ab 17 October 2025 Global Research Shenzhen Envicool Technology Co., Ltd A golden window to access a 10x TAM Riding the liquid cooling boom: the golden window for expanding overseas We lift our price target for Envicool from Rmb30.15 to Rmb100.00 on its potential expansion into overseas markets and solidifying leadership in China. We expect the global rack-level liquid cooling market to see secular growth through 2028, due to increasing power density of AI racks. Moreover, we see 2026 as a golden window for ...

Summary of China Logistics Conference Call Industry Overview - The conference call focused on the **China logistics industry**, particularly the express delivery sector, highlighting the performance of key players in September 2025. Key Companies Discussed - **YTO Express (600233 CH)** - **STO Express (002468 CH)** - **Yunda Holding (002120 CH)** - **SF Holding (002352 CH)** - **J&T Express (1519 HK)** - **JD Logistics (2618 HK)** - **ZTO Express (Cayman)** Core Insights and Arguments - **ASP Recovery**: In September 2025, the Average Selling Price (ASP) for Tongda players showed recovery, with YTO, STO, and Yunda increasing their ASP by Rmb 6, 6, and 10 cents month-over-month, translating to year-over-year changes of +1.1%, +4.95%, and +0.5% respectively [1][1][1] - **Revenue Growth**: - YTO achieved a **14.9% year-over-year revenue growth** with a **13.6% parcel volume growth**. - STO also reported **14.9% year-over-year revenue growth** with a **9.5% parcel volume growth**. - Yunda underperformed with only **4.1% year-over-year revenue growth** and **3.6% parcel volume growth**. - SF's parcel volume grew by **31.8% year-over-year**, contributing to a **14.2% revenue growth** despite a sequential ASP recovery [1][1][1]. - **Market Positioning**: - YTO and STO are noted for balancing volume and price effectively, while Yunda is expected to continue losing market share. - SF's strong parcel volume growth indicates effective optimization strategies in its economy express segment [1][1][1]. - **Investment Recommendations**: - The current pecking order for e-commerce express players is: **J&T (Buy) > STO (Buy) > ZTO (Buy) > YTO (Neutral) > YUNDA (Sell)**. - For premium express players, the order is **SF (Buy) > JDL (Buy)** [1][1][1]. - **Future Outlook**: - Anticipation of further ASP recovery in the upcoming peak season for e-commerce, which could positively impact ZTO and J&T. - J&T Express is highlighted as a top pick due to its superior parcel volume growth in Southeast Asia and potential ASP recovery in China [1][1][1]. Additional Important Points - **Performance Metrics**: - Detailed metrics for September 2025 show YTO with **2,627 million parcels** (13.6% YoY), STO with **2,187 million parcels** (9.5% YoY), Yunda with **2,110 million parcels** (3.6% YoY), and SF with **1,504 million parcels** (31.8% YoY) [3][3][3]. - **ASP Trends**: - ASP for YTO was Rmb 2.21, for STO Rmb 2.12, for Yunda Rmb 2.02, and for SF Rmb 13.87, indicating significant differences in pricing strategies among the players [3][3][3]. - **Strategic Considerations**: - JDL's valuation is considered attractive with limited downside potential, although uncertainties exist regarding JD's strategies for food delivery and overseas expansion [1][1][1]. This summary encapsulates the key points from the conference call, providing insights into the performance and strategic positioning of major players in the China logistics industry.

