Investment Rating - The report does not explicitly state an investment rating for the pet food industry in China Core Insights - The pet food market in China is experiencing robust growth, with online GMV across major platforms increasing by 18% YoY in May 2025, driven by a 22% rise in volume despite a 4.3% decline in average selling price [2] - Douyin is leading the growth in the market, with a 54% YoY increase in GMV, significantly outperforming JD and Tmall [2] - The top 10 pet food brands accounted for 39.7% of the market share in May, showing an increase of 1.7 percentage points MoM and 3.2 percentage points YoY [3] Sales Trends - Gambol's online retail sales increased by 42% YoY in May, with its premium cat food brand, Fregate, surging by 147% YoY [4] - China Pet Foods (CPF) recorded an 18% YoY growth in online sales in May, with its brand Toptrees growing by 50% [5] - Petpal's core brand, Meatyway, saw a 14% YoY increase in online sales in May and a 38% YoY rise for the January–May period [5] Cost Trends - The average cost of raw materials for pet treats and staple food declined by 7% and 2% YoY, respectively, in May 2025, primarily due to lower prices for chicken, duck, and soybean meal [6] Market Share Dynamics - The market share for Myfoodie and Fregate increased by 0.5 percentage points and 1.6 percentage points YoY, respectively [4] - CPF's aggregate online sales for January–May were up 24% YoY, with Toptrees' market share increasing to 1.1% [5] Online Sales Channels - Online channels for pet food are showing significant growth, with Tmall, JD, and Douyin all contributing to the overall increase in GMV [27][29]

ab 16 June 2025 Global Research China Equity Strategy EU and Asia marketing feedback and key debates Improved sentiment on China though sustainable growth path still questioned We have just completed two weeks of marketing in Europe and Asia. Overall we have seen improved interest in Chinese equities, and among the European investor base we have seen more investors that are neutral on China now as opposed to underweight and a few that are now overweight which on previous visits was almost unheard of. While ...

Investment Rating - The report maintains a bullish outlook on gold despite recent price consolidation, indicating a positive investment sentiment towards the precious metals sector [2][6][7]. Core Insights - The gold price has been consolidating since reaching an all-time high of $3,500 in late April, with market participants reacting to US tariffs and economic data, leading to volatile trading conditions [2][6][7]. - High levels of uncertainty regarding US fiscal policy and the Federal Reserve's response enhance gold's appeal as a portfolio diversifier [7][8]. - There is a notable interest in buying dips in gold, with prices frequently returning above the $3,300 mark, suggesting potential for further upside [8][9]. Summary by Sections Gold Market Dynamics - The gold market is experiencing thinner liquidity conditions, which could amplify price movements, making it easier for price changes to occur with lower trading volumes [3][9]. - Continued buying from the official sector and inflows into gold ETFs are contributing to a reduction in available metal in the market [9][10]. Physical Demand and Investment Trends - Global physical investment demand for gold bars and coins increased by 3% year-on-year in Q1, despite a 12% drop in overall consumer demand due to a decline in jewelry consumption [10][16]. - Mainland China accounted for approximately 38% of total physical consumer demand in Q1, highlighting its significant role in the gold market [10][26]. Shifts in Investor Preferences - There are indications that investors may be rotating from gold to white precious metals like platinum and silver, as evidenced by changes in futures open interest [4][32]. - Platinum has recently outperformed gold, gaining around 4% in a single day, while palladium also saw gains, suggesting a shift in investor focus towards more industrial precious metals [4][37].

Investment Rating - The report assigns a "Buy" rating to GDS, Guangdong Aofei Data Technology, and VNET, indicating a positive outlook for these companies [22]. Core Insights - The Doubao token usage has seen significant growth, reaching 16.4 trillion tokens daily by the end of May 2025, which is 137 times the level in May 2024. This growth is attributed to Doubao 1.6, which supports a 256k context window and offers competitive pricing compared to its predecessor [2][3]. - The report suggests that breakthroughs in AI applications are expected to drive the next wave of capital expenditures (capex) and stock re-rating in the AI sector. The report highlights that improving model intelligence and declining prices will create an ecosystem conducive to these breakthroughs [3]. Summary by Sections Doubao Token Usage - Doubao's daily token usage reached 16.4 trillion by the end of May 2025, marking a 137x increase from May 2024. The pricing for Doubao 1.6 tokens is significantly lower than that of Doubao 1.5, making it more attractive for enterprise use [2][3]. AI Applications and Investment Opportunities - The report emphasizes that the inflection point in AI applications will be crucial for triggering further AI capex and re-rating of AI stocks. Key investment picks include GDS, driven by AI inference demand and overseas expansion, VNET, benefiting from AI training demand and retail business growth, and Aofei, which is expanding into Northern China [3].

