Investment Rating - The report indicates a tightening trade balance with a significant drop in imports, suggesting a potential positive impact on GDP in the second quarter [1][5][10]. Core Insights - The trade balance in April tightened to -$61.6 billion, a substantial improvement from -$138.3 billion in March, driven by a nearly 20% month-over-month decline in imports [3][5]. - The decline in imports is attributed to the implementation of substantial tariffs, front-loading of goods, and uncertainty regarding future tariff policies [1][5][7]. - Imports from China are expected to decrease further due to high tariffs of 145% that were not delayed until mid-May, impacting trade dynamics significantly [8][9]. Summary by Sections Trade Balance and Imports - The trade balance with Canada improved from -$4.9 billion to -$2.6 billion, while the balance with Mexico tightened to -$13.5 billion, reflecting declines in imports of 17.2% and 10.3% respectively [4]. - Imports from the EU fell by 35.7%, contributing to a tighter trade balance of -$17.9 billion [4]. - Overall, imports from China decreased by 18.9%, leading to a trade balance of -$19.7 billion [4]. Economic Implications - The significant drop in imports is expected to provide a mechanical boost to GDP in the second quarter, although some of this effect may be offset by weaker inventories and consumption [10]. - The effective tariff rate on goods imported to the US was around 7% as of April, indicating a substantial increase in trade costs [11][13]. Future Outlook - The report anticipates a potential rebound in imports in May as tariff clarity improves, although ongoing uncertainty and policy changes are likely to create volatility in trade data throughout the year [5][7][9].

Investment Rating - The report forecasts exports to grow approximately 4% YoY in May despite tariff shocks [1][3]. Core Insights - China's shipping activities have shown resilience, with a narrowing contraction in containership departures for the US, from -32.9% YoY to -14.8% YoY in the 15 days ending June 4 [2][13]. - Overall cargo throughput in China remained steady, with a reported 4.8% YoY increase in cargo throughput volume for the week ending June 1, slightly down from 5.4% YoY the previous week [3][14]. - Container exports volume continued to exhibit double-digit growth, recorded at 12.3% YoY for the week ending May 30, although this was a decrease from 15.5% YoY a week prior [3][9]. Summary by Sections Export Trends - Exports to the US are experiencing a shallow rebound ahead of summer, but still face tariff impacts and increased volatility [2]. - US import bills from China for seaborne routes have declined significantly, down 38.8% YoY in the week ending May 31 [2][8]. Cargo Throughput - The Ministry of Transport (MoT) reported a 4.8% YoY increase in overall cargo throughput volume, indicating continued expansion in shipping activities [3][14]. - The growth in container exports volume per PortWatch/IMF was noted at 12.3% YoY, reflecting ongoing strength in the sector [3][9]. Container Departures - The contraction in container departures from China to the US has narrowed, indicating a potential recovery in shipping activities [2][13].

Investment Rating - The investment rating for the lithium sector has been adjusted to a pecking order of steel > aluminum > lithium > copper > gold > battery > thermal coal > cement [1] Core Insights - The national "trade-in" subsidy for new energy vehicles (NEVs) has been suspended in some provinces earlier than expected, which may exert downward pressure on NEV demand, but the impact is estimated to be limited due to OEMs offering price discounts and diminishing marginal impact of subsidies [1] - Supply side dynamics are critical, with expectations of more supply cuts for lithium compounds sourced from spodumene and lepidolite in the next three months, as current prices are testing the cost curve for most lithium producers [1] - The market is expected to experience lingering pressure over the next 12 months due to significant oversupply this year [1] Summary by Sections Lithium Market Overview - As of June 5, 2025, the average selling prices (ASP) for lithium carbonate (Li2CO3) and lithium hydroxide (LiOH) are Rmb60.2k/t and Rmb62.3k/t respectively, showing a decline from the previous week [2] - China's Li2CO3 production increased by 5% week-over-week to 17,471 tons, with production from brine, lepidolite, and spodumene showing varied changes [2] - Total inventory of Li2CO3 reached 132,432 tons, reflecting a 1% increase week-over-week, with downstream players' inventory decreasing slightly [2] Company Valuations - Aluminum Corporation of China (Chalco) has a target price of HK$7.60 per share based on a price-to-book (P/B) ratio of 1.59x for 2025E, reflecting stronger than historical average returns due to higher aluminum margins [18] - Tianqi Lithium's A-share target price is set at Rmb26.26 per share based on a P/B multiple of 1.0x for 2025E, which is approximately 1.2x standard deviation below the historical average [22] - The target price for Tianqi Lithium's H-shares is HK$23.0, applying a 30% discount to the A-share target P/B, consistent with historical averages [24]

