Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Hedge funds have been selling USD and purchasing European currencies such as EUR, CHF, and SEK, likely due to optimism surrounding Germany's stimulus measures [4] - Hedge funds are refraining from trading the tariffs theme, with light flows observed in currencies like CAD and MXN, as they focus on concerns regarding US growth slowdown [4] - Countries identified as having "GDP at risk" from potential US tariffs include Vietnam, Thailand, India, Indonesia, Canada, and Taiwan [4] - Thailand's corporates are expected to pay out $1.8 billion in dividends to foreign investors, approximately 3% of GDP, which may impact the THB [4] Summary by Sections G10 FX - Hedge funds have sold more USD and purchased EUR, while also unwinding some JPY longs [6] - Significant buying of SEK was noted, with hedge funds purchasing 2.8 standard deviations in two weeks [6] EM FX - Hedge funds have shown varied activities across different currencies, with notable selling in PLN and slowing buying flows in THB [6][4] - The report highlights the correlation of hedge fund flows to various EM currencies, indicating a strategic shift in focus [161][165] Precious Metals - The report includes insights on gold and silver flows, indicating a correlation between client flows and market performance [133][145]

Global Research NVIDIA Corp GB300 (BW Ultra) Pulled In By ~1Q; Maintain Buy Summary ab 17 March 2025 UBS Global Tech Team met with >30 companies in the APAC supply chain over the past week. We believe Blackwell demand remains very strong, residual bottlenecks on GB200 racks are now fully resolved, and NVDA is now pulling in timing for B300/GB300 (Blackwell Ultra) by 1Q with significant volume shipments now likely in CQ3:25. We did hear about slightly less aggressive expansion plans for TSMC for CoWoS capaci ...

Investment Rating - The report maintains a "Buy" rating for several companies within the industrials sector, including BYD, CCCC, Yutong, and others, indicating a positive outlook on their performance and growth potential [6]. Core Insights - The analysis highlights the driving factors behind China's direct trade surplus with the US, noting that consumer durables, technology, industrials, and automotive sectors are key contributors. The overall trade surplus has narrowed since 2019 due to US-China trade tensions, particularly affecting consumer durables and technology [3][9]. - The report emphasizes the significant increase in China's indirect exports to the US via ASEAN and Latin America, with technology and consumer durables being major contributors to the widening US trade deficits with these regions [4][33]. - Investment trends show a 66% increase in Chinese companies' investment plans in ASEAN, with a focus on electronic components, lithium batteries, and auto parts, particularly in Thailand and Vietnam [5]. Summary by Sections Direct Trade Surplus with the US - China's trade surplus with the US has narrowed since 2019, with consumer durables and technology seeing the most significant declines due to increased tariffs. In contrast, the industrials and automotive sectors have experienced a widening surplus [3][13]. - The largest incremental trade surplus in 2024 compared to 2018 was recorded in the smartphones, battery & material, and pharmaceutical sectors [27]. Indirect Exports via ASEAN and LatAm - The US trade deficits with ASEAN and LatAm have expanded significantly from 2016 to 2024, driven by increased imports of technology and consumer durables from these regions [4][33]. - The automotive industry has notably contributed to the increase in China's export value to LatAm, aligning with the US's growing imports from that region [4][37]. Investment Trends - Chinese firms' investment plans in ASEAN increased by 66% year-over-year in 2024, with Thailand attracting 44% of total investment plans. Investment in Mexico rose by 85%, primarily driven by the automotive sector [5]. - The report identifies BYD, CCCC, and Yutong as preferred beneficiaries of the "going global" strategy, highlighting their strong market positions and growth potential [6].

ab 12 March 2025 Global Research China Equity Strategy Time for A-share catch-up? Recent data somewhat better than expected Recent macro data came in slightly better than we expected with: 1) property sales and property prices in Tier One cities stabilising, 2) domestic excavator sales recovering strongly, up 51% YoY in 2M25, and 3) anecdotally we also hear that local government repayment to suppliers have accelerated. While US trade tariffs continue to pose significant uncertainties, for listed companies t ...

