19 May 2025 | 3:01PM EDT Global: GS Economic Indicators Update: Global Growth Outlook Improves on Better Tariff News Please find an update of our proprietary global economic indicators below. The data behind these exhibits can be downloaded here. Interactive charts can be found on our living page here. Chart of the Week Exhibit 1: Our 2025 Global Growth Forecast Was Revised Up to 2.3% Following the 90-day Suspension of US-China Tariffs and Generally Better Tariff News Source: Goldman Sachs Global Investment ...

市场洞察 - Marquee --- Market Insights - Marquee Market Insights 市场洞察 CHINA WATCH: Small Cap Backwardation - Two Sides of A Coin 中国观察：⼩盘股倒挂——硬币的两⾯ While we are again back in a policy void and catalyst absence period, two observations topical lately onshore: 虽然我们再次处于政策真空和缺乏催化剂的时期，但近期在岸市场有两个值得关注的现象： 1. Small cap re-active: Small/micro-cap turnover % of market reaching new high ⼩盘股反应活跃：⼩盘/微盘股成交额占市场⽐例达到新⾼ high 2. Backwardation/futures discount: Index futures basis widened and discount moved to new 逆价差/期货贴⽔：指数期货基差扩⼤ ...

Investment Rating - The report indicates a positive outlook for hedge fund performance, particularly for Asia-focused Fundamental Long/Short managers, with a year-to-date (YTD) performance of 6.1% and a month-to-date (MTD) increase of 1.6% [5][7]. Core Insights - The recovery in equity markets is attributed to the US-China tariff deal, which has allowed Fundamental Long/Short managers to recover from early April losses [5]. - The report highlights that returns are primarily driven by beta, with positive alpha contributions from asset selection, while negative returns stem from concentrated longs and country tilts [5]. - Strong net buying flows were observed in the global prime book, with North America accounting for 90% of the inflows, indicating a risk-on sentiment [5][23]. Summary by Sections Hedge Fund Performance - Asia-focused Fundamental Long/Short managers reported a MTD increase of 1.6% and a YTD performance of 6.1% [5][7]. - China-focused managers achieved a MTD increase of 1.3% and a YTD return of 6.5% [10]. - Japan-focused managers saw a MTD increase of 0.8% and a YTD return of 5.9%, with significant dispersion across managers [5][10]. Positioning and Flows - The global prime book experienced strong net buying, primarily driven by the US-China deal, with long buys outpacing short covering at a ratio of 3.9 to 1 [5][23]. - Asian equities saw marginal net buying in May, with inflows into emerging markets offset by outflows from developed markets [5][26]. - Japanese equities experienced slight net selling, with hedge funds adding macro shorts and single stock longs [5][38]. Trading Flows - Chinese equities saw slight net selling, with A-shares net bought due to short covering, while H-shares and ADRs experienced net selling [32][35]. - Japanese equities had marginal net selling, with short sales exceeding long buys [38][44]. - Taiwan and Korea showed slight increases in gross allocation, with Taiwan at 2.2% and Korea at 0.7% [47]. Sector Positioning - In Asia, the most overweight sectors include Industrials (+5.3%), Consumer Discretionary (+3.8%), and Communication Services (+2.4%) [54]. - Financials remain the most underweight sector at -11% [54]. - The report notes that Industrials is the most net bought sector in May, with significant buying across Japan, China, Korea, and Taiwan [64].

23 May 2025 | 9:51AM EDT Apple Inc. (AAPL): Updated tariff comments BOTTOM LINE: AAPL is trading down 3% in pre-market trading on 5/23/2025 following a post on Truth Social that President Trump stated AAPL would face tariffs of at least 25% on iPhones sold in the United States that are manufactured outside of the United States. The US reciprocal tariffs (excluding the current tariff suspensions) on AAPL's key final assembly countries are already >25% so we believe this is consistent with current trade polic ...

25 May 2025 | 9:15AM HKT Tencent Music Entertainment Group (TME): TechNet China 2025 Key Takeaways: SVIP progress on track; Long-term vision to diversify We hosted Tencent Music with investors during GS TechNet China 2025 in Shanghai, where investors' key focus and our takeaways centered around: 1) SVIP progress: management notes SVIP now accounts for low-teens% of its total paying users with current monthly ARPU at Rmb17~18 and a sequentially improving trajectory; 2) Net adds trend, where company reiterate ...

