Earnings beat in 2020. Tigermed announced positive profit alert that its attributable net profit in 2020 rallied 100-115% YoY to RMB1,683-1,810mn (higher than our estimate of 90% YoY growth), and attributable recurring net profit grew 20-33% YoY to RMB670-742mn (vs our estimate of 23% YoY growth). Tigermed recognized RMB1.0-1.1bn one-off fair value gains and investment gains in 2020 vs RMB283mn one-off gains in 2019. Strong growth momentum continued despite challenging COVID-19 pandemic in 2020. Recall that Tigermed’s operation was interrupted by COVID-19 in the first half of 2020. As the pandemic got largely controlled in China, clinical trial operations started to normalize from 2Q20, leading to recovery in Tigermed’s domestic revenue. However, the pandemic remained serious in overseas regions such as the US and Europe. As a result, the overseas CRO demand, such as data management services and Frontage's BIO, CMC, DMPK services, were negatively impacted. In 1H20, Tigermed received 42% of total revenue from overseas and 40% of gross profit from overseas. We forecast Tigermed to register 27% YoY revenue growth in 2H20E, accelerating from 9% YoY growth in 1H20. Looking into 2021, we expect the COVID-19 epidemic to gradually ease thanks to the wide availability of vaccines, which will drive further business recovery for Tigermed. We expect Tigermed’s revenue growth to accelerate to 30% YoY in 2021E and 28% YoY in 2022E. Global expansion to drive long-term growth. Given China’s large patient pool, international pharmaceutical companies are including China as one site in MRCTs to speed up the enrollment of patients. Meanwhile, Chinese biotech companies are initiating more MRCTs for the purpose of product registration in overseas countries. Tigermed provides clinical CRO services for Chinese innovative drugs to go global and multinational enterprises’ drugs to enter Chinese market. Meanwhile, we expect Tigermed to further expand its overseas business network to become a clinical CRO company with global operations. The Company already has established networks in Asia Pacific regions, while US market could be the next emphasis. Maintain BUY. We raised our 2020E/21E net profit forecasts by 8.2%/0.3%, respectively, to factor in one-off gains and strong core business growth. We raised our DCF-based TP to RMB187.23 (WACC: 9.84%, Terminal growth: 4.0%).

Sunway released FY20E earnings preview with net profit growth between -4.9% and 4.9%, with mid-point of RMB1.0bn which is 23%/24% below our/consensus estimates. By 4Q20, we estimate revenue/net profit of RMB1,832/274mn, up 18% /42% YoY. We believe the miss is mainly due to slower antenna, GPM pressure, higher R&D and RMB appreciation. We cut FY20-22E estimates by 17-27% to reflect more conservative assumptions, and trimmed our TP to RMB46.7 based on same 31.4x FY21E P/E. We expect near-term pressure on stock price, but we maintain our positive view on Sunway’s antenna/wireless charging with 32%/51% sales CAGR in FY20-23E given strong 5G smartphone shipment and rapid adoption of wireless charging. Maintain BUY. Weaker 4Q20 due to slower antenna and FX impact. We believe the miss was mainly due to 1) slower antenna and GPM pressure due to competition, 2) product launch delay of major clients; 3) domestic client impact on macro uncertainties, 4) foreign exchange loss due to RMB appreciation, and 5) higher R&D expense and share-based compensation. By 4Q20, revenue/net profit grew 18%/43% YoY, and GPM came in at 34.0% (vs 33.3% in 4Q19). Positive outlook for 5G antenna upgrade and wireless charging. As global leader in antenna and wireless charging, we expect Sunway to accelerate category expansion in both Apple/Android camp ranging from smartphones to tablets to AIoT (Watch/TWS/band). We forecast antenna to grow 32% FY20-23E CAGR, driven by share gain for LDS antenna and 5G antenna upgrade. Also, we expect Sunway’s wireless charging to grow 51% CAGR in FY20-23E given share gain in iPhone/iPad/wearables, Android adoption and product launch of transmitters (e.g. Magsafe and Airpower). Maintain BUY; lower TP to RMB46.7. We adjusted our estimates and lower TP to RMB46.7 (same 31x FY21/P/E) to reflect more conservative revenue and margin assumptions. We expect near-term pressure on stock price, but we recommend to accumulate after correction as we believe Sunway will benefit from 5G smartphone shipment and rapid adoption of wireless charging. Potential risks include slower-than-expected market share gain and delay in 5G upgrades.

