Asia Pacific Equity Research 09 March 2025 www.jpmorganmarkets.com {[{3wcfGjz7AitDVgOPH1AAEJGet1Pf4tcaKEMl6PVfVUkiiot4RGG9g_rfdtR9KDYP-_5a6ClGL2E}]} 更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 China gen AI Entering a stage of application proliferation See page 10 for analyst certification and important disclosures, including non-US analyst disclosures. J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of intere ...

Investment Rating - The report maintains an overweight position on equities, particularly European equities, while being underweight in duration-sensitive bonds [75][78]. Core Insights - European equities are viewed as an attractive investment opportunity due to recovering PMIs, low earnings expectations, and favorable pro-growth policies [4][9][59]. - The report highlights a potential rebound in the European Construction & Construction Materials sector, driven by rate cuts and reconstruction efforts related to the Ukraine ceasefire [10][65]. - A shift in economic policy is anticipated, with the private sector expected to take over as a growth driver as public sector spending decreases [18][22]. - The report indicates that inflation expectations are rising, with inflation breakevens moving above post-pandemic averages, suggesting a mildly inflationary environment [14][15][39]. Summary by Sections Top Ideas - Adding to European equity exposure is recommended, countering consensus views, due to recovering global PMIs and low earnings expectations [9][59]. - Overweighting European construction is suggested as the sector is poised for a rebound with improving fundamentals and potential reconstruction efforts [10][65]. - A turning point for real estate is noted, with stabilizing pricing and improving long-term operating outlooks [12][69]. Economic Outlook - Global economic growth remains positive, supported by easy central bank policies outside Japan, which is beneficial for earnings and asset prices [7]. - Economic policy uncertainty has risen significantly, yet growth data continues to point towards expansion [28]. Market Trends - The report notes that cyclical sectors, particularly materials, have shown improved earnings surprises, indicating a recovery trend [32]. - Small- and mid-cap segments are expected to benefit from a continued manufacturing recovery, contrasting with large-cap earnings trends [36]. Fixed Income Insights - The report suggests a modest underweight in duration-sensitive bonds due to expectations of a steepening yield curve and rising inflation risks [11][78]. - Bank loans are highlighted as a strong performer, with attractive valuations and high carry relative to other fixed income sectors [43]. Alternatives and Commodities - The report maintains a neutral stance on key commodity markets, balancing geopolitical risks with high spare capacity [83]. - Hedge funds are favored for their ability to navigate market volatility and capitalize on price movements [83].

March 6, 2025 07:18 PM GMT China Internet and Software | Asia Pacific Manus and Central Government Work Report: Implications We find this bullish for Alibaba in view of market share gain via cloud infrastructure adoption by SOEs. Launch of Manus AI agent has positive implications for Tencent on the AI application front. We are more neutral on B2B software. Positive implications for Tencent from Manus launch: The publicity around the Manus AI agent launch further strengthens our belief that the industry is n ...

更多资料加入知识星球:水木调研纪要 关注公众号:水木纪要 Morqan Stanley RESEARCH March 5, 2025 09:00 PM GMT China Equity Strategy │ Asia Pacific Positions of Active Long-only Managers in China/HK Chinese equities saw inflow from foreign funds in February, after three months of outflow. The inflow was driven by passive funds but at a more moderate magnitude compared to last October rally. Active foreign funds continued outflow, a beit at a slower space. China A-shares saw meaningful outflow. Foreign domiciled funds flow: _x 阅研究 Chinese ...

更多资料加入知识星球:水木调研纪要 关注公众号:水木纪要 Morqan Stanley RESEARCH March 5, 2025 04:54 AM GMT China Economics │ Asia Pacific NPC: Modest Stimulus, Tech Focus Fiscal package came as expected: a Rmb2rn expansion with mild support on consumption. Policy focus is to accelerate AI adoption and autonomous driving, while make gradual progra in restructuring housing and LGFV debt. We think tech animal spirits may return but broader reflationMemains slow. NPC announces a modest fiscal expansion: The augmented fiscal deficit for t ...

China Data Centers │ Asia Pacific What will hyperscalers' Rmb100bn capex mean for IDCs? 更多资料加入知识星球:水木调研纪要 关注公众号:水木纪要 Morgan Stanley RESEARCH March 5, 2025 04:44 PM GMT Investors are asking how hyperscalers' Rmb100bn annual translates to the data center market. We lay out our conc and framework here. Key Takeaways | Exhibit 1: From hyperscalers' capex to data center capacity | | --- | MORGAN STANLEY ASIA I I Yang Liu Equity Analyst Yang.Liu@morg Industry View Morgan Stanley does and seeks to do business with ...