Investment Rating - The report maintains a "Buy" rating for Miniso (MNSO) with a 12-month price target of $23.40, indicating an upside potential of 5.5% from the current price of $22.19 [1]. Core Insights - Miniso reported a 19% year-over-year revenue growth in 1Q25, slightly above guidance, but adjusted operating profit declined by 5% year-over-year, missing expectations due to higher contributions from lower-margin direct-to-consumer (DTC) sales and new store openings [1][2]. - Management remains optimistic about top-line growth for 2025, but has tempered expectations regarding margins due to the ongoing transition to a DTC model [1][2]. - The company aims for a positive same-store sales growth (SSSG) recovery, with management targeting double-digit growth in China and a 40% year-over-year increase in overseas markets [19][20]. Summary by Sections Earnings Review - In 1Q25, total sales reached Rmb 4.4 billion, reflecting a 19% year-over-year increase, with overseas sales growing by 30% year-over-year [29]. - The adjusted net profit was Rmb 587 million, which was 6% lower than expectations, primarily due to lower-than-expected operating profit [32][34]. Financial Forecasts - Revenue forecasts for 2025-2027 have been adjusted slightly downward, with total sales projected at Rmb 20.55 billion for 2025, reflecting a 20.9% growth [37]. - The adjusted net profit for 2025 is now estimated at Rmb 2.22 billion, a 14.7% decrease from previous estimates [37]. Operational Insights - The company closed 111 stores in Mainland China during 1Q25, which was below expectations, while opening 95 stores overseas [31]. - Management highlighted that the DTC model will continue to exert pressure on margins in the near term, but expects improvements in operational efficiency to mitigate this impact [19][20]. Market Strategy - Miniso's strategy includes a focus on increasing the number of larger format stores and enhancing same-store sales productivity, with plans to open fewer stores than previously targeted [25]. - The company is also investing in its IP strategy, which has shown positive market feedback, particularly in the toy category, which accounted for 30% of sales in 1Q25 [27][28].

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies Core Insights - The report highlights the impact of US tariffs on various sectors including appliances, autos, industrial tech, and solar companies, indicating a cautious recovery in production and shipment from China [1][4][19] China Consumer Durables - On average, companies in the consumer durables sector derive 35% of revenues from exports to overseas markets and 7% from exports to the US [2] - Companies are partially resuming production in China, but the pace of recovery varies based on global production capacity [4] - Tariff costs are largely borne by US clients, influencing manufacturers' decisions to resume production in China [4][5] China Autos - Auto OEMs derive 6%-26% of total revenue from China exports and 0%-10% from exports to the US [7] - Companies are cautious about restocking due to high warehousing costs and potential demand decline [7][8] - Some auto suppliers report stable or increasing orders post-tariff reduction, with minimal impact from US-China trade tensions [8][9] China Industrial Tech - Companies in the industrial tech sector are experiencing weakening domestic demand for capital goods, particularly among consumer goods manufacturers [12][14] - Despite a reduction in tariffs from 145% to 30%, the effective tariff burden remains around 55% for thin-margin manufacturers, leading to hesitance in new investments [14][17] China Solar - Solar exporters have seen a meaningful recovery in US shipments following tariff rollbacks, with companies restocking inventory ahead of upcoming regulations [19][20] - There is limited room for further pricing negotiations due to rising demand uncertainty and previous price increases [19][20] - Companies are becoming more cautious about capital allocation to the US, seeking diversified geographical exposure instead [20][21]