ZTE announced FY20preliminary results with revenue/net profit growth of +11.7%/-15.3% YoY, largely in-line with our/consensus estimates, thanks to solid growthacross all segments, share gain in China and improving profitability overseas. By4Q20, revenue/net profit grew 3%/62% YoY to RMB27.3bn/1.66bn. In a mixedbackdrop of global 5G deployment and macro uncertainties, we believe ZTE iswell positioned to seize the opportunities from “New Infrastructure” initiative and5G network upgrade amid Huawei uncertainties. We slightly revised our forecastsand raised our TP to RMB41.7based on same 31.2x FY21E P/E. Catalystsinclude 5G BTS tenders and 2021operator capex budget.n FY20largely in-line; Solid growth across all segments. Despitechallenges from COVID-19and macro uncertainties, ZTE achieved salesgrowth of 11.7% YoY in FY20E, driven by solid growth from both domesticand overseas markets and all three business segments (carrier’s network,consumer business and government/corporate business). Net profit declined15.3% YoY in FY20, mainly due to one-time asset disposal gain in 3Q19.n Improving operating and financial metrics. ZTE reported record-highoperating cashflow of RMB10.23bn in FY20E, up 37.4% YoY, while gearingratio improved to 69.5% from 73.1% in FY19. We believe ZTE will continueto improve its working capital and optimize balance sheet structure.n Major beneficiary of global 5G deployment. As we believe Chineseoperators will kick off next 5G BTS tender in 1Q21E, we expect 5G BTS net-adds to reach 800k/1mn (including CBN) in FY21E/22E and ZTE’s 5G marketshare in China will gradually ramp to 35% (vs 30% in FY20). Thanks to globaleconomic recovery and resumption of 5G BTS rollout post COVID-19, weexpect domestic/overseas revenue from carrier’s network to grow at 9%/18%CAGR during FY21-23E.n Reiterate BUY; Lift TP to RMB41.7. We adjusted our forecasts to reflectbetter operating leverage and new FX assumptions. We slightly raised ourtarget price to RMB41.7based on same 31.2x FY21E P/E, in line with 2-yearhistorical forward P/E. Trading at 25.5x FY21E P/E (1-sd below 2-year avg.),we think the stock is attractive, vs 26% EPS FY21-23E CAGR. Risks includeUS-China disputes, component restriction and 5G deployment delays.

Reiterate BUY. We are more bullish on Zoomlion given: (1) High certainty onconcrete machinery growth in 2021E; (2) Explosive growth of excavator sales; (3)Resilient margin outlook. We raise our 2020E-22E earnings forecast by 6-7%after modelling higher sales volume across different segments. We believe theconsensus remains conservative and our new net profit forecast for 2021E/22Eare 13%/15% above that. We raise our TP from RMB9.56to RMB17.8, based on16x 2021E (up from 10x). Key catalysts: (1) strong machinery sales in 1Q21E, (2)completion of share placement in 1Q21E.n 2020E preliminary results. Zoomlion released a positive profit alert last week,stating that net profit in 2020E is expected to grow 60-72% YoY to RMB7.0-7.5bn. This implies net profit of RMB1.3-1.8bn in 4Q20E, up 46%-102% YoY.We estimate Zoomlion achieved revenue of RMB20bn from concretemachinery (+44% YoY) and RMB35bn from crane machinery (+58% YoY) in2020E. Besides, we believe gross margin in 4Q20rebounded QoQ, helped bycost control.n High certainty on concrete machinery growth in 2021E. Zoomlion expectsthe industry growth rate of concrete machinery to reach 15%, driven by 10-20% of growth of pump truck and 20% growth of mixer truck. Zoomlion seeshigh certainty on concrete machinery as many infrastructure projects will enterthe construction stage this year after the completion of earthworks in 2020.Besides, the implementation of National Emission Standard (NES) VI startingin Jul 2021will continue to boost replacement demand.n Explosive growth of excavator to continue. We estimate Zoomliondelivered 7k units of excavator and generated RMB2.5bn revenue in 2020E.Zoomlion targets to achieve 12-14k units of excavator sales in 2021E,representing a substantial growth YoY. For medium size excavators, Zoomlionis able to leverage its existing sales network for concrete machinery to speedup the penetration. Besides, Zoomlion, for the first time, delivered large sizeexcavators (45-48t) starting this year. Zoomlion maintains its strategic targetto become the top 5player in China in 3years and top 3player in 5years.

