Rating Quick Look: "Buy" for XIAOMI-W and Trip.com! Target price for MEITUAN lowered.

• BOCOM INTL: Lowers Target Price for MEITUAN to HKD 93

The report pointed out that MEITUAN announced organizational adjustments in early February, focusing on its two core businesses, offline retail and food delivery, to accelerate the flow of traffic and merchant resources. The company's founder continues to steer the direction of innovation, demonstrating the management team's unwavering commitment to technological innovation on a solid business foundation.

Despite intense industry competition, the report believes that MEITUAN's scale in offline retail and profitability in food delivery have been validated, with the management maintaining stability. It is expected that MEITUAN's core business will maintain a 17% revenue growth and 13% profit growth this year. Compared to the e-commerce industry, MEITUAN's key category market barriers are solid, and the sustainability of low-price competition remains to be observed.

Given its competitive advantage over e-commerce and significant room for increased user stickiness, BOCOM INTL believes that MEITUAN's valuation should fall between Alibaba, JD.com, and Pinduoduo.

• Lion Capital: Reiterates "Buy" Rating for XIAOMI-W

The bank pointed out that XIAOMI-W's performance in Q4 2023 is expected to remain stable, driven by the recovery in smartphone sales, with revenue and adjusted net profit expected to increase by 10% and 1.72 times year-on-year, reaching RMB 72.8 billion and RMB 4 billion, respectively.

Lion Capital stated that with the rise in average selling prices in mainland China and strong sales in emerging markets, smartphone revenue is showing positive year-on-year growth, and strict cost control will further improve the profit margin of the core business. The bank expects that after deducting RMB 2.4 billion in losses from electric vehicles, adjusted net profit will increase by 1.64 times year-on-year to approximately RMB 7.1 billion, with a profit margin of around 10%.

• Huaxing Securities: Downgrades Rating for SMIC to "Hold", Lowers Target Price from HKD 18 to HKD 14

The bank pointed out that SMIC's multi-year expansion plan is still steadily progressing, with a current preference for expanding production capacity in the N22-28 process to avoid competition at more mature 12-inch/8-inch process nodes, as other domestic peers also have relevant capacity and continue to expand in these more mature process areas. According to SMIC, the expansion of production capacity in the N22-28 process will be carried out in large wafer fabs worldwide.

Based on a 0.7 times forecasted P/B ratio for 2024 (previously 0.9 times), reflecting the company's emphasis on expansion rather than profitability, resulting in a significant decline in return on investment and profit growth. The bank predicts that SMIC's mid-term return on equity will only be at a low single-digit level, while its compound annual growth rate in earnings per share from 2024 to 2026 will be 25%.

• CICC International: Maintains "Buy" Rating for Ctrip Group-S, Raises Target Price to HKD 437

Ctrip has repurchased USD 224 million in ADS since September 2023 and announced a USD 300 million shareholder feedback plan (repurchase/cash dividends, etc.), providing additional support to the stock price. During the Spring Festival holiday, domestic hotel bookings and flight bookings through Ctrip increased by 60% and 50% year-on-year, respectively, surpassing the levels of 2019 for outbound hotel and flight bookings.

Due to the low base effect year-on-year in January, it is expected that the first-quarter performance growth rate will still be impressive. In 2024, the company's performance is expected to benefit from the strong domestic tourism momentum and overseas expansion efforts, with the large-scale model and content marketing expected to continue optimizing costs. UBS: Maintains "Buy" rating on AIA Group, with target price lowered from HKD 95 to HKD 90

The bank pointed out that AIA Group will release its 2023 fiscal year performance before the market opens on March 14. It is forecasted that the new business value (VNB) calculated in actual exchange rate (AER) and constant exchange rate (CER) terms is expected to grow by 31.5% and 34% annually. This is a slowdown compared to the 28% and 26% year-on-year growth in VNB in the fourth quarter of last year, and the 33% and 36% growth in the first three quarters of last year.

In the Hong Kong market, the growth in the fourth quarter of last year was mainly driven by the contribution of Mainland Chinese visitors (MCV) to VNB. It is predicted that the VNB in Hong Kong for the whole of last year could grow by over 90%. This year, the demand for MCV is expected to continue due to the wealth diversification demand from the ongoing interest rate decline, as well as support from the Greater Bay Area plan and other factors.

UBS predicts that AIA's post-tax operating profit in 2023 will see a slowing annual growth rate, with an estimated increase of about 3% in the second half of last year. The dividend per share is expected to increase by 5% to HKD 1.61. The forecast for post-tax net profit in 2023 and 2024 has been lowered by 7% and 4% respectively, while the intrinsic value forecast for 2023 has been reduced by 1%.