Investment Rating - The report maintains a positive outlook on the Testing space for 2025, with Bureau Veritas and SGS rated as preferred Overweights [6][18]. Core Insights - The Testing, Inspection, and Certification (TIC) sector is expected to achieve organic growth in line with FY25 guidance, with a consensus forecast of 5-7% organic growth and 40-50 basis points margin expansion across the TIC3 in 2025 [6][12]. - Despite a significant decline in China exports to the US in April (-21%) and May (-34%), the organic growth of the TIC sector has remained resilient, decoupling from traditional indicators such as GDP growth and patent applications [27][31]. - The report identifies 22 megatrends that could drive organic performance in the Testing sector through 2030, with Bureau Veritas and SGS positioned to capitalize on these trends [18][19]. Summary by Sections Market Overview - The global TIC market is forecasted to grow at a mid-single-digit rate to 2030, driven by increasing regulation and demand for testing solutions [12][14]. - The organic growth rates of testing companies have decoupled from GDP growth since 2021, with expectations of sustained GDP+ organic growth driven by regulatory demands [12][18]. Company Performance - Bureau Veritas has reported the highest average organic growth since the pandemic, while Intertek has shown the lowest group organic growth due to its higher consumer exposure [56]. - For FY25, Bureau Veritas guides to mid to high single-digit organic growth, SGS to 5-7%, and Intertek to mid-single digits [56]. Growth Drivers - Key growth drivers include testing megatrends, increased regulation, supply chain assurance, AI-enabled products, and ESG regulation [56]. - The report highlights the potential for high-single-digit to low-double-digit organic revenue growth in the Certification/Assurance division due to changes in the ESG reporting landscape [42]. Valuation and Financial Metrics - Bureau Veritas has a market capitalization of €12.5 billion ($14.8 billion) with a revenue of €6,241 million and an EBITA margin of 16.0% [59]. - The report provides a valuation snapshot, indicating that Bureau Veritas is expected to have an EV/EBITDA of 10.9x in 2025, while SGS is projected at 10.3x [58].

Investment Rating - The report does not explicitly state an investment rating for the industry or specific securities Core Insights - Government bond issuance remained strong in June, reaching approximately 1.4 trillion yuan, with net government bond issuance at 50% of the full-year quota approved in March, indicating a faster pace than in recent years [7][9][16] - Container shipping from China to the US saw a significant increase in June, with tonnage averaging 41% higher than May and 19% higher than a year ago, suggesting a recovery in trade activity [7][28] - New home sales in 30 major cities fell by 8.6% year-on-year in June, indicating a contraction in the housing market, while secondary home sales also declined by 2.1% year-on-year [7][45] - Auto retail sales rose by 24% year-on-year for the first three weeks of June, with new energy vehicle (NEV) sales increasing by 38% year-on-year, reflecting a positive trend in consumer demand [7][45] Government Bond Issuance and Liquidity Operations - Overall government bond issuance in June was strong, with a total of 1.4-1.5 trillion yuan, maintaining a solid pace despite a moderation in special CGB issuance [9][16] - Year-to-date CGB issuance reached 51% of the full-year target, while special LGB issuance accounted for 49% of its full-year target [16][18] - Liquidity injections through MLF and OMOs were recorded, stabilizing CGB yields around 1.65% [9][16] Shipping and Logistics - The deadweight tonnage of departing container ships increased by 9.4% year-on-year in June, indicating a robust export growth [35] - The China Containerized Freight Index (CCFI) rose significantly, with increases of 39% to USEC and 28% to USWC compared to the end of May [35][36] Housing, Consumption, and Production - The decline in new home sales and secondary home sales suggests ongoing weakness in the housing market, with confidence indices remaining subdued [45][46] - Mixed operating rates were observed across various sectors, with increases in all-steel tire and petroleum plants, while semi-steel tire plants showed little change [45][46] Food and Commodity Prices - Agricultural food prices increased by 0.2% year-on-year in June, while pork wholesale prices dropped by 16.3% year-on-year, reflecting a high base effect from the previous year [78][79] - Commodity prices showed mixed trends, with increases in copper and aluminum prices, while cement and steel rebar prices declined [78][79]

July 4, 2025 02:14 PM GMT G10 FX Strategy | Japan M Idea JPY: Watching Upcoming Risk Events The strong headline US NFP print coupled with a lower unemployment rate have made it difficult for the market to price in a lower US terminal rate. However, the next risk event - the deadline of the 90-day suspension of reciprocal tariffs on July 9 - could potentially become the catalyst for USD/JPY to break through the low-end of the recent range. Maintain short USD/ JPY position. Key Takeaways Morgan Stanley MUFG S ...

