Investment Rating - The report indicates a favorable outlook for both Zepbound and Wegovy, with physicians rating Zepbound higher in efficacy, tolerability, and patient satisfaction compared to Wegovy [7][36]. Core Insights - Zepbound is expected to continue gaining market share from Wegovy, with a projected 60:40 split in favor of Zepbound within a year [7]. - The removal of compounded GLP-1s is anticipated to benefit both Novo and Lilly, with nearly 75% of patients expected to switch to branded products [7]. - Physicians expect Zepbound and Wegovy to retain approximately 50% of the market share in five years, with oral GLP-1s and next-gen high-efficacy products capturing the remaining share [7]. - Reimbursement remains a significant hurdle, with around 40% of patients denied coverage for GLP-1s, primarily due to lack of insurance coverage and insufficient comorbidities [9][40]. Summary by Sections Key Obesity Survey Takeaways - Zepbound has overtaken Wegovy in prescriptions, with current shares at 42% for Zepbound and 40% for Wegovy [28]. - Physicians expect a 60:40 split in favor of Zepbound in the next year as compounded GLP-1s exit the market [28]. - Cost is the primary reason for treatment discontinuation, affecting both Zepbound and Wegovy similarly [62]. Key Novo Takeaways - Novo is expected to benefit from the reduced availability of compounded products, with Wegovy gaining around 50% of patients switching from compounded drugs [11]. - The launch of oral Wegovy and other high-efficacy products is crucial for Novo to maintain market share [11]. - Efforts to improve reimbursement processes are expected to unlock significant market growth for both Novo and Lilly [11]. Key Eli Lilly Takeaways - Zepbound's market share is projected to grow from approximately $12.5 billion in 2025 to nearly $20 billion by 2027 [13]. - The pipeline for Lilly's incretin franchise is expected to expand significantly, with oral GLP-1s anticipated to capture around 20% market share in five years [13]. - LillyDirect and other direct-to-consumer channels are becoming increasingly important for Zepbound's market penetration [13]. Reimbursement Insights - The survey indicates that 40% of patients prescribed GLP-1s are denied reimbursement, with the most common reasons being lack of insurance coverage and insufficient comorbidities [40]. - Approximately 60% of patients denied coverage opt for out-of-pocket treatments [41]. - As insurance coverage improves, the fill rate for GLP-1 prescriptions is expected to increase, benefiting both Novo and Lilly [44]. Market Share Expectations - In five years, Zepbound is expected to maintain a leading share of around 30%, with Wegovy and oral GLP-1s each capturing approximately 20% [48]. - Physicians anticipate that the use of weight loss medications among heavier patients (BMI ≥40) will increase significantly if higher efficacy options become available [51].

Investment Rating - The investment rating for China Petroleum & Chemical Corp. is Equal-weight [4][62]. Core Views - The report suggests that the share price of China Petroleum & Chemical Corp. is expected to rise in absolute terms over the next 15 days due to a sharp increase in oil prices amid concerns over energy supply disruptions from the Middle East [1]. - The report estimates a 70% to 80% probability for this scenario, indicating a "very likely" outcome [1]. Summary by Sections Stock Information - Current stock price as of June 12, 2025, is Rmb5.89 with a price target of Rmb6.00 [4]. - The 52-week price range is Rmb7.64 to Rmb5.25 [4]. - The market capitalization is approximately Rmb660.52 billion [4]. Valuation Methodology - The valuation methodology includes applying a slight discount to the multiples of international peers to reflect lower realized prices of refined oil products [7]. - A 42% A-H premium is applied to derive the price target for Sinopec - A [7]. Market Context - The report highlights that the share price could rebound after recent trading weakness linked to oil prices [1]. - The average daily trading value for the stock is Rmb920 million [4].

Investment Rating - The investment rating for the company has been downgraded to "Neutral" from "Overweight" due to weak order demand and profit margin pressure [1][2][12]. Core Insights - The report indicates that revenue growth is weak, primarily due to soft SiP orders and mixed demand outlook for EMS, with industrial demand recovering but cloud and automotive orders declining [1][7]. - The projected compound annual growth rate (CAGR) for revenue and profit from 2024 to 2027 is estimated at 3% and 14%, respectively [1][12]. - The target price has been adjusted to 15 CNY, based on a 14x forward P/E ratio, reflecting a change in market sentiment [1][13]. Revenue and Profit Forecast - The adjusted revenue forecast for FY25 is 59,194 million CNY, down from a previous estimate of 69,390 million CNY, representing a 15% decrease [18]. - The adjusted net profit for FY25 is now projected at 1,817 million CNY, down from 2,909 million CNY, indicating a 38% reduction [18]. - The report anticipates a decline in revenue and profit for Q2 FY25, with expected year-on-year decreases of 7% and 24%, respectively [7]. Business Segment Analysis - SiP revenue growth is expected to be weak due to intense competition and limited growth in Apple product sales, with a projected CAGR of only 2% from 2024 to 2027 [7]. - The EMS business outlook is mixed, with a forecasted CAGR of 6% for industrial, cloud, and automotive segments, but profit margins are under pressure due to insufficient utilization [7][12]. Valuation Summary - The target price of 15 CNY is based on a 14x forward P/E ratio, which is 12% lower than the industry average due to slowing growth prospects [13][25]. - The report highlights that the company's valuation is aligned with its historical average P/E ratio minus one standard deviation [13][25].

