27 May 2025 | 5:38AM BST Europe Retail Mid-Year European Retail Outlook & Strategy: Having lowered European consumer HAC to c.+2%, we focus on four themes for 2025 HAC update: Our 2025 HAC forecasts are now Germany +2.3%, UK +1.7%, and France +1.2%, largely reflecting differences in wage inflation and, in all cases, assuming the recent material savings rate increases stabilise across the year. In this context, we look at 4 themes for the second half of 2025: promotion mix). Notably, Ahold flag their persona ...

Investment Rating - The report does not explicitly state an investment rating for the industry or specific companies [1]. Core Insights - The UK clothing market experienced a year-over-year growth of +1.4% for the 12 weeks ending April 27, compared to +0.9% in the previous period [1]. - Notable performers include M&S with +11.5% growth, Primark at +3.1%, and Next at +2% [1]. - Zara led with a remarkable +16.1% growth year-over-year, while H&M reported +8.9% [1][4]. Summary by Relevant Sections Market Performance - The UK clothing market's growth of +1.4% year-over-year is an improvement from +0.9% in the prior 12 weeks [1]. - Pre-COVID comparisons show a +3.3% growth stack versus +4.5% previously [1]. Company-Specific Performance - **Primark**: Achieved +3.1% year-over-year growth, a recovery from -0.2% in the previous period. Market share increased by +11 basis points to 6.7% [4]. - **M&S**: Reported +11.5% growth, up from +8.8% in the previous period. Market share rose by +99 basis points to 11% [4]. - **Next**: Recorded +2% growth, with market share increasing by +6 basis points to 9.3% [4]. - **Zara**: Achieved +16.1% growth year-over-year, with a pre-COVID growth of +78.9% [4]. - **H&M**: Reported +8.9% growth year-over-year, with a pre-COVID growth of +4.4% [4]. Future Projections - Forecasts for Inditex suggest a +5.1% growth in 1Q26E, while H&M is expected to see +1% growth in 2Q25E [4].

Investment Rating - The report maintains a "Buy" rating for Intercontinental Exchange Inc. (ICE) with a 12-month price target of $191, indicating an upside of 8.4% from the current price of $176.12 [33] Core Insights - ICE's Energy business is projected to continue its robust growth trajectory, supported by structural tailwinds such as the globalization of natural gas, increasing Brent dominance, and the U.S. administration's push for energy exports [2][4] - The Mortgage segment is showing signs of improvement, with management confident in capturing a larger share of the $14 billion revenue total addressable market (TAM) as industry headwinds diminish [24] - The Fixed Income & Data Services segment is expected to achieve over 5% growth driven by unique data offerings and increasing demand for analytics [29][31] Summary by Sections Energy Business - ICE's Energy revenues are on track for another record year, with over $2 billion in annual revenues, accounting for more than 20% of total revenues and over 25% of operating income [2] - Year-to-date growth in Energy revenues exceeds 20%, following a 25% growth last year and 29% growth in 2023 [2] - The firm anticipates continued growth in LNG and natural gas benchmarks, with TTF volumes up approximately 30% year-to-date [4][15] Mortgage Segment - The mortgage business has undergone significant transformation, with management seeing early signs of idiosyncratic growth that could outweigh broader industry challenges [24] - Recent improvements in origination volumes, with new purchases up 10% year-over-year and refinancing up 50% year-over-year, support a positive near-term outlook [24][27] Fixed Income & Data Services - The Fixed Income segment is experiencing steady growth, driven by demand for unique pricing content and analytics, with the index business contributing over $100 million in revenue [29][31] - Management expects continued growth in fixed income Active ETFs and further integration of unique data sets from the mortgage franchise [31] Data Centers and Connectivity - ICE is expanding its data center capabilities to support future connectivity revenue growth, driven by rising demand from various market participants [32] - The firm operates its private cloud, which is more cost-effective compared to outsourcing, enhancing operational efficiency and easing future M&A integration [32]

27 May 2025 | 7:19AM HKT TechNet China 2025: SenseTime (0020.HK) Foundation model introduced; expanding AI-powered user case We hosted SenseTime's management on May 21 at our TechNet Conference China 2025 in Shanghai. Management remains positive on the generative AI trend in China, and highlights their newly launched foundation model, SenseNova V6, carrying upgraded features with competitive costs across training and inferencing. The company also newly signed a MOU with the Faculty of Law at the Chinese Uni ...