Summary of Zijin Mining Conference Call Company Overview - **Company**: Zijin Mining (2899.HK) - **Market Cap**: HK$866.4 billion / $111.5 billion - **Industry**: China Basic Materials Key Financial Highlights - **3Q25 Net Profit**: Rmb14.6 billion, up 57% YoY - **EPS**: Rmb0.548 per share - **9M25 Recurring Net Profit**: Rmb34.7 billion, representing 69% of the full-year estimate for 2025 and 73% of Bloomberg consensus [1][2] - **Operating Cash Flow**: Rmb52.1 billion in 9M25, up 44% YoY [26] - **Free Cash Flow**: Positive at Rmb14.3 billion in 9M25 [26] Production and Sales Performance - **Copper Production**: Total mined copper volume was 830kt in 9M25, up 5% YoY, reaching 75% of the full-year estimate [24] - **Gold Production**: 9M25 gold output was up 20% YoY, also at 76% of the full-year estimates [24] - **Realized ASP for Copper**: Rmb63,718/t in 3Q25, up 3% QoQ [24] - **Realized ASP for Gold**: Rmb768/g in 3Q25, up 4% QoQ [24] Cost and Profitability - **Cost of Goods Sold (COGS)**: Increased by 3-4% QoQ for gold and copper in 3Q25; YoY increase of 11-20% due to declining grades and higher royalties [25] - **Profit from Joint Ventures and Associates**: Rmb4.1 billion in 9M25, increased by 32% YoY [25] Strategic Developments - **Zijin Gold International Spin-off**: Completed on September 30, raising HK$28.7 billion with Zijin retaining an 85% stake [27] - **Acquisition of RG Gold Mine**: Completed on October 10 for US$1.2 billion (Rmb8.6 billion), expected to boost gold output by 6.4% in 2026E [29] Commodity Price Forecasts - **Copper Price Forecast**: Revised up by 2-5% for 2025-26E; expected to reach US$4.44/lb in 2025E and US$4.76/lb in 2026E [30] - **Gold Price Forecast**: Revised up by 3% to US$3,400/oz for 2025E, with risks skewed to the upside [31] Valuation and Investment Outlook - **Revised Target Prices**: HK$37.50 for H shares and Rmb37.50 for A shares [2] - **Earnings Growth**: Expected ~50% profit growth CAGR for 2025-26E driven by rising gold/copper prices and volume growth [2] - **Key Risks**: Fluctuations in gold and copper prices, project execution delays, and currency/country risks associated with overseas assets [33] Financial Ratios and Projections - **P/E Ratio**: Expected to be 15.2x in 2025E [12] - **Dividend Yield**: Projected at 2.1% in 2025E [12] - **Net Debt to Equity**: Expected to decline to 33.3% by 2025E [12] Conclusion Zijin Mining is positioned for strong growth driven by rising commodity prices and strategic acquisitions. The company’s financial performance in 3Q25 and 9M25 indicates robust profitability and operational efficiency, making it a compelling investment opportunity in the basic materials sector.

Summary of Centre Testing International Group (300012.SZ) Investor Day Company Overview - **Company**: Centre Testing International Group (CTI) - **Ticker**: 300012.SZ - **Market Cap**: Rmb 24.1 billion / $3.4 billion - **Enterprise Value**: Rmb 23.1 billion / $3.2 billion - **Industry**: Testing, Inspection, Certification (TIC) Key Takeaways from the Investor Day 1. Financial Performance and Projections - Expected revenue and net income CAGRs of 11% and 15% respectively from 2025E to 2030E - Operating profit margin (OPM) projected to improve to 18.4% by 2030E from 15.4% in 2025E [1][2][22] 2. Strategic Initiatives - **"123 Strategy"**: - Stabilizing traditional TIC business - Accelerating expansion in rapidly-growing end-markets - Incubating technologies and certifications for potential new markets [2][19] - **LEAN Project**: - Implementation has improved efficiency in 43% of CTI's labs, with plans to increase this to 60% in 2026E and 75% in 2027E [2][19] 3. Digitalization and Automation - Established 31 sets of Laboratory Information Management Systems (LIMS) since 2008 - Achievements in digitalization include reducing manual processing workload by 8% and significant efficiency improvements in various applications [3][19] 4. Overseas Expansion and M&A - Targeting over 20% overseas revenue exposure in the next 5-10 years - Three overseas M&As initiated in 1H25 to expand into food, carbon emission, and ESG testing segments [17][20] 5. Financial Management and Growth Targets - Aiming for double-digit revenue and net income growth over the next three years - CAPEX to revenue ratio expected to drop to 5-7% from 7% previously guided [17][20] - Monthly reviews on cash flow conditions and projects with hard-to-collect accounts receivable [20] 6. Market Position and Competitive Landscape - CTI is positioned as a consolidator in the TIC market, benefiting from a resilient operational performance compared to peers - The TIC market in China is expected to grow at a long-term CAGR of 7% [22] Important Metrics - **Revenue Projections**: - 2025E: Rmb 6,506.6 million - 2026E: Rmb 7,116.2 million - 2027E: Rmb 7,807.9 million [5][14] - **EPS Growth**: - 2025E: Rmb 0.60 - 2026E: Rmb 0.69 - 2027E: Rmb 0.78 [5][14] Risks and Considerations - Key risks include potential damage to the company's credibility, intensifying pricing competition, and greater accounts receivable risk due to the 3rd National Soil Census [23] Conclusion - CTI is positioned for growth with a strong focus on efficiency, digitalization, and strategic expansion into new markets. The company is well-prepared to navigate challenges in the TIC industry while aiming for significant revenue and profit growth in the coming years [22][23]

