Group 1: Dollar Credit and Economic Dynamics - The recent high interest rate environment has led to a significant cooling of private credit expansion in the U.S., indicating a fragile balance for the dollar[1] - The correlation between global capital inflow and the dollar index is weak, primarily due to the mirrored relationship between U.S. capital inflow and trade deficits[6] - U.S. residents' net worth is positively correlated with the dollar index, with stock net worth showing a stronger correlation than housing net worth[21] Group 2: Risks and Policy Challenges - There is a notable tail risk of a "debt-recession" spiral if economic policies do not adjust significantly, particularly under the current high interest rates[26] - The U.S. government’s pursuit of trade barriers and a weaker dollar could harm resident welfare and exacerbate the tail risks associated with high bond yields[32] - The ongoing high interest rates and low growth environment raise questions about the sustainability of government debt, potentially leading to a "debt-recession" spiral[34]

Investment Rating - The report does not explicitly provide an investment rating for the automotive industry or specific companies within it [1]. Core Insights - The introduction of the "60-day payment term" reform aims to alleviate the long-standing average payment cycle of 182 days in the Chinese automotive industry, which has been a significant strain on supply chain liquidity [1][7]. - The reform is expected to enhance supplier cash flow, optimize budget management for OEMs, and foster mutual trust and innovation within the industry [2][11]. Summary by Sections Event - On June 10-11, leading independent automakers and new-energy brands in China pledged to standardize supplier payment terms to no more than 60 days, following the revised Regulations on Ensuring Payment to Small and Medium-Sized Enterprises that took effect on June 1 [1][7]. Benefits of the "60-Day Payment Term" - Alleviating supplier cash-flow pressure by reducing settlement cycles to 60 days, which helps small and mid-tier parts suppliers lower financing costs and invest more in R&D and quality improvement [2][11]. - Optimizing OEM budget management through predictable payment schedules, which aids in financial planning and reduces risks associated with late payments [2][11]. - Strengthening mutual trust and driving innovation by establishing clear payment commitments that enhance collaboration and technology sharing between OEMs and suppliers [2][11]. Challenges Ahead - Many OEMs still have payables turnover exceeding 127 days, and existing payment schemes can extend actual receipt cycles to eight months, complicating the implementation of the 60-day term [3][9]. - The need for significant investment in process optimization and digital transformation may hinder smaller OEMs from fully adopting the reforms [3][9]. - The lack of a unified credit-rating and enforcement mechanism in the industry makes compliance with the new payment terms challenging [3][9]. - Ambiguities in contract interpretations regarding payment terms may lead to delays in acceptance and invoicing, affecting the actual execution of the reform [3][9]. - Effective regulatory and judicial coordination is necessary to ensure that penalties for late payments are enforced, preventing the new rules from becoming ineffective [3][9].

Investment Focus - The report covers UAE companies with a market capitalization of approximately $50 billion, primarily benefiting from four core themes: the importance of UAE's energy system and resource growth, strong domestic consumption, increasing focus on technology and AI, and business decarbonization transformation [3][4][5] - The report provides a detailed analysis of various companies, including ADNOC Gas, ADNOC Drilling, and Borouge, all rated "Outperform" with significant growth potential [1][2][4][5] Company Analysis - **Borouge (BOROUGE UH)**: A leading global diversified petrochemical company, Borouge operates one of the largest integrated polyolefin production facilities globally. The company is expected to benefit from a merger with Nordic Chemicals and the acquisition of Nova Chemicals, forming Borouge International Group, which is projected to complete in Q1 2026 [11][15][25] - **ADNOC Distribution (ADNOCDIS UH)**: The largest fuel retailer in the UAE with a market share of approximately 65%. The company is expected to experience strong growth driven by the UAE's economic expansion [4][5] - **Fertiglobe (FERTIGLB UH)**: A leading nitrogen fertilizer producer in the MENA region, aiming for nearly 60% profit growth over the decade through operational efficiency, product expansion, and low-carbon ammonia development [5][6] Market Trends - The petrochemical industry is expected to recover, with improved profit margins anticipated from 2025 due to demand recovery in China and rationalization of high-cost capacities in Europe [12][17][25] - Borouge's products command a price premium over market benchmarks, attributed to its Borstar® technology, which enhances product differentiation and quality [12][34][41] - The report highlights that Borouge's EBITDA margin is projected to be around 40%, significantly higher than the industry average of 19%, indicating strong profitability potential [40][41] Financial Projections - Borouge's revenue is forecasted to reach $5.996 billion in 2025, with a net profit of $1.233 billion, reflecting a stable financial outlook [10][53] - The company is expected to maintain a dividend yield of approximately 6% in 2025, aligning with global industry averages [45][47] Strategic Initiatives - The merger with Nordic Chemicals and acquisition of Nova Chemicals is expected to create a significant synergy, with projected annual EBITDA of approximately $7 billion for the new entity [25][34] - Borouge's strategic focus on the Chinese market, which accounts for about 30% of its sales, is seen as a long-term growth opportunity, especially with plans for a new specialty polyolefin plant [48][49]

