Market Overview - The Hang Seng Index closed down by 0.76%, while the Hang Seng Tech Index decreased by 0.58% [1] - The Hong Kong Tech ETF (159751) rose by 0.91%, and the Hang Seng Hong Kong Stock Connect ETF (159318) fell by 0.21% [1] Sector Performance - The communication equipment, electronic devices, and instruments sectors showed strong gains [1] - The life sciences tools and passenger airlines sectors experienced significant declines [1] Individual Stock Movements - Lens Technology increased by 12.63%, Shandong Gold rose by 7.23%, Zhaojin Mining gained 6.35%, WuXi Biologics went up by 6.09%, and SMIC climbed by 5.16% [1] - China National Railway fell by 13.33%, and Longi Green Energy dropped by 7.81% [1] - Shandong High-speed Holdings surged by 29.76%, and MIRXES-B increased by 27.68% [1]

Summary of CCTC (300408 CH) Equity Research Report Company Overview - **Company**: CCTC (300408 CH) - **Industry**: Electronic Equipment & Instruments - **Market Cap**: CNY 81,604 million (USD 11,454 million) [7][16] Key Insights MLCC Sector Dynamics - The MLCC (multi-layer ceramic capacitors) sector is entering a new upcycle, with prices for high-end MLCCs on the rise due to strong demand from AI servers and automotive sectors, while supply increases remain limited [3][12] - Unlike previous cycles focused on commodity MLCCs, this cycle emphasizes high-end products, benefiting leading Japanese and Korean manufacturers [3][12] - CCTC is expected to gain market share in the commodity MLCC segment due to: 1. Utilization rates at leading manufacturers exceeding 90%, shifting capacity to high-end applications, thus reducing commodity supply [3][12] 2. CCTC's expansion into high-capacity MLCC offerings, contributing over 50% of its MLCC sales in 1H25 [3][12] SOFC Product Demand - Demand for Solid Oxide Fuel Cell (SOFC) products is increasing, driven by data centers' need for clean energy [4][12] - CCTC's share price rose 31% over the past three months, outperforming the Wind passive components index [4][12] - Key customer Bloom Energy plans to double its fuel cell manufacturing capacity to 2GW by 2026, potentially generating RMB 1.4 billion in orders for CCTC's SOFC electrolyte [4][12] Financial Performance and Estimates - CCTC reported record-high quarterly revenue of RMB 2,316 million (up 24% year-on-year) and net profit of RMB 704 million (up 19% year-on-year) [27] - Revised 2025-26 net profit estimates down by 3% and up by 1%, respectively, reflecting lower MLCC revenue estimates offset by higher SOFC revenue [5][27] - Target price raised to RMB 54.00 from RMB 45.40, implying a 27% upside from the current share price [5][12] Financial Projections - **Revenue Estimates**: - 2025: RMB 9,258 million - 2026: RMB 11,184 million - 2027: RMB 13,975 million [13][27] - **Net Profit Estimates**: - 2025: RMB 2,780 million - 2026: RMB 3,469 million - 2027: RMB 4,312 million [13][27] Valuation Metrics - Expected net profit CAGR of 25% from 2025 to 2027 [5][12] - Average PEG multiple for the A-share passive component sector is 1.3x, leading to a target PE multiple of 32x [5][12] Risks and Considerations - Weaker-than-expected recovery in MLCC demand and price rebound [32] - Potential for lower market share gains in high-end MLCC if competitors reduce prices [32] - Risk of lower gross margins due to expansion of new capacities [32] Conclusion - CCTC is positioned to benefit from the evolving dynamics in the MLCC and SOFC markets, with a strong outlook for revenue growth and market share expansion. The revised target price reflects confidence in the company's ability to capitalize on these trends while managing associated risks.

Market Overview - The Hang Seng Index closed down 0.61% and the Hang Seng Tech Index fell by 1.78% [1] - The hotel and resort REITs and communication equipment sectors showed gains, while electronic devices and instruments, as well as healthcare technology sectors, experienced declines [1] Individual Stock Performance - Fuyuan saw a significant increase of over 57% [1] - Baijie Shenzhou rose by 4.06% [1] - Changfei Optical Fiber Cable dropped by 10.35% [1] - Quzhi Group fell by 10.87% [1] - Mongol Mining increased by 16.25% [1] - Haotian International Construction Investment rose by 11.61% [1]

Core Viewpoint - The CSI High-end Manufacturing Theme Index (CS High-end Manufacturing, 930820) has shown a recent upward trend, increasing by 1.76% to 5605.46 points, despite a significant decline over the past month and year-to-date [1]. Group 1: Index Performance - The CSI High-end Manufacturing Theme Index has decreased by 14.97% over the past month, 6.00% over the past three months, and 10.42% year-to-date [1]. - The index is based on a sample of listed companies in sectors such as aerospace, defense, communication equipment, semiconductors, biotechnology, pharmaceuticals, electronic devices, automotive, and computers, providing diverse investment options [1]. Group 2: Index Holdings - The top ten weighted stocks in the CSI High-end Manufacturing Theme Index include CATL (5.07%), BYD (2.67%), Hengrui Medicine (1.96%), SMIC (1.63%), Northern Huachuang (1.33%), Luxshare Precision (1.32%), BOE Technology (1.25%), Huichuan Technology (1.22%), Haiguang Information (1.19%), and Mindray (1.18%) [1]. - The market share of the index holdings is distributed as follows: Shenzhen Stock Exchange (51.22%), Shanghai Stock Exchange (48.72%), and Beijing Stock Exchange (0.06%) [1]. Group 3: Industry Composition - The industry composition of the index holdings is as follows: Industrial (36.79%), Information Technology (34.07%), Healthcare (15.25%), Consumer Discretionary (9.37%), Communication Services (4.30%), and Energy (0.23%) [2]. - The index samples are adjusted biannually, with adjustments occurring on the next trading day after the second Friday of June and December [2]. Group 4: Tracking Funds - Public funds tracking the CS High-end Manufacturing Index include the Fortune CSI High-end Manufacturing Index Enhanced C and A [3].