Investment Rating - Maintain BUY rating with a new target price (TTM) of HK$11.9, implying 1.0x FY24E P/B [2][7] Core Views - PICC P&C reported a solid underwriting combined ratio (CoR) of 97.8%, 0.3pct lower than the estimate, driven by better-than-expected non-auto CoR at 99.1% [2] - The company is expected to sustain a payout ratio of over 40% in the next two years, with a dividend yield of 5.7% in FY24E [2][7] - The auto segment met guidance with a CoR of 96.9%, while non-auto outperformed, particularly in individual A&H, which achieved RMB1.0bn underwriting profits [2] - The company's long-term auto premium growth is adjusted to 5%, with NEV profitability expected to improve [2] Financial Performance - Net profit for FY23A was RMB24.6bn, with EPS of RMB1.11, and is expected to grow to RMB30.0bn in FY24E [4] - The combined ratio is forecasted to improve from 97.8% in FY23A to 96.9% by FY26E [4] - ROE is expected to recover from 10.8% in FY23A to 12.6% by FY26E [4] Valuation - The stock is currently trading at 0.84x FY24 P/B, with a target valuation of HK$11.9 based on P/B-ROE [7][8] - Key valuation assumptions include a long-term growth rate of 3%, a revised long-term ROE of 12.8%, and a cost of equity of 9.7% [7] Dividend Policy - The company raised DPS by 2.3% YoY to RMB0.489 per share in 2023, maintaining a payout ratio of 44.2% [2] - Management guided to maintain a robust payout ratio of over 40% in the next two years [2] Segment Performance - Auto premiums grew by 5.3% YoY to RMB285.6bn, with a conversion rate of 98.8% [2] - Non-auto individual A&H achieved RMB43.7bn in insurance revenue, growing 23.8% YoY, with a CoR of 97.7% [2] Future Outlook - The company expects a lift in auto comprehensive loss ratio and a contraction in comprehensive expense ratio to 70.6%/26.1% in FY24E [2] - NEV profitability is anticipated to improve, with NEV CoR expected to drop below 100% [2]

M N 2 Apr 2024 CMB International Global Markets | Equity Research | Company Update Joinn Laboratories (6127 HK) Recovery could be not earlier than 1H24 Target Price HK$14.41 Joinn reported 2023 revenue of RMB2,376mn, up 4.8% YoY, and attributable (Previous TP HK$21.18) net income of RMB338mn, down 66.9% YoY. The decelerated revenue growth Up/Downside 57.1% was due to subdued R&D activities in Chinese pharmaceutical industry, leading Current Price HK$9.17 to heightened competition and lower pricing. The decl ...

M N 2 Apr 2024 CMB International Global Markets | Equity Research | Company Update Tigermed (300347 CH) Expect business rebound in 2024E Target Price RMB68.57 Tigermed reported 2023 revenue of RMB7,384mn, up 4.2% YoY, and attributable (Previous TP RMB80.31) recurring net income of RMB1,477mn, down 4.1% YoY. Revenue/ attributable Up/Downside 29.1% recurring net income missed our forecast by 2.9%/ 12.1%, respectively, mainly Current Price RMB53.10 due to shrinking COVID vaccine revenue, slowdown in global R&D ...

M N 29 Mar 2024 CMB International Global Markets | Equity Research | Company Update SANY International (631 HK) Solar power business remains major investor concern during site visit Target Price HK$8.00 We attended SANYI’s 2023 post-results meeting together with >70 investors and analysts in the Company’s production base in Zhuhai on 28 Mar. During the (Previous TP HK$15.40) meeting, most of the questions were related to the solar power business. Given Up/Downside 59.0% SANYI’s determination to invest in so ...