Investment Rating - The report assigns an "Outperform" rating to Xiaomi Group, Lenovo Group, BYD Electronics, and Sunny Optical, while a "Neutral" rating is given to SMIC and ASMPT [1]. Core Insights - Generative AI is expected to accelerate a software productivity revolution, pushing the global software market to exceed $2 trillion by 2030, with enterprise software and cloud services projected to grow at CAGRs of 12.3% and 20.7% respectively [4][12]. - The AI + Coding sector is becoming a key area for generative AI applications, with major players including OpenAI Codex and GitHub Copilot leading the market [5][32]. - AI is transforming software development processes, enhancing efficiency and reducing development costs significantly, with expectations of a 90% reduction in project development cycles and labor costs [22][38]. Market Overview and Growth Drivers - The global software market is projected to grow from approximately $737 billion in 2024 to over $2 trillion by 2030, driven by digital transformation, remote work, and cloud computing [17][48]. - North America holds the largest market share at 44%, followed by Europe at 28% and Asia-Pacific at 22% [17][48]. - The AI programming tools market is expected to grow from $6.21 billion in 2024 to $18.2 billion by 2029, with a CAGR of 24% [20]. Technological Breakthroughs and Applications - AI + Coding tools are evolving from simple code completion to full-process development assistants, significantly improving development efficiency [12][29]. - The core technology relies on large language models (LLMs) that understand and generate code, with applications in code generation, testing automation, and project management [24][32]. - The introduction of generative AI is expected to democratize software development, allowing non-professionals to participate through low-code/no-code platforms [32][52]. Hardware Foundation and Cost Structure - The cost structure of AI programming tools is primarily driven by hardware costs, which account for about 70% of total costs, with significant reductions in inference costs due to model optimization [34][37]. - Innovations in CPU and GPU technologies are reshaping the computational ecosystem, with RISC-V architecture gaining traction for its flexibility [37][38]. Industry Impact and Future Outlook - AI + Coding is anticipated to reduce development time by 5-10 times and lower enterprise development costs to 10% of current levels, fundamentally reshaping the software industry ecosystem [38][40]. - By 2028, it is predicted that 75% of enterprise software engineers will use AI programming tools regularly, a significant increase from less than 10% in early 2023 [38][40]. Investment Opportunities and Strategic Recommendations - Three main investment themes are identified: platform-based AI programming tools and IDE providers, vertical industry AI solution providers, and IT outsourcing firms transitioning to AI-driven models [40][44]. - Companies are encouraged to strategically adopt AI programming tools, restructure development processes, and establish governance frameworks for AI-generated code [44].

Employment Data - In May, the U.S. added 139,000 non-farm jobs, slowing from April but exceeding expectations of 126,000[4] - The labor force participation rate fell to 62.4%, down 0.2 percentage points from April[4] - The unemployment rate slightly increased to 4.2%, the highest since October 2021, marking a continuous rise for four months[4] Wage and Hours - Average hourly wage growth year-on-year was 3.9%, better than the expected 3.7%[8] - The month-on-month wage growth improved to 0.4%, surpassing the forecast of 0.3%[8] - Average weekly hours remained stable at 34.3 hours[8] Sector Performance - Job gains in the service sector were strong, with notable increases in leisure, hospitality, and warehousing, while manufacturing and government jobs weakened[7][17] - Professional and business services saw a significant decline, with a loss of 18,000 jobs[7][17] Federal Reserve Outlook - The non-weak payroll data supports a narrative of a soft landing for the U.S. economy, alleviating recession fears[19] - The Fed is unlikely to cut rates in the short term due to stable employment and unclear inflation risks[19]

Economic Overview - The U.S. job market remains stable, with May non-farm payrolls increasing by 139,000, exceeding market expectations of 126,000[6] - The unemployment rate slightly rose to 4.24%, the highest since October 2021, while the labor participation rate fell to 62.4%[6] - In Europe, the Eurozone's HICP inflation rate dropped to 1.9% in May, below the expected 2%[17] Market Performance - Major stock markets saw gains last week (June 2-6, 2025): Hang Seng Index up 2.2%, S&P 500 up 1.5%, and emerging markets index up 1.9%[3] - Commodity prices rose significantly, with Brent oil futures increasing by 4.3% and the S&P-GSCI up 4.1%[3] Monetary Policy - The European Central Bank (ECB) cut rates by 25 basis points, marking the eighth reduction since June 2024, with current rates at 2.00% for deposit facilities[27] - The Federal Reserve remains cautious about rate cuts, with officials highlighting uncertainties related to tariffs and inflation risks[26] Inflation Expectations - U.S. inflation expectations have decreased, with 5-year expectations at 2.35% and 10-year expectations at 2.31%, both down 4 basis points from the previous week[14] - The ECB has revised down its CPI and GDP forecasts for 2025-2026, indicating a downward risk to economic growth[27]

