Investment Rating - The report indicates a downward adjustment in GDP growth forecast for China, expecting a decline from 5.4% in Q1 to below 4.5% in Q2 2025 due to tariff impacts and reduced trade volume with the US [2][9]. Core Insights - The report highlights that the high tariffs imposed have significantly affected trade, with a 64% month-on-month decrease in container bookings from China to the US in April 2025 [2][3]. - Consumer confidence in real estate and overall spending is weakening, with survey data showing increased concerns about income and employment among consumers [3][20]. - The report anticipates a potential reduction in tariffs in the coming months, with expectations of a 60% average reduction by the end of June 2025, and a further 34% reduction by the end of the year, although achieving a comprehensive and lasting resolution remains challenging [4][9]. Summary by Sections Economic Impact - The report projects a significant economic downturn in Q2 2025, with the GDP growth rate expected to drop below 4.5% due to the adverse effects of tariffs and declining domestic demand [9][2]. - It notes that the high tariffs have led to a contraction in trade volume, particularly with the US, impacting various sectors including consumer electronics and automotive [2][3]. Consumer Sentiment - Consumer confidence has been notably affected, with a marked decline in sentiment regarding real estate and consumer spending, as evidenced by survey results indicating fears of job loss and reduced income [3][20]. - The report mentions that the sales growth of online appliances and passenger vehicles has slowed, reflecting the broader economic concerns [3][25]. Trade Relations - The report discusses the complexities of US-China trade relations, indicating that while there is a window for tariff reductions, the path to a comprehensive agreement is fraught with difficulties [4][9]. - It emphasizes that a significant portion of Chinese exports to the US (30-40%) are less elastic to tariffs, particularly in sectors where the US has a high dependency on Chinese imports [3][15].

Investment Rating - The report advises a balanced portfolio approach, recommending high-quality, large-cap internet names in offshore markets and blue-chip consumer names in the A-share market [1][4]. Core Insights - A-share sentiment has decreased, with the weighted Morgan Stanley A-share Sentiment Indicator (MSASI) dropping 13 percentage points to 70% and the simple MSASI falling 15 percentage points to 61% compared to the previous cutoff date [2][6]. - Average daily turnover (ADT) for ChiNext, A-shares, and Equity Futures has decreased by 18%, 17%, and 40% respectively, while ADT for northbound trading increased by 27% [2]. - Southbound net inflows have continued for 56 consecutive weeks, with net inflows of US$0.7 billion over April 17-23, bringing year-to-date and month-to-date net inflows to US$77.5 billion and US$21.8 billion respectively [3]. - Potential tariff de-escalation could benefit large-cap internet/tech, consumer, and healthcare sectors, with expectations that offshore markets may outperform onshore markets if such de-escalation occurs [4][13]. Summary by Sections A-Share Market Sentiment - The MSASI indicates a current sentiment of 70% (weighted) and 61% (simple), reflecting a notable decline in investor sentiment [6][8]. - The report highlights a slowdown in the downward momentum of consensus earnings estimate revisions since late November 2024 [2]. Trading Volume and Inflows - The report notes a significant drop in trading volumes across various segments, with ChiNext experiencing an 18% decline in ADT [2]. - Southbound trading has shown resilience with consistent net inflows, indicating ongoing interest in A-shares from international investors [3]. Tariff and Economic Outlook - The report discusses the implications of potential tariff reductions, suggesting that if realized, they could lead to improved performance in specific sectors [4][14]. - The analysts emphasize the importance of monitoring bilateral negotiations and government responses to evolving trade narratives [14].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Viewpoints - Shifting business operations away from China is nearly impossible for other Asian economies due to China's central role as a market, supplier, and source of foreign direct investment [1][6][12] - Any trade restrictions imposed on China by other Asian economies would likely lead to retaliatory measures from China, severely impacting trade, capital flows, and growth prospects in the region [6][12][13] Summary by Sections Trade Restrictions and Challenges - The report analyzes which economies might be pressured to impose trade restrictions on China and concludes that most Asian economies outside of China would find it very difficult to implement such measures [3][6] - Economies like Vietnam, Thailand, and India, which have significant trade surpluses with the US and deficits with China, would struggle to impose tariffs on China due to their reliance on Chinese inputs [8][12] Economic Dependencies - China is a crucial source of final demand, inputs, and equipment for many Asian economies, particularly ASEAN countries, making it challenging for these economies to decouple from China [12][34] - Approximately 17% of exports from Asia (excluding China and Hong Kong) go to the US, while 16.6% go to China, highlighting the significant trade relationships within the region [12][26] Investment Flows - China accounts for 7.9% of foreign direct investment inflows into Asia (excluding China), with ASEAN economies being particularly reliant on Chinese investment [12][34] - The share of ASEAN in China's outward foreign direct investment has increased from 15% in 2018 to 20% in 2023, indicating growing economic ties [34][38] Supply Chain Implications - The report emphasizes that imposing tariffs on Chinese goods would disrupt the cross-border production networks in Asia, leading to inflation in consumer goods prices [12][30] - China holds a significant share in global exports of key products, such as mobile phones (37%) and computers (37%), meaning tariffs would likely lead to increased prices for these goods in other Asian economies [30][31] Conclusion - The report concludes that Asian economies are unlikely to impose trade and investment barriers against China, as it would severely disrupt their existing business models and economic growth [13][34]