Investment Rating - The report assigns a 12-month rating of "Buy" for Alibaba Group with a price target of US$176.00, up from a prior target of US$160.00 [5][10][31]. Core Insights - The management of Alibaba Group identifies capacity as a key constraint on growth, with a focus on monetizing AI capabilities primarily on the B2B side. The company is leveraging its QWen model for MaaS and has integrated LLM into various products [3][4]. - The report highlights strong growth potential in the cloud sector driven by digitalization in Chinese enterprises and SMEs, with expectations of margin improvements in the long term [3][10]. - The Taobao Tmall Group (TTG) is expected to benefit from a new software service fee and improved marketing tools, with a focus on user acquisition and enhancing customer experience [4][10]. Financial Metrics - Revenue projections show growth from Rmb941.17 billion in FY24 to Rmb970.25 billion in FY25, with net earnings expected to rise from Rmb158.36 billion to Rmb160.42 billion in the same period [7]. - The report anticipates a diluted EPS increase from Rmb62.23 in FY24 to Rmb67.18 in FY25, with a projected CAGR of 12% [7][10]. - The company's market capitalization is noted at US$331 billion, with a free float of 97% and an average daily trading volume of 3,609,000 shares [5][7]. Valuation and Returns - The report employs a sum-of-the-parts (SOTP) valuation method, projecting a target price of US$176, reflecting an improved outlook for TTG and cloud growth potential [10][12]. - Forecasted returns include a price appreciation of 24.7% and a dividend yield of 1.2%, leading to an expected total stock return of 26.0% [12][10].

ab 12 March 2025 Global Research China Equity Strategy Time for A-share catch-up? Recent data points slightly better than expected We switch our most preferred sector from internet to consumer stocks given the cheaper valuations on offer, the visible policy tilt towards consumption at the NPC meeting, low investor expectations and improving macro backdrop. We continue to prefer A-share TMT names over offshore listed tech names as a way to play the Equity Strategy The AI-led outperformance for the H-share YT ...

First Read China Industrials Takeaways from fireside chat with UBS EMEA Capital Goods team Automation: positive signals on demand; AI empowerment in the long run Global Research ab 6 March 2025 Positive on e-bus/CM/Mining equipment; Tariff the main concern on truck UBS European Capital Goods Analyst Hemal Bhundia sees continued e-bus demand in the buses segment. For OEMs, bus margins have improved due to the greater profitability from e-buses in his view. For the trucks sector, the US tariffs on Mexico, whe ...

1) Foreign investors turning more +ve: On the back of i) positive government stance demonstrated by the recent meeting between President Xi and the tech entrepreneurs. His supportive statement to private enterprises also provides assurance, ii) GenAI adding structural growth angle to China internet space. It is interesting to note that among our meeting with 60+ investors, only 1-2 asked about the recent macro trend while the rest mainly focused on the long term AI potential. Investors see this rally more s ...

ab 6 March 2025 Global Research China AI Intelligence AI agents: AI applications' frontier What are AI agents and why does it matter? Given the strong traction gained through DeepSeek-R1 (which emphasizes iterative problem-solving capability with high cost efficiency) and recently unveiled general- purpose AI agent Manus, we believe LLM development in China is entering the inference-dominated phase, which echoes Microsoft's comments that AI investments are increasingly dictated by real-world application dem ...

ab 3 March 2025 Global Research EM & APAC Equity Strategy China rally: How far have we travelled? EM earnings cuts accelerate After a volatile start to the year - MSCI EM is up c2% YTD (underperforming DM's 3%) - although we point out that this is heavily lifted by China. EM ex-China has underperformed DM by 5%. Overall, we also see a decent YTD trend of reversal of 2024 winners and losers (with the exception of China and Singapore, which continue to outperform). Fundamentally, EM continues to see earnings ...