Investment Rating - Maintain BUY rating with a target price of US$131.9 per ADS [1][7] Core Views - Alibaba is expected to deliver in-line-with-consensus revenue growth for 4QFY24, with estimated revenue of RMB221.4bn, up 6% YoY [1] - The company is focusing on long-term growth through investments in international business, cloud, and Taobao and Tmall (T&T) Group, despite short-term margin pressure [1] - Alibaba is committed to improving shareholder return through loss reduction in non-core businesses, enhanced share buyback, and dividend payout [1] - The strategic move to drive an integrated group strategy is expected to enhance long-term value [1] Financial Performance - For 4QFY24, group-level adjusted EBITA is forecasted to decline 5% YoY to RMB24.0bn, with an adjusted EBITA margin of 10.8% [1] - T&T Group's adjusted EBITA is expected to decline 1.5% YoY to RMB38.5bn, implying a margin of 42.1% [1] - Customer management revenue growth is forecasted at 3% YoY in 4QFY24, driven by 7% YoY GMV growth from T&T GMV [1] Revenue and Profit Forecasts - Revenue for FY24E is estimated at RMB940.7bn, with FY25E and FY26E revenues projected at RMB1,027.6bn and RMB1,117.5bn, respectively [2][4] - Adjusted net profit for FY24E is forecasted at RMB155.5bn, with FY25E and FY26E projections at RMB158.2bn and RMB175.2bn, respectively [4] - Gross margin for FY24E is estimated at 37.8%, with FY25E and FY26E margins projected at 38.0% [4] Valuation and Shareholder Return - The SOTP-based target price is US$131.9 per ADS, translating into 15.7x FY24E P/E [7] - Alibaba is enhancing shareholder return through an integrated group strategy, including investments in international business and cloud infrastructure [1] - The next key event for shareholder return will likely be the announcement of annual fiscal year dividends in May [1] Segment Valuation - Taobao and Tmall Group is valued at US$59.1 per ADS, based on 7.0x FY24E EV/adjusted EBITA [8] - Cloud Intelligence Group is valued at US$24.4 per ADS, based on a 4.2x EV/S multiple on FY24E revenue [8] - Cainiao is valued at US$2.6 per ADS, based on the latest valuation given by Alibaba to repurchase Cainiao shares from minority shareholders [8] Financial Summary - Revenue for FY24E is projected at RMB940.7bn, with gross profit of RMB356.0bn [4] - Operating profit for FY24E is forecasted at RMB113.7bn, with net profit of RMB89.9bn [13] - Adjusted net profit for FY24E is estimated at RMB155.5bn, with an adjusted net profit margin of 16.5% [4]

M N 11 Apr 2024 CMB International Global Markets | Equity Research | Company Update GigaCloud (GCT US) Improving fundamentals with BaaS initiatives Target Price US$46.00 After short-term stock price volatility on insider filings, we suggest investors to (Previous TP US$43.00) refocus on GigaCloud (GCT)’s strong organic growth and fundamentals Up/Downside 45.6% improvement. We expect GCT to deliver another eye-catching 1Q24E, with topline accelerating to +96% YoY (5% above high-end of guidance) and bottom Cu ...

