Investment Rating - The investment rating for Pop Mart (09992) is upgraded to "Overweight" by Morgan Stanley [1] Core Insights - Morgan Stanley has raised the target price for Pop Mart from HKD 224 to HKD 302, reflecting a 35% increase [1] - The report emphasizes that Pop Mart's diverse intellectual property and operational capabilities will drive sustainable growth [1] - Although the growth momentum for 2025 may be fully reflected, the long-term growth potential remains underappreciated [1] - Earnings per share forecasts for 2025, 2026, and 2027 have been increased by 6%, 15%, and 21% respectively, indicating a clearer growth path in North America and Europe [1]

Investment Rating - The report maintains a "Buy" rating for China Resources Beer (00291) with a target price of HKD 34 [1] Core Insights - China Resources Beer achieved positive sales growth in April and May, consistent with the sales trend from January to May 2025, benefiting from favorable raw material factors that helped increase gross margin by over 1 percentage point [1] - The company is implementing "Three Precision" initiatives to further reduce operating costs [1] - The management anticipates pressure on the white liquor business revenue this year due to weak demand and high base effects, aiming to avoid losses and impairments [1] Sales Performance by Product - Heineken continues to perform strongly with sales growth exceeding 20% year-on-year - Super X's year-to-date sales have increased by approximately 10% year-on-year - Sales of Old Snow and Amstel have seen over 50% year-on-year growth - Snow Beer Pure Draft experienced a slight single-digit decline in sales year-on-year [1] Sales Performance by Region - The company highlighted strong sales momentum in Guangdong, particularly around the Shenzhen area - It is expected that East China and South China will become key drivers of sales growth in 2025 [1] Sales Performance by Channel - The management noted that demand in the ready-to-drink channel remains weak, although there was a slight improvement in some dining markets in East and South China in May - The company has gained some market share in the nightlife channel - The proportion of ready-to-drink channel sales remains stable, consistent with the end of 2024 levels, at approximately 38-39% [1] Capital Expenditure Plans - Due to strong Heineken sales, the company plans to expand Heineken production capacity in Fujian - In 2025, further investments are planned in maintenance, production line transformation, and the white liquor business - Future capital expenditures are expected to gradually decrease [2] Financial Assumptions - The report uses a discounted cash flow method with a weighted average cost of capital (WACC) of 11.3%, derived from a 3% risk-free rate and a 9.1% risk premium, and a terminal growth rate of 3% [2]

Investment Rating - The industry investment rating is In-Line [5]. Core Insights - The United States and Mexico are negotiating a trade deal to remove the 50% tariff on steel imports, allowing Mexico to export tariff-free steel to the US up to a certain volume [1]. - The US was a net exporter of steel to Mexico in 2024, exporting approximately 4.78 million tons while importing around 3.51 million tons [4]. - The potential shift to a tariff-rate quota (TRQ) system for Mexico could negatively impact long steel producers, as Mexico is a net exporter of rebar and wire drawn products [3]. Summary by Sections Section 232 Overview - Section 232 was enacted in 2018, imposing a 25% tariff on all steel imports and 10% on aluminum, with exemptions granted to Canada, Mexico, and Australia [2]. - In early June 2025, President Trump reinstated a 50% tariff on steel and aluminum imports, removing all prior exemptions [2]. Trade Dynamics - In 2024, the US imported approximately 154,000 tons of rebar from Mexico but exported only about 4,000 tons, indicating a significant trade imbalance in this category [4]. - The US imported around 233,000 tons of wire rod from Mexico while exporting just 45,000 tons, further highlighting the trade dynamics [4]. Company Ratings - Cleveland-Cliffs Inc (CLF.N): Equal-weight rating as of February 15, 2024, with a price of US$8.02 [56]. - Commercial Metals Company (CMC.N): Equal-weight rating as of December 19, 2024, with a price of US$50.67 [56]. - Nucor Corp (NUE.N): Overweight rating as of August 14, 2024, with a price of US$124.68 [56]. - Steel Dynamics Inc (STLD.O): Overweight rating as of March 7, 2025, with a price of US$133.81 [56]. - US Steel (X.N): Equal-weight rating as of February 3, 2025, with a price of US$53.89 [56].

