Investment Rating - The report maintains a cautious stance on inflation forecasts while awaiting further policy actions [3][19]. Core Insights - The year-on-year Consumer Price Index (CPI) turned positive in June, marking a surprise after four consecutive negative readings, which may indicate potential reflation in China [3][4]. - The Producer Price Index (PPI) deflation deepened unexpectedly, highlighting a divergence in price trends among different sectors, particularly between auto and steel prices [4][19]. - The report emphasizes the importance of supply-side reforms (SSR2.0) and the role of demand in shaping inflation expectations [19]. Summary by Sections CPI Analysis - The CPI reading for June was +0.0% YoY, compared to a prior reading of -0.1% YoY, with a sequential change of -0.1% MoM [3][5]. - Significant price increases were noted in the "other goods and services" category, which includes jewelry, with a +8.1% YoY change [5][8]. - Core inflation rose by +0.7% YoY, with core goods prices increasing by 0.9% YoY [5][19]. PPI Analysis - The PPI reading was -3.6% YoY, contrasting with market expectations of a narrower contraction [4][19]. - The PPI for the auto sector showed stabilization, while ferrous metals and non-metallic minerals reported negative changes, indicating a mixed outlook for SSR2.0 candidates [4][19]. Supply Side Reform Insights - The report suggests that the upcoming Politburo meeting and action plans from relevant ministries will be crucial for future inflation trajectories [19]. - The divergence in price trends between sectors like steel and auto underscores the need for targeted demand-side policies [19].

Investment Rating - The report highlights the Digital Currency theme as an attractive investment opportunity, ranking it among the top themes for performance and attractiveness [4][10][24]. Core Insights - The Digital Currency theme has shown strong performance, returning 15.1% in June, which is a significant +2 standard deviation compared to the past 12 months [4][24]. - The report indicates a shift in theme rankings, with Cloud Computing replacing Hydro Energy in the top 10 most attractive themes due to improved Estimates Momentum [3][10]. - The overall performance of the themes has been positive, with a return spread of 1.09% between the most and least attractive themes in June [2][15]. Summary by Sections Theme Performance - Digital Currency has been the best-performing theme over various periods, including the last month, year-to-date, and the last three years [4][24]. - The Biodiversity theme is noted as the worst performer [4]. Notable Theme Changes - The only change in the top 10 themes is the introduction of Digital Currency and Cloud Computing, reflecting a positive shift in market sentiment towards these sectors [3][10]. - The report also notes that the Education Tech theme has seen a significant improvement in ranking, moving from 67th to 35th [36]. Investment Style Insights - For value-focused investors, Biofuels and Belt & Road are highlighted as attractive themes [5][40]. - Defensive investors may consider themes like Risky Business and Generics & Biosimilars, which rank highly on Low Risk metrics [5][39].

Investment Rating - The report maintains a "Buy" rating for MediaTek and a "Neutral" rating for Alchip, while downgrading GUC to "Sell/H" [5][43][52]. Core Insights - The report emphasizes the increasing importance of system integration and interoperability in the semiconductor industry, particularly for AI ASICs and GPUs. It highlights that successful chip design alone is insufficient; cohesive and scalable systems are crucial for performance [1][9][18]. - The transition of AI chips from N5/4 to N3 nodes is expected to significantly increase average selling prices (ASP) and computing capabilities, despite a slowdown in overall AI chip shipment growth [2][16]. - Nvidia continues to dominate the AI server market, holding over 80% of market value, while Broadcom leads in the ASIC market driven by its Google TPUs [23][36]. Summary by Sections AI ASIC Market Dynamics - Broadcom holds the largest market share in the ASIC market, with stable trends expected for TPU v7 and growth anticipated for TPU v8 in late 2026 [3][36]. - The report estimates that AI ASIC shipments from major cloud service providers (CSPs) will reach approximately 4.5 million units in 2026, which is lower than consensus estimates [2][23]. System Integration and Design - The report stresses the need for advanced system design capabilities, including thermal management and network fabric design, to support the growing complexity of AI workloads [18][22]. - It notes that developing an HPC AI ASIC can take 3-4 years, necessitating partnerships with experienced semiconductor makers to expedite the process [20][22]. Company-Specific Insights - MediaTek is highlighted as a preferred choice due to its design expertise and expected revenue contributions from AI ASICs starting in late 2026 [5][43][45]. - Alchip's contribution is expected to begin in 2H26, with a cautious outlook due to potential redesign delays [52][53]. Financial Projections - The report provides revised financial estimates for MediaTek, projecting a revenue of NT$588.85 billion for 2025, with a YoY growth of 11% [46]. - Alchip's financial outlook is less optimistic, with a projected revenue of NT$41.96 billion for 2025, reflecting a decline [52][53].

