Investment Rating - The report maintains a "Buy" rating for major US internet giants, with a preference order of Meta, Microsoft, Amazon, and Google [3]. Core Insights - The cloud business growth has slowed down, with major players like Amazon AWS, Microsoft Azure, and Google Cloud showing year-over-year revenue growth rates of 19%, 31%, and 30% respectively, which are below market expectations [1][2]. - Despite the slowdown in cloud growth, major internet companies are increasing capital expenditures for AI infrastructure in 2025, with Amazon planning to invest $105 billion (+34% YoY), Google $75 billion (+43% YoY), Meta $60-65 billion (+59% YoY), and Microsoft $80 billion (+44% YoY) [2]. - DeepSeek's cost innovation is shifting the AI industry focus from "computing power competition" to "algorithm optimization," which may lead to increased cloud service demand in the long term [2]. Summary by Sections Cloud Business Performance - Major US internet companies reported weaker-than-expected cloud business growth, with revenue growth rates for Q4 2024 showing no acceleration despite significant capital investments [1][2]. Capital Expenditure Plans - In 2025, major internet companies are set to increase capital expenditures significantly for AI infrastructure, indicating a strong commitment to AI despite current cloud growth challenges [2]. Investment Recommendations - The report expresses optimism about the long-term opportunities presented by the deep AI investments of major US internet companies, maintaining a "Buy" rating and highlighting the potential benefits for Meta and Microsoft due to reduced computing costs from DeepSeek [3].

Investment Rating - The report maintains a "Buy" rating for Qualcomm (QCOM.US) with a target price of $205.7, indicating a potential upside of 17% from the current price of $175.9 [1][5]. Core Insights - Qualcomm's FY1Q25 performance exceeded market expectations, driven by strong growth in its mobile, automotive, and IoT segments. The company is expected to benefit from the rapid penetration of edge AI in smartphones, which could enhance its valuation [1][2]. - The report slightly raises the earnings forecasts for FY2025 and FY2026, reflecting positive trends in smartphone sales, particularly high-end models, and the anticipated growth in smart cockpit and integrated driving solutions [1][3]. Financial Performance Summary - FY1Q25 revenue reached $11.67 billion, a 17% year-over-year increase and a 14% quarter-over-quarter increase, surpassing the upper limit of guidance [2][11]. - The QCT segment generated $10.1 billion in revenue, marking a historical high, primarily due to better-than-expected performance in Android smartphones, IoT, and automotive sectors [2]. - Gross margin for FY1Q25 was 55.8%, down 0.8 percentage points year-over-year and 0.6 percentage points quarter-over-quarter [2][11]. - Net profit for FY1Q25 grew by 15% year-over-year and 9% quarter-over-quarter, also exceeding market expectations [2]. Earnings Forecasts - The report provides the following revenue and net profit forecasts for Qualcomm: - FY2025E Revenue: $44.1 billion, a 13% increase year-over-year - FY2025E Net Profit: $11.1 billion, a 9% increase year-over-year [4][9]. - The projected PE ratio for FY2025 is 20.4x, indicating a favorable valuation compared to historical averages [3][4]. Market Dynamics - The report highlights that the Chinese government's smartphone subsidy policy is expected to boost sales, particularly for high-end flagship models, providing a solid foundation for Qualcomm's FY2025 performance [1][3]. - The company anticipates that its automotive business will reach $8 billion in revenue by FY2029, with a target market share of 12% in Windows PCs [3].

Investment Rating - The report does not explicitly state an overall investment rating for the industry, but it provides individual stock ratings for various companies within the consumer sector, indicating a mix of "Buy," "Hold," and "Sell" recommendations [20]. Core Insights - The report discusses the impact of the US-China trade war on Chinese consumer goods companies, highlighting the increased costs due to a 10% tariff on exports to the US, which could lead to reduced competitiveness and market demand for Chinese products [1][8]. - It emphasizes the need for companies to adjust their supply chains, suggesting that relocating production to Southeast Asia or other regions is a primary strategy to mitigate tariff impacts [2][11]. - The report suggests that companies should focus on reducing their export proportion to the US and instead target markets with lower tariff risks, such as Japan, South Korea, Southeast Asia, and Europe [3][13]. - It notes that the trade war may compel companies to enhance product innovation and brand building to maintain competitiveness, as low-price strategies may no longer be viable [6][17]. - The potential for rising raw material costs due to retaliatory tariffs is also discussed, urging companies to secure local supply chains to minimize risks [18]. Summary by Sections Impact of Tariffs - The report outlines that the 10% tariff on Chinese goods will increase export costs, affecting major consumer categories like electronics, appliances, clothing, and toys [1][8]. Supply Chain Adjustments - Companies are encouraged to shift production to Southeast Asia to avoid tariffs, with examples like Pop Mart and OEM firms such as Shenzhou International and Yue Yuen already implementing such strategies [2][12]. Market Focus Shift - It is recommended that companies reduce their reliance on the US market and explore other international markets that present lower risks [3][13]. Innovation and Branding - The report highlights the necessity for companies to innovate and strengthen their brands to justify higher prices, as the trade war diminishes the effectiveness of low-cost strategies [6][17]. Raw Material Costs - The potential for increased raw material costs due to retaliatory tariffs is noted, with a recommendation for companies to secure local sourcing to mitigate these risks [18].

