市场洞察 - 重点报道 --- Market Insights - Marque e Market Insights | Markets | Asia 市场洞察 | 市场 | 亚洲 GS Macro: Five things you need to know ⾼盛宏观：五⼤要点解读 Five things you need to know: 4/ As tari concerns fade, equity investor focus shifts to the 'one big beautiful bill' (US equity analysis) 4/ 随着关税担忧消退，股市投资者关注点转向"那⼀项宏伟法案（" 美国股市分析） 5/ RBI meeting preview (6 June) – 25bps cut expected; and another in Q3. 5/ 印度储备银⾏会议预览（6 ⽉ 6 ⽇）——预计降息 25 个基点；第三季度再降⼀次。 五件你需要知道的事： 1/ GS Weekend – thought leader views and weekend macro call 1 ...

Investment Rating - The report has lowered the eCommerce sub-sector preference to 4 from 3 due to a more challenged near-term profit outlook, while identifying JD as having the most favorable upward risk-reward within eCommerce on a 12-month view [1][2]. Core Insights - China Internet companies reported solid 1Q results with top line and profit beats, but expressed conservative tones regarding 2Q profitability due to investments in platform ecosystems, food delivery subsidies, AI applications, and overseas expansions [1]. - Key investor debates include food delivery competition, AI application beneficiaries, and the implications of geopolitical developments [1][2]. Summary by Sections 1Q Results Recap & Stock Ideas - The report highlights the top four investor focuses: food delivery competition, weak 2Q profit setup for transaction platforms, the status of the AI trade, and navigating geopolitical events [8][9]. - JD's GMV growth was estimated at +16% in 1Q25, while PDD and Kuaishou both saw growth of 15% [9]. eCommerce & Local Services - The report notes a significant increase in food delivery industry volume growth due to subsidies, with JD's 2Q new business EBIT loss estimated at RMB 10 billion [9]. - JD's unique 1P + supply chain-driven business model is expected to benefit from the government's trade-in program, while Meituan's food delivery profit is projected to decline by RMB 5-6 billion year-on-year [12][13]. AI Applications - Tencent and Kuaishou are identified as key beneficiaries of AI applications, with Tencent's ads and games businesses expected to benefit directly from AI in adtech and gaming experiences [1][12]. - The report anticipates further model launches and AI agents to sustain investor interest in AI applications over the next 3-6 months [12]. Mobility and Internet Verticals - Mobility is highlighted as a strong growth area, with YMM expected to see over 60% year-on-year growth in adjusted EBIT for 2025 [14]. - Xiaomi is projected to experience a multi-year growth trajectory, with revenue and net profit CAGRs forecasted at 26% and 39% respectively for 2024-2027 [14]. Geopolitical Implications - The report discusses the impact of geopolitical events on investor appetite, noting a preference for HK-listed or dual-listed companies over US-only listed names due to potential restrictions and tariffs [12][16].

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies Core Insights - The China Export Tracker indicates a gradual recovery in US-bound orders from Chinese corporates following a reduction in tariffs from 145% to 30%, with orders reaching an average of 95% of pre-tariff levels [2][3][19] - Despite the tariff reduction, the overall recovery in orders is described as mild, with many companies still cautious about inventory levels and future demand [3][27] - The report highlights a significant shift in supply chain dynamics, with a notable increase in shipments from China to the US, now fulfilling 47% of US orders compared to 35% previously [19][22] Summary by Sections Export Orders - Post-tariff reduction, export orders from the US have incrementally picked up, averaging 95% of pre-tariff levels, compared to 90-92% in April [3][19] - Approximately 25% of corporates reported a 2-13% increase in US order books, particularly in consumer products [4][21] - A small number of products are experiencing declines in orders, with nearly 60% of corporates reporting no changes [12][21] Supply Chain Adjustments - Nearly one-third of products saw improvements in US-bound shipments, particularly in lifestyle products and machinery [17] - The report notes that only about 2% of corporates plan to move production back to China despite the tariff reduction [18] - The increase in shipments from China is primarily driven by additional orders rather than a shift from ex-China production [19] US Inventory Update - US inventory levels are reported to range from 1-4.5 months, with 42% of corporates indicating a restocking trend [27][31] - Restocking is mainly observed in consumer goods, while industrial products are experiencing destocking [27][31] Pricing Discussions - There has been significant progress in pricing negotiations, with 35% of corporates settling prices, often with end-customers bearing the tariff burden [32][36] - The report suggests that supply chains can function effectively if tariffs remain below 40% [33] Capacity Expansion - Over 60% of corporates are committed to expanding overseas production capacity, with varying degrees of ramp-up planned by year-end [34][38] - Specific sectors, such as selected appliances and industrial tech components, are expected to see significant increases in production capacity [34][38] Shipping Data - High-frequency shipping data indicates a decline in container shipping from China to the US in May, but signs of recovery are emerging [41][42] - Container shipping to Southeast Asia has shown a 26% increase in cargo volume compared to the previous year [42]

