Investment Rating - The investment rating for Dyno Nobel Limited is Equal-weight with a price target of A$2.90, indicating a modest upside of 13% from the current price of A$2.57 [6]. Core Insights - The report indicates that divestments are progressing towards a full fertilizer separation, although the proceeds from these sales appear light [1][4]. - The underlying performance in explosives is solid, but overshadowed by resegments and turnarounds [1]. - The market is expected to wait for a complete fertilizer separation before making significant moves [1]. Financial Performance - The sale of the Fertiliser Distribution business to Ridley Corporation is expected to yield gross proceeds of A$375 million, which is viewed as underwhelming at 7x EBIT based on the average over the past five years [4]. - The Perdaman offtake agreement is projected to generate gross proceeds of A$145 million, which is considered light given expectations of A$45 million per annum of EBIT [4]. - The company reported a 1H25 EBIT of A$174 million, which is a 13% increase compared to Morgan Stanley estimates and an 8% increase versus the previous year [9]. Market Guidance - The guidance for FY25 remains unchanged, with an expected exit run rate of approximately 40-50% of a ~A$300 million EBIT uplift program [9]. - The production forecast for Phosphate Hill in FY25 is maintained at 740-800kt, with anticipated gas costs of A$40-80 million due to shortfalls [9]. - Contracted fertilizer sales volumes have been deferred into 2H25 due to adverse weather conditions [9].

Investment Rating - The investment rating for Britannia Industries Ltd is Equal-weight [8] Core Insights - Management anticipates a gradual sequential recovery in growth, aiming for double-digit revenue growth in fiscal year 2026. Price hikes implemented in the fourth quarter are expected to fully impact the first quarter, with no further price changes anticipated [1] - Volume growth was reported at 3.5% in the fourth quarter [1] - The company is targeting cost savings of over 2.5% in fiscal year 2026, with a focus on increasing distribution depth in high-potential outlets and expanding reach in rural areas [2] - The non-biscuit portfolio currently represents 75% of the product mix, with aspirations to grow it at 1.5 times the biscuit portfolio [2] - The company has not actively pursued mergers and acquisitions due to high valuations and low potential for value creation [3] Financial Metrics - The price target for Britannia Industries Ltd is set at Rs 5,511.00, with a current share price of Rs 5,436.00, indicating a 1% upside potential [8] - Market capitalization is reported at Rs 1,307,186 million, with an enterprise value of Rs 1,295,712 million [8] - Projected revenue for fiscal year 2025 is Rs 177,781 million, increasing to Rs 194,068 million in fiscal year 2026 [8] - Earnings per share (EPS) is expected to grow from Rs 91.57 in fiscal year 2025 to Rs 109.51 in fiscal year 2026 [8] - The company maintains a high return on equity (ROE) of 60.6% for fiscal year 2025, projected to be 60.1% in fiscal year 2026 [8]

Investment Rating - The report assigns an "Overweight" rating to Eli Lilly & Co. with a price target of $1,133.00, reflecting a strong growth outlook for the company [5]. Core Insights - The SURMOUNT-5 Phase 3 obesity trial data indicates that Zepbound (Tirzepatide) outperformed Wegovy (Semaglutide) in terms of weight reduction, with a 20.2% reduction from baseline at 72 weeks compared to 13.7% for Wegovy [2]. - Zepbound patients were significantly more likely to achieve substantial weight loss milestones, being 2.8 times more likely to lose at least 30% of their body weight compared to Wegovy patients [2]. - The trial also showed that Zepbound had a lower incidence of gastrointestinal adverse events leading to treatment discontinuation compared to Wegovy, although injection-site reactions were more common with Zepbound [1][2]. Summary by Sections Trial Results - In the SURMOUNT-5 trial, 89.3% of Zepbound participants received at least one 15mg dose, while 92.8% of Wegovy participants received at least one 2.4mg dose [1]. - The rates of nausea and diarrhea were similar in both groups, but Zepbound had a lower vomiting rate (15% vs. 21%) [1]. Weight Reduction - The percent change from baseline in body weight at 72 weeks was 20.2% for Zepbound versus 13.7% for Wegovy [2]. - Zepbound patients were 1.3x to 2x more likely to achieve weight reductions of at least 10%, 15%, 20%, and 25% compared to Wegovy patients [2]. Cardiometabolic Improvements - Greater weight reduction with both treatments led to improvements in cardiometabolic risk factors, including blood pressure and glycemia, with clinically relevant mean differences between Zepbound and Wegovy [3][7]. Market Context - The SURMOUNT-5 data may help Eli Lilly maintain market share in the face of potential impacts from the IRA on Semaglutide in 2027 and its eventual loss of exclusivity in 2032 [9].

