Investment Rating - The report upgrades the Brent crude oil price forecast for the remainder of 2025 to $66 per barrel, with expectations of further price increases due to rising price premiums and shifting market risk concerns towards supply disruptions [1][2]. Core Insights - The cautious outlook for oil prices in 2026 is based on anticipated oversupply of approximately 1.7 million barrels per day due to the ramp-up of non-OPEC projects and the development of U.S. shale oil [1][2]. - The refining industry is currently in an upward cycle, driven by supply factors, with a projected net increase in global refining capacity of only 0.2 million barrels per day in 2025 and 0.4 million barrels per day in 2026 [8]. Summary by Sections Oil Price Forecast - The Brent crude oil price is expected to rise to $66 per barrel for the remainder of 2025, supported by low global inventory levels, particularly in OECD countries, and concerns over supply disruptions [2][3]. - A cautious forecast for 2026 predicts a decline to around $50 per barrel due to oversupply from non-OPEC projects [1][2]. Refining Industry Dynamics - The refining sector is experiencing high profit margins, particularly in diesel, driven by low inventory levels and the permanent closure of several refineries [7][8]. - The global refining system is under pressure due to a tight supply-demand balance, with significant growth expected in the demand for middle distillates like diesel and jet fuel [8]. Geopolitical and Supply Risks - Current market risks include supply disruptions and geopolitical instability, with a recommendation for conservative yet flexible trading strategies, such as purchasing call options and utilizing spot and forward contracts for hedging [5][6]. - The impact of Iranian oil production on market prices is significant, with potential price spikes if production increases dramatically [6]. OPEC and Non-OPEC Supply - The report highlights the uncertainty surrounding OPEC's spare capacity, which supports forward oil prices, and the potential for oversupply if new projects come online as planned [3][4]. - The refining industry is expected to benefit from the complexities of companies like Reliance Industries, which can leverage OPEC supply increases while also growing in other sectors [8].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report emphasizes a preference for short dollar and long gold positions as a hedge against concerns regarding Fed independence and potential tariff shocks [2] - It highlights the economic implications of potential tariff scenarios in the US, predicting an increase in the effective tariff rate (ETR) by 17 percentage points by 2027, which could lead to a cumulative boost in core PCE prices by about 1.7% over the next 2-3 years [26][28] - The report notes that the MAS is expected to reduce the slope of the SGD NEER to flat at the upcoming meeting on July 30, reflecting a softer inflation outlook and downside risks to growth [20][21] Summary by Sections Global Views - The report discusses the expectation of a return to Fed easing, which is anticipated to lower US Treasury yields and the dollar while boosting global equities and gold [2] Asia FX Views - The report provides insights into various Asian currencies, indicating low activity flows primarily driven by profit-taking and unwinding positions, particularly in USD/TWD and USD/HKD [17] - It mentions that the market for USD/KRW is expected to face unpriced risks to the upside due to impending tariffs [18] MAS Meeting Insights - The report anticipates that the MAS will adjust its monetary policy stance to a flat slope, reflecting a cautious outlook on inflation and growth [20][21] Economic Implications of Tariffs - The report outlines the expected rise in the US effective tariff rate and its potential impact on inflation, projecting core PCE inflation rates for December 2025, 2026, and 2027 [26][28] Thailand Central Bank Leadership - The report notes the appointment of Vitai as the new Governor of the Bank of Thailand, who is expected to advocate for more aggressive monetary easing to support the economy [31][33]

Investment Rating - The report indicates a positive outlook for the semiconductor industry, particularly in the silicon wafer and silicon carbide sectors, driven by strong demand from electric vehicles and artificial intelligence applications [1][2]. Core Insights - The price of silicon wafers in China has been declining, with a forecast for stabilization by 2027 due to capacity expansion [1]. - The market for silicon carbide is significantly influenced by the electric vehicle sector, with penetration rates expected to reach 28% in 2025 and 40% in 2026 [1][7]. - The Chinese silicon wafer market is dominated by five companies, holding a 57% global market share, with significant improvements in technology quality [1][5]. - Geopolitical factors are impacting the semiconductor industry, necessitating careful consideration of tariffs and policies [1][14]. Summary by Sections Silicon Wafer Market - In 2024, the price of silicon wafers in China decreased by 17%, with further declines of 8% in 2025 and an expected 5% in 2026 [4]. - The market is expected to stabilize in 2027 as production capacity continues to expand [4]. Silicon Carbide Market - The price of silicon carbide fell by 16% in 2024 and is projected to decrease by 17% in 2025, driven by strong demand from the electric vehicle market [5][6]. - Local manufacturers are significantly increasing their output, contributing to the optimistic market outlook for silicon carbide substrate manufacturers [8]. Key Companies to Watch - Notable companies include Nora (silicon carbide and nitride equipment supplier), Xingyi and Sankexing (leaders in AI server orders), and SICC (local silicon carbide substrate leader) [2][15]. - Infineon is highlighted for its strong performance in silicon carbide strategy, with capabilities in IGBT and silicon wafer production, as well as involvement in AI power chips [1][16]. Geopolitical Considerations - The semiconductor industry faces pressures from geopolitical factors, including tariffs and trade policies, which could affect pricing and market dynamics [1][14]. - Investors are advised to weigh these geopolitical influences carefully when considering investments in the sector [14].

