Investment Rating - The investment rating for Kingmed is Neutral with a 12-month target price of Rmb31, reflecting a potential upside of 7.6% from the current price of Rmb28.82 [10][9]. Core Insights - The report highlights that Kingmed is a leading player in China's independent clinical laboratory (ICL) industry, facing challenges such as shrinking gross profit margin (GPM) and net profit margin (NPM), as well as difficulties in collecting accounts receivables [8][9]. - Despite these challenges, Kingmed's base in Covid testing has facilitated its entry into new markets, particularly in Tier 3 hospitals, which is expected to support the growth of its non-Covid-19 testing business in the future [8]. Industry Environment and Policy Impact - The growth of diagnostic services has been slowed by multiple factors, including DRG unbundling, medical insurance inspections, price reductions, and a decline in physical examinations [2]. - The company believes that the impact of DRG unbundling on independent clinical laboratory providers is limited, as the outsourcing rate for diagnostic services in China remains below 10% [2]. Operating Status and Strategic Response - Kingmed's primary challenge is the volume of tests, with revenue growth previously driven by increasing test volumes and rising outsourcing rates [3]. - In response to operational challenges, the company has prioritized profitability and cash flow, accelerated automation, and optimized staffing, while establishing capacity hubs to improve utilization and margins [3]. Outlook and Key Initiatives - The company maintains a cautious outlook for achieving positive year-over-year growth in the second half of 2025 due to uncertainties in policy developments [7]. - Kingmed is advancing key initiatives, such as promoting a blood-based Tau-217 protein test for Alzheimer's diagnostics, which, although currently contributing modest revenue, is seen as groundwork for future growth [7].

Investment Ratings - Advantest, Disco, and Tokyo Electron are rated as Buy, indicating strong earnings momentum and growth potential [2][15][24] - Tokyo Seimitsu is rated as Sell due to expected downward revisions in profit margin growth [3][24] - SCREEN Holdings, Kokusai Electric, and Lasertec are rated as Neutral, reflecting mixed investor sentiment [24] Core Insights - Investor sentiment in the semiconductor sector is improving compared to early June, although not as bullish as in 2023 and 1H2024 [1] - Advantest is highlighted for its strong earnings growth potential driven by increasing demand for ASICs and GPUs [3] - Disco is seen as increasingly attractive relative to Advantest, despite concerns about near-term shipment momentum [3] - Tokyo Electron is viewed as having significant earnings growth potential that may outpace the WFE market [2] Summary by Sections Investor Meetings Feedback - Over 40 investor meetings were held, indicating strong interest in a range of stocks, particularly small- and mid-cap names [1] - The sentiment in the semiconductor sector has improved, with specific interest in Advantest, Disco, and Tokyo Electron [1][2] Stock-Specific Insights - Advantest is attracting significant interest due to its high AI exposure and expected earnings growth in FY3/26 and FY3/27 [3] - Disco's share price has lagged behind Advantest, making it more attractive to investors despite shipment concerns [3] - Tokyo Electron is noted for a gap between investor expectations and earnings growth potential, which is expected to be strong [2] Market Trends - Investor expectations for the CY25 WFE market growth are converging around flat to mid-single-digit percentage growth, with a specific estimate of +3% year-on-year [4] - There is growing awareness of the upside potential in China demand, although views on the NAND market sustainability are divided [4][8] EUV and Related Stocks - Interest in Lasertec has increased as investors perceive its share price as having bottomed out, although further gains will depend on broader market recovery [9] - JEOL is rated as Buy, with expectations for increased mask writer demand aligning with Lasertec's recovery scenario [9]