Investment Rating - The report maintains a cautious outlook on the industry, with GDP growth tracking below 4.5% year-on-year for 2Q 2025, down from 5.4% in 1Q 2025, primarily due to escalating tariffs impacting trade with the US [1][10]. Core Insights - The report highlights significant trade impacts from the 125% reciprocal US tariffs on China, leading to a sharp decline in shipments to the US and a notable drop in China's container throughput and freight shipping prices [2][10]. - Consumer sentiment is weakening, with rising household concerns over jobs and salaries, resulting in reduced consumption appetite and a cooling property market [3][10]. - The report suggests that while tariff de-escalation may occur in the next 1-2 months, achieving a durable resolution remains challenging due to the complexity of bilateral issues [5][8]. Summary by Sections Economic Impact - 2Q GDP growth is projected to slow significantly, with a forecast below 4.5% year-on-year, attributed to the adverse effects of US tariffs [1][10]. - The logistics data indicates a 64% week-on-week decline in ocean container bookings from China to the US in early April 2025 [2]. Consumer Sentiment - The AlphaWise Consumer Pulse Survey indicates initial signs of a secondary hit from US tariffs, with increased household concerns over job security and reduced consumption [3][19]. - Year-on-year sales of online home appliances and passenger cars have softened, and secondary housing sales have moderated more than seasonal trends would suggest [3][27]. Tariff Analysis - The report identifies low tariff elasticity for 30-40% of China's export products to the US, particularly in consumer electronics, which constitute 22% of China's exports to the US [4][21]. - The expectation is that US tariffs on China could be reduced to 60% by the end of June 2025, contingent on successful trade negotiations [5][8]. Policy Response - The report anticipates that Beijing will implement a front-loaded Rmb2 trillion stimulus package in 2Q 2025, with an additional Rmb1-1.5 trillion supplementary fiscal package expected in the second half of the year [10][32]. - As of April 2025, 36% of this year's government bond quota has been utilized, compared to an average of 20% in the past five years, indicating a proactive policy approach [10][29].

Investment Rating - The industry view for China Materials is rated as Attractive [6] Core Insights - Cement is preferred due to supply discipline, price coordination, lower costs, and no impact from trade wars. The building materials sector is recovering from improved secondary property sales [1][2] - The cement industry is experiencing margin expansion and has formed new alliances to focus on profit rather than volume. A 5-10% year-over-year decline in demand is expected, but margin recovery is anticipated due to lower coal prices and effective supply control measures [2][3] - Late-cycle building materials are recovering, supported by better secondary home sales and government initiatives. However, demand remains soft due to declining property starts and completions [3] - The float glass segment is facing weak fundamentals, with low demand from property developers and high supply levels continuing to pressure earnings [4] Summary by Sections Cement - Major cement players have agreed to prioritize profit over market share, leading to a healthier price recovery despite weak property demand. The industry is expected to see a margin recovery due to lower coal prices and effective supply control policies [2] - Top producers like Conch, CNBM, and CR Cement are likely to benefit from new supply control measures aimed at reducing overproduction [2] Building Materials - The late-cycle building materials sector is expected to see mild growth in new infrastructure and industrial investments, with demand improving from better secondary home sales and government programs [3] - Companies such as Yuhong, Weixing, and Lesso are identified as potential beneficiaries of this recovery [3] Float Glass - The float glass market is currently weak, with low order days at processing plants and high supply levels continuing to exert pressure on earnings [4] Price Targets and Ratings - Price targets for key companies include Anhui Conch (A) at RMB 37.40 with a 47% upside, Anhui Conch (H) at HKD 29.80 with a 35% upside, and China Resources Building Materials at HKD 2.30 with a 39% upside [7][11] - Ratings for companies in the cement sector are predominantly Overweight (OW), while Xinyi Glass and Zhuzhou Kibing Glass are rated Underweight (UW) due to weak fundamentals [11][12]

