First Shanghai Upgrades Netflix to Buy From Hold, Adjusts Price Target to $742 From $690
First Shanghai: Rated bilibili-W(09626) as 'buy', with a target price of HKD 156.23.
Bilibili is expected to achieve Non-GAAP operation profit breakeven in Q3.
Brokerage Focus: First Shanghai: 'Three Strategies' Drive Bilibili (09626) Game Business to Rebound in the Second Half of the Year, Recommended to Buy Rating.
Jingu Finance News | First Shanghai released a research report, bilibili (BILI.US/09626) Q1 revenue was 5.66 billion yuan, up 11.7% year-on-year, slightly higher than the market's consensus expectations. Gross margin was 28.3%, up 6.5pcts year-on-year, mainly due to the increase in the proportion of high-gross-margin advertising business and optimization on the cost side; Operating profit margin was -14.5%, narrowing by 12.6% year-on-year. GAAP net loss was 0.76 billion yuan; non-GAAP net loss was 0.44 billion yuan, narrowing by 55.8% year-on-year, slightly higher than the market's consensus expected loss of 0.5 billion yuan. Next quarter revenue is expected to achieve growth.
Brokerage First Shanghai maintains a 'buy' rating for China Water (00855), pointing out its core business stability and entering a high-quality development stage.
First Shanghai issued a report commenting on China Water's (00855) performance for 23/24 fiscal year. During the reporting period, the company's revenue decreased by 9.4% year-on-year to HKD12.86 billion, and net income decreased by 16.1% year-on-year to HKD2.59 billion. The non-generally accepted accounting principles net profit, excluding the impact of exchange rate fluctuations, also decreased by 4.0% year-on-year. The decline in the company's performance during the reporting period was mainly due to the decrease in non-core business income and the reduction in connecting and construction service income for urban water supply and environmental protection businesses. Although the company's performance declined in the 23/24 fiscal year, its core business, such as water supply, drinking water, and environmental protection operation services, remained stable.
Brokerage focuses on First Shanghai's initial buy rating of Kuaishou (01024), with a target price of 60 Hong Kong dollars and expected high-speed profit growth.
Jingu Cai Xun | First Shanghai covers Kuaishou (01024) for the first time. It is expected that as user stickiness and commercial capabilities continue to improve, the company's advertising and e-commerce business will grow rapidly. The target price of the company is HKD 60, corresponding to 13 times PE in 2025, and there is a 26% upside potential compared to the current price. A buy rating is given. The bank pointed out that online marketing business is one of Kuaishou's main sources of disciples, and its revenue maintains steady growth, while internal circulating advertising is expected to become the main driving force of Kuaishou's advertising revenue. As for the e-commerce business, as an important engine for Kuaishou's future growth, Kuaishou has opened up a cross-category shelf scene.
Brokerage Focus: First Shanghai initiates a buy rating for PetroChina (00857) with a target price of HKD 10.06.
First Shanghai's research report states that PetroChina (00857), as an oil & gas company with integrated operation in the upstream exploration, development, storage and transportation, midstream refining and chemical, downstream sales, has strong risk resistance. At the same time, as the oil company with the largest reserves in China, the company has excellent resource endowment. The policy background of increasing reserves and production highlights the company's full industry chain advantages, and the income level of midstream and downstream business is expected to be significantly improved. The bank believes that the oil and gas mining sector revenue of the company is highly positively correlated with international oil prices, and upstream oil and gas resource business will operate at high oil prices.
First Shanghai: Tencent (00700) released Xingmai Network 2.0 AI large-scale model training efficiency increased by 20%.
The communication efficiency of Tencent's (00700) StarLink Network improved by 60%, and the MoE large model training efficiency improved by 20%.
Ruichang International Holdings (01334.HK) will start its IPO on June 28th with an offering price per share ranging from HKD 1.05 to HKD 1.39.
On June 28th, Glory Times reported that Ruichang International Holdings (01334.HK) announced that it plans to globally issue 125 million shares, sell 12.5 million shares in China's Hong Kong, sell 1.125 billion shares internationally, with an additional 15% over-allotment option; from June 28th, 2024 to July 5th, it will be accepting applications, with expected pricing date on July 8th; the sale price will be between HKD1.05-1.39 per share, with each trading unit being 2500 shares; First Shanghai is the sole sponsor; expected to begin trading on the Main Board of the Hong Kong Stock Exchange on July 10th, 2024.
New stock news|Richang International goes through hearing with HKEX. The company's market share in the domestic petroleum refining and petrochemical equipment industry is about 0.08%.
According to HKEX's disclosure on June 25th, Ruichang International Control Planning Co., Ltd. (hereinafter referred to as Ruichang International) went through the listing hearing on the HKEX main board, with First Shanghai as its exclusive sponsor.
[Brokerage Focus] First Shanghai initiates buy rating on Zhaojin Mining (01818), indicating it is a high-quality and high-growth company in the gold industry.
Jingu Finance News | First Shanghai released research reports indicating that Zhaojin Mining (01818) achieved a sales revenue of RMB 8.424 billion for the full year of 2023, a growth of 6.82% compared to the previous year; a gross profit of RMB 3.37 billion, a YoY growth of 26.90%; a gross margin of 40.1%, a YoY increase of 6.33 percentage points; and a net income attributable to shareholders of RMB 686 million, a YoY growth of 70.77%, achieving significant performance growth. The company's total gold production in 2023 was 24.68 tons, a YoY decrease of 9.75%; of which mineral gold production was 17.58 tons, a YoY decrease of 8.63%.