Investment Rating - The report maintains a "Buy" rating for TSMC (2330.TT) with a target price of 1,401.1 TWD, representing a potential upside of 27% [1][13]. - For TSMC's ADR (TSM.US), the target price is set at 256.3 USD, indicating a potential upside of 24% [1][13]. Core Insights - TSMC is expected to benefit significantly from the ongoing AI demand, which is projected to drive growth in 2025 and beyond [6][9]. - The company has raised its earnings forecasts for 2025 and 2026, reflecting strong anticipated revenue growth driven by AI-related income [1][6]. - TSMC's AI-related revenue is expected to grow at a compound annual growth rate (CAGR) of 40% over the next five years, contributing to an overall revenue CAGR of 20% [6][9]. Financial Projections - TSMC's revenue is projected to reach 3,713,586 million TWD in 2025, with a year-on-year growth rate of 28% [2][11]. - The gross margin is expected to improve to 58.3% in 2025, with net profit projected at 1,555,461 million TWD, reflecting a 33% increase from the previous year [2][11]. - The basic earnings per share (EPS) is forecasted to be 60.0 TWD in 2025, up from 45.2 TWD in 2024 [2][11]. Performance Review and Guidance - TSMC's Q4 2024 revenue was 868,461 million TWD, a 39% increase year-on-year, driven by strong demand for 3nm and 5nm technology nodes [9][10]. - The company provided guidance for Q1 2025, expecting revenue to grow by 41% year-on-year, despite a seasonal decline due to smartphone demand [9][10]. - The gross margin for Q4 2024 was reported at 59.0%, exceeding previous guidance, and the operating margin was 49% [9][10]. Valuation - The report employs an EV/EBITDA valuation method, assigning TSMC a target EV/EBITDA of 14x under the base case scenario, leading to the target price of 1,401.1 TWD [13][14]. - For the ADR, the valuation considers a 20% premium over the local stock price, resulting in a target price of 256.3 USD [13][14].

Group 1: Economic Policy and Strategy - The Central Economic Work Conference emphasizes expanding domestic demand as a priority for economic policy[4] - The government plans to increase the deficit ratio and the issuance scale of special bonds, alongside implementing a moderately loose monetary policy[4] - Key industries targeted for policy support include real estate, consumption, infrastructure, technology, and fertility[4] Group 2: Investment Focus - The first investment focus is on boosting consumption to expand domestic demand, with initiatives to support new consumption policies and urban renewal projects[5] - The second investment focus is on "Artificial Intelligence+" and new productive forces, aiming to enhance technological innovation and industry upgrades[5] - Recommended sectors for investment include the new energy vehicle supply chain, smart home industry, hospitality, and modern services like healthcare and finance[5] Group 3: Market Outlook and Strategy - The market is expected to enter a policy implementation phase leading up to the next Two Sessions, with structural market trends anticipated[6] - A-shares are predicted to perform more steadily compared to overseas Chinese stocks, driven by profit growth and market sentiment[6] - Investment strategies should balance risk, favoring high-beta sectors during positive market sentiment and defensive sectors during downturns[6]

