Investment Rating - The industry investment rating is "In-Line" [4]. Core Insights - The report indicates solid growth in the industrial robot sector, with China's industrial robot production growing by 36% year-on-year in May, up from 34% in the previous four months [7]. - Global players such as ABB, Fanuc, Kuka, and Yamaha saw a combined shipment increase of 3% year-on-year in May, compared to a 2% increase in the first four months of 2025 [7]. - The growth is primarily driven by demand from the automotive sector, consumer electronics (3C), and exports, with expectations of intense competition and sustained market share gains for domestic brands like Estun and Inovance [7]. Summary by Sections Industry Overview - The industrial robot operations in China are experiencing robust growth, with significant contributions from various sectors [7]. Production and Shipment Data - China's industrial robot production increased by 36% year-on-year in May, supported by strong demand from the automotive and consumer electronics sectors [7]. - The report highlights that Fanuc's inventory levels have normalized, allowing for continuous shipments to key customers such as Li Auto and Xiaomi [7]. Market Dynamics - The competition in the industrial robot market remains intense, with domestic brands expected to maintain their market share gains [7].

Investment Rating - The industry view for China Utilities is rated as Attractive [3] Core Insights - The report highlights a stable pricing environment for solar products, with polysilicon prices averaging Rmb35/kg, remaining flat week-over-week, while granular polysilicon prices decreased by 1.4% week-over-week [5] - The report notes a downward trend in prices for N-type wafers and TOPCon cells, with decreases of up to 3.1% week-over-week [5] - Year-over-year price changes show significant declines across various solar products, with polysilicon prices down 10.3%, and TOPCon bifacial modules down 20.9% [2][5] Summary by Sections Price Summary - Polysilicon prices averaged Rmb35/kg, with a weekly average of Rmb19.00/kg for polysilicon in USD terms [2] - Wafer prices for 182mm and 210mm were Rmb0.93 and Rmb1.27 respectively, with a year-over-year decline of 15.5% and 23.0% [2] - The average price for TOPCon bifacial modules was Rmb0.68, reflecting a year-over-year decrease of 20.9% [2] Price Changes - The report indicates that solar-grade EVA resin prices decreased by 11.3% year-over-year, while POE resin prices remained stable [2][5] - The price of solar films showed a year-over-year decline of 15.0% for transparent EVA film and 27.3% for POE film [2] Company Ratings - CGN Power Co., Ltd is rated Overweight with a price of HK$2.73 as of June 18, 2025 [59] - China Gas Holdings is rated Equal-weight with a price of HK$7.60 [59] - LONGi Green Energy Technology Co Ltd is rated Overweight with a price of Rmb14.59 [59]

Investment Rating - The report indicates a positive outlook for the industrial automation sector, particularly in the context of strong demand from the battery terminal market and equipment upgrades in various industries [1][3]. Core Insights - The production of industrial robots in China saw a year-on-year increase of 36% in May, although there was a month-on-month decline of 3% [3]. - The total demand for process automation in the next two years is projected to reach between RMB 10 billion to 20 billion, driven by equipment upgrades in coal chemical, power, nuclear power, and metallurgy sectors [1]. - The order trends for industrial automation companies showed mixed results, with some companies experiencing order growth while others faced deterioration [3]. Summary by Sections Industrial Robot Production - In May, industrial robot production increased by 36% year-on-year, but the month-on-month growth was down by 3%, contrasting with a historical average seasonal growth of 11% [3][33]. Equipment Exports - The export growth rate for major equipment has slowed, with injection molding machine exports growing by 25% in value and 28% in volume year-on-year in April, down from 45% in both metrics in March [3][26]. Order Trends - Among the 32 companies covered, 3 reported improved order trends in May, while 5 experienced a decline. Notably, Yiheda's orders grew due to strong demand from the lithium battery sector, despite a decline in consumer electronics [3][7]. Process Automation Market - The demand for process automation is expected to be supported by equipment upgrades starting in May, with a total projected demand of RMB 10 billion to 20 billion over the next two years [1][3]. Manufacturing and Economic Indicators - The manufacturing PMI for China was reported at 49.5 in May, indicating a slight improvement from 49.0 in April, while the PPI was down by 3.3% year-on-year [38][40].