Investment Rating - The report provides a short-term investment focus on specific companies across various sectors, highlighting preferred and risk names based on tariff impacts [7][30]. Core Insights - The report analyzes the implications of the Trump administration's tariffs on nine major sectors, emphasizing the direct and indirect impacts on individual companies and their stock performance [6][30]. - The automotive sector is expected to face significant price increases due to tariffs, with an estimated 11.5% rise in US auto prices, translating to approximately $5,100 per vehicle [9][17]. - The report identifies key companies within each sector that are likely to be affected by tariffs, providing a detailed analysis of their potential performance [4][30]. Sector Summaries Autos and Auto Parts - Tariffs on automobiles could lead to a gross impact on operating profit ranging from 30% to over 100% for various automakers, with Toyota and Honda facing a manageable impact while Nissan and Mazda are at higher risk [4][9]. - Focus is placed on Toyota Motor for its resilience and ability to raise prices, while Bridgestone is noted for its high local production ratio [30][31]. Banks - The impact of tariffs on banks remains uncertain, but concerns over worst-case scenarios have eased, with a potential downside risk of slightly over 10% to sector earnings forecasts in a bearish scenario [4][33]. - Japan Post Bank is highlighted as a relatively stable option amidst tariff uncertainties [4][33]. Pharmaceuticals and Medical Devices - Major pharmaceutical companies like Takeda and Astellas are expected to be heavily impacted by tariffs, while companies with lower US sales ratios may benefit from tariff avoidance [4][30]. - The report emphasizes the potential for increased costs of goods sold (CoGS) affecting operating profits for medical device companies [4]. Technology - The technology sector's tariff impact is complex, with companies like NEC and Fujitsu expected to perform well due to limited exposure to tariffs [5][30]. - Sony Group is under close observation for potential price hikes on its products, particularly the PlayStation 5 [5][30]. Chemicals and Steel - In the chemicals sector, companies like Nippon Paint are expected to benefit from lower raw material prices, while the steel sector is anticipated to experience limited direct tariff impacts [5][30]. - Kobe Steel is noted for its resilience due to a significant earnings contribution from its machinery business [5][30]. Retail - The retail sector is advised to focus on drugstores and discount retailers, with companies like Asics and Fast Retailing facing risks from declining sales due to high tariff exposure [5][30]. - Seven & i Holdings is highlighted as particularly vulnerable due to its significant exposure to the US market [5][30].

Investment Rating - The report assigns a Neutral investment rating for Goertek [1][17][18] Core Insights - Goertek is recognized as the global leading assembler for VR headsets, with expectations of a year-over-year revenue decline in 2025, followed by growth resuming in 2026 due to anticipated market share growth for new AirPods [11][17] - The revenue and earnings compound annual growth rates (CAGRs) are projected at 6% and 18% respectively for the period from 2024 to 2027, driven more by improved cost structure than top-line growth [11][17] - The earnings contribution from AR/AI glass is expected to be limited [11][17] Financial Estimates - Adjusted EPS for FY25 is revised down from Rmb0.95 to Rmb0.89, and for FY26 from Rmb1.11 to Rmb1.08 [2] - Quarterly forecasts for FY25 show Q1 at Rmb0.13, Q2 at Rmb0.16, Q3 at Rmb0.33, and Q4 at Rmb0.26, leading to an annual adjusted EPS of Rmb0.89 [3] - Revenue estimates for FY25 are adjusted to Rmb94,474 million, down from Rmb99,125 million, reflecting a 5% decrease [15] Valuation - The price target for June 2026 is set at Rmb22.50, based on a 19x one-year forward P/E, aligning with the average of peers [12][18] - The current market cap is approximately $9,959 million, with a share price of Rmb20.83 as of April 22, 2025 [10] Performance Metrics - Year-to-date performance shows a decline of 19.3%, with a 12-month performance increase of 39.8% [10] - The adjusted net income for FY25 is projected at Rmb3,090 million, with a net margin of 3.3% [21]

Uranium: Fundamentals remain solid despite spot price correction. Term pricing has remained stable at ~US$80/lb, representing a constructive medium-to-long- term supply-demand outlook. The spot price declined further, to ~US$60+/lb, as uncertainty over a Russian enriched uranium ban and US tariffs (uranium turns out to be excluded from the US tariffs announced on April 2) kept utilities on the sidelines, and contracting activities are weak YTD, given utilities have sufficient inventory and are well covered ...

