2024, despite strong sales [2] - Projected earnings per share (EPS) are Rmb9.47 for FY 2024, increasing to Rmb38.62 by FY 2027 [4] - Revenue projections show a growth from Rmb8.5 billion in FY 2025 to Rmb34.8 billion in FY 2027 [4] - EBITDA is expected to rise from Rmb2.15 billion in FY 2025 to Rmb8.92 billion in FY 2027 [4] Market Context - The stock price is expected to react negatively and experience volatility in the near term due to the unexpected fundraising announcement [7] - Demand for gold remains strong, but emerging risks have been highlighted in recent reports [7] - The company declared a dividend per share (DPS) of Rmb6.35, totaling approximately Rmb1.07 billion [8]

Investment Rating - The investment rating for Haidilao International Holding Ltd is Overweight, with an industry view of In-Line [6][67]. Core Insights - Haidilao's performance in April showed a decline in table turn by double digits year-over-year and a 10% drop during the Labor Day holiday, contrasting with a high-single-digit decline in March. The average spending per table remained stable year-over-year [9]. - The company plans to maintain stable average selling prices (ASP) while remaining flexible to macroeconomic and market conditions. In April, Haidilao opened four new locations and closed six, resulting in a net closure of 11 locations year-to-date [9]. - Despite facing top-line pressure, Haidilao's overall margin is expected to remain resilient due to slightly improved gross profit margin (GPM), stable staff cost ratios, and savings in rent and depreciation [9]. - The company attributes the weakness in April to a shift in consumer preference towards low-price casual dining and increased competition from at-home dining options [9]. Financial Projections - Revenue projections for Haidilao are as follows: Rmb 42,755 million for 2024, Rmb 45,930 million for 2025, Rmb 50,436 million for 2026, and Rmb 56,209 million for 2027 [6]. - Earnings per share (EPS) estimates are Rmb 0.87 for 2024, Rmb 0.99 for 2025, Rmb 1.12 for 2026, and Rmb 1.27 for 2027, indicating a projected compound annual growth rate (CAGR) of 14% from 2025 to 2027 [6]. - The target price for Haidilao is set at HK$20.00, representing a 19% upside from the current price of HK$16.84 [6]. Valuation Methodology - The valuation methodology suggests a target price-to-earnings (P/E) ratio of 19x for 2025 estimated earnings, reflecting a conservative approach given the current macroeconomic uncertainties [11].

Investment Rating - The report maintains a "Buy" rating for Giant Biogene and Shanghai Jahwa, reflecting their potential for growth and turnaround [11][26]. Core Insights - The China beauty sector is showing signs of stabilization, with demand shifting from negative year-over-year (yoy) growth to a flat performance, particularly noted during Women's Day [1]. - Onshore sales growth in 1Q25 re-accelerated to 3.2% yoy, surpassing the full-year estimate of 1.2% yoy, although this was countered by a decline in the DFS channel [1]. - The sector has experienced a 50% rerating, with the 12-month price-to-earnings (PE) ratio moving from 20x to 30x, indicating a recovery towards mid-cycle valuation levels [1][7]. Summary by Sections Sales Performance - The covered companies in the China cosmetics sector reported mixed results for 2024/1Q25, with most missing sales expectations except for Giant Biogene, which outperformed due to effective cost management [2][25]. - The average selling expenses ratio decreased by 6.8 percentage points yoy in 4Q24 and 3.7 percentage points yoy in 1Q25, indicating improved cost discipline across the sector [2][25]. Competitive Landscape - Local brands are gaining market share, with emerging leaders like Giant Biogene, Marubi, and Chicmax achieving over 30% sales growth, while global brands are pulling back on promotions to focus on quality growth [3][13]. - The premium segment remains largely dominated by global brands, but local brands are expected to capture more market share over the next 5-10 years [6]. Valuation Trends - The beauty sector's valuation has rebounded to around 30x PE, reflecting a recovery from downcycle lows and aligning more closely with global peers [7][8]. - Limited valuation upside is anticipated as the sector stabilizes at mid-cycle levels, with potential idiosyncratic rerating drivers emerging from new product categories and brand expansions [8]. Catalysts for Growth - Key upcoming events include the 618 shopping festival and increased activity in the medical aesthetics space, which could provide growth opportunities for companies like Giant Biogene [9][10]. - The report highlights the importance of effective execution and brand expansion as critical factors for sustained growth in the sector [8][11]. Stock Preferences - The report favors emerging leaders such as Giant Biogene and Shanghai Jahwa, while maintaining a neutral stance on MGP, Proya, and Botanee due to concerns over growth visibility and execution [11][26]. - A sell rating is assigned to Bloomage, reflecting challenges in revitalizing its cosmetics business amid intensified competition [11][26].

