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HISENSE HA(921)
Analysis¡G
Hisense Home Appliances continues to deepen its ¡§AI-Empowered Advanced Manufacturing¡¨ strategy. Through globally leading technological innovation applications and an efficient, collaborative global manufacturing layout, the company systematically enhances manufacturing efficiency and sustainable development capabilities.
In terms of technological innovation, the Group is comprehensively promoting advanced technologies such as big data analytics, AI, digital twins, and 5G integrated applications. These efforts reduce abnormal losses like equipment failures, improve the first-pass yield of products, and drive a 21% year-on-year increase in manufacturing efficiency across its global factories. Regarding global manufacturing network development, the Group is pursuing a parallel ¡§new build + upgrade¡¨ strategy. This includes both constructing new capacity and upgrading existing facilities to continuously strengthen the resilience and responsiveness of its global supply chain. In September 2025, construction officially began on the Thailand Smart Manufacturing Industrial Park, positioned as a regional intelligent manufacturing base for Southeast Asia. The first phase plans to build smart production lines for refrigerators, washing machines, and air conditioners, fully benchmarking against lighthouse factory standards to create fully digitized and intelligent advanced production lines. In December 2025, the Changsha Home Appliances Industrial Park was completed and put into production on schedule. Its first-phase commercial air conditioner smart manufacturing base focuses on high-end products such as water chillers and multi-split systems. Through an efficient multi-base capacity coordination mechanism, this base has significantly improved the company¡¦s responsiveness to customer orders. The smooth advancement and commissioning of the Thailand and Changsha key bases mark important progress in Hisense Home Appliances¡¦ ¡§Global 7+1¡¨ manufacturing network layout. This network covers the Asia-Pacific, ASEAN, North America, Central and South America, Middle East and Africa, Europe, India, and China regions. As a core pillar of the Group¡¦s globalization strategy, it effectively enhances supply chain resilience and localized response capabilities, providing solid production capacity support for the Group¡¦s continued expansion in global markets.
Hisense reported first-quarter 2026 revenue of RMB 23.06 billion, down 7.16% year-on-year. Net profit attributable to the parent company was RMB 1.035 billion, a slight decline of 8.22% year-on-year. Although profit dipped slightly, the net cash inflow from operating activities reached RMB 933 million in the first quarter, representing a massive 1,333.88% year-on-year surge. This reflects significant achievements in inventory optimization, channel management, and refined supply chain cost control. The financial structure remains robust, demonstrating strong cash flow generation and high-dividend defensiveness. The dividend payout ratio has stayed above 50% over the past two years. For the 2026 final dividend, the company will distribute RMB 1.265 per share (ex-dividend on June 30), offering a current dividend yield close to 6%.With the overseas restocking cycle expected to begin in the second half of this year, along with major sporting events such as the World Cup driving television and home appliance shipments, full-year 2026 revenue is projected to rebound to over RMB 90 billion, representing approximately 3% year-on-year growth. The Chinese government has recently increased subsidies for green white goods (such as high energy-efficiency air conditioners and refrigerators). As a leading first-tier brand, Hisense is well-positioned to capture a larger market share compared to smaller competitors.(I do not hold the above stock.)
Strategy¡G
Buy-in Price: $24.00, Target Price: $25.50-26.50, Cut Loss Price: $22.80
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ILUVATAR COREX(9903)
Analysis¡G
In terms of news flow, on June 5, the Shanghai Stock Exchange issued the "Announcement on the Adjustment of the Shanghai-Hong Kong Stock Connect Program Underlying Securities", and ILUVATAR COREX was officially included in the list of eligible stocks under the Hong Kong Stock Connect, effective from June 8. In 2025, the company recorded revenue of RMB 1.034 billion, representing a year-on-year increase of 91.6%; gross profit reached RMB 558 million, up 110.5% year-on-year; adjusted net loss was RMB 437.7 million, narrowing by 32.1% year-on-year, while gross margin expanded from 49.1% in 2024 to 54.0% in 2025. During the reporting period, following a product strategy driven by both training and inference needs, the company continued to iterate and upgrade its Tiange and Zhikai series. In 2025, revenue generated from the company's general-purpose GPU products reached RMB 922.6 million, up 149.6% year-on-year, accounting for 89.3% of total revenue for the year. Within this, the Tiange series contributed RMB 583.7 million, an increase of 116.7% year-on-year; the Zhikai series, as the core product in the inference segment, generated revenue of RMB 339 million, representing a sharp year-on-year increase of 238.2%. Based on its in-house developed Tiange and Zhikai series chips, the company provides customers with full-stack solutions ranging from single servers to AI computing clusters. In 2025, revenue from the company's AI computing solutions was RMB 96.1 million, accounting for 9.3% of total revenue; gross margin for this segment increased from 31.7% in 2024 to 41.5% in 2025. Benefiting from the rapid expansion of AI computing power demand and the accelerated advancement of domestic substitution, the company, as a pioneer in the domestic general-purpose GPU space, is poised to achieve nonlinear growth in the expansion of cloud service provider customers, leveraging its competitive advantages in the supply chain, its technical adaptability to the PD-separation architecture, and its continuously iterated and optimised software ecosystem.