Profit surprise in 2020E. Hengli’s net profit in 2020E is expected to surge 58%-77% YoY to RMB2.05-2.3bn. This implies net profit of RMB575-828mn in 4Q20, up 52%-118% YoY. The earnings growth was driven by strong downstream demand (excavator) that boosted the sales of hydraulic cylinders, pump and valve, market share gain, as well as the reduction of SG&A expense ratio. We forecast a solid growth of excavator demand in 2021E. For the industry as a whole, major manufacturers of excavator delivered sales volume of 328k units in 2020, up 39% YoY, according to CCMA. In 4Q20, excavator sales grew 61% YoY. In 2021E, we expect excavator demand to grow 10% YoY (industry), driven by infrastructure spending growth, continuous trend of the substitution of labour and wheel loaders. We expect Hengli to deliver strong sales in 1Q21E. We estimate Hengli production volume of hydraulic cylinder (for excavator) surged 75% YoY in Jan. Besides, we expect the production volume of pump, valve and motor to remain strong. Based on our new assumptions, we forecast Hengli’s sales volume of hydraulic cylinder (for excavator) to grow 20% YoY in 2021E, while sales volume of pump and valve to grow 40% YoY. Structural growth trajectory remains solid. We forecast Hengli’s market share in hydraulic cylinder to increase from 50% in 2020E to 59% in 2022E. Besides, we expect pump & valve for large-size excavators, as well as non-standardized hydraulic components for various industries will serve as key drivers over the coming few years. Key risks: (1) Slowdown of construction activities; (2) risk of overseas expansion; (3) increase in raw materials cost.

BYD delivered outstanding auto sales in Dec. NEV sales reached 29K withflagship Han EV shipment exceeded 12k units in Dec. NEV sales volume hadaccounted for 44% of total auto sales in 2020. Looking ahead in 2021E, we stillsee several positive catalysts for BYD from 1) new DM EV model to boost sales;2) cooperation with DiDi to take the lead in the ride-hailing renewable cycle; 3)power battery capacity expansion to support EV sales; and 4) semiconductorsegment spin-off to release business value. We revised up BYD’s TP by 31% toRMB293.2. Reiterate BUY rating.n NEV sales speeded up in Dec. BYD announced that total auto sales volumeachieved 56K units in Dec, +30% YoY/+4%MoM.In Dec, NEV reached 29K,+120%YoY (NEPV 28K/+157%YoY, NECV 1K/-48%YoY). Delivery of Hancontinued to climb with a total of 12K units in Dec, up 19.6%MoM. The annualcumulative sales volume was 427K units/-7%YoY, in line with CMBIexpectation.n China NEV sales growth to accelerate in 2021E. We expect that the salesvolume of NEV in China will continue to rise at a high speed in 2021E. Given1) the strong NEV pipeline among all major OEMs; 2) the product recognitionfrom retail consumers; 3) the beginning of the first round of replacement cyclein ride-hailing business; 4) the gradual introduction of LFP version for existingmodels, we expect the penetration rate of NEV will exceed marketexpectations. Specifically, we expect the penetration rate of NEV to reach 7%in 2021E, with a corresponding sales volume of 1.92mn units, representing anincrease of 57% (1.66mn NEPV/260K NECV). NEV sales volume to increase 99% in 2021E. We estimate BYD’s NEVmarket share declined to 15% in 2020, due to epidemic impacts and laterelease of new vehicle model. Starting from 2021, BYD will use a brand newlogo and launch several new models including Qin Plus (based on the latestsuper hybrid DM-i platform), Song Pro DM, etc. We expect those measureswill boost its NEV sales. At the to-B end, we expect the cooperation model D1between BYD and DiDi to take lead in the ride-hailing renewable cycle. Weestimate D1 to have 66K units shipment in 2021E. As we believe theCompany’s NEV sector to maintain strong recovery, we expect BYD's marketshare in NEPV to continue to rebound to 20%, and that will boost NEV salesvolume to 364K units in 2021E, +99%YoY. We think BYD will gradually shiftits business focus to NEV from ICE (61% vs 39% in 2021E), and maintainrelatively stable ICE vehicle sales at 244K units, +3% YoY.

