Investment Rating - The report assigns an "In-Line" industry view for the Hong Kong property sector [1]. Core Insights - July 2024 retail sales in Hong Kong declined by 12% year-over-year, which is worse than expected, leading to a revised forecast for 2024 retail sales to a decline of 9% from a previous estimate of 5% [1]. - The report highlights that stocks with retail exposure, such as Wharf REIC, Link REIT, and Hysan, have underperformed the Hang Seng Index by 20-24 percentage points year-to-date [1]. - The report favors residential developers over retail and office landlords, with a preference for Wharf REIC and Link REIT among retail landlords [1]. - The report notes that luxury retail sales dropped significantly, with a 25% year-over-year decline in July 2024, and a 15% drop year-to-date [1]. - Online retail sales grew by 1% year-over-year in July 2024, accounting for 7.8% of total retail sales [1]. Summary by Sections Retail Sales Performance - July 2024 total retail sales were HK$29.1 billion, marking a 12% year-over-year decline and the lowest dollar amount since the full border reopening [1]. - Major categories such as luxury goods, department stores, and clothing/footwear experienced significant declines, with luxury sales down 25% year-over-year [1]. Stock Recommendations - The report recommends Wharf REIC and Link REIT with an "Overweight" rating, while Hysan is rated "Equal-weight" due to slowing retail momentum and high office exposure [1]. - The report anticipates that potential upcoming US rate cuts could widen the dividend yield spread, positively impacting earnings per share (EPS) and dividends per share (DPS) for these stocks [1]. Visitor Trends - Chinese visitor arrivals increased to 78% of 2018 levels in August 2024, but local spending per capita remains weak, affecting overall retail performance [1].

Investment Rating - The report maintains a positive outlook on key themes, particularly Obesity, AI, and Defence, indicating strong fundamentals and potential for continued growth [3][7]. Core Insights - The report emphasizes the importance of not selling secular themes too early, as they have historically delivered significant returns, averaging 66% in their first year and 17% in the second year [3]. - Among the leading themes, Obesity is highlighted as the strongest performer, with AI and Defence also showing promising fundamentals that justify their valuations [3][7]. - The analysis suggests that thematic stocks, particularly in Obesity, AI, and Defence, are experiencing earnings upgrades, which supports their current valuations [7]. Thematic Performance - The report categorizes thematic performance into three major themes: Tech Diffusion, Decarbonisation, and Longevity, aligning them with MSCI's thematic indices for better tracking [5]. - Obesity thematic stocks, led by companies like Novo and Lilly, continue to see upgrades, justifying their re-ratings over the past 24 months [8]. - AI and Robotics have seen significant EBITDA revisions of over 10% year-to-date, indicating strong performance and a re-rating close to 15% [8]. - Defence and Security have experienced modest re-ratings, with Defence showing greater earnings upgrades compared to Security, particularly in Europe [8]. Stock Selection - The report identifies 50 stocks globally that are included in multiple MSCI thematic indices, which have collectively outperformed the S&P 500 by over four times in the past decade [12]. - Multi-theme exposed stocks are considered reliable options for investors looking to outperform the market [12]. Market Conditions - The report notes that while China Tech is not a primary theme, it is experiencing 10% sales growth, suggesting a potential for higher valuation multiples [11]. - The analysis indicates that national budgets for Defence need to rise, and institutional investor positioning remains thin for key companies like Rheinmetall in Europe [7].

