Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Foreign private investors have become the dominant holders of US debt, with their holdings growing significantly since 2010, now totaling approximately $8.5 trillion, surpassing official holdings by $1 trillion [4][11] - The US external debt has surged 1.5 times since 2020, now nearing $10 trillion, indicating a growing reliance on foreign private creditors to service this debt [2][6] Summary by Sections Foreign Holdings of US Debt - Foreign investors hold around $8.5 trillion of US treasury debt, with private creditors holding $4.7 trillion and official creditors holding $3.8 trillion [4][11] - Over 60% of these foreign holdings have maturities within 5 years [4] Maturity Distribution - The weighted average maturity of US debt portfolios for foreign private investors is 10 years, compared to 8 years for foreign official investors, reflecting differing investment priorities [5][21] - Most foreign-held treasury securities with maturities longer than 20 years are held by private investors, with private holdings at $450 billion versus $130 billion for official investors [15][16] Short and Long-Term Debt - Private foreign investors exhibit greater exposure to both short-term (less than 1 year) and long-term (more than 15 years) maturities compared to official institutions, holding approximately $1 trillion in short-term debt [24][25] - The report highlights that the US external debt service payments (principal + interest) have increased significantly, indicating potential challenges in refinancing and servicing this debt [29][31]

Investment Rating - The report indicates a weaker-than-expected performance in loan and credit data for April, suggesting a cautious outlook for investment in the sector Core Insights - Total social financing (TSF) flows and new RMB loans in April were below market expectations, primarily due to a slowdown in corporate loan demand, with bill financing indicating soft demand [1][4] - M2 growth increased significantly in April, influenced by a low base from the previous year, while M1 growth moderated, reflecting substantial funds held in the fiscal account [3][10] Summary by Sections Loan and Credit Data - New RMB loans reported at RMB 280 billion in April, significantly lower than the Bloomberg consensus of RMB 695 billion and GS forecast of RMB 600 billion [2] - Outstanding RMB loan growth was 7.2% year-on-year in April, a decrease from 7.4% in March, with corporate loans showing a notable decline [9] Social Financing - Total TSF flow was RMB 1163 billion in April, below the Bloomberg consensus of RMB 1397 billion and GS forecast of RMB 1350 billion, indicating weaker loan extension [2][4] - TSF stock growth accelerated to 8.7% year-on-year in April, compared to 8.4% in March, with a month-on-month growth of 8.8% [3][8] Monetary Aggregates - M2 growth reached 8.0% year-on-year in April, surpassing the Bloomberg consensus of 7.2%, while M1 growth slightly decreased to 1.5% year-on-year [3][10] - Fiscal deposits showed a significant increase, accumulating an RMB 1190 billion surplus year-to-date, compared to an RMB 187 billion deficit last year [10]

15 May 2025 | 7:53PM HKT We expect key focus on the results call to be on: 1) AI capex/cloud strategies in light of recent AI model breakthroughs, the trajectory for Alibaba Cloud's revenue growth and margin outlook (with the proliferation of AI inference demand yet step-up in AI-related depreciation), while also considering evolving foreign chip availability, time for domestic chip supply ramp-up and more edge-deployed AI models. 2) Outlook for Taobao-Tmall's growth, take rate outlook and profits, with con ...

Investment Rating - The report indicates a positive sentiment towards the market, suggesting opportunities for adding exposure, particularly in short-dated topside volatility strategies [2][3]. Core Insights - Volatility has decreased, allowing systematic investors to take a more bullish stance [2]. - Retail demand remains strong despite May typically being a month of outflows, indicating robust market support [3]. - Liquidity and market sentiment have improved, signaling a healing market environment [4][5]. - CTAs are projected to flip to a net long position in US equities, with expected purchases of approximately $14 billion over the next week [9]. - The report highlights significant short covering in US-listed ETFs and single stocks, particularly in large-cap equity and tech sectors [20][21]. Summary by Sections Liquidity - S&P Top of Book liquidity reached $9.83 million, significantly higher than April lows of $1.1 million and 28% above the year-to-date average [5]. CTA Positioning - CTAs have increased their long positions in US equities, with a projected net purchase of $14 billion, indicating a shift in market dynamics [9]. Retail Demand - Retail flows have remained strong, supporting the market post "Liberation Day" frenzy, with confidence bolstered by the absence of negative economic data [39][40]. Sentiment - Overall market sentiment has improved but remains at low levels compared to historical data, suggesting potential for growth [27]. Volatility Control Strategies - Volatility control strategies are expected to add length due to lower realized volatility, which is currently around 15, aligning with the one-year average [42][43].