Investment Rating - Buy: Hon Hai, Wiwynn, Wistron, Gigabyte, ASUS, AVC; Neutral: Quanta, Inventec [8] Core Insights - The average year-over-year revenue growth for ten companies in the AI servers and AI PCs supply chain is expected to be +37% in June 2025, +27% in July 2025, and +18% in August 2025, driven by the ramp-up of AI servers and new product launches [1] - Rack-level AI servers are transitioning models, which may impact revenue growth in the second half of 2025 [1] - Geopolitical uncertainties are causing changes in end market demand, leading to a slower month-over-month growth forecast of -6% in June, -8% in July, and +2% in August 2025 [1] Company Summaries Hon Hai - Expected 2Q25 revenues to grow 17% YoY to NT$1,813 billion, driven by AI server demand and tariff-related consumption pull-ins [13] - May revenues were 6% below estimates, affected by slower customer pull-in momentum and negative exchange rate impacts [13] - Maintain Buy rating with a target price of NT$242 based on a 14.9x 2026E P/E multiple [15] Quanta - Anticipated 2Q25 revenues to grow 57% YoY to NT$488 billion, supported by AI server ramp-up [20] - May revenues were 13% below estimates, with a decline in notebook shipments [20] - Maintain Neutral rating with a target price of NT$273 based on a 12.8x 2026E P/E [23] Wiwynn - Expected 2Q25 revenues to grow 161% YoY to NT$202 billion, driven by strong demand for ASIC AI servers [38] - May revenues were 34% higher than estimates, reflecting continued strong demand [39] - Maintain Buy rating with a target price of NT$3,838 based on a 20.5x 2026E P/E [42] Wistron - Expected June revenues to grow 123% YoY to NT$198 billion, driven by AI server demand [47] - Strong revenue in May, up 162% YoY, supported by new product cycles [44] - Maintain Buy rating with a target price of NT$152 based on a 14.8x 2026E P/E [49] Gigabyte - Expected 2Q25 revenues to grow 32% YoY to NT$97 billion, supported by AI servers and VGAs [50] - May revenues were 79% above estimates, reflecting tariff-related pull-ins [51] - Maintain Buy rating with a target price of NT$344 based on a 14.0x 2026E P/E [55] AVC - Expected 2Q25 revenues to grow 67% YoY to NT$27 billion, driven by liquid cooling business [27] - May revenues were higher than estimates, reflecting the rising trend in liquid cooling [27] - Maintain Buy rating with a target price of NT$878 based on a 20.0x 2026E P/E [37] ASUS - Expected 2Q25 revenues to grow 21% YoY to NT$175 billion, supported by AI and gaming PCs [57] - May revenues were up 41% YoY, exceeding estimates [62] - Maintain Buy rating with a target price of NT$849 based on a 14.6x 2026E P/E [63] Inventec - Expected June revenues to be similar to May, supported by AI server ramp-up [65] - Maintain Neutral rating with a focus on AI server revenue contribution [65]

Investment Rating - The report assigns a Neutral rating to Aier Eye Hospital with a 12-month target price of Rmb14, indicating a potential upside of 12.9% from the current price of Rmb12.4 [10][8]. Core Insights - Aier Eye Hospital is experiencing improvements in refractive surgery pricing due to new technologies, with a forecast of double-digit revenue growth for 2025 [2][7]. - The company anticipates a recovery in cataract surgery revenue growth to double digits in the second half of 2025, following price cuts of approximately 8-10% since the second half of 2024 [9][7]. - The overall ophthalmology market in China is expected to grow at a 12% CAGR from 2020 to 2030, driven by increased service upgrades and market penetration [7]. Summary by Sections Recent Trends - Growth in refractive surgeries slowed in April and May after a busy first quarter, but June showed improvement due to an increase in average selling prices (ASP) from new technologies [3]. - Cataract surgeries faced volume declines due to tightening reimbursement policies, while optometry performance remained moderate [3]. Refractive Surgery Pricing - New technologies such as SMILE 4.0 and SMILE pro have been launched, with SMILE 4.0 contributing 12% of refractive surgery revenue in Q1 2025 [3][6]. - The ASP for SMILE 4.0 is around Rmb18,800, with approximately 100 installations [3]. Cataract Surgery Outlook - The company expects cataract surgery revenue growth to recover to double digits in H2 2025, as the lower prices from H2 2024 are now reflected [9]. - Premium cataract surgeries accounted for 45%-50% of total cataract surgeries as of Q1 2025, with 15% of revenue coming from femtosecond laser-assisted surgeries [9]. Optometry Services - Recent pricing pressure on OK lenses was noted, particularly after public hospitals in Beijing reduced prices by 50% [9]. - The annualized cost for OK lenses is around Rmb10,000, while defocal lenses cost only Rmb2,000 to Rmb3,000 [9]. Overseas Expansion - Aier Eye Hospital is focusing on expanding its presence in South America [9].

