Macro Commentary - In 2026, China's deflationary pressure continues to ease, with January CPI growth slowing to 0.2% due to the impact of the Spring Festival and food price fluctuations. Core inflation remains strong, driven by price increases in durable goods, travel services, and gold jewelry [2] - PPI exceeded market expectations again, with upstream price increases beginning to transmit to midstream and downstream sectors, particularly in the non-ferrous metals industry, while consumer goods PPI remains relatively weak [2] - It is anticipated that price levels will continue to rise moderately in 2026, driven by antitrust movements, AI-related investments, and rising global commodity prices, which will enhance corporate profitability and boost capital market performance in raw materials and cyclical industries [2] - CPI and PPI are expected to rebound from 0.1% and -2.6% in 2025 to 0.9% and 0.5% in 2026, respectively [2] Market Performance - The Hang Seng Index closed at 27,266, up 0.31% for the day and 6.38% year-to-date. The Hang Seng Tech Index rose nearly 1% [2] - The Shanghai Composite Index slightly increased to 4,132, marking a "seven consecutive days" rise [4] - The performance of various sectors in the Hong Kong stock market showed mixed results, with the Hang Seng Property Index up 20.44% year-to-date [3] Company Commentary - NetEase (NTES US) reported 4Q25 earnings with total revenue growing 3% year-on-year to 27.5 billion RMB, which was 4% lower than Bloomberg consensus expectations, primarily due to slower-than-expected growth in gaming revenue and extended revenue recognition periods [5] - Operating profit increased by 6% year-on-year to 8.3 billion RMB, falling short of consensus expectations by 6% [5] - Despite the revenue miss, the outlook for FY26E revenue growth remains positive, supported by a 34% year-on-year increase in contract liabilities in 4Q25 and the anticipated launch of several major new products in FY26 [5] - The target price for NetEase has been adjusted to $161.5 from $164.0, maintaining a "Buy" rating [5]

Investment Rating - The report maintains a BUY rating for NetEase, indicating a potential return of over 15% over the next 12 months [19]. Core Insights - NetEase reported a total revenue increase of 3% year-over-year to RMB 27.5 billion in 4Q25, which was 4% below Bloomberg consensus estimates due to slower-than-expected games revenue growth and a prolonged revenue recognition period [1]. - Operating income grew by 6% year-over-year to RMB 8.3 billion, also falling short of consensus estimates by 6% [1]. - Contract liabilities increased by 34% year-over-year in 4Q25, suggesting a positive outlook for revenue growth in FY26, supported by several highly anticipated game launches [1][8]. - The target price for NetEase has been slightly adjusted to US$161.5 from the previous US$164.0, reflecting a 30.7% upside from the current price of US$123.52 [3][12]. Financial Performance - For FY26E, total revenue is projected to reach RMB 120.8 billion, with adjusted net profit expected at RMB 41.4 billion, reflecting a growth of 10.5% year-over-year [2][9]. - Gross margin is expected to improve to 64.8% in FY26E, while operating margin is projected to be 33.0% [9][10]. - The company has maintained a decent shareholder return of RMB 14.5 billion in 2025, which is approximately 3% of its market capitalization [8]. Business Segments - The online games segment is valued at US$142.1 billion, accounting for 88% of the total valuation, based on a 17x EV/EBIT multiple for FY26E [12]. - Youdao and NetEase Cloud Music are valued at US$0.7 billion and US$3.4 billion, respectively, based on industry-average multiples [12]. - The innovative businesses segment is valued at US$1.5 billion, with net cash contributing an additional US$13.8 billion to the overall valuation [12]. Market Position - NetEase's market capitalization stands at approximately US$78.7 billion, with an average trading volume of US$92.3 million over the past three months [4]. - The stock has experienced a decline of 11.3% over the past month and 13.2% over the past three months, indicating some volatility in its performance [5]. Future Outlook - Several highly anticipated game launches are scheduled for FY26, including "Sea of Remnants" and "YaoYaoQi," which are expected to drive revenue growth [1][8]. - The integration of AI into various phases of game development is expected to enhance quality and efficiency, positioning the company favorably in the competitive landscape [8].

