Core Viewpoint - Morgan Stanley has downgraded Greentown China (03900) from "Overweight" to "Underweight," citing concerns over the company's ability to recover profits and achieve sales growth due to its balanced approach to reducing land reserve risks [1] Summary by Relevant Categories Company Performance - Greentown China is adopting a more balanced strategy to mitigate land reserve risks, which may slow down its real estate sales growth in the coming year [1] - The company's gross margin performance is expected to be below expectations, impacting its profit recovery [1] Financial Projections - Morgan Stanley believes that Greentown China will require a longer time frame than anticipated to restore profits to levels seen before the decline in 2022 [1] - The firm has revised its earnings estimates for Greentown China for 2025 to 2027 down by 15%, 35%, and 22% respectively, reflecting weak real estate sales and a slowdown in margin recovery [1] Valuation - The target price for Greentown China has been reduced from HKD 11.62 to HKD 8.55, indicating that the current valuation is considered too high [1]

Core Insights - The biopharmaceutical industry in South Korea experienced a year-on-year sales growth of 7.9% in the first quarter, although this represents a slowdown of 3.4 percentage points compared to the previous quarter [1] Industry Performance - The medical device sector saw an increase in growth rate from 1.2% to 2.8% - The pharmaceutical sector's growth rate decreased from 14.0% to 8.8% - The cosmetics sector's growth rate fell from 10.7% to 8.7% - Overall, the growth rate of the biopharmaceutical industry remains higher than the average manufacturing growth rate of 2.8% [1][1] Profitability Metrics - The operating profit margin for the biopharmaceutical industry was 10.7%, an increase of 1.9% year-on-year - The pharmaceutical industry's profit margin improved from 7.3% to 10.8% - The cosmetics industry's profit margin rose from 9.4% to 11.2% - The medical device sector's profit margin decreased from 13.6% to 9.4% [1][1][1] Financial Health - The pre-tax net profit margin increased from 11.3% to 12.3%, indicating a recovery in profitability levels - The debt ratio and reliance on borrowing for this manufacturing sector are significantly better than the overall manufacturing industry, reflecting a robust financial structure [1][1]

Investment Rating - The report maintains an "Overweight" rating for the aviation industry [1] Core Viewpoints - The aviation industry shows a long-term growth logic, with passenger traffic in January-February increasing by 6% year-on-year, and load factors recovering to 2019 levels. The new flight season is expected to support supply and demand recovery, with anticipated growth in business travel and ticket price recovery. Improved cost pressures may aid in better-than-expected profit recovery [3][4] Summary by Sections Passenger Traffic - During the Spring Festival period of 40 days, passenger volume increased by 7.4% year-on-year, reaching a new high. For January-February, the industry passenger volume grew by 6% year-on-year, which is an 18% increase compared to 2019. Domestic and international traffic increased by 3% and 39% year-on-year, respectively, with international traffic showing positive growth for the first time compared to 2019 [3][20] Load Factor - The industry load factor for January-February was 84%, up by 1.7 percentage points year-on-year, remaining consistent with 2019 levels. This trend continues from December 2024, where the increase compared to 2019 has narrowed [20][21] Ticket Prices - By the end of 2024, airlines' revenue management strategies have positively changed, continuing into the Spring Festival. Due to high base numbers and a reduction in fuel surcharges, it is estimated that domestic ticket prices fell by 5% year-on-year in January-February, with prices including fuel dropping by nearly 10%. After the Lantern Festival, domestic ticket prices remained stable year-on-year, and recently began to rise with the recovery of business travel post the Two Sessions [3][20] Airline Operations - In January-February, the turnover of airlines continued to improve year-on-year, with expectations that the growth rate of domestic Available Seat Kilometers (ASK) will gradually decrease. The first quarter of 2025 is expected to see continued improvement in fleet turnover and load factors, with a year-on-year increase in ASK of 5% for the three major airlines compared to 2019 [3][20] Flight Schedule Changes - The summer flight season will begin on March 30, 2025. The total planned flight volume is expected to decrease by 3% year-on-year, while actual flight operations are anticipated to stabilize. Domestic flight plans are expected to decrease by 3.9% year-on-year, while international flight plans are projected to increase by 4% year-on-year, recovering nearly 84% compared to the summer season of 2019 [3][20] Profitability Outlook - The report suggests that the recovery in profitability for airlines may exceed expectations due to improved unit non-fuel cost pressures and a 10% year-on-year decrease in aviation fuel prices. The consensus among airlines is that ticket price recovery is expected in 2025, with a focus on business demand growth and ticket price recovery [3][20] Company Ratings - The report maintains an "Overweight" rating for several airlines, including Air China, Juneyao Airlines, China Southern Airlines, Spring Airlines, and China Eastern Airlines [3][32]