Investment Rating - The report assigns a "Buy" rating to First Solar Inc (FSLR) with a target price of US$160.16 as of June 9, 2025 [112]. Core Insights - AI data centers are a significant driver of electricity demand growth in the U.S., with six major technology companies (Amazon, Microsoft, Google, Meta, Oracle, and Apple) accounting for nearly 20% of the growth in U.S. electricity demand, which grew by 3.2% year-over-year [2][3]. - The report anticipates that the potential loss of U.S. renewable tax credits will not materially impact the demand for renewables from large tech companies, as electricity costs average around 1.3% of their revenue [3][7]. - There is a shift towards hourly matching of renewable energy consumption by corporations, with some companies aiming for 24/7 carbon-free energy by 2030, which will increase the demand for diverse energy generation sources [4][90]. Summary by Sections Electricity Demand Growth - U.S. electricity generation increased by 3.2% year-over-year, equating to an additional 144 TWh [2]. - The six technology companies mentioned are growing their electricity consumption at approximately 30% per annum [2]. Tax Credits and Cost Impact - The estimated loss of U.S. renewable tax credits would have less than a 25 basis points impact on operating margins across the technology sector [3][11]. - Electricity costs are projected to average around 1.3% of revenue for the companies analyzed, indicating minimal impact from potential tax credit losses [3][7]. Corporate Renewable Targets - Corporations primarily meet renewable targets through Power Purchase Agreements (C-PPAs), which allow them to match their total annual non-renewable electricity consumption with renewable energy [4][89]. - Companies are increasingly focusing on achieving hourly matching of renewable energy consumption, which will require a more diverse energy generation mix [4][90]. Technology Company Insights - Amazon's electricity consumption was reported at 30.9 TWh in 2021, with a commitment to match 100% of its electricity with renewable sources by 2023 [25][26]. - Microsoft reported a 180% increase in electricity consumption since 2020, with electricity costs making up only 1.8% of its revenue in 2024 [40]. - Google's electricity consumption grew by 17% year-over-year in 2023, with a goal of operating on 24/7 carbon-free energy by 2030 [46]. - Meta has maintained net zero emissions since 2020 by matching 100% of its electricity use with renewable energy [53]. - Oracle's electricity consumption increased by 55% year-over-year in 2023, with electricity costs representing a small fraction of its revenue [56]. - Apple's electricity usage is significantly lower than its peers, accounting for only an estimated 0.14% of its revenue in 2023, but it is pushing for renewable energy in its supply chain [57]. Market Dynamics - The report highlights that if the growth rates of the six technology companies continue at approximately 25% per annum, their annual incremental electricity demand will exceed the entire U.S. utility-scale solar industry's generation growth by early 2028 [64][68]. - The corporate renewable demand is dominated by solar energy, which comprised 87% of the C-PPA market in 2025 [62].

Investment Rating - The report maintains a "Buy" rating for Wuxi Apptec, Pharmaron, and Tigermed A/H, while Wuxi Bio and Joinn A/H are rated as "Neutral" [5][107]. Core Insights - The biopharma industry in China is expected to see a mild increase in R&D activities and outsourcing over the next 12 months, with an average R&D budget increase of 10.8% YoY and an outsourcing rate rising from 46.7% to 48.3% [2][14]. - Biopharma managers are increasingly considering out-licensing as a primary financing option, rising from 58% in 2024 to 75% in 2025, which is anticipated to benefit CROs/CDMOs [3][16]. - The demand for R&D speed and capacity is growing, with biopharma companies prioritizing on-time delivery and quality when selecting CROs [3][50]. Summary by Sections R&D Budget and Outsourcing - Biopharma managers expect their R&D budgets to increase by an average of 10.8% YoY, with a higher willingness to allocate more funds to outsourcing [23][34]. - The overall outsourcing ratio is projected to increase from 46.7% to 48.3% in the next 12 months, with late-stage trials expected to recover more than early-stage trials [34][50]. Business Development (BD) Activities - 75% of surveyed biopharma managers view BD as the primary financing option, reflecting a significant increase in BD activities [3][16]. - The report indicates that the reinvestment of BD income may lead to more CRO orders, enhancing growth opportunities for CROs/CDMOs [16][50]. Pricing Trends - Biopharma managers anticipate smaller price cuts in the next 12 months compared to the previous year, indicating an improving demand/supply situation [4][56]. - The report highlights that no price cuts are expected for manufacturing in the upcoming year, which is a positive sign for the industry [4][56]. Vendor Selection - Wuxi Apptec remains the top choice for preclinical lab-testing, while Tigermed is the preferred vendor for clinical testing and trials [5][74]. - The criteria for selecting CROs emphasize quality, on-time delivery, and reputation, with a growing importance placed on delivery speed [65][92]. Market Outlook - The survey results suggest an overall positive outlook for the CRO/CDMO sector in China, with expectations of improved R&D activity and outsourcing compared to 2024 [5][50]. - The geopolitical uncertainties are expected to have limited impact on the operations of China CROs, with less than 10% of Wuxi Apptec's goods subject to US tariffs [5][107].