First Shanghai maintains a "buy" rating for Sino Biopharm (01177) with a target price of HKD 3.25.
First Shanghai expects that innovative products in 2025 will account for 47% of Sino Biopharm's (01177) revenue.
[Brokerage Focus] First Shanghai cuts Hengan Int'l (01044) target price by 20%, but expects its performance to be better than the industry.
First Shanghai's research report states that Hengan Int'l (01044) saw a 5.1% increase in revenue to HKD 23.77 billion in 2023 (benefiting from the boost in tissue sales (+12.2%) and fast-growing e-commerce channel (+17.7%, accounting for 30.1% of revenue)). Gross margin declined by 0.3 percentage points to 33.7% (mainly due to the rise in raw material prices in the first half of the year and increased promotion expenses). The bank predicts fierce competition in the industry in 2024, but expects the group to outperform the industry. It is expected that the revenue of tissue, sanitary napkins and diaper business will increase by low single digits in 2024.
First Shanghai: Maintains a "buy" rating for Sany Int'l (00631), with a target price of HKD 8.12.
First Shanghai adjusted Sany Int'l (00631) net income attributable to shareholders forecast for 2024-2026 to 2.193 billion/2.534 billion/2.958 billion yuan.
[Brokerage Focus] First Shanghai Raises Meituan's (03690) Target Price by 4%, Expects Further Profit Contribution Release.
First Shanghai's research report states that in Q1 2024, Meituan's revenue and profit exceeded market expectations, mainly due to a 28% unexpected growth in takeaway orders and a significant reduction in losses from community group buying. The report points out that Meituan's core local business operation profit will continue to improve, and new businesses' losses will continue to narrow, emphasizing high-quality development. The report believes that Meituan's advantage in takeaway business will maintain a 70% market share, placing it in an absolute leadership position, and can increase the average unit economics profit through subsequent refinement of operations, reduction of subsidies, adjustment of capacity structure and increase in commission rate. Based on the local living business,
Brokerage focuses on Sany Int'l (00631), raising target price by 27% due to sustained growth in its main business, bullish on medium to long-term development.
First Shanghai's research report states that Sany Int'l (00631) achieved record high performance in 2023, mainly due to the continuous penetration of intelligent and electric products in the market, which drove significant growth in revenue for fully mechanized mining, mining trucks, wide-body trucks and large port machinery, as well as a substantial increase in international sales revenue brought about by continuous internationalization. First-quarter performance was lower than expected, mainly due to the impact of the coal industry's business climate resulting in lower-than-expected revenue in the mining equipment sector. The bank pointed out that based on the development potential of the company's emerging aviation equipment and oil and gas business, as well as the sufficient backlog of orders in the mining equipment and logistics equipment sectors and the company's intelligence and internationalization.
First Shanghai Investments AGM Wins Unanimous Support
[Broker Focus] The first Shanghai to Alibaba (09988) purchase rating indicates that GMV is reshaping growth
Jinwu Financial News | According to the First Shanghai Development Research Report, Alibaba (09988) e-commerce GMV experienced good growth this quarter, indicating that the e-commerce business may have reached a turning point after experiencing continuous competition over the past few years. The bank believes that the performance in the second half of the year is particularly important. Additionally, in June 2024, the company will pay regular dividends and a one-time special dividend for the fiscal year 2024, totaling approximately US$4 billion. The company plans to complete the second conversion to a dual major listing in Hong Kong in August 2024. It is expected that it will be included in the Hong Kong Stock Connect in the future if it meets the conditions. The bank mentioned that revenue from core public cloud products recorded double-digit year-on-year growth this quarter
First Shanghai: Target price of HK$9.06 for a “buy” rating for BOE Precision Electronics (00710)
First Shanghai predicts BOE Precision Electronics (00710)'s revenue for 2024-2025 to be HK$12.6 billion, HK$13.6 billion, and HK$15.2 billion, respectively.
[Broker Focus] The first purchase rating from Shanghai to BOE Precision Electronics (00710) indicates that last year's performance fell short of expectations
Jinwu Financial News | According to the First Shanghai Development Report, BOE Precision Electronics (00710) is BOE's only vehicle display module and system operation platform, providing customers with vehicle display assemblies and smart vehicle display systems. Revenue of HK$10.76 billion in 2023 increased by 0.4%; net profit of HK$475 million, a decrease of 18%, lower than market expectations. The pressure on performance was mainly due to pressure on product prices in the second quarter, depreciation of the RMB, inventory depreciation, and cost pressure brought about by a steep decline in the commissioning of the Chengdu factory. The bank mentioned that the overseas automotive display market is far larger than the domestic market, and the company has set up an overseas offensive mission team, which is expected
[Broker Focus] The target price of Shanghai Shengxin Oriental (09901) is still optimistic about the long-term development prospects of the industry until HK$87.1
Jinwu Financial News | According to the First Shanghai Development Research Report, as of February 29, '24, New Oriental (09901) FY24Q3 was +60.1% year-on-year to US$1.27 billion, higher than the previous company's performance guidelines (US$1,071-US$1,094 million). Net operating profit of USD 113 million, +70.6% year over year; non-GAAP operating profit of USD 141 million, +60.3% year over year; profit to mother of USD 87 million, +6.8% year over year. Non-GAAP net profit was $105 million, +9.8% YoY. The bank refers to maintaining long-term development for the industry
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