Scores on the Doors: gold 19.5%, govt bonds 4.3%, IG 2.4%, cash 1.2%, HY 0.2%, commodities -5.5%, stocks -6.2%, US dollar -7.0%, oil -16.1%, crypto -38.8% YTD. Zeitgeist: "I wouldn't want to be a waiter in Boca Raton tonight," retired investor on US muni bond meltdown. The Flow Show US Exceptionalism to US Repudiation Zeitgeist: "Musk owned the long-end in Q1, but now the long-end owns Trump." The Biggest Picture: "US exceptionalism" ending, "US repudiation" starting; end of era of "US buys RoW goods-RoW bu ...

LO relative weight in S&P 500 stocks with high foreign sales exposure (top decile) 0.7 0.9 1.1 1.3 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Active managers' holdings update But how do you really feel? Investor positioning tells us… Liberation Day: another plug for Large Cap Value Any tariff news tomorrow that fuels stagflation concerns could drive further upside in Utilities, Energy and Staples, and downside in exporters (see Exhibit 13 for geographical breakdown of US stocks with high foreign sal ...

Accessible version China Watch March China macro tour takeaways: Bracing for higher tariffs We hosted our China macro tour during March 25-26 in Beijing. With investors from within China and outside, we had 11 meetings with academics, policy advisors and industry experts. Below is a summary of our key takeaways from the tour. Trade: consensus expects a bumpy road ahead Both Chinese and US experts largely agreed that additional US tariff hikes on Chinese products are likely and that China stands ready to rea ...

Investment Rating - The investment rating for NVIDIA Corporation is maintained as BUY with a price objective of 200.00 USD, while the current price is 113.76 USD [1]. Core Insights - The report emphasizes the geopolitical risks associated with the implementation of the US government's "AI Diffusion Rules," which could impact NVIDIA's earnings. However, the valuation remains compelling, with an implied price-to-earnings (P/E) ratio of 20x to 26x for CY26, significantly below NVIDIA's historical average of 36x [1][21]. - The report outlines potential earnings per share (EPS) impacts ranging from 0% to 23% for CY26E due to direct exposure to China and the effects of the AI Diffusion Rules. Even in a bear-case scenario, the EPS is projected to be between $4.40 and $5.05, indicating an attractive P/E ratio of 22.5x to 26x [2][14]. - The anticipated recovery in gross margins (GMs) in the second half of the year is expected to be driven by the ramp-up of the B300 Blackwell Ultra products, which could restore upward momentum in EPS revisions [3][22]. Summary by Sections Earnings Estimates - EPS estimates for NVIDIA are projected as follows: 2024A: $1.30, 2025A: $2.99, 2026E: $4.50, 2027E: $6.07, 2028E: $6.77, with a year-over-year change of 293.9% for 2024A and 50.5% for 2026E [4]. Valuation Metrics - NVIDIA is currently trading at approximately 20x CY26E P/E, compared to a historical median of 36x. The PEG ratio is at 0.7x, below the typical range for high-growth companies [21][28]. Market Dynamics - The report highlights NVIDIA's transformation from a traditional PC graphics chip vendor to a key player in high-end gaming, enterprise graphics, cloud computing, and automotive markets, supported by a solid balance sheet and commitment to capital returns [10][9]. Scenario Analysis - The report presents three scenarios regarding potential sales impacts from China restrictions: 1. Bull-case: No impact, with EPS around $5.74. 2. Middle-case: Moderate impact, with EPS between $5.15 and $5.43. 3. Bear-case: Significant impact, with EPS between $4.40 and $5.05 [18][19][20]. Financial Performance - NVIDIA's sales are projected to grow significantly, with estimates of $60,922 million in 2024A, $130,497 million in 2025A, and $202,116 million in 2026E, reflecting a year-over-year change of 125.9% for 2024A [8]. Cash Flow and Returns - Free cash flow is expected to increase from $27,023 million in 2024A to $155,700 million in 2028E, indicating strong cash generation capabilities [8]. Competitive Position - NVIDIA's competitive position is bolstered by its leadership in AI chip technology, with a projected return on equity (ROE) of 97.6% for 2026E, showcasing its profitability and efficiency [6][8]. Conclusion - Overall, the report presents a positive outlook for NVIDIA, highlighting its growth potential despite geopolitical risks and market challenges, making it an attractive investment opportunity in the semiconductor sector [1][10].

