花旗速度 --- Citi Velocity CitiPoint Asia: First Read Of Impact Of Tariffs On Global Trade - US Is Winning Trade War Game 花旗亚洲：⾸次解读关税对全球贸易的影响--美国正在赢得贸易战游戏 Markets 市场 Mohammed Apabhai 穆罕默德-阿帕巴伊 20 hours ago Asia Trading Strategies 亚洲交易策略 NOT A PRODUCT OF CITI RESEARCH ‒ INTENDED FOR INSTITUTIONAL CLIENTS ONLY. ⾮花旗研究部产品，仅供机构客⼾使⽤。 MACRO: FIRST READ OF IMPACT OF TARIFFS ON GLOBAL TRADE - US IS WINNING TRADE WAR GAME 宏观：⾸次解读关税对全球贸易的影响--美国正在赢得贸易战游戏 Markets have been looking for signs of the impact of the Trade War on ...

Investment Rating - The report maintains a cautious outlook on China's exports, forecasting a contraction of -5% YoY for the entire year due to prohibitive US tariffs affecting approximately 80% of China's exports [7]. Core Insights - China's exports growth surged by 12.4% YoY in March, significantly exceeding market forecasts, while imports contracted at a slower pace of -4.3% YoY, leading to a trade surplus of US$102.6 billion [3][4]. - The strong export performance is attributed to front-loading activities in anticipation of US tariffs, with exports to the US rising by 9.1% YoY in March [6]. - The global manufacturing cycle remains resilient, supporting China's exports in machinery and electrical products, although semiconductor-related exports are moderating due to slowing demand [6][7]. Summary by Sections Exports Performance - Exports growth in March was robust, driven by favorable base effects and broad-based recovery across trade partners [4][6]. - For Q1 2025, exports grew by 5.7% YoY, while imports fell by 7.0% YoY, marking a six-quarter low [3]. Import Dynamics - Imports continued to contract, primarily due to sluggish domestic demand, with significant declines in iron ore and agricultural commodities [5][6]. - Notably, iron ore imports fell by -27.0% YoY in value, while oil imports showed improvement, declining only -3.7% YoY [6]. Trade Relationships - China's exports to ASEAN and other emerging markets were strong, with exports to ASEAN increasing by 11.6% YoY in March, benefiting from trade re-routing and China's role as an intermediates supplier [6][7]. - Direct exports to the US, which accounted for 14.7% of total exports in 2024, are expected to decline due to high tariffs, but China may benefit from front-loading by other trade partners [7].

Investment Rating - The report suggests a positive outlook for the economy, indicating that monetary policy actions may be necessary to support growth amid trade disputes [1][6]. Core Insights - New credit data for March exceeded expectations, with new RMB loans at RMB3,640 billion and total social financing (TSF) at RMB5,888 billion, suggesting a solid economic condition prior to the escalation of trade disputes in April [3][5]. - The report highlights a sequential improvement in credit growth, with outstanding RMB loans growing at 8.4% YoY and TSF growth at 7.4% YoY, marking the first improvement since early 2023 [3][4]. - The housing market showed signs of weakness in April, with primary sales in the top 30 cities down 15.4% YoY, indicating a need for policy intervention to stabilize the economy [5][17]. - The anticipated sequence of monetary policy actions includes liquidity support, a reserve requirement ratio (RRR) cut, and a rate cut, with expectations of 100 basis points of RRR cuts and 40 basis points of rate cuts for the year [1][6]. Summary by Sections Credit Growth - New household short-term loans reached RMB484 billion and long-term loans rose to RMB505 billion in March, indicating a recovery in household borrowing [7]. - Corporate short-term loans were strong at RMB1,440 billion compared to RMB980 billion in March of the previous year, while long-term loans remained stable [7][16]. Monetary Policy Outlook - The report anticipates that monetary policy actions could resume in the second quarter of 2025, with a focus on liquidity support for exporters and potential RRR and rate cuts [1][6]. - The report notes that uncertainties remain high, particularly regarding tariff exemptions and semiconductor policies [6]. Government Bond Issuance - Government bond issuance was robust, reaching RMB1,483 billion in March, contributing to the overall financing environment [7][12].

