Industry Overview * **Plasma Supply Uptick**: The supply of albumin, IVIg, and pdFVIII saw a notable increase in 4Q24, driven by factors such as new collection center openings and increased exports. * **Price Concerns**: Despite the supply increase, prices may fall slightly in 2025 due to subpar demand, lack of academic promotion, and stricter hospital prescription control. * **Valuation Concerns**: The plasma segment is currently trading at a 34% discount to the 5-year average, reflecting concerns about pricing and competition from rHSA. * **Challenges and Opportunities**: The industry faces challenges such as falling prices and competition, but also opportunities such as increased exports, product mix shifts, and structural growth driven by academic promotion, production yield improvement, and new product innovation. Key Products and Companies * **Albumin**: Domestic albumin outgrew imported albumin in 4Q24, with Tiantan maintaining the leading market share. * **IVIg**: Tiantan maintained its leading position in the IVIg market, followed by RAAS, Taibang, and Hualan. * **pdFVIII**: RAAS was the largest player in the pdFVIII market, followed by Hualan, Taibang Bio, and Tiantan. * **PCC**: Tiantan led the PCC market, followed by Taibang, Nanyue, and Hualan. * **Human Fibrinogen**: RAAS and Boya led the market, followed by Taibang, Hualan, and Green Cross. Valuation and Market Dynamics * **Valuation**: The plasma fractionators' valuation is at a trough and likely to stay depressed in the near term due to falling prices and temporary market dynamics. * **Market Dynamics**: Supply expansion could drive further pricing correction for major PDMPs, especially in retail pharmacies. Plasma players should manage through by increasing exports and shifting their product mix towards high-margin products. Conclusion The China plasma industry is facing challenges and opportunities. While supply has increased, prices may fall due to subpar demand and competition. However, the industry has the potential for structural growth driven by factors such as increased exports, product mix shifts, and new product innovation.

Industry Investment Rating - The report does not explicitly provide an overall investment rating for the industry [1][20] Core Viewpoints - The global chemicals industry is at a crossroads, with the US benefiting from favorable conditions while Europe faces significant challenges [3] - The US chemicals industry has gained a competitive edge due to the shale gas boom, leading to lower production costs and increased investment [5][6] - Europe's chemicals industry is struggling with high energy costs, which are expected to continue hampering recovery [9][11] - The investment outlook for the US chemicals sector is significantly higher than Europe, with a CAGR of 3.8% compared to Europe's 1.5% for 2024-2034 [12][13] - Europe is expected to lag behind the US, China, and the Middle East in both chemicals and basic chemicals production growth over the next decade [16][17][18] Regional Analysis United States - US natural gas production more than doubled between 2005 and 2023, while prices dropped by more than 70% over the same period [5] - The American Chemistry Council estimates investments of USD 208 billion in more than 350 shale gas-related projects [6] - The CAGR for investment in basic chemicals in the USA is 4.7% for 2024-2034, significantly higher than the global rate of 2.7% [13][14] Europe - Europe's chemicals production contracted by 4% in 2022 and 7% in 2023, with modest rebounds forecasted at 3.2% in 2024 and 2% in 2025 [7] - The EU has reduced its reliance on Russian gas, with imports dropping from over 40% in 2021 to about 8% in 2023 [8] - The current capacity utilization rate of the chemicals industry in the eurozone is approximately 7% below its 2015-2019 average [9] - Germany, the largest chemicals producer in Europe, is expected to have a CAGR of just 0.9% for chemicals production and 0.8% for basic chemicals from 2024-2034 [18] China and Middle East - China's chemicals industry has increased capacity in recent years, supporting competitive pricing, though oversupply risks remain [14] - The Middle East benefits from plentiful local oil, gas, and chemicals feedstocks, with Saudi Arabia leading growth due to significant infrastructure investments [15] - The Middle East is forecast to achieve a CAGR of 3.0% for chemicals production and 3.1% for basic chemicals from 2024-2034 [16][18] Long-Term Outlook - Europe faces a significant loss of competitiveness in key products like ammonia and fertilizer due to high energy costs [11] - The chemicals market is undergoing a structural upheaval that is likely to reshape trade in the industry for many years [19] - European manufacturers may relocate to regions with lower energy costs, such as the US, posing a downside risk for Europe [19]