Investment Rating - The report maintains a "BUY" rating for TK Group with a target price (TP) adjusted to HK$2.79, based on an 8.2x FY24E P/E ratio, which aligns with its 5-year historical forward P/E [2][20][34]. Core Insights - Management expressed a positive outlook on order restocking, new client acquisitions, and capacity expansion in Vietnam and Huizhou, particularly in the automotive, medical device, and e-cigarette sectors. Following a challenging FY23, net profit is expected to grow by 38% and 19% year-on-year in FY24 and FY25, respectively, driven by new orders and operational efficiency improvements [2][38]. - The stock is currently trading at 4.4x FY24E P/E with a yield of 10%, indicating an attractive risk/reward profile [2][38]. Financial Summary - FY23 revenue and net profit declined by 15% and 10% year-on-year, respectively, primarily due to weak demand in consumer electronics and communications, although the automotive and e-cigarette segments showed growth [38]. - Revenue projections for FY24E are set at HK$2,318 million, with a year-on-year growth of 19%, and net profit is expected to reach HK$282 million, reflecting a 38% increase [9][10][38]. - Gross profit margin improved to 26.4% in FY23 from 23.7% in FY22, attributed to favorable foreign exchange rates and easing supply chain issues in the automotive sector [38]. Revenue Breakdown - The revenue mix indicates a significant contribution from various segments, with mobile and wearable devices, medical devices, and automotive sectors being key growth drivers [6][9][10]. - The automotive segment is projected to grow by 25% in FY24E, while the e-cigarette segment is expected to continue its strong performance with a 40% growth forecast [9][10][38]. Valuation Metrics - The report highlights a P/E ratio of 4.4x for FY24E, which is considered attractive compared to historical averages, alongside a dividend payout ratio of 83% [2][38]. - The expected return on equity (ROE) is projected to improve to 16.0% in FY24E, reflecting enhanced profitability and operational efficiency [10][15][38].

M N 10 Apr 2024 CMB International Global Markets | Equity Research | Company Update Tongcheng Travel (780 HK) Continued outperformance during Qingming Target Price HK$26.10 The three-day Qingming Festival holiday embraced booming demand, with (Previous TP HK$26.10) domestic tourist trips +11.5% and tourism revenue +12.7% (both vs. the Up/Downside 23.7% 2019 level), according to the Ministry of Culture and Tourism. Tongcheng Current Price HK$21.10 Travel (TC) kept its strong momentum during the Qingming Fest ...

M N 9 Apr 2024 CMB International Global Markets | Equity Research | Company Update Akeso (9926 HK) Promising Ph3 data of cadonilimab in 1L GC  Promising Ph3 data of cadonilimab in 1L GC, especially for patients with Target Price HK$59.61 low PD-L1 expression. The interim Ph3 (NCT05008783) data of (Previous TP HK$59.61) cadonilimab in 1L GC was recently released at the AACR meeting (link). With Up/Downside 27.8% a median follow-up of 18.7 months, cadonilimab + chemo (XELOX) extended Current Price HK$46.65 t ...

M N 9 Apr 2024 CMB International Global Markets | Equity Research | Company Update Yunkang Group (2325 HK) Back to normal growth Target Price HK$13.78 Yunkang Group reported 2023 revenue of RMB891.5mn, down by 76.3% YoY, (Previous TP HK$16.01) primarily due to the sharp decline of diagnostic testing demand for COVID-19 Up/Downside 24.3% in China. The blended gross margin improved to 36.5% in 2023 (+1.7 ppts), Current Price HK$11.08 mainly due to enhanced operation efficiency and effective cost control. The ...

M N 8 Apr 2024 CMB International Global Markets | Equity Research | Company Update Haidilao (6862 HK) Looking for expansion opportunities with downside protection We think Haidilao’s downside is protected by its dividend (5.6% FY24E yield and Target Price HK$21.52 the 90% payout ratio should sustain into the future), while the upside is highly (Previous TP HK$24.76) dependent on its speed of store expansion (which is still very slow but we tend Up/Downside 25.1% to think it will accelerate once the franchis ...

