Investment Rating - The investment rating for Advanced Micro Devices (AMD) is Equal-weight [7] Core Insights - AMD launched the MI350 series, but the focus is on the upcoming MI400 series, which is expected to have a more significant impact in the long term [2][4] - Commentary from major cloud customers like Oracle, Microsoft, and Meta was positive regarding AMD's performance, but it did not significantly alter the investment thesis [4][9] - AMD's ability to expand its market share among existing customers is crucial, especially as competition from Nvidia intensifies [5][10] Summary by Sections Product Launch and Performance - The MI350 series was officially launched, featuring 288GB HBM3E memory and significant performance improvements over the MI300 series, with a ~4x increase in compute and 35x in inference capabilities [12] - The MI400 series is anticipated to launch next year, featuring 432GB HBM4 and a performance uplift of up to 10x compared to MI355X, particularly for inference workloads [13][16] Market Dynamics - AMD is expected to see a 25% year-over-year growth in its Instinct product line in 2025, but there are concerns that it may underperform among its top customers [5][20] - The competitive landscape remains challenging, with Nvidia's strong position in the market potentially limiting AMD's growth opportunities [10][20] Financial Projections - The price target for AMD is set at $121.00, reflecting a P/E ratio of approximately 22x based on FY2026 estimates [25][30] - Revenue projections indicate growth from $25.8 billion in 2024 to $45.1 billion by 2027, with non-GAAP EPS expected to rise from $3.33 in 2024 to $6.69 in 2027 [35][39] Strategic Outlook - AMD's strategy includes significant investments in software and cloud infrastructure, with the introduction of ROCm 7 and a new developer cloud aimed at enhancing performance for AI workloads [13][14] - The company is optimistic about its server business and expects to gain market share in the x86 segment, despite current challenges in the gaming and embedded markets [18][20]

Investment Rating - The investment rating for China Yangtze Power Co. is Overweight [4][81]. Core Views - The report indicates an attractive industry view, supported by improved water resources and a sustainable high payout ratio of over 70% from 2021 to 2025 [14][4]. - The price target has been revised to Rmb34.79, reflecting a 1.7% increase due to earnings revisions [3][8]. - The net profit estimates for 2025 and 2026 have been increased by 3.3% and 2.6%, respectively, with a new forecast for 2027 net profit at Rmb40.5 billion [2]. Summary by Sections Price Target and Scenarios - The price target is set at Rmb34.79, with a bull case of Rmb42.53 and a bear case of Rmb24.99 [8][11]. - The bull case assumes a 5% increase in utilization hours and a 1 percentage point higher tariff growth from 2025 [12]. - The bear case assumes a 5% decrease in utilization hours and a 3 percentage point lower tariff growth from 2025 [17]. Financial Estimates - The expected EPS for fiscal years ending in December are projected as follows: 1.33 for 2024, 1.52 for 2025, 1.61 for 2026, and 1.66 for 2027 [4]. - Revenue from electricity generation is forecasted to be Rmb74.48 billion in 2024, Rmb79.46 billion in 2025, Rmb81.31 billion in 2026, and Rmb82.30 billion in 2027 [19]. Investment Drivers - Key investment drivers include the recovery of hydro resources, synergy in power generation among hydro stations, and rising utilization of newly acquired units [14]. - The report emphasizes the company's ability to generate stable profits and cash flows from its hydropower stations, supported by a WACC of 6.7% [8].

Investment Rating - The investment rating for Mindray Bio-Medical is Overweight, with an industry view classified as Attractive [6]. Core Insights - Mindray aims to become a global top 10 medtech player, focusing on AI integration and consumable sales as part of its total solution strategy [2][9]. - The company plans to generate 70% of its sales from overseas markets, emphasizing a localized supply chain and customized offerings [9]. - Mindray's Mi-Care segment has launched a proprietary LLM model for critical care and plans to expand its AI offerings across various medical applications in the coming years [4][9]. - Despite challenges in the IVD sector, Mindray anticipates healthy demand from Class III hospitals and aims to install 200-300 automated lines globally in 2025 [5][9]. - The company is also focusing on enhancing its reagent production capabilities to reduce costs and improve quality, targeting an in-house material production rate of 80% by the end of 2026 [5][9]. Summary by Sections Mi-Care - Mindray's Mi-Care segment is well-established, with plans to install its LLM model in over 30 hospitals in 2025 and to release additional LLMs for anesthesia and other applications [4]. Mi-innoLab - The IVD segment is expected to face challenges, but Mindray is targeting significant installations and has a robust pipeline of new products, including next-gen analyzers and a comprehensive reagent portfolio [5]. Mi-Imaging - Mindray's imaging segment has integrated AI into its ultrasound portfolio, launching over 50 AI applications that significantly enhance efficiency and diagnostic capabilities [10].