Company-Specific Information 1. **Innolight's Presence at Citi China Conference**: Innolight participated in the Citi China Conference, where it received strong investor interest. This event served as a platform for the company to showcase its potential and attract investment [2]. 2. **Potential Catalysts**: The company's potential launch of Gemini2.0 in December and a potential ChatGPT update later this year are seen as near-term catalysts for the optical transceiver sector and Innolight [2]. 3. **800G LPO Demand**: There is strong demand for 800G LPO from some customers, which suggests an upside risk of 1.5-2mn 800G demand on top of the 20mn 800G industry demand forecast in 2025 [3]. 4. **SiPh Mix**: Innolight has a decent SiPh mix for a particular customer, with the SiPh shipment mix of that customer expected to reach 100% in 2025. The company also expects the SiPh mix of 800G to reach 50%+ in 2025 [5]. 5. **CPO Solutions**: Innolight is developing CPO solutions like PIC/EIC and mountable CPO. However, pluggable solutions are still likely to be the primary solutions in the era of 3.2T and CPO adoption is still quite far away [7]. 6. **2026 Outlook**: Innolight expects 1.6T demand to further ramp in 2026, which will be significantly higher than the 2025 level. The company also expects 800G to remain an attractive mainstream solution given price decline and SiPh migration [8]. 7. **ASP Decline**: Management expects annual price decline in 2025 to be similar to the 10-20% level, as domestic rev mix is low and domestic demand usually sees higher pricing pressure [9]. 8. **Capex**: Innolight expects capex-to-rev ratio to gradually decline, with no extra capital investment needs once they reach their capacity target [10]. 9. **Supply Chain**: The company has seen a tight supply of 100G EML due to slower-than-expected ramp from suppliers, but CW laser supply is much better. Innolight will rely less on EML since 2Q24, given customer migration to 800G SiPh [11]. 10. **Passive Component Shortage**: Innolight does not see any shortage in passive optical components like Faraday Rotators/TEC but more of a price hike [12]. 11. **Valuation**: The target price for Innolight is Rmb226, based on 22x FY25E Forward PE, which is around -0.5SD of 3-year average to account for slower FY26 growth and overhang of peaking AI capex in FY26 and CPO [14]. 12. **Risks**: Downside risks include slower-than-expected data center investments, weaker-than-expected telecoms market expansion, margin pressures due to price competition, and China-US tech disputes intensifying [15]. Industry Information 1. **400G/800G Industry Demand**: There is strong demand for 800G LPO from some customers, suggesting an upside risk of 1.5-2mn 800G demand on top of the 20mn 800G industry demand forecast in 2025 [3]. 2. **Overall Overseas 400G Demand**: Overall overseas 400G demand is likely to decline but could still remain at a high level next year [3]. 3. **SiPh Migration**: There is a gradual SiPh migration from competitors, with Innolight having started developing their SiPh chip 5 years ago [5]. 4. **CPO Adoption**: CPO adoption is still quite far away given low interest from customers [7]. 5. **AI Upgrade Cycle**: The overall narrative of AI upgrade cycle remains intact [8].

