Property sales recorded a deeper y-y decline in June as expected, despite improved constructions. We stay cautious on the physical market and expect the weak sales trend to continue in 3Q given worsened resident sentiment, more secondary inventory, and reactive policy. June property sales recorded a wider decline: Rebased national sales were -10.8% y-y in value and 5.5% y-y in volume, widening the 6M25 decline to -5.5% in value and -3.5% in volume y-y. NBS 70-city home prices continued to edge down, -0.3% a ...

Investment Rating - Industry view is rated as In-Line [4] Core Insights - The Asia Beauty market is currently experiencing a potential turnaround or bottoming phase, with varying growth rates across different segments and brands [2][6] - The report highlights significant year-on-year growth in cosmetics sales, particularly in the Chinese market, with some brands showing remarkable recovery post-pandemic [18][36] Summary by Sections China Beauty Market - The report provides a detailed analysis of the cosmetics sales growth in China, indicating fluctuations in growth rates over the years, with a notable recovery trend observed in recent quarters [6][18] - Monthly cosmetics import units showed a year-on-year growth of 17% in the first five months of 2025 [22] Cosmetics Sales Tracker - The quarterly sales tracker for major beauty brands in China reveals varied performance, with brands like Proya and Imeik showing strong growth rates, while others like AmorePacific and Marubi faced declines [18] - For instance, Proya's sales growth was recorded at 49% in 1Q21, while Imeik peaked at 228% in the same period [18] Online Shopping Trends - The report outlines the rankings of beauty products during major online shopping festivals, with L'Oreal and Proya consistently leading in sales across platforms like Tmall and Douyin [31][32] - The rankings indicate a strong presence of both international and local brands, with Chinese brands like Proya gaining significant market share [31][32] Market Share Analysis - The skincare and color cosmetics market shares in China are analyzed, showing a competitive landscape with brands like L'Oreal, Estee Lauder, and Proya dominating the market [39][41] - The report emphasizes the growing importance of online sales channels in driving brand visibility and consumer engagement [31][32]

Investment Rating - The report assigns an "Overweight" rating to Xiaomi Corp, indicating a positive outlook for the stock's performance relative to its industry peers [4][64]. Core Insights - Xiaomi's global smartphone shipment in 2Q25 is expected to exceed its performance in 1Q25, with preliminary data suggesting a slight year-over-year increase of 0.6% to 42.5 million units, securing a 14.4% global market share [1][2]. - The overall global smartphone shipment in 2Q25 is projected to be 295.2 million units, reflecting a modest increase of 1.0% year-over-year according to IDC [1]. - Samsung remains the market leader with 58 million units shipped, representing a 7.9% year-over-year increase and a 19.7% market share, while Apple follows with 46.4 million units and a 15.7% share [2]. Summary by Sections Shipment Performance - Xiaomi's shipment is anticipated to surpass its previous quarter's performance, with a total of 42.5 million units shipped in 2Q25, marking a 0.6% increase year-over-year [2]. - The global smartphone market is experiencing slight growth, with IDC reporting a total shipment of 295.2 million units in 2Q25, up 1.0% year-over-year [1]. Market Position - Xiaomi ranks third in the global smartphone market, holding a 14.4% share, while Samsung and Apple hold the first and second positions, respectively [2]. - Canalys data indicates a 1% year-over-year decline in global smartphone shipments, with Xiaomi's market share slightly lower at 15% compared to IDC's figures [3]. Financial Metrics - The report provides financial projections for Xiaomi, estimating revenue growth from RMB 365.9 billion in 2024 to RMB 687.1 billion by 2027, with corresponding EPS growth from RMB 1.07 to RMB 2.56 over the same period [4].