比亚迪发布了优秀的12月汽车销售数据。新能源汽车销量达2.9万量，其中旗舰车型汉出货量超1.2万辆。2020全年新能源汽车销售占比达44%。展望2021年，我们仍然能看见多项刺激比亚迪业务发展的催化剂，包括1）新的DM 乘用车型发布将继续推升车辆销售；2）与滴滴合作车款的推出将引领电召车辆更新周期；3）动力电池产能扩张将支持更多的电动汽车销售；以及4）半导体业务的分拆上市将释放业务价值。我们将比亚迪的目标价上调31%至293.2元人民币。重申买入评级。 新能源乘用车12月销售加速。比亚迪发布了 2020年 12月销量公告。汽车销量 5.6万辆，同比+30%/环比+4%。12月新能源汽车实现2.9万辆，同比增长120%（其中乘用车2.8万辆，同比+157%，商用车1,247辆，同比-48%）。汉销量继续爬坡，12月共交付1.2万辆，环比增长19.6%。全年累计销量 42.7万辆，同比-7%, 大致符合我们预期。 中国新能源汽车销售将在2021年加快。展望2021年，我们判断中国新能源汽车销量将继续提升。由于1）主机厂新能源车型投放力度加大，2）C 端消费者认知度提升，3）B 端网约车首轮更新潮来临以及4）磷酸铁锂车型逐步推出，我们预计新能源汽车渗透率有望超出此前预期。具体而言，我们预计2021年新能源汽车渗透率有望达到7%，对应销量为192万辆，同比增长57%（新能源乘用车166万，新能源商用车26万）。 2021年公司新能源汽车销量料同比增长99%。2020年比亚迪受疫情及新车发布较晚影响，新能源汽车渗透率有所下滑至15%。自2021年开始，公司将启动新车换标，并投放秦Plus（基于最新超级混动DM-i 平台），宋ProDM 等新车型，将提振新能源汽车销量，驱动新能源汽车方面将继续保持强势复苏态势。在to B 端，我们预计比亚迪与滴滴的合作车型D1有望在网约车换购周期中抢得先机，我们预计2021年滴滴有望实现6万辆。由于其在新能源汽车方面将继续保持强势复苏态势，我们预计比亚迪在新能源乘用车市场占有率有望继续提升至20%，对应销量36.4万辆，同比增长99%。我们认为比亚迪将把业务重点逐步转向新能源汽车方面，因此燃油车2021年增速将较为保守，预计销量达到24.4万辆，同比增长3%。 2020年盈利将达人民币53亿。基于公司的汽车销量和销售组合，我们对公司2020年全年的盈利测算上调1%至人民币53亿元。同时，我们对2021年新能源乘用车销量预测自30万量上调至36.4万量。基于上述展望调整，我们将2021年全年盈利预测上调11%至人民币77亿元。

We see potential re-rating opportunity on SANY given that: (1) excavator demandwill continue to be driven by structural drivers, making the upcoming sales moresustainable; (2) SANY’s digital transformation strategy will help widen itscompetitive edge over competitors; (3) Overseas expansion will offer hugeopportunity. As such, we believe market will gradually price SANY as a growthstock instead of a cyclical growth. We revised up our earnings forecast in 2020E-22E by 6-14%. Our new TP of RMB49.5is based on 22x 2021E PE (up from 17x),on the back of 22% earnings growth in 2021E. We believe surprise on excavatordemand in 1Q21E will serve as a strong near-term catalyst. Reiterate BUY.Digital transformation to enhance global competitiveness. SANY startedthe digital transformation of intelligent manufacturing years ago, which hasenabled SANY to gradually achieve higher production efficiency. In 2019,SANY’s revenue per employee reached US$590k, surpassing that ofCaterpillar (CAT US) (US$530k). Going forward, with the commencement ofmore light tower plants and further digital transformation, we expect SANY’sglobal competitiveness will be further enhanced.n Overseas opportunity. Caterpillar generated ~60% of revenue outside theUS, while Komatsu (6301JP) generated >70% of revenue outside Japan foryears. We see huge potential for SANY to expand outside China given thatoversea accounted for <20% of total revenue between 2019and 1H20. Withenhancing products quality and the continuous sales network construction, webelieve overseas markets will become an important revenue driver over thecoming years. We believe the increase in overseas exposure will smooth theearnings trend of SANY going forward, which will help boost the valuation.Higher industry forecast on excavator. According to CCMA, excavatorsales by major producers in China increased 39% YoY to 328k units in 2020,a record high. Going forward, we see the continuous replacement of labour,substitution of