January 5, 2026 04:42 PM GMT Damai Entertainment Holdings Ltd | Asia Pacific M Update Key Takeaways from Internet Trip We hosted a meeting with Damai management on Jan 5. Key highlights as below. Offline entertainment business IP business Film business Morgan Stanley Asia Limited+ Rebecca Xu Equity Analyst Rebecca.Xu@morganstanley.com +852 2848-7359 Damai Entertainment Holdings Ltd (1060.HK, 1060 HK) | Greater China Media China | | | | | | --- | --- | --- | --- | --- | | Stock Rating | | | Overweight | | | ...

Summary of ZTO Express 4Q25 Preview Conference Call Company Overview - **Company**: ZTO Express (ZTO.N) - **Industry**: Transportation & Infrastructure - **Market**: Hong Kong/China Key Points Earnings Outlook - The earnings outlook for 4Q25 remains largely unchanged compared to the management discussion post-3Q25 [1] - ZTO is expected to achieve a net profit of approximately Rmb2.7 billion, which is flat year-over-year [3] Market Share Dynamics - ZTO is projected to gain 1 percentage point in market share in 4Q25, recovering from a loss of 0.6 percentage points in 3Q25 and 0.3 percentage points in 1H25 [2] - Industry volume growth is anticipated to slow from 13% in 3Q25 to 5% year-over-year in 4Q25, attributed to decreased low-value parcels and a high base from the previous year [2] - ZTO's market share gains resumed in October 2025, leading to a 1 percentage point year-over-year gain in 4Q25 [2] Profitability Metrics - Unit operating profit is expected to improve by Rmb0.05 quarter-over-quarter to Rmb0.30 in 4Q25, despite a slight increase in unit costs during the peak season [3] - The unit profit is projected to remain stable at Rmb0.26, with higher operating profit offset by lower tax credits [3] 2026 Outlook - The outlook for 2026 indicates continued market share gains for ZTO, with manageable downside risks to unit profit [4] Investment Recommendation - The recommendation for ZTO remains "Overweight" (OW), with sustained market share gains being a key focus for investors [5] - The stock is currently trading at a price-to-earnings (P/E) ratio of 12x for 2026 estimates, with a forward free cash flow yield of 6-8%, which is attractive compared to the peer average of 1% [5] - A reduction in capital expenditures is expected to enhance shareholder returns [5] Valuation and Risks - The valuation methodology includes a discounted cash flow approach with a probability-weighted scenario analysis: 15% bull case, 75% base case, and 10% bear case [12] - Key assumptions include a weighted average cost of capital (WACC) of 13.2% and a terminal growth rate of 3% [13] - Upside risks include faster-than-expected market share gains and better cost control, while downside risks involve intensified competition and potential market share losses [15] Financial Metrics - Current market capitalization is Rmb119.7 billion, with an enterprise value of Rmb108.1 billion [7] - Earnings per share (EPS) estimates for the next fiscal years are Rmb11.76 for 2025 and Rmb12.93 for 2026 [7] Additional Insights - The company is positioned to achieve approximately 10% year-over-year profit growth in 2026 under the base case scenario [10] - The bear case scenario suggests potential challenges in achieving both earnings growth and market share gains [10] This summary encapsulates the critical insights from the ZTO Express conference call, highlighting the company's performance, market dynamics, and investment outlook.

