Investment Focus - Alphabet (GOOGL US) is expected to maintain good visibility in its advertising business due to the gradual release of its valuation under pressure from AI search, with a projected 30%+ growth in cloud business for the year and margin improvement driven by scale effects [1] - Alibaba (BABA US) is anticipated to see a cloud business growth rate of 28%-30%, benefiting from strong momentum in instant retail, with Taobao expected to achieve a 20-30% MAU growth driven by flash purchase [1] - NVIDIA (NVDA US) is projected to achieve strong revenue growth in FY2027, with GB300 series products expected to account for two-thirds of Blackwell series products, and a revenue target of $500 billion over the next five quarters [1] - Tencent (700 HK) is recommended as a top pick, with a target price of 700, driven by steady growth in core gaming and advertising businesses, and a projected near 20% growth rate in advertising [3] - New Oxygen (SY US) is focusing on the light medical beauty sector with a rapid expansion plan, aiming to open 50 self-operated stores by 2025, supported by a strong marketing capability and low customer acquisition costs [3] - Ctrip (TCOM US) is expected to benefit from steady growth in domestic leisure travel and the recovery of outbound travel, with a projected revenue growth of 14% to 71.1 billion yuan in 2026 [3] - Huazhu (HTHT US) is transitioning to a high-margin franchise model, with a target price of $52, supported by a strong recovery in industry RevPar [4] - Futu (FUTU US) is positioned for long-term growth in the virtual asset business, with a user base of 3.1 million and a current valuation offering a safety margin [4] - AIA (1299 HK) is expected to see steady growth in new business value and operational indicators, with a forward PEV of 1.46x [4] - Dongfang Electric (1072 HK) is actively involved in global power station project contracting, with significant opportunities in the U.S. market due to the demand for power supply capabilities [9]

Core Viewpoint - The company is initiating coverage on Sangfor Technologies with an "Outperform" rating and a target price of HKD 45.5, highlighting its strong market position and growth potential in the pharmaceutical sector [1] Group 1: Market Position and Financial Performance - The company has a leading market share in its core products, including TPO (67%), EPO (42%), and the hair loss treatment brand Mandy (over 70%), which supports stable cash flow and growth [1][2] - The company is expected to achieve robust revenue growth, with projected peak sales from its innovative drug pipeline reaching between RMB 7 billion to 10 billion [2] Group 2: Innovation Pipeline - The company has over 30 drug candidates in development, with four innovative drugs currently undergoing NDA approval, which are expected to contribute to future revenue [2] - Key products in the pipeline, such as SSS06 (long-acting EPO) and IL-17A monoclonal antibody, are anticipated to have significant sales potential [2] Group 3: Strategic Partnerships - The global licensing agreement with Pfizer for SSGJ-707 (PD-1×VEGF dual antibody) is expected to enhance the company's global valuation, with peak global sales projected to reach USD 11.3 billion to USD 13.4 billion [3][4] - The partnership with Pfizer is expected to leverage their existing oncology portfolio, potentially expanding the market reach of SSGJ-707 [4] Group 4: Financial Projections - Revenue forecasts for the company from 2025 to 2027 are projected at RMB 19.18 billion, RMB 11.90 billion, and RMB 14.05 billion, with net profits of RMB 9.36 billion, RMB 2.73 billion, and RMB 3.33 billion respectively [4]

Investment Rating - The report initiates coverage on 3S BIO with an "OUTPERFORM" rating and a target price of HK$45.50, indicating a positive outlook for the company's stock performance [1][2][7]. Core Insights - The company's core business is robust, with innovative products expected to drive future growth. Key products include TPO, EPO, and the leading hair loss treatment brand Mandi, which dominate their respective markets [2][9]. - The company has a strong pipeline with over 30 projects in development, including four innovative drugs currently undergoing NDA approval, which are anticipated to contribute significantly to revenue growth [2][12]. - The partnership with Pfizer for the PD-1×VEGF dual antibody SSGJ-707 is expected to reshape the global valuation landscape, with peak global sales projected to reach between US$11.3 billion and US$13.4 billion [3][6][31]. Summary by Sections Business Overview - 3S BIO has established itself as a leading biopharmaceutical company in China, focusing on nephrology, hematology, oncology, and other therapeutic areas. The company has shown steady revenue growth from RMB 55.9 billion in 2020 to an estimated RMB 91.1 billion in 2024 [9][12]. - The company’s core products, including TPO and EPO, maintain leading market shares of 67% and 42% respectively, ensuring a solid cash flow foundation [2][11]. Product Pipeline - The innovative pipeline includes promising candidates such as SSS06 (long-acting erythropoietin) and IL-17A monoclonal antibody, with peak sales potential estimated at RMB 7-10 billion [2][12]. - The company has also introduced new products in the consumer healthcare sector, targeting the growing market for hair loss treatments, with Mandi achieving sales of RMB 1.34 billion in 2024 [15]. Strategic Partnerships - The collaboration with Pfizer for SSGJ-707, a PD-1×VEGF dual antibody, is a significant milestone, with Pfizer paying US$1.25 billion upfront and potential milestone payments of US$4.8 billion, highlighting the product's anticipated market potential [31][33]. - The dual antibody is positioned to capture a substantial share of the oncology market, projected to exceed US$200 billion, as it demonstrates superior efficacy compared to existing PD-1 monoclonal antibodies [18][22]. Financial Projections - Revenue projections for 2025-2027 are estimated at RMB 19.18 billion, RMB 11.90 billion, and RMB 14.05 billion respectively, with net profits expected to reach RMB 9.36 billion, RMB 2.73 billion, and RMB 3.33 billion [7][9]. - The report employs a discounted cash flow (DCF) model with a WACC of 10% and a perpetual growth rate of 3.5%, supporting the target price of HK$45.50 per share [7].