Investment Rating - The report indicates a continued downturn in China's property market, with expectations of a decline in property activities in 2025, albeit less severe than in 2024 [51]. Core Insights - Home purchase intentions have weakened overall, with tier 1 cities stabilizing while lower-tier cities, particularly tier 2 and tier 3, have seen a more significant decline [2][7]. - The survey reveals that 42% of respondents expect housing prices to decline further in the next 12 months, with a notable increase in homeowners reporting paper losses [3][30]. - The report emphasizes the need for government intervention through pro-growth policies, further mortgage rate cuts, and support for developers to boost market sentiment [4][51]. Summary by Sections Home Purchase Intentions - The latest survey shows a decrease in home purchase intentions, with only 20% planning to buy in the next two years, down from previous surveys [7]. - Among current renters, 73% prefer to rent rather than buy, marking the highest inclination since the survey began [7][40]. Housing Price Outlook - 42% of respondents anticipate further declines in housing prices, with 47% expecting a drop of less than 10% and 37% expecting a decline of 10-20% [3][23]. - Official data indicates a 10% decline in new residential prices and a 17% decline in secondary residential prices from peak levels [22]. Market Confidence and Economic Factors - The report notes that government policy easing has slightly improved market confidence, with fewer respondents expressing a lack of confidence compared to previous surveys [18]. - Key factors affecting confidence include lower mortgage rates, reduced down payment requirements, and expectations of further price declines [18][49]. Consumer Sentiment and Wealth Effect - The negative wealth effect from declining housing prices is likely to suppress household consumption, as 47% of homeowners report paper losses [30]. - The report highlights that housing stock value constitutes a significant portion of household assets, further impacting consumer sentiment [30]. Policy Recommendations - The report suggests that the government should implement more supportive policies to address stalled projects and enhance financing for both developers and home buyers [4][51]. - It emphasizes the importance of addressing bottleneck restrictions in the destocking program to improve market conditions [51].

Investment Rating - The report assigns a "Buy" rating to key players in the China Internet sector, specifically Tencent, Alibaba, and Kuaishou, indicating a positive outlook on their potential for AI monetisation [8]. Core Insights - The report emphasizes the near-term certainties and long-term opportunities in AI monetisation within the China Internet sector, highlighting the early progress of private companies and tech startups in this area [3]. - Major Chinese cloud service providers (CSPs) are expected to benefit significantly from growing enterprise demand for AI services, with AI revenue contributing an estimated 10-20% to their cloud revenue in Q125 [4][21]. - AI is driving improvements in advertising efficiency, with companies reporting increases in click-through rates and conversion rates due to AI-enabled enhancements [4][50]. Summary by Sections AI Monetisation Opportunities - The report identifies enterprise-facing AI agents as having a visible monetisation path with a total addressable market (TAM) estimated at Rmb1.6 trillion, while consumer-facing agents have a larger TAM of Rmb3.2 trillion but slower monetisation progress [5][7]. - AI adoption among China's internet companies is still in its early stages, but significant revenue growth has already been observed in cloud and advertising sectors [4][13]. Cloud Services - The GenAI Infrastructure as a Service (IaaS) market has expanded nearly fivefold from US$0.24 billion to US$1.2 billion between H123 and H224, with its share of the total public cloud rising from 1.3% to 5.0% [15][19]. - Major Chinese CSPs are expected to see cloud revenue growth rates revised upwards by 6-13 percentage points for 2025, driven by AI-related demand [29]. Advertising Sector - AI has been reported to contribute meaningfully to ad revenue growth for major platforms, with Tencent's advertising business growing 20% YoY in Q125, attributed to improved targeting and content recommendations [51]. - The report notes that AI-driven improvements in advertising could lead to mid-single to mid-teen percentage increases in click-through and conversion rates [47]. AI Agents and Applications - The report highlights the strategic importance of AI agents in forming competitive moats and exploring new traffic gateways, with enterprise-facing agents expected to show more advanced progress compared to consumer-facing agents [7][55]. - Despite strong user engagement with AI products, monetisation remains nascent, with leading AI products in China generating annual recurring revenues significantly lower than their global counterparts [67]. User Engagement and Market Trends - The report indicates that users in China show strong interest in innovative AI products, with DeepSeek being the most popular chatbot app, achieving 168 million monthly active users [58]. - However, the willingness to pay for AI services among Chinese consumers lags behind global users, posing challenges for monetisation [70].