Group 1: Market Dynamics - The emergence of "Little Dragons" like DeepSeek and Yushutech has renewed confidence in China's supply chain competitiveness and technological innovation[2] - China's supply chain advantages stem from cost reduction and efficiency, but reliance on exports may continue due to domestic economic imbalances[4] - The potential market growth rate may fall below the pace of capacity expansion due to upcoming tariff pressures and long-term multipolar trends[4] Group 2: Economic Challenges - Structural economic imbalances and cyclical deflation pressures cannot be resolved solely through technological innovation[2] - Risks of capital misallocation persist, exacerbated by corporate profit pressures and non-market investments driven by supply-side policies[4] - Evidence of capital misallocation includes weak total factor productivity growth and rising debt ratios[4] Group 3: Policy Recommendations - A five-part policy framework is proposed to address economic challenges: re-inflation, rebalancing, restructuring, reform, and revitalizing private enterprise confidence[8] - Progress in the five-part framework could help overcome supply-side growth bottlenecks and enhance China's supply chain and innovation capabilities[8]

Group 1: Market Performance - Recent rebound in the Chinese market is primarily driven by AI momentum, with significant divergence between tech stocks and others[3] - From January 13 to February 7, 2025, the Hang Seng Index rose by 12%, while the Hang Seng Tech Index surged by 22%[3] - The MSCI China Index increased by 13%, with the MSCI China IT sector up by 24% during the same period[3] Group 2: Investment Trends - Southbound capital inflow reached $17 billion year-to-date, primarily directed towards IT and communication services[11] - Daily average net inflow for IT sector doubled from $42 million in 2024 to $88.1 million in 2025[11] - Global long-term investors still hold significant underweight positions in relevant sectors, indicating potential for catch-up[11] Group 3: Economic Outlook - Continued deflationary pressures are expected to hinder consumption and traditional non-tech sectors, prolonging performance divergence[12] - Recent macroeconomic data shows little improvement in deflationary pressures, with weak sales in duty-free shops during the Spring Festival[12] - Concerns over economic slowdown may limit broad beta investment opportunities until after the National People's Congress in March[12] Group 4: AI Sector Insights - The report highlights 15 AI-related stocks that are expected to benefit from advancements in AI technology, particularly in infrastructure and applications[13] - The technology from DeepSeek significantly reduces AI training and inference costs, potentially accelerating AI adoption in China[13] - The shift in global investor sentiment towards China's tech and AI sectors is seen as more sustainable than previous short-term rebounds[6]

Macro Policy and Economic Forecast - The official deficit rate is expected to reach 4% or higher, with a fiscal stimulus increment of around 2 trillion RMB[1] - Policy focus shifts towards consumer goods renewal, with a predicted cumulative policy rate cut of 40 basis points by mid-next year[1] - Unconventional counter-cyclical measures include central enterprises issuing special investment bonds and coordinated fiscal and monetary policies, injecting 2 trillion RMB in liquidity[5] Economic Priorities and Structural Reforms - Expanding domestic demand is prioritized over technology and industrial chain investments, signaling a shift towards an internal demand-driven framework[3] - Structural reforms are necessary to transition from an investment and real estate-centric economy to a more balanced structure, a process expected to be long-term[5] - Addressing real estate bad debts requires a combination of policy intervention and market-based mechanisms to clear the market and ensure fiscal sustainability[5] Financial and Insurance Sector Outlook - Loose monetary policy has led to increased deposit savings rates, limited consumption stimulation, and reduced resource allocation efficiency[8] - The insurance sector shows strong investment value, with significant growth in new business value and improved performance due to channel optimization and product structure enhancements[13] - Challenges for the insurance industry in 2025 include managing new business value growth and addressing market concerns over interest rates and opening red scenarios[14]

