Investment Rating - The report assigns a "Buy" rating to CRL, C&D, China Jinmao, and KE Holdings, indicating a positive outlook for these companies in the real estate sector [5][8][19]. Core Insights - The pre-sale overhaul in lower-tier cities, such as Xinyang, is viewed as a positive development for the property market, as it aims to rebalance supply and demand by limiting new supply and reducing excess inventory [2][8]. - The Shanghai property market shows signs of recovery, with stronger sales and firmer pricing, particularly in the high-end segment driven by city migration and demand from affluent buyers [3][8]. - Debt restructuring among distressed developers is progressing, and the government's funding schemes have largely fulfilled housing completion duties, which supports market stability [4][8]. Summary by Sections Market Overview - The report highlights a structural market driver in the form of a supply squeeze, which is expected to support early-stage housing market recovery [2]. Company Analysis - CRL (1109 HK) is rated "Buy" with a target price of HKD 36.30, reflecting a 36.7% upside potential [19]. - C&D International (1908 HK) is also rated "Buy" with a target price of HKD 21.20, indicating a 37.3% upside [19]. - China Jinmao (817 HK) is rated "Buy" with a target price of HKD 1.60, suggesting a 42.9% upside [19]. - KE Holdings (BEKE US) is rated "Buy" with a target price of USD 26.30, implying a 31.5% upside [19]. Valuation Metrics - The report provides valuation metrics for various companies, including NAV discounts and expected PE ratios, which are essential for assessing investment opportunities [17][19].

Investment Rating - The report assigns a "Buy" rating to CRL, C&D, China Jinmao, and KE Holdings, indicating a positive outlook for these companies in the real estate sector [4][7][19]. Core Insights - The report highlights expectations for more supportive property policies in China to stabilize the housing market recovery, with a focus on tier-1 and tier-2 cities [2][7]. - There are clear signs of market bottoming, as evidenced by busy sales offices and solid project sell-through rates, despite macroeconomic uncertainties [3][7]. - The report emphasizes the resilience of luxury projects and the potential for pent-up demand to be released due to lower mortgage rates [2][3]. Summary by Sections Market Dynamics - Centaline's Vice President believes additional policies will be introduced to support the recovery cycle, particularly in tier-1 and tier-2 cities [2]. - Successful policy implementations, such as in Xiamen, have effectively reduced property purchasing costs through vouchers and subsidies [2]. Sales and Pricing Strategies - Site visits revealed high engagement levels among sales managers and a non-aggressive pricing strategy from developers, contributing to solid sell-through rates [3]. - Despite low mortgage rates (3.15% for first homes) and a downpayment requirement of 15%, buyers are cautious about leveraging due to macro uncertainties, with an average downpayment ratio of 40% [3]. Stock Recommendations - Preferred stocks include CRL (1109 HK, target price HKD36.30), C&D (1908 HK, target price HKD21.20), and China Jinmao (817 HK, target price HKD1.60), all rated "Buy" for their strong performance in the luxury and upgrader segments [4][19]. - KE Holdings (BEKE US, target price USD26.30) is also favored for its market share gains in both primary and secondary markets [4][19].

Investment Rating - The report assigns a "Buy" rating to CRL, C&D, China Jinmao, and KE Holdings, indicating a positive outlook for these companies in the real estate sector [4][7][19]. Core Insights - The report highlights expectations for more supportive property policies in China to stabilize the housing market recovery, with a focus on tier-1 and tier-2 cities [2][7]. - Observations from site visits suggest a clear indication of market bottoming, with engaged sales teams and solid sell-through rates for projects [3][7]. - The report emphasizes the resilience of luxury projects and the potential for pent-up demand to be released due to lower mortgage rates [2][3]. Summary by Sections Market Dynamics - Centaline's Vice President believes additional policies will be introduced to support the recovery cycle, despite a pullback in April [2]. - Successful case studies, such as Xiamen, demonstrate the effectiveness of property vouchers and home purchase subsidies in reducing purchasing costs [2]. Sales and Pricing Strategies - Sales managers report high engagement levels, with developers adopting unaggressive pricing strategies, leading to solid project sell-through rates [3]. - Home buyers are financially capable but remain cautious due to macroeconomic uncertainties, with an average downpayment ratio of 40% [3]. Stock Recommendations - Preferred stocks include CRL (1109 HK, target price HKD36.30), C&D (1908 HK, target price HKD21.20), and China Jinmao (817 HK, target price HKD1.60), all rated "Buy" [4][19]. - KE Holdings (BEKE US, target price USD26.30) is also highlighted for its market share gains in both primary and secondary markets [4][19].