M N 29 Mar 2024 CMB International Global Markets | Equity Research | Company Update BYDE (285 HK) Reiterate BUY on multiple growth drivers in 2024 Target Price HK$46.51 Reiterate BUY and raise TP to HK$46.51 (61% upside) to reflect a strong (Previous TP HK$45.86) outlook and multiple growth drivers in 2024: 1) Android high-end demand Up/Downside 61.2% recovery (e.g. Huawei, Xiaomi); 2) Jabil sales synergy and strong ramp in 2H24; Current Price HK$28.85 3) Apple’s share gain with sales contribution rising to ...

Investment Rating - Maintain BUY with a new target price of HK$22.0 [2][6] Core Viewpoints - ZhongAn reported a significant turnaround in FY23, with net profit attributable to shareholders reaching RMB4.1bn, compared to a net loss of RMB1.1bn in FY22 [2] - Excluding the one-off gain from the disposal of ZA International (RMB3.78bn), the insurer recorded a net profit of RMB294mn, in line with consensus [2] - The company's growth is driven by its digital lifestyle ecosystem, technology export, and ZA Bank's breakeven progress [2][6] Domestic P&C Insurance - Domestic P&C insurance premiums grew by 33.1% YoY in 2H23, driven by digital lifestyle-related products such as e-commerce cargo insurance, travel insurance, and pet insurance [2] - The underwriting combined ratio (CoR) rose 1.0ppt to 95.2% in 2023, but underwriting profit (UWP) increased by 1.7% YoY to RMB1.3bn due to higher insurance revenue (+24.2% YoY) [2] - The health segment saw a 130.6% YoY increase in gross written premiums (GWP) for critical illness insurance, reaching RMB1.3bn in 2023 [2] Technology Export - Revenue from domestic technology export surged 73% YoY to RMB504mn in 2023, benefiting from the Digital China initiative [2] ZA Bank Performance - ZA Bank's net revenue increased by 42.9% YoY to RMB366mn in 2023, with a net interest margin (NIM) expansion of 10bps to 1.94% [2] - The bank launched US-stock trading in January 2024, which is expected to attract tech-savvy customers and improve retention [2] Proprietary Channels - Premiums from proprietary channels grew 31.0% YoY to RMB7.6bn, accounting for 26% of total GWP [2] - In the Health ecosystem, GWP from proprietary channels increased by 45.0% YoY to RMB4.4bn, representing 44.5% of total Health GWP [2] - The number of paid customers rose 14.8% to 11.43mn, with premiums per user increasing by 14.4% YoY to RMB670 [2] Financial Projections - FY24-26E net profit is projected at RMB434mn, RMB547mn, and RMB678mn, respectively [3] - The underwriting combined ratio (CoR) is expected to remain stable at 95.8%/96.0%/96.0% for FY24-26E, with underwriting profits projected at RMB1.38bn/RMB1.56bn/RMB1.77bn [6] Valuation - The stock is trading at FY24E 0.9x P/B and FY24E 0.5x P/S [5] - The fair value is based on a FY24E P/B of 1.46x, implying a 20-year growth rate of 8% [6]

M N 28 Mar 2024 CMB International Global Markets | Equity Research | Company Update WuXi Biologics (2269 HK) Expand overseas capacity to mitigate risks Target Price HK$18.32 WuXi Biologics (Wuxi Bio) reported 2023 revenue of RMB17.03bn, up 11.6% (Previous TP HK$39.65) YoY, attributable net income of RMB3.40bn, down 23.1% YoY, and adjusted Up/Downside 33.1% attributable net income of RMB4.70bn, down 4.6% YoY. Both revenue and Current Price HK$13.76 adjusted attributable net income were in-line with our forec ...

