Investment Focus - The report indicates that the market has entered a corrective phase, advising investors to take advantage of any rebound highs to trim positions and redeploy once the pull-back is complete [1][7] - The Hang Seng Index fell by 1.3%, while the Hang Seng Tech Index dropped by 1.5%, indicating a downward trend across major indices [1][7] - The report highlights the potential in blockchain and cross-border payment sectors driven by Hong Kong's forthcoming stable-coin ordinance, although the near-term staying power of this theme is limited [1][7] Market Conditions - Southbound capital flows recorded an inflow of HKD 28.1 billion, with short-selling turnover falling to 14% as Hong Kong shares retreated [2][9] - The AH premium remains stable at 141, indicating a challenging environment for further compression [2][9] - The report notes that the HIBOR remains low, but carry trades have pushed the USD/HKD exchange rate close to the weak-side convertibility limit of 7.85 [2][9] A-Share Market Insights - Micro-cap stocks continue to dominate turnover, with the Micro-Cap Index rising by 2.7% this week, but regulatory tightening on speculation is leading to significant losses in these stocks [3][10] - The SSE 50 index has already declined by 1.2%, suggesting that losses in micro-caps could further escalate [3][10] - The report advises investors to avoid overheated A-share micro-caps and Hong Kong "new consumption" plays for the time being, recommending patience until clearer support levels are reached [3][11] Sector Recommendations - The report suggests accumulating positions in internet and AI application leaders during the pull-back, with potential catalysts including the launch of DeepSeek R2 and accelerated deployment of AI agents [3][11] - It is recommended to consider incremental investments in large- and mid-cap stocks if they experience significant corrections [3][11]

Investment Rating - The report maintains a positive outlook on innovative drugs and related sectors, recommending continuous attention to innovative pharmaceuticals and biotech companies [1][6][25]. Core Insights - The $6 billion deal between 3SBio and Pfizer is expected to further stimulate the innovative drug market, indicating strong demand for Chinese innovative drug assets despite geopolitical tensions [1][26]. - The A-share pharmaceutical sector outperformed the market, with a 1.8% increase during the third week of May 2025, while the overall index fell by 0.6% [1][9][27]. - The report highlights strong performance in specific sub-sectors such as chemical raw materials (+8.8%), chemical preparations (+5.1%), and biological products (+4.0%) [1][15][27]. Summary by Sections Continuous Focus on Innovative Drugs - The report emphasizes the high growth potential of innovative drugs and suggests monitoring companies like Jiangsu Heng Rui Medicine, Huadong Medicine, and 3SBio, among others [1][6][25]. A-Share Pharmaceutical Sector Performance - In the third week of May 2025, the A-share pharmaceutical sector ranked first among Shenwan primary industries, with notable individual stock performances [1][9][27]. Hong Kong and U.S. Pharmaceutical Sector Performance - The report notes that the Hong Kong and U.S. pharmaceutical sectors outperformed their respective markets during the same period, with significant gains in specific stocks [1][21][28].

Investment Rating - The report assigns an "Outperform" rating to multiple companies in the healthcare sector, including JD Health, WuXi Biologics, China Biologic Products, and others [1]. Core Insights - The Hang Seng Healthcare Index increased by 3.4% during the week of May 26-30, 2025, outperforming the Hang Seng Index by 20.3 percentage points year-to-date [4][39]. - The report highlights significant market movements driven by the suspension of President Trump's tariff policy and the release of the 2025 ASCO abstracts, which increased investor interest in innovative drugs [40][44]. - The report notes that the innovative drug sector is currently experiencing manageable geopolitical risks despite ongoing monitoring of tariff policy impacts [40]. Summary by Sections Industry Performance - The Hang Seng Healthcare Index has risen by 36.4% since the beginning of 2025, with various sub-sectors showing different performance levels: Pharmaceuticals +8.5%, CXO/Research Services +5.6%, Biotech +2.6%, and Internet Healthcare -1.1% [4][26]. - Notable gainers in the Hong Kong healthcare sector include JOINN Laboratories (+24.4%), Simcere Pharmaceutical (+24.2%), and CSPC Pharmaceutical (+22.4%) [41]. Recent Developments - The 2025 ASCO abstracts were released, showcasing promising data from companies like Innovent Biologics and Kelun Biotech, which contributed to heightened interest in the innovative drug sector [44]. - The HARMONi study by Summit Therapeutics reported positive topline results, indicating that Ivonescimab combined with chemotherapy met the primary endpoint of progression-free survival in NSCLC patients [18][44]. Company-Specific Updates - CSPC Pharmaceutical reported a Q1 2025 revenue of 7 billion yuan, with ongoing negotiations for three potential deals valued at approximately 5 billion USD [22][44]. - Xinnuowei Pharmaceutical entered a licensing agreement for the CLDN18.2 ADC program, receiving an upfront payment of 130 million USD and potential milestone payments totaling up to 1.34 billion USD [23][44].