Investment Rating - The report indicates an "Overweight" (OW) fundamental stock rating for several companies, suggesting a positive outlook for these stocks [2][24]. Core Insights - The alpha model MOST has outperformed for the fourth consecutive month, returning +12.4% over the past 12 months, with a significant portion of gains occurring in the current calendar year [2][19]. - The ASX200 index is trading at a forward multiple of 18.7x, which is 1.5x P/E points above the lows observed on April 7, reflecting a 16.4% increase since that date [11][13]. - Growth factors have been the best performing, with a composite growth factor return spread of +5.7% in May, while quality stocks with low leverage and high profitability have also shown strong gains [3][4]. Summary by Sections Stock Ideas - Top-ranked stocks with an OW rating and upside to price targets include ABB, BHP, EDV, IPH, MMS, ORI, PME, QAN, QBE, RDX, and SIG [2][24]. - High-quality companies preferred by the MOST model include ABB, APE, AX1, BHP, COL, DTL, EDV, FMG, IPH, PME, PMV, QBE, and RDX [4][5]. Market Observations - In May, high beta and volatile stocks outperformed, with the broader equity markets advancing from April lows [3]. - The ASX200 has adjusted higher, now trading at 18.7x 12-month forward P/E, indicating a shift in market sentiment towards higher valuations [8][11]. Performance Metrics - The MOST model has shown strong cumulative growth, with high-scoring stocks returning +5.9% in May, while low-scoring stocks returned +5.3% [19][22]. - The report highlights that multiple expansion has been a key driver of index returns, despite a moderation in earnings signals [11][16]. Screens and Stock Ratings - The report categorizes stocks into various buckets based on market capitalization and investment style, providing tailored stock ideas for different investment disciplines [4][10]. - Bottom-ranked stocks with an Underweight (UW) rating include WBC, ORG, and SFR, indicating a negative outlook for these companies [27][28].

Investment Rating - The industry investment rating is "In-Line" [5][10]. Core Insights - China's total absolute non-domestic Available Seat Kilometers (ASK) was 76% of 2019's level as of June 9, 2025, reflecting a 12% year-over-year increase but a slight decrease of 1% week-over-week [10]. - Excluding US routes, the recovery of China's absolute non-domestic ASK reached 86% of 2019's level [10]. - Capacity additions were noted on Hong Kong (+2%) and US (+1%) routes, while reductions occurred on Macau (-1%) and Korea (-1%) routes [10]. - Significant year-over-year increases in ASK were observed for Japan (+35%), Korea (+25%), Hong Kong (+17%), and US (+13%) routes, while Macau (-15%) and Thailand (-31%) saw decreases [10]. - Seat capacity for Japan, Thailand, and Korea routes reached 106%, 47%, and 94% of 2019 levels, respectively, while US routes were at 29% [10]. Summary by Relevant Sections International Air Capacity - Non-domestic ASK was 76% of 2019's level as of June 9, 2025, compared to 77% the previous week [2]. - Total seat capacity has recovered to approximately 80% of 2019's level [5]. Capacity Recovery - The report highlights that total absolute non-domestic ASK was -1% week-over-week and +12% year-over-year [10]. - Specific route recoveries include Japan at 106%, Korea at 94%, and US routes at 29% of 2019 levels [10]. Company Ratings - Air China Limited (601111.SS) rated Equal-weight, Air China Limited (0753.HK) rated Overweight [62]. - Cathay Pacific Airways (0293.HK) rated Equal-weight, China Eastern Airlines (600115.SS) rated Equal-weight [62]. - China Southern Airlines (600029.SS) rated Equal-weight, COSCO SHIPPING Energy Transportation (1138.HK) rated Overweight [62].

Investment Rating - The investment rating for ZoomInfo Technologies Inc is Equal-weight [5]. Core Insights - ZoomInfo announced a ~6% reduction in its global workforce to align resources with its strategy to focus on upmarket customers, expecting to achieve $28 million in annualized savings [1][2]. - The restructuring is anticipated to enhance margin expansion opportunities in FY26, with a potential operating margin of 37.5%-38% [2][3]. - The company expects down-market revenue to decline further, but the overall downside risk to FY25 revenue is viewed as less concerning [2][3]. Summary by Sections Workforce Reduction and Strategy - The workforce reduction is primarily focused on sales representatives servicing down-market customers, allowing for a more efficient growth model targeting larger deal sizes with upmarket clients [1]. - The company plans to flow through the majority of the savings from the workforce reduction, which was included in the guidance provided alongside Q1 earnings [1][2]. Financial Outlook - For FY25, revenue is expected to decline by approximately 1% year-over-year, with down-market revenue projected to deteriorate towards mid to high-teens declines [2]. - The guidance for FY25 margin is set at 35.9%, with expectations for minimal expansion, while FY26 forecasts suggest a margin of 36.6% [2][3]. Valuation and Market Position - The current market capitalization of ZoomInfo is approximately $3.588 billion, with a price target set at $12.00 [5]. - The company operates within the software industry, which is viewed as attractive, indicating a positive outlook for the sector [5].

