Investment Rating - The report indicates a robust GDP growth forecast for Q2, with expectations of 5.0-5.2% YoY growth, despite anticipated headwinds in H2 [4][32]. Core Insights - The manufacturing sector shows signs of improvement, with NBS manufacturing PMI rising to 49.7 and Caixin PMI increasing to 50.4 in June, indicating a less negative growth momentum [7][10]. - Property sales continue to decline significantly, with 30-city property sales down 10% YoY in June, and top 100 developers' contract sales volume decreasing by 35% YoY [9][19]. - Retail sales growth is expected to moderate to 6% YoY in June, influenced by a low base and earlier promotional activities [23]. - Infrastructure investment growth is projected to cool to 6% YoY due to a high base effect, while overall fixed asset investment (FAI) growth is anticipated at 3% YoY [20][32]. Summary by Sections Economic Overview - Q2 GDP growth is expected to remain robust at 5.0-5.2% YoY, supported by front-loading of exports and earlier government stimulus [4][32]. - CPI is projected to edge up marginally to 0% YoY, while PPI remains in deep deflation at -3.3% YoY [3][29]. Manufacturing Sector - NBS manufacturing PMI increased by 0.2ppt to 49.7, with improvements in new orders and production indices [7][10]. - Caixin manufacturing PMI rose by 2.1ppt to 50.4, indicating stronger production and new orders [7][10]. Property Market - 30-city property sales declined further to -10% YoY in June, with significant drops in both tier 1 and tier 3 cities [9][19]. - The contract sales volume of the top 100 developers fell by 35% YoY in June, reflecting ongoing challenges in the property sector [9][19]. Retail and Consumer Trends - Retail sales growth is expected to moderate to 6% YoY in June, influenced by earlier promotional activities and a low base [23]. - Auto retail sales growth picked up to 24% YoY in June, driven by trade-in subsidies and a low base effect [38]. Investment and Infrastructure - Overall FAI growth is projected at 3% YoY in June, with infrastructure investment cooling to 6% YoY due to a high base [20][32]. - Manufacturing investment growth is expected to hold up at 7-8% YoY, supported by fiscal subsidies for equipment upgrading [20].

Investment Rating - The report does not explicitly state an investment rating for the solar industry, but it suggests that polysilicon and module names could exhibit the highest potential upside within the sector due to inexpensive valuation and limited downside risks [4]. Core Insights - The solar glass manufacturers in China are beginning to cut production due to persistently weakening demand, with estimates suggesting a reasonable production cut of 10-20%, leading to an effective monthly production of around 45-50GW [2]. - The government is expected to push for capacity cuts across the solar supply chain, starting with the polysilicon segment, and discussions are ongoing regarding acquiring smaller players [3]. - There is a stronger commitment from the government to tackle overcapacity, with expectations of more policy support to phase out obsolete capacity and deter price competition, despite lingering fundamental pressures in the second half of 2025 [4]. Summary by Sections Production and Demand - Solar glass manufacturers are cutting production due to weak demand, with a potential cut of 10-20% rather than the 30% estimated by some media [2]. - The effective production capacity could be around 45-50GW monthly, with the possibility of resuming operations once prices rebound [2]. Government Policies - The government is anticipated to implement capacity cuts in the solar supply chain, particularly in the polysilicon segment, and is discussing measures to acquire smaller players [3]. - There is speculation about policies to curb excess capacity, with a belief that the government is determined to reduce involution competition [4]. Market Sentiment and Valuation - Despite expected fundamental pressures in the second half of 2025, market sentiment may improve in the long term due to better supply-demand dynamics [4]. - Polysilicon and module names are highlighted as having the highest potential upside within the sector, attributed to inexpensive valuations and limited downside risks [4].

ab 3 July 2025 Global Research First Read We think investors may have overly priced in potential price upside from anti-involution initiates, while overlooking the structural demand weakness and obstacles to industry consolidation. We maintain our cautious view on the China cement sector. Equities China Building Materials China Cement Sector Expert call takeaway: "lie flat" no good for long- term consolidation No new policy We hosted a call with Digital Cement analyst, Ms. Xiaoliang Wang, to dive into the t ...