Investment Rating - The report does not specify explicit investment ratings for the Southeast Asia Staples and Discretionary sectors. Core Insights - Economic growth in Indonesia and Thailand has slowed, with Indonesia's GDP growth at 4.87% year-on-year in Q1 2025, the lowest since Q3 2021, primarily due to weak domestic consumption and reduced government spending [15] - Thailand's GDP growth was 3.1% year-on-year in Q1 2025, exceeding expectations but lower than the previous quarter's 3.3% [23] Economic Data - Indonesia's GDP growth in Q1 2025 was 4.87%, marking a decline from previous quarters, influenced by weak domestic consumption and government spending cuts [15] - Thailand's GDP growth in Q1 2025 was 3.1%, showing a slowdown from the previous quarter's 3.3% [23] - Vietnam's GDP growth reached 6.93% in Q1 2025, the highest for the first quarter from 2020 to 2025 [37] Inflation Trends - In April 2025, Indonesia's CPI increased by 1.95% year-on-year, driven by a rebound in consumption during the Eid holiday [18] - Thailand experienced its first deflation since March 2024, with a CPI decrease of 0.22% in March 2025 [24] - Vietnam's CPI rose by 3.12% year-on-year in April 2025, with core inflation increasing to 3.14% [2] Consumer Sentiment and Retail Performance - Consumer confidence in Indonesia declined, with the consumer confidence index at 121.10 in March 2025, down from 123.80 in the previous year [20] - Malaysia's leading index rose to 112.5 in March 2025, indicating potential future economic activity [3] - In April 2025, Vietnam's retail sales index for food and beverages showed a year-on-year decline of 1.66% [20] Market Performance - In April 2025, stock indices in Indonesia, Thailand, and Malaysia rose by 3.9%, 2.5%, and 1.8% respectively, while Singapore and Vietnam indices fell by 3.4% and 6.9% [13] - The report highlights that only Vietnam's consumer sectors outperformed the indices, while other markets' consumer sectors lagged [3] Valuation Metrics - As of April 2025, Indonesia's essential and discretionary consumer sectors had historical PE ratios at 1% and 3% respectively, while Thailand's were at 4% and 62% [4] - Singapore's essential and discretionary consumer sectors had historical PE ratios of 36% and 33% respectively [4]

Investment Rating - The report suggests a focus on companies such as Howmet Aerospace, HEICO, LOAR, Rheinmetall AG, RTX Corporation, and BAE Systems [9] Core Insights - The U.S. government's halt on exports of certain jet engine technology to China poses a significant challenge to the development of China's indigenous commercial aircraft industry, particularly affecting flagship aircraft projects that rely on international collaboration for critical propulsion systems [2][6] - The export controls will jeopardize the supply of these systems to China, severely impacting production schedules and future market delivery capabilities [6][7] - While China is pursuing independent R&D to seek alternatives, the high technological barriers and lengthy development cycles in the aerospace engine sector make it difficult to fully compensate for the absence of mature Western products in the short term [2][6] - Should China's aircraft programs decelerate due to supply chain disruptions, there may be a short-term redirection of aircraft procurement demand back to established Western manufacturers, benefiting their extensive supply networks [7][8] - Geopolitically driven export restrictions will compel global aerospace companies to reassess and adjust their supply chain security and resilience, potentially leading to shifts towards regions with lower geopolitical risk [7][8] - The escalation of competition in aerospace engine technology highlights the geopolitical risks facing global high-end manufacturing and presents new challenges for Western Aerospace & Defense companies [8] - Maintaining technological leadership and building resilient, diversified supply chains will be crucial for Western A&D companies to navigate future uncertainties [8]