Investment Rating - The report assigns an "Attractive" investment rating to the financial industry in China, highlighting a positive outlook for specific companies such as Ping An Insurance-H, AIA Insurance, Hong Kong Exchanges, Ningbo Bank, Minsheng Bank-H, and China Merchants Bank-H [5]. Core Insights - The report suggests that the most challenging period for local government financing structure adjustments may have passed, with local government leverage expected to slow down, leading to a balance of short-term and long-term risks [1][3]. - It is believed that local government financing has likely bottomed out in the first half of 2024, following necessary adjustments over the past few years, which were crucial for addressing risks associated with local government financing and related sectors [1][26]. - The new financing structure is seen as more sustainable, balancing short-term and long-term risks, with stricter controls on low-quality local government financing platform debts leading to a shift towards higher productivity projects [2][28]. Summary by Sections Local Government Financing - Local government financing and related risks are believed to have bottomed out in the first half of 2024, with a significant reduction in land sale revenues and local government platform debts [1][27]. - The report estimates that local government financing from land sales and platform debts peaked at approximately RMB 16 trillion in 2020, contributing to significant risks in the real estate sector [26][24]. - The decline in land sale revenues in the first half of 2024 was substantial, dropping to RMB 1.53 trillion compared to RMB 3-6 trillion in previous years [27]. Debt Management and Sustainability - The interest expenses of local governments have decreased significantly, from RMB 1.7 trillion in 2021 to RMB 1.2 trillion, improving the sustainability of local government debt [2][29]. - The report anticipates that the net interest burden from infrastructure debt as a percentage of GDP may decrease from 0.9% to 0.8% over the next five years, indicating a more sustainable development outlook [2][21]. - The restructuring of local government debt towards bonds is expected to reduce uncertainty in the financial system and enhance market stability [29]. Financial Sector Outlook - The improvement in local government financing is expected to support a revaluation of Chinese financial stocks, with potential price increases of 30-40% for covered banks [3][36]. - The report highlights that the stabilization of local government financing can alleviate peripheral risks associated with credit in various sectors, including industrial and retail [35]. - The anticipated adjustments in the credit cycle are expected to lead to a gradual rebound in bank price-to-book ratios, with a projected increase of 0.1-0.2 times [3][36].

Asia Pacific Equity Research 04 March 2025 Humanoid Robot Expert Call Takeaways (Part II): Commercialization is closer than you think We hosted an expert call today (Mar. 4) with Dr. Nicholas Nadeau, a distinguished figure in the fields of AI and robotics. Dr. Nadeau, with his extensive experience as a former CTO and founder in high-impact tech sectors, has been at the forefront of developing humanoid robots and integrating AI into practical applications. His tenure as CTO of 1X (formerly Halodi Robotics) s ...

Investment Rating - The report indicates a positive outlook for MXCN with an EPS growth forecast of 16.8% year-on-year for 2024, suggesting a favorable investment environment [2]. Core Insights - The MXCN index has shown strong performance with 22% of its constituents reporting results that are in line with or better than consensus estimates for 2024. Notably, EPS grew by 15.9% year-on-year in 4Q24, driven by a 5.8% increase in sales per share and a 115 basis points expansion in net profit margin (NPM) [2]. - The CSI-300 index also reported robust results, with 34.3% year-on-year EPS growth in 4Q24, despite a slight decline in sales per share by 1%. This was supported by a 365 basis points NPM expansion [2]. Summary by Sector - **Communications Services, Discretionary, Financials, and Industrials**: These sectors reported favorable NPM expansions year-on-year, with beat ratios of 100%, 57%, 67%, and 100% respectively. EPS growth for these sectors was 11.8%, 13.7%, 27.4%, and 16.6% respectively, alongside significant NPM expansions [5]. - **Consumer Staples and Healthcare**: The Consumer Staples sector saw an impressive EPS growth of 482% year-on-year, while Healthcare reported a 64% increase. NPMs rose significantly, with Consumer Staples at 637 basis points and Healthcare at 3,095 basis points [5]. - **IT, Materials, and Real Estate**: These sectors faced challenges, with reported NPM contractions of -46 basis points, -60 basis points, and -111 basis points respectively. EPS growth was modest at 0.8%, 1.9%, and -231% year-on-year [9]. - **Financials and Industrials within CSI-300**: These sectors reported high beat ratios of 75% and 67%, with NPM expansions of 1,139 basis points and 257 basis points, and EPS growth of 56.3% and 40.1% year-on-year [5][12]. Upcoming Results - Key companies expected to report in the next two weeks include JD.com, JD Health, and Li Auto, among others, which will provide further insights into sector performance [9].

更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 Asia Pacific Equity Research 03 March 2025 China Internet We met around 40 investors in North America last week, and received quite different feedback vs the feedback we got in Asia: 1) investors in North America are focused on the China macro outlook and the industry competitive landscape, but are less convinced about the potential from AI, especially its sustainability as a share price driver. This is the opposite to the focus of investors in Asia; 2) investors we met generall ...