Investment Rating - The report maintains a "BUY" rating for JD.com with a target price of US$52.00, indicating a potential upside of 142.5% from the current price of US$21.44 [1][6][23]. Core Insights - JD.com reported better-than-expected results for 4Q23, with revenue of RMB306.1 billion, up 3.6% year-over-year, and non-GAAP net income of RMB8.4 billion, surpassing estimates [6]. - The company aims to enhance user experience and market share in 2024, with a focus on reinvesting profits to drive user acquisition amid intensified market competition [6]. - JD's net product revenue for 4Q23 was RMB246.5 billion, reflecting a 3.7% year-over-year increase, with electronics and home appliance revenue growing by 6.1% [6][27]. - The new share repurchase program and increased dividends are expected to support valuation and drive a rerating of the stock [6][23]. Financial Performance Summary - For FY23, total revenue reached RMB1.1 trillion, up 3.7% year-over-year, with non-GAAP net income of RMB35.2 billion, a 25% increase [6][7]. - The forecast for FY24 estimates total revenue of RMB1,160.3 billion, with a gross profit of RMB173.6 billion and a non-GAAP net profit of RMB36.1 billion [5][22]. - JD's gross margin is projected to be 15.0% in FY24, with a non-GAAP net margin of 3.1% [5][22]. Revenue Breakdown - JD Retail generated RMB267.6 billion in revenue for 4Q23, up 3.4% year-over-year, driven by better-than-expected growth in electronics and home appliances [6]. - Net services revenue for 4Q23 was RMB59.6 billion, up 3.0% year-over-year, although marketplace and advertising revenues declined by 4% [6][27]. Future Outlook - The management's focus for 2024 includes enhancing merchant support and user acquisition strategies, with expectations for commission revenue to return to growth by 3Q24 [6]. - The company anticipates an 8% year-over-year growth in JD Retail's revenue and a 4% increase in non-GAAP operating profit for FY24 [6].

M N 8 Mar 2024 CMB International Global Markets | Equity Research | Company Update Bilibili (BILI US) Steady progress towards a sustainable business model Target Price US$20.50 Bilibili announced its 4Q23 results on 7 Mar: total revenue grew by 3% YoY to (Previous TP US$24.00) RMB6.35bn, in line with our/consensus estimate; adjusted net loss narrowed by Up/Downside 89.6% 58% YoY to RMB556mn, beating our/consensus estimate of RMB677/633mn, Current Price US$10.81 mainly attributable to the better-than-expecte ...

M N 11 Mar 2024 CMB International Global Markets | Equity Research | Company Update ZTE (000063 CH) Improved margins in 2023 Target Price RMB34.20 ZTE released its FY23 results. Revenue grew by 1.1% YoY to RMB124bn, in line with consensus and 3% higher than our forecast. Net profit increased by 15.4% (Previous TP RMB36.90) YoY to RMB9.3bn, 5% lower than consensus and in line with our forecasts. Gross Up/Downside 13.3% margin for 2023 was 41.5%, representing a 434bps increase from FY22. NPM Current Price RMB ...

Investment Rating - The report maintains a BUY rating on Prada SpA, indicating a potential return of over 15% over the next 12 months [2][16]. Core Insights - Prada's 4Q23 net revenue grew by approximately 18.1% year-over-year, driven by a remarkable 82% growth in the Miu Miu brand, surpassing expectations [2]. - The company reported strong growth across all regions, particularly in Japan (cFX +38%) and APAC (cFX +32%), while the US showed sequential improvement [2]. - Management confirmed positive sales momentum has continued into 2024, with expectations of sustained growth despite challenging market conditions [2]. - Prada plans to implement routine price hikes of 4-8% in 2024, focusing on clothing and leather goods, which is expected to support long-term margin expansion [2]. - The closure of outlet stores is progressing, with this segment contributing only about 10% to overall sales, set to be phased out in the next 2-3 years [2]. Financial Summary - Revenue is projected to grow from EUR 4,726 million in FY23A to EUR 5,091 million in FY24E, reflecting a year-over-year growth of 7.7% [3]. - Net profit is expected to increase from EUR 671 million in FY23A to EUR 739 million in FY24E, with a year-over-year growth of 10.1% [3]. - The report indicates a gross margin of 80.8% for FY24E, with EBIT margin projected at 22.9% [8]. - The target price for Prada is set at HK$65.2, representing a 17.1% upside from the current price of HK$55.7 [4]. Earnings Revisions - The earnings estimates for 2024E have been revised to reflect a revenue increase to EUR 5,091 million, up from EUR 5,008 million previously [7]. - Gross profit estimates for 2024E have been adjusted to EUR 4,113 million, indicating a 2.0% increase from prior estimates [7]. - Net profit for 2024E is now projected at EUR 739 million, a slight increase from the previous estimate of EUR 732 million [7].