Investment Rating - The report indicates a revised Q1 GDP growth of -0.2% (quarter-over-quarter annualized), which is an upward revision of 0.1 percentage points from previous estimates [1][6] Core Insights - The revision details show softer underlying growth, particularly in real domestic final sales, which were revised down by 0.3 percentage points, primarily due to a 0.6 percentage point downward revision in consumer spending growth [1][6] - The contribution of inventory accumulation to GDP growth was revised up by 0.3 percentage points to 2.6 percentage points, while net exports' contribution was revised down by 0.1 percentage points to -4.9 percentage points [6][7] - Real gross domestic income (GDI) fell by 0.2% in Q1, influenced by a significant drag from net dividends, which saw a $125 billion increase from the rest of the world, the largest since 2018 [7][8] - Core PCE inflation for April is forecasted at 0.10%, leading to a year-over-year rate of 2.49%, while headline PCE inflation is expected at 0.09%, corresponding to a year-over-year rate of 2.12% [8][9] - Initial jobless claims rose to 240,000 for the week ending May 24, exceeding expectations, with continuing claims also showing an increase [9][10] Summary by Sections GDP and Economic Activity - Q1 GDP growth was revised to -0.2%, with consumer spending growth revised down to +1.2% [2][6] - Equipment investment growth saw a significant upward revision to +24.8% [6][7] Inflation Metrics - Core PCE inflation was revised down to +3.41% annualized, with the year-on-year rate at +2.76% [8] - The GDP deflator was also revised down to +3.70% annualized [8] Employment Data - Initial jobless claims increased by 14,000 to 240,000, with a four-week moving average remaining at 231,000 [9][10]

Investment Rating - The report assigns a "Buy" rating to Li Auto, indicating a positive outlook for the company's stock performance [1][9][10]. Core Insights - Li Auto's 1Q25 results showed a GAAP net profit that exceeded Goldman Sachs estimates and Visible Alpha Consensus by 21% and 33%, respectively, primarily driven by higher vehicle sales [1]. - The company is positioned well for 2025 with improvements in urban NOA performance and a focus on AI, which aligns with the growing trend of intelligent driving [9]. - Li Auto maintains the best net cash position among major Chinese OEMs, which supports future R&D and capital expenditures [9]. Financial Performance Summary - Vehicle sales increased by 5% compared to Goldman Sachs estimates, attributed to a 3% rise in sales volume and a 2% increase in average selling price (ASP) [2]. - The vehicle gross margin was reported at 19.8%, reflecting a year-over-year increase of 0.4 percentage points and a quarter-over-quarter increase of 0.1 percentage points [2]. - SG&A expenses were 9% lower than estimates, indicating improved cost control, while R&D expenses rose by 11% due to increased investment in new vehicle models and AI technologies [2]. Guidance and Future Outlook - For 2Q25, the guidance aligns broadly with estimates, projecting vehicle sales volume between 123,000 and 128,000 units, and revenue between RMB 32.5 billion and RMB 33.8 billion [3]. - Upcoming catalysts include new model launches and advancements in ADAS and AI technologies, which are expected to drive growth [9]. Balance Sheet and Cash Flow Analysis - As of 1Q25, Li Auto reported RMB 102 billion in net cash, with a stable total debt to equity ratio of 12% [4]. - The company experienced a tightening of working capital quarter-over-quarter but showed improvement year-over-year, with stable receivable days and an increase in payable days [4]. Valuation Metrics - Li Auto is currently trading below its historical average 12-month forward price-to-sales (P/S) and price-to-earnings (P/E) multiples, suggesting potential undervaluation [9]. - The 12-month price target is set at $31.7 for ADR and HK$124 for H-shares, indicating an upside potential of approximately 13.6% and 13.9%, respectively [8].