Summary of Haidilao International Holding (6862.HK) Conference Call Company Overview - **Company**: Haidilao International Holding - **Industry**: Consumer & Leisure, specifically in the restaurant sector Key Points Recent Updates - **Table Turn**: Remained flat year-over-year (yoy) in December and for the second half of 2025 [1] - **Revenue Impact**: Conversion of direct-operated stores to franchise stores, net closures, and smaller party sizes per table led to a slight dip in restaurant revenue. However, overall group revenue in 2025 is expected to be supported by strong growth in delivery and other brands' revenue [1][10] - **Store Count**: Approximately 1,300 stores in 2025, indicating a net decrease compared to 2024 [10] - **Pricing**: Remained largely flat yoy in 2025, with table turnover also flat in December and the second half of 2025 [10] Financial Projections - **Gross Margin**: Expected to improve in the second half of 2025 compared to the first half, with stable labor costs and expense ratios [10] - **Store Openings**: Projected gross openings of stores to increase by mid-single digits percentage (MSD%) yoy in 2026, with a potential slowdown in franchise store expansion [10] - **Cost Savings**: Anticipated from automation and depreciation & amortization (D&A) reductions, with several hundred million expected in savings for 2026 and 2027 [10] Strategic Initiatives - **Multi-Brand Strategy**: Shifted to a top-down approach, focusing on Haidilao seafood street stall and Ru Sushi in 2026. The goal is to incubate 1-3 brands with over 500 stores within three years [1][10] - **Performance of Other Brands**: Yanqing underperformed due to subdued demand and competition, while Miaoshixiong and Ju Gao Gao showed healthy performance [10] Payout Ratio - **Dividend Policy**: Aiming to maintain a high payout ratio of 90% in 2023 and 95% in 2024, though not yet finalized [1][11] Market Outlook - **Price Target**: Neutral rating with a 12-month target price of HK$14.70, based on a 9.5x 2026E EV/EBITDA [12] - **Risks**: Include variability in table turn recovery, expansion rates, performance of new business models, cost savings, and food safety issues [12] Financial Metrics (2025 Estimates) - **Revenue**: Rmb 42,630.9 million - **EBITDA**: Rmb 7,062.0 million - **EPS**: Rmb 0.69 - **P/E Ratio**: 18.5x - **Dividend Yield**: 5.1% [13] Additional Insights - **Competition Landscape**: Management noted the emergence of segmented hotpot categories and a strong demand for value-for-money food services [9] - **Store Expansion Strategy**: Management does not expect aggressive store expansion in the next 2-3 years, indicating a cautious approach to growth [10] This summary encapsulates the key takeaways from the conference call, highlighting the company's current performance, strategic direction, and market outlook.

Summary of the Conference Call for Yingen Biotech Company Overview - **Company**: Yingen Biotech - **Key Projects**: - Hertu ADC for endometrial cancer and hormone-positive breast cancer - B7H3 ADC for multiple indications including liver cancer, melanoma, head and neck squamous cell carcinoma, cervical cancer, and platinum-resistant ovarian cancer Core Insights and Arguments - **Hertu ADC Project**: - Shows potential in second-line and later treatment for endometrial cancer and hormone-positive breast cancer - Key registration clinical trial results expected in 2026, with a sales team already established for commercialization [2][5] - **B7H3 ADC Project**: - Demonstrates significant efficacy across various indications with high Objective Response Rate (ORR) and Disease Control Rate (DCR) - No specific expression testing required, indicating broad application potential [2][6] - **Future Catalysts**: - Key clinical trial results for Hertu ADC and submission for market approval - Phase III registration clinical trial for B7H3 ADC in prostate cancer planned for 2026 [2][7] - **Safety Profile**: - B7H3 ADC shows significant safety advantages compared to similar drugs from Merck and Hansoh/GSK, with a lower incidence of interstitial pneumonia [2][9] - **DB1,303 (TOP2 ADC)**: - Comparable efficacy to AstraZeneca's drug and superior to Gilead's, but may face challenges in single-agent indications due to competition [2][10] - **HER3 ADC (DB1,310)**: - Shows significant potential in EGFR-mutant non-small cell lung cancer and hormone-positive breast cancer, with a PFS level of 15 months, outperforming other ADCs [2][11] - **PD-1 VEGF Dual Antibody + ADC Combination**: - Considered a key direction for future cancer treatment, showing good safety and efficacy [2][12] Industry Insights - **Chinese Innovative Drug Industry Outlook for 2026**: - Expected to be broad and optimistic due to the trend of Chinese innovative drugs going global, with companies leading in various technical fields [3] - **Investment Timing**: - Current valuation reflects only part of the potential of Hertu ADC and B7H3 ADC, suggesting significant upside potential as key clinical trial results are released [2][8] - **Global Competition for B7H3 ADC**: - Competitive landscape includes Merck and IDXD, with challenges faced by Merck due to safety issues leading to trial pauses [2][9] - **Upcoming ADC Data Releases in 2026**: - Multiple companies, including Yingen, are expected to release data on various ADC drugs, indicating a rich pipeline and potential industry trends [2][12] Additional Important Points - **Collaborations**: - Yingen collaborates with other companies for various ADC projects, which may yield initial data or enter registration clinical stages in the coming years [2][14][17] - **Early Pipeline Progress**: - Early pipeline projects like PDL1 B7H3 ADC show promising results in broad-spectrum efficacy and low toxicity, supporting further development [2][18]

Summary of Midea Group's Conference Call Company Overview - **Company**: Midea Group - **Industry**: Home Appliances and Robotics Key Points and Arguments Revenue and Profitability Outlook - Midea Group expects revenue growth in the mid-to-high single digits for 2026, aiming to stabilize profit margins [2][3] - The B-end business is projected to grow faster than the C-end, particularly in building and renewable energy sectors, with KUKA robotics business also recovering rapidly [2][3] - The company is shifting its strategic focus towards revenue growth rather than solely pursuing profit margin increases, having achieved its best profitability levels historically [2][6][7] Cost Management Strategies - Midea is addressing rising raw material costs through dynamic procurement, price transmission, scale advantages, hedging, and digital technologies [2][5] - The company believes that rising costs can optimize industry competition, benefiting leading firms like Midea with stronger bargaining power [5] - Midea's cost reduction measures are expected to contribute over 0.5% to profit margins by 2025, with further efficiency improvements anticipated in 2026 [4][17] Aluminum-Copper Strategy - Midea is actively promoting the "aluminum replacing copper" strategy, which has been widely applied in overseas markets and is making progress in domestic commercial air conditioning [2][9] - This strategy is in response to national policies and aims to mitigate the scarcity and price volatility of copper resources [2][9] International Expansion and Brand Recognition - Midea plans to expand its overseas OBM (Original Brand Manufacturer) business, targeting operations in over 50 countries by the end of 2025 [2][11] - The company is increasing its marketing efforts through sponsorship of sports events to enhance brand recognition and sales [11] Market Dynamics and Pricing Strategies - The company anticipates that the domestic market will face significant growth pressure despite strategies to achieve sales growth [10] - Recent price increases primarily affect older products with higher copper content, aimed at alleviating industry sales pressure [12][15] - Midea's pricing strategy is designed to maintain profitability while ensuring the health of the overall industry [15] Product Development and Technological Advancements - Midea's building products are expected to grow due to technological and cost advantages, with magnetic levitation centrifugal technology leading the industry [4][22] - The acquisition of OBANI and Toshiba has strengthened Midea's competitive position in the European heating market, which is larger than the cooling market [22][24] Future Business Segments - The establishment of a separate New Energy Division is aimed at better managing complex business models and releasing growth potential in the energy sector [21] - Midea's refrigerator and washing machine segments are expected to see stable growth, with a focus on improving technology and user experience [25] Financial Guidance and Shareholder Returns - Midea maintains confidence in revenue growth for Q4 2026, but profit stability will depend on various external factors [26] - The company has a regular share buyback plan and aims to maintain its dividend payout ratio, with potential increases subject to board approval [27] Additional Important Insights - Midea's approach to raw material cost management includes leveraging digital and AI technologies to enhance efficiency across the value chain [4][17] - The company is cautious about the implementation pace of the aluminum-copper strategy to ensure product quality and performance [8] - Midea's competitive edge in the market is bolstered by its scale and technological advancements, positioning it as one of the most profitable companies globally [6][7]