Investment Rating - The report maintains a "Buy" rating for Huaming Power Equipment, indicating a positive outlook for the company's performance [6][27]. Core Insights - Huaming is expected to experience moderate net profit growth of 3% in 2025, driven by strong overseas revenues, while the 2026 net profit is projected to decrease by 1% due to lower domestic revenues [27]. - The company anticipates double-digit growth in overseas tap changer revenues in 2025, with indirect export revenue growth outpacing direct exports [2][9]. - Domestic tap changer revenues are expected to grow at a low single-digit rate of 0-5% in 2025, influenced by steady growth in the grid business and limited upside from non-grid sectors [3][20]. Revenue and Profit Forecast - Total revenue is projected to increase from Rmb2,322 million in 2024 to Rmb2,518 million in 2025, reflecting an 8.4% growth [33]. - The gross profit margin is expected to stabilize around 50.4% in 2025, with a slight increase in the contribution from high-margin products [2][31]. - The net profit forecast for 2025 is Rmb690 million, with an expected net profit margin of 27.4% [26][33]. Financial Metrics - The report outlines key financial metrics, including a projected P/E ratio of 18.6x and a P/B ratio of 4.0x for 2025, indicating that the stock is relatively inexpensive compared to its earnings potential [6][33]. - The expected dividend yield is 4.0%, with a payout ratio of 75% in 2025 [6][33]. Market Dynamics - Huaming's overseas revenue is expected to double from Rmb274 million in 2023 to Rmb549 million by 2027, highlighting the company's growth strategy in international markets [2]. - The company is almost immune to US tariff risks, as its revenue from the US is minimal, primarily from non-grid customers [4][11]. Strategic Initiatives - Huaming plans to repurchase shares worth Rmb150-200 million before February 2026, reflecting confidence in its financial position [3][22]. - The company is considering building a production line in the US to meet local demand, despite challenges posed by investment restrictions [12][18].

14 Apr 2025 00:00:21 ET │ 18 pages Volatilityhas grippedmarkets following "LiberationDay."Atrecentlows,major equity markets were pricing in flat-ish EPS growth, but not a recession. While markets have subsequently priced out some tariff-related risks, EPS downgrades are likely to continue. Late last year, we suggested investors shouldbegindiversifyingaway fromtheUS—recentdevelopments (DeepSeek, Europeanfiscal,tradetensions)havereinforcedthis view.WeupgradeJapanto Overweight, joining our pre-existing prefere ...

花旗速度 --- Citi Velocity CitiPoint Asia: Turmoil In The Treasury Market? When To Start Panicking 花旗亚洲：国债市场动荡？何时开始恐慌 Markets 市 场 Mohammed Apabhai 穆罕默 Apr 11, 2025 1:03PM CST美国中部时间 2025 年 4 ⽉ 11 ⽇ 1:03PM Asia Trading Strategies 亚洲交易策略 NOT A PRODUCT OF CITI RESEARCH ‒ INTENDED FOR INSTITUTIONAL CLIENTS ONLY. ⾮花旗研究部产品，仅供机构客⼾使⽤。 MACRO: TURMOIL IN THE TREASURY MARKET? WHEN TO START PANICKING 宏观：国债市场动荡？何时开始恐慌 Press reports, including from the BBC and CNN, have suggested that one of the reasons why President Trump ba ...

花旗速度 CitiPoint Asia: Who Is Winning The Currency War - Why Europe Could Be Facing Disinflation 花旗观点亚洲：谁是货币战争的赢家--欧洲为何可能⾯临通货紧缩 Markets 市场 Mohammed Apabhai 穆罕默德-阿帕巴伊 21 hours ago Asia Trading Strategies 亚洲交易策略 NOT A PRODUCT OF CITI RESEARCH ‒ INTENDED FOR INSTITUTIONAL CLIENTS ONLY. ⾮花旗研究部产品，仅供机构客⼾使⽤。 MACRO: WHO IS WINNING THE CURRENCY WAR - WHY EUROPE IS FACING DISINFLATION 宏观：谁是货币战争的赢家--欧洲为何⾯临通货紧缩 In a recent piece we showed how the currency markets were an integral part of the trade war (How To Win A Trade ...