Investment Rating - The report maintains a base case for oil prices in the low-to-mid $60s for the remainder of 2025 and $60 in 2026, despite geopolitical tensions [5][7]. Core Insights - Oil prices surged by 5% due to heightened security risks in the Middle East, with a 7% probability assigned to a worst-case scenario where supply impacts extend beyond a reduction in Iranian exports [5][6]. - The geopolitical risk premium is partially reflected in current oil prices, trading just under $70, which is $4 above the model-derived fair value of $66 for June [6]. - An attack on Iran could spike oil prices to $120, potentially driving US CPI to 5%, but the closure of the Strait of Hormuz is considered a low-risk event [5][6]. - Key players in the Middle East have strong incentives to keep conflicts contained due to ongoing economic transformations in the Gulf region [25][28]. Summary by Sections Geopolitical Context - Rising tensions in the region are linked to stalled US-Iran nuclear talks, with a sixth round of negotiations expected soon [2][3]. - The IAEA Board of Governors is set to vote on Iran's non-compliance with nuclear obligations, which could trigger the reinstatement of UN sanctions [3]. Oil Market Dynamics - The report highlights that the probability of a worst-case scenario, where oil prices react exponentially, is at 7%, with potential supply impacts extending beyond a 2.1 million barrels per day reduction in Iranian oil exports [6][15]. - The report emphasizes that despite geopolitical risks, the base case for oil prices remains stable, with expectations of low-to-mid $60s for 2025 and $60 for 2026 [7][39]. Economic Implications - Higher oil prices are expected to correlate with increased inflation, with a potential 1.7% increase in US headline CPI if oil prices spike to $120 [11]. - The report discusses the economic transformation plans in the Gulf region, which require a sustained absence of conflict to succeed [28][29].

Investment Rating - The report indicates a geopolitical premium of $10 above the model-derived fair value of $66, suggesting a 17% probability of a worst-case scenario impacting oil supply and prices [2][3]. Core Insights - The recent attack by Israel on Iran's nuclear program has escalated tensions in the region, potentially affecting global energy markets significantly [1][4]. - Iran's crude oil production has increased to 3.2 million barrels per day (mbd), with exports at 1.8 mbd, although still below the peak levels seen in 2018 [5]. - The report maintains a comfort zone for oil prices in the $60-65 range, as sustained increases could negatively impact inflation trends in the US [3]. Summary by Sections Geopolitical Context - Israel's military actions against Iran have raised concerns about regional stability and its implications for global oil supply [1][4]. - The probability of a worst-case scenario, where supply impacts extend beyond Iranian oil exports, is assessed at 17% [2]. Oil Production and Exports - Iran's current crude oil production stands at 3.2 mbd, recovering from a low of 1.7 mbd in 2021, while exports have nearly doubled since early 2022 [5]. - The report notes that approximately 148 vessels carrying Iranian oil are under US sanctions, accounting for 1.03 mbd, or 65% of Iran's oil export volume in 2024 [9]. Market Dynamics - The report emphasizes that any geopolitical developments that drive oil prices higher could conflict with US policies aimed at maintaining low energy prices to combat inflation [3]. - The Strait of Hormuz is highlighted as a critical passage for global oil trade, with 30% of the world's seaborne oil trade flowing through it, although the risk of closure is deemed very low [18][25]. Future Projections - The report provides forecasts for global oil supply and demand, indicating a balanced market with total oil demand projected at 100 mbd for 2024, while total oil supply is expected to be slightly higher at 101.3 mbd [36]. - Price forecasts for Brent and WTI suggest a gradual decline in prices over the next few years, with Brent averaging $82 in 2024 and WTI at $76 [41].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report discusses three significant changes in the industry: US-China trade negotiations, the partial suspension of China's consumer goods trade-in programs, and the acceleration of social welfare reforms in China, while highlighting that deflation remains a persistent macroeconomic issue [1][2][13] Summary by Sections US-China Trade Negotiations - The London trade talks represent a key advancement following the Geneva meeting where the US and China agreed to pause tariffs, although challenges remain due to differing expectations on non-tariff measures [2] - A Framework Agreement was established to implement the Geneva trade deal and utilize the bilateral economic consultation mechanism [2][3] - The scope of the London agreement appears limited, focusing primarily on non-tariff measures without significant US concessions beyond student visas [3] Consumer Goods Trade-in Programs - China has partially suspended its consumer goods trade-in programs due to the exhaustion of allocated trade-in funding in some regions, with Rmb162 billion already distributed out of a Rmb300 billion quota [4] - The rapid utilization of funds and the impact on retail sales indicate potential limitations of such stimulus measures, reminiscent of the US Cash-for-Clunkers program [8] - Despite these challenges, the report anticipates a modest expansion of the annual quota if economic growth declines [8] Social Welfare Reforms - China has released a blueprint aimed at enhancing the social welfare system, focusing on equal access to public services and addressing healthcare and elderly care concerns [9][10] - The reforms are characterized as gradual, with a focus on improving existing frameworks rather than implementing radical changes [10][11] - The report suggests that while some measures have been implemented, the overall pace of reform may be slow due to structural challenges and external pressures [11][13]

