For the exclusive use of VIPS@RISKMACRO.COM 9a0c3bf0514c11deab0a0014c2408514 What's Top of Mind in Macro Research: US recession fears likely overblown, market volatility, Europe/China economic weakness 7 August 2024 | 4:39PM EDT This week: n US: weaker data, but recession fears likely overblown n Markets: bad news is bad news n Europe and China: a weaker economic picture, too Transcript US: weaker data, but recession fears likely overblown We raised our 12m US recession odds by 10pp to 25% and now expect a ...

Investment Rating - The report indicates a positive outlook for imports with a score of +3, while exports received a score of 0, reflecting weaker performance [2]. Core Insights - China's export value growth was 7.0% year-over-year in July, which was below expectations, while import value growth was 7.2%, exceeding consensus forecasts [3][5]. - The trade surplus decreased to US$84.6 billion in July from US$99 billion in June, indicating a decline in export performance [5][9]. - Import strength was attributed to more working days in July this year compared to last year, contributing to a sequential growth of 4.0% in imports [5][6]. Summary by Category Export Performance - Year-over-year export growth moderated to 7.0% in July from 8.6% in June, with a sequential decline of 2.0% non-annualized [3][5]. - Exports to major trading partners showed mixed results, with exports to the US rising by 8.1% year-over-year and to the EU by 8.0% [6][10]. - Tech-related products, such as chips and automobiles, saw notable growth, with chip exports increasing by 27.7% year-over-year [7][11]. Import Performance - Import growth accelerated significantly to 7.2% year-over-year in July, compared to a decline of 2.3% in June, with a sequential increase of 4.0% [3][5]. - The most significant increases in imports were seen in automobiles, which rose by 17.3% year-over-year, and chips, which increased by 14.9% [8][12]. - Import value rose across major trading partners, with notable improvements from the US and EU [6][11].

8 August 2024 | 5:50AM EDT _ US Autos & Industrial Tech 2Q24 earnings recap, and thoughts on end market trends Coming out of 2Q24 earnings season, Street estimates on average moved lower for companies more tied to the auto end market (especially EV OEMs and auto suppliers), while estimates were generally revised up for companies with higher exposure to the datacenter market. In this note we show changes in Street consensus estimates and stock moves post earnings, as well as analyze end market demand trends ...

8 August 2024 | 12:50PM CST _ China Tower Corp. (0788.HK): 1H24 net profit largely in line; first interim dividend announced and a turnaround in FCF; Neutral We see encouraging signs from 1H24 results, including: 1) the announcement of an interim dividend for the first time; 2) a turnaround in free cash flow as previously guided; 3) a net debt decline resulting from cash flow improvements; and 4) net profit is largely in line. Additionally, management provided a more detailed guidance for 2024, including: 1 ...

Investment Rating - The report assigns a Buy rating to Kweichow Moutai with a 12-month price target of Rmb2,098 [3][4] Core Investment Thesis - Kweichow Moutai is the largest player in the China spirits industry with a 20% value share in 2022 [3] - The company benefits from strong fundamentals, high visibility, and upside from channel reforms [3] - Near-term earnings drivers include wholesale and direct sales growth, product portfolio enhancement, and price hikes [3] - Long-term growth is supported by supply-demand gap, market-driven pricing system, and growth of Moutai-flavor spirits [3] Financial Performance and Estimates - 2Q24 revenue was Rmb37.0bn, up 17% YoY, with net profit of Rmb17.6bn, up 16.1% YoY [35][55] - Moutai Spirits revenue grew 13% YoY to Rmb28.9bn, while Series spirits revenue accelerated to 43% YoY at Rmb7.2bn [35][36] - i-Moutai generated Rmb4.91bn in spirits sales in 2Q24, up 11% YoY, exceeding expectations [55] - The company aims for a 75% dividend payout ratio for 2024-26, implying total shareholder return of Rmb219bn [56] Valuation and Price Target - The 12-month price target of Rmb2,098 is based on a 29.4x 2026E P/E, discounted back to 2024E year-end using a 9.8% CoE [4] - The target P/E includes a 40% premium for Moutai's leading position in China's spirits industry and strong returns profile [4] - Moutai is trading at 21x/18x 2024E/2025E P/Es with a 12% earnings CAGR in 2024E-26E [63] Product and Channel Performance - Wholesale channel sales grew 27% YoY in 2Q24, supported by a price hike in November 2023 [55] - Direct sales grew 6% YoY in 2Q24, contributing 40% of total spirits sales [55][59] - i-Moutai contributed 14% of total sales in 2Q24, with 531k bottles released in July, down 60% YoY [60] Market Trends and Pricing - Feitian Moutai's wholesale price increased by Rmb180 for original case and Rmb130 for unpacked bottles in July [78] - Channel inventory stands below 1 month, with shipments expected to increase for the Mid-Autumn Festival [78] - Non-standard SKUs like Jingpin and Zodiac Moutai maintain decent channel profitability [79] Production and Supply - Base spirits production volume declined YoY in 1H24, with Moutai base spirits down 12.3% and Series base spirits down 5.4% [60] - The company has implemented active shipment controls, particularly for Moutai 1935 and Zodiac (500ml) [60]