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies covered Core Insights - The focus of the report is on the implications of Section 899 of the One Big Beautiful Bill Act (OBBBA), which could impose penalty taxes on foreign companies operating in the US if their home country is deemed to have a "discriminatory" tax system [1][10] - The proposed tax increase is phased in over four years, starting with an additional 5 percentage points on top of the current US corporate tax rate of 21%, potentially reaching a total increase of 20% [2][15] - The report highlights that the fundamental impact of Section 899 on European equities should be relatively small at the index level, with an estimated decrease of approximately 0.5% in Stoxx 600 earnings due to the incremental tax [5][31] Summary by Sections Section 899 Overview - Section 899 is part of the OBBBA and targets foreign entities operating in the US with potential penalties if their home country's tax system is considered unfair [2][12] - The tax applies to a wide range of entities, including corporations, individuals, partnerships, and government-controlled entities [13] Expert Insights - A US tax expert indicated that if Section 899 is enacted, it would impose higher taxes on both corporate earnings and passive income for companies with significant ownership from individuals or corporations in affected countries [4][19] - The expert noted that mitigation measures are limited, and the effective tax rate could increase significantly for many companies [4][26] Implications for European Equities - The report suggests that while the index-level impact is limited, the company-level impact could be concentrated among those with high US revenue exposure, particularly in sectors like Media, Health Care, and Food & Beverage [5][35] - Approximately 20% of Stoxx 600 revenues come from the US, but only about 30 companies have more than 50% US sales exposure [5][35] - The report anticipates that Section 899 may encourage diversification away from US assets due to increased policy uncertainty and higher tax burdens [36][38]

Investment Rating - The report assigns a "Buy" rating for NextEra Energy Inc (NEE) with a target price of $84 based on a 24x P/E multiple on the 2024 consolidated EPS estimate [32][39]. Core Insights - The US utility capex is projected to grow at a CAGR of approximately 5% from 2016 to 2024, with electric transmission and distribution being the primary growth drivers [4][8]. - The historical transmission growth rate from 2017 to 2023 was 5.4%, and it is projected to accelerate to 8.2% from 2024 to 2027 due to increasing power demand [8][12]. - The report highlights a robust increase in data center and advanced manufacturing activities as key drivers of load growth in the US [13][17]. Summary by Sections Historical Utility Capex Trends - US utility capex grew approximately 5% per year from 2016 to 2024, with electric transmission and distribution leading the growth [4][5]. Capex Forecast - NextEra's utility segment (FPL) is estimated to have T&D capex making up 15-20% of total capex, with a stable outlook through 2028 [25][31]. - PSE&G's T&D spend is projected to be around 50% of total capex throughout its planning period, indicating a stable capex outlook [31][26]. Drivers of Load Growth - The report forecasts global data center IT load growth at a CAGR of 14% to 110 GW by 2030, with Gen-AI workloads expected to account for nearly 60% of demand for data center power by that year [17][18]. Regulatory and Political Factors - NextEra's capex is uncertain beyond 2028 due to potential changes from the "Big Beautiful Bill," which may affect renewables capex [23][25]. - The report notes that affordability is a significant concern in New Jersey, with customer bills expected to spike approximately 17% in July [31][22].

Investment Rating - The report does not explicitly provide an investment rating for the industry or companies discussed [2]. Core Insights - Core PCE inflation in April was recorded at 0.116% month-over-month, aligning with expectations, indicating a cooling trend in inflation aside from tariff impacts [4][7]. - Personal income increased by 0.8% month-over-month, primarily due to enhanced eligibility for Social Security payments, which rose by 6.9% month-over-month [6]. - Consumer spending showed a nominal increase of 0.2% month-over-month, with real spending slightly up by 0.1% month-over-month, reflecting a normalization after a surge in March [5][8]. Summary by Sections Inflation and Spending - Core PCE inflation readings for March and April suggest a slowdown after strong readings in January and February, providing reassurance to Federal Reserve officials [7]. - Airfares increased by 0.5% month-over-month, contrasting with declines in other price indices [4]. - Portfolio management fees saw a significant decline of 6.6%, while healthcare prices rose by 0.33% month-over-month, above pre-pandemic levels [4]. Consumer Behavior - Personal spending in April was softer, with goods spending declining by 0.2% month-over-month in real terms, and auto purchases down by 0.6% month-over-month [5]. - Services spending increased by 0.3% month-over-month, indicating some resilience in consumer behavior in sectors less affected by tariffs [8]. - The savings rate rose to 4.9% due to increased government transfers and weak spending [6].

Investment Rating - The report maintains a positive outlook on risky assets, recommending to stay long equities and FX carry [2][11]. Core Insights - De-dollarization is a significant theme, with evidence suggesting foreign concerns for US assets and a shift in European investor preferences towards local equities [3][9][12]. - The global bond glut is real, with expectations that term premia could rise by approximately 50 basis points over the next year due to increasing net supply of global safe assets [3][38][45]. - USD dominance as the global reserve currency is projected to remain until 2070 under current trends, with EUR seen as the most viable alternative [4][57][59]. Summary by Sections De-dollarization - Evidence indicates a shift in asset allocation away from US equities, particularly among European investors, with significant outflows from US-focused ETFs [10][21][32]. - The USD's status as a global reserve currency is expected to persist, with projections showing a decline in USD share and a stable growth for EUR [57][63]. Global Bond Glut - The report estimates that the global bond glut will continue, with term premia expected to rise by around 50 basis points due to increased net supply of safe assets [38][45]. - Stablecoins are emerging as a growing demand source for US Treasury bills, although their impact on longer-term debt demand may be limited [51][52]. USD Dominance - The USD remains dominant in global financial transactions, accounting for 88% of FX turnover and over 50% of global FX reserves [73][74]. - Despite some vulnerabilities in trade invoicing, the overall USD hegemony is stable, with ongoing increases in its share of international payments [73][76].