Investment Rating - The report does not explicitly provide an investment rating for the industry or assets discussed Core Insights - Recent simultaneous declines in US equities, bonds, and the Dollar have raised questions about changes in cross-asset correlations [2][4][6] - The Dollar has historically provided protection against equity declines during monetary policy tightening, but recent trends show a weakening Dollar alongside rising yields and falling equity prices, indicating a significant shift [4][6][17] - New structural risks in the US, such as concerns over central bank independence and fiscal sustainability, are altering traditional asset correlation patterns [4][7][17] Summary by Sections Market Performance - Since the peak of the US equity market in late February, equities have declined, long-end yields have increased, and the Dollar has weakened [2][4] - The report highlights that bonds typically protect equity portfolios during negative growth shocks but fail to do so during monetary policy tightening shocks [6][18] Cross-Asset Correlations - The report identifies a new set of shocks affecting market dynamics, including tariff concerns, bond market dysfunction, and fiscal sustainability worries, which have not been prominent in recent memory [7][17] - The correlation structure has shifted, with the Dollar weakening alongside equity and bond weakness during these new structural risks [4][16][17] Portfolio Implications - Longer-dated bonds may be less effective as risk reducers than usual, while front-end yields could provide protection against equity downside in growth concerns [18] - Positioning for USD weakness against currencies like EUR, JPY, and CHF is recommended to mitigate new risks [18][19] - Gold is expected to perform well in the context of these structural risks, suggesting a potential allocation in diversified portfolios [19]

Investment Rating - The report does not explicitly provide an investment rating for the industry discussed [1]. Core Insights - The report highlights that the recent court ruling blocking certain tariffs does not signify the end of tariff policies, as the US Administration has alternative authorities to impose tariffs [2][4]. - It anticipates a rebound in US inflation, projecting a core PCE price index increase of 2.49% in April, with a forecasted rise to 3.6% by December [6][5]. - The report discusses the ongoing deflation in China, predicting a headline PPI inflation of -2.1% for the current year and -0.6% for the next [7]. Summary by Sections Tariffs Down but Not Out - The report indicates that the US Administration may utilize Section 122 of the US Trade Act of 1974 to impose tariffs, potentially leading to investigations that could result in tariffs exceeding 10% [2][4]. - Smaller trading partners may experience relief from tariffs, while major partners may not see significant changes [2]. US Inflation, China Deflation - The report forecasts a core PCE inflation increase to 3.6% by December, driven by tariff impacts, despite disinflationary forces [6][5]. - It also notes that while inflation concerns persist, the expected rebound will be less severe than in 2022, contingent on tariff levels [6]. Digesting Global Fiscal Shifts - The report suggests that concerns regarding the US fiscal outlook may lead to a resumption of steeper US Treasury curves and continued Dollar weakness [10]. - It emphasizes that fiscal expansion and growth risks in Europe will keep the front-end of the curve steep, while Japan may face ongoing pressure on long-end yields [11].

Investment Rating - The report does not specify a direct investment rating for the industry [1] Core Insights - Global real GDP growth is expected to slow to 2.4% year-on-year in 2025, influenced by higher US tariffs [4] - In the US, real GDP growth is projected to decrease to 1.1% in 2025, with a 35% probability of entering a recession within the next 12 months [4] - Core inflation in the US is anticipated to rise to 3.6% year-on-year by the end of 2025, driven by tariff increases [4] - The Euro area is expected to see real GDP growth of 0.9% year-on-year in 2025, with core inflation falling to 2.1% [4] - China is forecasted to achieve a real GDP growth of 4.6% year-on-year in 2025, despite ongoing uncertainties in trade relations [4][5] Economic Forecasts - Global GDP growth is projected at 2.4% for 2025, with the US at 1.1%, China at 4.6%, and the Euro area at 0.9% [15] - The Federal Reserve is expected to implement three 25 basis point rate cuts starting in December, reaching a terminal rate of 3.5-3.75% [4] - The European Central Bank is anticipated to continue rate cuts until reaching 1.75% by July 2025 [4] - Inflation rates are expected to remain low in China, with CPI and PPI inflation projected at 0% and -2.1% respectively by the end of the year [5]

