ab 18 October 2024 Global Research Life Sciences & Diagnostic Tools China Pharma Mfg Returned to Double-digit Growth in Sept. | --- | --- | |------------|-------| | Equities | | | Americas | | | Healthcare | | Bottom Line We track China's monthly industrial output data as a key indicator for the China end market health in our Life Sciences Tools coverage. The September high-technology manufacturing output growth was +10.1% vs. +8.6% in August. Pharma manufacturing output returned to double-digit growth in S ...

Investment Rating - The report indicates a cautious stance on emerging markets (EM) with a focus on selective opportunities, particularly in Chinese equities, while maintaining a skeptical view on broader EM asset performance [4][5][6]. Core Insights - The report highlights that the recent Chinese stimulus package is expected to primarily benefit Chinese assets, with equities trading at approximately a 30% price-to-book (P/B) discount compared to EM peers [5][9]. - There is skepticism regarding the effectiveness of the stimulus and Federal Reserve easing in accelerating growth, suggesting that the market may be under-positioned and could react positively in the short term [4][6]. - The report emphasizes that while local equities in China are likely to benefit, the risk/reward for commodities and the Chinese yuan (RMB) appears weaker [6][7]. Summary by Sections Global Strategy - The report notes that sentiment towards EM has improved, driven by significant developments including China's stimulus and the Fed's interest rate cuts, but remains cautious about long-term reflation [4][6]. - It suggests that the market may experience a short-term rally in EM assets, particularly in the lead-up to the US elections [4]. Chinese Market Focus - Chinese equities are viewed as inexpensive, with a strong potential for growth due to fiscal support for consumers, despite the lack of focus on housing recovery [5][9]. - The report indicates that while Chinese exporters have outperformed, the stimulus measures are more likely to impact market sentiment rather than macroeconomic realities [19]. Regional Opportunities - Other Asian markets, such as Korea and South Africa, are identified as potential beneficiaries of easing headwinds from China, with favorable valuations and growth outlooks [7][9]. - The report suggests a selective approach to foreign exchange (FX) carry trades, with a preference for currencies like the South African rand (ZAR) and Brazilian real (BRL) against certain peers [7][8].

ab 12 September 2024 Global Research and Evidence Lab | --- | --- | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------| | | | | Eu ...

ab 28 August 2024 Global Research and Evidence Lab China Economic Perspectives Home Destocking Debate and Property Forecast Downgrade Economics China Where are we now in the property downturn? China's property activities have not bottomed since the unprecedented sharp downturn in 2021. The decline in urban housing prices has accelerated since H2 2023 amid elevated inventory pressure, weighing on household home purchase intention, consumption confidence and local government finances. China has eased property ...

ab 26 August 2024 Global Research and Evidence Lab US Equity Strategy Earnings Brief 2Q24: August 26 NVDA (6.6% of S&P 500 market cap) reports earnings on Wednesday. EPS is expected to grow 137% (vs. 462% in 1Q24, and expectations of 76% in 3Q24). Reported earnings have beaten estimates for the past 5 quarters. 90.2% of the S&P 500's market cap has reported. 2Q expectations are for revenues to grow 5.1% and EPS by 11.3%. Growth among groups varies significantly, as shown in the table below (a blend of conse ...

ab 30 August 2024 Global Research and Evidence Lab APAC Economic Perspectives Asia by the Numbers (August 2024) Downgrading China's GDP growth forecast to 4.6% in '24 and 4.0% in '25 Despite new easing measures in July, China's property downturn has persisted. Given lingering inventory pressures, we downgraded our property market forecasts, and expect sales, new starts, and investments to continue falling in 2025, albeit at a slower rate. The weakness in property activities and prices has further weighed on ...

Investment Rating - The report assigns a **Neutral** rating for the company with a 12-month target price of **Rmb24.00** [4] Core Viewpoints - The company announced its intention to acquire a controlling stake of at least 51% in Runyang, the world's fifth-largest solar cell manufacturer, for a total transaction value not exceeding **Rmb5 billion** [2] - Runyang has significant production capacities, including **5.5 million tons of industrial silicon, 1.3 million tons of polysilicon, 7GW of crystal pulling, 10GW of wafers, 57GW of solar cells, and 13GW of modules**, with **11GW of overseas cell capacity** and a **5GW module capacity under construction in the US** [2] - The acquisition is expected to create synergies with the company's existing polysilicon, cell, and module businesses, enhancing market share and pricing power, while Runyang's overseas capacity could provide additional value for the company's international market expansion [2] - The acquisition signals the beginning of industry consolidation, which could improve supply-demand dynamics and accelerate the elimination of outdated capacity [3] Company Background - The company was established in 1995 and initially focused on agricultural feed before transitioning to become one of the world's largest manufacturers of monocrystalline silicon and monocrystalline cells by capacity [8] - As of the end of 2023, the company's annual production capacities were **450,000 tons of silicon, 95GW of cells, and 75GW of modules** [8] Valuation and Forecast - The report uses a **DCF valuation method** to derive the target price [9] - The forecasted stock price increase is **29.2%**, with a dividend yield of **0.9%**, resulting in a total stock return of **30.1%** [7] - The market return assumption is **7.3%**, leading to an excess return forecast of **22.8%** [7] Industry Outlook - The acquisition is seen as a positive signal for industry consolidation, with the potential to improve overall supply-demand conditions [3] - Runyang's assets, particularly its cell and polysilicon capacities built since 2020 and 2023 respectively, are considered to be of high quality and technologically advanced [3]