Industry Overview * **China Paper Price Weakness**: China paper prices continued to weaken in October, down by RMB 70-200/ton, despite seasonally stronger demand. This decline is attributed to an oversupplied market, negative macro sentiment, and disappointing seasonal demand. As a result, profitability has further weakened, now 6-50% below the 5-year average. [5] * **China Pulp Restocking**: China's pulp restocking is crucial to changing the pulp price direction and balancing the market. However, this is unlikely to happen in the short term, leading to continued downward price pressure. [6] * **Paper Utilization**: China's paper utilization rate remained low at 57%, reflecting weak profitability and an oversupplied domestic market. [10] * **Paper Production**: China's paper production decreased by 1% month-over-month and 6% year-over-year in October, driven by weak profitability and an oversupplied domestic market. [24] * **Paper Margins**: Paper margins decreased across all grades in October, with the decline ranging from 4-11% month-over-month, primarily due to lower paper prices. [26] China Market * **Hardwood and Softwood Prices**: Hardwood negotiations concluded at $540-550/ton in October, with buyers expected to bid lower for November deals. Softwood prices saw a $10-20/ton increase, expected to remain stable due to capacity shutdown announcements and buyers' perception that prices are already at marginal cost. [8] * **Pulp Prices**: China's FOEX hardwood imported pulp prices decreased by $3/ton to $556/ton, while domestic resale prices were down RMB 0-42/ton week-over-week. Softwood imported FOEX prices remained flat at $770/ton, with domestic resale prices ranging from RMB -1 to 3/ton week-over-week. [14] * **Pulp Inventories**: Pulp inventories at Chinese ports remained flat month-over-month at 1.7 million tons in October, 9% below the 5-year historical average. [17] Europe Market * **Containerboard Prices**: European containerboard prices remained flat month-over-month in October, after increasing for the past six months. This plateau is attributed to concerns regarding demand, especially for 2025. Metsa Board announced layoffs of 1,000 employees from different mills in Finland due to low demand expected going forward. [34] * **Graphic Paper Prices**: European graphic paper prices remained flat in October, with market sources starting to see some decline in prices for both UWF and CWF. [37] * **Pulp Inventories**: European pulp port inventories increased by 73,000 tons month-over-month in September, reaching 1.6 million tons, above historical levels of 1.3 million tons. [46] Company Analysis * **Klabin**: Goldman Sachs upgraded Klabin to Neutral from Sell, driven by the company's commitment to deleverage and the expectation that FCF pressure will likely peak in 2024. [54] * **Suzano**: Goldman Sachs maintained a Neutral rating on Suzano, with a new 12-month price target of R$62.0/share, based on a DCF methodology. [61] * **Metsa**: Metsa's management highlighted the soft market demand for paper and pulp in China, with improving demand for paperboard but expected to soften by lower consumer purchasing power. [53]

Atradius Payment Practices Barometer 2024 | --- | --- | --- | --- | |-----------|--------------------|--------------------|-------| | | | | | | | | | | | B2B | payment | practices trends | | | in | Canada | | | | How | companies manage | risk | | | and its | impact on | | | | | | | | | | | | | About the Atradius Payment Practices Barometer The Atradius Payment Practices Barometer is an annual survey of business-to-business (B2B) payment practices in markets across the world. Our survey provides us with the ...

Atradius Payment Practices Barometer 2024 | --- | --- | --- | --- | |----------------------------------|----------------------------------------|-------------------------|-------| | | | | | | | | | | | B2B in the How and its | payment United companies impact on | practices trends risk | | | | | | | About the Atradius Payment Practices Barometer The Atradius Payment Practices Barometer is an annual survey of business-to-business (B2B) payment practices in markets across the world. Our survey provides us with ...