Investment Rating - The report initiates coverage on Aikang Medical (1789 HK) with a "Buy" rating and a target price of HKD 6 8 [1][2] Core Views - Aikang Medical is positioned as a leading domestic orthopedic joint company with strong performance in the national joint procurement program The company is expected to see accelerated revenue growth in 2025 as the impact of industry anti-corruption measures subsides and joint procurement risks are cleared [1] - The company is a pioneer in applying metal 3D printing to orthopedic implants and is leveraging technologies such as 3D printing ICOS and surgical robots to build a digital orthopedic platform which will help expand its presence in the mid-to-high-end market [1] - The orthopedic industry is under short-term pressure due to anti-corruption measures but will benefit in the long term from a large patient base increasing surgical penetration rates and domestic substitution [1] - Aikang Medical's core products have cleared procurement risks and the company is expected to see improved earnings visibility in 2025 with revenue growth potentially accelerating on a lower base in 2024 [1] Financial Projections - Revenue is projected to grow at a CAGR of 22% from 2023 to 2026E with 2024E and 2025E revenue expected to reach RMB 1 305 million and RMB 1 625 million respectively [3] - Net profit attributable to shareholders is forecasted to grow at a CAGR of 22 9% from 2023 to 2026E with 2024E and 2025E net profit expected to reach RMB 261 million and RMB 324 million respectively [3] - The company's PE ratio is expected to decline from 30 8x in 2023 to 17 5x in 2025E reflecting improved earnings growth [3] Industry Overview - The orthopedic industry continues to face short-term pressure from anti-corruption measures but is expected to recover in 2025 with revenue growth driven by a large patient base increasing surgical penetration rates and domestic substitution [16] - The industry saw a 3% YoY increase in revenue and a 1% YoY increase in net profit in 9M24 with signs of recovery in 1Q/2Q/3Q24 showing revenue growth of -9% +3% and +17% respectively [1] - Domestic substitution is expected to accelerate as foreign brands focus more on top-tier hospitals and reduce overall investment in China [1] Company-Specific Analysis - Aikang Medical's hip and knee joint products which contributed 85% of revenue in 1H24 performed well in the national joint procurement program with most products achieving price increases in the procurement [1] - The company is a leader in 3D printing technology for orthopedic implants and has developed the ICOS platform which offers customized solutions for patients and surgeons [2] - Aikang Medical has a dual-brand strategy in overseas markets with Aikang and JRI which provides a full product line advantage and potential for scale making international markets a key growth driver [2] Valuation and Target Price - The target price of HKD 6 8 is based on a 22x 2025E PE multiple in line with the company's historical average over the past three years [2] - The target price implies a 27% upside from the current price of HKD 5 4 [4]

Investment Rating - The report maintains an "overweight" rating for the global AI computing chip industry, with specific buy ratings for AMD and MediaTek, and a sell rating for Intel [15][20]. Core Insights - The global AI industry is experiencing explosive growth, with the generative AI market expected to reach nearly $1 trillion by 2030, driven by a compound annual growth rate (CAGR) of 40% from 2024 to 2030 [15][52]. - AI computing chips are essential for the development of AI models, benefiting significantly from the industry's high growth [15][20]. - The report emphasizes the importance of AI computing chips in both cloud and edge applications, highlighting the increasing demand for these chips across various sectors, including smartphones and electric vehicles [17][20]. Summary by Sections Global AI Computing Chip Industry Investment Highlights - The AI industry is in a rapid growth phase, with significant capital expenditure from cloud service providers on AI computing chips [20]. - The demand for AI computing chips is expected to grow as AI models penetrate consumer devices, enhancing user experience [20][28]. Overview of the Global AI Industry: Explosive Growth - The generative AI market has seen a sixfold increase from 2020 to 2023, with substantial growth expected to continue [52]. - The report notes that the AI industry is still in its early stages, with ongoing advancements in AI model performance and capabilities [21][23]. AI Computing Chip Development Trends - GPUs are identified as the most critical computing foundation for generative AI, with CPUs and SoCs also benefiting from increased demand [20]. - The report highlights the rapid expansion of AI computing chip production capacity, leading to a more balanced supply-demand dynamic [20]. Review and Outlook for US Tech Stocks - The report suggests that the current economic environment, including a potential interest rate decrease, could support the valuation of growth tech stocks [20]. - The Nasdaq and M7 indices are expected to show long-term growth potential driven by fundamental factors [20]. Company-Specific Coverage - AMD is positioned to benefit from multiple AI computing chip layouts, receiving a buy rating with a target price of $168.7 [11]. - MediaTek is also rated as a buy, with a target price of NT$1,468.5, benefiting from AI penetration in consumer electronics [13]. - Intel, while benefiting from AI demand, is rated as a sell due to delayed financial performance, with a target price of $20.4 [15].