Investment Rating - The report raises Brent price forecasts by up to $10/bbl, reflecting a justified risk premium of approximately $10/bbl due to geopolitical uncertainties [5][45]. Core Insights - The report outlines three potential scenarios for future oil prices amid increased military activity between Israel and Iran, with the majority of probability concentrated in scenario 1, which suggests no disruption to oil supply [8][43]. - Scenario 1 predicts Brent prices could decline back to around $60/bbl if oil exports from the region remain unaffected [15][21]. - Scenario 2 anticipates a sharp reduction in Iran's exports, potentially leading to a balanced market with prices around $75-80/bbl [22][28]. - Scenario 3 considers the risk of wider supply disruptions, which could push prices to $120/bbl, but this scenario is viewed as an outlier [30][36]. Summary by Sections Price Forecasts - The new Brent price forecasts for 2Q25, 3Q25, and 4Q25 are $72.5, $67.5, and $65.0 respectively, reflecting significant upward revisions from previous estimates [6][49]. - The report indicates that the risk premium may dissipate over time, with a long-term forecast of $60/bbl for 2H26 [45][49]. Scenarios Analysis - **Scenario 1**: Military conflicts do not disrupt oil supply, leading to a potential price drop to ~$60/bbl if Iran's oil infrastructure remains intact [15][21]. - **Scenario 2**: A decline in Iran's exports could balance the market, with prices expected to stabilize around $75-80/bbl [22][28]. - **Scenario 3**: Significant supply disruptions could necessitate demand destruction, potentially raising prices to $120/bbl, although this is considered less likely [30][36]. Market Dynamics - The report notes that Brent prices have rallied approximately 7% following recent geopolitical events, indicating a shift in market sentiment [9][11]. - The disappearance of contango in the 2026 forward curve suggests that market participants no longer anticipate oversupply, reflecting a more bullish outlook [11][12]. Supply and Demand Balance - The current oil liquids supply/demand model forecasts a surplus of ~1.3 mb/d in 2026, with a smaller surplus of 0.8 mb/d when considering only crude oil [26][27]. - If Iran's oil exports were to decline significantly, the expected global surplus could be eroded, leading to a more balanced market [27][28].

Investment Rating - The report suggests a bearish outlook on the USD and recommends selling USD while buying curve steepeners [9][13][53]. Core Insights - The report indicates that the consensus view aligns with a weaker USD and a steeper yield curve, but the expected magnitude of these moves is significantly larger than what the consensus anticipates [9][13]. - It is projected that the USD will weaken by approximately 9% on a DXY basis and that the US Treasury curve will steepen by around 100 basis points over the next 12-18 months [13][20]. - Investor positioning is currently cautious, but supportive fundamentals and strengthening sentiment suggest a favorable environment for the recommended trades [9][13]. Summary by Sections G10 FX Strategy - The report highlights that while a weaker USD is a consensus view, the extent of the weakening is underpriced, with only a 15-25% chance assigned by the market to reach the forecasted levels against major safe-haven currencies [3][31]. UK Rates Strategy - The report notes the closure of a long position in SFIZ6 due to a recent rally in front-end rates, but identifies an attractive entry point for upside option structures given low implied volatility [4][26]. Japan Rates Strategy - The focus is shifting from the Bank of Japan (BoJ) to the Ministry of Finance (MoF) regarding long-end issuance and quantitative tightening (QT) pace, which may influence market dynamics [5][30]. US Rates Strategy - The report discusses entering 2s10s CPI swap steepeners, as the TIPS breakevens curve has steepened, indicating potential for further widening based on financial conditions and inflation expectations [6][36]. General Market Dynamics - The report emphasizes that recent USD declines are primarily driven by reduced investor appetite for USD exposure due to policy uncertainty rather than concerns about US growth [17][20]. - It also notes that the USD discount reflects a negative policy premium associated with uncertainty around US trade and fiscal policy [18][19].