Key Points Summary of the Conference Call Company Overview - The company discussed is **Nexteer Automotive**, focusing on its **Robotaxi** project and steering systems. Industry Insights - The **Robotaxi** line control steering system is expected to ship tens of thousands of units by **2025**, priced between **3,000-4,000 RMB**. This system utilizes a dual actuator solution, offering better cost performance [2][5] - The production capacity is initially planned for tens of thousands of units, with potential adjustments to over **100,000** based on Full Self-Driving (FSD) commercialization and regulatory conditions [2][3] - The line control steering standard will take effect on **July 1, 2025**, accelerating technology promotion [9] Core Business Developments - In **2026**, Nexteer is collaborating closely with companies like **Li Auto**, **Geely (ZEEKR)**, and **Xiaomi** on line control steering projects, with more orders expected to be secured by the end of **2025** [2][7] - The domestic market's growth rate is slowing, which may impact performance, but a diversified customer base is expected to mitigate risks [2][13] Financial Performance and Projections - The company anticipates continued price pressure in **2025**, but expects to maintain growth due to strong clients like **BYD** and **Xiaomi**, with Xiaomi's revenue contribution nearing that of BYD [2][13] - The North American market is recovering slowly, with profit margins in the mid-single digits, affected by tariffs, inflation, and supply chain issues, but a target profit margin of over **10%** is set for the future [3][14][15] - The effective tax rate is expected to decrease from **40%** in the first half of **2025** to around **30%**, with a long-term goal of below **20%** [15][27] Market Dynamics - The overseas market is progressing slowly, with only **T Company** making significant advancements in line control steering technology [11] - The domestic market is advancing faster than overseas, with integrated solutions priced similarly in both markets [12] Challenges and Risks - The potential increase in tariffs from **Mexico** could impact costs, but the direct effect on the company is limited as only a small percentage of revenue is affected [28][30] - The company aims to pass on increased costs to customers, with about **3%** of revenue impacted by tariffs [29] Future Outlook - The company is optimistic about the future of line control steering systems, especially with the rise of autonomous vehicles and partnerships with key players in the market [8] - The timeline from order acquisition to commercial production is expected to shorten significantly, with some projects potentially launching within a year [9] Additional Notes - The impact of **Beijing Yizhuang's** share reduction on the company's long-term investment logic is acknowledged, but short-term stock price volatility is expected [16][17] - The company is actively working on the **EMB (Electric Brake)** and **ENB (Electric Brake)** systems, with expectations for commercial production by **2027** [23][25]

Summary of the Conference Call for Lens Technology (蓝思科技) Industry and Company Overview - Lens Technology is a leading player in the consumer electronics and automotive sectors, with a strong focus on precision manufacturing for smart devices, including smartphones, computers, smart cars, and servers [2][3]. Key Financial Highlights - Revenue is projected to increase from 45.2 billion to 69.8 billion CNY, while profit is expected to rise from 2 billion to 3.6 billion CNY, indicating robust growth momentum [2][3]. Core Business Insights - The company maintains close collaborations with major North American clients in the consumer electronics sector and is actively expanding its AI glasses business through partnerships with Rokid, Meta, and Apple, suggesting stable growth in this area [2][3]. - In the automotive sector, Lens Technology offers a diverse product line, including smart cockpit glass, B-pillars, body structural components, and rearview mirrors, with partnerships established with leading clients like Tesla and Xiaomi, indicating a promising market outlook [2][4]. - Since 2016, the company has provided joint modules, dexterous hands, and complete assembly services to various robotics companies, accumulating significant technical expertise for future developments in the robotics field [2][5]. New Business Developments - Through acquisitions of Feimei Gao International and Yuanshi Technology, Lens Technology has rapidly entered the AI server market, forming an integrated capability for material module assembly and securing orders from specific domestic and international clients, which is expected to become a new growth engine [2][5]. - The company has made significant progress in commercial aerospace, with established shipments of satellite protection glass and radiation-proof glass to North American clients, while also expanding its domestic market presence [4][6]. Future Growth Directions - Lens Technology plans to continue its focus on multiple sectors, including consumer electronics, new terminal glasses, new energy vehicles, robotics, AI servers, and commercial aerospace. The upcoming 20th-anniversary special edition release from Apple is expected to significantly benefit the company as a core structural component supplier [7]. - New business lines such as automotive laminated glass, humanoid robot joint modules, and liquid-cooled AI servers are anticipated to become additional growth points [7].

