April 21, 2025 10:34 PM GMT Wistron Corporation | Asia Pacific Hopper GPU baseboards may face downside Last week, Nvidia filed an 8k to disclose that the US government has enacted new licensing requirements for shipments of the H20 product "and any other circuits achieving the H20's memory bandwidth, interconnect bandwidth, or combination thereof" pertaining to China or companies headquartered in China along with any D:5 countries. The U.S. government also informed Nvidia that the license requirement will b ...

Investment Rating - The report indicates a cautious outlook for the industry, with a projected GDP growth slowdown for China to 4.2% in 2025 due to tariff shocks [2][14]. Core Insights - The report highlights a significant deceleration in economic growth across Asia, particularly in China, driven by external tariff pressures and domestic economic challenges [14][29]. - Consumer confidence has notably weakened, attributed to uncertainties surrounding US tariffs, leading to a deteriorating outlook for household spending, especially in tier-1 cities [30][31]. - The report anticipates a phased tariff rollback, which may alleviate some trade pressures, but the overall trade-weighted tariff impact remains substantial [10][12]. Summary by Sections Economic Growth Projections - China's GDP growth is expected to soften meaningfully in Q2-Q3 of 2025, with a new forecast of 4.2% [2][14]. - The report presents a historical context of GDP growth rates, indicating a trend of declining growth [3]. Tariff Impact Analysis - The report details the current US tariffs on Chinese exports, with headline reciprocal tariffs remaining at 60% but trade-weighted tariffs potentially reducing to 34% with exemptions [9][10]. - It discusses the unsustainability of current tariffs and the likelihood of gradual rollbacks amid ongoing trade tensions [10][12]. Consumer Behavior and Confidence - A sharp drop in consumer confidence has been observed, likely due to tariff uncertainties, impacting household spending outlook [29][30]. - The report notes that consumer goods sales have been robust under government trade-in programs, but overall retail sales are under pressure [26][28]. Policy Stimulus Expectations - The report outlines expectations for policy stimulus, including a front-loading of existing policies and potential new stimulus measures in the second half of 2025 [34][36]. - It anticipates a significant fiscal package aimed at consumption and infrastructure investment, with a total of Rmb2 trillion expected in the NPC stimulus package [35][39]. Social Welfare and Economic Rebalancing - The report emphasizes the need for social welfare reforms to support household consumption and address the fragmented social safety net [41][43]. - It discusses the potential for increased social welfare spending to help unleash precautionary savings among households [43][44].

April 21, 2025 12:31 AM GMT Netflix Inc | North America Less Is More? Remain OW, Top Pick | What's Changed | | --- | Netflix Inc (NFLX.O) From To Price Target $1,150.00 $1,200.00 Reaction to earnings Strengthens our thesis Modest upside Modest revision higher Impact to our thesis Financial results versus consensus Direction of next 12-month consensus EPS The first quarter without reporting net adds forces us, to some extent, to see the bigger picture in its results. Netflix, as measured in quarters, is a pr ...

Investment Rating - The investment rating for Zhejiang Dingli Machinery Co Ltd. is Overweight [6]. Core Insights - The report indicates that China's Aerial Working Platform (AWP) sales have shown a narrowing decline, with a 10% year-over-year decrease in March, totaling 18.2k units, compared to a 20% decline in the first three months of 2025. Domestic sales fell by 22% year-over-year to 8.8k units, while exports increased by 6% year-over-year to 9.4k units [1]. - Dingli has suspended shipments to the US due to tariffs but anticipates growth in non-US markets [1]. Summary by Sections Sales Performance - In March, AWP sales in China decreased by 10% year-over-year to 18.2k units, with domestic sales down 22% to 8.8k units and exports up 6% to 9.4k units [1]. Company Overview - Zhejiang Dingli Machinery Co Ltd. is a leading supplier of aerial working platforms in China, making the AWP sales volume a significant indicator for its share price [4]. Financial Metrics - The price target for Dingli is set at Rmb70.00, indicating a potential upside of 77% from the closing price of Rmb39.48 on April 18, 2025 [6]. - The company has a market capitalization of Rmb19,991 million and an enterprise value of Rmb15,647 million [6]. - Projected revenues for the fiscal years ending in December are Rmb6,312 million for 2023, Rmb8,450 million for 2024, Rmb10,020 million for 2025, and Rmb11,487 million for 2026 [6]. Valuation - The report applies a P/B multiple of 2.8x to the 2025 estimated book value per share, which aligns with its average P/B over the past three years, reflecting similar ROE levels and earnings growth [8].

