22 May 2025 | 12:34PM EDT US Daily: Lower Oil Prices Won't Offset Much of the Effects of Tariffs on Inflation, Inflation Expectations, and Growth (Rindels) +1(212)902-0394 | jan.hatzius@gs.com Goldman Sachs & Co. LLC Alec Phillips +1(202)637-3746 | alec.phillips@gs.com Goldman Sachs & Co. LLC Jan Hatzius David Mericle +1(212)357-2619 | david.mericle@gs.com Goldman Sachs & Co. LLC Ronnie Walker +1(917)343-4543 | ronnie.walker@gs.com Goldman Sachs & Co. LLC Manuel Abecasis +1(212)902-8357 | manuel.abecasis@gs ...

Investment Rating - The report maintains a "Buy" rating on Hunan Yuneng with a target price (TP) of Rmb62.0, up from Rmb60.0, indicating a positive outlook for the company as a key beneficiary of the LFP cathode upcycle [3][54]. Core Insights - The report highlights a cyclical recovery in China's LFP cathode sector driven by strong demand from Battery Energy Storage Systems (BESS) and New Energy Vehicles (NEV), with LFP cathode demand expected to grow by approximately 24% in 2025E-2026E, leading to a compound annual growth rate (CAGR) of 31% from 2024 to 2026 [1][17]. - The cost advantages of LFP batteries over NCM batteries are projected to expand to around 30% in 2025E, significantly influencing demand growth [1][32]. - Insufficient capital expenditure (CAPEX) is expected to limit supply additions, with capacity growth forecasted to decelerate to approximately 20% CAGR from 2024 to 2026E, lagging behind the demand growth [1][36]. Summary by Sections Demand Outlook - Strong demand is anticipated from both BESS and NEV, with LFP cathode demand projected to grow at a CAGR of 31% from 2024 to 2026E, driven by 30% CAGR from NEV and 34% CAGR from BESS [1][20][21]. - BESS demand is expected to grow significantly, with a revised CAGR of 35% for 2024-2026E, indicating a robust outlook for energy storage solutions [14][29]. - LFP penetration in NEV is expected to reach 90% in China by 2030E, reflecting a growing trend among major automotive manufacturers to adopt LFP technology [15][29]. Supply Dynamics - A significant decline in LFP cathode CAPEX, down 70% from 2Q23 to 1Q25, is expected to constrain capacity additions, with a forecasted CAGR of only 21% from 2024 to 2026E [36][39]. - The report estimates that a price increase of Rmb3k/t is necessary to bring tier 2 LFP manufacturers back to EBIT break-even levels, which is crucial for reactivating capacity expansion [2][42]. Financial Projections - Hunan Yuneng's unit gross profit is expected to increase from Rmb2.4k/t in 2024 to Rmb5.4k/t in 2026E, reflecting the anticipated recovery in pricing and demand [3][54]. - The report projects a volume CAGR of 24% for Yuneng from 2024 to 2030E, indicating a strong market position with an expected market share of approximately 30% [3][54].

21 May 2025 | 2:50PM EDT Apple Inc. (AAPL) WWDC 2025 Preview: Design improvements and AI progress AAPL 12m Price Target: $253.00 Price: $206.86 Upside: 22.3% Bottom line: Apple's WWDC 2025 Keynote will take place on June 9 at 1pm ET (10am PT). We expect AAPL to demonstrate continued progress toward incorporating AI into its operating systems through developer access to its AI models for app development (building on year-ago's availability of Writing Tools, Image Playground, Genmoji), as well as the potentia ...

21 May 2025 | 4:58PM HKT EHang (EH): TechNet China 2025: CFO visit; Low-altitude sightseeing commercialization with OC obtained; eVTOL capacity in expansion; Buy We hosted EHang CFO on May 21 at our TechNet Conference China 2025. Key discussions were around eVTOL commercialization after OC, eVTOL capacity expansion, and OC progress for more operating companies. Overall, management is positive on accelerated deliveries of EH216-S to clients, supported by PC and OC for mass production and commercialization, a ...