Investment Rating - The report initiates coverage on DiDi Global Inc. with a "Buy" rating and a 12-month price target of US$7.20, indicating a 35% upside potential [1][27][34]. Core Insights - DiDi is positioned to capitalize on the growing global mobility market, particularly in autonomous driving and shared mobility, with a strong valuation compared to peers [1][27]. - The company is expected to achieve significant revenue and EPS growth, with projected CAGRs of 8% and 44% respectively from 2024 to 2027 [2][28]. - DiDi's market leadership in China, with a 70% market share, and its expansion into international markets, particularly in Latin America, are key growth drivers [27][31]. Summary by Sections 1. Domestic Mobility Growth - DiDi operates within a growing RMB 744 billion shared mobility total addressable market (TAM) in China, with expectations for continued growth in ride-hailing services [28][31]. - The company aims to improve profit margins by reducing user subsidies and leveraging operational efficiencies, with a target GTV margin of 6-7% by 2030-35 [31][32]. 2. Robotaxi Opportunity - The report views robotaxis as a significant growth opportunity rather than a threat, projecting that DiDi will capture a substantial share of the robotaxi market by 2030 and 2035 [34][35]. - DiDi's autonomous fleet is expected to contribute significantly to its overall trip volume and profit margins in the coming years [34][35]. 3. International Business Expansion - DiDi has established a strong presence in Latin America, particularly in Brazil and Mexico, with significant user bases and transaction volumes [28][31]. - The company is also diversifying into food delivery services, leveraging its existing rider network to compete effectively in the region [31][32]. 4. Valuation and Fundamentals - DiDi's current valuation at 14X domestic 2026E P/E is considered attractive compared to its peers, with potential for re-rating based on strong growth fundamentals [2][32]. - The report highlights that DiDi's discounted valuation is influenced by non-fundamental factors, including liquidity concerns and competitive pressures in the food delivery market [32][34].

Investment Rating - The report maintains a "Buy" rating for JD, Kuaishou, PDD, and Alibaba, while also recommending Meituan due to its significant market share despite profit declines [7][10][9]. Core Insights - The eCommerce landscape in China is experiencing heightened competition, particularly in food delivery and on-demand services, leading to revised earnings estimates for Alibaba and JD, with cuts ranging from -1% to -10% for 2025E-27E [1]. - June online retail goods GMV increased by 5% year-over-year, showing a moderation from 8% in May, with overall retail sales growing by 4.8% in June [2][28]. - The report anticipates profit declines across transaction platforms in the second half of 2025, with a potential inflection point for eCommerce share prices expected in the latter half of 2025 [7]. Summary by Sections eCommerce Tracker - Daily order volumes in the food delivery and on-demand retail industry peaked at approximately 250 million on July 12, with Meituan capturing significant market share through discounts [1]. - Alibaba is leveraging synergies between Taobao Instant Commerce and Ele.me, achieving over 80 million daily orders through its fulfillment network [1]. Market Performance - The national online retail goods GMV for June was reported at a 5% increase year-over-year, with a sequential moderation from 8% in May [2]. - The overall retail sales growth in June was 4.8% year-over-year, with notable strength in home appliances at 32% growth [28]. Parcel Volume Growth - The average daily parcel volume in July to date is approximately 531 million, maintaining a year-over-year growth rate of 15% [6][27]. - The report maintains a 2025E industry online GMV growth estimate at 6%, while adjusting the parcel volume growth estimate down to 17% from 19% [6]. Stock Implications - The report highlights a preference for sectors such as games, mobility, and internet verticals over eCommerce due to stronger near-term earnings setups [7]. - JD's market has largely priced in expected profit declines, while PDD is favored for its non-participation in the food delivery battle [9][10].