Investment Rating - The report does not provide a specific investment rating for Conant Optical (2276.HK) as it is categorized as "Not Covered" [1]. Core Insights - Conant Optical is expanding its business from traditional spectacle lenses to AI/AR glasses, anticipating sustained growth in its core business and increased demand for AI/AR glasses due to their higher dollar content and specific client requirements [1][2]. - The company is positioned to benefit from the growing AI/AR glasses market, with expectations of a 56% CAGR in shipments in China from 2024 to 2030, reaching 7 million units by 2030 [2]. - Conant's customized lenses for AI/AR glasses are designed to be lighter and thinner, with a significant increase in average selling price (ASP) compared to traditional lenses [4]. Summary by Sections Company Profile - Conant Optical is a leading resin lenses manufacturer in China, with 44% of its revenues from standardized lenses, 37% from functional lenses, and 19% from customized lenses, which have a higher gross margin [3]. - The company operates in 90 countries and ranks among the top 10 resin lenses manufacturers globally by revenue [3]. Market Outlook - Management expresses optimism about the AI/AR glasses market's growth potential, indicating that Conant will be a key beneficiary due to its customized lens solutions for both global and local clients [8]. - The company plans to enhance its market presence by partnering with offline stores in China to facilitate the lens ordering process for consumers [8]. Production Capabilities - Conant has demonstrated strong mass production capabilities, allowing it to produce millions of customized lenses quickly, supported by its precision manufacturing skills [7]. - The company is expanding its production capacity with a new plant in Thailand expected to commence operations in 2026 [7].

Investment Rating - The report maintains a neutral asset allocation stance while focusing on diversification across regions and styles [3]. Core Insights - Increased expectations of a more dovish Federal Reserve and de-escalation of geopolitical tensions have created a favorable "Goldilocks" environment for markets, supporting growth pricing across various assets [1][2]. - The report highlights a broad geographical bullish growth repricing, with equities outperforming bonds and cyclicals outperforming defensives [1]. - Consensus EPS revisions have turned less negative recently, with positive revisions noted for the US market, indicating improved expectations for equity fundamentals [2]. Summary by Sections Market Conditions - The report indicates that markets are pricing in a more dovish Fed, with expectations for a rate cut brought forward to September and a reduced terminal rate forecast of 3-3.25% [1][7]. - The labor market data expected this Thursday is deemed critical for sustaining positive momentum, with economists forecasting 85k for non-farm payrolls, below the consensus of +113k [1]. Earnings Outlook - The upcoming Q2 earnings season is highlighted as a key focus, with a relatively low bar for EPS growth set at 4%, down from 12% in Q1, and insights expected on corporate adjustments to increased tariff rates [2]. Asset Allocation - The report suggests that reverse dispersion trades may be attractive as a macro hedge against potential growth deterioration over the summer [2]. - Recommendations include option hedges and specific strategies such as USD HY puts/CDS payers to hedge against stagflationary shocks [6]. Performance Metrics - The report provides forecasts for various asset classes, indicating expected total returns and downside risks for equities and bonds over different time horizons [18]. - The S&P 500 is projected to have a total return of -4.1% over 3 months, with a potential upside of 6.6% over 12 months [18]. Risk Appetite - The report notes a rebound in the Risk Appetite Indicator to 0.3, reflecting increased risk appetite among investors [1][26]. - Implied equity correlations have been falling, indicating expectations of more dispersion in the earnings season and a fading macro risk environment [2][15].