Investment Focus - Amazon is highlighted as a top pick due to its leading position in the cloud industry with a global market share of 30%, benefiting from scale effects and stable margin improvements [1] - Meta is expected to see continued user growth and profitability enhancement, with AI marketing initiatives starting to yield results [1] - Alphabet is noted for its strong self-developed capabilities in the cloud space, with expectations of margin improvement and a robust bottom line driven by AI and advertising [1] - Meituan demonstrates a strong cost advantage in delivery, with a significant cash flow generation capacity that supports its competitive position [1] - Broadcom is projected to exceed $20.5 billion in ASIC revenue by 2026, with new major clients contributing to growth [1] - NVIDIA is expected to benefit from macro improvements and stable downstream capital expenditures, with strong product demand anticipated [1] Industry Insights - The AI hardware sector is experiencing explosive growth, with AI server revenue expected to increase by over 150% year-on-year in 2024, driven by major cloud providers' capital expenditure expansions [2] - Samsung is positioned to outperform due to significant competitive advantages and upcoming GPU releases [2] - Lenovo's server business is expected to see substantial growth, with a projected revenue of 498.5 billion won in the 2024/25 fiscal year [2] - TSMC's core mobile business remains robust, with a focus on high-end smartphone models driving ASP increases [2] - The healthcare sector, particularly JD Health, is seeing significant revenue growth, with Q1 2025 revenue reaching 16.65 billion yuan, a year-on-year increase of 25.5% [5] - The pharmaceutical sector is expected to benefit from the growth of the obesity drug market, with strong performance anticipated from WuXi AppTec [5] Company Performance - Tencent is expected to benefit significantly from AI advancements, with revenue and profit forecasts for 2025 being raised [3] - New Oriental is seeing growth driven by online gaming, with potential profits exceeding expectations [3] - Futu Holdings is projected to see a customer AUM growth of 11% CAGR from 2025 to 2027, supported by its low-commission model and strong customer service [3] - Century Internet is positioned well in the IDC space, with expectations of strong demand for AI-related infrastructure [4] - The healthcare sector is seeing a recovery, with companies like Kangzhe Pharmaceuticals focusing on core business areas for growth [4]

Investment Rating - The report maintains an "OUTPERFORM" rating for Uni-President China Holdings with a target price of HK$12.10, representing a potential upside of 15.0% from the current price of HK$10.36 [1][6]. Core Insights - The company has shown steady performance growth and continuous improvement in profitability, with a net profit after tax of 602 million yuan in 1Q25, a year-on-year increase of 32%, exceeding market expectations [4][11]. - The beverage segment performed exceptionally well, with low double-digit revenue growth in 1Q25, driven by improved gross profit margins and effective freezer deployment enhancing sales efficiency [4][12]. - The food segment also demonstrated stable performance, with instant noodle revenue achieving high single-digit growth despite slight declines in gross profit margins due to palm oil cost pressures [5][13]. - The dividend yield remains attractive, with a projected yield of 5.2% based on a consistent 100% dividend payout ratio, reflecting the company's commitment to shareholder returns [5][14]. Financial Performance Summary - Revenue projections for 2025-2027 are estimated at 32.45 billion yuan, 34.19 billion yuan, and 36.00 billion yuan, with year-on-year growth rates of 7.0%, 5.4%, and 5.3% respectively [6][15]. - The net profit attributable to the parent company is forecasted to be 2.17 billion yuan in 2025, with corresponding EPS of 0.50 yuan, reflecting a year-on-year growth of 17.4% [6][15]. - The company's gross profit margin is expected to improve from 33.8% in 2025 to 34.4% in 2027, indicating enhanced profitability [6][10]. Market Position and Valuation - The report highlights that Uni-President's dividend yield above 4.5% is attractive compared to its peers, with a projected P/E ratio of 22x for 2025 [6][15]. - The company is positioned favorably within the beverage and food sectors, with strong brand recognition and product innovation driving growth [4][12][13].

