Investment Rating - The report maintains a constructive outlook on IG Financials, suggesting they are a sweet spot relative to Corporates, while also indicating a cautious stance on Energy and Basics due to tariff vulnerabilities [2][11]. Core Insights - The baseline scenario anticipates gradually slowing global growth for H2'25, with spreads expected to remain rangebound due to healthy balance sheets and low default rates [2][3]. - The European private credit market is highlighted for its robust fundamentals and significant liquidity, which is expected to suppress hard defaults [2][15]. - The report emphasizes the importance of sector-specific dynamics, noting that IG Financials have shown resilience amid geopolitical risks, while sectors like Energy and Basics are more sensitive to tariff headlines [8][11]. Economic Data and Tariff Rulings - Recent economic data from the EU and US have surprised positively, challenging initial recessionary scenarios, with EU GDP projected to halve to 0.4% in 2025 under a downside scenario involving tariffs [3]. - The report suggests that spreads may peak in Q3'25 around 120/425bp but could tighten by year-end, supported by monetary policy and resilient fundamentals [3][4]. ECB Policy Outlook - The ECB is expected to cut rates by 25bp to 2.0% in June, with another cut anticipated in July, reflecting a prioritization of growth support amid trade tensions [4]. - The report indicates that the ECB may remain in a gradual easing mode due to legal complexities surrounding US tariffs, which could reduce immediate downside risks [4]. Spread Dynamics - In May, PMIs softened, yet manufacturing activity trended higher, supporting risk sentiment despite ongoing trade uncertainties [5]. - The report notes that spreads widened in an orderly fashion around tariff announcements, with limited panic selling observed [8]. Sector Analysis - The report identifies that IG Financials exhibited lower beta during spread widening, while IG Energy and HY Basics were the most sensitive to tariff headlines [8]. - In the Energy sector, firms with robust balance sheets are better positioned against global demand fragility, while those with higher leverage face more exposure [9]. Technicals and Market Dynamics - The report highlights a record-breaking month for IG Corps supply in May, driven by positive tariff news, which pushed spreads tighter [14][39]. - It anticipates that flows will remain orderly, targeting high-quality structures and issuers, reflecting a cautious investor appetite [14]. European Private Credit Outlook - The report notes that European private credit shows resilience with rising revenue and EBITDA, alongside improving interest coverage ratios [15]. - It suggests that ample dry powder is available to support liquidity and suppress hard defaults in the private credit space [15].

Investment Rating - The report maintains a "Most Preferred" rating for several companies in the APAC Tech sector, including TSMC, SK Hynix, and Samsung Electronics, all rated as "Buy" [11][12]. Core Views - The report highlights the significant impact of tariff outcomes on end-demand, indicating that while the effect is material, the exact degree is difficult to quantify [9]. - AI demand is confirmed to be on track, with Nvidia's supply chain accelerating [9]. - A weakening memory cycle is anticipated, with expectations of oversupply for NAND and DDR DRAM from Q3 2025 to Q2 2026 [9]. Summary by Sections Market Overview - The smartphone unit growth forecast has been lowered to flat YoY for 2025-2026, while PC growth is expected at +2% for both years [10]. - The report forecasts that the 3MMA YoY semiconductor revenue growth peaked in April 2025, with the next trough expected in Q2 2026 [10]. Key Stock Coverage - Top picks include TSMC and SK Hynix, both rated "Buy," with price targets indicating significant upside potential [11]. - Other recommended stocks include Samsung Electronics, SEMCO, and LG Innotek, all with favorable ratings and price targets suggesting substantial upside [12]. Sector Preferences - The report categorizes APAC Tech stocks into "Most Preferred" and "Least Preferred," with a clear bias towards value stocks in the technology sector [12]. - The report indicates an overweight position in leading-edge foundries and memory semiconductors, while being underweight in back-end equipment and displays [12]. Model Portfolio Performance - The "Most Preferred" portfolio has shown a year-to-date return of -8.5%, while the "Least Preferred" portfolio has returned 9.0% [13]. - Overall, the portfolio has achieved a significant return since inception, indicating strong long-term performance despite recent volatility [13].