Global Economic Changes - The restructuring of the global economic system is rooted in changes in trust among countries, leading to a long-term bull market for gold[30] - Supply chain shifts are expected to be slow, with short-term tariff disturbances having limited impact[30] - The U.S. dollar's credibility may decline in the short to medium term, with potential risks of rising U.S. bond rates and inflation expectations[30] Domestic Economic Outlook - China's economy has significant medium to long-term potential, but short-term demand needs to be boosted[31] - Stabilizing housing prices is crucial, with a focus on maintaining positive expectations[31] - Macro policies are expected to marginally increase in the second half of the year, with potential further rate cuts[31] Investment Strategies - The report suggests cautious investment in U.S. bonds due to potential further declines in dollar credibility[22] - Emphasis on fixed-income assets, long-term bonds, and money market funds as attractive investment options[28] - New consumption trends and technological innovations are highlighted as long-term investment opportunities[28]

Investment Rating - The report maintains an "Outperform" rating for Li Auto [1][9]. Core Views - Li Auto's Q1 2025 revenue was RMB 25.9 billion, a year-on-year increase of 1%, with a net profit of RMB 6.5 billion, up 9% year-on-year. The company is expected to benefit from its AI capabilities and the cycle of new electric vehicle launches [1][9]. - The projected revenues for Li Auto for 2025, 2026, and 2027 are RMB 168.5 billion, RMB 223.4 billion, and RMB 267.1 billion, respectively, with net profits attributable to shareholders expected to be RMB 10.7 billion, RMB 14.4 billion, and RMB 17.8 billion for the same years [9]. Financial Summary - In Q1 2025, Li Auto delivered 93,000 new vehicles, a 16% increase year-on-year but a 41% decrease quarter-on-quarter. The revenue per vehicle was approximately RMB 266,000, down RMB 36,000 year-on-year [4][9]. - The company's gross profit margin for vehicles in Q1 2025 was 19.8%, an increase of 0.4 percentage points year-on-year, attributed to cost reductions and changes in pricing strategy [4][9]. - The SG&A expense ratio decreased by 1.9 percentage points year-on-year, primarily due to reduced employee compensation and improved operational efficiency [4][9]. Market Data - The current market capitalization of Li Auto is approximately HKD 235.5 billion, with a current share price of HKD 110.00 [4]. - The stock has traded within a range of HKD 69.15 to HKD 128.70 over the past 52 weeks [4].

宏观研究 /[Table_Date] 2025.06.03 2025-06-09 特朗普关税一波三折，市场情绪反复摇摆 [Table_Authors] ——海外经济政策跟踪 本报告导读： 特朗普关税受阻，对全球风险资产有所提振，但关税博弈一波三折，避险情绪跟随 摇摆。美国经济边际下行，但长期通胀预期进一步上升，货币政策前瞻性指引依然 模糊，但是我们预计降息预期会进一步收窄。 投资要点： 请务必阅读正文之后的免责条款部分 宏 观 研 证 券 研 究 报 告 | 求 | | --- | | 1. | 美国：经济边际走弱，长期通胀预期回升 3 | | --- | --- | | 2. | 欧洲：经济景气度略有上行 5 | | 3. | 美联储继续模糊化前瞻性指引，欧央行 6 月大概率降息 6 | 究 宏 观 周 报 [Table_Summary] 全球大类资产表现。上周（2025.5.23-2025.5.30），全球大类资产价 格中，主要经济体股市分化明显。发达市场股票指数上涨 1.67%， 新兴市场股票指数下跌 0.93%。大宗商品价格均下跌，南华商品指 数下跌 1.62%，IPE 布油期货下跌 1.74%，伦敦 ...

Investment Rating - The report maintains an "OUTPERFORM" rating for Innovent Biologics with a target price of HK$90.10, up from a previous target of HK$62.50 [2][10]. Core Insights - Innovent Biologics showcased its strong oncology R&D capabilities at the 2025 ASCO Annual Meeting, with eight studies selected for oral presentation, highlighting the efficacy and safety of IBI363 and IBI343 in various cancer types [3][15][16]. - The data presented for IBI363 in advanced non-small cell lung cancer (NSCLC) and colorectal cancer (CRC) indicates its potential as a backbone therapy for next-generation immuno-oncology treatments, demonstrating robust tumor responses and long-term survival benefits [4][16]. Financial Summary - Revenue projections for Innovent Biologics are set at RMB 11.86 billion for 2025, with a growth rate of 26% compared to the previous year, and expected to reach RMB 18.17 billion by 2027 [10][13]. - The company is projected to turn profitable in 2025, with a net profit of RMB 384 million, and further growth to RMB 1.77 billion by 2027 [10][13]. Clinical Data Highlights - IBI363 monotherapy showed a median progression-free survival (mPFS) of 9.3 months in advanced NSCLC, outperforming standard therapies [5][19]. - In MSS-type colorectal cancer patients, IBI363 demonstrated a median overall survival (mOS) of 16.1 months, significantly longer than the typical 9-10 months seen with current therapies [8][20]. - The efficacy of IBI363 in treating acral and mucosal melanoma was also notable, achieving a confirmed objective response rate (ORR) of 23.3% in a historically difficult-to-treat population [22].