Investment Rating - The report upgrades Evergreen Marine (EVG) to Buy from Hold and OOIL to Hold from Reduce, while maintaining Buy ratings on Maersk and SITC, and Hold ratings on CSH-H/A and HLAG [6][10]. Core Insights - The US and China have agreed to a 90-day reduction in reciprocal tariffs, which is expected to boost shipments from China to the US and drive an early peak season in freight rates [2][10]. - Freight rates are anticipated to improve in Q2 and Q3 2025 due to capacity discipline among liners, with spot rates to the US rising by 4-8% [4][10]. - The container shipping sector is projected to remain profitable in 2025, with EBIT margins reported between 5-23% in Q1 2025, and profit estimates for certain companies raised by 16-31% [5][10]. Summary by Sections Tariff Developments - A 90-day reduction in US-China tariffs will lower tariffs on Chinese exports to the US to 30% from 145% and on US exports to China to 10% from 125% [2]. Shipping Volume Trends - April saw a 30-60% decline in China to US volumes, but recent data indicates a recovery, driven by restocking and the tariff pause [3][10]. Freight Rate Expectations - Freight rates have held steady in Q2 2025, with the SCFI Composite declining only 0.9% since March, while spot rates to the US have increased [4][10]. Profitability Outlook - The sector is expected to remain profitable in 2025, with raised profit estimates for companies like EVG, CSH H/A, and OOIL due to high transpacific exposure [5][10]. Stock Performance - Container shipping stocks have rebounded, with price increases of 2-13% since May 12, 2025, reflecting positive market sentiment [6][10]. Company-Specific Forecasts - Evergreen Marine's 2025 recurring profit forecast has been raised by 16% to TWD62 billion, while OOIL's recurring profits for 2025-26 have been increased by 11-31% [41][49]. - COSCO Shipping's EBIT estimates for 2025 have been raised by 42%, reflecting resilient spot freight rates and an early peak season [57][61].

Investment Rating - The report indicates a positive outlook on the trade talks between China and the US, suggesting potential upside risks for growth due to the rollback of tariffs [6][8]. Core Insights - The recent high-level trade talks in Geneva resulted in a significant breakthrough, with both sides agreeing to a consultation mechanism for trade and economic issues, reflecting a constructive tone and mutual respect [2][3]. - The US will roll back tariffs on China to 10% for 90 days, while China will also reduce its tariffs to 10% for the same period, which is expected to alleviate the burden on businesses affected by previous tariffs [6][7]. - The restoration of dialogue channels and establishment of key contact points between both countries is crucial for facilitating further discussions and reducing the risk of trade escalations [9]. Summary by Sections Trade Talks Overview - The first set of high-level trade talks since the start of Trump 2.0 took place on May 10-11, 2025, in Geneva, involving key officials from both sides [2]. - A joint statement was issued on May 12, highlighting the agreement on a consultation mechanism for trade and economic issues [2][3]. Tariff Adjustments - Both countries agreed to a 90-day pause with a rollback in tariffs, with China facing an additional 30% tariff and the US facing 10% [6]. - The rollback of tariffs is expected to provide relief to businesses that have been impacted by reciprocal tariffs since April 9, 2025 [4][6]. Economic Implications - The additional 30% tariffs could potentially drag China's GDP down by approximately 0.9 percentage points, but the rollback presents upside risks for growth if successfully implemented [8]. - Future discussions may extend beyond trade, indicating that a comprehensive agreement may require further negotiations [8].