Investment Rating - Maintain BUY rating with an adjusted target price of HK$24.8, based on 10x 2024E P/E, close to its 3-year average [3][4] Core View - ZTE is expected to capitalize on emerging trends in the telecom industry, focusing on the evolution towards 5.5G/6G and AI compute power [3] - The company's profitability improved steadily due to operation optimization and cost reduction, including the use of self-developed components [3] - Revenue growth is projected to be steady, with FY24E revenue expected to reach RMB133.7bn, a 7.6% YoY increase [1][3] Financial Performance - FY23 revenue grew by 1.1% YoY to RMB124.3bn, in line with consensus and 3% higher than forecasts [3] - FY23 net profit increased by 15.4% YoY to RMB9.3bn, 5% lower than consensus but in line with forecasts [3] - Gross margin for FY23 was 41.5%, a 434bps increase from FY22, driven by cost optimization and favorable revenue mix [3] - FY24E net profit is projected to grow by 16.3% YoY to RMB10.8bn, with a net margin of 8.1% [1][3] Segment Performance - Carrier segment revenue increased by 3.4% YoY, driven by domestic market share gains and overseas progress [3] - Consumer segment sales declined by 1.3% YoY due to overseas inventory digestion and intensified competition, partially offset by domestic growth in family network business [3] - Enterprise & government segment sales declined by 7.1% YoY in 2023 due to a slowdown in investment [3] Valuation Metrics - FY24E P/E is projected at 7.3x, with ROE expected to reach 14.3% [1] - FY25E P/E is projected at 6.5x, with ROE expected to reach 14.5% [1] Market Data - Current price is HK$17.92, with an upside potential of 38.4% to the target price of HK$24.8 [4] - Market capitalization is HK$13.5bn, with an average 3-month turnover of HK$162mn [5]

Investment Rating - The report upgrades the investment rating for Contemporary Amperex Technology Co. Ltd. from Equal-weight to Overweight [2][3] - The price target is raised from Rmb184.00 to Rmb210.00, implying a 34% upside potential [2][4] Core Insights - Price competition in the battery market is nearing an end, allowing CATL to enhance cost efficiency and return on equity (ROE) [3][10] - The company is expected to restore EBIT growth year-over-year after a slowdown in the first quarter of 2024 [3][23] - CATL's new generation mega production lines are anticipated to significantly improve cost advantages and ROE [3][12] Financial Performance - Revenue estimates for 2024 and 2025 are raised by 11% and 21%, respectively, to Rmb390.8 billion and Rmb49 billion [23][24] - The report projects a free cash flow yield increasing from 6% in 2024 to 10% in 2026 [4][28] - CATL's market capitalization is currently Rmb779.949 billion, with a share price of Rmb158.00 as of March 8, 2024 [7] Market Share and Competitive Position - CATL maintains a stable market share of approximately 46% in China and 37% globally as of 2023 [10][82] - The company is expected to account for 63% of new models launched in 2024, up from 45% in 2023, indicating strong demand for "CATL Inside" models [58][77] - CATL's market share in the EU rose to 36% in 2023, driven by strong sales from Tesla and other OEMs [60][62] Cost Efficiency and Production Capacity - CATL's new mega production lines are projected to reduce capital expenditures by over 40% while increasing production capacity significantly [12][44] - The company is expected to achieve unit operating expenses of US$55/kWh and capital expenditures of US$30/kWh in the coming years, which are substantially lower than global competitors [12][44] - CATL's R&D expenses are approximately US$3 billion annually, significantly higher than other global battery manufacturers, contributing to its competitive edge [36][37] Future Outlook - The report anticipates a robust growth trajectory for electric vehicle (EV) battery demand, projecting a 22% compound annual growth rate (CAGR) to approximately 3 TWh by 2030 [15][21] - CATL is expected to maintain a market share of 45% in China and 35% in the EU by 2030, with potential growth in the US market if technology licensing opportunities arise [15][72] - The company's bull case scenario values the stock at Rmb320, reflecting its potential as a cash cow or contract manufacturer in the EV supply chain [25][26]