Company Insights - Geekplus (2590 HK, Buy, Target Price: HKD 26.7) has officially launched Gino 1, the world's first general-purpose robot designed specifically for warehouse scenarios, which is expected to open up more application areas in warehouse automation [1] - Gino 1 is capable of performing multiple warehouse tasks including picking, moving boxes, packing, and inspection, and will be offered to customers as a solution alongside existing Autonomous Mobile Robot (AMR) products before mass production [1] - Datadog (DDOG US, Buy, Target Price: USD 196.90) reported Q4 2025 revenue of USD 953.2 million, a year-on-year increase of 29.2%, driven by accelerated revenue growth from non-AI customers and strong demand from AI-native clients [1] - Datadog's non-GAAP net profit for Q4 2025 was USD 217.4 million, up 22.5% year-on-year, exceeding both internal and market expectations due to better-than-expected revenue and operational leverage [1] - For the full year 2025, Datadog expects total revenue to grow by 27.7% to USD 3.4 billion, with a non-GAAP operating margin of 22.4% [1] - Management indicated that the trend of accelerating revenue growth from non-AI customers continued into January 2026, guiding for Q1 2026 revenue growth of 25%-26% [1] - The revenue growth forecast for 2026 is set at 18%-20%, with a non-GAAP operating margin of 20%-22%, reflecting a cautious approach towards AI-native customer revenue growth assumptions [1] - The target price for Datadog has been adjusted to USD 196.90 based on a 16.3x EV/Sales for 2026, which is at a level one standard deviation above the two-year average [1]

Investment Rating - The report maintains a "BUY" rating for Datadog (DDOG US), indicating a potential return of over 15% over the next 12 months [20]. Core Insights - Datadog reported total revenue of US$953.2 million for 4Q25, reflecting a 29.2% year-over-year growth, which is 4% above both the forecast and Bloomberg consensus [1] - The company experienced strong revenue growth from both non-AI customers and AI-native customers, with non-GAAP net income after tax adjustments reaching US$217.4 million, up 22.5% year-over-year [1] - For 2025, total revenue is projected to grow by 27.7% year-over-year to US$3.4 billion, with a non-GAAP operating profit margin (OPM) of 22.4% [1] - Management has guided for 1Q26 revenue growth of 25-26% year-over-year, with a conservative full-year revenue growth forecast of 18-20% for 2026 [1] Financial Performance - Datadog's platform had over 32,700 customers by the end of 4Q25, a 9% increase year-over-year, with significant growth in large customers [8] - The company reported a remaining performance obligation (RPO) of US$3.46 billion, up 52% year-over-year, indicating strong future revenue visibility [8] - The net dollar-based retention rate was approximately 120% in 4Q25, consistent with the previous quarter and up from high-110% in 4Q24 [8] Revenue Forecasts - Revenue projections for FY26E are set at US$4.1 billion, representing a year-over-year growth of approximately 18-20% [10] - Adjusted net profit for FY26E is expected to be between US$779.2 million and US$792.7 million, with an adjusted EPS of US$2.08-2.16 [10] Target Price and Valuation - The target price for Datadog has been adjusted to US$196.9 from US$203.7, based on a valuation of 16.3x 2026E EV/sales [1][2] - The current price of Datadog is US$114.01, indicating a potential upside of 72.7% to the target price [2]

Investment Rating - The report maintains a "BUY" rating for Geekplus, indicating potential for over 15% return in the next 12 months [1][17]. Core Insights - Geekplus has officially launched Gino 1, the world's first general-purpose robot designed for warehousing, which is expected to enhance its position in the warehouse automation market [1]. - The company is projected to experience significant revenue growth, with estimates of RMB 2,409 million for FY24, RMB 3,176 million for FY25, and RMB 4,316 million for FY26, reflecting year-on-year growth rates of 12.4%, 31.9%, and 35.9% respectively [2]. - The revenue from AMR solutions is expected to grow significantly, with a projected increase of 70.3% in FY24 and 32.0% in FY25 [13]. Financial Summary - For FY23, Geekplus reported revenue of RMB 2,143 million, with a year-on-year growth of 47.6% [2]. - Adjusted net profit is expected to turn positive by FY25, reaching RMB 112 million, and further increasing to RMB 401.6 million in FY26 [2]. - The company’s gross profit margin is projected to improve from 30.8% in FY23 to 39.0% by FY27 [15]. Market Position and Strategy - Geekplus is positioned to capitalize on the increasing penetration of warehouse fulfillment AMRs, with 80% of its revenue coming from overseas markets in the first half of FY25 [7]. - The company aims to expand its solutions offering by integrating embodied intelligence, which includes AI-powered robotic arms for picking and packaging tasks [7]. Share Performance - The stock has shown strong performance, with a 1-month increase of 11.3% and a 6-month increase of 50.2% [6]. - The current market capitalization of Geekplus is approximately HK$ 37.88 billion [4]. Target Price - The target price for Geekplus is set at HK$ 26.70, indicating a downside of 4.4% from the current price of HK$ 27.94 [3].