Investment Rating - The report does not explicitly provide an investment rating for the industry discussed Core Insights - Oil prices have rallied sharply, and the forward curve has shifted, indicating potential for higher prices depending on disruptions in oil flows [46] - Developed Markets (DM) may not experience significant impacts on core inflation from rising oil prices, while Emerging Markets (EM), particularly Asia, are more exposed [46][12] - Asia's oil burden is currently lower than historical averages, and inflation and current account balances are benign, suggesting that oil prices need to rise sustainably above $85/bbl for central banks to delay rate cuts [18][46] - The report draws parallels between current economic conditions and the early 1990s, suggesting defensives may continue to perform well in European equities [46][25] Oil Market Analysis - The disappearance of contango beyond month 6 indicates a significant shift in oil market dynamics [5] - A $10 increase in oil prices is estimated to lead to a 0.4 percentage point increase in Asia's headline inflation and a -0.4 percentage point impact on GDP [14][16] - The report emphasizes that oil prices will need to rise above $85/bbl in a sustained manner to influence central bank policies in Asia [18][20] Credit Market Insights - High Yield (HY) Energy has seen a strong rebound since early May, with HY Energy trading wider compared to the broader HY market [39][42] - The report recommends a defensive investment strategy, focusing on higher quality assets within the HY Energy sector [44][46]

Investment Rating - The report maintains an "Overweight" rating for Capital Goods and Software sectors, indicating a favorable outlook for these industries [57]. Core Insights - Leading indicators suggest a stronger earnings backdrop than anticipated, with high-single-digit EPS growth projected over the next year [4][9]. - Earnings revisions breadth has improved significantly, moving from -25% in mid-April to -9%, indicating a positive shift in earnings expectations [4][9]. - The Non-PMI Leading Earnings Indicator points to mid-teens EPS growth by the first half of 2026, driven by stable demand and reduced material costs [4][9]. - A weaker US dollar, down 11% from January highs, is expected to provide additional support for US earnings trends, with further downside anticipated [4][9]. Summary by Sections Earnings Outlook - The main earnings model forecasts high-single-digit EPS growth for the next year, supported by improving earnings revisions breadth [4][9]. - The Non-PMI Leading Earnings Indicator suggests mid-teens EPS growth by 1H26, driven by demand stability and lower material costs [4][9]. Sector Preferences - Capital Goods and Software sectors are highlighted as key beneficiaries of a weaker dollar, with significant inverse correlations between earnings revisions breadth and the dollar [16][21]. - Capital Goods are expected to benefit from infrastructure build-out, while Software is positioned to leverage GenAI for cost efficiency and revenue growth [13][15]. Market Dynamics - The report emphasizes the importance of earnings revisions breadth as a driver for industry group outperformance, particularly for Capital Goods and Software [12][22]. - The US equity market is preferred over international equities due to stronger earnings revisions in the US compared to Europe and Japan [22]. Financial Sector Insights - The Financials sector is viewed positively, with expectations of a stabilizing M&A environment and resilient consumer conditions [31][33]. - Companies are leveraging AI to enhance operational efficiency, which is expected to contribute positively to earnings growth [37][39].

Investment Rating - The report does not explicitly state an overall investment rating for the industry [4]. Core Insights - The report highlights significant movements in various asset classes, with Brent crude oil prices experiencing a notable spike of +11.7% and a +2 standard deviation move, marking the largest increase since the onset of the Ukraine conflict [9][94]. - The DXY index fell to its lowest level in over three years, indicating a weakening of the US dollar against other currencies [9][12]. - The University of Michigan Consumer Sentiment Index showed the largest monthly increase in the last 30 years, suggesting a potential shift in consumer confidence [9][12]. Summary by Sections Equities - Major equity markets generally posted losses, with the exception of emerging market equities [94]. - Sector performance was mixed, with energy (+5.1%) and healthcare (+1.4%) sectors outperforming, while financials (-1.8%) and industrials (-0.9%) lagged [94]. Fixed Income - Credit spreads widened across US and EU investment-grade (IG) and high-yield (HY) indices, indicating increased risk perception [94]. - The US Treasury 10-year yield decreased by 11 basis points, reflecting a rally in developed market rates [94]. Currencies - Most G10 currencies appreciated against the US dollar, indicating a shift in currency dynamics [94]. Commodities - Most major commodity markets posted gains, with Brent crude oil leading the performance [94]. - Gold prices reached new highs, reflecting increased demand for safe-haven assets [13]. Market Sentiment - The report indicates a significant shift in market sentiment, with the Market Sentiment Indicator (MSI) reflecting changes in positioning and volatility [50][55]. Cross-Asset Positioning - The report provides a detailed summary of net positioning across various asset classes, indicating a diverse range of strategies among asset managers, hedge funds, and dealers [60]. Correlations - The report discusses cross-asset correlations, noting a current correlation index of 43%, which is above the 10-year median of 39% [69]. Volatility - The cross-asset volatility monitor indicates varying levels of implied volatility across major equity markets, with the S&P 500 showing an implied volatility of 17.4% [92]. Fund Flows - The report tracks daily fund flows across approximately 5,000 ETFs globally, covering around $7 trillion in assets, providing insights into cross-asset sentiment and positioning [20]. Key Data - The report includes forecasts for various asset classes, with expected returns and risk metrics for Q2 2026 [4][16].