Investment Rating - The report maintains a "Buy" rating for Mobileye (MBLY.US) with a target price of $16.2, indicating a potential upside of 19% [2][6]. Core Insights - Mobileye's Q3 revenue was $486 million, a year-over-year decline of 8% but a quarter-over-quarter increase of 11%, outperforming consensus estimates [2][11]. - The company expects continued strong cash flow and has confidence in its technological capabilities, particularly in AI and related technologies, despite lowering earnings forecasts for 2024-2026 [2][3]. - The report highlights the normalization of inventory levels among downstream Tier 1 and OEM customers, with EyeQ chip shipments expected to recover significantly by 2025 [3][4]. Financial Performance Summary - Q3 2024 revenue: $486 million, down 8% YoY, up 11% QoQ [11]. - Q3 2024 adjusted gross margin: 68.1%, down from 69.1% YoY [11]. - Full-year 2024 revenue guidance: $1.62 to $1.66 billion [3]. - Adjusted net profit for 2024 is projected at $199 million, a significant decrease from previous estimates [12]. Revenue and Profit Forecasts - Revenue forecasts for 2024E: $1.635 billion, with a year-over-year decline of 21% [5][12]. - Adjusted net profit forecasts for 2025E: $364 million, reflecting an 83% increase from 2024E [5][12]. - The report anticipates a recovery in revenue growth rates, with 2025E expected to grow by 18% and 2026E by 23% [5][12]. Valuation Metrics - The report employs a DCF valuation method, maintaining a target price of $16.2, corresponding to a 2025E adjusted P/E ratio of 35.9x [4][15]. - The WACC is estimated at 8.0%, with a perpetual growth rate of 3% [4][13]. Market Expectations - The report outlines optimistic and pessimistic scenarios for Mobileye's stock price, with a bullish target of $18.8 and a bearish target of $11.7, reflecting varying expectations for revenue growth and market conditions [18].

Investment Rating - The report suggests a positive outlook for the tourism industry, indicating a resilient market with a recommendation to focus on OTA and domestic hotel sectors [2]. Core Insights - The tourism market is experiencing steady growth, with domestic travel reaching 765 million trips during the National Day holiday, a year-on-year increase of 5.9% and a 10.2% increase compared to 2019 [1]. - Total domestic tourist spending during the holiday was approximately 700.82 billion yuan, reflecting a year-on-year growth of 6.3% and a 7.9% increase compared to 2019 [1]. - The report highlights a trend of increasing travel demand despite a decrease in average spending per person, attributed to lower prices for flights and accommodations [1]. - International travel is also recovering, with outbound travel bookings nearly doubling year-on-year, particularly from lower-tier cities [1][2]. Summary by Sections Domestic Travel Trends - Domestic travel during the National Day holiday saw 765 million trips, with a 5.9% increase year-on-year and a 10.2% increase compared to 2019 [1]. - Average spending per person was approximately 916 yuan, nearly flat year-on-year, recovering to 98% of 2019 levels [1]. - The decline in travel costs, with flight prices down 15.1% and hotel prices down 6%, has contributed to the increase in travel demand [1]. International Travel Trends - Outbound travel has shown strong growth, with bookings increasing by nearly 100% year-on-year [1]. - The majority of outbound travel destinations are concentrated in East Asia and Southeast Asia [1]. - Residents from lower-tier cities are increasingly participating in international travel, with a threefold increase in orders from these areas during the holiday [1]. Market Outlook - The report indicates that the tourism market will continue to show resilience, with a trend of rising travel demand and falling prices likely to benefit OTA and domestic hotel sectors [2]. - The focus on lower-tier cities and the potential for international business expansion are highlighted as key areas for growth [2].

Economic Indicators - The core CPI inflation rate in the US for August rose to 0.28%, up from 0.17% in July, exceeding the market expectation of 0.2%[1] - Overall CPI growth increased by 0.04 percentage points to 0.19%, aligning with market expectations[1] - Year-on-year, the overall CPI decreased by 0.4 percentage points to 2.5%, while the core CPI remained unchanged at 3.2%[1] Housing and Services - Housing prices saw a month-on-month increase of 0.52%, the highest since February of this year[1] - The owner’s equivalent rent inflation rate rose to 0.50% in August, up from 0.36% in July, marking another peak since February[1] - The inflation rate for temporary lodging surged to 1.75% in August, up from 0.22% in July, driven by seasonal tourism[1] Employment Data - Non-farm payrolls added 142,000 jobs in August, a recovery from July but still below market expectations[2] - The unemployment rate slightly decreased by 0.1 percentage points to 4.2% in August, with temporary unemployment dropping from 1.062 million in July to 872,000[2] - The three-month moving average for new jobs fell to 116,000, the lowest since the second half of 2020[2] Federal Reserve Outlook - The report suggests a 25 basis point rate cut by the Federal Reserve in September, supported by the recent inflation and employment data[2] - The potential for a 50 basis point cut in future meetings remains if economic data indicates signs of recession[2] - The JOLT job openings to unemployment ratio fell to 1.07 in July, below the pre-pandemic average of 1.19, indicating a weakening labor market[2]