Report Industry Investment Rating - No specific industry investment rating is provided in the report. Core Viewpoints - Yesterday, real - money and PB accounts showed buying interests in Australian, Chinese, European, Japanese and Korean bank/corporate FRNs before the Chinese New Year holiday. The report maintains a buy recommendation on BSFR 6.375 Perp and BSFR 35 [2]. - FABUH's FY25 net profit surged 24% year - on - year to AED21.1bn, and the report maintains a buy on FABUH 6.32 04/04/34 and FABUH 5.804 01/16/35 [3][7]. - Fitch upgraded China Vanke to CC from RD on completion of distressed debt exchange and affirmed Vanke HK's CC rating [2][17]. Summary by Directory Trading Desk Comments - Buying interests in FRNs: Real - money and PB accounts sought to lock in yields on Australian, Chinese, European, Japanese and Korean bank/corporate FRNs before the Chinese New Year holiday [2]. - Middle East bonds: BSFR 6.375 Perp and BSFR 35 edged 0.1pt higher; FABUH 34 - 35s were unchanged to 0.2pt higher [2]. - Global sales: Global real - money and PB accounts sold long - end KSAs and long - dated China TMT papers (maturities > 20 years) [2]. - Greater China higher - yielding space: WESCHI 28/LIFUNG 5.25 Perp closed 0.3 - 0.4pt higher; FAEACO 12.814 Perp/EHICAR 26 - 27 were down by 0.1 - 0.3pt [2]. - Chinese properties: VNKRLE '27 and '29 led the space and rose 1.3 - 1.6pts; YTD, VNKRLEs have surged 10.4 - 11.0pts, supported by loans and upfront cash payments. FUTLAN 28/FTLNHD 27 were unchanged to 0.2pt higher, FTLNHD 26 was 0.2pt lower. Seazen expects to get an offshore - debt quota before Chinese New Year and could launch a USD bond offering. DALWAN 28s were unchanged to 0.1pt higher [2]. - SE Asian space: VLLPM 27 - 29 dropped 1.0 - 1.6pts; ACPM 3.9 Perp was 0.7pt lower; INDYIJ 29/IHFLIN 27 - 30/VEDLN 28 - 33s and the ReNew Energy complex were unchanged to 0.2pt higher; GLPSPs traded 0.2 - 0.3pt higher; Yankee AT1s recovered by 0.1 - 0.4pt; LGFVs were stable [2]. Market Data in the Morning - Asian IG credits were unchanged to 2bps wider. There was better selling on MEITUA and Korean IG names. NWDEVL 4.8 Perp was 0.8pt higher. YPCORP 29/VLLPM 29 were 0.6pt lower. HYSAN 4.85 Perp leaked 0.5pt [3]. - FABUH's FY25 net profit surged 24% yoy to AED21.1bn from higher income across all segments [3]. - ADSEZ's committee approved a tender offer to purchase up to USD345.137mn of ADSEZ 4 07/30/27 and up to USD150mn of ADSEZ 3.1 02/02/31. ADSEZ 27 - 29 edged 0.3pt higher [3]. Top Performers and Underperformers - Top Performers: VNKRLE 3.975 11/09/27 rose 1.6pts to 31.6; VNKRLE 3 1/2 11/12/29 rose 1.3pts to 30.3; PMBROV 11 1/2 02/18/30 