Investment Rating - The report maintains a "Buy" rating for Minth Group (425.HK) and Top Group (601689.CH) [2][4] - Top Group is given an "Accumulate" rating with a target price of 59.1 CNY [8] Core Insights - Minth Group is projected to achieve total revenue of 23.15 billion CNY in 2024, representing a year-on-year increase of 12.8%, with a net profit of 2.32 billion CNY, up 21.9% [2] - Top Group is expected to realize operating revenue of 26.6 billion CNY in 2024, a year-on-year increase of 35.02%, with a net profit of 3.001 billion CNY, up 39.52% [6][8] - Both companies are focusing on optimizing operational efficiency and expanding into new markets, including electric vehicle wireless charging and robotics [3][7] Summary by Sections Minth Group - The company has improved its gross margin to approximately 28.9%, up 1.5 percentage points year-on-year, driven by increased profitability in its plastic and battery box segments [2] - Cash flow has improved, allowing the company to resume dividends and share buybacks, reflecting management's confidence in future growth [4] Top Group - The company has faced challenges such as increased competition and raw material price fluctuations, but has managed to maintain a net profit margin of 11.3%, up 0.4 percentage points year-on-year [6] - Plans for capacity expansion include new factories in China and Mexico, with a focus on the rapidly growing robotics sector [7][8]

Core Viewpoint - Geely has proposed a non-binding offer to privatize Zeekr, aiming to consolidate its automotive business and enhance operational flexibility, amidst uncertainties in the US market for Chinese companies [2][3][11]. Summary by Sections Geely's Proposal - Geely announced a non-binding offer to acquire all outstanding shares of Zeekr at $2.57 per share or $25.66 per American Depositary Share, which represents a premium of approximately 13.6% over the previous closing price [5][7]. - The move is seen as a strategy to focus on the core automotive business and streamline operations under a unified Geely brand [2][3]. Market Reaction - Following the announcement, Geely's stock price increased by 5%, reaching approximately HKD 17.88 per share, with a market capitalization of around HKD 180 billion [3]. - Zeekr's stock price surged over 11% in pre-market trading after the buyout announcement [10]. Zeekr's Performance and Challenges - Zeekr has faced significant challenges, including a high debt-to-asset ratio exceeding 130% and a net loss of CNY 5.791 billion, which is greater than the funds raised during its IPO [16]. - The brand's stock price has been volatile, dropping to a low of $13 per share, and it has not met its sales targets, delivering only 22,221 vehicles against a goal of 230,000 [18][16]. Strategic Implications - If the acquisition is successful, Zeekr will be fully integrated into Geely, potentially enhancing synergies in procurement and technology across the brands [19][20]. - The consolidation reflects Geely's historical strategy of streamlining its brand portfolio to improve market competitiveness, as seen in previous brand integrations [19]. Future Outlook - The outcome of the non-binding offer could lead to two scenarios: successful privatization or continued operation as a publicly traded entity, depending on market conditions and investor sentiment [9][10]. - The potential for Zeekr to be re-listed in Hong Kong has been discussed, but industry insiders suggest this may not be feasible due to concerns over competition with Geely's existing brands [11][12].

Investment Rating - The investment rating for the company is "Buy" with a target price of 80.82 RMB [7][8]. Core Views - The company reported a revenue of 5.35 billion RMB in Q1 2025, representing a year-over-year increase of 12.3%, while the net profit attributable to the parent company was 760 million RMB, down 3.3% year-over-year. The short-term pressure on profitability is attributed to the ramp-up of new factory capacity. However, the company is expected to benefit from capacity improvements and the expansion of new customers, maintaining its competitive advantage [1][5]. - The company has strategically expanded its customer base, including partnerships with Adidas, New Balance, and On, which have significantly contributed to revenue growth. The company anticipates further impressive growth as the peak season approaches in Q2 2025 [2][5]. - The company's net profit margin decreased by 2.3 percentage points year-over-year to 14.2%, and the gross profit margin fell by 5.5 percentage points to 22.9%, primarily due to the initial efficiency ramp-up of new factories. The workforce increased to 184,000, a 17% year-over-year rise. The company’s inventory was 3.67 billion RMB, up 12.5% year-over-year, and accounts receivable reached 3.31 billion RMB, up 15.3% year-over-year, indicating a focus on stocking for production expansion [3][5]. - The company acquired three Vietnamese shoe companies for a total of approximately 67.4 million RMB to optimize production resources, which are expected to enhance production capacity synergy within 1-2 years, thereby increasing the company's market share in global footwear manufacturing [4][5]. - The profit forecast for 2025-2027 is maintained at 4.32 billion RMB, 4.95 billion RMB, and 5.61 billion RMB, respectively. The company is assigned a PE ratio of 21.8 for 2025, based on a comparable company average PE of 12.7, reflecting its strong customer base and industry leadership [5][6]. Summary by Sections Financial Performance - Q1 2025 revenue was 5.35 billion RMB, a 12.3% increase year-over-year, while net profit was 760 million RMB, a decrease of 3.3% year-over-year [1]. - The company’s net profit margin decreased to 14.2%, and gross profit margin fell to 22.9% due to new factory ramp-up [3]. Customer Expansion - The company has successfully expanded its customer base, notably with Adidas, New Balance, and On, contributing to an 8.24% increase in sneaker sales volume to 49 million pairs in Q1 2025 [2]. Capacity and Acquisitions - The company acquired three Vietnamese shoe companies to enhance production capacity, expected to yield benefits within 1-2 years [4]. Profit Forecast and Valuation - The profit forecast for 2025-2027 is set at 4.32 billion RMB, 4.95 billion RMB, and 5.61 billion RMB, with a target PE ratio of 21.8 for 2025 [5][6].