Sieyuan Electric (002028.SZ) 3Q25 Earnings Call Summary Company Overview - **Company**: Sieyuan Electric - **Ticker**: 002028.SZ - **Date of Call**: 17 Oct 2025 Key Financial Highlights - **Net Profit**: Increased by 45.7% year-over-year (YoY) to Rmb1,293 million in 9M25, with 3Q25 net profit rising by 48.7% YoY to Rmb899 million, surpassing market expectations [1][2] - **Revenue**: Grew by 32.9% YoY to Rmb13,827 million, significantly exceeding the company's target of over 20% growth for 2025E [1][2] - **Net Margin**: Expanded by 1.5 percentage points YoY to 15.8% [1] - **Earnings Per Share (EPS)**: Increased by 46.4% YoY to Rmb2.81 [1] - **Return on Equity (ROE)**: Rose by 2.83 percentage points YoY to 16.11% [1] Order and Revenue Growth - **New Orders**: Sieyuan targets over 25% YoY growth in new orders for 2025E, with a significant portion expected from overseas markets [2] - **Revenue Sources**: Anticipated revenue growth primarily from switchgears, coil products, and reactive compensation products [2] - **Geographic Distribution**: Approximately two-thirds of new orders are from China, with the remaining one-third from overseas, particularly from Latin America, the Middle East, Southeast Asia, Europe, and Africa [2] Cash Flow and Financial Health - **Free Cash Flow**: Positive free cash flow quadrupled YoY to Rmb728 million in 3Q25, with operating cash flow turning positive at Rmb432 million in 9M25 [3][6] - **Cash Flow Outlook**: The company expects to maintain positive free cash flow in 2025E, driven by increased operating cash inflow from product deliveries [6] Research and Development - **R&D Investment**: R&D expenses accounted for 7% of revenue in 2024, with expectations to maintain this ratio in 2025E to support new business developments [7][8] - **New Product Launches**: Key developments include breakthroughs in UHV gas insulated switchgear (GIS) sales and the introduction of new energy storage system (ESS) products [7] Market Position and Valuation - **Market Cap**: Rmb82,744 million (approximately US$11,615 million) [4] - **Target Price**: Rmb100.00 per share, based on a discounted cash flow (DCF) model, equating to a 2025E P/E of 28.3x and P/B of 5.2x [11] - **Investment Rating**: Reiterated as a "Buy" due to strong earnings performance, positive cash flow, and competitive product positioning [8] Risks and Considerations - **Downside Risks**: Include lower-than-expected PRC grid capital expenditures, reduced overseas new orders, and higher raw material costs [12] Conclusion - Sieyuan Electric demonstrates robust financial performance with significant profit and revenue growth, a strong order pipeline, and a commitment to R&D, positioning itself favorably within the power grid equipment sector in China. The company is well-placed to capitalize on increasing demand for renewable energy and electric vehicle infrastructure.

