We raise our 2025 GDP forecast by 50bps to 4.5% on a stronger-than-expected starting point and solid capex momentum, aligning with consensus. That said, we still expect growth to soften from 2Q onwards amid tariff impact and reactive policy measures, and remain below consensus on nominal GDP. Debate on whether growth recovery can sustain and broaden out has been on the rise. Indeed, stimulus measures on local governments and consumption have started to filter through, leading to green shoots. We think a fur ...

March 23, 2025 10:00 PM GMT Meituan | Asia Pacific Core OP Intact, but Wider New Initiatives Loss and Increased AI Investment We continue to estimate 2025 CLC OP at Rmb61bn, but expect the new initiatives loss to widen to Rmb9.5bn on a slower loss reduction pace for Select. Impact from the social security scheme should kick in from 2Q, but limited effect on 2025 food delivery OP and UE. OW. 4Q24 beat on CLC OP: Total revenue and adjusted EBITDA were largely in line with consensus, while core local commerce ...

March 20, 2025 09:00 PM GMT China Equity Strategy | Asia Pacific A-Share Sentiment Edged Down on Lower Trading Volume A-share sentiment dropped with lower trading volume but remains elevated. We expect some volatility in the earnings season, but remain cautiously optimistic on a six-/12-month basis. Watch for geopolitical developments and tariff-related US government investigations on April 2. A-share investor sentiment dropped vs. pervious week: Weighted MSASI and simple MSASI dropped 7ppt to 84% and 5ppt ...

March 17, 2025 10:14 PM GMT Asia Economics | Asia Pacific M Idea The Viewpoint: Seeking Reciprocity – What's Next? Raising defense spending and putting tariffs on China were raised as potential asks for a trade deal in addition to importing more from the US to fix the trade balance. We explore if other Asia economies will be able to meet these demands and what this means. Key Takeaways Morgan Stanley Asia Limited Jonathan Cheung Economist Jonathan.Cheung@morganstanley.com +852 2848-5652 Kelly Wang Economist ...

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - Policymakers have initiated multi-channel funding initiatives to stimulate tech innovation, reviving investor confidence in the tech sector [2] - Significant increases in government spending on technology are projected, with on-budget tech spending expected to reach Rmb1.2 trillion, representing an 8.3% year-on-year growth compared to 4.4% for overall fiscal spending [3] - The report anticipates a nominal GDP growth of less than 4% in China starting from the second quarter of 2025, driven by slower exports and ongoing housing market weaknesses [36][37] Summary by Sections Technology Sector - A new tech board for direct debt financing by tech companies and private equity is being established [3] - The state startup fund could grow to Rmb1 trillion after incorporating private investments [3] - AI capital expenditure is projected to increase, with a notable rise in China's share of global patent applications related to humanoid technology since 2023 [4][6] Consumer Goods - The trade-in program is supporting goods consumption, with decent sales reported for home appliances and passenger cars in the first quarter of 2025 [9][10] - Online home appliance sales have shown fluctuations, with a significant year-on-year change noted [10] Government Financing - Local government financing has been strong year-to-date, with faster issuance of local government special bonds to support infrastructure capital expenditure [13] - A Rmb2 trillion local debt swap program has been front-loaded this year [15] Real Estate Market - The report indicates a need to monitor the sustainability of the recent rebound in the property market, as secondary housing sales have softened post-Lunar New Year [18] - A comprehensive housing buyback program of Rmb500 billion is planned, alongside measures to ease housing demand [42] Economic Indicators - Early signs of declining export orders and a larger-than-seasonal drop in new export orders have been observed [21] - Household credit demand remains weak, despite fiscal measures supporting credit growth [25][27]

March 17, 2025 02:24 PM GMT China Economics | Asia Pacific Consumption Press Conference: Modest Stimulus, Limited Clarity Key Takeaways Modest increase in welfare spending: The press conference disclosed a marginal increase (~Rmb4bn) in central government subsidies for basic public health service, basic medical assistance, and promotion of employment. These combined with the NPC's slightly improved basic pension and medical insurance amount to a Rmb75bn rise in basic welfare spending in 2025 over 2024. Limi ...

March 17, 2025 04:21 AM GMT China Economics | Asia Pacific Q1 GDP Tracking at 5.4%, Limited Policy Actions Ahead Key Takeaways Strong start to the year: FAI saw the largest beat, with a large uptick in housing investment as we expected, but manufacturing and infrastructure investment also came in stronger than we expected on policy support. The beat in industrial production also defied softer-than-expected (yet still decent) exports somewhat amid possible front-loading. Growth mix echoes policy support: Loc ...

Investment Rating - The report suggests a defensive macro positioning, favoring long government bond duration in the US and the UK, and shorting the US dollar [11][39][40]. Core Insights - The report highlights significant uncertainty surrounding US trade policy, which has led to a decline in investor and CEO confidence, potentially impacting economic activity [12][15][31]. - The upcoming FOMC meeting is anticipated to either alleviate or heighten concerns regarding economic growth, with expectations for a steady message from the Fed [32][39]. - The report notes that the S&P 500 has lost 10% from its all-time high, reflecting heightened uncertainty in economic policy [12][31]. Summary by Sections US Rates Strategy - The report indicates that US Treasury yields are expected to decline further due to ongoing tariff threats and fiscal austerity, with no signs of overextension in the current market [44][46]. - A hawkish dot-plot from the Fed could extend the bull market in Treasuries, while the current market conditions suggest a defensive stance [44][46]. UK Rates Strategy - The report turns bullish on UK duration, suggesting an attractive opportunity for lower yields ahead of the Spring Forecast, despite recent weak trading [51][55]. G10 FX Strategy - The report maintains a bearish outlook on the USD, recommending shorts against EUR, GBP, and JPY, while targeting a resistance level of 1.12 for EUR/USD [58][61]. Japanese Investment Behavior - The report revisits the investment behavior of Japanese investors, who hold approximately US$48 trillion in financial assets, indicating potential impacts on asset class performance due to recent economic changes [53][56].

March 17, 2025 04:01 AM GMT M Idea Morgan Stanley & Co. LLC Michael J Wilson Equity Strategist M.Wilson@morganstanley.com +1 212 761-2532 Andrew B Pauker Equity Strategist Andrew.Pauker@morganstanley.com +1 212 761-1330 Michelle M. Weaver, CFA Equity Strategist Michelle.M.Weaver@morganstanley.com +1 212 296-5254 Diane Ding, Ph.D. Quantitative Strategist Qian.Ding@morganstanley.com +1 212 761-6758 Nicholas Lentini, CFA Equity Strategist Nick.Lentini@morganstanley.com +1 212 761-5863 Morgan Stanley does and s ...

SALES AND TRADING COMMENTARY ONLY (NOT A PRODUCT OF MS RESEARCH) FOR INSTITUTIONAL USE ONLY NOT FOR DISTRIBUTION TO KOREA AND PRC CLIENTS FOR QIBS ONLY IN THE US The China Playbook Quarterly Ideas from Sales Spring Edition 2024 | SALES IDEAS | Research Rating* | Sales Call | Sales Investment Horizon Target | | --- | --- | --- | --- | | Single Stocks | | | | | Dongfeng Motor Group (489 HK) | EW | Long | 6 Months | | Meitu Inc (1357 HK) | OW | Long | 6 Months | | Tencent (700 HK) | OW | Long | 6 Months | | Sh ...