Investment Rating - Maintain HOLD rating for NIO Inc (NIO US) with a revised target price of US$6 20, down from US$6 80 [2] Core Views - NIO's cash burn has accelerated despite the capital injection from CYVN, and the company shows no clear strategy to achieve profitability [2] - The company's 4Q23 earnings missed expectations, particularly in other income and SG&A expenses, with an operating loss of RMB6 6bn, RMB1 9bn higher than projected [2] - Management's FY24E gross profit margin (GPM) guidance of 15-18% is considered overly optimistic, especially given the failure to achieve 15% GPM in 3Q23 and 4Q23 [2] - Even with a 15% vehicle GPM and disciplined R&D and SG&A spending, NIO's FY24E net loss is expected to exceed RMB10bn, far from profitability [2] Financial Performance - 4Q23 revenue and gross profit from vehicles were in line with forecasts, but vehicle GPM of 11 9% missed the guidance of 15% [2] - Gross margin for other revenue was -34%, below the projected -25%, indicating that the elimination of service benefits is impacting margins more than expected [2] - R&D and SG&A expenses in 4Q23 were RMB720mn higher than estimates, contributing to the larger-than-expected operating loss [2] - FY24E sales volume forecast has been cut from 0 21mn units to 0 19mn units due to delayed deliveries of the second brand Alps [2] Earnings and Valuation - FY24E net loss revised from RMB14 7bn to RMB17 2bn, reflecting higher-than-expected costs and lower margins [2] - Target price cut to US$6 20 based on 1 4x revised FY24E revenue estimates, compared to Li Auto's 1 3x FY24E P/S [2] - NIO's profitability remains significantly weaker than peers like Li Auto, which trades at a lower P/S multiple [2] Quarterly Results - 4Q23 sales volume was 50,045 units, down 9 7% QoQ but up 25 0% YoY [7] - Overall ASP in 4Q23 was RMB341,756, down 0 6% QoQ and 14 8% YoY [7] - Gross margin improved to 7 5% in 4Q23, up 3 6ppt YoY but down 0 5ppt QoQ [7] - Operating margin was -38 7% in 4Q23, a decline of 13 3ppt QoQ [7] Financial Summary - FY23E revenue is projected at RMB55,618mn, with a gross margin of 5 5% [9] - FY24E revenue is expected to grow 17 3% to RMB65,239mn, with a gross margin of 8 1% [9] - FY24E operating profit is forecast at a loss of RMB18,814mn, improving from FY23E's loss of RMB22,655mn [9] - Net profit for FY24E is projected at a loss of RMB17,170mn, slightly better than FY23E's loss of RMB21,147mn [9] Cash Flow and Balance Sheet - FY23E net cash from operations is expected to be negative at RMB1,872mn, worsening to RMB10,446mn in FY24E [10] - Cash and equivalents are projected to decline from RMB32,935mn in FY23E to RMB22,783mn in FY24E [9] - Total liabilities are expected to decrease slightly from RMB87,787mn in FY23E to RMB74,228mn in FY24E [9] Growth and Profitability - FY24E revenue growth is forecast at 17 3%, with gross profit growth of 72 8% [10] - Operating margin is expected to improve from -40 7% in FY23E to -28 8% in FY24E [10] - Adjusted net profit margin is projected to improve from -33 2% in FY23E to -23 4% in FY24E [10]

M N 6 Mar 2024 CMB International Global Markets | Equity Research | Company Update Yuexiu Transport (1052 HK) 2023 core profit +91% YoY but below estimates; >7% yield + potential asset injection Target Price HK$7.20 Yuexiu Transport’s net profit in 2023 grew 69% YoY to RMB765mn. Adjusted (Previous TP HK$7.50) for RMB100mn of non-cash impairment on Shantou Bay Bridge, the core net Up/Downside 57.2% profit would be RMB865mn (+91% YoY), 10%/8% below our/consensus Current Price HK$4.58 forecast as the gross mar ...

Investment Rating - The report indicates that the company is expected to achieve AGI (Artificial General Intelligence) by 2027, with significant advancements anticipated in the near future [30][32]. Core Insights - The company has started training a 125 trillion parameter multimodal model, originally planned for release in 2025, but the launch was canceled due to high inference costs [31]. - The training of GPT-5 was completed in December 2023, achieving a proto AGI with an IQ of 48 [30][33]. - The report discusses the correlation between the number of parameters in AI models and their performance, suggesting that a model with around 100 trillion parameters could match human-level intelligence [6][9]. Summary by Sections Model Development - The company has been working on a model with 125 trillion parameters, which is significantly larger than previous models like GPT-3 and GPT-4 [31][32]. - The original GPT-5 was planned for release in 2025 but has been renamed due to the cancellation of its launch [31]. Performance Metrics - The report highlights that the performance of AI models tends to reach human-level capabilities when the parameter count approaches that of the human brain, estimated at around 100 trillion synapses [6][9]. - The training of GPT-4 was completed with a parameter count of 1 trillion, while the full model is expected to be much larger [99][101]. Future Projections - The company aims to achieve full AGI by 2027, with various stages of model development planned leading up to that date [30][32]. - The report suggests that the advancements in AI capabilities are driven by increased computing power and data availability, which have been significantly enhanced in recent years [39][40].

M N 1 Mar 2024 CMB International Global Markets | Equity Research | Company Update Salesforce (CRM US) 4Q results in-line; eye on AI development Target Price US$350.00 Salesforce reported 4QFY24 financial results: total revenue was up 10.8% YoY (Previous TP US$329.30) to US$9.29bn, in line with consensus estimate of US$9.22bn. FY24 total revenue Up/Downside 16.8% was up 11.2% YoY to US$34.9bn. Non-GAAP operating income grew by 19.3% Current Price US$299.77 YoY to US$2.92bn in 4QFY24, also in line with conse ...