Investment Rating - The report maintains a "Buy" rating for SK Hynix and Micron, while downgrading Samsung to "Neutral" from "Buy" [5] Core Insights - HBM supply and demand are expected to remain balanced, with a projected gap of 12% in 2025 and 6% in 2026 [2][10] - SK Hynix is gaining a competitive edge in HBM negotiations, securing significant contracts with major clients like AWS and Google [3] - The report forecasts a strong growth in DRAM and NAND bit shipments, with DRAM expected to grow by 17% in Q2 2025 and 11% in Q3 2025 [4] Summary by Sections HBM Supply and Demand - HBM shipments are adjusted to 5.6 billion Gb in 2025 and 8.1 billion Gb in 2026, reflecting a decrease from previous estimates [2] - The report indicates that HBM typically ships into consignment inventories, leading to a lead time of up to 4 months for mature products [2] Market Dynamics - SK Hynix is positioned as a primary supplier for several key products, including HBM3E for AWS and Google [3] - Ongoing negotiations with Nvidia for 2026 procurement units suggest a potential increase in demand for HBM products [3] Pricing and Shipment Forecasts - The report anticipates a 7% increase in blended DDR contract pricing in Q2 2025 and a 3% increase in Q3 2025 [4] - NAND contract pricing is expected to remain flat in Q2 2025 but increase by 3% in Q3 2025 [4] Company Ratings and Price Targets - SK Hynix's price target is raised to Won350k, while Micron's price target is revised to US$155 [5] - Samsung's stock is downgraded to Neutral due to a lack of immediate catalysts for HBM growth [5]

ab Global Research 30 June 2025 China Economic Comment China Weekly: Sliding Home Sales, Trade-In to Continue, Trade Talks, Weak May Profits High frequency: sliding home sales, softer port activities in June 30-city property sales declined further to -11% YoY in the first 28 days of June from -3% YoY in May. That in tier 1 cities slid to -7% YoY, tier 2 cities narrowed decline to - 11% YoY and tier 3 cities weakened to -17% YoY (also see latest China housing survey). Port cargo throughput and container thro ...

Global Research ab 30 June 2025 First Read China Solar Industry People's Daily reiterates efforts to curb excess competition People's Daily of China advocates tackling involution competition On 29 Jun, People's Daily of China published commentary about reining in involution- style competition, especially in the solar, EV, and battery sector. It attributed the involution-style competition mainly to oversupply, lack of high market entry standards, and support from local government. Measures to address excess ...

Investment Rating - The report does not explicitly state an investment rating for the industry or specific companies within it [10]. Core Insights - The agency has visibility into approximately $1 billion of ad spend, with around $650 million allocated for gaming user acquisition, which is expected to grow by 25% year-over-year in FY25 compared to a 30% growth in FY24 [2][5]. - In Q2, gaming user acquisition (UA) growth exceeded expectations, while e-commerce growth moderated compared to previous discussions [2]. - Unity's contribution to the ad spend has increased, now accounting for about 6% of the expert's wallet, up from 5% in FY24 [5]. - The report highlights that APP's e-commerce budget grew in the mid-single to high-single digits quarter-over-quarter in Q2, with expectations for similar growth in Q3 and acceleration in Q4 [5]. Summary by Sections Gaming Spend - APP's Q2 gaming UA budget growth accelerated to 27%, up 2 percentage points from Q1 [5]. - Unity's share of the expert's wallet increased to approximately 6% [5]. - The report notes that the return on ad spend (ROAS) improvement for Vector has been less than during the beta phase, but significant performance improvements are anticipated in Q4 FY25 to Q1 FY26 [5]. E-commerce Spend - APP's e-commerce budget grew in the mid to high single digits quarter-over-quarter in Q2, with a high-20% share of e-commerce brands now onboarded to APP [5]. - Some of the largest advertisers reduced their spending in Q1 and Q2, but their daily spend levels stabilized in June [5]. - New advertisers on the platform reported strong first-purchase rates and efficient customer acquisition costs (CAC) [5]. Vertical Performance - The best-performing verticals include cosmetics, select electronics, and cooking products, while CPG and Food & Beverage were noted as "surprise" winners [5]. - Some retail and clothing brands have struggled to effectively utilize APP as a channel [5]. APP Ad Manager Updates - APP introduced creative-level reporting, allowing advertisers to assess performance by specific ad formats, which supports better optimization [5]. - Interactive creative formats, such as drag-and-drop and carousel units, are gaining traction, with early adopters observing ROAS gains of 5-15% [5]. Market Sentiment - Advertiser enthusiasm at Cannes was primarily focused on Meta and Google, viewed as the most reliable performance channels [5]. - There is a noted shift towards performance-driven spending, with ROAS and incrementality being top priorities [5]. Competitive Landscape - Google is becoming more aggressive in targeting APP's mediation share, offering incentives such as exclusive inventory deals and upfront payments [5].