Investment Rating - The report provides a base case forecast for various asset classes, indicating a positive outlook for equities, particularly the S&P 500, which is projected to reach 6,500 by Q4 2025, representing a total return of 24.5% [3]. Core Insights - Gold prices have reached a historic high, crossing the $3,300 per troy ounce mark for the first time [7]. - The DXY index has dropped to its lowest level since early 2022, indicating a weakening US dollar [9]. - The JGB 10s30s curve has reached its highest level in 25 years, reflecting significant changes in the Japanese bond market [13]. Summary by Sections Equities - S&P 500 is forecasted to reach 6,500 with a total return of 24.5% and a volatility of 19% [3]. - MSCI Europe is expected to reach 2,150 with a return of 9.9% and volatility of 16% [3]. - Emerging Markets (MSCI EM) is projected to decline slightly to 1,050 with a return of 1.1% [3]. Fixed Income - The 10-year UST yield is forecasted to decrease to 4.00% with a total return of 7.0% [3]. - US Investment Grade (IG) credit is expected to yield an excess return of 2.0% [3]. - US High Yield (HY) credit is projected to yield an excess return of 4.8% [3]. Commodities - Brent crude oil is expected to decline to $62.5 per barrel, reflecting a -4.0% return [3]. - Copper is projected to increase to $9,300 per ton with a return of 1.1% [3]. - Gold is forecasted to reach $3,500 per troy ounce, indicating a 2.6% return [3]. Currency - The JPY is expected to strengthen slightly to 141, with a return of 2.9% [3]. - The EUR is projected to decline to 1.08, reflecting a -7.3% return [3]. - The GBP is expected to decrease to 1.30, indicating a -2.2% return [3]. Market Sentiment - 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 [21]. - Weekly US ETF flows to equities recorded their second lowest print since September of the previous year, indicating cautious investor sentiment [14].

Investment Rating - The investment rating for Fuyao Glass Industry Group is Equal-weight [5]. Core Viewpoints - Fuyao's 1Q25 earnings increased by 46% year-over-year (YoY) and 1% quarter-over-quarter (QoQ) to Rmb20.3 billion, surpassing market expectations due to higher finance income driven by USD appreciation against CNY [1]. - The group's revenue for 1Q rose by 12% YoY but fell by 9% QoQ to Rmb9.9 billion, outperforming the global light vehicle production trend [2]. - The gross margin decreased by 1.6 percentage points YoY to 34.6%, attributed to ongoing price pressure, although there was a sequential increase due to foreign exchange (FX) tailwinds [2]. - The operating profit rose by 18% YoY to Rmb2.0 billion, aligning with top-line growth, resulting in an EBIT margin of 20.4% [2]. Summary by Sections Financial Performance - 1Q25 earnings: Rmb20.3 billion, +46% YoY, +1% QoQ [1] - Revenue: Rmb9.9 billion, +12% YoY, -9% QoQ [2] - Gross margin: 34.6%, -1.6ppt YoY, +3.2ppt QoQ [2] - Operating profit: Rmb2.0 billion, +18% YoY [2] Market Outlook - Domestic demand in China is expected to remain crucial, with a focus on US auto demand post-tariff hikes [3]. - Key areas of focus include the 2Q vehicle production outlook, average selling price (ASP) pressure, and the adoption of high-value products amid pricing competition [3]. Valuation Metrics - Price target set at HK$51.50, with a 5% upside from the current price of HK$49.15 [5]. - Market capitalization currently stands at Rmb136,943 million [5]. - Projected EPS for the fiscal year ending December 2025 is Rmb3.55 [5].

Investment Rating - The report maintains an Overweight (OW) rating on Laopu Gold with a price target of HK$1,111.00 for December 2025, reflecting a significant upside potential from the current price of HK$804.00 [2][10][28]. Core Insights - Laopu Gold aims to become the No.1 gold brand globally, with plans to expand its boutique network significantly, targeting six to eight new boutiques in 2025, following seven new openings in 2024, bringing the total to 36 [1][10]. - The company has set a long-term sales target of Rmb1 billion per shopping mall, with expectations of achieving over Rmb300 million in 2024, driven by strong sales momentum and enhanced product offerings [1][10]. - Laopu Gold's market share in the heritage gold segment is currently at 2%, with expectations of substantial growth due to the fast-growing market and store expansion opportunities [10][28]. - The report highlights that over 60% of sales in 2024 are expected to come from new customers, indicating a low penetration rate among target customers [1][10]. - Despite potential negative impacts on gross profit margin (GPM) due to rising gold prices, the company plans to mitigate these through advance procurement and strategic price increases [1][10]. Summary by Sections Revenue and Earnings Estimates - Revenue estimates for 2025 have been increased from Rmb16,070 million to Rmb18,780 million, and for 2026 from Rmb22,288 million to Rmb26,172 million [3][9]. - The report anticipates a revenue growth of 59% and an EPS growth of 65% over the period from 2025 to 2027 [10][28]. Market Expansion and Product Innovation - Laopu Gold is focusing on expanding its presence in both domestic and international markets, with plans for boutiques in cities like Tokyo, Osaka, Kuala Lumpur, and Bangkok [1][10]. - The company is also emphasizing product innovation, with around 40% of its products expected to contribute to 70% of sales, indicating a strong focus on diversifying its product offerings [1][10]. Financial Metrics and Valuation - The report projects a gross margin of 41.2% for 2024, with expectations of maintaining a bottom line GPM of 40% [1][10]. - The DCF-based valuation suggests a price target of HK$1,111, implying a 33x forward P/E for the next 12 months [11][29].