wheel loader and tightening emission standard as structuralgrowth drivers. We revise up our excavator demand growth forecast in 2021Eto 10% from 3%. Based on the feedback from the upstream supply chain, weexpect the excavator demand growth will remain strong in 1H21E. We expectexcavator sales growth of >70% YoY in 2M21E, which should surprise themarket on the upside.Key risks: (1) Risk of overseas business due to pandemic; (2) Slowdown ofconstruction activities; (3) Risk of expanding to financing business.

我们认为，在以下几个因素推动下，恒立液压20-22年盈利存在上升空间：（1）短期：12月恒立的排产计划意味着液压缸产量将环比增长20%，增长较预期强劲；（2）中期：在国产品牌挖掘机主机厂（恒立的客户）市场份额不断上升的背景下，恒立市场份额将稳步上升；（3）长期：泵阀以及其他产品的进口替代趋势明显。在上调销量和毛利率假设后，我们将20-22年盈利预测上调8-10%（较市场预期高9-10%）。我们一如既往偏好恒立在高端液压件行业的稳固地位，及实现进口替代的明确路线图。我们把目标价由87元上调至114.4元人民币,基于55倍2021年预测市盈率（较42倍的历史平均水平溢价30%）。 2021年挖掘机需求强劲。根据中国工程机械工业协会数据，主要挖掘机制造商在2020年前11个月销量为29.6万辆，同比增长37%。我们预计全年销量增长将达40%。在基建投资增长和挖掘机人工替代的趋势推动下，我们预计2021年挖掘机需求增速将较我们现时预测的3%增长为高。 恒立的增长是由结构性因素驱动的。我们预计2021年挖掘机需求的个位数增长将足够为恒立提供20%的收入增长，鉴于中国挖掘机制造商——其中大部分是恒立客户如三一重工（600031CH，买入）——市场份额扩张，这将有助提升恒立的市场份额。我们预测恒立液压油缸市场份额将由2020年的52%上升至2022年的61%。此外，我们预计大型挖掘机的泵阀以及各种行业的非标准化液压组件亦将驱动恒立增长。 最新生产计划显示2021年第一季度需求强劲。根据恒立12月的排产计划，液压缸（挖掘机用）预定产量将达到7.9万台，环比增长20%。我们预计这将转化为2021年1月全行业挖掘机需求约4万台，将大幅高于今年1月行业销量的9,900台。另一方面，我们预计恒立液压泵阀12月环比增长强劲。 主要风险：（1）建筑活动放缓；（2）海外扩张风险；（3）原材料成本增加。

We see potential earnings upside in 2020E-22E driven by several drivers: (1) Short term: Hengli’s production plan in Dec implies 20% MoM increase in hydraulic cylinders output volume, which is surprisingly strong; (2) Medium term: Solid market share gain on the back of the rising market share of Chinese-brand excavator manufactures (Hengli’s customers); (3) Long-term: Trend of import substitution of pump & valves and other products is clear. We revise up our earnings forecast in 2020E-22E by 8-10% (9-10% above consensus), after revising up both sales volume and gross margin assumptions. We continue to like Hengli’s solid position in the high-end hydraulic components industry with clear roadmap to achieve import substitution. Our TP is lifted to RMB114.4 from RMB87, based on 55x 2021E P/E (30% premium to the historical average of 42x). Resilient demand for excavator in 2021E. For the industry as a whole, major manufacturers of excavator delivered sales volume of 296k units in 11M20, up 37% YoY, according to CCMA. We expect the full year sales volume growth will reach ~40%. In 2021E, we see upside to our existing excavator demand growth forecast of 3%, driven by infrastructure spending growth and the continuous trend of the substitution of labour by excavators. Hengli’s growth is driven by structural factors. We estimate a single-digit growth of excavator demand will be enough for Hengli to deliver 20% revenue growth in 2021E, given that the Chinese excavator makers (majority of them are Hengli’s customers with high installation ratios), such as SANY Heavy (600031 CH, BUY), are gaining market share, which will drive Hengli’s share gain. We forecast Hengli’s market share in hydraulic cylinder to increase from 52% in 2020E to 61% in 