Investment Rating - The report assigns a "Buy" rating to both Tokyo Ohka Kogyo and Toray Industries, indicating a positive outlook for these companies [26]. Core Insights - The overall interest in Japanese equities has been stronger than anticipated, with a positive medium-term outlook despite global economic uncertainties [4][5]. - The panel discussion on Japan's economic future highlighted a bright outlook for Japan's economy, with expectations of moderate growth and inflation continuing [3]. - Investors are increasingly viewing Japanese stocks as a stable investment compared to other markets, particularly in Asia [5]. Sector Summaries ESG Sector - The discussion on ESG emphasized the transformative impact of climate change and the need for international cooperation in sustainability efforts [8]. - Companies in the climate tech sector are viewing decarbonization as a source of earnings and competitiveness, despite potential challenges from changing US policies [8]. Machinery Sector - There is strong interest in Japanese machinery stocks among global institutional investors, with discussions focusing on capital expenditure (capex) recovery and earnings growth [9]. - Key companies of interest include Komatsu, Daifuku, and Japan Elevator Service Holdings, which are expected to achieve earnings growth due to unique factors [9]. Chemical Sector - Investors are exhibiting caution towards the chemical sector due to uncertainties surrounding US tariff policies and their potential impact on earnings [10]. - Despite the cautious stance, Toray Industries and Tokyo Ohka Kogyo are preferred by investors, with expectations for cost reduction and strategic pricing to yield positive results [10].

Investment Rating - The report assigns a 12-month investment rating of "Buy" for NVIDIA Corp with a price target of US$175.00 [3] Core Insights - The report highlights NVIDIA's strong revenue growth potential, particularly in the data center segment, with visibility into a pipeline that could yield approximately US$400 billion annually over the next 2-3 years [4][5] - The gaming segment has shown significant improvement, with a nearly 50% quarter-over-quarter increase in revenue, driven by recovering supply chains and demand [7] - The report emphasizes the importance of NVLink technology in driving networking revenue growth, which increased by 64% quarter-over-quarter [5] Financial Summary - Revenues are projected to grow from US$26.97 billion in 2023 to US$204.78 billion in 2026, representing a 56.9% increase [8] - Net earnings are expected to rise from US$8.37 billion in 2023 to US$110.20 billion in 2026, reflecting a 48.4% growth [8] - The diluted EPS is forecasted to increase from US$0.33 in 2023 to US$4.48 in 2026, indicating a 49.6% growth [8] Valuation Metrics - The report maintains a price target of US$175 based on a target multiple of approximately 29x and an EPS estimate of US$6.05 for FY27 [6] - The P/E ratio is projected to decrease from 53.7 in 2023 to 22.7 in 2027, indicating a more favorable valuation over time [9] - The report notes a significant increase in gross profit margin, expected to stabilize around mid-70% by the end of FY26 [7] Market Position - NVIDIA's market capitalization is reported at US$3,363 billion, with a free float of 96% [3] - The company is positioned strongly in the semiconductor industry, particularly in graphics processing units and AI infrastructure [11]

Investment Rating - The report does not explicitly state an investment rating for the industry or specific companies within it. Core Insights - Top 100 developers' contract sales weakened by 10% YoY in May 2025, slightly worsening from a 9% decline in April 2025, while MoM sales increased by 3% [2][6][19] - The decline in sales is attributed to macro uncertainties amid the trade war, impacting homebuyer confidence, particularly in export-heavy cities like Ningbo and Guangzhou [2] - Tier-1 cities continue to drive the primary market, with primary sales volume in these cities increasing by 26% on a 30-day moving average basis, compared to a mere 3% for 30 cities combined [2] - SOE developers outperformed the overall market with a 4% YoY decline in contract sales, while semi-SOE and POE developers saw declines of 22% and 15% respectively [4][23] - The luxury housing market remains active, with notable sales such as Shanghai's Kangding 19 project, which sold out 91 units in 41 minutes with a 265% oversubscription rate [2] Summary by Sections Sales Performance - In May 2025, the combined sales of the top 100 developers dropped 10% YoY, with a 3% MoM increase, reflecting ongoing market challenges [6][19] - For the first five months of 2025, combined sales declined 8% YoY, consistent with the previous month [2][19] Secondary Market Activity - Secondary listings in 50 cities increased by 8.7% YoY and 7.8% YTD, while Tier-1 cities saw a 4.3% YoY and 5.6% YTD increase [3][9] - The secondary transaction volume for 12 cities increased by 7% YoY in May, although this was a slowdown from 17% in April [3][29] Developer Performance - SOE developers maintained a market share of 53%, outperforming POE developers at 32%, with Jinmao and COLI showing significant contract sales growth of 72% and 21% YoY respectively [4][23] - The report indicates a potential shift in sales models from presale to completed properties, which may favor SOE developers due to their lower financing costs [4] Market Outlook - The report anticipates stabilization in the property market, indicated by positive land sales YoY after three years of decline and a robust luxury housing market [2]