Investment Rating - The report assigns a "Buy" rating for CSPC Pharma with a 12-month price target of HK$8.74, indicating an upside potential of 14.7% from the current price of HK$7.62 [13][14]. Core Insights - The report highlights that CSPC Pharma experienced a revenue decline of 22% in Q1, primarily due to a high base in Q1 2024, ongoing pressure from volume-based procurement (VBP), and a 12.5% price cut for NBP injection [1]. - Despite the revenue miss, earnings showed resilience, supported by out-licensing income and significant expense cuts, particularly in selling expenses [1]. - Management has revised its guidance for 2025, focusing on sequential improvement rather than positive sales growth, and plans to pursue three more business development (BD) deals with a potential total deal size exceeding US$5 billion [2][8]. Summary by Sections Revenue and Earnings Performance - CSPC Pharma's sales in Q1 declined by 22% year-on-year, with finished drug sales down 27% year-on-year [1]. - Earnings for Q1 were reported at Rmb1.5 billion, an 8% decrease year-on-year, but were bolstered by Rmb718 million from out-licensing [1]. - Core earnings, excluding BD income, are estimated to have declined by approximately 45% year-on-year [1]. Business Development and Licensing - The company is actively negotiating three potential BD deals, with one expected to close in June, focusing on SYS6010 (EGFR ADC) and other technology collaborations [2]. - In Q1, CSPC Pharma booked US$40 million from the AZ deal and US$60 million from the BeOne deal, with expectations of over Rmb1 billion in additional income from new deals throughout the year [2]. Clinical Development and Pipeline - SYS6010 is prioritized for clinical development, with ongoing phase 3 studies for NSCLC and plans for further trials in various solid tumors [3][7]. - The company is preparing for pivotal studies outside China and aims to apply for breakthrough designation for certain assets [7]. Shareholder Returns and Incentives - CSPC Pharma plans to utilize operational cash flow for R&D and higher dividends, with a share buyback target of up to HK$5 billion over the next 24 months [8]. - A share-based incentive program is set to cover 200-300 key staff, with additional coverage planned for the second half of 2025 [8]. Financial Projections - Earnings estimates have been revised down by 7.7% for 2025 due to lower-than-expected finished drug sales, but the price target has increased from HK$7.84 to HK$8.74 [9]. - Revenue projections for 2025 are set at Rmb30.1 billion, with expectations of gradual recovery in subsequent years [14].

Investment Rating - The report maintains a Neutral rating for Futu Holdings since July 14, 2021 [10]. Core Insights - Futu reported a positive net profit growth in 1Q25, primarily due to better-than-expected cost savings and a reduction in client acquisition costs (CAC) [1]. - The management's guidance for 2025 indicates that CAC will remain high due to market volatility, despite the positive performance in 1Q25 [1][2]. - The guidance for paying user growth in 2025 is set at 800,000, reflecting a cautious outlook given the anticipated slowdown in new user growth starting from 2Q25 [2]. - A lower HIBOR rate is expected to negatively impact interest income growth, with management indicating that a 25 basis points rate cut could lead to a pre-tax profit decrease of HK$ 8-10 million per month [3]. - The report highlights the potential positive impact of stablecoin adoption, AI integration, and market expansion into regions like Japan and New Zealand on Futu's competitive edge [16]. Financial Estimates - The revenue estimates for 2025 have been slightly adjusted downwards by 1%, while net profit estimates have been revised upwards by 4% [17]. - The new target price for Futu is set at US$ 111.11, reflecting a 3% decrease from the previous target [17]. - The report projects total revenue for 2025 at HK$ 17,039.5 million, with net income expected to reach HK$ 6,600.1 million, indicating a growth rate of 21.5% [5][13]. Key Data - Futu's market capitalization is reported at US$ 15.0 billion [5]. - The company is positioned within the China Brokers & Asset Management sector, with a notable M&A rank of 3 [5]. - The report outlines a projected EPS of HK$ 47.74 for 2025, with a P/E ratio of 17.7 [10][5].