Investment Rating - The report does not explicitly state an investment rating for the semiconductor industry but highlights potential tariff impacts and export controls that could influence investment decisions. Core Insights - The report indicates that tariff headlines related to Section 232 are expected to emerge within the next 4-6 weeks, with potential tariffs of 25% on final products like electronics, while allowing for offsets for U.S. originated content [2][6] - A complete ban on semiconductor equipment exports to China is deemed improbable, with a more realistic approach being the broadening of export controls on semiconductor materials [7][8] - The Trump administration may be more open to negotiating export controls with China compared to the Biden administration, which could lead to easing restrictions for companies like NVIDIA [8] Summary by Sections Section 232 Investigation - The timeline for the Section 232 investigation has been accelerated, with final remedies expected by late July or August, a significant shift from previous expectations [6] - The most likely outcome of the investigation is a blanket tariff on electronics, applied on top of existing country-specific tariffs, without initial content exemptions [6] Export Controls - The Trump administration may consider easing export controls on China, potentially in exchange for access to critical minerals [7] - The current administration is not actively enforcing the AI Diffusion rule, which may be replaced by bilateral agreements [7] Market Implications - The report suggests that headline risks from the Section 232 investigation remain elevated, but some measures may be negotiated down [8] - NVIDIA is identified as a potential beneficiary of any easing of export controls, especially if concessions are part of a larger U.S.-China trade agreement [8]

Investment Rating - The report maintains a "Buy" rating for both JD Health and Meituan, indicating a positive outlook for their stock performance in the healthcare sector [5][22]. Core Insights - The pharmaceutical retail O2O market in China is characterized by strong competition, with Meituan being the largest player due to its delivery capabilities and early market entry in 2013. JD Health is emerging as a significant competitor with advantages in supply chain and asset-heavy business model [2][4]. - Meituan's healthcare product GMV is estimated to reach approximately Rmb45 billion in 2023, with a target growth rate of at least 30% annually. The majority of its healthcare-related GMV comes from O2O sales [2][3]. - JD Health's asset-heavy model may provide a competitive edge in the healthcare industry, as many services require offline provision and have higher logistics demands. JD Health's scale gives it stronger bargaining power with suppliers [4][5]. Summary by Sections Meituan's Position - Meituan has captured a significant share of the pharmacy market, with around 250,000 pharmacies operating on its platform. The company aims to expand its healthcare segment despite challenges in driving growth due to market saturation [2][3]. - The expert suggests potential strategies for Meituan to enhance growth, including integration with the medical beauty segment and lobbying for reimbursement of O2O drug orders in more cities [3]. JD Health's Competitive Edge - JD Health operates its own offline pharmacies, which provides it with a supply chain advantage over Meituan. This model may be more suitable for the healthcare sector, where offline services are crucial [4]. - The report highlights that JD Health could outperform revenue growth expectations due to strong drug sales and gross profit margin expansion [5]. Market Outlook - The internet healthcare space is viewed positively due to its high growth visibility and potential catalysts such as AI and consumption recovery. Both JD Health and Meituan are expected to benefit from these trends [5].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The survey indicates that Nvidia, Microsoft, and OpenAI continue to dominate the AI landscape, with a focus on identifying potential tailwinds and headwinds for other players in the market [2][4] - 100% of surveyed organizations are in the AI investigation stage, but only 14% are in production at scale, highlighting a slow adoption curve [3][8] - The average AI spend per organization is $3.27 million, with larger companies spending more, indicating that AI investments are still in early stages [3][56] Overall Enterprise AI Adoption - 100% of respondents are investigating AI use cases, but only 14% are in production at scale, suggesting a slow adoption curve [3][8] - The average AI spend per organization is $3.27 million, representing only 0.4% of the average IT budget of $806 million [56] - The most frequently cited hurdle for AI adoption is "unclear ROI," with 72% of respondents indicating that AI spending would displace other IT budget items [8][62] Key Players and Market Dynamics - Nvidia remains the preferred platform for both training and inference, with 86% of respondents choosing Nvidia for training and 87% for inference [12][4] - Microsoft maintains a strong lead in hosting AI workloads, followed by AWS, with only 13% of enterprises reporting material GPU constraints [10][4] - OpenAI's models dominate the enterprise market, with Google Gemini emerging as a significant competitor [11][4] Application and Data Software Trends - Microsoft M365 Copilot and GitHub Copilot are leading applications in their respective markets, with significant adoption among enterprises [5][16] - The DIY option for AI solutions is gaining traction, indicating a shift away from third-party software [19][5] - Data software firms are expected to benefit from increased AI spending, particularly in cloud-based data warehouses [17][5] IT Spending Outlook - The average expected increase in IT budgets for 2025 is 4.4%, unchanged from the previous survey, indicating a stable spending outlook [38] - 72% of respondents expect AI spending to displace other IT budget items, with a notable increase in the desire to consolidate IT solutions [62][66] - The survey results suggest that enterprises are likely to defer back-office investments to fund AI initiatives [66][8]