Investment Rating - The report assigns a "Buy" rating to ZTO Express (Cayman) Inc. with a 12-month price target of US$27 or HK$210, indicating a potential upside of approximately 54% from the current price levels [2][19]. Core Insights - ZTO Express is experiencing solid share gains in reverse parcels, despite intense competition in the express delivery industry. The company aims for above-industry volume growth while maintaining service quality for sustainable long-term growth [1][2]. - The competitive landscape is characterized by increasing price competition and a higher mix of low-weight small parcels, which are putting pressure on the industry-wide average selling price (ASP). However, ZTO believes there is limited downside to ASP due to the profitability challenges faced by competitors [3][9]. - ZTO plans to invest between Rmb5.5 billion and Rmb6 billion in capital expenditures to ensure that the majority of its land is self-owned, with expectations for a reduction in capex levels by FY26 [1]. Competitive Landscape - The company notes that the competitive landscape remains intense, particularly during peak seasons like the June 18 shopping festival, where ASP is expected to remain pressured as players focus on higher asset utilization [11]. - ZTO has observed increasing pressure on network partners across the industry, which is a key factor in tracking the progress of price competition [9]. Operating Strategies - ZTO is focusing on regaining order volume share while balancing service quality and profitability. The company emphasizes ecosystem sustainability by improving the financial health and efficiency of network partners [1][16]. - The company is also working on cost optimization potentials, particularly in labor costs and automation, to enhance last-mile efficiency [13]. Financial Performance - In the first quarter of FY25, ZTO reported parcel volumes of 8.539 million, representing a year-over-year growth of 19%. However, net revenues were Rmb10.892 million, which was 11% lower than expected [15]. - The revenue per parcel decreased to Rmb1.25, down by Rmb0.11 compared to the previous year, indicating pressure on profitability [15][17]. EBIT Outlook - The EBIT per order is expected to face continued pressure from competition, although the positive contribution from reverse parcels is noted as a mitigating factor [14].

21 May 2025 | 10:11PM IST Goldman Sachs Asia in Focus India: Towards a better growth-inflation balance Santanu Sengupta +91(22)6616-9042 | santanu.sengupta@gs.com Goldman Sachs India SPL Arjun Varma +91(22)6616-9043 | arjun.varma@gs.com Goldman Sachs India SPL Andrew Tilton +852-2978-1802 | andrew.tilton@gs.com Goldman Sachs (Asia) L.L.C. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclo ...

Investment Rating - The report maintains a "Buy" rating for VeriSilicon, with a 12-month target price of Rmb119, indicating an upside potential of 35.9% from the current price of Rmb87.59 [11][9]. Core Insights - VeriSilicon is experiencing strong order momentum, with orders on hand reaching Rmb2.46 billion as of the end of Q1 2025, up from Rmb2.41 billion at the end of 2024. Approximately 80% of these orders are expected to be delivered within one year, supporting growth from Q2 2025 onwards [2][8]. - The company is expanding its capabilities in Chiplet and GPU/AI IP, supported by private placement funding approved by the CSRC in April 2025. This funding will primarily focus on developing high-performance, low-power Chiplet platforms for AI and autonomous driving applications [3][8]. - Revenue from turnkey solutions, which include chipset design and mass production services, has seen significant growth, increasing by 41% year-over-year [4][7]. - The investment thesis highlights VeriSilicon's leading position in the semiconductor IP market in China, with a 2% share in the global IP market. The company is well-positioned to capitalize on the rising demand for computing power, particularly in AI and autonomous driving applications [8][9]. Summary by Sections Orders and Revenue - Orders on hand reached Rmb2.46 billion at the end of Q1 2025, supporting anticipated growth. The product mix is shifting towards more advanced projects (14nm and above), which carry higher value [2][8]. Funding and Expansion - The company plans to utilize private placement funding for R&D in Chiplet and GPU IP/AI IP, focusing on local client needs for high-performance chipsets [3][8]. Turnkey Solutions - The revenue growth from turnkey solutions has increased significantly, indicating strong demand in consumer electronics and a diversified client base across various sectors [4][7]. Market Position and Valuation - VeriSilicon is recognized as a leading semiconductor IP and design service provider in China, with a target P/E multiple of 31x for 2029E, suggesting that the shares are currently undervalued [8][9].

