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 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 ...

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].

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 on Nayuki (2150 HK) but cuts the target price to HK$ 3.43 [2][4] Core View - The report highlights that franchising and cost-cutting are key to Nayuki's strategy, despite a cautious outlook on the catering sector due to weakening macro demand and increased competition [2] - Nayuki's high cash level (over 75% of its market cap) and potential income from franchising are key reasons for the BUY rating [2] - The report expects a mixed FY24E outlook with pressure on topline growth but some room for margin improvement [2] Store Expansion and Performance - Nayuki's SSSG for Jan/Feb/Mar 2024 were -29%/-34%/-30%, worse than the 7% drop in 2H23, driven by a drop in both ASP and volume [2] - The store expansion plan for FY24E is conservative, with ~200 new self-operated stores and ~150 closures, resulting in a net increase of only a handful of stores [2] - For franchising, around 80 stores were opened in FY23, and the target for FY24E is 200-400 franchised stores, with a long-term goal of 2,000-3,000 new stores [2] Financial Projections - Revenue growth for FY24E is forecasted at 14%, driven by a 3% increase in store counts (excluding franchise), a 6% increase in sales per store, and ramp-up of RTD and franchising business [2] - Net profit margin for FY24E is expected to improve to around 1.1%, supported by stable GP margin, cost control, and cautious investment in the RTD business [2] - The report cuts FY24E/25E net profit by 87%/72% due to slower self-operated store expansion and falling sales per store [2] Valuation and Market Performance - Nayuki is currently trading at 0.7x FY24E P/S and 20x FY25E P/E, with a target price of HK$ 3.43, representing a 31.3% upside from the current price of HK$ 2.61 [2][4] - The valuation method has been changed from 20x FY24E P/E to 1.0x FY24E P/S, applying a ~20% discount to peers' average of 1.2x [2] Historical Performance - FY23 revenue increased by 20% YoY to RMB 5.2bn, with net profit turning positive to RMB 13mn, but NP margin remained low at 0.3% [6] - In 2H23, sales growth slowed to 14%, and NP margin turned negative to -2.1%, driven by a sharp drop in ASP and volume [6] Earnings Revision - The report significantly revises down FY24E revenue and net profit estimates, with revenue now forecasted at RMB 5,877mn (-28.2% from previous estimates) and net profit at RMB 63.7mn (-86.9% from previous estimates) [7] Peer Comparison - Nayuki's valuation is compared to peers in the Greater China catering sector, with a 12-month target price of HK$ 3.43, representing a 31% upside [12]

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 ...

M N 5 Apr 2024 CMB International Global Markets | Equity Research | Company Update Atour Lifestyle (ATAT US) Prudent guidance but QoQ recovery is likely 4Q23 results were a slight beat but the FY24E guidance is slightly disappointed. Target Price US$23.68 However, we are not that pessimistic because: 1) sequential improvement is (Previous TP US$23.93) likely (high base in 1H), 2) OCC rate is still the best among its peers implying Up/Downside 24.7% further market share gains, and 3) PMI has started to impro ...

| RESEARCH 5 Apr, 2024 EEKA Fashion | 03709.HK COMPANY UPDATE Stable development with new catalysts H F NGO, Brian, CFA STOCK RATING TARGET PRICE SENIOR ANALYST BUY HK$ 16.78 brianngo@westbullsec.com.hk EEKA Fashion (03709.HK) reported a YoY 22.1% growth in revenue to RMB 6.9bn, and its gross +852 3896 2965 margin slightly surged to 75.3%, leading to a YoY 121.8% increment in the bottom-line. The Group 2701 – 2703, 27/F, Infinitus Plaza, 199 Des Voeux Rd also announced a dividend of HKD 0.7/share, amounting ...

M N 2 Apr 2024 CMB International Global Markets | Equity Research | Company Update RemeGen (9995 HK) Awaiting the fruition of overseas BD collaborations RemeGen recorded RMB1.08bn of revenue in FY23, including RMB1.05bn from Target Price HK$41.72 product sales (+42% YoY), contributed equally by RC18 and RC48. In FY23, (Previous TP HK$57.65) GP margin (vs product sales) increased to 76.9% (vs 63.4% in FY22). Selling Up/Downside 53.7% expense ratio (vs product sales) increased from 60% in FY22 to 74% in FY23, ...

M N 3 Apr 2024 CMB International Global Markets | Equity Research | Company Update Great Wall Motor (2333 HK) PHEVs key to FY24; Earnings likely still resilient Target Price HK$13.00 Maintain BUY. We are of the view that the Tank brand, pick-up trucks and exports (Previous TP HK$13.00) will continue to support Great Wall’s earnings in FY24E. Great Wall’s success in Up/Downside 39.2% the off-road style SUVs has helped its PHEV sales volume and brought higher- Current Price HK$9.34 than-expected margins, alth ...