Investment Rating - The report maintains a BUY rating for China Life, with a new target price set at HK$13.7, implying a potential upside of 47.2% from the current price of HK$9.31 [2][4][16]. Core Insights - China Life reported a full-year net profit attributable to shareholders of RMB 46.2 billion, a decrease of 30.7% year-over-year, but the net loss in 4Q23 significantly narrowed to RMB 610 million from a loss of RMB 10.6 billion in 3Q23 [2][6]. - The company achieved a low-teen growth in Value of New Business (VNB), increasing by 11.9% year-over-year to RMB 36.9 billion, despite revised Economic Value (EV) assumptions [2][6]. - The insurer's insurance revenue saw a strong rebound, growing by 32.6% in the second half of 2023, supported by a release of RMB 44.1 billion in contractual service margin [2][6]. Summary by Sections Financial Performance - For FY23, China Life's net profit was RMB 46.2 billion, with a net profit of RMB 10.6 billion in 4Q23, reflecting a significant improvement from the previous quarter [2][6]. - The company reported a total investment yield of 2.43% and a net investment yield of 3.70% by the end of 2023, both showing a decline compared to the previous year [2][6]. VNB and EV Growth - The VNB for FY23 was RMB 36.9 billion, reflecting an 11.9% increase year-over-year, while the EV grew by 5.6% to RMB 1.26 trillion [2][6]. - The report indicates that the revisions in EV assumptions had a limited impact on VNB growth, with the long-term investment return revised down to 4.5% [2][6]. Investment Strategy - The report anticipates a positive turnaround in net investment results in 1H24, driven by improved index performances and a higher allocation to bonds [2][6]. - The target price adjustment reflects a new valuation approach based on P/EV and DDM, with the new target price of HK$13.7 implying a P/EV of 0.3x for FY24E [2][6].

Investment Rating - The report maintains a "BUY" rating for Haier Smart Home with a target price raised to HK$31.24, indicating a potential upside of 21.8% from the current price of HK$25.65 [2][4]. Core Insights - Haier's FY24E guidance is expected to be resilient, supported by steady growth in the Casarte brand, improvements in the Air-conditioning business, and favorable macroeconomic policies [2][6]. - The company has raised its dividend payout ratio to over 45% for FY24E, reflecting a strong commitment to returning value to shareholders amidst a challenging macro environment [2][6]. - Management remains confident in achieving sales growth of mid-single digits to high-single digits (MSD to HSD) and over 10% net profit growth for FY24E [2][6]. Financial Summary - FY23 results showed a 7% YoY increase in sales to RMB261.4 billion and a 14% YoY rise in net profit to RMB16.7 billion, aligning with Bloomberg estimates [6]. - The dividend per share (DPS) increased by 42% YoY to RMB8.04, with a payout ratio significantly up from 36% the previous year [6]. - Revenue projections for FY24E are set at RMB278.9 billion, with expected net profit of RMB19.3 billion, reflecting a 14% growth [3][12]. Growth Drivers - Key growth drivers for FY24E include: 1. Steady sales growth of 10% to 15% for the Casarte brand due to increased presence in high-end markets and repeat orders from members [2]. 2. A ramp-up in the Air-conditioning business, aided by improved operational efficiencies and in-house production [2]. 3. Potential subsidies and favorable policies in the EU market, alongside a rebound in demand in the ANZ market [2]. 4. Continued demand from high-end segments, particularly in the US market [2]. Margin Improvement - Expected improvements in both gross profit (GP) and net profit (NP) margins due to: 1. Centralized sourcing of raw materials and better freight rate negotiations [2]. 2. Increased automation and digitization across global factories [2]. 3. Enhanced product premiumization through high-end brand sales [2]. 4. Targeted marketing strategies and manpower rationalization in the EU market [2]. Earnings Revision - FY24E net profit estimates have been fine-tuned down by 1% to RMB19.1 billion, while FY25E estimates have been adjusted up by 2% to RMB21.8 billion [7]. - Revenue estimates for FY24E have been slightly reduced by 0.8% to RMB278.9 billion, reflecting slower growth in certain segments [7]. Valuation Metrics - The stock is currently trading at 12x FY24E P/E, which is below its 5-year average of 15x, indicating potential undervaluation [2][4]. - The new target price is based on a 14x FY24E P/E, reflecting a positive outlook for the company's performance [2].

M N 5 Apr 2024 CMB International Global Markets | Equity Research | Company Update GAC Group (2238 HK) PHEV could be a new catalyst We estimate GAC Group (GAC)’s net profit to rise 22% YoY to RMB5.4bn in Target Price HK$5.50 FY24E, as Aion’s upscale attempt, cost reduction and overseas expansion could (Previous TP HK$6.00) help narrow its loss. We are of the view that Aion needs quality growth in FY24E Up/Downside 73.0% to lay out foundation for long-term development. We project Trumpchi’s PHEV Current Pric ...