2022E. Besides, we expect pump & valve for large-size excavators, as well as non-standardized hydraulic components for various industries will serve as other key drivers. Latest production plan suggests robust demand in 1Q21E. According to Hengli’s production plan in Dec, the scheduled production volume of hydraulic cylinder (for excavator) is expected to reach 79k units, up 20% MoM. We estimate this will translate into ~40k units for excavator demand for the industry in Jan 2021E, which is impressive given that the industry sales volume was only 9.9k units in Jan 2020. On the other hand, we expect Hengli’s hydraulic pump and valves will see strong growth in Dec on MoM basis. Key risks: (1) Slowdown of construction activities; (2) risk of overseas expansion; (3) increase in raw materials cost.

BYD announced that total auto sales volume achieved 48K units in Oct, anincrease of 16.1% YoY. Among these, NEPV achieved 22K units, an increase of83.1% YoY/ 18.5% MoM. The Company announced its 4Q20E earnings guidancewith a bottom-line range of RMB 4.2bn-4.6bn in 2021E. We believe BYD willbenefit most from recent improving sentiment on NEV, from both sales volumeand market sentiment perspective. We raised our bottom-line forecast by 24% toRMB 5.2bn in 2020E to reflect a higher ASP and GPM on auto segment.Reiterate BUY rating and raise TP to RMB223.8.BYD continues rapid growth in NEV segment in Oct. BYD sold 47K units(ICE+NEV) of auto in Oct, an increase of 16.1%YoY. Its NEV businessremains on the high growth path with a total sales volume of 23K units, anincrease of 84.7% YoY. Among these, NEPV achieved 22K units (+83.1%YoY) whereas NECV achieved 1.2K units (+123.2% YoY). We believe that thetotal delivery of model Han is in line with our expectations, with a total volumeof 7,545units in Oct. We expect that the sales volume of Han will continue torise MoM within the year as the production of the blade battery is ramping up.In terms of ICE, sales reached 25K units in Oct, down 14.2% YoY/up 9.9%MoM.3Q20achieved RMB1.75bn, an increase 1363% YoY, in line with theCompany’s earnings preview. Among them, BYD Electronics (285HK, BUY)contributed approximately RMB1.22mn while other segments contributedRMB527mn. We believe that a series of new models, underpinned byproduction ramp-up of blade battery, will support the sales performance in theshort term. We expect BYD will achieve total NEPV sales of 45K units in Nov& Dec, an increase of 112%YoY. We expect DM4.0(expected rollout in1Q21E) and new BEV platform (expected rollout in 2021Shanghai Auto Show)will further boost its NEV sales in 2021E.Higher ASP and GPM raise the 2021E bottom-line forecast. We expectthat strong sales of model Han among its NEPV will increase to 20% in NEVsales mixbased on our new calculation. Therefore, aggregate ASP for theNEPV segment increased by 9% to RMB187Kin 2020. In the meanwhile, webelieve that BYD will continue to utilize its cost control advantage, driving itsimprovement in GPM of auto segment. We therefore raised our 2021Eearnings forecast by 30% to RMB6.88mn.