Investment Rating - The report indicates a strong positioning for the semiconductor sector, with Nvidia (NVDA) rated at 10 on a scale of 1-10, Microsoft (MSFT) at 9, and Meta (META) at 8.5, while Apple (AAPL) is rated at 4, indicating a significant underweight in the market [10][12][14][18]. Core Insights - The semiconductor sector is viewed as the cleanest expression of growing AI enthusiasm, with investor sentiment reaching new highs daily [2]. - Generalist inflows into the semiconductor group continue without signs of slowing, despite being well-held by various investor types [3]. - The internet sector is crowded, with notable year-to-date winners, but investors are now balancing high valuations against strong long-term narratives [4][5]. - The telecommunications/media sector has pockets of investor interest, with several companies like DIS and T showing increased long positions [6]. - Software sentiment is declining due to uncertainties surrounding the long-term impact of AI on enterprise/cloud software businesses [7]. - IT services and ad agencies are experiencing significant market negativity, with concerns about AI posing a cannibalistic threat [8]. Summary by Sector Semiconductors - The semiconductor sector is currently crowded with high investor interest, particularly in companies like NVDA, AVGO, TSM, and MU, which are among the most popular longs [19][20]. - The long/short ratio in this sector is at highs, consistent with positive market sentiment [19]. Internet - The internet sector has a high long/short ratio (~4.5x) but is in the middle of its recent range, indicating a balanced sentiment [24]. - Popular longs in this sector include META, SPOT, NFLX, and AMZN, while shorts include SNAP and LYFT [26]. Software - The software sector is experiencing a multi-year decrease in the long/short ratio, indicating negative sentiment [21][23]. - Popular longs include MSFT and ORCL, while shorts include ADBE and WDAY [23]. Telecommunications/Media - There is a notable increase in long positions in certain telecommunications/media stocks, despite the sector's historical negativity [6]. Overall Market Sentiment - The overall market sentiment is mixed, with strong enthusiasm in semiconductors and internet sectors, while software and IT services face challenges due to AI-related uncertainties [7][8].

Investment Rating - The report assigns a "Buy" rating to Anta Sports Products with a 12-month price target of HK$117, indicating an upside potential of 30.3% from the current price of HK$89.80 [16][18]. Core Insights - Anta's operational update for 2Q25 shows retail sales growth for its core brand at +LSD% year-over-year, while Fila and other brands performed better, with Fila growing at +MSD% and Descente and Kolon exceeding +40% and +70% respectively [1][12]. - The management expressed confidence in the recovery of the Anta brand in 2H25 following restructuring efforts in 2Q25, with a full-year growth target of HSD% for Anta core, MSD% for Fila, and over 30% for other brands [1][12]. - The report highlights the solid performance of Fila and smaller brands, which are expected to offset any potential weaknesses in the Anta brand, thus providing a positive outlook for the overall group [1][12]. Operational Updates - In 2Q25, Anta's core brand faced challenges due to management restructuring and weaker offline traffic, leading to a slower sales growth compared to previous quarters [7][8]. - The e-commerce channel showed growth at +LSD%, while offline sales also recorded similar growth rates, indicating a balanced performance across channels [7][8]. - The management has initiated a "Light-house Store Campaign" to enhance store performance in lower-tier cities, which involves optimizing underperforming stores and potentially closing some temporarily [8][12]. Brand Performance - Fila's retail sales grew by +MSD% year-over-year in 2Q25, with the core Fila brand achieving +HSD% growth, indicating strong brand momentum [11][12]. - Other brands like Descente and Kolon reported impressive growth rates, with Descente achieving over 40% and Kolon over 70% year-over-year [11][12]. - MAIA, still in its incubation stage, posted over 30% growth in 2Q25, driven by an expanding offline presence and innovative retail formats [12]. Margin and Cost Control - Management noted some headwinds on gross profit margins due to a shift towards online sales channels, which typically involve deeper discounts [13]. - Operating expenses for the Anta brand were well-controlled in 1H25, with expectations for increased marketing expenses in 2H25 due to planned events [13]. - The overall margin outlook remains positive, supported by stronger growth in smaller brands that typically carry higher operating profit margins [13].

Investment Rating - The report maintains a positive outlook on the Robotaxi industry growth, raising the Total Addressable Market (TAM) estimates for China by 9% to 35% for the years 2026 to 2035, expecting the market to reach US$14 billion by 2030 and US$61 billion by 2035 [1][11]. Core Insights - The report highlights several factors driving the growth of the Robotaxi industry, including advancements in technology, new riding experiences, support for online ride-hailing mobility, and the emergence of new business models for fleet owners [1]. - The penetration rate of Robotaxis in China is projected to reach 10% by 2030 and 29% by 2035, with fleet size estimates increasing from 474,000 to 535,000 for 2030 and from 1.9 million to 2.3 million for 2035 [11][14]. Summary by Sections Market Overview - The report indicates that Robotaxi operators in China are optimistic about long-term growth, with significant advancements in software and hardware improving safety and user experience [1]. - The report notes that the shift to Robotaxis can alleviate the expected retirement of 4 million human drivers by 2035, providing a solution to fill the gap in the labor market [1]. Financial Projections - The revised TAM for the Robotaxi market in China is expected to grow to US$14 billion in 2030 and US$61 billion in 2035, reflecting increases of 20% and 31% from previous forecasts [11][13]. - The report also details the expected revenue per vehicle in Tier-1 cities, projected to increase to US$32,000 by 2035, up from US$10,000 in 2024 [16][17]. Fleet Size and Penetration - The report raises the fleet size estimates for Robotaxis, projecting 535,000 units by 2030 and 2.3 million by 2035, representing 10% and 29% of the shared mobility fleet, respectively [11][14]. - The report emphasizes the acceleration of commercialization efforts by leading Chinese Robotaxi companies, with significant fleet expansions and partnerships, such as Pony AI's goal of 1,000 vehicles by 2025 and Baidu's plans for large fleets in Dubai and Abu Dhabi [10][11].