Investment Rating - The report indicates a muted inflation environment in China, with a headline CPI of -0.1% year-on-year in April, suggesting a cautious outlook for consumer prices [4][6]. Core Viewpoints - The report highlights the need for a faster pickup in domestic demand to stabilize prices, as external demand faces ongoing challenges [4][10]. - Core CPI remained stable at 0.5% year-on-year, supported by consumption policies, while the headline PPI fell deeper to -2.7% year-on-year due to lower commodity prices [4][9]. Summary by Sections Inflation Overview - Headline CPI showed a slight decline of -0.1% year-on-year in April, with core CPI stable at 0.5% year-on-year [4][6]. - Food prices recorded a narrower decline of -0.2% year-on-year, with pork prices rising modestly by 5.0% year-on-year [5][6]. Producer Price Index (PPI) - The headline PPI fell by -2.7% year-on-year, with significant declines in petroleum and coal manufacturing prices, which dropped by 11.1% year-on-year [9][12]. - The report notes that external demand may face headwinds due to tariff risks, which could further pressure PPI [10][12]. Policy Implications - The National Development and Reform Commission allocated cRMB80 billion to support trade-in programs, indicating a focus on boosting consumption [6]. - The Politburo Meeting emphasized expanding services consumption, with the People's Bank of China planning a RMB500 billion relending program for services and elderly care [6][12].

Investment Rating - The FTSE World REIT Index has a rating of 26th out of 37 constituents in April 2025, with a return of +0.5% [2][10] - The FTSE World REIS Index performed better, achieving a return of +4.9%, placing it in the top quartile [2][10] Core Insights - The report indicates a divergence in performance between REITs and REIS, with REITs underperforming significantly, particularly in the US market [2][9] - Emerging markets, particularly Brazil, showed positive returns across all sub-sectors, while mainland China continued to underperform [5][9] - Data Centres in both developed and emerging markets rebounded in April after a sharp decline in March, indicating a recovery trend [2][9][19] Performance Summary - In the last month, developed markets saw the best performance from Developed Europe excluding the UK, while the US was the worst performer [5][9] - Over the last 12 months, most markets underperformed relative to their broader local indices, with the US and Developed Europe excluding the UK being exceptions [18] - The report highlights that the industrial sector continues to decline in developed markets, while data centres have shown significant positive returns over the last 12 months [19][49] Target Price Changes - In the last month, most markets recorded flat or declining target price cuts, with the US experiencing its first significant target price cuts of the year [14][54] - Over the last six months, the UK saw the sharpest target price downgrades, while the US was the only market to record marginal target price upgrades [54][59] Consensus Ratings - The US has seen a material rise in positive ratings over the last three and six months, despite a marginal increase in negative ratings [15][60] - South Africa recorded a significant rise in positive ratings, with a corresponding drop in negative ratings over the same periods [17][60]

Investment Rating - The report maintains a neutral stance on US Treasuries and a defensive position in US credit markets [4][32][28] Core Insights - The Federal Open Market Committee (FOMC) kept the federal funds rate steady at 4.25-4.50% for the third consecutive time, citing increased uncertainty in the economic outlook and heightened risks of both higher unemployment and inflation [10][19][20] - The unemployment rate remained stable at 4.2% in April, with expectations of GDP growth slowing to 1.0% on a Q4/Q4 basis this year and the unemployment rate potentially rising to nearly 5% by year-end [12][13] - The report expresses skepticism about the resilience of risky assets in the face of a tumultuous policy backdrop, suggesting that negative economic surprises could lead to a rapid decline in these assets [5][41][42] Summary by Sections Labor Market and Economic Outlook - The FOMC's decision to maintain rates reflects concerns over the impact of larger-than-anticipated tariffs on the economy, which could lead to different policy responses depending on inflation and unemployment trends [11][10] - The report forecasts three 25 basis point rate cuts in June, September, and December, contingent on labor market data showing signs of softening [13][14] Currency Analysis - The USD has shown modest strength following the FOMC's decision, with its value currently influenced by political and structural factors rather than solely by interest rate differentials [3][22] Fixed Income Strategy - The report maintains a neutral duration conviction on US Treasuries, indicating a wait-and-see approach amid policy uncertainty and mixed economic data [4][24] - Expectations for lower Treasury yields by year-end are noted, with a forecast of 3.50% for 10Y Treasuries by the end of 2025 [28] Multi-Asset Strategy - Risky assets have demonstrated resilience despite a challenging economic environment, but the report warns that this may not be sustainable [5][41] - The report highlights the potential for negative surprises in economic data to impact market sentiment and positioning, leading to a cautious outlook on equities [44][43] Credit Market Strategy - The report indicates that corporate spreads may not fully reflect the cyclical risks posed by tariffs, with expectations for wider spreads in the near term [32][36] - Revised year-end spread targets for US investment-grade (IG) and high-yield (HY) credit have been set higher, reflecting anticipated economic pressures [36][37]

