Investment Rating - The investment rating for Hangzhou Hikvision Digital Technology is Neutral, with a target price of Rmb30.000, indicating an expected share price return of 8.5% and an expected total return of 11.6% including a dividend yield of 3.1% [2][15]. Core Insights - The Canadian government's ban on Hikvision's operations is expected to have a limited revenue impact, as current revenue exposure from Canada is less than 1%, and developed markets account for approximately 10% of total revenue [1][4]. - The valuation target of Rmb30 is based on a 20.2x NTM PE, reflecting the company's leading position in the surveillance camera market and its growing innovation business, while also considering uncertain growth in the SMBG segment and geopolitical risks [4][1]. Summary by Sections Revenue Impact - The Canadian government's request for Hikvision to cease operations is primarily due to national security concerns, but the overall revenue impact is expected to be limited due to low exposure in Canada and developed markets [1]. Valuation - The target price of Rmb30 is justified by the company's historical average PE ratio and its strong market position, despite potential risks from competition and geopolitical factors [4]. Market Position - Hikvision maintains a leading position in the surveillance camera market, supported by ongoing innovation, which is crucial for sustaining growth amid external challenges [4].

V i e w p o i n t | 27 Jun 2025 09:59:52 ET │ 10 pages Global Economics Shock simulation: Simultaneous US tariffs and tax cuts CITI'S TAKE In this edition, we model the combined effect of US tariffs and US tax cuts. We simulate an effective US tariff rate of around 15%, coupled with tax cuts worth 1% of GDP. The tax cuts offset much of the initial downturn in GDP caused by the increase in tariffs. Revenues from the latter are balanced by revenue losses from the former, resulting in a negligeable net budgeta ...

Investment Rating - The report does not explicitly provide an investment rating for the semiconductor and hardware industry, but it highlights significant growth potential in AI infrastructure and related technologies. Core Insights - The constraints of AI growth are multifaceted, including power, compute at scale, connectivity for low latency, and talent, indicating substantial opportunities for infrastructure development [1] - The focus of AI is shifting from training to an inferencing era, emphasizing the importance of data capture, extraction, and actionable insights [1][2] - Enterprise AI is still in its early stages, while sovereign AI is gaining traction as a national priority for owning models and infrastructure [1][5] - The agent-to-employee ratio is projected at 2000:1, suggesting that every enterprise could effectively become a supercomputer with modern infrastructure needs [1][5] - Edge AI's effectiveness will depend on the specific use cases and the value it can unlock [1] - The cost and speed of inference for reasoning models are creating opportunities for new entrants in the GPU market [1] Summary by Sections AI Infrastructure and Growth - The report discusses the need for significant infrastructure changes to support scalable AI, particularly as the focus transitions from training to inferencing [2] - VAST Data's architecture is designed to meet the increasing data demands of AI, with large GPU deployments (10,000 to 100,000 GPUs) in data centers [2] Market Dynamics - VAST Data has achieved $2 billion in software sales since its inception, with key customers and large contracts indicating strong market positioning [6] - The company is cash flow positive and views traditional storage competitors as lagging behind, while startups face higher barriers due to VAST's scale and lead [6] Future Outlook - The report anticipates that every organization will require modern infrastructure tailored for AI, driven by the increasing agent-to-employee ratio [5] - The interaction of models and agents with the physical world is expected to enhance performance through real-time feedback, leading to extreme scale requirements [2]