Investment Rating - The report does not provide a specific investment rating for NCE Power (605111.SS) as it is categorized as "Not Covered" [1]. Core Insights - NCE Power anticipates a recovery in demand for power semiconductors, driven by improving inventory levels and foundries' utilization rates, with management expressing optimism for sales growth in 2025 [4][6]. - The company is facing significant competition from both domestic and international peers, alongside tariff uncertainties that may impact future demand [6][7]. - NCE Power is focusing on expanding into higher-end applications, particularly in the automotive sector with 800V and 48V EV platforms, as well as emerging markets such as drones, eVTOL, and AI computing [7]. Summary by Sections Demand Recovery - Management reports a recovering trend in power semiconductors since last year, with inventory improvements and foundries nearing full capacity [4]. - The overall outlook for power semiconductors is positive, with expectations for increased sales growth in 2025 [4]. Competitive Landscape - There is ongoing competition among domestic and overseas peers, which poses challenges for NCE Power [6]. - Tariff risks are also highlighted as a source of uncertainty for future demand [6]. Strategic Expansion - NCE Power is expanding its product offerings into broader and higher-end applications, with a strong focus on automotive electronics [7]. - The company aims to accelerate product adoption in 800V and 48V EV platforms, while also exploring growth in industrial control applications such as drones and robotics [7].

Investment Rating - The report upgrades FLSmidth to a Buy rating from Neutral, with a 12-month price target increased to DKK 430 from DKK 340, indicating an upside potential of 17.9% [1]. Core Insights - The report highlights that FLSmidth is expected to improve its margins by +320 basis points to 14.2% by 2027, driven by SG&A savings and a higher mix of service and PCV [1]. - The current EV/EBIT multiple of 9.9x is below its 10-year median of 11.5x, suggesting a re-rating is warranted as the company enhances its margin prospects [1]. - FLSmidth is in exclusive negotiations to divest its Cement business, which could act as a catalyst for a re-rating as it transitions to a pure-play mining business [1]. - The company anticipates a gradual increase in orders, forecasting group orders to be +0.3%/+0.7%/+1.8% above consensus for FY25/26/27 [1]. Financial Projections - Revenue projections for FLSmidth are DKK 20,187 million for FY24, DKK 18,683.9 million for FY25, DKK 19,341.2 million for FY26, and DKK 20,269.9 million for FY27 [2]. - Adjusted EBIT estimates are projected to be DKK 1,998.5 million for FY24, DKK 2,271.3 million for FY25, DKK 2,419.7 million for FY26, and DKK 2,642.5 million for FY27 [2]. - EPS is expected to grow from DKK 22.51 in FY24 to DKK 32.50 in FY27, reflecting a positive growth trajectory [2]. Valuation Metrics - The report provides various valuation ratios, including a P/E ratio of 15.3x for FY24, decreasing to 11.2x by FY27, indicating an attractive valuation as earnings grow [7]. - The dividend yield is projected to increase from 2.3% in FY24 to 3.6% in FY27, suggesting a commitment to returning capital to shareholders [7]. - The report notes a low net debt to EBITDA ratio of 0.2x for FY25, indicating a strong balance sheet position [7]. Market Position and Strategy - FLSmidth is positioned as a leader in the mining equipment sector, with a focus on enhancing its service offerings and operational efficiency [13]. - The company aims to close the margin gap with its mining equipment peers, which trade at an average EV/EBIT multiple of 14.35x [1]. - The transition to a service-based business model is expected to support higher margins and improved returns on invested capital (ROIC) [33][39].

Investment Rating - The report maintains a "Sell" rating for Acciona Energia with a price target of €18 [1][18][37] Core Views - Consensus earnings estimates for Acciona Energia are considered overly optimistic, particularly regarding the impact of targeted disposals on future profits [1][18] - The company is expected to end 2025 with a smaller installed capacity than in 2024, leading to a year-on-year decline in underlying EBITDA for 2025 and 2026 [1][3][18] - The report forecasts net income for 2025-26 to be approximately 20%-40% below Bloomberg consensus estimates, indicating significant downside risk [4][26][27] Summary by Sections Installed Capacity and Growth - Acciona Energia plans to add 600 MW of capacity organically by 2025, but the announced disposal of 600 MW of domestic hydro assets implies no net growth in installed capacity [2][19] - Incremental divestments of €1.5-1.7 billion are expected, suggesting a minimum reduction of 1 GW in operational assets [2][19] EBITDA and Financial Performance - A decline in underlying EBITDA is anticipated for both 2025 and 2026 due to a shrinking installed base and lower power prices [3][22] - The report projects EBITDA for 2025 at €998 million and for 2026 at €961 million, contrasting with Bloomberg's consensus forecast of a 5%-10% increase in 2026 [3][24] Net Income Forecasts - The report estimates net income for 2025-26 to be around €135-145 million, significantly lower than the consensus estimate of €180-220 million [4][26][27] - This discrepancy suggests a potential for negative EPS revisions, which could further impact the share price [4][26] Valuation and Price Target - The price target of €18 is based on a sum-of-the-parts (SOTP) valuation, with 50% derived from the 2025E SOTP of €19.2/share and 50% from existing asset valuation [37][38] - The report indicates a 2.7% downside from the current price, compared to an average upside of 17% for peers [37][38]