Investment Rating - The industry investment rating is In-Line [5]. Core Insights - The optical transceiver market, valued at approximately $8 billion, is experiencing significant growth driven by the demand for high-speed AI networks. However, traditional architectures face challenges such as power drain, reliability, and cost. Newer architectures like Linear Pluggable Optics (LPO), Co-Packaged Optics (CPO), and Optical Circuit Switching (OCS) are emerging as solutions, each with unique advantages and challenges [3][8][13]. Summary by Sections Optical Technologies Overview - The report discusses the need for advanced optical technologies due to increasing power and reliability demands in AI networks. It highlights the linear adoption of these technologies, particularly LPO, CPO, and OCS, while noting the challenges associated with their implementation [3][4]. Market Growth and Dynamics - The datacomm optical components market is projected to grow at approximately 10% over the next five years, indicating a robust demand for higher-speed transceivers that connect servers and switches [13]. Adoption Challenges - LPO is identified as the most likely to see near-term adoption due to its similarity to traditional architectures, which allows for a larger ecosystem of providers. However, there are concerns that hyperscalers may prefer more permanent solutions than LPO, which is often viewed as a transitional technology [4][8]. OCS and CPO Insights - OCS and CPO are considered more complex solutions, with adoption expected to be further off due to significant rearchitecting and investment requirements. The report notes that while there is interest from major players like Google and Oracle, the transition to these technologies will take years [5][9]. Beneficiaries of Technology Adoption - The report identifies potential beneficiaries of these technologies, with ANET likely to benefit from LPO adoption, while LITE and COHR may see more advantages from OCS if it gains traction [3][8]. Technical Advantages and Challenges - LPO offers lower power consumption and cost efficiency by eliminating the need for Digital Signal Processors (DSPs), but it has limitations in transmission lengths and interoperability. CPO promises lower power consumption and reduced latency but faces challenges in yield and ecosystem development. OCS provides reliability and efficiency but requires sophisticated control software and is less suited for dynamic traffic flows [49][41][32][42][50].

Investment Rating - The report assigns an "In-Line" investment rating for the China Autos & Shared Mobility industry [2]. Core Insights - The report discusses the potential of robotaxis, highlighting the expected growth in Level 4+ autonomous driving vehicles, which are projected to reach over 20% penetration by 2035 [5]. - China is positioned as a leader in robotaxi development, with strong policy support and a significant existing taxi fleet that could facilitate the deployment of robotaxis [11][14]. - The report emphasizes the cost advantages of robotaxis over human-driven taxis, particularly in terms of operational costs, where robotaxis could become more profitable as the Bill of Materials (BOM) costs decline [18][19]. Summary by Sections Industry Overview - The global passenger vehicle market is projected to reach 94.7 million units by 2030, with 1.6 million units expected to be Level 4+ autonomous vehicles [8]. - China is expected to account for 25% of the global passenger vehicle market and 73% of the Level 4+ vehicles by 2030 [8]. Robotaxi Market Potential - China's taxi fleet consists of approximately 4 million units, with over 50% being online ride-sharing services, providing a substantial base for robotaxi deployment [12]. - The report forecasts that robotaxi penetration could increase significantly as ride-sharing continues to gain market share [12]. Competitive Landscape - Key players in the robotaxi space in China include WeRide, Pony AI, and Apollo Go, with varying fleet sizes and operational strategies [21]. - The report notes that early movers in the robotaxi market are likely to achieve breakeven sooner due to operational leverage and cost reductions [24]. Future Expectations - The report anticipates a decline in BOM costs as technology improves, which will enhance the economic viability of robotaxis [22]. - Scaling the fleet is expected to accelerate data accumulation, further improving algorithms and reducing costs [23].