In 3Q20, GPM was 11.0%, down 2.4ppt YoY, reflecting intensified market competition. The expense ratio was 9.6%, down 2.3ppt YoY (tax exp -0.1ppt, S&D exp -2.0ppt, Admin exp -0.3ppt). The decrease in S&D exp ratio was mainly due to 1) implementation of the new accounting standard in the current period which moves the car loan interest subsidy from S&D expense to revenue recognition offset; and 2) the YoY decrease of logistic expense and advertising expense. SAIC achieved a total investment income of RMB8.9bn in 3Q20, an increase of 19% YoY. Among which, investment income from JVs and associates was RMB6.6bn, an increase of 2.9% YoY. SAIC Volkswagen achieved sales of 454K units in 3Q20, down 4% YoY. SAIC GM achieved sales of 395K units, an increase of 3% YoY. We believe the main factor which contributes to YoY earning growth in 3Q20 was still the investment income from financial assets. The sales performance of major JVs is still mixed. SAIC Volkswagen launched a mid-term facelift version Santana in Oct (-23% YoY in 3Q20). At the end of Oct, the first BEV based on the MEB platform, namely ID.4 was put into production. We expect both new models to drive the recovery of the Volkswagen brand. However, the Skoda brand fell 29% YoY in 3Q20, which is still expected to drag down the recovery of SAIC Volkswagen in the short-term. For SAIC-GM, the sales volume of Excelle (英朗) in Sep exceeded 30K units after the re-launch of four-cylinder version. As a result, Buick achieved a 30% YoY growth in 3Q20. The sales of high-end brand Cadillac increased by 75% YoY given the strong performance in overall luxury segment. However, due to lack of brand power, Chevrolet declined by 47% YoY, dragged down the overall performance of SAIC GM.

中联重科第三季度利润强劲（同比增长85%），管理层对需求的展望（第四季度环比增长10%）和对毛利润率的展望（环比改善）表明业务前景仍然良好。我们认为最近因担心利润率而导致的股价回调过度，为良好的买入机会。我们将2020E-22E的盈利预测略微下调了2-4%，以反映更高的销量但更保守的毛利率预测。我们将基年延展至2021年，目标倍数为10倍P/E（之前为2020年12倍P/E），目标价从10.2人民币微调至9.56人民币。维持买入评级。 第三季度业绩亮点。第三季度净利润同比增长85%至16.7亿元人民币，处于公司于10月中旬发布的盈喜范围内（14.8-17.8亿元人民币）。收入同比增长73%至164亿元人民币，而毛利率同比收窄2.4个百分点、环比收窄1.8个百分点至27%。净经营现金流同比增长58%至26亿元人民币。 全业务分部强劲增长。前九个月，混凝土机械和起重机的收入分别同比增长34%和44%至137亿元人民币和236亿元人民币。农机收入同比增长35%。 就新业务而言，来自挖掘机的收入同比增长244%，而来自高空作业平台的收入同比增长60%。 料毛利率将在第四季度反弹。第三季度毛利率下降是由于：（1）利润率较低的小型汽车起重机和塔式起重机的销量增加；（2）利润率较低的混凝土搅拌车比混凝土泵的增长更快；（3）与现有业务相比，快速发展的高空作业平台和挖掘机利润率较低（尽管有所提高）。然而，由于（1）新业务利润率不断提高，以及（2）公司于第三季度开始实施的集中采购政策将有助于降低成本，因此管理层有信心在第四季度取得更高的利润率。 第四季度和和2021年前景乐观。管理层认为，持续稳健的基建和房地产投资，加上人工替代和严格的环境保护政策都是有利的推动因素。此外，大型企业将受惠于继续上升的行业集中度。管理层认为，这一轮上升周期将比上一轮更加强劲。

20年3季度美的业绩明显超于预期（就算不含一次性投资和公允价值收益），鉴于其具有极强竞争力的产品和强劲的出口订单增长，我们对4季度相当乐观。因此我们维持买入评级，并将目标价从上调至95.24元人民币，相当于22倍21财年预测市盈率（此前为20倍）。国内/国际同业的平均水平为21倍/17倍。 20财年3季度业绩表现强劲。公司3季度的销售额/净利润分别同比增长16％/32％至777/81亿元人民币，好于彭博预测9％/32％及招银国际预测8％/27％。我们认为这归因于：1）强劲的销售增长(内销及出口）以及2）可观的投资及公允价值收益。毛利率同比下降3.4个百分点，主要是由于：1）将安装费由从销售费用归入销售成本以及2）电商销售占比增加。但即使不包括一次性投资和公允价值收益，经调整净利润仍然取得了19％的同比增长，也是超预期的。 内销和出口销售均加速增长，空调是主要驱动力。公司内销和出口销售增速分别从上半年的下滑16％/0％改善至22％/18％。我们认为，国内销售增长主要由于美的在空调产品的市场份额提升（根据AVC数据，线上市场增加3个百分点至33％，线下市场增加6个百分点至35％）。