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report highlights five key themes impacting the market, including macroeconomic factors, currency dynamics, oil market conditions, and tariff developments [1][2][5][20][29] Summary by Sections Macroeconomic Insights - The UK is positioned as a higher-growth, higher-inflation jurisdiction compared to G10 peers, with terminal rates likely settling 100-200 basis points above Europe [2][3] - Business confidence in the UK is at multi-month highs, and there is a deep sovereign bond market with long-term investors under-invested [2][3] Currency Dynamics - The USD may weaken further due to a dovish tilt from the Fed, especially if upcoming labor market data shows weakness [5][6] - The Euro area is experiencing equity inflows, which may lead to a stronger Euro, although the pace could slow if there are no compelling reasons to reallocate from the US [7][8] - The JPY is expected to maintain demand due to recession risks and reduced appeal of US assets, while the INR may lag in appreciation compared to other Asian currencies [9][13] Oil Market Analysis - The risk premium in oil prices has significantly decreased, dropping from over $15 per barrel to just a few dollars, as geopolitical risks have lessened [20][21] - The report forecasts Brent crude oil prices to decline from the current high 60s to around $60 in Q4 and mid-50s by 2026, driven by oversupply [23][24] - Global oil inventories have increased by approximately 1.3 million barrels per day over the last 90 days, supporting the forecast of an oversupplied market [27][28] Tariff Developments - The July 9 tariff deadline is likely to be pushed out, with potential for sectoral tariffs rather than broad increases [29][30] - The report suggests that specific sectors, such as semiconductors and pharmaceuticals, may face targeted tariffs, but the timing remains uncertain [35][36]

Investment Rating - The report does not explicitly provide an investment rating for the industry or the specific company, SenseTime Core Insights - The management of SenseTime is optimistic about the increasing demand for generative AI solutions from enterprise clients, emphasizing their capability to deliver a comprehensive one-stop solution that includes infrastructure, software migration services, foundational models, and applications [1][4][7] - SenseTime's generative AI products have shown triple-digit year-over-year growth in 2024, contributing 64% to the total revenue, indicating strong market traction [4][8] - The company is also expanding its generative AI applications, targeting various sectors including productivity tools and interactive AI tools, with significant engagement metrics reported [8][9] Summary by Sections Generative AI Solutions - SenseTime is positioned to provide a complete generative AI solution, from infrastructure to foundational models and applications, which is crucial for enterprise clients looking to implement AI effectively [1][4][7] - The company has developed an in-house large-scale AI data center (AIDC) in Shanghai, enhancing its operational capabilities and software migration processes [7] Market Engagement - SenseTime's generative AI applications have penetrated major enterprises such as Kingsoft Office, China Mobile, and Lenovo, with daily API calls exceeding 3.5 billion, showcasing the high demand for their tools [8] - The company has also launched multiple AI interactive tools, achieving high engagement and conversion rates, indicating successful commercialization strategies [8] Automotive Solutions - In 2024, SenseTime's automotive solutions empowered 42 new car models, and the company is collaborating with major automotive manufacturers to deploy advanced AI functionalities [9] - The expectation is set for mass production of their intelligent driving solutions on NVIDIA's Thor platform by the end of 2025, reflecting a strong pipeline for future growth in the automotive sector [9]

Investment Rating - The investment rating for China Resources Pharmaceuticals is Neutral with a 12-month price target of HK$6.17, representing an upside potential of 18.8% from the current price of HK$5.19 [8][29]. Core Insights - The company is experiencing soft growth in the first half of the year, leading management to lower previous guidance of double-digit year-on-year sales growth for 2025, pending a recovery in the second half [1][2]. - The distribution business is facing challenges due to a tough industry environment, and there are no clear signals of growth recovery as the national medical reimbursement fund remains tight [2][3]. - Cash collection is under pressure, with hospitals' financial positions still strained, resulting in delayed payments for non-VBP products despite some acceleration in cash collection for VBP products [3]. Summary by Sections Financial Performance - Revenue for 2025 is projected to be HK$271.5 billion, with a 5-year EPS CAGR of 10% for the manufacturing business and 5% for the distribution business [7]. - The company’s market cap is HK$32.6 billion, with an enterprise value of HK$133.8 billion [8]. Business Segments - The manufacturing business is valued at HK$31.4 billion, while the distribution business is valued at HK$4.1 billion [7]. - Specific challenges include slower growth for Sanjiu due to a high base, pressure on Boya from albumin VBP, and a softer growth trajectory for plasma collection [2]. Cash Management - To alleviate cash pressure, the company is managing its cash cycle actively, including de-prioritizing high-risk regions for receivables [3].