Investment Rating - The report maintains a "Buy" rating on PDD, indicating favorable risk-reward dynamics due to its non-participation in the food delivery competition and potential growth from new user traffic and general merchandise strength [10]. Core Insights - The report highlights a potential resumption of Nvidia H20 chip supply, which could positively impact China's cloud service providers' capital expenditures starting from Q3 2025, with an expected 44% quarter-over-quarter increase in aggregate capex [1]. - There is a notable increase in generative AI adoption among Chinese enterprises, with over 40% having pilot-tested generative AI tools, up from 8% last year [1]. - The performance gap between US and Chinese AI models is narrowing, with new releases from various internet platforms and AI startups [1]. - The report emphasizes steady progress in monetization of AI applications, with Chinese models achieving scalable annual recurring revenue (ARR) for their AI products [1]. Summary by Sections AI Application Trends - China's top AI applications showed healthy user engagement trends in June, with a 6% month-over-month increase in domestic AIGC application engagement, driven by strong growth in Doubao and DeepSeek [8][10]. - The overall time spent on the top 400 mobile apps increased by 7% year-over-year in June 2025, with significant growth in eCommerce and social engagement [7][10]. Capital Expenditure Forecasts - The report forecasts a drop in combined capex from China CSPs in Q2 2025, followed by gradual improvement in Q3 and Q4 2025, driven by the resumption of Nvidia shipments and domestic chip ramp-up [15]. Monetization and Revenue Growth - The ARR of various AI operations in Chinese companies shows significant figures, with Kuaishou's Kling AI expected to reach over US$400 million in total annual revenue by 2027 [20][21]. - The report notes that subscription-based productivity tools and advertising-based AI search engines are contributing to the monetization of AI applications [1]. Competitive Landscape - Competition in video-generative models is intensifying, with Kuaishou's Kling AI projected to achieve substantial revenue growth, alongside other models from ByteDance and Alibaba [1][6]. - The report highlights the increasing capabilities of Chinese AI models, which are closing the performance gap with US counterparts [33][34].

Investment Rating - The report maintains a Neutral rating on Pop Mart (9992.HK) with a 12-month target price of HK$260.00, reflecting a downside of 1.2% from the current price of HK$263.20 [10][19]. Core Insights - Pop Mart's 1H25 profit alert indicates a sales increase of no less than 200% year-on-year, translating to at least Rmb13.7 billion in revenue, surpassing Goldman Sachs' estimate of 187% growth [1][15]. - The group profit is expected to rise by no less than 350% year-on-year, suggesting a net profit of Rmb4.5 billion in 1H25, which is above the previous estimate of Rmb3.8 billion [1][15]. - The robust performance is attributed to strong IP popularity, particularly the Labubu IP, and significant growth in both mainland China and overseas markets [2][3]. Financial Forecasts - Revenue projections for Pop Mart have been revised upwards for 2025-2027, with expected revenues of Rmb32.8 billion in 2025, Rmb42.3 billion in 2026, and Rmb49.1 billion in 2027, reflecting growth rates of 152%, 29%, and 16% respectively [5][16]. - The adjusted net profit for 2025 is forecasted at Rmb10 billion, indicating a growth of 213% [16]. - The report highlights a significant EBITDA growth forecast, with expected figures of Rmb14.8 billion in 2025 and Rmb22.7 billion in 2027 [5][10]. Market Performance - Pop Mart's stock has shown substantial price performance, with an absolute increase of 588.1% over the past 12 months [11]. - The company has a market capitalization of HK$350.6 billion and an enterprise value of HK$336.7 billion [5]. Growth and Margins - The report indicates a notable expansion in net profit margin (NPM), expected to reach around 30% in 1H25, compared to 20% in 1H24 and 26% in 2H24 [1][3]. - The EBITDA margin is projected to improve to 45.1% in 2025, with continued growth in subsequent years [10][13]. Strategic Outlook - The report emphasizes the importance of extending IP popularity beyond Labubu and expanding the product category to maintain growth momentum [3][20]. - The potential for further customer base expansion is highlighted as a key driver for future earnings growth [3][20].