Investment Rating - The report does not explicitly provide an investment rating for the industry but indicates a cautious outlook due to escalating trade tensions and potential economic impacts [1][3]. Core Insights - China's recent retaliation against the additional 50% US tariffs is expected to have limited direct economic damage, as tariffs may already be at prohibitive levels. However, the escalation of tensions could hinder negotiations and increase risks in other sectors, particularly finance [1][3]. - The report anticipates a greater likelihood of domestic stimulus measures being implemented to support economic growth amid external shocks, with a focus on consumption and fiscal policy expansion [4][6]. Summary by Sections Tariffs and Trade Relations - China's tariffs on US goods have increased by an additional 50%, contributing to an overall 84% increase in tariffs recently [2]. - The US is a significant supplier for agricultural products, energy products, and high-end manufacturing goods, with China ramping up domestic production and potentially diversifying suppliers [2][3]. Economic Impact - The report suggests that the direct economic impact of the tariffs may be limited due to their prohibitive nature, and growth forecasts remain stable despite the tensions [2][3]. - Inflationary pressures from retaliatory tariffs are expected to be mild in the context of a deflationary macro backdrop [2]. Policy Outlook - The report predicts that fiscal policies will focus on expanding domestic demand, with potential funding of RMB 1 to 1.5 trillion expected mid-year [4][6]. - Monetary policy adjustments, including a 40 basis point cut in policy rates and a 100 basis point reduction in the reserve requirement ratio, are anticipated to support small and medium-sized enterprises [6].

Investment Rating - The report does not explicitly provide an investment rating for the industry but indicates expectations for a Fed rate cut in May or June due to anticipated economic slowdown [10]. Core Insights - The 90-day pause on reciprocal tariffs, excluding China, does not prevent a slowdown in US economic growth and inflation [4][10]. - The average effective tariff rate has increased by approximately 21 percentage points from the beginning of the year, raising concerns about trade uncertainty and its impact on growth [4][6]. - A surge in non-China imports is expected, which may dampen growth in Q2 [4][9]. Summary by Sections Tariff Impact - The baseline 10% tariff remains in place against all countries, with significant increases for many [6]. - New tariffs of 105% on Chinese goods are in addition to existing tariffs, contributing to a high effective tariff rate [6]. - Sector-specific tariffs on autos, aluminum, and steel are still enforced, with new tariffs anticipated on pharmaceuticals and semiconductors [6]. Economic Forecast - The report anticipates a slowdown in growth, leading to potential Fed policy rate cuts of 125 basis points this year [10]. - The dynamics of the 90-day tariff pause may lead to a temporary surge in imports, affecting Q2 growth negatively [9]. - Consumer spending may initially strengthen in Q2 but is expected to slow down in Q3 due to ongoing uncertainty [9].

Investment Rating - The report rates SG Micro as a "Buy" with a target price of Rmb115, reflecting a positive outlook for the company amid ongoing market dynamics [32][45]. Core Insights - The report identifies China's mature semiconductors, particularly analog, as defensive investments due to the recent 34% retaliatory tariff on US imports, which is expected to enhance local supply and reduce competition from US firms [1][3][14]. - SG Micro is highlighted as the top beneficiary of the tariff, with expectations of improved earnings and market share gains as US competitors face cost disadvantages [5][21]. - The report anticipates that the tariff will accelerate the localization of semiconductor supply in China, benefiting companies like SG Micro, Will Semi, and Maxscend [3][14][21]. Summary by Sections Market Overview - The US tariffs have limited direct impact on Chinese semiconductors, as most are shipped to ODM/EMS outside the US and are not subject to tariffs. However, there is an indirect effect on demand due to increased selling prices [2][11]. Company Analysis - SG Micro is projected to expand its market share as the cost advantage of Texas Instruments is eliminated by the tariff. The company is expected to benefit from an ongoing recovery in the analog segment and tariff protection against US competitors [4][5][21]. - Will Semi is also rated as a "Buy," with expectations of strong growth driven by its CMOS Image Sensors (CIS) business, particularly in the automotive sector [48][49]. - Maxscend is rated as a "Sell" due to concerns over rising investment costs and potential profitability pressures despite its leadership in the RFFE market [39][40]. Financial Projections - SG Micro's revenue forecasts for 2024E and 2025E have been adjusted to Rmb3,301 million and Rmb4,188 million respectively, reflecting a year-on-year growth of 26% and 27% [22]. - The report indicates that SG Micro's gross profit margin is expected to stabilize around 51.3% in 2025, with net profit projected to reach Rmb828 million [22][32]. Valuation - The target price for SG Micro is based on a forward P/E of 65x for 2025E EPS, justified by the anticipated recovery in the analog semiconductor market and reduced foreign competition due to tariffs [45][46].