28 May 2025 | 12:07AM AEST Telstra Group (TLS.AX) Buy Monetizing a Connected Future; with 1¢ p.a. DPS growth and A$7-8bn buy-back capacity | | | Telstra hosted its Connected Future 30 Strategy day on 5/27. In our view the two key takeaways from the update are: (1) Telstra has a clear focus on delivering consistent and predictable earnings growth, through simplifying the business, monetizing its core value proposition of superior connectivity, and maintaining tight cost discipline through a commitment to pos ...

Investment Rating - The report does not explicitly state an investment rating for the industry or specific companies Core Insights - Recent sales growth trends for non-alcoholic beverages have decelerated slightly, with overall dollar sales growth up +3.4% year-over-year for the two weeks ending May 17, 2025, compared to previous periods [1] - Pricing growth has softened to +2.7%, while volume growth remains stable at +0.7% year-over-year [1] - Energy drinks continue to show strong sales growth at +8.3% year-over-year, although this is a slight deceleration from previous periods [7] Summary by Category Carbonated Soft Drinks (CSDs) - Dollar sales growth in CSDs was up approximately +LSD% and stable sequentially, with pricing growth slightly stronger but offset by weaker volumes [2] - Coca-Cola Company and Pepsico Inc reported dollar sales growth of +2.7% and +0.3% respectively, with volume declines [9] Bottled Water - Dollar sales trends in bottled water were stable sequentially, with growth around +LSD% and stable pricing and volume growth [2] Energy Drinks - The energy drink category saw dollar sales growth of +8.3% year-over-year, with volume growth at +6.7% [7] - Monster Energy Co. (excluding Bang) reported dollar sales growth of +9.5% year-over-year, driven by stable volume growth [7] Salty Snacks - Dollar sales trends for salty snacks modestly accelerated to -0.9% year-over-year, with volume growth at -2.1% [8] - Pepsico Inc's salty snack sales growth was down -3.3% year-over-year [8] Specific Company Trends - PEP's dollar sales growth modestly accelerated sequentially, while MNST (excluding Bang) showed strong and stable growth at +HSD% [3] - KO's dollar sales growth remained stable at +MSD%, with stable volumes and pricing growth [3] - KDP's dollar sales growth was stable at +LSD%, with stronger pricing growth offset by softer volumes [3]

Investment Rating - The report assigns a "Buy" rating to Ajinomoto with a 12-month target price of ¥4,100, representing an upside of 16.9% from the current price of ¥3,506 [8][10]. Core Insights - Ajinomoto aims to achieve some of its KPIs for 2030 a year ahead of schedule, focusing on cost savings and price hikes while fostering new product development and eliminating sectionalism within the organization [1][6]. - The company expects to achieve its ROE target of 20% in FY3/27 and plans to implement price increases across a wider range of products to secure solid margins [6][9]. - Ajinomoto's overseas sales ratio was 66% in FY3/25, indicating strong international market presence, and the company is well-positioned to benefit from rising demand for seasonings and foods in emerging markets [9]. Summary by Sections 2030 Roadmap - Ajinomoto is targeting to achieve certain KPIs ahead of schedule, including an improved EBITDA margin through expansion into neighboring markets and organic growth [6]. Profitability Improvement Initiatives - The company plans to implement price increases across various product lines while focusing on cost reductions to maintain profitability [6]. FY3/26 Guidance - Ajinomoto believes it can meet its FY3/26 guidance for ABF, which performed well in FY3/25, and acknowledges challenges in achieving significant profit increases in the CDMO segment [6]. New Products and Services - The company has not launched major new products since ABF but is motivated to innovate, with improved cooperation between internal organizations noted as a positive change [6][7]. High-Speed R&D System - Ajinomoto's R&D system focuses on understanding customer needs and completing products ahead of demand, which has been successfully applied in both electronic materials and the food business [7]. CDMO Business Model - Ajinomoto operates an asset-light CDMO business model, leveraging technological advantages to earn licensing income with minimal investment [7]. Valuation Methodology - The target price of ¥4,100 is based on an average EV/NOPAT multiple of 26X for FY3/26E-FY3/27E, reflecting an 18% premium to the sector average [8].