Investment Rating - The report indicates a supportive outlook for oil prices despite bearish factors, suggesting that the market may have priced in most of the negative influences [1][3] Core Insights - Oil prices have found support in the low $60s, influenced by geopolitical risks and low inventories, despite expectations of increased OPEC+ supply [1][2] - The ongoing geopolitical tensions, particularly the Russia-Ukraine conflict and US-Iran nuclear talks, are contributing to a bullish sentiment in the oil market [3][8] - The report highlights that while OPEC+ is unwinding output cuts, effective crude oil exports have only increased modestly, maintaining a tight market [6][8] Summary by Sections Macro Factors - The front-loading of goods manufacturing and exports to the US has positively impacted oil prices, with refining margins remaining healthy [2] - OPEC+ has not significantly increased exports despite earlier announcements, leading to a perception that the oil market may remain tighter than expected [2] Geopolitical Factors - The Russia-Ukraine conflict remains unresolved, with potential for additional sanctions affecting oil and gas flows from Russia [3] - The US-Iran nuclear negotiations are progressing slowly, with a potential deal that could influence oil prices significantly [3] Supply and Inventory Dynamics - OPEC+ has reaffirmed its output cuts, but actual compliance has been lower than expected, with visible liquid inventories remaining low [6][8] - US commercial crude oil inventories fell by 2.8 million barrels, significantly more than expected, indicating a tighter supply situation [15][26] - Global oil product inventories rose by 5.1 million barrels, but light end inventories decreased, reflecting mixed supply dynamics [18][19] Demand Trends - US gasoline demand has shown resilience despite macroeconomic concerns, with implied demand rising due to seasonal driving patterns [26] - Fleetwide fuel efficiency has improved, which could impact overall gasoline consumption trends moving forward [10][26]

Investment Rating - The investment rating for Zijin Mining is "Buy" with a target price of HK$24.40, representing an expected return of 36.3% from the current price of HK$17.90 [5]. Core Insights - The Kamoa-Kakula project is expected to contribute approximately 5.4% to Zijin's total net profit in FY24, with a net profit of Rmb1.7 billion from this project in 2024 [2][3]. - The copper production guidance for the Kamoa-Kakula project is set at 520-580kt for 2025, which will account for 20%-22% of Zijin's total copper production guidance for that year [2][4]. - Zijin is planning to spin off and list eight gold mining assets, targeting completion before the end of 2025, subject to approval [3]. - The Manono lithium project is anticipated to commence operations in 2026, with a production guidance of 250-300kt by 2028 [4]. Summary by Sections Kamoa-Kakula Project - The underground mining activities at Kakula Mine have been suspended, while the phase 1+2 processing plant has started processing surface stockpiles totaling 3.8 million tonnes of ore with an average grade of 3.2% copper [2]. - The phase 3 processing plant continues to operate normally, and the overall impact on production and cost guidance is still under investigation [2]. Gold Spin-off - The management of Zijin is actively working on restructuring to facilitate the spin-off and listing of eight gold mining assets, with a completion target before the end of 2025 [3]. Lithium Project - The Manono lithium project is expected to be operational by 2026, with a production target of 250-300kt in 2028 [4]. Financial Overview - Zijin's market capitalization is approximately HK$475.739 billion (US$60.693 billion), with an expected dividend yield of 2.3% and a total expected return of 38.7% [5][7].

Investment Rating - The investment rating for UBTECH Robotics is "Buy" with a target price of HK$108.00, indicating an expected share price return of 28.0% [6]. Core Insights - UBTECH is confident in delivering 300-500 industrial humanoid robots (Walker S1/S2) in 2025, with a significant order from BYD expected in June 2025 [1][2]. - The bill of materials (BOM) cost for humanoid robots is projected to decrease from Rmb400k (~US$60k) to Rmb200k (~US$30k) by 2027, as production volume increases from 500 units to 10,000 units [1]. - UBTECH is leading in industrial applications of humanoid robots compared to its peers, who are primarily focused on entertainment [1]. Summary by Sections Humanoid Robot Shipments - In addition to the 300-500 units of Walker S1/S2, UBTECH plans to ship 500 units of the Una, 200 units of Walker C, and 200 units of Tiangong Walker [4]. Product Development - The new version, Walker S2, will be introduced in June 2025, with a total cost expected to be 30% lower than Walker S1 due to design improvements [3]. Computing Power - Currently, Walker S1 utilizes one Nvidia Jetson AGX Orin with a TOPS of 275, but UBTECH is considering upgrading to the Jetson AGX Thor for enhanced performance [5]. Payback Period and Lifecycle - The estimated payback period for a humanoid robot is 2.0-2.5 years, with a lifecycle of 5 years based on operational hours of 12-16 hours per day [8].