B2B Payment Practices in North America (USMCA) - 49% of companies report no significant change in B2B payment behavior, especially in Mexico, while one-third of businesses, notably in the US, report quicker invoice payments [8] - Late payments currently affect around half of all invoices issued by North American businesses in B2B trade, with bad debts averaging 6% of all credit sales [8] - 35% of companies across North America respond to poor payment practices by delaying payments to their own suppliers, while deferring investment plans is another strategy, especially in Canada [8] - Approximately 45% of all B2B sales by North American companies are transacted on credit, an increase from the previous year, notably in Canada [8] - Around 55% of companies focus on maintaining debt collection efficiency to stabilize Days Sales Outstanding (DSO), with improvements reported in Mexico but deterioration in Canada [8] B2B Payment Risk Management - Administrative challenges faced by B2B credit customers in their payment processes are cited as the main reason for late payments, particularly among US businesses [8] - Customer cash flow issues contribute significantly to payment delays for almost one-third of companies, primarily in Mexico [8] - Companies are shifting away from in-house retention of customer credit risk, with 40% of Canadian and Mexican businesses using trade credit insurance, compared to 23% in the US [8] - Factoring is popular in Canada, where 46% of businesses use it as a credit management tool [8] Economic Outlook and Insolvency Trends - 48% of companies, primarily in Canada, anticipate an increase in insolvencies during the coming months, while 49% expect the insolvency trend to remain stable, especially in Mexico [15] - 45% of companies in North America expect Days Sales Outstanding (DSO) to remain stable, while 38% anticipate improved debt collection efficiency, notably in the US [15] - 67% of companies across North America expect a surge in demand for their products and services, with optimism particularly evident in Mexico [15] - Only 48% of businesses are positive about the prospect of improved profitability in the year ahead, with economic uncertainty being a key concern [15] Financing and Cash Flow Challenges - 57% of companies used trade credit as a main source of financing during the past 12 months, followed by invoice financing (52%) and bank loans (49%) [14] - 35% of companies report slowing down payments to suppliers due to late payments from B2B customers, while 31% face difficulties in meeting financial obligations [13] - 28% of companies delay paying bills and/or staff, and 25% report increased borrowing costs and reliance on short-term financing [13] Future Concerns and Strategic Adjustments - The main concerns for businesses in North America include economic conditions (36%), cybersecurity challenges (34%), and environmental and sustainability issues (31%) [20] - Market saturation and financial constraints are pressing challenges, with many businesses experiencing a lack of working capital and difficulty in accessing finance [15] - Companies are exploring diversified approaches to credit risk management, including trade credit insurance and factoring, to navigate the complex and challenging environment [8]

July 2024 Industry trends Chemicals Ongoing recovery, with an uneven outlook among Global overview Rebound in Europe and the US supports higher global growth rates in 2024 and 2025. The chemical industry was amongst the worst impacted by the energy crisis in 2022 and into 2023, as output is heavily reliant on oil and gas feedstocks and requires energy- intensive manufacturing processes. High inflation and tight monetary policies kept feedstock prices high, while also causing key buyer industries and consume ...

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - B2B trading on credit remains vital in Türkiye, with an average of 49% of total B2B sales transacted on credit, varying by sector [7] - Nearly 60% of businesses report no significant change in payment policies over the past year, with an average payment term of 54 days from invoicing [7] - Late payments affect an average of 43% of all B2B sales on credit, with bad debts standing at 5% [7] - A significant 69% of companies expect a surge in demand for their products and services in the coming year, particularly in the chemicals industry [14] - Concerns about the domestic economy, customer acquisition challenges, and geopolitical tensions are prevalent among businesses [14] Summary by Sections B2B Payment Practices Trends - Trading on credit is crucial, with 49% of B2B sales on credit; 55% in chemicals and 41% in agri-food sectors [7] - Average payment term is 54 days, with the agri-food sector offering the most lenient terms [7] - Late payments affect 43% of B2B sales on credit, with bad debts at 5%; cash flow issues are the main reason for late payments [7] Future Outlook - 69% of companies anticipate increased demand, while only 44% expect profit growth [14] - 47% of businesses expect stable payment practices, with mixed views on Days-Sales-Outstanding (DSO) [14] - Major concerns include economic conditions (42%), human resources limitations (37%), and customer acquisition challenges (30%) [15]

Clean Energy Transition: Machines and Manufacturing Has the sector flown under the sustainability radar? When looking at the sources of greenhouse gas emissions into in our atmosphere, the machines sector does not come anywhere near the top of the list. In fact, a detailed breakdown by Climate Watch in 2020 found that energy-related emissions from the production of machinery amounts to about 0.5% of total global emissions. This contrasts markedly with iron and steel manufacturing, for instance, which alone ...