我们认为很大的关键新的创新技术，像无风感系列和180％旋转风道等等。在我们看来，出口销售的增长加速更多是行业整体的增长加速，因为20年9月冰箱/洗衣机/空调的销售同比迅速增长57％/17％/15％。我们预测4季度销售会增长14％，净利润会增长24％。但是，尽管势头强劲，我们也应该意识到由于近期人民币升值，对毛利率也可能造成一些拖累。 库卡业务开始复苏。库卡在3季度实现了扭亏为盈，这无疑是超预期的，而且因为未来的订单也录得约20％的同比增长，因此4季度的销售可能会恢复增长。 至维持买入评级，将目标价上调至95.24为元人民币（上升空间为22％）。我们重申买入评级是因为：1）领先行业的销售增长；2）强劲的出口增长；3）持续的行业复苏和估值提升。我们将2020/21/22年预测净利润分别微调了+7％/0％/0％，以考虑销售增长的改善及毛利率的下降。我们的新目标价基于22倍的21财年预测市盈率（由于其增速持续比同行强劲，而从20倍提升至22倍）。该股目前的市盈率为18倍21年预测市盈率（国内同业平均为21倍）或1.9倍PEG（国内同业平均为2.9倍）。

Solid earnings growth in 3Q20. Tigermed reported 3Q20revenue ofRMB848mn, up 22.3% YoY, which accelerated from 8.6% YoY revenuegrowth in 1H20. Attributable net profit was up 81.4% YoY in 3Q20toRMB319mn, including RMB288mn one-off fair value gains and investmentgains. Adjusted net profit rose 29.4% YoY in 3Q20to RMB195mn, driven byboth solid topline growth and margin improvement. Gross margin improved2.89ppts in 3Q20vs 3Q19, mainly due to the consolidation of acquired targets,including MOSIM (an early-stage clinical CRO company) and Yaxincheng (amedical translation CRO company). Strong quarterly recovery. Recall that Tigermed’s operation was interruptedby COVID-19in the first half of 2020. As the pandemic got largely controlledin China, clinical trial operations started to normalize from 2Q20, leading torecovery in Tigermed’s domestic revenue. However, the COVID-19outbreakworsened in overseas regions such as the US and Europe. As a result, theoverseas CRO demand, such as data management services and Frontage'sBIO, CMC, DMPK services, were negatively impacted. In 1H20, Tigermedreceived 42% of total revenue from overseas and 40% of gross profit fromoverseas. We expect the COVID-19epidemic to gradually ease in 2021Ethanks to the wide supply of vaccines, which will drive further businessrecovery for Tigermed. H-share IPO brings sufficient capital for Tigermed’s global expansion.Tigermed has completed its dual-listing in HKEX in Aug 2020and raised atotal of HK$11.82bn net proceeds. With sufficient cash on hand, we expectTigermed to accelerate its pace of global expansion via both acquisitions andself-expansion. Given China’s large patient pool, international pharmaceuticalcompanies are including China as one site in MRCTs to speed up theenrollment of patients. Meanwhile, Chinese pharmaceutical companies aredoing many MRCTs for the purpose of product registration in overseascountries. Tigermed provides clinical CRO services for Chinese innovativeproducts to go global and multinational enterprises’ innovative products toenter Chinese market. The Company already has established good networkin Asia Pacific regions, while US market could be the next emphasis. Maintain BUY. We raised our 2020E/21E net profit forecasts by 90%/17%,respectively, to factor in fair value gains and investment gains, and raisedSOTP-based TP to RMB146.43, implying 70x FY22E P/E. We like Tigermedgiven its leading positioning in clinical CRO space and large potential inoverseas expansion.