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings (0700.HK) with a 12-month target price of HK$595, indicating a potential upside of 15.2% from the current price of HK$516.50 [2][20]. Core Insights - Tencent's unique WeChat ecosystem and global gaming assets provide multiple monetization levers, enabling the company to deliver compounding earnings through macro cycles [2]. - The company is positioned as a key beneficiary of AI applications, particularly through its WeChat super-app and Tencent Cloud, which ranks among the top three public cloud players in China by scale [2]. - The report highlights the tangible benefits from AI-driven adtech upgrades, leading to improved click-through rates (CTR) across various advertising properties [12]. - Tencent's gaming segment continues to thrive, with record gross receipts from evergreen titles, indicating strong user engagement and productivity in game development [12]. - The fintech business has significant growth potential, particularly in wealth management and lending, with a focus on improving blended take rates [16]. Advertising - Advertising has benefited from AI-driven upgrades, with Video Account and Moments being the top two revenue streams in Weixin advertising [12]. - The company has not aggressively monetized live streaming e-commerce yet, viewing it as a transaction element within the Weixin ecosystem [12]. Gaming - Tencent's evergreen games, such as HoK and PKE, continue to achieve record grossing after years of operation, with expectations for healthier economics and reduced reliance on channels [12]. - The company is exploring cross-platform launches and maintaining close relationships with investee studios globally, focusing on Europe and Asia [12]. AI Investment and Monetization - Tencent is committed to investing a low teens percentage of revenue in capital expenditures, primarily for in-house AI model development and applications [12]. - The company is strategically focusing on PaaS and SaaS for external cloud services, aiming for more sustainable margins [12]. Fintech - The fintech segment emphasizes risk management as a top priority, with expectations for improved blended take rates and growth opportunities in wealth management and lending [16]. - The company anticipates a narrowing gap between revenue growth and operating profit growth through reinvestment of operating leverage from high-margin revenue streams into AI initiatives [16]. Financial Projections - Total revenues are projected to grow from RMB 660.26 billion in 2024 to RMB 836.65 billion by 2027, with a compound annual growth rate (CAGR) of approximately 8% [20]. - The report forecasts a significant increase in net profit, with non-GAAP net profit expected to rise from RMB 222.70 billion in 2024 to RMB 299.63 billion by 2027 [20].

Investment Rating - The report indicates that mutual funds ended 1Q25 approximately 175 basis points overweight in the Financials sector, although this is a decrease of about 45 basis points quarter-over-quarter [2]. Core Insights - The reduction in overweight positioning may reflect the impact of tariffs on the broader economic outlook affecting financials and a pushback in capital markets activity [2]. - The Insurance subsector remains an overweight that grew over 1Q25, while Capital Markets exposure was reduced during the same period [2]. - Exposure to Insurance increased quarter-over-quarter by 7 basis points, while exposure to Capital Markets decreased by 14 basis points [2]. - The report suggests that while this positioning may not directly reflect the Australian market, it serves as a useful proxy for investor sentiment towards the insurance and diversified financials sector, particularly in the US market [2]. Summary by Sections - **Mutual Fund Positioning**: Mutual funds had the most overweight exposure to Insurance, which grew over 1Q25, while Capital Markets exposure was reduced [4][8]. - **Sector Analysis**: The report notes that investors remain favorably positioned towards insurers, which appears to be more General Insurance (GI) weighted, relevant to companies like SUN, IAG, QBE, SDF, and AUB within the coverage [2]. - **Market Trends**: The data reflects positioning as of the end of March 2025, with the possibility of changes since then [2].

Investment Rating - The report does not explicitly state an overall investment rating for the luxury goods industry, but it indicates a preference for companies with high-end exposure and diversified large/mid caps with margin defensiveness, while remaining cautious on turnaround stories in a tough industry backdrop [7]. Core Insights - The luxury goods market is experiencing price increases across various brands, particularly in the US, as companies aim to offset inflation and tariffs. Brands such as Louis Vuitton, Moncler, Burberry, and Hermès have implemented notable price hikes [2][7]. - The pricing tracker indicates that overall price gaps across regions have decreased, with the US experiencing a tightening price gap with Europe despite recent price increases [3][5]. - China remains the most expensive market for luxury goods, with a premium of approximately 20-25% compared to Europe. However, there is ongoing softness in the luxury market in China, raising questions about consumer appetite [6][7]. Summary by Sections Pricing Trends - Several luxury brands have increased prices in the US, with notable increases from Louis Vuitton (+L-MSD), Moncler (+LSD), and Burberry (+HSD) [2]. - The current price increases are designed to offset a 10% level of additional tariffs, with potential for more global price increases if tariffs rise further [7]. Regional Analysis - The US has seen a recent weakening of the dollar, which has tightened the price gap with Europe, making luxury goods less attractive for American consumers traveling to Europe [3][5]. - Chinese consumers are showing strong demand for luxury goods, particularly in Japan, where spending nearly doubled year-on-year in FY24 [6]. Brand-Specific Observations - Moncler has the largest price gap between Europe and China at approximately 30%, but this gap has compressed significantly over the past decade [7]. - The report highlights that brands are likely to focus on narrowing the price gap between China and Europe, with Moncler seeing further opportunities to reduce this gap [7].