Investment Rating - The report indicates a cautious outlook on the Chinese economy, with lowered GDP forecasts for 2024 and 2025, reflecting concerns over soft activity data [7][19]. Core Insights - The report highlights a significant decline in China's industrial production, retail sales, and fixed asset investments, leading to a negative GDP deflator throughout the forecast period [2][19]. - The Federal Reserve is expected to consider a 50 basis point rate cut in the upcoming FOMC meeting, with market participants anticipating a shift in monetary policy [3][7]. - The Bank of Canada is also under scrutiny, with Governor Macklem expressing concerns about economic slack, which may lead to more aggressive rate cuts [10][19]. Summary by Sections Global Macro Commentary - Soft economic data from China has raised growth fears, prompting economists to lower GDP forecasts [7]. - The USTs rallied amid expectations of a potential 50 basis point Fed cut, while uncertainty remains regarding the exact size of the cut [3][7]. Developed Markets - The Empire State Manufacturing Survey showed a significant improvement, rising to 11.5 in September, indicating a rebound in new orders and shipments [19]. - The Canadian economy is facing pressure, with the BoC Governor indicating a desire to avoid further economic slack, which may lead to rate adjustments [10][19]. Emerging Markets - China's August activity data was disappointing, with industrial production growth moderating to 4.5% year-on-year, and retail sales slowing to 2.1% [19]. - In India, the RBI Governor expressed confidence in sustaining a growth rate of 7.5% over the next few years, despite external influences from major central banks [19].

Investment Rating - The report assigns an "Attractive" investment rating to the industry [1]. Core Insights - The headline Total Social Financing (TSF) growth moderated to approximately 8% year-on-year (YoY) in August, indicating a more rational loan extension which is expected to stabilize loan yields [1][2]. - Government bond issuance is anticipated to be a primary support for investment and consumption in the second half of 2024 [1]. - The report forecasts TSF growth to remain around 8% for 2024, with a potential decline below this level, which is viewed positively for the long-term sustainability of the financial system [1][2]. - Credit growth is expected to slow to approximately 7% in 2025, which will help close the gap between credit supply and demand, thereby supporting loan yields through more market-oriented pricing by banks [1]. Summary by Sections TSF Growth and Loan Dynamics - TSF growth moderated to 8.1% YoY in August, with RMB loan growth also at 8.1% YoY [2][3]. - The moderation in loan growth is attributed to efforts to reduce self-circulating loans and a rationalization of loan growth as banks focus on risk containment [1][3]. - Long-term corporate loans remain weak, influenced by policies on capacity control and fair competition rules [1]. Government Bonds and Investment Support - Government bond issuance increased by 15.8% YoY, providing significant support for investment and consumption [2][3]. - The report highlights that government bonds will likely be utilized to bolster investment and consumption in the latter half of 2024 [1]. Household and Corporate Deposits - Household deposit growth remained stable at 10.9% YoY in August, while corporate deposits declined by 3.9% YoY [1][11]. - The stability in household deposits is seen as a positive indicator for fee income rebound in the second half of 2024 [1]. Loan Types and Trends - Short-term household loans saw a significant decline of 52% YoY, while long-term household loans are experiencing a slower decline [1][11]. - The report notes that mortgages are gradually stabilizing, attributed to lower early repayments and some recovery in demand due to lower mortgage rates [1]. Valuation Comparisons - The report includes valuation comparisons for various Chinese banks, indicating a range of price-to-earnings (P/E) and price-to-book (P/B) ratios, with several banks rated as Overweight (OW) [12][13].