Strategy¡G
Buy-in Price: $458.00, Target Price: $518.00, Cut Loss Price: $423.00
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Foryou Group (002906.CH) - Second Growth Curve Gradually Becoming Clear
Company profileForyou Corporation was established in 1993 and is mainly engaged in the R&D, production and sales of automotive electronics and precision die-casting businesses. The Company's automotive electronics business mainly covers two core sectors, namely smart cockpit and advanced driver-assistance systems. Its precision die-casting business is centred on precision mould design and manufacturing technology, covering aluminium alloy, magnesium alloy and zinc alloy product lines. In addition, it actively explores and develops AI, robotics and other related businesses, including optical communication modules, AI high-speed connectors, robotics and other related component businesses. In 2025, the Company reported revenue of RMB13,048 million, up 28.46% yoy; net profit attributable to the parent company was RMB782 million, up 20.00% yoy. Investment SummaryQ1 Revenue Maintained High Growth
In Q1 2026, the Company reported revenue/net profit attributable to the parent company/net profit excluding non-recurring items of RMB3,096 million/RMB166 million/RMB159 million, respectively (RMB, the same below), up 24.37%/6.61%/5.89% yoy, respectively. Gross margin was 16.5%, down 1.7 ppts yoy. The slower profit growth compared with revenue growth was mainly due to factors such as price competition and rising raw material prices. The Company has established a raw material price linkage mechanism with most of its customers, and its operating results are expected to improve significantly from Q2. Automotive Electronics Business Continued to Grow, With Its Leading Position in Smart Cockpit Firmly EstablishedThe Company's automotive electronics business reported revenue of RMB9,675 million in 2025, up 27.25% yoy, accounting for 74.15% of total revenue. CAGR reached 35.66% from 2020 to 2025, maintaining high-quality growth. The Company has built a comprehensive product matrix and solution capabilities in the smart cockpit field. The market shares of HUD, in-vehicle wireless charging and other products continued to rank first in China, while the market shares of LCD instrument panels and central control screens rapidly rose to the forefront of the industry. The Company's customer structure continued to optimise, with a low dependence on any single customer, and the revenue contribution from some new energy vehicle makers and international automotive brands increased. Revenue from customers including Changan, BAIC, Xiaomi, Dongfeng, STELLANTIS, SAIC Volkswagen, BYD, Xpeng, NIO and Leapmotor increased significantly. Leveraging the ADAYO Automotive Open Platform (AAOP), the Company provides customers with "one-stop" overall smart cockpit solutions based on its implementation capabilities in cockpit domain controllers across multiple platforms including Qualcomm, SemiDrive and MediaTek, as well as mainstream large models, demonstrating significant platform-based competitive advantages. Precision Die-Casting Business Improved Its Process Technologies, Enhancing Overall CompetitivenessThe Company overcame a number of difficult technical challenges in mould design and manufacturing, expanded the application of highly flame-retardant magnesium alloy materials, and promoted the deep integration of 3D vision guidance with AI and robotics to improve the flexible changeover capability of automated manufacturing cells. Its capabilities in complex and difficult production processes, including high-vacuum combined extrusion, friction stir welding of aluminium-magnesium alloys, profiling spraying, multi-spindle machining and vacuum adsorption, continued to improve. The precision die-casting business delivered particularly impressive performance in 2025, reporting revenue of RMB2,859 million, up 38.47% yoy, with growth exceeding that of the automotive electronics business. CAGR reached 35.08% from 2020 to 2025. Second Growth Curve Gradually Becoming Clear, with Capacity Expansion Releasing Growth MomentumThe Company actively explores non-automotive businesses such as AI and robotics: 1) In the AI infrastructure field, optical communication modules, high-speed connectors and data centre cooling system components have secured project nominations; 2) In the robotics field, the Company has received orders for robotics display screens and joint module components, and jointly developed robotics main and auxiliary controllers, with brand momentum surging and sales increasing exponentially. Following a record-high scale of capacity construction in 2025, capital expenditure is expected to remain at a high level in 2026, focusing on the Thailand Production Base, the expansion of the Automotive Electronics Huizhou Base, the expansion of the zinc alloy die-casting business in the AI field, and Phase III of the Precision Die-Casting Changxing Project. Capacity expansion is being carried out based on orders on hand, providing solid support for sustained business growth going forward. Among them, the Thailand Production Base is expected to commence production in Q4 2026, providing strong support for overseas business expansion. Investment ThesisThe Company's traditional automotive business is growing steadily and rapidly, while its non-automotive business offers enormous growth potential. We are optimistic about the long-term development of the Company and expect EPS to be 1.81/2.18/2.63 yuan respectively for 2026/2027/2028, a yoy increase of 22%/21%/21%. We offer a target price of 36.3 yuan, respectively 20/16.6/13.8x P/E for 2026/2027/2028, and an "Buy" rating. (Closing price as at 5 June) Historical P/E Band 
Source: Wind, Company, Phillip Securities Hong Kong Research
RiskProgress of new production line is below expectations
Electric vehicle sales fall short of expectations
Macroeconomic downturn affects product demand
Sharply rising raw material prices or sharply falling product prices Financials
(Closing price as at 5 June) Download PDF Version
| Recommendation on 9-6-2026 | | Recommendation | BUY (Initiation) | | Price on Recommendation Date | $ 28.340 | | Suggested purchase price | N/A | | Target Price | $ 36.300 |
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