Investment Rating - The investment rating for Midea Group Co Ltd. is Overweight, indicating that the stock's total return is expected to exceed the average total return of the analyst's industry coverage universe over the next 12-18 months [3][15]. Core Views - The report maintains 2025 forecasts largely unchanged due to consistent guidance, with slight reductions in 2026 revenue and net profit estimates by 1% to account for a higher base from trade-in subsidies amid macro uncertainties [2]. - The price target for Midea Group is set at Rmb95.00, with the stock currently priced at Rmb73.62, indicating a potential upside of approximately 29.04% [3][10]. - Midea's diversification into the B2B channel is expected to drive earnings growth alongside its home appliances business, supported by a consumer trade-in program that may enhance domestic sales [13]. Financial Estimates - The fiscal year ending estimates for Midea Group are as follows: - 2025e Sales/Revenue: Rmb452,452 million - 2025e Net Income: Rmb44,233 million - 2025e EPS: Rmb6.3 [20]. - Key earnings inputs for 2025 include: - AC volume growth: 7.0% - AC ASP growth: 2.0% - Air conditioners gross margin: 26.0% [18]. Valuation Metrics - The valuation for home appliances is based on a 2025e P/E of 15x, reflecting high earnings visibility and potential growth in the To-business segment [7]. - The report indicates that Midea is trading at a 30% discount to the consumer average, suggesting that the valuation gap should narrow due to reduced cyclicality and improved earnings visibility [14]. Market Trends - Midea is well-positioned to benefit from industry trends such as market consolidation, increased small appliance purchases, and growing online penetration [13]. - The report highlights potential upside from the To-B channel growth and overseas business expansion, alongside stimulus effects [6].

Investment Rating - The report downgrades the investment rating for Hua Hong Semiconductor Ltd from Overweight to Equal-weight [1][6][27] Core Insights - The rising depreciation burden and intense pricing competition in the 8-inch wafer market are expected to lead to gross margin erosion in 2025 and 2026, indicating that the stock appears fairly valued [1][6][38] - The company guided for 2Q25 revenue of US$550-570 million, with a gross margin forecast of 7-9%, reflecting a decline due to increased depreciation costs and the ramp-up of the new 12-inch fab [3][13] - The pricing environment for 8-inch wafers remains soft, which is likely to hinder gross margin recovery for Hua Hong [4][38] Summary by Sections Financial Performance - 1Q25 revenue was US$541 million, showing a 0.3% increase quarter-over-quarter but an 18% decrease year-over-year, with a gross margin of 9.2%, down 2.2 percentage points from the previous quarter [2][11] - The company reported a net income of US$4 million in 1Q25, a significant decline compared to the previous year [11] Guidance and Projections - For 2Q25, the company expects revenue to be between US$550-570 million, with a gross margin of 7-9%, indicating a continued decline in profitability [3][13] - The report revises the 2025 EPS estimate down by 14% but raises the 2026 and 2027 EPS forecasts by 5% and 6%, respectively, due to anticipated capacity and shipment growth trends [23][24] Market Dynamics - The report highlights that the 12-inch wafer demand remains strong, which may gradually drive up prices, while the 8-inch wafer market faces pricing pressure due to increased competition [4][38] - The acquisition of HLMC is noted, with plans for integration by 2026, focusing on overlapping mature-node business [5][38] Valuation - The price target for Hua Hong is raised to HK$34.00 from HK$32.00, reflecting changes in the EPS estimates for 2025-2027 [25][27] - The stock is currently trading at 1.2 times the estimated book value per share for 2025, which is considered fair compared to historical averages [27][39]

Investment Rating - The report downgrades Hwatsing and Maxscend to Neutral from Buy due to relatively lower upside potential across the coverage [2][30]. Core Insights - The report remains positive on China Semis, driven by generative AI and autonomous driving trends, with upgrades for SMIC, VeriSilicon, AMEC, and Cambricon to Buy [1][2]. - Hwatsing is a local leader in CMP equipment, expanding into wafer thinning and ion implantation tools, but faces challenges in revenue growth from mature nodes [11][28]. - Maxscend is experiencing slower growth in the Android smartphone market, impacting its revenue and net income forecasts [31]. Summary by Company Hwatsing - Downgraded to Neutral with a 12-month price target of Rmb201, suggesting a 22% upside potential [10][11]. - Revenue estimates for 2025-27E revised down by 4%/5%/6% due to slower contributions from mature nodes CMP tools [2][14]. - Expected revenue growth of 38%/20% YoY in 2025/26E driven by product mix upgrades towards advanced nodes [12][14]. - 1Q25 results showed revenues of Rmb912 million, a 34% YoY increase but 7% below estimates [14][15]. Maxscend - Downgraded to Neutral with a 12-month price target of Rmb86, indicating a 14.9% upside potential [30][31]. - Net income estimates reduced by 36%/25%/4% for 2025-27E due to weaker-than-expected 1Q25 results and slow smartphone market growth [31]. - The company is expanding its product lines from RF discrete to modules, but faces gross margin pressure from pricing competition [31].

Investment Rating - The investment rating for CGN Power Co., Ltd is Overweight [6][68]. Core Viewpoints - The approval of 10 new nuclear reactors in China aligns with expectations, supporting the goal of achieving a total nuclear capacity of 150GW by 2035 [3][4]. - CGN Power Co., Ltd owns four of the new reactor units, which will utilize Hualong No. 1 technology with a capacity of approximately 1.2GW each [2][4]. - China's nuclear capacity is projected to reach 110GW by 2030 and 200GW by 2040, making it the world leader in nuclear energy [4]. Summary by Sections Investment Overview - CGN Power Co., Ltd has a market capitalization of approximately RMB 122.42 billion and an enterprise value of RMB 313.49 billion [6]. - The price target for CGN Power is set at HK$2.81, with the current share price at HK$2.45 [6]. Industry Context - The construction of five new nuclear power projects, totaling 10 reactor units, has been approved, which is a slight decrease from the 11 units approved in 2024 [1][2]. - The trend of annual approvals of 8-10 units is expected to continue, facilitating China's nuclear capacity expansion [3]. Financial Metrics - The average daily trading value for CGN Power is approximately HK$228 million [6]. - The company is applying a P/E multiple of 13x on the estimated EPS for 2025, indicating a positive outlook based on accelerating project trends [10][11].