Investment Rating - The report maintains a positive bias on GDS, VNET, and SUNeVision, with GDS being the top pick in the industry [3][4]. Core Insights - The resumption of the sale of NVIDIA H20 GPUs in China is seen as a major positive for the data center industry, alleviating procurement bottlenecks for Chinese hyperscalers [2][3]. - The lack of GPUs was identified as a primary reason for the subdued domestic data center bookings in Q2 2025 and the significant decline in share prices of IDCs since March [2]. - A new tender for data centers from hyperscalers is anticipated soon due to the improved GPU availability [2]. Summary by Sections Industry Overview - The report categorizes the Greater China IT Services and Software industry as cautious, while the Greater China Telecoms industry is viewed as attractive [4]. Company Ratings - GDS Holdings Ltd (GDS.O): Overweight [76] - VNET Group Inc (VNET.O): Overweight [76] - SUNeVision Holdings Limited (1686.HK): Overweight [76] Market Dynamics - The report highlights that the resumption of GPU sales is expected to stimulate demand and potentially lead to a recovery in share prices for data center operators [2][3].

Investment Rating - The report indicates a positive outlook for the Chinese hotel industry, highlighting significant growth potential in brand penetration and market expansion Core Insights - The total number of hotels in China has reached 350,000, with branded hotels increasing from 16% in 2017 to 40% currently, reflecting a compound annual growth rate of 12% over five years, yet still below the global average of 72% [1][4] - The economy hotel segment constitutes 78% of the total hotel count but contributes less than 50% to market value, while high-end and mid-to-high-end hotels account for a higher proportion of room numbers, reaching 38% [1][5] - The market is highly fragmented, with even leading hotel groups holding relatively small market shares, such as 4%-8% in regions like Xinjiang [1][8] - The franchise model dominates, with over 90% of large hotel groups operating under this model, although this is still lower than international brands like Marriott and InterContinental, which operate at 99% [1][10] - The average room price for chain hotels in China is projected to be 235 RMB (approximately 30 USD) in 2024, influenced by hotel tier and city classification [1][11] Summary by Sections Market Supply - The supply of hotels in China has seen significant changes over the past decades, with a peak in growth around 2018, followed by a decline in 2019 exacerbated by the pandemic, but a rapid rebound has occurred since 2023 [3] Brand Development - The growth of branded hotels has been robust, maintaining an upward trajectory even during the pandemic, with expectations for further increases in brand penetration to 50%-60% in the future [4] Hotel Distribution - Economic hotels dominate the total property count at 78%, while high-end and mid-range hotels have a higher share in terms of room numbers, with high-end hotels making up 38% [5] City-Level Penetration - Brand penetration rates vary by city tier, with first-tier cities like Beijing and Shanghai at 60% and over 50% respectively, while second-tier cities are at 48% and third-tier cities at 33% [6] Revenue Channels - In terms of booking channels, OTAs account for 27% (possibly exceeding 30%), direct sales for 18%, and offline bookings for 55% [2][12][13] Performance Trends - The hotel market is expected to see stable occupancy rates in 2025, but average daily rates may decline, indicating a potential decrease in overall revenue despite stable guest flow [16] - The leisure segment is projected to perform well in 2025, while business demand is expected to decline by 4%-5% year-on-year [17] Company Performance - Among major listed hotel companies, HTST leads the market, while BTGM Xinjiang and ATPSD show relatively weaker performance, highlighting a divergence in post-pandemic recovery [19] International Brands - International hotel brands like Marriott and Hilton are rapidly expanding in China, with a significant portion of their global pipeline located in the country, reflecting a strong growth trajectory [20]