Accessible version Liquidity: 8%, very loose. The 10-year government bond yield remains at low levels but has rebounded to 1.83% in Mar-2025 from its record lows at 1.6% in Jan-2025. Fund flow: 22%, strong. Turnover/market cap stands at 176% in Mar-2025, above its long-term average of 107% since 2007. Earnings: 83%, very negative. CSI 300 earnings downgrade has recovered from -12% YoY in Sep-24 to -5% in Mar-25, although it remains significantly negative. China A-share W&W Indicator - Monthly The W&W Indica ...

Investment Rating - The report upgrades ZTE Corporation (H/A) to Buy from Neutral with new price objectives of HK$32 for H shares and CNY45 for A shares [1][15][17]. Core Insights - ZTE's server business is expected to see robust expansion in 2024, driven by increased orders from Chinese telecom companies and cloud service providers (CSPs) [1][12][43]. - Despite potential near-term earnings pressure due to a soft carrier business, ZTE is positioned for a re-rating based on a positive outlook for China's Internet Data Centers (IDCs), share gain potential amid rising server demand, and its in-house CPU capabilities [1][12][15]. - The valuation of ZTE is supported by a re-rating of China IDC names, reflecting the market's growing confidence in server demand, particularly with the acceleration of AI applications [16][17]. Summary by Sections Investment Rating Changes - ZTE-H's price objective is raised to HK$32 from HK$21, and ZTE-A's price objective is lifted to CNY45 from CNY31 [3][17]. - The report reflects a change in earnings estimates for 2025-26, with a reduction of 12-17% due to margin pressures [17][18]. Financial Performance - ZTE's server sales nearly doubled year-on-year to CNY10 billion in 2024, representing an 8% mix, primarily due to breakthroughs with major CSPs [2][43]. - The company is expected to maintain robust growth into 2025-26, supported by strong capital expenditures from CSPs and a focus on data centers by Chinese telecoms [2][43]. Valuation Metrics - The report indicates that ZTE-H/ZTE-A trades at a discount compared to other Chinese server peers, with a current P/E of 13x for 2026E [1][32]. - The valuation gap between ZTE-A and ZTE-H has become volatile, suggesting that historical valuation trends may be more suitable for assessing ZTE-A's value [17][32].

Investment Rating - The report highlights a "Buy" rating for Kingsoft Corp and Agora in the software sector, as well as VNET and GDS in the data center space [1][18]. Core Insights - The launch of the AI agent "Manus" marks a significant advancement in AI technology, transitioning from traditional large language models (LLMs) to more autonomous AI agents capable of independent thinking and complex task execution [1][2]. - Manus has demonstrated superior performance in benchmark tests compared to OpenAI's DeepResearch, indicating strong technological capabilities [2][10]. - The introduction of Manus is expected to accelerate the development and application of AI agents, leading to increased demand for AI computing power and fostering innovation in software products, particularly in office software, ERP, and financial software [1][3]. Summary by Sections Industry Overview - Manus, developed by Butterfly Effect HK Limited, is the first general AI agent capable of planning and executing tasks independently, outperforming existing LLMs [1][2]. - The report anticipates a shift in the industry towards more sophisticated AI applications, which will require enhanced AI computing resources [1][3]. Product Innovation - The capabilities of Manus suggest that Chinese software companies can innovate their product offerings, particularly in ERP and office automation sectors [3]. - Companies like Kingdee and Yonyou are already integrating AI agents into their products, which could lead to enhanced user experiences and operational efficiencies [3]. Company Analysis - Kingsoft Corp is highlighted for its potential in AI-powered office software, with a projected price objective of HK$53 based on a 30x forward P/E ratio [23]. - Agora is noted for its growth potential, with a price objective of US$7.1 based on a 5x forward estimated P/S ratio [19]. - GDS Holdings has a price objective of US$49.3, reflecting a strong growth outlook for its domestic and international business segments [21]. - VNET Group is projected to have a price objective of US$14.5, based on a 14x forward estimated EV/EBITDA [25].