Ac t i o n | 19 Oct 2025 18:02:06 ET │ 14 pages Hangzhou Hikvision Digital Technology (002415.SZ) 3Q25 Investor Call Takeaways: Emerging Fruit of Destocking CITI'S TAKE Hikvision posted 3Q25 results and we attended the 3Q25 investor call. 3Q25 revenue rose 1% YoY to Rmb23.9bn, 4%/8% below CitiE/BBGe, while 3Q25 margin rose 1.3ppts YoY to 44.8%, 0.7ppts ahead of CitiE. 3Q25 op. profit rose 8% YoY to Rmb3.7bn, largely in line. 3Q25 net profit rose 20% YoY to Rmb3.7bn, 9%/3% ahead of CitiE/BBGe, helped by non- ...

Summary of Conference Call on China Electric Utilities Industry Overview - The conference call discusses the impact of VAT rebate cuts announced by the PRC's Ministry of Finance on the electric utilities sector, specifically focusing on wind and nuclear power industries [1][2]. Key Points on VAT Rebate Cuts - **VAT Rebate Cancellation**: - The 50% VAT rebate for onshore wind farms will be cancelled effective from November 1, 2025. Offshore wind power generation will see a similar cancellation starting January 1, 2028 [2]. - New nuclear units approved after October 31, 2025, will not be entitled to VAT rebates, while existing operational units will continue to receive rebates for a defined period [2]. Impact on Companies - **Longyuan Power Group**: - The VAT rebate cut is expected to reduce Longyuan's net profit by more than 5%, pending confirmation from the company [1][6]. - The company is currently assessing the financial impact of the VAT changes [3]. - **CGN Power**: - The VAT rebate cut will have a lesser impact on CGN Power as it primarily affects new nuclear units. The estimated reduction in net profit for new units is approximately Rmb20 million per annum in the 6th-10th years and Rmb50 million per annum in the 11th-15th years of operation [7]. - CGN Power's existing operational units will not be affected in the near term, specifically for the years 2025-2030 [7]. Financial Projections - **Valuation Models**: - CGN Power's target price is set at HK$2.60, based on a DCF model, with a WACC of 7.0% [8]. - Longyuan's target price is set at HK$7.00, also based on a DCF model, with a WACC of 7.6% [10]. - CNNP's target price is Rmb11.00, with a WACC of 6.7% [12]. Risks Identified - **Longyuan Power Group**: - Risks include unpredictable weather conditions affecting utilization rates, capacity additions, and potential tariff cuts [11]. - **CGN Power**: - Risks include lower-than-expected utilization, tariff reductions, and interest rate hikes [13]. Additional Insights - The VAT rebate changes are part of a broader policy affecting multiple industries, including financial leasing and coal bed methane extraction, indicating a significant shift in government policy towards renewable energy and its financial support [2]. - The conference call highlights the cautious outlook for both Longyuan (Neutral) and CGN Power (Sell) due to anticipated net profit cuts year-over-year in 2025 [1]. This summary encapsulates the critical insights from the conference call regarding the implications of VAT rebate cuts on the electric utilities sector in China, particularly focusing on Longyuan and CGN Power.

Summary of Cambricon's Conference Call Company Overview - **Company**: Cambricon (688256.SS) - **Industry**: AI Chip Manufacturing Key Points Financial Performance - **3Q25 Revenue**: Rmb1.7 billion, up 1333% YoY, consistent with 2Q25 levels, and close to Bloomberg consensus estimates [4][8] - **9M25 Revenue**: Rmb4.6 billion, nearing the low-end of the 2025 revenue guidance of Rmb5 billion [1] - **4Q25 Revenue Projection**: If high-end guidance of Rmb7 billion is achieved, 4Q25 revenues could increase by 39% QoQ to Rmb2.4 billion [1] - **Gross Margin (GM)**: Decreased to 54% in 3Q25 from 56% in 2Q25, reflecting a shift in product mix from government projects to enterprise clients [4][10] - **Operating Expenses (Opex)**: Ratio improved to 21%, better than consensus estimates, with R&D expenses increasing by 12% QoQ [7][10] Strategic Partnerships - **Sensetime Cooperation**: A strategic agreement signed in October 2025 to leverage technical advantages in AI chips and foundation models, aiming to enhance product compatibility and accelerate AI deployment [2] - **Zhipu Collaboration**: Zhipu's new GLM-4.6 model successfully deployed on Cambricon's AI chips, marking a significant achievement in local chip production [3] Market Dynamics - **Contract Liability**: Reduced to Rmb80 million in 3Q25 from Rmb543 million in 2Q25, indicating improved cash flow management [1] - **Inventory Increase**: Inventory rose by 39% QoQ, suggesting strong market demand and effective wafer supply management [1] Future Outlook - **Revenue Guidance**: Analysts have raised 2025E net income estimates by 8% due to better-than-expected cost control [10] - **Target Price**: Maintained at Rmb2,104, reflecting a 68.6% upside potential from the current price of Rmb1,247.68 [16][14] Risks - **Supply Chain Risks**: Potential wafer supply restrictions due to Cambricon being added to the US Entity List in December 2022 [15] - **Competition**: Increased competition in the cloud chips market could impact future growth [15] Additional Insights - **R&D Capability**: Recognition of Cambricon's strong R&D capabilities, as evidenced by passing compatibility tests with other leading AI models [3] - **Cost Control**: Effective cost management strategies have led to a significant improvement in operating income, exceeding analyst expectations [7][10] This summary encapsulates the essential insights from Cambricon's conference call, highlighting its financial performance, strategic partnerships, market dynamics, future outlook, and associated risks.