Investment Rating - The report indicates a positive investment outlook for healthcare stocks in Southeast Asia, particularly in countries facing aging populations like Thailand [5][12]. Core Insights - The Asian consumer market is characterized by price sensitivity, with consumers downgrading spending in food but increasing expenditures in travel [1][4]. - The rapid growth of the fast-moving consumer goods (FMCG) market in Southeast Asia, particularly in Indonesia, the Philippines, and Thailand, is noteworthy, with growth rates double that of India [1][7]. - Local brands are gaining market share over global brands due to their ability to offer personalized products at lower prices through e-commerce and social media [6][4]. Summary by Sections Consumer Behavior - Asian consumers prioritize value for money and are highly sensitive to prices, often influenced by macroeconomic cycles [4][1]. - The Z generation plays a significant role in consumer behavior, heavily relying on social media and influencers for purchasing decisions [4][1]. Demographics and Market Impact - Approximately one-third of Asia's population is under 25, but significant demographic differences exist, with countries like Thailand facing rapid aging [5][1]. - The increase in single-person households is driving growth in pet ownership and online entertainment [5][1]. FMCG Market Trends - The combined FMCG market size of Indonesia, the Philippines, and Thailand is comparable to that of India, with a growth rate significantly higher than India's [7][1]. - There is a notable opportunity for growth in the dairy sector, particularly in Indonesia, where per capita spending is significantly lower than in Thailand [7][1]. Grocery Retail Sector - Traditional small stores remain important in Asia, but modern retail channels are growing faster, with convenience stores dominating the market [8][9]. - Thailand's 7-11 is one of the most profitable globally, with substantial room for market share expansion [11][9]. E-commerce Development - The e-commerce market in Southeast Asia is rapidly expanding, with a current market size of $160 billion and a compound annual growth rate exceeding 30% [20][21]. - Despite the growth, e-commerce penetration remains lower than in China and South Korea, indicating further potential for development [21][20]. Healthcare Sector Potential - The healthcare sector in Southeast Asia has significant growth potential, driven by low current spending relative to GDP and an aging population [12][5]. - Thailand's healthcare spending has increased by approximately 7% over the past decade, highlighting a growing demand for healthcare services [12][5]. Key Companies - CPO is a leading grocery retailer in Thailand with a market capitalization of approximately $12 billion, dominating the convenience store segment [24]. - Astro is Indonesia's largest diversified group, holding significant market shares in both the automotive and heavy equipment sectors [24]. - Jollibee, the largest listed fast-food chain in Asia, is expanding internationally while maintaining a strong domestic presence [27]. - BDMS operates the largest private healthcare network in Thailand, catering to both local and international patients [29]. - bh Hospital is a major private hospital in Southeast Asia, known for its high profit margins and focus on international patients [30].

Investment Ratings - NVIDIA (NVDA): Outperform with a price target of $185 [6] - AMD: Market Perform with a price target of $95 [6] Core Insights - NVIDIA anticipates the granting of H20 licenses, which could lead to significant revenue recovery in China, potentially adding $15-$20 billion in revenue and 40-50 cents in EPS upside for FY2026 [3][4] - The easing of the China ban is expected to benefit NVIDIA's current year EPS by approximately 10% and AMD's by mid to upper single digits [10] - The datacenter opportunity for NVIDIA remains substantial, with significant upside potential, while AMD faces challenges in its core business despite high AI expectations [8] Summary by Sections NVIDIA - NVIDIA's recent announcements suggest a positive shift regarding H20 licenses, with expectations to resume sales in China [1][2] - The company faced an estimated $8 billion loss in revenue due to the previous ban, but recovery in the second half of the fiscal year is anticipated [3] - Every $10 billion in recovered revenue from China could translate to approximately 25 cents in additional EPS for NVIDIA [9] AMD - AMD has not made similar announcements regarding the easing of restrictions, but it is expected to experience similar dynamics as NVIDIA [5] - The company estimated a $700 million hit to Q2 revenues and an additional $800 million loss in the second half, totaling around $1.5 billion for the year [5] - Each $1 billion in additional revenue from China for AMD corresponds to about 25 cents in EPS, with potential recovery in the second half of the fiscal year [9] Market Context - The report highlights that allowing NVIDIA to compete in China is crucial to maintaining its ecosystem advantages and preventing the market from shifting to local competitors like Huawei [4] - The overall sentiment is that the previous ban on NVIDIA's H20 was unnecessary, as its performance was already below that of local alternatives [11]