Investment Rating - The report assigns a "Sell" rating to CFME, indicating a cautious outlook on the company's performance in the near term [1][9][16]. Core Insights - CFME is expected to see a revenue growth of 22% year-over-year and 27% quarter-over-quarter in Q2 2025, reaching Rmb308 million, driven by an upgrade in product mix towards mid-to-high-end PCB equipment [1][2]. - The company is actively expanding into global markets, including plans for a new subsidiary and plant in Thailand, which aims to capitalize on the growing PCB demand influenced by AI trends and geopolitical uncertainties [2][4]. - The earnings revision reflects an upward adjustment in revenue forecasts for 2025-2027, with expected revenues of Rmb1,761 million in 2025, Rmb2,242 million in 2026, and Rmb2,754 million in 2027, representing increases of 9%, 12%, and 21% respectively [3][4]. Financial Projections - The report projects gross profit margins to remain strong, with gross margins of 40.0% in 2025, 39.6% in 2026, and 38.7% in 2027, indicating a positive trend in profitability [3][4]. - Net income is expected to rise to Rmb328 million in 2025, Rmb400 million in 2026, and Rmb460 million in 2027, reflecting growth rates of 10%, 16%, and 23% respectively [3][4]. - The operating income is forecasted to increase to Rmb381 million in 2025, Rmb469 million in 2026, and Rmb527 million in 2027, with corresponding operating margins of 21.7%, 20.9%, and 19.1% [3][4]. Valuation - The target price for CFME is set at Rmb66.7, based on a discounted P/E methodology using a 21x P/E on the 2027E EPS, discounted back to 2026E at a 10% cost of equity [9][14][16]. - The report indicates a downside potential of 8% from the current price of Rmb72.50, reinforcing the "Sell" rating [16].

Investment Rating - The report upgrades Ningbo Tuopu to an Overweight (OW) rating with a price target of Rmb56.00, reflecting a positive outlook based on recent developments and recovery in sales volume from key customers [2][41]. Core Insights - The worst is considered to be behind for Tuopu, with signs of recovery in sales volume from key customers Tesla and Seres. The company is expected to benefit from upcoming catalysts such as Tesla's Robotaxi and AI Day events [7][9][41]. - Tuopu is gradually reducing its reliance on Tesla by expanding its customer base among domestic NEV manufacturers, which is expected to enhance revenue stability [13][41]. - The company anticipates mitigating the impact of US tariffs by leveraging production capacities in Thailand and Mexico, thereby reducing its export exposure [41]. Summary by Sections Financial Performance - Tuopu's revenue for FY24 is estimated at Rmb26.6 billion, with projections of Rmb33.6 billion for FY25 and Rmb41.6 billion for FY26, indicating a growth trajectory [12][18]. - The adjusted net income is projected to grow from Rmb2.999 billion in FY24 to Rmb3.572 billion in FY25, reflecting a year-on-year growth of 19% [12][18]. Customer Insights - Tesla and Seres are significant contributors to Tuopu's revenue, accounting for 33% and 17-18% of FY24 revenue, respectively. Recent sales volume recovery from these customers is expected to drive revenue growth [7][13]. - Tesla's global deliveries in 1Q25 decreased by 13% year-on-year, but recovery is noted since April 2025, with weekly retail sales volume increasing to approximately 9,000 units [7][23]. Valuation - The report maintains a price target of Rmb56, applying a sum-of-the-parts (SOTP) valuation method, with a 40x P/E for robotic parts and a 20x P/E for auto parts [14][42]. - The current valuation reflects an attractive entry point post recent share price corrections, trading at 18x 2026E P/E [10][12]. Market Trends - The report highlights a sequential recovery in sales volume for Tuopu, particularly in 2Q25, with expected revenue growth of approximately 15% year-on-year and 30% quarter-on-quarter from a low base in 1Q25 [10][12]. - The anticipated launch of Tesla's Robotaxi and updates on Tesla's AI Day are seen as near-term catalysts that could further enhance Tuopu's market position [9][10].

Investment Rating - The report does not provide a specific investment rating for XDLK (688582.SS) as it is categorized as "Not Covered" [1]. Core Insights - XDLK has experienced significant revenue growth of 292% year-over-year in Q1 2025, attributed to new MEMS gyroscope orders, with management expressing optimism about future visibility due to increasing client adoption [1][8]. - The company is expanding its MEMS accelerometer product from single chip single axis to dual/triple axis configurations to enhance product integrity and meet client demands [1][8]. - XDLK is targeting new markets such as autonomous driving, eVTOL, and robotics, in addition to its existing industrial and energy sectors [4]. Summary by Sections Company Profile - XDLK is a local supplier of MEMS IMU, offering products that include a MEMS chipset and an ASIC chipset for high-accuracy navigation, monitoring, and stabilization at relatively low costs [3]. Client Penetration and Product Upgrade - The company has secured new MEMS gyroscope orders valued at RMB 270 million, indicating a growing adoption of its products by clients [5]. - XDLK's Q1 2025 revenue reached RMB 87 million, with net income turning positive, driven by new orders and a positive outlook on order visibility [8]. Technology Advantages - XDLK's MEMS IMU products face high barriers to entry, with a client partnership development cycle of 6-12 months, emphasizing the importance of high accuracy, integrity, small size, adaptability, and low cost in client decision-making [9].