Investment Rating - The report maintains a "Buy" rating on Tencent Holdings with a 12-month sum-of-the-parts (SOTP) based target price of HK$590, indicating an upside of 13.2% from the current price of HK$521 [12][24]. Core Insights - Tencent reported a solid performance in 1Q25, with total revenues increasing by 13% year-over-year (yoy) to Rmb180.022 billion, surpassing the consensus estimate of Rmb175.629 billion [13][21]. - The company's earnings per share (EPS) grew by 25% yoy, reaching Rmb6.58, which also exceeded the expected growth of 20% [13][21]. - Key growth drivers included a 24% yoy increase in gaming revenues and a 20% yoy rise in advertising revenues, both outperforming expectations [11][15]. - Gross margin expanded to 55.8%, the highest level since 2Q16, driven by a favorable mix shift towards higher-margin businesses [11][17]. Summary by Sections Revenue Performance - Total revenues for 1Q25 were Rmb180.022 billion, reflecting a 13% increase yoy, with gaming revenues at Rmb59.5 billion (+24% yoy) and advertising revenues at Rmb31.853 billion (+20% yoy) [13][15]. - FinTech and Business Services (FBS) revenue grew by 5% yoy to Rmb54.907 billion, aligning with expectations [17]. Profitability Metrics - Adjusted operating profit increased by 18% yoy to Rmb69.320 billion, exceeding the consensus estimate [13][17]. - Gross profit reached Rmb100.493 billion, with a gross margin of 55.8%, up 3.2 percentage points yoy [17][19]. Capital Expenditure and Cash Flow - Capital expenditure was Rmb27 billion in 1Q25, down from Rmb37 billion in 4Q24, contributing to a free cash flow of Rmb47.1 billion [11][22]. - The company continued its share repurchase program, executing HK$17.1 billion in buybacks during the quarter [11]. Strategic Focus Areas - The report highlights the sustainability of gaming revenue growth, particularly with the performance of evergreen titles and the potential contribution from VALORANT Mobile [2]. - Progress in AI applications and capital expenditure on AI technologies is also a focal point, with recent upgrades enhancing Weixin's capabilities [3][8]. - The implications of AI-driven advertising technology upgrades and revamped eCommerce strategies are expected to bolster marketing services growth [8][9]. Market Positioning - Tencent's unique WeChat ecosystem and global gaming assets are viewed as key strengths that will enable the company to deliver compounding earnings through macro cycles [11]. - The company is positioned as a significant beneficiary of AI applications, particularly with its WeChat super-app and Tencent Cloud's standing as a top player in China's public cloud market [11].

10 May 2025 | 5:55AM HKT China Semis: Maxio (688449.SS): Local memory controller IC, expanding to PCIe 5.0 solution and enterprise market We talked to Maxio (688449.SS, Not Covered) management recently. Maxio is a local memory controller IC supplier, expanding from consumer electronics to enterprise market. Overall, management is positive on company's product migration from PCIe 4.0 to PCIe 5.0 memory controller IC, and expects revenue contribution to start from this year, capturing opportunities from risin ...

9 May 2025 | 1:23PM EDT Global Economics Wrap-Up: May 9, 2025 Global Economics 5/9/25 10:20AM ET Joseph Briggs Andrew Tilton +852-2978-1802 | andrew.tilton@gs.com Goldman Sachs (Asia) L.L.C. Katya Vashkinskaya +44(20)7774-4833 | katya.vashkinskaya@gs.com Goldman Sachs International Jessica Rindels +1(972)368-1516 | jessica.rindels@gs.com Goldman Sachs & Co. LLC Sarah Dong +1(212)357-9741 | sarah.dong@gs.com Goldman Sachs & Co. LLC Blair Turoff +1(212)357-7951 | blair.turoff@gs.com Goldman Sachs & Co. LLC In ...

10 May 2025 | 4:20AM SGT Asia-Pacific Weekly Kickstart MXAPJ stayed around its ytd highs; Hong Kong and China A led this week; Strong foreign inflows continued despite a stronger Dollar MXAPJ rose 0.3%, led by Hong Kong (+4%), China-A (+2%), and Singapore (+1%), while India (-2%), Australia (-1%), and Indonesia (muted) lagged. Tech Hardware & Semis, Transportation, and Insurance & Financial Services led Health Care, Energy, and Software. EM Asia experienced strong foreign inflows totaling US$4.1bn, led by T ...