Investment Rating - The investment rating for Tianqi Lithium is set at "Hold" with a target price of HK$23.0 for H-shares and Rmb26.26 for A-shares, reflecting a valuation based on P/B multiples [19][21]. Core Insights - The report indicates a near-term bottom for lithium prices at Rmb60k/t, with expectations of supply discipline to help rebalance the market. However, there are concerns about potential supply resumption if prices rebound to Rmb70k/t [1]. - The report maintains a bullish outlook on lithium in the short term, despite anticipated pressure from oversupply in the next 12 months [1]. - Recent data shows mixed trends in lithium prices, with Li2CO3 and LiOH ASP quoted at Rmb60.6k/t and Rmb58.1k/t respectively, indicating slight fluctuations week-over-week [2]. Summary by Sections Lithium Price Trends - Lithium prices are currently experiencing a mixed trend, with Li2CO3 and LiOH ASP at Rmb60.6k/t and Rmb58.1k/t as of June 26, 2025, compared to Rmb60.5k/t and Rmb59.2k/t the previous week [2]. - The production of Li2CO3 in China increased by 2% week-over-week to 18,767 tons, with varying outputs from different sources [2]. Inventory and Production Insights - Total inventory of Li2CO3 reached 136,837 tons, reflecting a 1% increase week-over-week. Inventory levels for downstream players, smelters, and others also showed increases [2]. - The report highlights ongoing production increases across various lithium sources, with brine and lepidolite outputs up by 2% and 3% respectively [2]. Company Valuation - Tianqi Lithium's H-shares are valued at HK$23.0 based on a 0.70x 2025E P/B multiple, while A-shares are valued at Rmb26.26 based on a 1.0x 2025E P/B [19][21].

V i e w p o i n t | 26 Jun 2025 09:09:39 ET │ 11 pages Hong Kong Property Conference Takeaways: Promotes a Good Story about Hong Kong CITI'S TAKE 16 HK property firms attended Citi's conference & shared a slightly constructive view: [1] new homes: expect a 6-year high volume in 1H25 & strong response to new launches in May-Jun on end-user demand at just 7-8% disc at most; [2] office: beat- expectation deals & possible "centralization" amid flight-to-quality leasing; [3] retail: rent is weak but at less decl ...

Investment Rating - The report maintains a base case for a 25 basis point rate cut in September, with potential for an earlier cut in July if unemployment rises sharply [6][11][40]. Core Insights - The Federal Reserve is closely monitoring economic data over the summer months to determine the timing of potential rate cuts, with a consensus forming around the likelihood of cuts resuming in September [5][8]. - Consumer spending has shown significant slowdown, particularly in real services spending, which has implications for economic growth and inflation [10][12][19]. - The unemployment rate is projected to rise to 4.4% in June, with a possibility of reaching 4.5% if job market conditions worsen, which could prompt earlier rate cuts [11][23][40]. Economic Indicators - Services inflation has remained subdued, with core PCE inflation at 0.179% month-over-month, indicating a cooling inflation environment [9][30]. - Real personal spending has stagnated, with a notable decline in both goods and services spending observed in recent months [10][30]. - The housing sector is experiencing weakness, with new home sales declining by 13.7% month-over-month in May, reflecting ongoing challenges in the market [15][18][30]. Labor Market Trends - Initial jobless claims have shown a slight decline, but continuing claims are rising, suggesting a loosening labor market [24][67]. - The Conference Board Consumer Confidence Index fell to 93.0 in June, indicating growing concerns among consumers regarding the labor market and economic conditions [19][30]. - Average hourly earnings are expected to slow to 0.2% month-over-month, reflecting a weakening labor demand environment [38][39]. Manufacturing and Trade - ISM Manufacturing is expected to remain in contraction, while ISM Services is projected to rebound slightly, indicating modest growth in services activity [60][63]. - The trade balance is anticipated to widen to -$71.7 billion, driven by a drop in exports, which could weigh on GDP growth [57][58].