Industry Investment Rating - The report highlights a significant pivot in venture funding from blockchain protocols to AI start-ups, with blockchain funding down 75% while AI funding has doubled from 2022 lows [6][7] Core Report Insights - Bitcoin's price is 6% below its 2021 high and 15% below its all-time high, yet venture funding for blockchain protocols has dropped by 75% [6] - AI start-up funding now constitutes over 40% of all venture/growth funding, indicating a strong shift in investor focus [8] - AI funding has a stronger correlation to Bitcoin prices than blockchain funding, a trend only seen once before in 2020 [8] Blockchain Industry Analysis - Blockchain faces challenges with product-market fit and user engagement, with venture-backed investments unlikely to return significant funds compared to previous cycles [2] - Institutional interest in blockchain, driven by ETFs and the recent halving, has supported prices but not on-chain activity levels [6] AI Industry Analysis - AI start-ups have seen better adoption statistics compared to blockchain, but exit challenges remain in the private market [7] - AI funding has surged, with deal flow dominating other verticals, including blockchain-focused companies [8] Crypto Mining to AI Data Center Conversion - There is a growing opportunity for Bitcoin miners to convert mining facilities into AI data centers, with potential valuations up to $10/watt for powered shell conversions [11] - The conversion of a 150 MW crypto facility to an AI data center could yield significant financial benefits, with an indicative enterprise value of $411 million [13] Venture Funding Trends - Venture funding for AI start-ups has doubled from 2022 lows, aligning with the stock performance of key listed AI companies [7] - AI funding now makes up over 40% of all venture/growth funding, significantly outpacing other sectors [8] Market Performance and Correlations - AI funding shows a stronger correlation to Bitcoin prices than blockchain funding, a trend not seen since 2020 [8] - The report includes detailed correlation data between Bitcoin prices and AI/ML capital invested from 2014 to 2024 [9] Largest Deals and Funding Rounds - The report lists significant VC and PE deals, including Grafana Labs' $328 million 6th round and Borealis Biosciences' $150 million 1st round [17][18] - Notable AI-related deals include Story Protocol's $83 million 3rd round and Slingshot AI's $30 million 2nd round [17]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report highlights significant changes in futures positions among various market participants, indicating a shift towards flattener positions in the back end and steepener positions in the front end [5][22][19] - There were notable inflows in equities, particularly from private investors, with Japan and the Caribbean being the top Treasury buyers in June [1] - Large commercial banks saw an increase in deposits and cash assets, while their holdings in UST/Agency and MBS also rose [42] Summary by Sections CFTC Non-Commercial Futures Positions - Non-commercials removed $20.6 billion in the front end and added $5.6 billion in the back end, resulting in a total of $26.2 billion of a flattener position [5][9] - The breakdown of front-end positions included SOFR (-$2.4 billion), TU (-$2.1 billion), and FV (-$2.1 billion) [9] Traders in Financial Futures - Asset managers put on $8.8 billion of a steepener position, increasing their net longs in FV contracts to the highest level in six months [2][16] - Leveraged funds added $9.0 billion of a steepener position, increasing their net shorts in TY contracts to the highest level in six months [2][19] Primary Dealer Positions - Dealers added $2.7 billion in the front end and $22.3 billion in the back end, resulting in a total of $19.6 billion of a flattener position [22][26] - Dealers decreased their net shorts in TY contracts to the lowest level in six months [26] Large Commercial Bank Positions - Deposits increased by $45.7 billion, and cash assets rose by $6.3 billion, with UST/Agency holdings increasing by $18.0 billion and MBS holdings by $16.4 billion [42] Foreign Central Bank Positions - Foreign Central Bank UST holdings decreased by $16.9 billion, while Agency/MBS holdings decreased by $0.4 billion [47]

Investment Rating - The report assigns an "Attractive" industry view for the Payments and Processing sector in North America [6]. Core Insights - There is significant stock performance dispersion in 2023-2024, despite a general compression of Fintech multiples. Three key areas of focus are identified within payment networks, FinTech, and smaller players [2]. - Visa (V) and Mastercard (MA) show an inverse correlation to bank performance, with V and MA up 3.1% and 6.4% month-to-date, respectively, while the Dow Jones U.S. Banks Index decreased by 1.2% [3]. - PayPal (PYPL) has seen a 6% increase week-to-date and a 23% increase month-to-date, attributed to a strategic partnership with Adyen to expand Fastlane services in the U.S. [4]. - Affirm (AFRM) experienced an 11% increase in the past week, benefiting from positive commentary from the CFPB regarding the BNPL industry [5]. Summary by Sections Stock Performance - Visa and Mastercard have shown positive month-to-date performance, contrasting with the decline in the banking index [3]. - PayPal's recent partnership is expected to enhance its service offerings, although immediate impact may be limited due to lower take-rates [4]. - Affirm's stock performance has improved following favorable regulatory commentary, indicating a potential for continued growth in the BNPL sector [5]. Market Trends - The report highlights a trend of Fintech EV/EBITDA multiples trading below the 5-year average, indicating a potential undervaluation in the sector [10]. - The Payments and Fintech sector has shown a total return of 80% year-to-date, outperforming the S&P 500 [12]. Short Interest Analysis - The report provides insights into short interest across various companies, with Affirm showing a relatively low short interest percentage of 9.2% [16]. - Companies like WEX and RPAY have higher short interest percentages, indicating potential market concerns [14].