Investment Rating - The report maintains a year-end 2024 target for the S&P 500 index at 5600, representing an 8% increase from current levels [3]. Core Insights - The recent sell-off in the US equity market has been attributed to concerns over the sustainability of economic growth, with the S&P 500 index experiencing a 6% decline over three days [1]. - Despite the downturn, the S&P 500 index remains 9% higher than at the beginning of the year, indicating resilience in the overall market [1]. - Historical data suggests that buying the S&P 500 after a 5% sell-off has typically resulted in positive returns, with a median return of 6% over the following three months [4]. - The report highlights a significant rotation from cyclical to defensive stocks, reflecting investor sentiment amid economic uncertainty [9]. - The expectation of aggressive interest rate cuts by the Federal Reserve in 2024 is likely to benefit defensive sectors, which historically outperform during such periods [13]. Summary by Sections Market Overview - The S&P 500 index has seen a sharp decline, but the overall level remains above the start of the year, indicating a potential buying opportunity [1][3]. - The report notes that the current P/E multiple of the S&P 500 is 20x, consistent with historical averages [3]. Economic Growth - The report forecasts US real GDP growth of 2.7% in 2024 and 2.3% in 2025, suggesting a stable economic environment despite recent market volatility [9]. Sector Performance - Defensive sectors such as Utilities and Consumer Staples are expected to perform well as the Fed begins to cut interest rates, with historical data supporting this trend [13][16]. - The report identifies a basket of Stable Growth stocks as an attractive investment strategy during periods of economic deceleration, with these stocks historically outperforming the S&P 500 [16][19]. Valuation Insights - Mega-cap tech stocks have seen a decline in valuations, with their P/E multiple dropping from 32x to 27x, yet still above the 10-year median of 24x [23]. - The report indicates that the median P/E for Stable Growth stocks is 24% higher than the median S&P 500 stock, but this premium is below historical peaks [19]. Small Caps - The Russell 2000 index is expected to be more sensitive to economic growth than interest rate changes, with a significant portion of its companies being unprofitable [25][27].

2024年8月7日 | 3:45PM CST 2131d4eaf4cb4d50b1d51c8af07b64b4 福耀玻璃 (600660.SS/3606.HK) 2Q24业绩分析：领先的销量增长、均价改善以 及利润率上升推动业绩大幅好于预期；买入 福耀玻璃公布的2024年二季度业绩大幅超出我们和市场的预测（请参见我们基于业绩 快报的简要分析）。福耀玻璃表示，显著超预期的业绩表现主要得益于销量增速领 先、均价提升和利润率提高，我们认为这些因素在未来的经营中都具有可持续性。我 们在本文中具体分析了管理层在业绩说明会上阐述的四大利好因素，我们认为它们也 为持续的业务扩张奠定了基础：1）美国工厂最新情况：管理层重申调查对象是第三方 劳务公司，而非福耀美国，管理层认为福耀在美国运营合规，遵守当地法律法规；因 此，其扩大美国生产的业务战略保持不变；2）销量增长领先，福耀玻璃2024年上半 年汽车玻璃销量同比增长16%，而全球汽车销量同比增速不到1%；管理层预计日后将 延续类似的增长势头；3）销售均价提升符合预期，福耀玻璃销售均价同比上涨 8.3%，管理层表示有清晰的可预见性显示未来5年均价有望同比上涨7%-8%；4）国内 ...