Investment Rating - The investment rating for Contemporary Amperex Technology Co. Ltd. is Overweight [4] Core Insights - Despite reports suggesting a loss of market share in China, the statistics are misleading due to the increase in EV exports. SNE data indicates that CATL's monthly market share remains stable within historical ranges [2][7] - CATL's ePV battery market share in China has averaged approximately 42% over the past couple of years, while BYD has gained significant share in the car market [7][8] - The report highlights that CATL is gaining market share in Europe year-to-date, contrasting with its performance in China [10] Summary by Sections Market Share Analysis - Battery Alliance data shows CATL's monthly market share was below historical trough levels, but this is misleading due to expanding EV exports. SNE data based on retail sales shows CATL's share remains stable [2][7] - The competition in the ePV battery market is primarily between CATL and BYD, with smaller battery makers not gaining significant share [7] Financial Metrics - Revenue projections for CATL are as follows: Rmb 362,013 million for FY 2024, Rmb 422,167 million for FY 2025, Rmb 497,822 million for FY 2026, and Rmb 600,728 million for FY 2027 [4] - EBITDA estimates are projected at Rmb 91,863 million for FY 2024, Rmb 106,451 million for FY 2025, Rmb 117,557 million for FY 2026, and Rmb 140,292 million for FY 2027 [4] Valuation - The price target for CATL is set at Rmb 355.00, indicating a 35% upside from the closing price of Rmb 262.59 on July 3, 2025 [4] - The valuation methodology used is based on EV/EBITDA, assigning a multiple of 15x to the 2025E EBITDA [13]

Investment Rating - The investment rating for WuXi Biologics Cayman Inc is Overweight, with an industry view classified as Attractive [5][69]. Core Insights - WuXi Biologics has developed a next-generation high-concentration biologics manufacturing platform, WuXiHigh 2.0, capable of producing biologics at concentrations up to 230mg/mL, significantly enhancing dosing efficiency and patient adherence [7]. - Over 20% of FDA-approved monoclonal antibodies are at or above the 100mg/mL threshold, indicating a growing market for high-concentration biologics, which WuXi aims to capitalize on [4]. - The report highlights the competitive landscape, noting that other leading global Contract Development and Manufacturing Organizations (CDMOs) in this space include Samsung Biologics, Lonza, and Fujifilm, with Samsung's S-HiCon platform achieving concentrations greater than 200mg/mL [4]. Financial Metrics - The price target for WuXi Biologics is set at HK$35.00, representing a 36% upside from the closing price of HK$25.80 on July 3, 2025 [5]. - Projected financials include revenue growth from Rmb 18,675 million in 2024 to Rmb 27,626 million by 2027, with corresponding EPS increasing from 0.79 to 1.40 Rmb [5]. - Key financial ratios include a P/E ratio projected to decrease from 20.8 in 2024 to 16.8 in 2027, indicating improving valuation metrics over time [5].

Investment Rating - The investment rating for Empyrean Technology Co Ltd is Equal-weight [4] Core Viewpoints - The recent lifting of US export restrictions allows Synopsys and Cadence to restore access to their software and technology for customers in China, which is significant for the EDA market [1] - Empyrean Technology, the largest local vendor in China, held a 10% market share in 2024, but its stock has declined by 10% over the past month, contrasting with the CSI 300 index's 3% increase [2] - The report suggests that achieving full flow in digital EDA by Empyrean Technology by the end of 2025 is unlikely, with potential delays extending to 2027 due to M&A processes [2] - The current valuation of Empyrean Technology at 37x NTM P/S is significantly higher than its global peers, indicating that future market share gains are already priced in [2] Financial Summary - Price target for Empyrean Technology is set at Rmb115.00, representing a downside of 4% from the current price of Rmb119.30 [4] - Market capitalization is Rmb64,773 million with 543 million shares outstanding [4] - Revenue projections show growth from Rmb1,222 million in 2024 to Rmb2,666 million by 2027 [4] - EPS is expected to increase from Rmb0.20 in 2024 to Rmb1.65 in 2027 [4] - EBITDA is projected to improve from a loss of Rmb14 million in 2024 to a profit of Rmb914 million by 2027 [4]