rose 0.7pts to 97.5; HCELEC 4.65 12/29/26 rose 0.6pts to 66.8; LOGPH 5 1/4 02/23/23 rose 0.6pts to 11.1 [4]. - Top Underperformers: VLLPM 9 3/8 07/29/29 dropped 1.6pts to 43.0; VLLPM 7 1/4 07/20/27 dropped 1.0pts to 55.5; GARUDA 6 1/2 12/28/31 dropped 1.0pts to 91.5; CHGRID 4.85 05/07/44 dropped 0.8pts to 99.9; ACPM 3.9 PERP dropped 0.7pts to 66.4 [4]. Macro News Recap - On Monday, S&P (+0.47%), Dow (+0.04%) and Nasdaq (+0.90%) were higher. The 2/5 - year UST yield was lower. The 2/5/10/30 - year yield was at 3.48%/3.75%/4.22%/4.85% [6]. Desk Analyst Comments - FABUH's FY25 net profit surged 24% yoy to AED21.1bn from higher income across all segments. The report maintains a buy on FABUH 6.32 04/04/34 and FABUH 5.804 01/16/35, which offer c60bps yield pick - up over its senior unsecured bonds for similar tenor. The likelihood of FAB calling its T2s on their first call dates is high [7]. FAB's Financial Performance - Operating income: In FY25, FAB's operating income rose 16% yoy to AED36.7bn, mainly driven by a 36% yoy increase in non - interest income to AED16.4bn. Net interest income increased by 4% yoy to AED20.3bn [10]. - Cost - to - income ratio: It dropped to 22.4% in FY25 from 24.6% in FY24 [11]. - Net impairment charges: They fell 17% yoy to AED3.3bn, and net profit rose 24% yoy to AED21.1bn. ROTE improved to 19.2% from 16.8% in FY24 [11]. - Asset quality: NPL ratio declined to 2.2% as of Dec '25 from 3.4% as of Dec '24, while NPL coverage ratio increased to 108% from 96% [12]. - Capital adequacy: CET1 pre - dividend ratio was 14.5% as of Dec '25, CET1 post - dividend ratio was 13.3% (down from 13.7% as of Dec '24, still above the regulatory minimum of 11.6%). FAB guided CET1 ratio to be above 13.5% in FY26 [12][13]. Offshore Asia New Issues - Priced: No offshore Asia new issues were priced today [14]. - Pipeline: Central Nippon Expressway Co Ltd plans a 5 - year USD bond with pricing of MS + 64 and an issue rating of A1/ - / - ; Xingye Gold (Hong Kong) Mining plans a 3 - year USD bond with a 7.7% coupon and an unrated issue [15]. News and Market Color - Onshore primary issuances: 80 credit bonds were issued yesterday with an amount of RMB61bn. Month - to - date, 687 credit bonds were issued with a total amount of RMB580bn, a 4998.2% yoy increase [17]. - Other news: Adani Energy Solutions secured a loan from Japanese banks; Mirae Asset Securities' FY25 operating revenue rose 22% yoy; Seazen expects an offshore - debt quota; HD Hyundai Heavy won an order; Minmetals Land privatization offer was approved; NIO recalls EVs; PTT Global Chemical's 2025 adjusted EBITDA fell 34.4%; Fitch upgraded China Vanke [17].