Investment Ratings - The report provides a "Buy" rating for First Quantum Minerals and Ero Copper, while Capstone Copper, Antofagasta, and Codelco are rated as "Neutral" [9][12][18][21][26][35]. Core Insights - The copper market is experiencing ongoing cyclical and structural bullishness regarding supply and demand dynamics [2]. - The consensus incentive price for copper is projected to be above $4.5/lb, with some major projects requiring prices between $4.75-$5/lb to incentivize capital returns [2][22][45]. - Cost inflation in the industry has peaked, and the regulatory environment is improving, which may support future project developments [2][22]. Summary by Company Antofagasta - Antofagasta is a pure-play copper producer with a market cap of $24.7 billion, targeting copper production of approximately 750ktpa in 2024 [9]. - The company is focused on brownfield project development, with major growth projects at Centinela and Los Pelambres progressing on schedule [10]. - The 2025 copper production guidance is set at 660-700kt, with net cash costs expected between $1.45-1.65/lb [11]. Capstone Copper - Capstone Copper, with a market cap of $4.7 billion, has a production guidance of 220kt-255kt for 2025 [14]. - The company is focusing on deleveraging and smaller expansion projects before a significant growth phase with the Santo Domingo project [15]. - The management anticipates a financing gap of $200-300 million for the Santo Domingo project, which they aim to address through internal cash flow generation [16]. Codelco - Codelco, a state-owned enterprise, aims for a copper production target of 1.7Mt by 2030, with significant projects at Chuquicamata and El Teniente [21][24]. - The company is exploring public-private partnerships to enhance copper production and smelting capacity [23]. - Codelco's capital allocation strategy includes a focus on internal cash flow to fund growth, with an available capital of $4 billion [25]. Ero Copper - Ero Copper, with a market cap of $1.8 billion, is expected to reach commercial production at its Tucumã operation soon, with a production capacity of 85ktpa of copper [26]. - The company aims to maintain C1 cash costs below $2.00/lb, leveraging high-grade zones at its Caraíba mine [27]. - Ero Copper has a 12-month price target of $18.0 based on DCF methodology [28]. First Quantum Minerals - First Quantum Minerals, with a market cap of $14.7 billion, has a production capacity of 820ktpa and is focused on strong physical demand and tight inventories [30]. - The company is excited about the Furnas project, which is expected to deliver high-grade deposits [31]. - First Quantum has a 12-month target price of C$22.0/share based on an EV/EBITDA multiple-based valuation [35]. Foran Mining - Foran Mining is the only single-asset developer constructing a copper mine in North America, targeting commercial production by mid-2026 [37]. - The company has cleared permitting and funding hurdles, with surface construction approximately 35% complete [38]. Freeport-McMoran - Freeport-McMoran, the largest publicly traded pure-play copper producer, is focused on improving efficiencies and reducing costs [39]. - The company has a large project pipeline representing an annual capacity of 2.5 billion lbs [40]. Hudbay Minerals - Hudbay Minerals has a market cap of $4.2 billion and is advancing its Copper World project, which is fully permitted for 85ktpa production [41]. - The company is optimistic about the regulatory environment in the US and Peru, which supports its project developments [42]. Teck Resources - Teck Resources is focused on responsible growth and value creation, with a strong portfolio of world-class assets [44]. - The company believes that copper incentive prices will need to be above $5/lb to generate adequate returns [45]. Vale Base Metals - Vale Base Metals is undergoing significant restructuring, with a focus on maximizing brownfield opportunities and improving project economics [48]. - The company aims for a copper production guidance of 700kt by 2035, with potential to exceed this figure [48].