Investment Rating - The report indicates a constructive outlook on China's economic recovery, with institutional investors adding cyclical risks and cutting defensive names during Q1 2025 [4][32]. Core Insights - Institutional investors, including domestic mutual funds and northbound funds, have shown a preference for sectors such as technology, healthcare, and financials, while also responding to trade tensions by increasing allocations to self-sufficient tech names [2][12][25]. - The national team has invested significantly in the AI value chain and new energy sectors, while individual investors remain the largest participants in the A-share market [5][39]. - Southbound fund inflows reached record levels, with estimates suggesting further inflows could total approximately RMB300 billion by the end of 2025 [6][11]. Summary by Sections Trade Tensions and Institutional Actions - Institutional investors took pre-emptive actions in response to trade tensions, increasing their positions in tech self-sufficient names by 1.3 percentage points for domestic mutual funds and 0.8 percentage points for northbound funds during Q1 2025 [12][2]. - Both groups of investors maintained over 20% allocation to "going global" names, indicating a positive long-term outlook despite recent reductions [13][2]. Divergence in Investment Preferences - Domestic mutual funds were more optimistic about food & beverage and healthcare sectors, while northbound funds favored banks with stable asset quality [3][25]. - In the electronics industry, domestic mutual funds focused on supply chain localization, whereas northbound funds preferred computing hardware names [26][25]. Economic Outlook - China's economy showed strong growth in Q1 2025, with a real GDP growth rate of 5.4% and positive retail sales growth [32]. - Both domestic and northbound funds increased exposure to pro-cyclical industries, reflecting confidence in economic recovery [32][33]. National Team and Market Participation - The national team holds RMB4.0 trillion in A-share stocks and RMB1.0 trillion in stock ETFs, accounting for 6.4% of the A-share floatable market cap [39][44]. - Financials dominate the national team's holdings, comprising 85.3% of their portfolio [45][39]. Southbound Fund Flows - Southbound net inflows reached RMB410.5 billion in Q1 2025, with mutual funds contributing approximately 16% and insurance funds about 25% [6][51]. - The report estimates that mutual funds' holdings in HK-listed stocks increased by 26.7% during Q1 2025, reflecting strong market performance [52][53].

Investment Rating - The report indicates a positive outlook for China's trade, with export growth showing an upside surprise despite US tariffs, leading to a trade surplus of USD 96.2 billion in April [5][6]. Core Insights - China's exports to non-US markets, particularly ASEAN, have accelerated, contributing to overall export growth of 8.1% year-on-year in April, which was significantly higher than the HSBC and Bloomberg forecasts of 2.0% [5][6]. - Imports showed a narrower decline of 0.2% year-on-year in April, aided by a surge in processing imports, indicating resilience in trade despite external pressures [5][10]. - The report highlights the ongoing US-China trade tensions and potential tariffs on third markets as significant risks, emphasizing the importance of domestic policy support for sustaining growth [2][6]. Summary by Sections Trade Data Overview - Exports in April 2025 increased by 8.1% year-on-year, while imports declined by only 0.2% year-on-year, showcasing a shift in trade dynamics [3][5]. - Exports to the US fell sharply by 21.0% year-on-year in April, primarily due to escalating trade tensions and new tariffs [3][6]. Market Breakdown - Exports to ASEAN markets rose by 20.8% year-on-year in April, while exports to the EU increased by 8.3% [3][7]. - Imports from the US decreased by 13.8% year-on-year, reflecting the impact of retaliatory tariffs [3][10]. Product Breakdown - Mechanical and electrical products saw a year-on-year export growth of 10.1%, while high-tech products grew by 6.5% [3]. - Conversely, clothing and toys exports experienced a decline of 2.3% year-on-year [3][6]. Future Outlook - The report anticipates that US-China trade negotiations may lead to a partial rollback of tariffs, but significant headwinds for exports to the US are expected to persist [6][13]. - Domestic policy measures, including monetary easing and fiscal policies, are deemed crucial for stabilizing growth amid external uncertainties [13].