Investment Rating - The report does not explicitly state an investment rating for the industry or specific companies mentioned Core Insights - Shein and Temu are shifting their marketing focus towards Europe due to declining performance in the US market, particularly after the end of de minimis exemptions [1] - App downloads for Shein and Temu in the US have sharply declined, while the rate of decline in Europe has slowed, indicating a potential strategic pivot [3][5] - Weekly active users for Shein and Temu in the US began to decline in April, suggesting a negative trend prior to the regulatory changes [6] Summary by Sections Market Performance - Shein and Temu's app downloads in the US via paid traffic have closely tracked those in five key European markets until recently, with a notable decline in the US [3] - The decline in app downloads for Shein and Temu in the US was approximately 62% in May compared to previous months, while the decline in Europe was less severe [5] Competitive Landscape - Increased competition from online discounters has been noted, with Sainsbury's reporting accelerated sales for Argos, indicating a shift in consumer behavior [1] - H&M and Zara have not experienced a significant increase in app usage or web traffic following the changes affecting Shein and Temu, suggesting that the competitive dynamics may not favor them in the current environment [9]

Investment Rating - The report maintains a positive outlook on global defense spending, indicating potential growth opportunities for defense contractors through the remainder of the decade [3][7][57]. Core Insights - The report highlights a significant shift in defense spending priorities under President Trump's administration, focusing on bolstering security in the Indo-Pacific and reducing reliance on European security [6][56]. - NATO member countries have set a new defense spending target of 5% of GDP by 2035, with core defense spending rising from 2% to 3.5% of GDP, which could enhance NATO's defense capabilities if achieved [4][22]. - The report emphasizes the increasing importance of technological advancements, particularly in artificial intelligence and unmanned systems, which are expected to drive future defense investments [49][81]. Summary by Sections Global Defense Spending - The U.S. defense budget is projected to increase significantly, with a flat discretionary budget and $119 billion in mandatory spending allocated for fiscal 2026 [10][72]. - The U.S. is currently spending 3.4% of GDP on defense, with a notable increase in defense spending across NATO countries due to geopolitical tensions [28][29]. European Defense - European defense spending has increased by approximately 40% over the past two years, with Germany accounting for a significant portion of this growth [39]. - The EU's ReArm Europe program aims to unlock additional funding for defense, potentially adding €160 billion annually over the next four years [37][40]. Indo-Pacific Defense - Countries in the Indo-Pacific region are enhancing their defense capabilities in response to threats from China and North Korea, with increased cooperation among Western and Eastern allies [9][18]. - The report notes that while some nations have maintained spending levels, others are increasing their budgets to deter regional conflicts [18]. Technological Advancements - The report discusses the role of AI and machine learning in modernizing defense efforts, with a focus on enhancing decision-making and operational capabilities [81]. - The U.S. is investing in autonomous systems and cyber capabilities to improve defense readiness and counter adversarial threats [81][83]. Procurement and Spending Trends - The report anticipates a shift in defense procurement priorities, with an emphasis on attritable systems and advanced technologies to enhance military effectiveness [74][90]. - The U.S. Department of Defense is expected to allocate significant funding towards shipbuilding and missile defense initiatives, reflecting a strategic focus on maritime threats [86][92].