Group 1: Market Overview - Global markets showed positive performance with the Hang Seng Index rising by 1.76% and the Shanghai Composite Index increasing by 1.41% [1] - The US markets experienced a mixed reaction, with the Dow Jones up by 0.04% and the S&P 500 increasing by 0.47%, while the Nasdaq saw a rise of 0.90% [1] - Japanese stocks surged significantly following the ruling party's unexpected electoral success, with the Nikkei 225 rising by 3.89% [3] Group 2: Sector Performance - In the Hong Kong market, the financial sector led gains with the Hang Seng Financial Index up by 2.63%, while the real estate sector also performed well, increasing by 2.12% [2] - The Chinese stock market saw a rebound, with materials, finance, and healthcare sectors leading the way, while telecommunications and utilities lagged behind [3] Group 3: Regulatory Developments in the Financial Sector - A new regulatory framework for the tokenization of real-world assets (RWA) was established, allowing domestic financial institutions to engage in cross-border RWA financing [4][5] - The framework differentiates between virtual currencies and RWA, providing a clear compliance path for domestic entities to issue asset-backed securities abroad [5] Group 4: Company Analysis - Beike (BEKE US) - Beike is projected to report revenues of 22.2 billion RMB for Q4 2025, reflecting a year-on-year decline of 28.5% due to high base effects [7] - The company is expected to achieve a non-GAAP net profit of 427 million RMB, with a net profit margin of 1.9%, driven by cost-cutting measures and improvements in new business profitability [8] - For 2026, Beike's core property transaction business is anticipated to benefit from cost optimization, with a projected non-GAAP net profit of 7 billion RMB, representing a 42% year-on-year increase [8]

Investment Rating - The report maintains a "BUY" rating for Ke Holdings (Beike), indicating a potential return of over 15% over the next 12 months [1][16]. Core Insights - Ke Holdings is expected to experience a revenue decline of 28.5% YoY in 4Q25, with anticipated revenue of RMB22.2 billion and a non-GAAP net profit of RMB427 million, resulting in a net profit margin of 1.9% [1]. - The company is well-positioned to expand its market share in the home transaction business due to its strong technological capabilities, superior service quality, and established agent cooperation network [1]. - For FY26E, the report forecasts a recovery in earnings driven by cost optimization measures and profitability improvements in new businesses, projecting a non-GAAP net profit of RMB7.0 billion, which represents a 42% YoY growth [1]. - The target price has been raised by 5% to US$21.80, reflecting a positive long-term operating cash flow outlook [1][3]. Financial Summary - For FY23A, revenue is reported at RMB77.8 billion, with a YoY growth of 28.2%. The adjusted net profit is RMB9.8 billion, showing a significant growth of 244.7% [2]. - The revenue forecast for FY25E is RMB94.6 billion, with a slight YoY growth of 1.3%, while the adjusted net profit is expected to decline to RMB4.9 billion, a decrease of 31.5% [2]. - The report projects a revenue of RMB91.5 billion for FY26E, with an adjusted net profit of RMB7.0 billion, indicating a recovery and growth trajectory [2]. Valuation Metrics - The report indicates a P/E ratio of 52.2x for FY25E, which is expected to decrease to 29.4x in FY26E and further to 22.5x in FY27E, suggesting an improving valuation as earnings recover [2][14]. - The SOTP-based valuation for Beike Core is estimated at US$20.9 per ADS, with an additional US$0.9 per ADS for Shengdu, leading to a total valuation of US$21.80 per ADS [1][12].

Global Macro Strategy - The report highlights a global economic rebalancing driven by various factors including increased fiscal expansion in the US, Japan, and Europe, and China's focus on stabilizing real estate and promoting consumption [1][2] - The US economy is expected to see GDP growth decrease from 2.2% last year to 2% this year, with PCE inflation projected to drop from 2.5% to 2.3% [1][4] - The report anticipates that risk assets may reach new highs, with cyclical and value stocks outperforming tech and growth stocks [1][2] United States - The US housing market is expected to see an increase in sales volume while prices remain stable, with existing home sales projected to grow by 10% and new home sales by 5% in 2026 [7] - The fiscal deficit is projected to rise from 5.4% last year to 6.2% this year, with significant tax cuts expected to stimulate the economy [11] - The report predicts that the Federal Reserve will only cut rates once in June, with the 10-year Treasury yield expected to rise from 4.18% to 4.3% by year-end [12][14] United Kingdom - The UK economy is expected to experience a slight slowdown, with GDP growth forecasted to decrease from 1.4% last year to 1.2% this year [19][20] - The unemployment rate is projected to rise from 4.4% to 5.1% as the job market cools, while wage growth is expected to normalize [20] - The report anticipates that the Bank of England will cut