Investment Rating - The investment rating for Joyoung Co. (002242.SZ) is "Sell" with a 12-month price target of RMB 9.4, indicating a downside potential of 9.6% from the current price of RMB 10.4 [5][6]. Core Views - The report suggests that the current valuation of Joyoung Co. does not adequately reflect several downside risks, including weak domestic demand for small appliances, intensified competition affecting profit margins, and slowing growth in overseas revenue [5][6]. - The revenue forecasts for 2024-2026 have been slightly adjusted downwards by 1-2% to reflect the latest industry trends, with expected revenues of RMB 9.6 billion in 2024, RMB 10.2 billion in 2025, and RMB 10.9 billion in 2026 [2][3][6]. Financial Summary - Revenue for 2024 is projected at RMB 9,629 million, with a year-on-year growth of 0.2%. For 2025 and 2026, revenues are expected to be RMB 10,230 million and RMB 10,873 million, respectively, reflecting growth rates of 6.2% and 6.3% [2][3]. - The gross profit margin (GPM) is expected to be 26.9% in 2024, with slight improvements to 27.1% in 2025 and 27.3% in 2026 [2][3]. - Net income is forecasted to be RMB 449 million in 2024, RMB 493 million in 2025, and RMB 549 million in 2026, with year-on-year growth rates of 15.5%, 9.7%, and 11.4% respectively [2][3]. - Earnings per share (EPS) are projected to be RMB 0.59 in 2024, RMB 0.64 in 2025, and RMB 0.72 in 2026, with slight adjustments from previous estimates [2][3][6]. Key Assumptions - The report highlights that the small appliance market remains vulnerable to consumer spending trends, with potential risks of consumption downgrade due to the discretionary nature of these products [5]. - The competitive landscape in the domestic market is expected to intensify, which may further pressure profit margins [5].

Industry Overview - The report focuses on seven key industries in China that contribute 22% to GDP growth, with five industries currently operating at overcapacity, leading to zero or negative cash margins for over 50% of their capacity [1] - The industries analyzed include solar modules, lithium batteries, electric vehicles, power semiconductors (IGBT), construction machinery, air conditioners, and steel [5][6] - China's global supply share in these industries ranges from 66% to 86%, with significant export growth observed from 2020 to 2023, particularly in lithium batteries (720% growth) and electric vehicles (670% growth) [8][22] Supply-Demand Imbalance - Five out of the seven industries have China's capacity exceeding global demand, with solar modules at 200% and lithium batteries at 150% of global demand [10][21] - Capacity utilization rates in 2023 ranged from 30% to 87%, with solar modules at 44% and electric vehicles at 54% [8][21] - Over 50% of the supply in most industries operated at zero or negative cash margins in Q1 2024, with solar modules and steel being the worst performers [31][37] Cyclical Inflection Points - The report identifies solar modules and lithium batteries as industries closest to a cyclical inflection point due to negative cash margins and reduced capex plans, while electric vehicles and power semiconductors are further away [1][11] - Capex revisions over the past 12 months show significant cuts in lithium batteries (-41% for 2024E) and solar modules (-5% for 2024E), while power semiconductors saw a 130% increase in capex plans [33][37] - The tipping point for capex adjustments is expected when over 50% of the supply is in net debt and EBITDA interest coverage falls below 5x, with solar modules and lithium batteries likely to reach this point sooner [37][39] Global Market Impact - China's share in ex-China markets is expected to stagnate or decline, with solar modules and lithium batteries potentially losing 4-19% of their market share by 2028 [42][43] - Chinese producers are increasingly building capacity outside China, with lithium batteries and electric vehicles leading this trend, particularly in the US and Europe [40][43] - Trade tensions, particularly with the US and EU, pose risks to China's exports, with 40-60% of solar modules, lithium batteries, and electric vehicles exported to these regions [24][26] Industry-Specific Insights - **Solar Modules**: China's capacity is 200% of global demand, with a 46% price decline in Q1 2024. The industry is expected to see a cyclical bottom by 2025, with one-third of capacity likely to shut down [66][67] - **Electric Vehicles**: China's capacity is 120% of global demand, with 42% of exports going to the US and EU. The industry is not yet at a tipping point, with 50% of firms still generating positive cash margins [71][72] - **Lithium Batteries**: China's capacity is 150% of global demand, with a 41% capex cut for 2024E. The industry is close to a tipping point, with significant consolidation potential [11][33] - **Power Semiconductors (IGBT)**: Capex plans have increased by 130% for 2024E, but the industry is 2-3 years away from a cyclical inflection point due to strong demand and high capex [33][37] - **Steel, Construction Machinery, and Air Conditioners**: These industries are expected to remain structurally oversupplied, with limited cyclical improvements [11][45]

1公众学： 本本论委 24 July 2024 | 6:20PM BST The EM Trader Leaning Defensive into H2 ■ Paradise Delayed for EM assets? Coming into this year, we argued that EM_ assets, having weathered the storm of higher US rates, a stronger Dollar and weak China activity, could deliver more balanced positive returns as the global macro weather changed for the better. However, our expectations of a more convergent growth outlook and non-recessionary cuts has at least been delayed if not denied altogether. Whereas US growth has sl ...