Investment Rating - The investment rating for Telefonica Brasil SA is Overweight [7][79]. Core Insights - The report outlines a strategy based on five pillars to enhance Free Cash Flow (FCF): 1) ARPU uplift, 2) Churn reduction, 3) Regulatory tailwinds, 4) Leasing cost optimization, and 5) Lower CAPEX intensity [3][4][5][6]. Summary by Sections Product Initiatives - Brazil's competitive landscape remains positive despite new entrants like NuCel, with price hikes expected to support revenue growth in Q2 2025. The focus is on high-quality convergent offers, which account for over 80% of fiber net additions. Management aims to increase ARPU and reduce broadband fiber churn from 1.5% to closer to 1% [4]. Cost Initiatives - Cost optimization is targeted through regulatory upgrades and leasing cost reductions. The transition from concession to authorization is expected to yield one-off benefits and recurring savings as legacy networks are phased out. Additionally, further reductions in tower leasing costs are anticipated due to market consolidation [5]. CAPEX Trends - The CAPEX/Revenue ratio is projected to decline as major investments for 5G and fiber-tower connections are completed. Future efforts will focus on increasing FTTH penetration and scaling network sharing agreements, which will help reduce CAPEX intensity [6]. Financial Projections - The report forecasts an improvement in FCF margins from 5% in 2024 to 16% in 2026, driven by successful execution of the outlined strategies. The current valuation is noted to be 18% below its 2021 average, indicating potential upside [7].

Investment Rating - Industry View: In-Line [5] Core Insights - Dollar Stores are experiencing significant momentum, with an expected acceleration in share gains throughout 2025, potentially driving an incremental comp growth of approximately 200-250 basis points [3][18][22] - The combined share of Dollar Stores (DG, DLTR, FIVE, OLLI) nearly doubled in Q1'25, reaching around 3% of incremental retail sales, compared to 1.6% in Q4'24 [2][13] - Major retailers like AMZN, WMT, and COST continue to dominate the market, capturing approximately 43% of every incremental dollar of retail sales, making it challenging for other retailers to gain market share [4][7] Summary by Sections Dollar Store Performance - Dollar Stores benefited from a heightened degree of share donation in Q1'25, with an estimated $3 billion of donated share, significantly higher than the previous quarter [15][18] - The share gains for Dollar Stores are attributed to bankruptcies and store closures among competitors, as well as tariff impacts on certain retailers [3][18] Major Retailers' Market Share - In Q1'25, AMZN's share of incremental retail sales decreased to 20.7%, while WMT and COST gained shares, with WMT at 11.1% and COST at 11.3% [4][9] - COST's share of incremental retail sales has shown a steady increase since 2022, reaching 11.3% in Q1'25, indicating strong momentum [9][10] Future Projections - The analysis suggests that Dollar Stores will continue to see outsized incremental sales through the end of 2025, driven by ongoing share donations from competitors [18][22] - The expected decline in Temu's sales is projected to significantly impact the market dynamics, with a forecasted 37% year-over-year decline in Q2'25 [18][22]

Investment Rating - The industry view for Greater China Materials is rated as Attractive [6]. Core Insights - The potential for a second batch of nuclear power plant approvals in the second half of 2025 remains uncertain, but may increase if economic growth requires stimulus [3]. - China National Nuclear Power (CNNP) has sufficient sites to meet an approval speed of 10 nuclear units per year, with a budgeted capital expenditure for nuclear power expected to show significant growth in 2025 [3][9]. - The commercial application of fusion reactors is projected to be a long-term endeavor, around the 2050s, while small modular reactors (SMRs) are not expected to be built on a large scale in China [4][9]. - China Nuclear Engineering Corporation (CNEC) has a strong track record, having built 64 nuclear power units and currently constructing 32 units, indicating potential for accelerated construction starts [5][9]. Nuclear Supply and Uranium Insights - China National Uranium Co., the mining arm of the group, owns domestic resources and international assets, including the Rossing mine in Namibia and a greenfield mine in Mongolia [10]. - The group is actively exploring for uranium in various countries, including Uzbekistan, Namibia, and Zimbabwe, to secure more resources [10]. - Despite some growth in domestic supply, China is expected to continue relying primarily on overseas uranium resources to fuel its expanding nuclear fleet [10].

Group 1: Investment Recommendations - Morgan Stanley recommends an "Overweight" (OW) rating on Recruit, Mercari, Kakaku.com, and LY for FY25 2H due to their growth potential and profit generation capabilities[1][5] - Kakaku.com is expected to achieve double-digit year-over-year (YoY) growth in sales and operating profit (OP) driven by digitalization trends in the restaurant sector and the success of Kyujin Box[5][7] - Mercari is in an earnings expansion phase with high domestic e-commerce profits and new advertising business opportunities[5] Group 2: Financial Performance and Forecasts - Kakaku.com's revenue is projected to grow from JPY 66,928 million in FY24 to JPY 78,435 million in FY25, reflecting a 15% YoY increase[13] - Operating profit for Kakaku.com is expected to rise from JPY 25,819 million in FY24 to JPY 29,293 million in FY25, indicating a 35% YoY growth[13] - LY is anticipated to maintain high shareholder returns and introduce AI-enabled products starting in the second half of FY25[5] Group 3: Market Conditions and Challenges - Recruit is expected to see profit growth through margin improvements despite a sales decline forecast due to macroeconomic uncertainties[5] - Askul faces challenges in achieving double-digit earnings growth due to rising fixed costs associated with logistics and platform renewals[21] - Hakuhodo DY Holdings is projected to experience moderate profit expansion amid a recovering advertising market, with a focus on restoring pre-pandemic profit levels[15]