Investment Rating - The report assigns an "Overweight" (OW) rating to Innovent, Akeso, and Kelun Biotech, indicating an expectation that these stocks will outperform the average total return of their coverage universe [4][7]. Core Insights - Innovent has shown strong investor interest, with a recent stock increase of approximately 3% following a share sale by Lilly Asia Ventures. The company achieved its first-ever non-IFRS positive profit and EBITDA in 2024, and this trend is expected to continue into 2025 and beyond. Innovent is anticipated to secure an outlicensing deal for IBI363, which holds significant value in the immuno-oncology therapy space [4]. - Akeso's share price rose by 10% on June 10, attributed to comments from its U.S. partner, Summit, regarding avoiding a cash raise and manufacturing Ivonescimab in-house. Summit plans to recruit participants for global trials from multiple regions, including China, the U.S., and the EU. The BLA filing strategy for HARMONi is still under discussion [4]. - Kelun Biotech completed an equity raise and does not require additional cash due to solid reserves. Promising ASCO data for Sac-TMT in treating triple-negative breast cancer and non-squamous non-small cell lung cancer indicates a higher probability of success in Phase 3 trials. The domestic Phase 3 trial is enrolling patients rapidly, with potential for an interim analysis this year [4][5]. Summary by Company Innovent - Innovent's stock increased by ~3% after a secondary share placement by Lilly Asia Ventures, which still holds a ~2% stake. The company achieved its first non-IFRS positive profit and EBITDA in 2024, with expectations for continued growth in 2025. Anticipated catalysts include an outlicensing deal for IBI363 [4][5]. Akeso - Akeso's share price increased by 10% following positive comments from Summit, its U.S. partner. Summit is working on in-house manufacturing of Ivonescimab and plans to recruit trial participants from various regions. The BLA filing strategy for HARMONi is still being evaluated [4][5]. Kelun Biotech - Kelun Biotech completed an equity raise and has solid cash reserves. Promising data for Sac-TMT in treating specific cancers suggests a high probability of success in upcoming trials. The company is rapidly enrolling patients for a domestic Phase 3 trial, with potential for an interim analysis this year [4][5].

