Unchanged In-line Largely unchanged Impact to our thesis Financial results versus consensus Direction of next 12-month consensus EPS April 27, 2025 02:38 PM GMT Luzhou Lao Jiao Co. Ltd | Asia Pacific 2024/1Q25 Results in Line; Dividend Policy Announced Reaction to earnings Key Takeaways Revenue by price segment: Mid-high end liquor sales rose 3% yoy (88.4% of liquor sales) and low-end liquor sales increased 6% yoy in 2024. Margin trends: OPM declined 1.0ppt yoy in 1Q25, with narrowed GPM on a lower product ...

April 27, 2025 04:24 PM GMT Pharmaron | Asia Pacific 1Q25 Results First Take: Revenue In Line with MSe; New Order Growth Slightly Softer Than Expected Key Takeaways Geographical mix: 1Q25 revenue streams from North America, EU and China delivered YoY growth of 16.8%, 26.6% and 13.1%, accounted for c. 65%, 18% and 15% of total revenue, respectively with another 2% from rest of the world. Customer base: Revenue stream from top 20 pharma and other customers grew 29% and 14% YoY, respectively. Cash flow: Net op ...

April 27, 2025 03:19 PM GMT Chongqing Changan Automobile (000625.SZ, 000625 Chongqing Changan Automobile | Asia Pacific Resilient 1Q performance, likely on the back of NEV advances Chang'an reported 1Q25 NPAT of Rmb1.35bn, representing YoY growth of 16.8% despite revenue slowing by 7.7% to Rmb34.1bn. We expect losses to narrow notably with respect to its NEV business, as seen by reduced minority interest (Rmb137mn in 1Q25 vs. Rmb302mn in 1Q24 and Rmb348mn in 4Q24, representing a loss to minority shareholder ...

Investment Rating - The investment rating for CGN Power Co., Ltd is Overweight [6][68]. Core Viewpoints - The approval of 10 new nuclear reactors in China aligns with expectations, supporting the goal of achieving a total nuclear capacity of 150GW by 2035 [3][4]. - CGN Power Co., Ltd owns four of the new reactor units, which will utilize Hualong No. 1 technology with a capacity of approximately 1.2GW each [2][4]. - China's nuclear capacity is projected to reach 110GW by 2030 and 200GW by 2040, making it the world leader in nuclear energy [4]. Summary by Sections Investment Overview - CGN Power Co., Ltd has a market capitalization of approximately RMB 122.42 billion and an enterprise value of RMB 313.49 billion [6]. - The price target for CGN Power is set at HK$2.81, with the current share price at HK$2.45 [6]. Industry Context - The construction of five new nuclear power projects, totaling 10 reactor units, has been approved, which is a slight decrease from the 11 units approved in 2024 [1][2]. - The trend of annual approvals of 8-10 units is expected to continue, facilitating China's nuclear capacity expansion [3]. Financial Metrics - The average daily trading value for CGN Power is approximately HK$228 million [6]. - The company is applying a P/E multiple of 13x on the estimated EPS for 2025, indicating a positive outlook based on accelerating project trends [10][11].

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific securities Core Insights - The May US Treasury refunding is anticipated to occur at a pivotal moment for yield direction, with expectations of no changes to coupon sizes and a skew towards smaller auction sizes [6][10] - Growth in stablecoins is identified as a structural demand source for T-bills, supporting the case for increased bill issuance [6][56] - Robust tax receipts in April bolster confidence in a late August to early September x-date for Treasury cash exhaustion [30][43] Summary by Sections Treasury Issuance and Auction Strategy - The Treasury is expected to maintain current nominal coupon auction sizes during the May refunding, with risks leaning towards smaller sizes rather than larger ones [10][20] - Overall net UST issuance to the private market in 2025 is projected to remain below levels seen in 2023 and 2024 [11][14] - The report outlines expected monthly net UST coupon and T-bill issuance figures for 2025, indicating a structured approach to managing Treasury securities [21][24] Tax Receipts and Fiscal Outlook - April tax receipts showed a significant increase, with total receipts reaching $762 billion, an 8% rise compared to the previous year [33][36] - Year-to-date tax receipts for 2025 have increased by 7% relative to 2024 and 15% compared to 2023, indicating a strong fiscal position [33][34] Market Dynamics and Investor Behavior - Auction results have remained strong, particularly in the long-end tenors, despite some concerns about demand [67][70] - The report refutes narratives of foreign investor "protest sales" of Treasuries, indicating stable demand from foreign entities in recent auctions [76][82] - The demand for T-bills is expected to grow due to the increasing use of Treasury securities as reserves for stablecoins, particularly with legislative support for stablecoin regulation [56][62]

