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China Automobile Weekly / LINK REIT / Edge Medical / Foxconn Industrial Internet
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Sector Update | Automobile
October NEV sales hit a record 1.94m on exports; domestic NEV sales fell 9% yoy. China extended battery-export-control suspension to 10 Jan 27. Momenta formed a 51:49 intelligent-driving JV with SAIC to aid overseas expansion. Hesai reported mixed 3Q26 results and expects robotics to contribute 50-60% of 2027 revenue. We estimate XPeng’s 3Q26 net loss at Rmb1b. Maintain MARKET WEIGHT; BUYs: BYD, Geely; SELLs: Li Auto, XPeng.
Company Results | LINK REIT (823 HK/BUY/HK$41.50/Target: HK$45.70)
1HFY27 DPU rose 0.3% yoy to 127.25 HK cents, accounting for 51% of our FY27 forecast, as cost control offset a retail rental reversion of -7.5% in Hong Kong. Management reiterated its FY27 reversion guidance and is planning HK$1b-2b of unit buybacks in 2HFY27. Four non-core disposals in 2026 will recycle about HK$6.3b. The Eastpoint Mall stake marks a return to acquisitions and is expected to sharpen Link REIT’s focus. We increase FY27-29 earnings by 0.5%. Maintain BUY. Raise target price to HK$45.70.
Company Update | Edge Medical (2675 HK/BUY/HK$27.88/Target: HK$37.00)
Our industry check has shown that fierce price competition in the surgical robot segment may lead to slower-than-expected revenue growth and depress profit margins for Edge Medical in 2026. Edge Medical expects to launch new products in 2027 competing directly with Intuitive Surgical’s most advanced model – da Vinci 5. The move will also allow the company to price the new products favourably and promote a strategic shift towards high-end market share. Maintain BUY. Lower target price to HK$37.00 to reflect short-term price pressure.
Company Update | Foxconn Industrial Internet (601138 CH/BUY/Rmb43.35/Target: Rmb77.60)
FII’s parent company Hon Hai Precision remains well positioned for double-digit revenue growth in 2027, supported by sustained AI-rack demand and rising ASIC adoption. Vertically-integrated content and consignment should strengthen gross margin and capital efficiency, while additional NeoCloud customers provide further share-gain potential. Data centre site readiness and component shortages remain the main constraints. Maintain BUY with a target price of Rmb77.60.
Top Stories
Sector Update | Automobile
October NEV sales hit a record 1.94m on exports; domestic NEV sales fell 9% yoy. China extended battery-export-control suspension to 10 Jan 27. Momenta formed a 51:49 intelligent-driving JV with SAIC to aid overseas expansion. Hesai reported mixed 3Q26 results and expects robotics to contribute 50-60% of 2027 revenue. We estimate XPeng’s 3Q26 net loss at Rmb1b. Maintain MARKET WEIGHT; BUYs: BYD, Geely; SELLs: Li Auto, XPeng.
Company Results | LINK REIT (823 HK/BUY/HK$41.50/Target: HK$45.70)
1HFY27 DPU rose 0.3% yoy to 127.25 HK cents, accounting for 51% of our FY27 forecast, as cost control offset a retail rental reversion of -7.5% in Hong Kong. Management reiterated its FY27 reversion guidance and is planning HK$1b-2b of unit buybacks in 2HFY27. Four non-core disposals in 2026 will recycle about HK$6.3b. The Eastpoint Mall stake marks a return to acquisitions and is expected to sharpen Link REIT’s focus. We increase FY27-29 earnings by 0.5%. Maintain BUY. Raise target price to HK$45.70.
Company Update | Edge Medical (2675 HK/BUY/HK$27.88/Target: HK$37.00)
Our industry check has shown that fierce price competition in the surgical robot segment may lead to slower-than-expected revenue growth and depress profit margins for Edge Medical in 2026. Edge Medical expects to launch new products in 2027 competing directly with Intuitive Surgical’s most advanced model – da Vinci 5. The move will also allow the company to price the new products favourably and promote a strategic shift towards high-end market share. Maintain BUY. Lower target price to HK$37.00 to reflect short-term price pressure.
Company Update | Foxconn Industrial Internet (601138 CH/BUY/Rmb43.35/Target: Rmb77.60)
FII’s parent company Hon Hai Precision remains well positioned for double-digit revenue growth in 2027, supported by sustained AI-rack demand and rising ASIC adoption. Vertically-integrated content and consignment should strengthen gross margin and capital efficiency, while additional NeoCloud customers provide further share-gain potential. Data centre site readiness and component shortages remain the main constraints. Maintain BUY with a target price of Rmb77.60.
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