Investment Rating - The report maintains a neutral rating on equities for both 3-month and 12-month asset allocations [2]. Core Insights - The US fiscal concerns are expected to increase the deficit by approximately $275 billion, or 0.8% of GDP, next year, primarily due to more generous individual tax cuts [1]. - Revenue from tariff increases is projected to offset the net increase in the deficit, with expectations of around $400 billion, or 1.25% of GDP, in revenue next year [1]. - Federal debt as a share of GDP is anticipated to rise to about 120% by 2035 from roughly 100% today, indicating a need for close monitoring of the US fiscal outlook [1]. - The report highlights a potential sharp decline in the US trade deficit with China, driven by a decrease in imports following frontloading ahead of tariffs [8]. - Global population aging is viewed as less concerning than previously thought, with healthier aging populations expected to work longer and mitigate economic drawbacks [9]. Summary by Sections US Fiscal Concerns - The House Republican reconciliation package is expected to increase the US deficit by around $275 billion next year [1]. - Tariff revenue is projected to be around $400 billion, which will likely offset the deficit increase [1]. - Federal debt is expected to reach approximately 120% of GDP by 2035 [1]. Trade Dynamics - The report anticipates a decline in the US trade deficit with China, with real goods imports increasing by 3% in April but declining by 4% in May [8]. - The annualized goods trade deficit was around $1.6 trillion in April, decreasing to $1.5 trillion in May [8]. Population Aging - Concerns about global population aging are considered overblown, as healthier aging populations are expected to work longer [9]. - The fertility rate required for long-term population stability is believed to be lower than the current global rate of 2.1, supporting continued population growth [9]. Hedge Fund and Mutual Fund Trends - The average US long/short equity hedge fund has maintained a return of 1% year-to-date, despite a challenging environment [11]. - Mutual funds have shown strong performance, with 50% of large-cap funds outperforming their benchmarks [11].

Investment Rating - The report does not explicitly provide an investment rating for the industry [2]. Core Insights - The report raises end-2025 US 2y/10y yield forecasts to 3.9%/4.5% from 3.3%/4.0% due to a larger-than-expected decline in US-China tariffs [3]. - It anticipates global real GDP growth to slow to 2.3% year-on-year in 2025, influenced by higher US tariffs [3]. - The report expects US real GDP growth to decelerate to 1.0% in 2025, with a 35% probability of entering a recession within the next 12 months [3]. - In China, real GDP growth is projected at 4.6% year-on-year in 2025, despite ongoing challenges from higher US tariffs and domestic issues [3][13]. - The Euro area is expected to see real GDP growth of 0.9% year-on-year in 2025, amid elevated trade policy uncertainty [3]. Economic Forecasts - Global GDP growth is forecasted at 2.3% for 2025, with US GDP growth at 1.0% and China at 4.6% [15]. - Core inflation in the US is expected to rise to 3.6% year-on-year by the end of 2025, driven by higher tariffs [3]. - The unemployment rate in the US is projected to increase to 4.5% by the end of 2025 [3]. - The European Central Bank (ECB) is expected to continue rate cuts until the policy rate reaches 1.75% in July 2025 [3]. Sector-Specific Insights - The report highlights the importance of monitoring US policy and geopolitical developments, particularly regarding US-China relations and the ongoing conflict in the Middle East [13]. - It notes that uncertainty surrounding US tariff policy poses significant risks to both the US and global economies [13].

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The market has experienced a significant rebound, with the S&P index rising approximately 20% from April lows, and all equity markets performing well [2][3] - Oil and gas prices have decreased materially, providing a potential tailwind for the economy, assuming it does not signal a recession [2][3] - There has been a notable increase in M&A activity, with numerous deals ranging from $1 billion to $10 billion announced in the past six weeks despite tariff concerns [2][3] - Retail investors have shown significant engagement, with net buying in the U.S. reaching an annualized rate of approximately $200 billion to $300 billion [17] - The report highlights a shift in focus towards cyclical stocks over defensive ones, with a notable demand for sectors like technology, healthcare, energy, and industrials [12][24] Market Dynamics - The report discusses the impact of tariffs, noting a de-escalation in U.S.-China tariff increases, which are now at 30% and 15% respectively, significantly lower than previous expectations [13][14] - Recession probabilities have decreased to around 35%, and GDP growth estimates for the U.S. and China have been revised upwards [13][14] - The market is currently driven by hard data such as high employment and stable GDP, rather than uncertainties surrounding tariffs [9][10] Retail Investor Influence - Retail investors have increasingly influenced market dynamics, particularly through the "buy the dip" strategy, which has been prominent during market downturns [17] - The report notes the growing relevance of retail investors, who now account for approximately 30% of daily trading volumes and 53% of equity ownership in the U.S. [17] M&A Activity - The report indicates a steady pace of mid-cap M&A activity, driven by the need for growth in a low GDP growth environment [21][24] - There is an emphasis on the challenges faced by small and mid-cap companies in a concentrated market, highlighting the importance of scale [21][24] IPO Market - The report mentions a resurgence in IPO activity, with strong investor demand and oversubscriptions for recent listings such as eToro and Aspen [19][20] - There is a backlog of companies waiting for favorable market conditions to go public, indicating a potential increase in future IPOs [19][20] Economic Indicators - The report notes a significant gap between hard data (employment and GDP) and soft data (ISM, PMI, consumer confidence), which is at one of the widest levels since the 1970s [9][10] - Concerns remain regarding inflation and the potential impact of tariff delays on the economy [7][8]