Investment Rating - The report does not explicitly provide an investment rating for the industry discussed Core Insights - The report highlights the potential for sustained lower interest rates in Singapore due to recent property cooling measures, which may impact the housing market and monetary conditions [1] - It discusses the implications of supply-side reform 2.0 in China, driven by prolonged PPI deflation and profitability concerns, with a focus on targeted sectors and specific measures [9] - The report anticipates a 70% chance of a 25bps cut in Malaysia's Overnight Policy Rate (OPR) due to recent economic indicators suggesting downside risks to GDP growth [2][10] Summary by Sections Economic Indicators - In China, CPI is expected to inch up to 0.0% YoY, while PPI contraction could narrow to -3.1% YoY in June [2] - Taiwan's CPI is projected to benefit from TWD appreciation, with exports expected to grow at 21% YoY [2] - South Korea's Bank of Korea is expected to hold the rate at 2.50% with potential hawkish signals [2] Inflation Forecasts - India's headline CPI is expected to fall to 2.2% YoY in June 2025, influenced by favorable base effects and lower vegetable prices [4] Key Events and Predictions - Upcoming key events include CPI releases for Thailand, Taiwan, and China, as well as the Bank of Malaysia's OPR decision [8][10] - The report notes that the Bank of Korea may prefer a wait-and-see approach until the October meeting to assess housing prices and fiscal stimulus impacts [10] Trade Ideas - Recommendations include taking profit on long USDIDR put spreads and going long on 10-year Indonesian government bonds [9][13] - A strategy to short SGD against a basket of currencies is also suggested, with a target of 98 and a stop of 100.5 [13]

Investment Rating - The report maintains a growth forecast of 5.2% YoY for Q2 2025, indicating a steady outlook for the industry [1][2]. Core Insights - The industry is on track to meet the growth target of around 5%, with a run rate of 5.3% YoY in the first half of 2025. However, monthly indicators for June may show mixed results [2]. - Industrial production is expected to moderate to 5.3% YoY in June, while retail sales are projected to increase by 5.8% YoY, supported by a favorable base [2]. - Exports are forecasted to grow by 3.3% YoY in June, despite a decline in shipments to the US, with imports expected to expand by 0.5% YoY [3]. - Inflation is anticipated to remain low, with CPI expected to rise to 0.0% YoY and PPI contraction narrowing to -3.1% YoY in June [4]. - Total social financing (TSF) is projected at RMB 3.4 trillion for June, driven primarily by government bond issuance [5]. Summary by Sections Economic Growth - The growth forecast for Q2 2025 is set at 5.2% YoY, with expectations of steady growth despite mixed monthly indicators in June [1][2]. Industrial Production and Retail Sales - Industrial production is expected to moderate to 5.3% YoY in June, while retail sales are likely to increase by 5.8% YoY, reflecting resilience in consumer spending [2]. Trade and Exports - Exports are projected to grow by 3.3% YoY in June, with imports returning to growth at 0.5% YoY, contributing to a trade surplus of US$106.1 billion [3]. Inflation and Prices - CPI is expected to remain flat at 0.0% YoY, while PPI contraction is anticipated to narrow to -3.1% YoY, indicating limited inflationary pressure [4]. Credit and Financing - New TSF is forecasted at RMB 3.4 trillion for June, with significant contributions from government bond financing and new RMB loans [5].

Investment Rating - The latest sector pecking order for investment is aluminum > lithium > copper > steel > gold > battery > thermal coal > cement [1] Core Insights - Market expectations on demand recovery for aluminum in China remain cautious, with production data showing a flat week-over-week (WoW) performance but a 2% year-over-year (YoY) increase [1] - Total aluminum production in China for the week of June 26 to July 2, 2025, was 844kt, with aluminum billet production at 349kt, reflecting a 2% decrease WoW but an 8% increase YoY [1][2] - The year-to-date (YTD) aluminum production in China reached 22.6 million tonnes (mnt), marking a 3.2% increase YoY, while aluminum billet production was 9.1mnt, up 6.4% YoY [1] Production Summary - Total aluminum production in China was 844kt for the week, flat WoW, and up 2% YoY [1] - Aluminum billet production was 349kt, down 2% WoW, but up 8% YoY [1] - YTD aluminum production was 22.6mnt, with a 3.2% YoY increase [1] Inventory Summary - Total aluminum ingot and billet inventory in China was 773kt on July 3, 2025, reflecting a 3% increase WoW but a 33% decrease YoY [2] - The inventory of aluminum ingot was 517kt, up 2% WoW and down 41% YoY, while aluminum billet inventory was 256kt, up 5% WoW and down 8% YoY [2] Consumption Summary - Overall aluminum apparent consumption in China was 833kt for the week, flat WoW and down 1% YoY [3] - Aluminum ingot apparent consumption was 864kt, flat WoW, and up 4% YoY, while aluminum billet apparent consumption was 318kt, down 2% WoW and down 4% YoY [3] - YTD overall aluminum apparent consumption was 23.3mnt, with a 5.7% YoY increase [3]