Investment Rating - The report provides an "Attractive" industry view for the energy sector in Asia Pacific [7]. Core Insights - Asia (excluding China) is projected to increase energy imports from the US, with potential additional imports of US$51 billion annually by 2028, which would help lower energy costs and diversify supply [2][4]. - The report highlights that US energy exports to Asia could rise significantly, with crude oil, natural gas, propane, and ethane being the primary products [4][12][15]. - The increase in US energy imports is expected to reduce the trade surplus with the US by 11%, with countries like Japan, Indonesia, and India seeing reductions of 18-39% in their current surpluses [11]. Summary by Relevant Sections Energy Import Projections - Asia (ex-China) imported 40 exajoules (EJ) of energy in 2023, accounting for about one-third of its needs, with US imports making up approximately 9% of the region's US$600 billion energy imports in 2024 [4]. - The report estimates that if 30-35% of LNG imports are sourced from the US, energy imports could reach US$51 billion by 2028, and a 50% share would increase this to US$60 billion [4]. Country-Specific Import Data - India: Expected to increase imports from US$10 billion in 2023-24 to US$24 billion by 2028, a US$14 billion increment [5]. - Japan: Anticipated to double its imports from US$12 billion to US$24 billion [5]. - South Korea: Imports projected to rise from US$20 billion to US$26 billion [5]. - Indonesia: Expected to increase from US$1 billion to US$8 billion [5]. Product-Specific Insights - Crude Oil: Asia (ex-China) imported approximately 1.4 million barrels per day (mbpd) of US crude in 2023, with potential to increase by 1.5 mbpd by 2028, translating to over US$30 billion annually [12]. - LNG: Asia (ex-China) imported 26 million tons per annum (mntpa) in 2024, with potential to import 47 mntpa from the US by 2028, equating to US$12 billion annually [13]. - Propane: Asia imports 66 mntpa of propane annually, with US propane being 30% cheaper than Asian benchmarks, indicating a potential for increased imports from the US [15]. Beneficiaries of Increased Imports - Companies such as Reliance, GAIL, and Tokyo Gas are expected to benefit from the increased US energy imports due to lower costs [14][5].

Investment Rating - The report assigns an "In-Line" investment rating for the biopharma industry in North America [7] Core Insights - The latest weekly Total Prescription (TRx) year-over-year (YoY) growth for the week ending April 11, 2025, was +2.7%, a decrease from +3.5% the previous week, but consistent with the +2.7% growth over the past 12 weeks [1][2] - The report highlights the launch performance of new drugs, including BMY's Cobenfy for schizophrenia and VRTX's Journavx for acute pain, with specific TRx targets needed to meet consensus sales estimates [3][4] Summary by Sections Market Overview - The US total market weekly TRx YoY change was +2.7% compared to +2.3% a year ago, with a rolling 4-week TRx YoY also at +2.7% [2] - Extended unit (EUTRx) weekly YoY growth was +1.4%, indicating a slower growth rate compared to TRx YoY [2] Drug Launch Analysis - BMY's Cobenfy, approved for schizophrenia, recorded approximately 1,660 scripts for the week, up from 1,580 the previous week, with a target of 105K TRx needed to meet 2025 consensus estimates [3] - VRTX's Journavx, approved for acute pain, had around 2,950 scripts for the week, with an estimated average script size of 35-37 pills, indicating a need for approximately 229K scripts for a 14-day duration to achieve $87 million in sales [4] Prescription Trends - The report includes a detailed analysis of prescription trends for major pharmaceuticals, highlighting significant YoY changes for key products such as Humira, Rinvoq, and Skyrizi [19][21] - The GLP-1 franchise, particularly Mounjaro and Zepbound, showed notable growth, with Mounjaro experiencing a 69% YoY increase [21] Seasonal Vaccine Tracking - The report tracks seasonal respiratory vaccines, noting that RSV vaccine volumes are approximately 65% below last year's levels, while COVID vaccine volumes are also down year-over-year [10]