Investment Rating - The report indicates a cautious outlook for the China local markets, with a revised USD/CNY target lowered to 7.15 for Q4 2025, expecting a gentle downtrend to 7.10 by Q2 2026 [2][8][36] Core Insights - Financial markets are entering the second half of 2025 with a pessimistic tone regarding China, as the market-implied risk premium for China-linked assets remains downbeat [2][3] - Despite recent signs of cooling trade tensions, investor sentiment has not turned positive, reflecting ongoing concerns about the protracted US-China trade war and domestic economic headwinds [3][8] - The report highlights that moderating tariff risks may allow USD/CNY to follow a broader downtrend, although CNY's relative weakness could persist [2][11] Summary by Sections Economic Outlook - The report notes that structural economic challenges in China, such as persistent deflation, weak consumer confidence, and ongoing adjustments in the property market, have not been resolved [3][8] - The recent US-China tariff détente in Geneva has led to expectations of lower tariffs, which may help stabilize the CNY [8][36] Currency and Rates - The CNY TWI is expected to decline further towards 94, with plans to re-engage in short CNH/crosses in the second half of 2025 [11][36] - The report recommends staying long on 3-year CGBs, anticipating further easing from the PBoC and hedging against potential trade tensions [2][36] Liquidity and Banking - Deposit rates in China have been cut further, which lowers banks' funding costs but raises concerns about potential deposit outflows as savers seek higher returns from alternative financial products [19][31] - The report indicates that lighter issuance pressure from government bonds, coupled with sluggish loan demand, provides a favorable backdrop for CNY rates [25][31]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The decline in the share of retail investors in US equity trading during February and March indicates that institutional investors were primarily responsible for the equity market correction and increased trading volumes during that period [7][34] - Retail trading activity has shown mean reversion rather than a consistent upward trend over the past five years, with a historical high of 31% in December 2020 yet to be surpassed [7][34] - The retail buying impulse subsided in May and June, suggesting that corporate share buybacks and macro hedge funds have been the main drivers of the equity market in recent months [7][34] - Euro area banks are exhibiting shorter duration positions compared to US banks, which may support Euro duration against US duration [7][34] Summary by Sections Flows & Liquidity - The report highlights a significant decline in retail investor participation in US equity trading during February and March, following a strong retail presence in the preceding months [7][34] - Institutional investors, particularly macro hedge funds and CTAs, have been instrumental in supporting the equity market, with momentum-driven hedge funds still having room to increase their long positions before reaching overbought levels [7][34] - The anticipation of a favorable US regulatory environment is leading to an increase in crypto IPOs and venture capital funding, with several crypto companies preparing for IPOs this year [7][34] Cross Asset Positioning Monitor - The current positioning across various asset classes shows equities at a 0.49 percentile, government bonds at 0.70, and commodities excluding gold at 0.53, indicating varied levels of investor sentiment [4] - Momentum-driven hedge funds such as CTAs are currently positioned significantly long in equities, suggesting potential for further market support [7][34] Fund Flows - Recent data indicates that overall fund flows, including mutual funds and ETFs, have shown a mixed trend, with US equities experiencing outflows while non-US equities have seen inflows [9][34] - The report notes that corporate share buybacks have remained strong, with monthly buyback activity close to $200 billion, contributing to market stability [19][34]

Investment Rating - The report indicates an improved sentiment towards A-shares, with a weighted Morgan Stanley A-share Sentiment Indicator (MSASI) at 66%, up 5 percentage points from the previous cutoff date [2][8]. Core Insights - Investor sentiment has improved significantly, with a higher willingness to allocate to Chinese equities driven by global diversification demand and increased confidence in technology and new consumption sectors despite a challenging macroeconomic environment [1][15]. - The London trade talks between the US and China have led to a Framework Agreement, although the scope may be limited, focusing primarily on non-tariff measures [4]. - Southbound trading recorded net inflows of US$2.4 billion from June 5 to June 11, contributing to a year-to-date total of US$86 billion [3]. Summary by Sections Investor Sentiment - A-share investor sentiment has improved, with the weighted MSASI rising to 66% and the simple MSASI to 53% [2][8]. - Average daily turnover for ChiNext, A-shares, equity futures, and Northbound increased by 18%, 14%, 5%, and 3% respectively compared to the previous cycle [2]. Trade and Economic Developments - The London trade talks are seen as a step forward but may not resolve structural tensions such as the trade deficit and fentanyl-related issues [4]. - China has partially suspended its consumer goods trade-in programs due to funding limitations and subsidy rollout issues, but a complete suspension is deemed unlikely [5]. Market Performance - MSCI China reported earnings in line with consensus for the first quarter of 2025, with a slight decline of 3.8% in the number of companies reporting, but a weighted surprise of 3.1% [13]. - The report advises investors to focus on technology and innovation sectors, preferring offshore investments over onshore A-shares in the near term [14].