Investment Rating - The report maintains a "BUY" rating for New Hope Services with a target price of HK$2.79, reflecting an upside potential of 86.9% from the current price of HK$1.49 [1][3]. Core Insights - New Hope Services reported a net profit (NP) increase of 6% year-on-year (YoY) for FY23, with earnings slightly below expectations. The company achieved revenue growth of 10.7% YoY, totaling RMB1,261 million [1][6]. - The company raised its dividend payout ratio to 60% from 48% in FY22, resulting in a dividend yield of 12%, which positively impacted the share price by 6% following the announcement [1][6]. - New Hope Services has a strong cash position, with a cash balance of RMB1.15 billion, exceeding its market capitalization of HK$1.21 billion, indicating robust cash collection capabilities [1][3]. Financial Performance - FY23 revenue was RMB1,261 million, up 10.7% YoY, while net profit reached RMB215 million, reflecting a 6% increase YoY. The net profit margin slightly decreased to 17.1% [1][6]. - The gross profit margin narrowed to 34.9%, down 2.9 percentage points, attributed to increased competition in the third-party market and the exit from higher-margin non-owner value-added services [1][6]. - The company anticipates revenue growth of 10-20% and net profit growth of 5-10% in the upcoming periods [1][6]. Operational Highlights - The Basic Property Management segment's revenue contribution increased to 37.9% in FY23 from 31.3% in FY22, with expectations to stabilize around 40% [1][6]. - The catering services business experienced significant growth, achieving a 44% YoY revenue increase in FY23 and securing three new contracts valued at RMB65 million in Q1 2024 [1][6]. Valuation Metrics - The company is currently trading at a price-to-earnings (P/E) ratio of 5x for 2024E, while the target price is based on a P/E of 8x for 2024E [1][3]. - The report indicates a projected P/E of 4.6 for FY23, with a forecasted P/E of 4.8 for FY24 [2][12].

Investment Rating - The report maintains a "BUY" rating for the company with a new target price of HK$52.00, implying a 57.6% upside from the current price of HK$33.00 [21][24]. Core Insights - The company reported a decline in OPAT by 19.7% to RMB 118.0 billion, primarily due to a net loss of RMB 20.7 billion from asset management. Despite this, the company sustained dividend per share (DPS) growth to RMB 2.43, reflecting a 37.3% payout on shareholders' OPAT [21][24]. - The life and health (L&H) value of new business (VNB) amounted to RMB 39.3 billion, representing a 36.2% year-on-year increase, driven by stable VNB margins [21][24]. - Economic assumptions were adjusted, lowering the long-term investment return from 5.0% to 4.5% and the risk discount rate from 11% to 9.5%, which resulted in a significant impact on the embedded value (EV) and VNB [21][24]. Financial Summary - For FY23, net profit attributable to shareholders was RMB 85.7 billion, down 22.8% from the previous year, with a reported EPS of RMB 4.84 [29][30]. - The company’s total assets are projected to grow from RMB 11,583.4 billion in FY23 to RMB 13,760.7 billion by FY26, indicating a steady increase in asset base [11]. - The return on equity (ROE) is expected to improve from 9.7% in FY23 to 14.3% by FY26, reflecting enhanced profitability [30]. Valuation Metrics - The stock is currently trading at 0.45x FY24E P/EV, with a target valuation of 1.0x FY24E P/EV and 0.9x FY24E P/B [24][28]. - The company’s dividend yield is projected to increase from 6.9% in FY23 to 8.7% by FY26, indicating a strong return to shareholders [3][30]. Embedded Value and Sensitivity Analysis - The Group's embedded value is estimated at RMB 1,390.1 billion for FY23, reflecting a decrease of 6.7% due to the revised economic assumptions [21][25]. - The sensitivity analysis indicates that a 50 basis point decrease in long-term investment return could lead to a 7.6% decline in Group EV [8][21].

28 Mar 2024 CMB International Global Markets | Equity Research | Company Updates DPC Dash (1405 HK) BUY (Maintain) Sales beats as new markets continue to succeed Target Price HK$73.05 (Previous TP HK$75.51) Up/Downside +25.2% While the FY23 results of DPC Dash (DPC) were roughly inline, we do find its GP Current Price HK$53.50 margin and sales per store growth very decent and should support a better outlook in FY24E. DPC remains our top pick in the catering sector, thanks to its China Catering Sector value ...