Summary of Conference Call on Chinese Banks Industry Overview - The conference call focuses on the Chinese banking sector, particularly the performance and outlook of A/H-share listed banks, with a specific emphasis on China Merchants Bank (CMB) [1][2]. Key Points and Arguments Market Performance - A/H-share listed bank stocks have recorded market-cap-weighted absolute returns of 12%/21% year-to-date, attributed to improving fundamentals rather than sector allocation demand [1]. - The stabilization of asset quality and a narrowing decline in Net Interest Margins (NIMs) are significant factors driving this performance [1]. NIM and Loan Demand - The decline in NIM has narrowed in 3Q25, with expectations for continued narrowing into 1H26 due to ongoing deposit re-pricing [5]. - The large state-owned enterprises (SOE) banks and CMB are expected to have a sustainable NIM recovery, providing greater potential for shareholder returns [2]. - Loan demand is anticipated to weaken due to the "anti-involution" trend in the industrial sector, which will slow corporate loan demand [5][18]. Investment Income - Investment income is likely to be a negative contributor to bank revenue in 3Q25, particularly affecting small and medium-sized banks (SMBs) [5][27]. - The average year-over-year growth of bond investment income for covered banks is forecasted to be -7% in 3Q25 [36]. Fee Income - Fee income is expected to improve despite weak consumer credit demand, driven by growth in sales of financial products through banking channels [39]. - The sustained decline in deposit costs is creating opportunities for growth in wealth management products, insurance, and funds [40]. Asset Quality - Overall asset quality in the Chinese banking industry has not shown significant deterioration, with banks increasing provisions to bolster risk-resistance reserves [45]. - The NPL (Non-Performing Loan) coverage ratio has been on an upward trend, indicating that provisions are greater than new NPLs [45]. Additional Important Insights - CMB is favored for investment with a 12-month target price of Rmb54.24/HK$52.98, representing potential upside of 31%/10% [2]. - The average NIM for covered banks is expected to stabilize at 1.32% in 2026, largely unchanged from previous forecasts [17]. - The average loan growth forecast for covered banks in 2025 and 2026 is 9%, adjusted down from previous estimates [24]. Conclusion - The Chinese banking sector is navigating challenges such as narrowing NIMs and weakening loan demand, but there are positive indicators in fee income growth and asset quality stability. CMB stands out as a strong investment opportunity amidst these dynamics.

Vi e w p o i n t | 15 Oct 2025 11:45:46 ET │ 11 pages China Banks 3Q25 earnings preview: eased NIM pressure & strong fee income, set stage for outperformance ahead CITI'S TAKE We expect covered China banks' 3Q25E revenue growth of +1.4% y-y on smaller NIM compression and decent fee income, offsetting by muted loan growth and weak trading gains. With stable asset quality, we expect banks to release provisions and buffer earning growth (+3.0% y-y in 3Q25E, vs. +0.8% y-y in 1H25). We expect all large banks' 9M ...