Investment Rating - The report assigns a "Buy" rating to J&T, STO, ZTO, and YTO, while Yunda is rated as "Sell" [5]. Core Viewpoints - The report suggests that pricing dynamics in China's parcel industry are stabilizing, with expectations of a 12% earnings CAGR for the sector from 2024 to 2027, driven by a 14% volume CAGR and a 3% annual drop in average selling price (ASP) [2][8]. - Smaller companies like J&T and STO are expected to outperform larger competitors in terms of market share and margin expansion due to their cheaper offerings and operational leverage [2][4]. Summary by Sections Pricing Dynamics - Delivery prices are believed to have bottomed out, with many franchisees reporting losses and expecting price hikes in the latter half of the year [3][11]. - The average ASP for Tongda companies fell approximately 7% year-over-year from January to May, but a stabilization is anticipated [8][11]. Earnings Forecasts - The report forecasts significant earnings growth for J&T and STO, with expected EPS CAGRs of 92% and 15% respectively from 2024 to 2027 [2][4]. - Adjustments to earnings estimates for 2025-2027 reflect a reduction of 0%-54% across Tongda companies, primarily due to pricing pressures [4]. Market Share and Competitive Landscape - J&T and STO are projected to gain a total of 4 percentage points in market share from 2025 to 2027, while other Tongda companies are expected to lose 2 percentage points [4][8]. - The report indicates that lower-tier firms are likely to capture more market share as they improve unit economics and pricing strategies [8][94]. Valuation Insights - Current PE multiples for J&T and STO are considered undervalued at 9x and 12x for 2026E, respectively, compared to the expected industry average of 15x [2][5]. - The report highlights that Tongda firms are trading near historical lows, suggesting that a stabilizing pricing environment could lead to a re-rating of multiples [8][110]. Demand Drivers - The parcel volume in China is expected to grow at a CAGR of 10% from 2024 to 2029, driven by consumption downtrading and government initiatives to stimulate domestic consumption [62][84]. - The report anticipates a 16.5% year-over-year growth in parcel volume for the current year, with strong growth momentum continuing [62][63].

Investment Rating - The report does not explicitly provide an investment rating for the thermal coal industry, but it indicates a pecking order of sectors, placing thermal coal lower than aluminum, lithium, copper, steel, gold, battery, and cement [1]. Core Insights - The report highlights cautious market expectations regarding demand recovery in the thermal coal sector in China, with a focus on tracking high-frequency on-ground demand trends [1]. - Weekly production data from 100 sample thermal coal mines in China shows a slight decrease in output week-over-week but a modest increase year-over-year [2]. - The overall utilization ratio of sample mines has decreased slightly week-over-week but shows a year-over-year increase [3]. - Total coal inventory in sample mines has decreased week-over-week but increased year-over-year, indicating a mixed trend in inventory management [4]. Production Summary - From June 26 to July 2, 2025, thermal coal output from 100 sample mines was 12,008 kt, down 0.9% week-over-week, up 0.4% year-over-year, and up 1.4% year-over-year on the lunar calendar [2]. - Year-to-date output for sample mines reached 327 million tonnes, reflecting a 3.6% increase year-over-year [2]. Utilization Ratio Summary - The overall utilization ratio for the sample mines was 88.9%, a decrease of 0.8 percentage points week-over-week, but an increase of 0.3 percentage points year-over-year [3]. - Utilization ratios varied by region, with Shanxi at 86.1%, Shaanxi at 88.3%, and Inner Mongolia at 90.9% [3]. Inventory Summary - Total coal inventory in sample mines was 3,302 kt as of July 2, 2025, down 0.5% week-over-week but up 3.9% year-over-year [4]. - Inventory levels in Shanxi, Shaanxi, and Inner Mongolia showed mixed trends, with Shanxi and Shaanxi experiencing decreases week-over-week, while Inner Mongolia saw a slight increase [4].