Investment Rating - The industry view is rated as Attractive [6] Core Insights - The report highlights that U.S. manufacturing sectors most tied to China imports present more opportunities than risks, particularly in the context of ongoing tariff negotiations and inflation concerns [3][8] - Companies that can push prices are better positioned to avoid negative revisions, with specific sectors like Electrical Equipment, Industrial Machinery, and HVACR showing positive potential for companies such as Eaton Corporation (ETN), Rockwell Automation (ROK), and Trane Technologies (TT) [3][8] - The report emphasizes that macroeconomic elasticity is shared across sectors, favoring companies that can increase prices despite potential volume losses [3][9] Summary by Sections U.S. Manufacturing Categories Tied to China - The report provides a detailed analysis of U.S. manufacturing categories and their reliance on China imports, indicating that consumer-facing sectors face headwinds due to high tariff exposure [3][8] Pricing Power and Competitive Positioning - Companies with significant tariff exposure can maintain operating profits even with volume losses, as demonstrated through comparative analysis of companies in the building products sector [9][10] - The report suggests that the ability to push prices is crucial for maintaining profitability in a challenging macroeconomic environment [3][9] Specific Company Ratings - Eaton Corporation (ETN) is rated Overweight, indicating strong potential for growth [63] - Acuity Brands Inc. (AYI) is also rated Overweight, reflecting positive outlooks for these companies in the current market [63] - Other companies such as Rockwell Automation (ROK) and Trane Technologies (TT) are similarly rated Overweight, showcasing their competitive advantages in the industry [63]

Investment Rating - The investment rating for Zijin Mining Group is "Overweight" [4][16][77]. Core Views - The report indicates that Zijin Mining Group has a price target of Rmb24.00, down from Rmb25.47, reflecting adjustments based on recent metal price changes and production volume guidance [2][3][4]. - The report highlights that Zijin generates over 50% of its gross profit from copper, with a forecasted compound annual growth rate (CAGR) of approximately 3% in copper production volume from 2024 to 2026 [13][22]. - Recent mergers and acquisitions, including four gold projects and three lithium projects, are expected to enhance Zijin's gold output and diversify into new sectors [14]. Summary by Sections Price Target and Scenarios - The updated price target for Zijin Mining Group is Rmb24.00, with a bull case of Rmb36.90 and a bear case of Rmb9.40 [2][4][12]. - The report estimates 2025 EPS at Rmb1.53, a decrease of 3% from previous estimates, and introduces a 2027 EPS estimate of Rmb1.57 [3][4]. Production and Financial Estimates - The report provides production estimates for gold and copper, with gold production expected to be 78.6 tons and copper production at 853.5kt in the base case scenario for 2025 [12][19]. - The report also outlines revenue and EBITDA estimates for 2025, projecting sales of Rmb374.71 billion and EBITDA of Rmb60.52 billion [21]. Market Dynamics - The report notes that Zijin's performance is sensitive to supply disruptions and strong demand for copper in China, which is a significant driver for the company's growth [13][22]. - The anticipated start of the Kamoa Phase 2 expansion by the end of 2024 is expected to contribute positively to production volumes [22].

Investment Rating - The report maintains an "Overweight" rating for the company [3][4][5]. Core Insights - The market reaction to the restrictions on H20 has been deemed excessive, with limited impact expected on the company's growth due to proactive measures taken by the company and its clients [1][3]. - The company is expected to see a 33% year-on-year increase in profits by 2025, supported by strong growth in its smartphone and PC businesses, which are projected to grow by 25% and 20% respectively [1][3][5]. - The anticipated revenue growth for 2025 is over 20%, with a projected increase of approximately 50% in the data center business, driven by improvements in domestic GPU performance and capacity [3][5]. Summary by Sections Investment Rating - The company is rated "Overweight" with a target price of 95.00 CNY as of December 31, 2025 [3][4]. Company Performance - The company has diversified operations across smartphones, PCs, and data centers, with a strong outlook for growth in these core areas [5]. - The company has increased its H20 inventory to support production through at least the first half of 2025 and is testing adaptations for domestic GPU solutions [1][3]. Financial Projections - The report forecasts a 28% increase in revenue and a 33% increase in profit for 2025, with the overall revenue growth target exceeding 20% [3][5]. - The company's stock price has seen a decline of 9.5% due to H20 restrictions, presenting a favorable entry point for investors [1][4].