Investment Rating - The industry view is rated as Attractive [2]. Core Insights - Earnings for banks remained largely stable in 2Q24, with notable divergences among state-owned enterprises (SOE) banks, particularly with ABC and BOC showing positive revenue growth while ICBC and BoCom exhibited weaker trends [2][6]. - The net interest margin (NIM) remained stable on average, with a modest decline of 2 basis points in 2Q24, supported by lower deposit and funding costs [2][6]. - Fee income pressure persisted, with a double-digit decline reported across most banks, although investment gains helped offset some losses [2][8]. - There was a wider divergence in revenue growth, with Ningbo and Hangzhou banks leading with 7-9% year-on-year growth, while banks like PAB and ICBC experienced notable revenue declines [2][10]. Summary by Sections Earnings Performance - The average profit growth for covered banks improved to 4.9% year-on-year in 2Q24, up from 1.5% in 1Q24, driven by SPDB and CRCB's strong performance [4][6]. - ABC reported a profit rebound of 6.2% year-on-year, while BoCom's profit decreased by 5.2% [5][6]. Net Interest Margin (NIM) - NIM for banks showed a slight average decline of 2 basis points, with CITIC Bank experiencing a notable rebound due to rational loan pricing and deposit cost cuts [2][7]. - ICBC's NIM fell to 1.38%, the lowest among the big four banks, reflecting a significant decline from the previous year [7][16]. Fee Income - Fee income across the covered banks declined by an average of 12.6% year-on-year in 2Q24, with most SOE banks experiencing accelerated declines [8][17]. - Investment income helped stabilize non-interest income, which remained flat year-on-year despite the fee income pressure [8][17]. Revenue Growth - Revenue trends showed a decline of 1.2% year-on-year on average, with significant variations among banks; ABC and BOC achieved positive revenue growth while ICBC's revenue fell by 8.8% [10][12]. - Ningbo and Hangzhou banks reported revenue growth of 8.6% and 7.3% year-on-year, respectively, supported by stable NIM and balance sheet growth [10][12]. Cost Management and PPOP - The average cost-income ratio rose by 60 basis points year-on-year to 32.3%, with SOE banks experiencing a more significant increase [10][11]. - Ningbo reported the strongest PPOP growth at 11.7% year-on-year, while ICBC and BoCom faced sharper declines in PPOP due to weaker revenue [11][12].

Investment Rating - The report indicates a positive investment rating for Financials, while Semiconductors and Semiconductor Equipment have been trimmed to an overweight (OW) position of +3.0% [1][3]. Core Insights - Active GEM funds experienced a significant outflow of US$2.2 billion, contrasting with a US$254 million inflow into GEM passive products [1]. - India has surpassed China as the largest market in active portfolios, while China has become the largest underweight (UW) market, replacing Saudi Arabia [2]. - The most bought stocks include Hon Hai Precision, Meituan, and ITC, while the most sold stocks are TSMC, Alibaba, and SK Hynix [2]. Summary by Sections Active Manager Positioning - Active managers have reduced their overweight positions in Semiconductors and Semiconductor Equipment, while increasing their exposure to Financials [2][3]. - Brazil is now the largest overweight market, with funds reducing exposure to Taiwan, China, and India, as well as Mexico [3]. Sector Analysis - In Japan, active managers have added to Materials, which is now the most crowded sector, while trimming their overweight positions in Tech Hardware & Equipment [2]. - Hedge fund managers have covered shorts in Energy and Real Estate, while increasing shorts in Communication Services and Information Technology [4]. Top Holdings - The top holdings among long-only EM active managers include Taiwan Semiconductor Manufacturing (11.4%), Samsung Electronics (5.7%), and Tencent Holdings (5.1%) [6]. - Notable changes in QTD include a decrease in active weight for TSMC and Alibaba, while Hon Hai Precision has seen an increase [6].