Investment Rating - The report indicates a cautious outlook for the A-share market, suggesting a barbell strategy with micro-cap and bank stocks performing steadily [6][10]. Core Insights - The A-share market has remained flat amid Middle East tensions, supported by the Lujiazui Forum, while H-shares lagged due to increased risk-off sentiment [1]. - Biotech and New Consumption sectors in Hong Kong have seen a sharp pullback after significant gains of 30-50% YTD, with the HS Biotech Index dropping over 9% in the past five days [2][3]. - The Lujiazui Forum has announced measures to support Shanghai as a global financial center, including the reopening of IPOs for unprofitable tech firms under new standards [10][11]. Summary by Sections A-share Market - The A-share market is experiencing a barbell strategy with micro-cap and bank stocks outperforming, while foreign participation remains light [6]. - Limited liquidity is driving small-cap beta, while deflationary pressures keep dividend plays attractive [7][8]. Hong Kong Market - The biotech and new consumption sectors have both declined after strong rallies, with notable sell-offs in stocks like CSPC and Innovent [2][3]. - The new consumption sector has seen significant drops in stocks such as PopMart and Laopu, attributed to profit-taking rather than clear negative catalysts [4]. Lujiazui Forum Insights - The forum emphasized credibility and global financial connections, with discussions on reopening IPOs for unprofitable tech firms and expanding QFII investment scope [10][12]. - AI and semiconductor companies are likely to be prioritized for new listings, with stocks in the growth tier marked with a "U" label to indicate investment risk [11]. Macro Economic Context - Retail sales showed strong performance in May, but sustainability is questioned due to potential payback effects in June [13]. - Property prices in 70 cities have continued to decline, with secondary market data indicating a drop of 5-15% over the past year [14]. Investor Behavior - Overall A-share flows indicate a selling trend, with long-only and hedge funds both showing net selling behavior despite the geopolitical tensions [18]. - Specific sectors like AI infrastructure are seeing renewed interest, with notable buying in companies like Zhongji Innolight and Eoptolink [17].

Investment Rating - The report assigns a "Buy" rating for the company with a 12-month target price of Rmb175.00, while the stock price as of June 12, 2025, was Rmb111.13 [4][20]. Core Insights - The company, Keda Li, is focusing on the humanoid robotics sector by collaborating with a humanoid robot industry chain company to establish a joint venture for dexterous hands, which is expected to inject new growth momentum into the company [2][3]. - The company's current product layout in humanoid robotics includes harmonic reducers, joint components, and dexterous hands, indicating a strategic move towards innovation in this emerging field [3]. Financial Summary - The projected revenue growth from Rmb8.65 billion in 2022 to Rmb27.12 billion by 2029, reflecting a compound annual growth rate (CAGR) of approximately 17.5% [6]. - The expected net profit is projected to increase from Rmb901 million in 2022 to Rmb3.47 billion by 2029, indicating strong profitability growth [6]. - The earnings per share (EPS) is forecasted to rise from Rmb3.84 in 2022 to Rmb12.79 by 2029, showcasing significant growth potential [6]. Valuation Metrics - The company is expected to have a price-to-earnings (P/E) ratio of 16.4x in 2025, decreasing to 8.7x by 2029, suggesting an attractive valuation as earnings grow [6]. - The projected return on invested capital (ROIC) is expected to improve from 18.9% in 2025 to 24.6% by 2029, indicating efficient capital utilization [6]. Market Outlook - The forecasted stock price increase of 57.5% and a dividend yield of 2.2% contribute to an overall expected return of 59.7%, significantly above the market return assumption of 6.7% [9].

June 13, 2025 06:50 AM GMT China Petroleum & Chemical Corp. | Asia Pacific Research Tactical Idea We believe the share price will rise in absolute terms over the next 15 days. This is because oil prices have risen sharply amid concerns over disruption in energy supplies from the Middle East. In our view, the share price could rebound after trading off on recent oil price weakness. We estimate that there is about a 70% to 80% (or "very likely") probability for the scenario. Estimated probabilities are illust ...

Investment Rating - The investment rating for the company has been downgraded to "Neutral" from "Overweight" due to weak order demand and profit margin pressure [1][2][12]. Core Insights - The report indicates that revenue growth is weak, primarily due to soft SiP orders and mixed demand outlook for EMS, with industrial demand recovering but cloud and automotive orders declining [1][7]. - The projected compound annual growth rate (CAGR) for revenue and profit from 2024 to 2027 is estimated at 3% and 14%, respectively [1][12]. - The target price has been adjusted to 15 CNY, based on a 14x forward P/E ratio, reflecting a change in market sentiment [1][13]. Revenue and Profit Forecast - The adjusted revenue forecast for FY25 is 59,194 million CNY, down from a previous estimate of 69,390 million CNY, representing a 15% decrease [18]. - The adjusted net profit for FY25 is now projected at 1,817 million CNY, down from 2,909 million CNY, indicating a 38% reduction [18]. - The report anticipates a decline in revenue and profit for Q2 FY25, with expected year-on-year decreases of 7% and 24%, respectively [7]. Business Segment Analysis - SiP revenue growth is expected to be weak due to intense competition and limited growth in Apple product sales, with a projected CAGR of only 2% from 2024 to 2027 [7]. - The EMS business outlook is mixed, with a forecasted CAGR of 6% for industrial, cloud, and automotive segments, but profit margins are under pressure due to insufficient utilization [7][12]. Valuation Summary - The target price of 15 CNY is based on a 14x forward P/E ratio, which is 12% lower than the industry average due to slowing growth prospects [13][25]. - The report highlights that the company's valuation is aligned with its historical average P/E ratio minus one standard deviation [13][25].