Investment Rating - The report maintains a cautious view on the container shipping sector, specifically placing Maersk underweight (UW) and highlighting downside risks for ZIM and Hapag-Lloyd as well [1][7]. Core Insights - The global container shipping industry is facing increased volatility, particularly in the Asia-North America trade lane, which accounts for approximately 17% of global containerized trade. Recent booking declines from China have been noted, with Hapag-Lloyd reporting a 30% year-over-year decrease in China-US bookings [1]. - Drewry has downgraded its demand forecast for 2025 to a -1% decline in container volume throughput, contrasting with a previous forecast of +3% in January. Supply growth is expected to rise by 5.4% in 2025, leading to a significant imbalance in the market [1][5]. - Drewry anticipates a 15% year-over-year decline in global freight rates for 2025, followed by an additional 18% decline in 2026. This forecast does not yet account for the potential return of capacity to the Suez Canal, which could exert further downward pressure on rates [1][5]. - The demand-supply outlook is increasingly negative, with Drewry projecting a 1% decline in container port handling volumes for 2025, driven by a 5.7% decrease in North America and a 4.5% decrease in China [1][5]. - The report indicates that while blank sailings have increased as a form of capacity management, rates have continued to decline, highlighting the challenges carriers face in maintaining schedule reliability and customer relationships [1][5]. Summary by Sections Demand and Supply Outlook - Drewry's Global Supply/Demand Index is under gradual pressure, with expectations of increased scrapping post-2026. However, order cancellations are rare, and delivery delays may occur [1][5]. - The report notes that the Asia-US contracting season is closing, with carriers offering discounts to maintain market share, despite spot rates declining since the beginning of the year [5]. Tariff and Policy Implications - The revised USTR charges on Chinese shipbuilding are viewed as less severe than initially proposed, with fees now applied based on net tonnage. Drewry advises shippers to resist accepting surcharges related to these fees [5][6]. Market Dynamics - The report highlights that the US import cliff has not yet materialized, with potential impacts expected to be seen from mid-May onwards. Utilization rates on key trade lanes have shown a material drop, indicating further challenges ahead [7][10].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report addresses key investor questions regarding tariffs, trade, and trade tensions, focusing on high-frequency indicators and their implications for growth outlook [3][5][8] Current Status of Trade and Tariffs - High-frequency indicators show a significant decline in US-China trade activity, while broader trade activity is starting to recover after a sharp deceleration [5][9] - Tariffs on China have risen sharply, with effective rates increasing from 11% in January 2025 to 107% by April 2025 [36][40] - The overall effective tariff rate on US imports has increased by 23 percentage points year-to-date, reaching 25% [42][44] High-Frequency Indicators - Daily port calling data indicates that port callings in China have softened to 4.0% year-on-year from a mid-March peak of 10.6% [10][12] - The number of cargo-carrying container ships departing from China to the US has contracted by 33% year-on-year [13][14] - Scheduled blank sailings in the US have risen 14-fold compared to the previous month, indicating significant disruptions in shipping [11][19] Future Outlook - Talks between the US and China are expected to begin, potentially leading to a gradual reduction in tariff rates, but tariffs are likely to remain higher than January 2025 levels [46][48] - For Asia excluding China, reaching trade deals before the tariff pause expires is challenging, with some economies more likely to secure agreements than others [55] - Elevated uncertainty from tariffs is expected to weigh on capital expenditures and trade, leading to a potential synchronous slowdown in growth [56][58] Growth Implications - The report anticipates a sharp deceleration in growth for China, projecting 2Q25 growth below 4.5%, significantly weaker than 1Q25 [58] - Trade-exposed economies in Asia, such as Korea and Taiwan, are expected to experience a sharper deceleration in growth compared to less exposed economies like India and Australia [59][60]