Investment Rating - The report maintains a "Buy" rating for several companies in the tech hardware and semiconductors sector, including ASE, Hon Hai Precision, MediaTek, and TSMC, among others [8]. Core Insights - The outlook for AI adoption remains strong, with significant momentum in enterprise AI, leading to supply constraints for major customers [2][3]. - TSMC aims to double its CoWoS capacity year-over-year in 2025, despite facing gross profit margin dilution due to overseas expansion [3]. - Samsung reports robust memory demand, particularly from PC and smartphone sectors, supporting DDR pricing [4]. - The report highlights a value bias within the APAC tech sector, indicating a preference for certain stocks over others [5]. Summary by Sections AI and Technology Hardware - AI-related developments are driving enterprise adoption, with Microsoft noting strong demand from large customers [2]. - The ramp-up of Blackwell rack assembly is on track, with Quanta expecting to meet server test cycle targets by the end of Q2 2025 [2]. Semiconductor Industry - TSMC's gross margin is negatively impacted by NTD appreciation against USD, with a 40-basis point decline for every 1% appreciation [3]. - MediaTek maintains its Q2 gross margin guidance at 47% despite foreign exchange pressures [3]. - ASE targets $1.6 billion in revenue from advanced packaging and testing in 2025, up from $600 million in 2024 [30]. Market Dynamics - Samsung anticipates strong demand for memory products, which is expected to support pricing in the DDR segment [4]. - The report notes a potential decline in revenue for certain ICs, indicating a cooling off from earlier pull-ins [3]. Company-Specific Insights - ASE is focused on expanding its advanced packaging and testing business, targeting significant revenue growth [30]. - MediaTek is aggressively pursuing the N2 process migration, with expectations of reaching $1 billion in cloud ASIC revenue by 2026 [39]. - Quanta's server business is expected to grow, with AI servers making up a significant portion of sales [24]. Preferred Companies - The report lists preferred companies in the APAC tech sector, highlighting those with strong growth potential and favorable valuations [8].

Investment Rating - The report assigns a 12-month rating of "Buy" for Futu Holdings with a price target of US$149.00 [6][24]. Core Insights - Futu Holdings is expanding its crypto-related capabilities, having launched crypto trading services in Hong Kong in Q3 2024 and introduced crypto deposit services, which have been well-received by the Web3 community [2]. - The company is positioned to benefit from the recent Stablecoin Bill passed in Hong Kong, which allows for public sales of stablecoins, and is exploring new stablecoin-based solutions for cross-border transactions through Airstar Bank [2]. - Futu expects limited earnings pressure from falling HIBOR due to its currency mix, where HKD accounts for a smaller portion of interest-earning assets compared to borrowings [3]. - The company anticipates significant growth potential in Hong Kong, aiming for a 40% retail investor penetration in the medium term by enhancing its product offerings and services [4]. Financial Projections - Revenue projections for Futu Holdings show a growth trajectory from HK$7.32 billion in 2022 to an estimated HK$39.83 billion by 2029 [5]. - Pre-tax profit is expected to increase from HK$3.36 billion in 2022 to HK$30.65 billion by 2029 [5]. - Net earnings are projected to rise from HK$2.95 billion in 2022 to HK$25.13 billion by 2029 [5]. - The diluted EPS is forecasted to grow from HK$20.47 in 2022 to HK$178.20 by 2029 [5]. Market Metrics - Futu Holdings has a market capitalization of US$14.4 billion and an average daily trading volume of 2.786 million shares [6]. - The stock price as of May 30, 2025, was US$101.93, with a 52-week range of US$128.93 to US$55.54 [6]. Forecast Returns - The forecast price appreciation for Futu Holdings is estimated at 38.3%, with no expected dividend yield, leading to a total forecast stock return of 38.3% [8].