Investment Rating - The report upgrades the ratings for CITIC Securities H shares and East Money to Overweight (OW) and downgrades China International Capital Corporation H shares to Equal-weight (EW) [1][19]. Core Insights - The valuation of most major brokers has dropped to near historical lows due to increased uncertainty regarding future business and regulatory environments, alongside a rapid cooling of private equity and venture capital investments [1]. - The capital market has supported industrial financing and supply chain upgrades, but has resulted in disappointing investor returns, leading to a temporary tightening of capital markets and reduced visibility for brokerage businesses [1]. - A more diversified and inclusive IPO structure could enhance the quality of listed companies and investor returns, aiding the recovery of underwriting businesses [1]. - There are still alpha opportunities in the securities industry, particularly in companies that can benefit from the shift in capital market focus from financing to shareholder returns [1]. Summary by Company East Money (300059.SZ) - Rating upgraded to Overweight (OW) as its P/E ratio has compressed from approximately 13 times to only 3.7 times, presenting an attractive buying opportunity [1]. - The business model's replicability, cost efficiency, and potential for market share growth justify a valuation premium over traditional brokers [1]. CITIC Securities (6030.HK) - Rating upgraded to Overweight (OW) with an expected recovery in ROE leading the industry, projected to rise to 8.1% by 2025, potentially returning to double digits with improved market conditions [1]. - Anticipated dynamic P/B ratio recovery to 0.6-0.7 times, the highest among peers [1]. China International Capital Corporation (3908.HK) - Rating downgraded to Equal-weight (EW) due to various factors creating uncertainty around future ROE [1]. - The P/B ratio has fallen from approximately 0.6 times in Q4 2023 to 0.3 times, reflecting market concerns [1].

Investment Rating - The report does not explicitly provide an investment rating for the company or sector discussed Core Insights - The focus of the report is on the potential risks associated with tariff increases and their implications for Asian economies, particularly in the context of trade tensions and supply chain diversification [3][5][30] Summary by Relevant Sections Trade Tensions and Economic Impact - The report highlights that apart from China, other Asian economies such as Vietnam, Japan, South Korea, and Taiwan are also facing increased trade tensions with the US, with Vietnam's trade surplus with the US growing significantly from $39 billion in 2017 to $111 billion [3][4] - The report discusses the significant changes in trade flows since 2018, indicating a shift in US imports from China to other countries like Mexico and Vietnam, with a total reduction of $97 billion in the trade deficit with China and an increase of $338 billion with other major trading partners [5][6] Currency Depreciation and Tariff Effects - The report anticipates potential currency depreciation in Asia if tariffs are enacted, drawing parallels to the 2018-19 period when the Chinese yuan depreciated by 11.6% amid rising tariffs [15][25] - It is noted that the effective tariff rate on Chinese imports has increased by 17.8%, and the report suggests that policymakers may be reluctant to allow similar levels of currency depreciation this time due to concerns over capital outflows [15][25] Sector-Specific Impacts - The report identifies specific sectors that may face greater pressure from tariffs, including electronics, industrial machinery, and textiles, which constitute a significant portion of US imports from China [36][37] - It emphasizes that if a 10% tariff is applied to all US imports, the impact would be broader and affect various sectors beyond those currently facing tariffs [36][37] Economic Growth and Central Bank Responses - The report estimates that the economic growth slowdown in China from 2018 to 2019 was approximately 130 basis points, primarily driven by reduced exports and weakened business confidence [30][32] - It discusses the challenges faced by central banks in emerging markets in responding to potential economic slowdowns due to tariffs, suggesting that fiscal measures may be prioritized over immediate interest rate cuts [33][34]