Investment Rating - The report maintains an "Overweight" rating on Tesla with a price target of $410, indicating a positive outlook on the company's potential in the humanoid robotics sector [3]. Core Insights - The global humanoid market is projected to reach 1 billion humanoids and $5 trillion in annual revenue by 2050, significantly surpassing the global auto industry [1][34]. - The report emphasizes that the market for humanoid robots will be materially larger than the global auto industry, with an estimated $4.7 trillion in sales by 2050, nearly double the revenues of the 20 largest global auto OEMs in 2024 [2]. - China is positioned as a dominant player in the humanoid robotics market, with significant investments from legacy auto manufacturers diversifying into humanoid robots [3][7]. Market Projections - By 2036, approximately 23.7 million humanoids are expected to be adopted globally, with significant contributions from various income classifications [22]. - By 2040, this number is projected to increase to around 134.4 million, and by 2050, total adoptions are expected to reach 1 billion [22][24]. - The report outlines that the humanoid market could reach $211 billion by 2035 and $1.2 trillion by 2040, with a 6-year replacement cycle factored into the estimates [34]. Implications for Legacy Manufacturing - The report discusses the decline of legacy manufacturing and the emergence of new entrants in the humanoid robotics space, suggesting a shift in investment strategies among traditional manufacturers [3]. - It highlights that US manufacturers may need to adapt significantly to remain competitive in the humanoid robotics sector, particularly in response to China's advancements [7]. Adoption Estimates - The report provides detailed adoption estimates by income classification, indicating that by 2050, low-income countries will adopt approximately 14 million humanoids, while high-income countries will adopt around 296 million [22][23]. - The cumulative adoption of humanoids is expected to vary significantly across regions, with East Asia and Pacific projected to lead in adoption numbers [24][32]. Performance of Humanoid-Related Stocks - The "Humanoid 100" list includes public companies involved in the humanoid market, which has outperformed the S&P 500 by 10.5 percentage points year-to-date [17]. - Notably, seven of the top ten performers on this list are China-based companies, reflecting strong market sentiment and government support for humanoid robotics [17][20].

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The Politburo has pledged to coordinate domestic policy and implement existing policies more aggressively, including faster issuance of government bonds and potential cuts to the reserve requirement ratio (RRR) and policy rates [3] - Real GDP growth is projected to soften, with 2Q real GDP tracking at less than 4.5% year-on-year [4] - Persistent deflationary pressures are noted, with a significant decline in container throughput to the US due to tariffs [7][8] - Household sentiment regarding consumption is weakening, driven by concerns over job security and salary amidst US tariff hikes [12] - The property market sentiment has cooled, with increased expectations of price declines and a rise in eager sellers [16] Policy Measures - The report outlines specific measures such as unemployment insurance rebates to exporters, a new relending facility for service consumption, and increased funding support for consumer trade-in programs [3] - A supplementary fiscal package of RMB 1-1.5 trillion is expected in the second half of 2025, alongside enhanced infrastructure and tech investment support [40] - The government is expected to implement a consumption-focused fiscal package of RMB 10 trillion over the next two years [49] Economic Indicators - The report indicates that 36% of the 2025 government bond quota has been utilized, compared to an average of 20% in the past five years [44] - Local government special refinancing bond net issuance is reported at RMB 1.5 trillion out of a total of RMB 2 trillion for local government debt swaps [47] - The US weighted average tariffs on China's exports are projected to remain high, with trade-weighted tariff hikes reduced to 34% with exemptions [22][24]

Investment Rating - The report assigns an "Overweight" rating to NVIDIA Corp. with a price target of $160.00, reflecting a strong outlook for the company in the semiconductor industry [5][29]. Core Insights - The demand for inference chips is surging, driven by the growth in AI applications, despite supply constraints limiting immediate availability [2][8]. - The report emphasizes that the current phase is not one of digestion but rather a robust demand environment for AI-related hardware, particularly GPUs [8][26]. - NVIDIA's revenue estimates for CY26 have been raised by 10.7%, with EPS estimates increased by 11.9%, indicating strong growth potential [25][28]. Summary by Sections Market Overview - Investor sentiment has worsened due to macroeconomic and supply chain risks, yet core demand for GPUs has increased significantly amid a shortage of inference chips [2][3]. - The report highlights a notable increase in tokens generated, straining the ecosystem and driving investment in AI workloads [3]. Company Performance - NVIDIA's Data Center business is expected to be a major growth driver over the next five years, fueled by enthusiasm for generative AI [32]. - The company has seen a rapid ramp-up in revenue, with projections indicating over $30 billion in the current quarter, a historic achievement for a single semiconductor product [19][20]. Financial Estimates - For FY26, total revenue is projected at $190 billion, with a significant portion coming from the Data Center segment [27][40]. - The report anticipates gross margins to improve starting in July, supported by a decline in H20 shipments and ongoing growth in AI demand [21][25]. Competitive Landscape - The report notes that NVIDIA's competitive position is strengthened by broader availability of its Blackwell architecture later in 2025, which is expected to enhance system sales [32]. - Despite concerns regarding supply chain issues, the report suggests that improvements are being made, and demand remains strong across various geographies [18][26]. Risk and Reward - The report indicates a favorable risk-reward scenario for NVIDIA, with a premium valuation compared to peers, reflecting confidence in upward revisions to estimates [29][37]. - The consensus rating distribution shows a strong preference for "Overweight" ratings, indicating positive sentiment among analysts [34].