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The report highlights the impact of changing US tariffs on trade flows with China, focusing on shipping, shipbuilding, ports, international freight flights, and land transportation [2] - Container throughput at key ports in China showed an acceleration, with a year-on-year increase of 11% compared to 6% in the previous week [3] - The spot container freight rate between China and the US increased significantly, with a 58% rise on the West Coast and 46% on the East Coast week-on-week [4] - Early signs of port congestion are noted in Europe due to strikes, tariffs, and climate change, with an 8% increase in global average waiting time for container ships over 8k TEU [5][28] - Import volume estimates at the Port of Los Angeles indicated a year-on-year decline of 2% in week 25, an improvement from a 12% decline in week 24 [8][2] Summary by Sections Trade Flows - The report tracks trade flows amid changing US tariffs, gathering data from various sources to present the latest trends [2] - The number of international freight flights rose by 21% year-on-year last week, indicating increased shipping activity [31] Port Activity - Container throughput at China's key ports increased by 11% year-on-year, while showing a slight week-on-week decline of 1% [6][7] - The average waiting time at the Port of Singapore increased by 9% week-on-week [19] Shipping Rates - The Shanghai Containerized Freight Index (SCFI) rose by 31% week-on-week but showed a year-on-year decline of 32% [11] - Container ship newbuild prices remained flat, with a slight increase of 0.4% year-on-year [25] Freight and Transportation - Direct shipping volume from China to ASEAN decreased by 7% week-on-week, while shipping volume from China to the US increased by 7% [14] - China expressway truck traffic decreased by 4% year-on-year last week [26]

Investment Rating - The report identifies 25 SMID Cap stocks with a "Buy" rating, focusing on high-quality and high-growth characteristics [2][10][12]. Core Insights - The report emphasizes the importance of operational quality and growth sustainability in selecting SMID Cap stocks, particularly in a challenging macroeconomic environment [3][12]. - SMID Caps have underperformed large caps by 750 basis points year-to-date, but historically, smaller caps tend to outperform larger caps by approximately 2% over the long term [3][12]. - The report combines insights from HOLT's screening criteria and UBS analysts' fundamental research to highlight underappreciated businesses in the SMID Cap segment [3][12]. Summary by Sections Investment Opportunities - The report lists 25 high-quality and high-growth SMID Cap stocks, categorized by sectors such as Industrials, Healthcare, Consumer, Financials, TMT, and Materials [10][11]. - Notable stocks include Alight Inc (ALIT) with a market cap of $2.9 billion and a price target upside of 81%, and Bio-Techne Corp (TECH) with a market cap of $7.6 billion and a price target upside of 45% [6][11]. Market Context - The report discusses the current underperformance of SMID Caps relative to the S&P 500, attributing it to higher exposure to interest rates and economic sensitivity compared to large caps [3][12]. - It highlights the need for careful stock selection and strong fundamentals in the current uncertain economic climate [3][12]. HOLT Methodology - The HOLT High Quality and Growth screen identifies companies with high and stable operational quality and strong growth characteristics, using metrics such as CFROI [16][19]. - The report indicates that the HOLT methodology provides a consistent approach to evaluating corporate profitability across a wide range of companies [17][19].

Investment Rating - The report does not explicitly state an investment rating for the oil industry but indicates a potential pause in production increases and marginally lower prices in the second half of 2025, suggesting a cautious outlook [5][3]. Core Insights - OPEC+ plans to increase oil production by an additional 411 thousand barrels per day (kb/d) in July, which aligns with market expectations [2] - The total production increase from OPEC+ members will reach 1.37 million barrels per day (Mb/d) out of the intended 2.5 Mb/d over 18 months, achieving the production level initially targeted for early 2026 [5] - The market is expected to experience a surplus of 0.3 Mb/d in the third quarter of 2025 and 0.7 Mb/d in the fourth quarter of 2025 due to the additional production [3] Summary by Sections OPEC+ Production Plans - OPEC+ members are set to add 411 kb/d in July, which was higher than the previously forecasted 138 kb/d [2] - The group has already implemented 1.37 Mb/d of the planned 2.5 Mb/d increase, indicating a significant ramp-up in production [5] Market Dynamics - The anticipated surplus in oil supply is projected to be 0.3 Mb/d in Q3 2025 and 0.7 Mb/d in Q4 2025, which could lead to downward pressure on prices if production increases continue [3] - The report suggests that demand will peak between March and August, with a decline expected in September, further influencing price dynamics [5] Price Forecast - The base case scenario anticipates a pause in production increases and a slight decrease in oil prices to approximately $62 per barrel in the second half of 2025 [5]