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 ...

Investment Rating - The report suggests that Asia credit investors should consider turning defensive due to expected widening of Asia IG spreads driven by tariff risks and weaker demand [2][8]. Core Insights - The Asia IG spread is anticipated to widen from its current range of 70-80 basis points to a base case of 93 basis points in the second half of 2025 [8][15]. - The report highlights three key decompression trades for investors: preferring Japan IG over Asia IG, preferring APAC financial IG over non-financial IG, and buying protection on iTraxx Asia ex Japan IG [27][28][34]. Summary by Sections Asia IG Spread Analysis - Asia IG spreads have remained resilient despite global pressures, trading in a tight range of 70-80 basis points, currently at 76 basis points [12][15]. - The report indicates that the current tight spread levels do not reflect the risks associated with US tariffs and weaker growth in Asia [21][23]. Tariff Risks - The report emphasizes that US tariff risks are expected to increase, which could lead to weaker growth in Asia, particularly affecting economies like China, Taiwan, and Korea [16][20]. - The US administration is expected to announce reciprocal tariffs on April 2, which could further impact Asia credit spreads [28]. Credit Demand Trends - Asia credit funds experienced significant inflows of approximately US$2.5 billion in January, but this trend has slowed down, with inflows dropping to US$641 million in February [23][25]. - The report notes a disparity in fund performance, with many Asia credit funds experiencing outflows, particularly those without Mutual Recognition Fund (MRF) approvals [25][26]. Recommended Trades - **Trade 1**: Prefer Japan IG over Asia IG, as investors can switch without losing spread, currently gaining 8 basis points instead of the historical loss of 50 basis points [28][29]. - **Trade 2**: Prefer APAC financial IG over non-financial IG, as financials are viewed as more defensive due to strong sovereign support [34]. - **Trade 3**: Buy protection on iTraxx Asia ex Japan IG, as current spreads do not adequately price in US tariff risks [36][37].

Investment Rating - The report assigns an "Overweight" (OW) rating to several companies including Delta Electronics, BizLink, Lotes, AVC, King Slide, and Luxshare, indicating a positive outlook for these stocks in the AI server components sector [3][57]. Core Insights - The latest MGX Ecosystem supplier list was updated at GTC 2025, highlighting notable changes from the previous list in October 2024, including the introduction of NVQD for GB300 server racks and the addition of new suppliers [1][4]. - The stability of the power shelf and connected busbar/cables supplier list suggests sound competitive dynamics within the industry [2][4]. - The report emphasizes a preference for AI server components over ODMs due to their potential for value upgrades and market share gains in upcoming GB300 projects [3][4]. Summary by Sections MGX Ecosystem Suppliers - The updated supplier list includes 11 suppliers for NVQD, with four based in Taiwan and six in China, indicating a growing ecosystem for liquid cooling solutions [1][4]. - New suppliers have been added for liquid cooling components, primarily from Taiwan and China, which will be monitored for potential shifts in supplier dynamics [2][4]. Company Ratings - The report provides specific ratings for various companies, with Delta Electronics, BizLink, Lotes, AVC, King Slide, and Luxshare receiving an OW rating, reflecting their strong positioning in the AI server components market [3][57].

March 16, 2025 09:00 PM GMT Investor Presentation | Asia Pacific M Foundation China Equity Strategy: Getting Out of the Woods Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision. For analyst certification and ot ...

March 16, 2025 06:00 AM GMT M Global Foundation Sunday Start | What's Next in Global Macro Is the Correction Over? Major US equity Indices are as oversold as they've been since 2022, sentiment/ positioning gauges have lightened up considerably, and seasonals are set to improve in the second half of March for earnings revisions and price. Furthermore, recent dollar weakness should provide a tailwind to 1Q earnings season/2Q guidance relative to 4Q24, and, if historical patterns hold, the decline in rates sho ...

Global Markets Strategy March 2025 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. China/HK Equity Strategy Chartbook Wendy Liu AC (852) 2800 1087 wendy.m.liu@jpmorgan.com J.P. Morgan Securities (Asia Pacific) Limited/J.P. Morgan Broking (Hong Kong) Limited ...

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 16 March 2025 China Internet earnings calendar Thoughts into the peak of 4Q24 earnings season See page 9 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 interest that could affect the objectivity of this report. Investors should consider this re ...

Investment Rating - The report assigns an "Overweight" rating to Tesla Inc, with an industry view of "In-Line" [4][67]. Core Insights - The survey results indicate that 85% of respondents believe Elon Musk's political activities negatively impact Tesla's business fundamentals [6]. - A significant 59% of respondents expect Tesla's FY25 deliveries to decline year-over-year, contrasting sharply with previous bullish sentiments [6]. - Despite the negative outlook, investor sentiment is relatively mixed regarding Tesla's stock performance by year-end, with 45% expecting the stock to rise and 36% expecting it to fall [6]. Summary by Sections Investor Survey Results - The survey collected 245 responses, revealing that 40% of investors view Musk's political activities as insignificant, while 3% see them as positive [3][6]. - Expectations for Tesla's auto delivery growth in 2025 show that 38% anticipate a decline of 10% or less year-over-year, while only 4% expect growth of more than 10% [8]. Valuation - Tesla's current valuation stands at 19x FY30 PE and approximately 10x EV/EBITDA for FY30, indicating a favorable risk-reward profile [6]. - The price target for Tesla is set at $430, with the stock closing at $230.58 on March 11, 2025 [4][6]. Market Sentiment - The report highlights a stark contrast in sentiment compared to earlier bullish outlooks, with a notable shift in expectations regarding Tesla's growth trajectory [6]. - The survey results suggest a cautious approach among investors, reflecting concerns over delivery forecasts and external factors impacting the company's performance [6].

Investment Rating - The report maintains a focus on high-quality stocks as the preferred investment choice amid elevated uncertainty, indicating a positive investment outlook for quality stocks [2][3]. Core Insights - The report emphasizes that quality stocks are expected to outperform in the long run, particularly in the context of ongoing policy uncertainty and declining earnings revisions [2][3]. - A selection of 30 companies, termed "30 for 2027," has been identified as the best long-term investment picks, focusing on those likely to enhance their sustainable competitive advantages [3][4]. - The criteria for selection include sustainability of competitive advantage, business model robustness, pricing power, cost efficiency, and growth potential, with a strong emphasis on Return on Net Operating Assets (RNOA) and management strategies [4][5]. Summary by Sections Selected Companies - The report lists 30 companies that are well-positioned for long-term growth, including Amazon, Apple, Microsoft, and Visa, among others [6]. Financial Metrics - The report provides detailed financial metrics for the selected companies, including projected revenue and EPS growth rates, EBIT margins, and net debt to EBITDA ratios, indicating strong financial health and growth potential [17][20]. Valuation Metrics - Valuation metrics such as P/E ratios, EV/EBIT, and free cash flow yields are presented, with price targets and risk-reward assessments for each company, suggesting significant upside potential for investors [20][28].

March 9, 2025 08:08 PM GMT Outlook: The 1Q25 GDP deflator appears likely stuck at -0.8%Y (vs. -0.7%Y in 4Q24). We maintain our view that reflation could be a bumpy and drawn-out process, as sustained reflation requires continued narrowing in the negative output gap, which could be difficult in view of tariff impact and a modest fiscal package. | M Reflation Momentum Eased in Jan-Feb | Zhipeng Cai Zhipeng.Cai@morganstanley.com Harry.Zhao@morganstanley.com | +852 2239-7820 +852 2239-7229 | | --- | --- | --- | ...