Investment Rating - The investment rating for UBTECH Robotics is "Buy / High Risk" [8] Core Insights - UBTECH's humanoid robot business is currently behind schedule, but management is confident in meeting the 2025 shipment guidance of 300-500 units, with potential for exceeding this target due to multiple projects [1][2] - The efficiency of the humanoid robot Walker S1 is expected to improve from 40-50% of human efficiency to 80-90% by the end of 2025 through optimized motion control algorithms [1] - A new customer, a Chinese NEV OEM cooperating with Huawei, is anticipated to emerge in Q3 2025 [1][3] - Management believes that bipedal robots are more suitable for industrial applications compared to wheeled robots, although wheeled options may still be offered for specific long-range tasks [4] - The new version of the humanoid robot, Walker S2, is under calibration and is expected to debut in July or August 2025 [5] Financial Overview - The current share price is HK$83.95, with a target price set at HK$108.00, indicating an expected share price return of 28.6% [6] - The expected total return, including dividend yield, is also 28.6% [6] - The market capitalization of UBTECH Robotics is HK$37,087 million (approximately US$4,724 million) [6] Valuation - The target price of HK$108.00 is based on approximately 22x the estimated price-to-sales (P/S) ratio for 2025, aligning with the average P/S of other companies in the humanoid robot supply chain [16]

V i e w p o i n t | 25 Jun 2025 16:16:30 ET │ 19 pages Thematic Equity Strategy A Global Perspective on Artificial Intelligence CITI'S TAKE AI remains one of our top Growth themes in the US given its premium growth expectations at justifiable valuations. In this report we take a broader look at AI across the globe and our Enablers versus Adopters value chain delineation. We reiterate the need for value chain diversification within the theme while also stressing geographic reach. Investors solely focused on ...

Investment Rating - The report maintains a positive outlook on aluminum and lithium sectors while being less bullish on steel names, indicating a preference for aluminum and lithium investments [1][2]. Core Insights - The report emphasizes the need for steel supply reform, anticipates a near-term bottom for lithium prices, and expects potential corporate actions from aluminum companies in China [1]. - It highlights that aluminum and lithium stocks have performed well, while steel stocks have lagged behind, prompting a reassessment of investment strategies [1]. - The report ranks the sectors in the following order: aluminum > lithium > copper > steel > gold > battery > thermal coal > cement [1]. Summary by Sections Aluminum - The aluminum sector is viewed as undervalued relative to mid-term fundamentals, with expectations for a re-rating driven by a cap on smelting capacity and improved margins [2]. - Shareholder return policies from companies like Hongqiao and Chalco are generating investor interest, with Chalco initiating share buybacks [2]. Steel - The anticipated steel supply reform has been delayed, with internal communications between local governments and steel mills ongoing [6]. - Recent data from the National Bureau of Statistics (NBS) shows a decline in pig iron output of approximately 3% year-over-year in May 2025, contrasting with a 4% increase reported by MySteel [6]. Lithium - The report suggests that lithium prices are nearing a short-term trough at Rmb60,000 per ton, with expectations of production cuts to stabilize the market [8]. - Investors are concerned about the potential restart of suspended supply if prices rebound to Rmb70,000 per ton, alongside ongoing capacity additions in the pipeline [8].

Investment Rating - The report suggests a dovish outlook for the Federal Reserve, indicating potential rate cuts in September due to weak consumer spending and subdued core PCE inflation [1][8]. Core Insights - Consumer spending has shown signs of persistent weakness, particularly in services, with a nominal increase of only 0.1% MoM and flat real terms, leading to an overall decline in personal spending [5][7]. - Core PCE inflation increased by 0.179% MoM, slightly above expectations, but still subdued enough to support the case for rate cuts [4][8]. - The report highlights a significant decline in travel-related spending, particularly in air travel and hotel accommodations, which have seen declines every month this year [7][8]. Summary by Sections Consumer Spending - Personal spending fell by 0.1% MoM in nominal terms and 0.3% in real terms, with goods spending declining by 0.8% MoM [5]. - Services spending showed unexpected weakness, with a nominal increase of only 0.1% MoM and flat in real terms, indicating a broader trend of reduced consumer demand [5][7]. Inflation Metrics - Core PCE inflation was reported at 0.179% MoM, slightly stronger than consensus but still indicative of a soft inflation environment [4][8]. - The report suggests that weak consumer demand limits the ability of firms to pass through tariff price increases, reducing the risk of broad-based inflation [8]. Employment Implications - The report indicates that weaker consumer demand could lead to softer hiring, raising downside risks to the Federal Reserve's employment mandate [8].