Group 1 - The report indicates that the demand for express delivery services is expected to maintain a strong growth momentum, with a projected business volume growth of over 20% year-on-year in the first four months of 2025, driven by structural changes in demand such as small parcelization and new consumption models like live e-commerce and community group buying [3][19][37] - Price competition is intensifying, with a year-on-year decline in single ticket revenue of 8.3% in the first four months of 2025, reflecting a heightened focus on market share among leading companies. However, the report anticipates that the competition will remain within a healthy range due to regulatory measures against malicious competition [4][19][53] - The report highlights that leading express delivery companies, such as Zhongtong and Shunfeng, are expected to maintain their competitive edge due to their asset barriers, cash reserves, and profitability, which provide resilience in the face of price competition [4][25][80] Group 2 - The report notes that the express delivery industry has experienced slower-than-expected concentration in recent years, with the CR8 index remaining stable between 84-85.3 from early 2022 to the end of 2024, indicating a gradual shift of market share towards leading companies [15][66] - The report emphasizes that the demand in lower-tier markets, particularly in central and western regions, is rapidly increasing, supported by government initiatives and the expansion of e-commerce channels [46][49] - The report outlines various government policies aimed at stimulating domestic demand, which are expected to further boost the express delivery sector, including consumption vouchers and support for new consumption models [47][48][50] Group 3 - The report discusses the differentiation in performance among express delivery companies in Q1 2025, with Shunfeng achieving over 10% growth due to its cost reduction capabilities, while Zhongtong's profitability improved despite a decline in single ticket gross margin [25][26][80] - The report indicates that Zhongtong is shifting its focus from profit maximization to market share growth in 2025, highlighting the importance of price competition as a means to capture market share [51][52] - The report concludes that the long-term outlook for the express delivery industry remains positive, with leading companies expected to continue gaining market share and profitability due to their competitive advantages [66][75]

Investment Rating - The report rates the industry as "Overweight" [1] Core Insights - Thermal power remains the most promising yet divisive sector, with notable performance differences between northern and southern thermal power [3][4] - April power generation growth was 0.9%, while electricity consumption grew by 4.7% [4] - The report highlights a significant increase in new energy supply from the Western Inner Mongolia grid, with daily average clearing of 350 million kWh, a year-over-year increase of 31% [4] Summary by Sections Power Generation and Consumption - In April, industrial power generation reached 711.1 billion kWh, a year-over-year increase of 0.9%, while total electricity consumption was 772.1 billion kWh, up 4.7% [4] - The year-over-year changes for different power sources in April were: thermal power -2.3%, hydro -6.5%, nuclear +12.4%, wind +12.7%, and photovoltaic +16.7% [4] Market Dynamics - Coal prices continue to decline, and the profit growth for the thermal power industry in Q2 is expected to be promising [3][4] - The average spot clearing price in the market dropped from RMB 0.344/kWh in January to RMB 0.153/kWh in April, indicating a significant price reduction [4] Provincial Market Developments - Shanghai is advancing its power spot market with plans for daily continuous trading and expansion of green power trading participants [4] - Chongqing aims to transition to continuous settlement trials in its power spot market by the end of 2025, having conducted multiple trial runs since 2022 [4]

Investment Rating - The report does not explicitly state an investment rating for the industry or specific companies involved Core Insights - Xiaomi's 15th Anniversary Event showcased the launch of self-developed chips, flagship smartphone, high-end tablet, and first SUV, marking a full implementation of its "Human-Car-Home" ecosystem strategy [1][6] - The XRing O1 chip represents a significant technological breakthrough, making Xiaomi the fourth global company to develop a 3nm SoC, which integrates 19 billion transistors and outperforms Apple's A18 Pro in multi-core performance by 5% while reducing power consumption by 35% [2][7] - Xiaomi's strategy involves a dual approach of self-research and strategic cooperation with Qualcomm, maintaining a three-year agreement to ensure Snapdragon chips remain in over 35% of flagship models while gradually reducing reliance on external suppliers [3][8] - The product portfolio has been upgraded to create synergy across devices, including smartphones, tablets, and vehicles, enhancing the overall ecosystem [4][9] Summary by Sections Event - On May 22, 2025, Xiaomi launched its self-developed chips (XRing O1 and T1), flagship smartphone (Xiaomi 15S Pro), high-end tablet (Pad 7 Ultra), and first SUV (YU7) [1][6] Technology Breakthrough - The XRing O1 chip, built on TSMC's 2nd-gen 3nm process, features a 10-core CPU and a 16-core GPU, significantly enhancing performance and energy efficiency, while reducing chip costs for premium phones by approximately 20% [2][7] Strategic Cooperation - Xiaomi's relationship with Qualcomm is characterized by a balance of self-reliance through the XRing O1 chip and continued partnership, ensuring market stability while pursuing high-end product development [3][8] Product Portfolio - The Xiaomi 15S Pro is priced from RMB 5,499, targeting the iPhone market with advanced features [5][11] - The Xiaomi Pad 7 Ultra, starting at RMB 5,699, aims to compete with the iPad Pro [5][11] - The YU7 SUV features an 835km range and L3 autonomy, positioning it in the premium EV segment while facing competition from Tesla and Huawei [5][11]