Investment Rating - The report maintains a "moderately loose" policy stance from the PBOC, indicating a continued easing bias but with a less dovish tone compared to previous communications [1][2]. Core Insights - The PBOC emphasizes the need to balance support for the real economy with the health of the banking system, suggesting a shift in focus towards targeted easing measures rather than broad monetary policy adjustments [1][2][3]. - The central bank has replaced "interest rate policy" with quantity-based tools such as MLF loans and relending/rediscounting, indicating a preference for executing existing policies and a data-driven approach to monetary easing [3][4]. - The PBOC aims to lower comprehensive financing costs for the real economy by reducing non-interest costs and adjusting loan pricing, which may limit the scope for further policy rate cuts [4][7]. Summary by Sections Monetary Policy Approach - The PBOC's Q1 monetary policy report reflects a measured and reactive approach to easing, focusing on quantity-based tools and targeted measures [1][2][3]. - The central bank has indicated a preference for relending programs over broad measures like RRR cuts, suggesting a more nuanced approach to monetary policy [2][3]. Interest Rates and Financing Costs - The PBOC is committed to driving down comprehensive financing costs, particularly by reducing banks' liability costs and adjusting loan pricing [4][7]. - The report highlights the importance of managing interbank liquidity through overnight repo rates and a defined interest rate corridor, indicating a strategic shift in liquidity management [9]. Inflation and Economic Coordination - The PBOC acknowledges deflationary pressures due to weak demand recovery and over-competition, emphasizing that monetary policy alone is insufficient for reflation [8]. - The report calls for better coordination between fiscal, monetary, and other policies to enhance economic recovery, leveraging China's relatively lower net debt compared to other major economies [8].

Investment Ratings - The report maintains a Buy rating for several companies including Kinder Morgan (KMI), Devon Energy (DVN), Par Pacific Holdings (PARR), Eversource (ES), Shoals Technologies (SHLS), Patterson-UTI Energy (PTEN), and Nucor (NUE) [1][2][5][6][8][10][40]. Core Insights - Increased investor interest has been noted in various sectors, particularly in midstream, E&Ps, majors & refiners, utilities, clean technology, energy services, and metals & mining [1][2][5][6][8][10]. - The earnings season has highlighted diverse responses from E&P operators to the weaker oil price environment, with some maintaining activity while others reduce it [4][27]. - The report emphasizes the importance of capital efficiency and free cash flow generation in the current macroeconomic context, particularly for E&Ps and energy services [4][9][31]. Midstream - Kinder Morgan (KMI) is experiencing heightened interest due to steady EBITDA generation and project announcements, closing the growth rate gap with peers [1]. - The company is expected to outperform due to its insulated growth backlog and significant discount to gas peers [1]. E&Ps - Devon Energy (DVN) has garnered attention due to strong 1Q25 results and lower capital spending guidance for FY25, with a focus on maintaining operational efficiencies [2][4]. - Investor sentiment is mixed regarding E&P adjustments, correlating with oil demand outlook and potential recession risks [4][27]. Majors & Refiners - Par Pacific Holdings (PARR) has seen increased investor interest, particularly regarding refining margins and capital allocation priorities [5]. - The company has returned its Wyoming refinery to normal operations ahead of schedule, contributing to positive sentiment [5]. Utilities - Eversource (ES) is attracting investor interest as it trades at a significant discount compared to more defensive utilities, despite regulatory uncertainties [6]. - The earnings season has shown confidence in utilities' earnings execution and growth for 2025 and 2026, with ongoing capital investment opportunities [6]. Clean Technology - Shoals Technologies (SHLS) has seen a stock increase of approximately 28% following a strong earnings report and positive guidance for 2025 [8]. - The company’s shift to a domestic manufacturing strategy is viewed as a competitive advantage [8]. Energy Services - Patterson-UTI Energy (PTEN) reported a 1Q earnings beat and is expected to maintain a steady rig count due to high contracted rigs [9]. - The company remains committed to share buybacks, which could lead to a significant payout ratio [9]. Metals & Mining - Nucor (NUE) is favored due to its scale and operating leverage, with a solid balance sheet and attractive valuation compared to historical averages [10]. - The US steel industry outlook is constructive, supported by order backlogs and market share gains [10].