Investment Rating - The report does not explicitly provide an investment rating for the industry or sector discussed Core Insights - The labor market shows low layoffs but a potential weakening in hiring rates, with initial jobless claims decreasing to 233,000 for the week ending June 21 from 237,000 the previous week, indicating stability in the labor market [1] - Continuing claims remain at a cycle-high of 1.964 million, suggesting an upward trend in unemployment, contrary to the reported decrease in the unemployment rate to 4.1% from 4.2% in May [2] - The four-week average of continuing claims has risen to 1.954 million, indicating persistent unemployment risks despite a drop in the unemployment rate [2] Summary by Sections Jobless Claims Overview - Initial jobless claims fell to 233,000 for the week ending June 21, showing a slight decrease compared to the previous week [1] - Continuing claims held steady at 1.964 million, marking a cycle-high, with the four-week moving average climbing to 1.954 million [2][9] Labor Market Analysis - The unemployment rate unexpectedly fell to 4.1%, but participation rates also declined, indicating potential risks for future employment stability [2] - The labor market differential from the Conference Board consumer confidence survey has been deteriorating, suggesting a weakening outlook [2]

July 3, 2025 10:29 AM GMT Multi-Industry | North America CoTD: No Import Wave 90 Days Later Chart of the Day (CoTD) highlights charts that tie into latest investor conversations, are timely for the macro + company events, or just ones that we find interesting. Exhibit 1: US Imports (YoY, trail 30d) - After ~20% yoy growth from December - March, imports flat-lined in April - May but are tracking sharply lower in June Source: Morgan Stanley Research, AlphaWise, UN Global Platform; PortWatch While the lead up ...

Investment Rating - The investment rating for Infineon Technologies AG is Overweight, with a price target of €38.00, while the stock closed at €36.21 on July 2, 2025 [4]. Core Insights - TSMC's decision to exit GaN/Silicon production by July 2027 indicates a strategic shift, prompting Navitas to transition to Powerchip Semiconductor Manufacturing Corporation (PSMC) for GaN/Si wafer production, with initial mass production expected in the first half of 2026 [2][3]. - Infineon may benefit from potential strategic partnerships for GaN production, as other GaN device makers might seek to utilize Infineon's 300mm facility or process IP [3][7]. - The exit of TSMC could lead to pricing pressure on Infineon due to lower barriers to entry at PSMC, similar to trends observed in the SiC market [3][7]. - Infineon holds a significant intellectual property portfolio in GaN/Si, with 350 patent families, which may provide a competitive advantage [7]. Summary by Sections Industry Overview - TSMC's exit from GaN/Si production is a significant development in the semiconductor industry, particularly affecting companies like Infineon and Navitas [2][7]. Company Specifics - Infineon Technologies AG has a market capitalization of €47.13 billion and a net debt of €3.506 billion as of September 2025 [4]. - The company is expected to navigate potential challenges in reliability testing for GaN devices, which may need to be developed in-house following TSMC's exit [3][7]. Financial Metrics - The valuation methodology applied to Infineon is based on an 18x multiple of the FY26 EPS of €2.10, reflecting expectations of a cyclical recovery in FY26 [9].

Investment Rating - The report maintains an Overweight (OW) rating on TSMC, which is also highlighted as a Top Pick [5]. Core Insights - New tax credits for semiconductor firms building capacity in the US are set to increase from 25% to 35%, benefiting companies like TSMC [1]. - TSMC's commitment to invest in its US fab is expected to enhance its chances of receiving exemptions from semiconductor tariffs, thereby reducing profit burdens associated with US capacity expansion [1]. - The forecast for TSMC's 3Q25 revenue growth is approximately 3% quarter-over-quarter in USD terms, which is lower than the typical seasonal growth of 6-7% [2]. - Despite the short-term revenue growth forecast, TSMC is expected to raise its full-year USD revenue guidance from mid-20% to high-20% due to strong demand in AI [2]. - TSMC's 2026 CoWoS capacity expansion is anticipated to be a significant catalyst for the global AI supply chain [2]. Summary by Sections Revenue Guidance - TSMC's 3Q25 revenue guidance is projected at NT$910 billion, with a quarter-over-quarter decline of 1.6% and a year-over-year increase of 35.1% [3]. - Gross margin (GM) is expected to drop by 1.5 percentage points to 55.8% due to the TWD's appreciation against the USD [2][3]. Financial Metrics - TSMC's price target is set at NT$1,288.00, indicating an 18% upside from the current price of NT$1,090.00 [5]. - The market capitalization of TSMC is currently NT$28,261,469 million, with an average daily trading value of NT$42,730 million [5]. - Projected EPS for TSMC is NT$45.25 for FY24, NT$55.01 for FY25, and NT$64.61 for FY26 [5].