Summary of the Conference Call for Lens Technology Company Overview - **Company**: Lens Technology - **Industry**: Consumer Electronics, Automotive Glass, Commercial Aerospace Key Points and Arguments Industry and Market Trends - Lens Technology's first-generation products have generated annual revenues in the hundreds of millions, with user numbers increasing from 1 million to over 2 million, indicating a significant rise in market penetration [2][3] - The UTG glass cover, used in aerospace-grade photovoltaic components, is valued at approximately 10,000 RMB per square meter, with individual satellites potentially worth several million RMB. Currently, there are about 10,000 satellites in orbit, with a planned total of 40,000, indicating a vast market opportunity [2][4] Automotive Glass Business - In Q1 2025, Lens Technology will launch four automotive glass factories, primarily sourcing float glass for deep processing to produce ultra-thin double-layer laminated functional glass. This is expected to lead to significant growth in the automotive business [2][5] Collaboration with Major Clients - A major North American client is set to launch its first high-end foldable smartphone in 2026, with Lens Technology as the exclusive supplier of UTG, PT films, and support plates, which are expected to be worth several times more than traditional smartphones. Anticipated strong sales in 2025 will prepare for growth in 2027 [2][6] Future Innovations - In 2027, the North American client plans to release a flagship model with an all-glass design, benefiting from advancements in materials, processes, and equipment to enhance drop resistance. The trend towards foldable phones and 3D glass backs is also highlighted, with Lens Technology being a leading producer of 3D glass [2][8] Satellite Business Developments - Lens Technology is positioned to become a key partner in the commercial aerospace sector, providing components for solar panels and ground receiving terminals. The shift towards cost-effective commercial satellites is expected to increase demand for their products [3][10] Capital Expenditure and Financial Health - Lens Technology's acquisition of original stone has enhanced its supplier qualifications in North America and allowed for rapid conversion of R&D results into deliverable products. The company anticipates achieving a revenue scale of 2 billion RMB in 2025 [3][11] - The company maintains a debt ratio below 40%, indicating a strong financial position to support future capital expenditures, including investments in UTG projects, automotive glass, and AI-related hardware [16][18] Response to Market Conditions - Lens Technology's focus on high-end clients with strong price absorption capabilities mitigates the impact of market price fluctuations. The demand for innovative products like AI and foldable smartphones is expected to accelerate replacement cycles and enhance product value [15][17] Additional Important Information - The company is actively expanding its capabilities in humanoid robots and machine dogs, with significant growth expected in 2026 [12][13] - Lens Technology's strategic investments are aligned with market demands, ensuring production capacity matches future needs [14]

Summary of SICC (688234.SS) Conference Call Company Overview - **Company**: SICC (688234.SS) - **Industry**: Power Semiconductors, specifically focusing on Silicon Carbide (SiC) technology Key Points and Arguments Industry Dynamics - The demand for power semiconductors, particularly SiC, is expected to rise due to increasing computing power in AI servers. The TDP (thermal design power) of NVIDIA's GPUs has significantly increased, indicating a shift towards higher power requirements in data centers [1][3] - Major power semiconductor suppliers are collaborating with NVIDIA to support the transition to 800V DC power architectures, which is expected to enhance the penetration of SiC technology in AI data centers [1][2] Technological Advancements - SICC is transitioning from 6-inch to 8-inch wafer production, which is anticipated to reduce costs and improve competitiveness. This shift is expected to support gross margin (GM) expansion [1][9] - SiC technology is being utilized in various applications, including power supply units (PSUs) and battery backup units (BBUs), which enhance energy efficiency and cooling solutions in AI data centers [3][4] Financial Performance and Projections - The company maintains a target price of Rmb115, reflecting a positive outlook based on expected growth in SiC applications and product mix upgrades [1][13] - Revenue estimates for 2026 and 2027 have been revised down by 5% due to intense pricing competition, but net income estimates for the same years have been increased by 6% and 7% respectively, indicating a positive view on GM improvements [9][10] - Despite revenue cuts, SICC is projected to achieve a 53% CAGR in revenues from 2025 to 2028, with operating income expected to turn positive in 2026 [9][10] Risks and Challenges - Potential risks include slower-than-expected capacity expansion, intense competition in the SiC substrate market, and potential supply chain issues [18] - The company faces challenges related to pricing competition and the need for rapid technological advancements to maintain market position [18] Market Position and Growth Potential - SICC is well-positioned to benefit from the growing demand for SiC in various sectors, including electric vehicles (EVs) and AI data centers, which are expected to drive significant revenue growth [5][8] - The company is also collaborating with global-tier brand makers in the AI glasses segment, further diversifying its application portfolio [8] Additional Important Information - The company’s market cap is approximately Rmb39.9 billion ($5.7 billion), with a current share price of Rmb88.88, indicating a potential upside of 29.4% to the target price [20] - The earnings revision reflects a strategic focus on enhancing product mix and reducing costs, which is crucial for sustaining profitability in a competitive landscape [9][10] This summary encapsulates the critical insights from the conference call, highlighting SICC's strategic direction, financial outlook, and the broader industry context.