Investment Rating - The report indicates an overall positive sentiment towards Hong Kong Property with specific stocks rated as Overweight (OW) such as China Resources Land, China Overseas Land, and Swire Properties [15][19]. Core Insights - There is strong interest in Hong Kong Property, particularly among onshore investors seeking stocks with yields greater than 5% and dividend certainty. Swire Properties is highlighted as the most enquired stock, followed by Henderson Land and Hang Lung Properties [1][4]. - In contrast, the sentiment towards Mainland China Property remains cautious, with investors skeptical about the effectiveness of new policy support to revive the housing market. The focus is on tactical trades, with CR Mixc, CR Land, and KE Holdings being the most sought-after names [1][7]. Summary by Sections Hong Kong Property - Investors are primarily interested in stocks yielding over 5%, with Swire Properties (~6% yield) and Henderson Land (~7% yield) being the most attractive options. SHKP is often screened out due to its lower yield [4][5]. - There is a notable shift in investor focus from Mainland China to Hong Kong, with discussions now predominantly centered on Hong Kong Property [1]. Mainland China Property - Investors express low expectations for effective policy support, believing that any new measures will not significantly impact the housing market. The focus remains on companies like CR Mixc, which is viewed as a proxy for improving consumption in China [7][9]. - There is growing interest in small and mid-cap state-owned enterprises (SOEs), with C&D and Greentown China being highlighted as attractive options [7][9].

Investment Rating - The industry investment rating is Attractive [3][28]. Core Insights - The Natural Resources Bureau of Jiangxi Yichun has ordered eight lithium-related mines, including the Jianxiawo project, to prepare reserve verification reports by September 30 due to flaws in the previous approval process [1][2]. - The total annual production volume of the involved mines exceeds 150,000 tons of lithium carbonate equivalent (LCE) [2]. Summary by Sections Industry Overview - The report highlights potential supply risks associated with the eight lithium mines in Yichun, which are crucial for the lithium supply chain [1][2]. Production Impact - Despite the verification process, a production halt is not expected as it could significantly impact local employment and GDP [2]. Company Ratings - Various companies in the Greater China Materials sector have been rated, with several receiving an Overweight rating, indicating expected performance above the average total return of their industry [58][60].

Investment Rating - The report maintains an "Overweight" rating for Tencent Holdings Ltd. and reiterates it as a "Top Pick" with a price target raised to HK$650.00 from HK$630.00, reflecting a 31% upside potential from the current price of HK$496.60 [6][8][24]. Core Insights - The report anticipates solid revenue growth of 11% and non-IFRS operating profit (OP) growth of 14% for 2Q25, driven by strong performance in online games and advertising sectors, while also noting a slight recovery in FinTech and Business Services (FBS) [1][2][4]. - Online games are expected to grow by 16% in 2Q25, with international game growth outpacing domestic growth, supported by strong grossing receipts from previous quarters [2]. - Advertising revenue is projected to grow by 18% year-over-year, bolstered by AI-driven ad technology improvements and enhanced user engagement through Weixin Search [3]. - FBS is expected to see a 6.5% year-over-year increase, with solid business service growth of 15% and gradual expansion in international cloud services [4]. - The report highlights a narrowing leverage between revenue and operating profit growth due to increased AI-related costs, while gross profit is expected to reach Rmb98 billion, up 15% year-over-year [5]. Summary by Sections Revenue and Profit Estimates - Total revenues for 2Q25 are estimated at Rmb179.018 billion, reflecting an 11.1% year-over-year increase, with gross profit expected at Rmb98.314 billion, a 14.5% increase [12]. - Non-IFRS operating profit is projected at Rmb66.580 billion, up 13.9% year-over-year, with an operating margin of 37.2% [12]. Financial Projections - For the fiscal year ending December 2025, revenue is estimated at Rmb732.526 billion, with a projected net profit of Rmb207.054 billion [8][40]. - The report also provides a detailed breakdown of expected earnings per share (EPS) growth, projecting Rmb22.11 for 2025 and Rmb26.29 for 2026 [8]. Valuation and Price Target - The price target of HK$650 is derived from a sum-of-the-parts valuation, including a DCF value of HK$569 per share for core businesses and HK$81 per share for associate investments, applying a 30% discount to the investment value [20][24].