Investment Rating - The report maintains a "Buy" rating for several healthcare stocks, including Wuxi Apptec and Eyebright, based on their strong growth potential and market positioning [11]. Core Insights - The EU's planned restrictions on Chinese medtech firms' access to public procurements over EUR 5 million are expected to have limited impact on the covered companies, as most do not participate in such procurements and have manageable revenue exposure to the EU market [3]. - The healthcare indices in China showed positive performance, with HSHCI rising by 4.1% and HSHKBIO by 4.5% during the week of June 2-6, 2025, indicating a favorable market trend [2]. - Recent approvals in the drug sector include Akeso's cadonilimab for cervical cancer and Hansoh's aumolertinib for NSCLC in the UK, showcasing ongoing innovation and regulatory progress in the industry [4][5]. Summary by Sections Market Access and Regulatory Environment - The EU's International Procurement Instrument investigation concluded that China has limited EU medical device producers' access to government contracts, leading to the proposed restrictions [3]. - Companies like Mindray and MGI Tech have established local manufacturing facilities, which may help mitigate the impact of these restrictions [3]. Drug Approvals and Developments - Akeso's cadonilimab received approval for treating first-line cervical cancer, while Innovent and Hutchmed's sintilimab + fruquintinib application was accepted for renal cell carcinoma [4]. - Hansoh's aumolertinib has been approved in the UK for specific NSCLC patients, indicating a strong pipeline for innovative therapies [4]. Stock Performance and Recommendations - The report highlights top picks in the healthcare sector, including Wuxi Apptec and Eyebright, based on their expected solid fundamental recovery and market share potential [11]. - The report notes that the chemicals sector outperformed healthcare indices, with a 1.7% increase in A shares and a 3.8% increase in H shares [12].

Investment Rating - The report does not explicitly state an investment rating for the semiconductor industry, but it highlights preferred stocks for investment in the US and internationally, indicating a positive outlook for certain companies [2]. Core Insights - Total semiconductor sales in April declined by 11.7% month-over-month (M/M), aligning with the 5-year seasonal average but approximately 120 basis points below the 10-year average. Year-over-year (Y/Y) sales increased for the 19th consecutive month, reaching a growth rate of 21.7% [2]. - The semiconductor industry is projected to experience a 3-6% quarter-over-quarter (Q/Q) growth in revenue for Q2 2025, with current street estimates at 3.4% Q/Q [4]. - Memory sales fell significantly by 23.3% M/M, driven by a 22.1% decrease in units sold. However, DRAM average selling price (ASP) increased by 2.8% M/M, while NAND ASP rebounded by 19.6% M/M [3]. Summary by Sections Semiconductor Sales and Trends - April semiconductor sales saw an 11.7% M/M decline, with a 21.7% Y/Y increase. The ASP dropped by 4.9% M/M, which is 360 basis points worse than the 10-year average [2]. - The decline in units sold across major product segments was noted, with a 7.1% M/M decline in units outperforming seasonal averages by 100-200 basis points [2]. Memory Market Insights - Memory sales decreased by 23.3% M/M, with DRAM revenue dropping by 29.0% M/M and NAND sales falling by 9.4% M/M. The report anticipates a weakening memory cycle in the second half of 2025 due to oversupply [3]. - The June forecast predicts a blended DRAM ASP increase of 6% Q/Q and NAND ASP increase of 3% Q/Q for Q2 2025 [3]. Preferred Stocks - In the US, preferred stocks include AVGO, MRVL, ARM, MU, NVDA, and TXN. Internationally, preferred stocks are ASE, Hon Hai Precision, NXP, Infineon, JCET, MediaTek, Quanta, Renesas Electronics, Samsung Electronics, SK Hynix, TSMC, and Wiwynn [2].