Summary of Baidu.com Inc. (BIDU) Conference Call Company Overview - **Company**: Baidu.com Inc. (BIDU) - **Industry**: Technology, specifically focusing on AI, cloud services, and autonomous driving Key Points Kunlunxin Spin-off - Baidu announced that Kunlunxin submitted an application for a listing on the HK Stock Exchange on January 1, 2026, as part of a proposed spin-off through a Global Offering of Kunlunxin shares [1] - Following the spin-off, Baidu expects Kunlunxin to remain a subsidiary, with Baidu holding a controlling stake of 59% as of August 2025 [2] Financial Implications - The potential spin-off of Kunlun could unlock significant value for Baidu, with estimates suggesting a valuation range of US$3 billion to US$11 billion for Baidu's 59% stake in Kunlun, which could represent 6% to 23% of Baidu's current market cap [8] - If applying a 40X 2026 P/S multiple, the implied valuation for Baidu could reach US$22 billion, equating to 45% of its latest market cap [8] Sales and Revenue Projections - Kunlun's total sales are estimated to have reached approximately RMB 3.5 billion in 2025, with projections of RMB 6.5 billion for 2026 [6] - External sales from Kunlun, which were insignificant as of late 2025, are expected to grow rapidly, potentially accounting for 14% of total cloud sales by 2026 [6] - Subscription-based revenue is projected to contribute close to 30% of cloud revenue, indicating a shift towards more recurring revenue streams [6] Strategic Positioning - Kunlun is a critical component of Baidu's full-stack AI cloud capabilities, which includes chips, deep learning frameworks, and applications across various industries [6] - The launch of the Kunlun P800 chip has garnered orders from diverse sectors, including internet platforms, telecommunications, finance, and government [6][7] Future Expectations - Upcoming announcements are anticipated regarding new orders and product upgrades for Kunlun, as well as updates on the separate listing process [8] - Baidu is expected to revise its shareholder return policy in Q1 2026 and provide further details on steps to unlock asset value [8] Market Context - Baidu's cloud segment is expected to grow significantly, driven by strong demand for AI accelerator-based cloud services, which saw a year-over-year growth of 128% in Q3 2025 [11] - The overall cloud segment is valued at 5X price to 2026E sales, with traditional CPU-based revenue having lower profit margins compared to GPU-based subscription services [11] Risks and Considerations - Key risks include competition in the AI cloud space, slower-than-expected growth in Robotaxi fleets, and potential declines in search advertising revenue impacting overall margins [24] Valuation and Price Target - Goldman Sachs maintains a Buy rating on Baidu with a 12-month price target of US$155, reflecting a potential upside of 3.1% from the current price [25] Additional Insights - Baidu is transitioning from a traditional advertising-focused model to a more diversified revenue stream, with non-search business expected to account for over 50% of core revenue by 2027 [23] - The company is taking proactive measures to enhance shareholder returns, which is reflected in its valuation approach [23]