rates twice in 2026, bringing the policy rate down to 3.25% [24] Eurozone - The Eurozone's GDP growth is expected to slow from 1.4% last year to 1.2% this year, with inflation projected to stabilize around the target level [1][2] - The report indicates that the European Central Bank's rate-cutting cycle has ended, with policy rates expected to remain unchanged [1][2] Japan - Japan's GDP growth is forecasted to decline significantly from 1.3% last year to 0.7% this year, with inflation also expected to decrease [1][2] - The report suggests that the Bank of Japan may raise rates twice, with the 10-year government bond yield expected to rise from 2.07% to 2.45% [1][2] China - China's GDP growth is projected to slow from 5% last year to 4.6% this year, with a focus on stabilizing the real estate market and promoting consumption [1][2] - The report anticipates that the People's Bank of China will implement two rate cuts totaling 20 basis points and one reserve requirement ratio cut of 50 basis points [2]

Macro Commentary - The report indicates a slowdown in China's economic growth in Q1, but improvements in deflation are noted, with policymakers signaling a focus on stabilizing real estate, promoting consumption, and countering "involution" [2] - The US economy is expected to rebound, with rental inflation declining, offsetting a rise in commodity inflation, leading to a stable dollar liquidity environment [2] - The report anticipates only one interest rate cut by the Federal Reserve in June this year, with a potential for a spring rebound in the stock market [2] Internet Sector - In January, high beta stocks benefitting from event-driven catalysts significantly outperformed the industry, aided by improved market risk appetite and liquidity [2] - Major Chinese internet companies are increasing market spending on AI applications targeting end-users, with 2026 identified as a critical year for capturing user engagement in the AI era [2] Stock Market Performance - The Hang Seng Index closed at 26,560, down 1.21% for the day but up 3.63% year-to-date, while the US markets showed a rebound with the Dow Jones up 2.47% [2] - The report highlights the performance of various indices, with the Hang Seng Financial Index down 1.89% and the Hang Seng Property Index up 17.49% year-to-date [3] Investment Strategy - A "barbell" investment strategy is recommended, focusing on companies with certain profit growth and those benefiting from AI [5] - Specific stocks to watch include Tencent, Alibaba, and Kuaishou for their AI-driven growth potential, and NetEase and Trip.com for their stable earnings visibility [5] Software and IT Services - The report expresses optimism for the software sector, expecting revenue growth to support valuations, while cautioning about the competitive pressures from AI model vendors [6] - Recommended stocks include Palo Alto Networks in the US and Kingdee in China, which are expected to benefit from AI-related revenue growth [6] Semiconductor Industry - The semiconductor sector is viewed positively, driven by AI demand, with structural shortages in memory products like HBM and server DRAM [7] - Recommended stocks include Zhongji Xuchuang and Northern Huachuang, which are expected to benefit from the ongoing demand for computing power [7] Technology Sector - The report anticipates a continued high demand for AI computing infrastructure and innovations in consumer electronics, with specific recommendations for companies like Luxshare Precision and BYD Electronics [8] Consumer Sector - The Hang Seng Consumer Index has risen 8% year-to-date, driven by high elasticity in discretionary consumption sectors [9] - The report highlights the potential for increased consumer spending during the Spring Festival, supported by government policies aimed at boosting consumption [10] Automotive Sector - January saw a slowdown in automotive sales, particularly in the new energy vehicle segment, but a recovery is expected post-Spring Festival [11] - Recommended stocks include Geely for its expanding new energy vehicle matrix and Xpeng for its potential to turn profitable [11] Pharmaceutical Sector - The report emphasizes the long-term trend of innovative drugs going global, with a focus on clinical progress and data validation for drugs already in international markets [12] - Recommended stocks include Innovent Biologics and CanSino Biologics, which are expected to benefit from the ongoing trend of drug commercialization [12] Capital Goods Sector - The report notes a positive outlook for the capital goods sector, particularly in construction machinery, driven by rising metal prices and increased mining capital expenditures [21] - Recommended stocks include SANY Heavy Industry and Zoomlion, which are expected to benefit from the ongoing demand for construction equipment [21] Real Estate and Property Management - The real estate sector is optimistic due to favorable policies, with the Hang Seng Property Index rising 15% year-to-date [19] - Recommended stocks include China Jinmao and Greentown China, which have shown significant price increases [19]