Investment Rating - The investment rating for the company is "Buy" with a target price of Rmb 24.00, down from Rmb 24.50 [5][6]. Core Insights - The company reported a 33% quarter-on-quarter increase in net profit for Q2, driven by improved coal-to-olefins price spreads and increased production of EVA [2][3]. - The Inner Mongolia olefins project is on track for production in Q4, with the first unit expected to start in October [4]. Financial Performance - The company achieved a revenue of Rmb 16.9 billion in the first half of the year, a 29% year-on-year increase, and a net profit of Rmb 3.3 billion, a 46% year-on-year increase [2]. - In Q2 alone, revenue reached Rmb 8.67 billion, reflecting a 36% year-on-year increase and a 5% quarter-on-quarter increase, while net profit was Rmb 1.88 billion, up 76% year-on-year and 33% quarter-on-quarter [2][3]. Product Performance - For Q2, polyethylene production and sales volumes decreased by 2% and 5% respectively, while polypropylene production and sales volumes increased by 10% and 14% respectively [3]. - The price spread for coal-based polyethylene and polypropylene improved by 13% and 15% respectively due to a decrease in coal prices [3]. Project Updates - The Inner Mongolia 3 million tons olefins project is progressing as planned, with 32% of the construction completed as of the half-year report [4]. - The first olefins unit is scheduled to be operational in October, with subsequent units expected to start in November and December [4]. Valuation - The target price has been adjusted to Rmb 24.00 per share based on a DCF valuation method, maintaining a WACC of 8.6% [5]. - The valuation corresponds to a PE ratio of 22x for 2024 and 12x for 2025 [5].

Investment Rating - The report assigns a "Buy" rating for the company with a 12-month target price of Rmb40.30 [6][19]. Core Insights - The company's H124 performance slightly missed consensus expectations, with revenue of Rmb11,827 million, a year-on-year increase of 9.5%, and a net profit of Rmb1,800 million, up 28.2% year-on-year [2][3]. - Key drivers for profit improvement include enhanced market development for infusion and non-infusion drugs, increased volume and price for intermediates and active pharmaceutical ingredients, and a reduction in interest-bearing debt and financing rates [3]. - The company maintains its previous guidance for FY24 net profit (excluding Kolun Botai) to reach Rmb3.2-3.25 billion, representing a year-on-year growth of over 15% [4]. Summary by Sections Financial Performance - H124 revenue was Rmb11,827 million, slightly below UBS's forecast of Rmb11,912 million and consensus expectations of Rmb11,918 million, reflecting a -0.8% variance [5]. - H124 net profit was Rmb1,800 million, exceeding UBS's estimate of Rmb1,631 million but falling short of consensus expectations of Rmb1,837 million, showing a -2.0% variance [5]. Business Outlook - The company expects infusion business to grow over 15% year-on-year, non-infusion drugs to grow approximately 15%, intermediates and active pharmaceutical ingredients to grow around 20%, and external investment to grow about 10% [4]. - Anticipated investor focus includes the registration progress and timeline for key products like SKB264, demand trends for infusion products related to respiratory infections, and the potential impact of the tenth batch of national procurement [3]. Market Data - The company's market capitalization is Rmb49.9 billion (approximately US$6.95 billion) with a 52-week stock price range of Rmb35.01 to Rmb22.59 [6]. - The average daily trading volume is 12,332 thousand shares, with an average daily turnover of Rmb393.2 million [6].

快评 新洁能 2Q归母净利润同比增长 42%；管理层维持对 于2H24的积极展望 2Q24营收和归母净利润均好于我们和市场预期 2Q24公司的营业收入(+30%/+35% YoY/QoQ)和归母净利润(+42%/+18% YoY/QoQ) 分别较Reuters一致预期和瑞银证券预测高14%/13%（vs一致预 期）和13%/12%(vs 瑞银证券预测)。我们认为这主要是由于：1）2Q24公 司营业收入的环比增长受到需求回升、国产替代以及切入新的应用的综合影 响，好于过去3年的平均季节性（2Q24 +35% QoQ vs 历史平均+7% QoQ）；2）受到晶圆代工成本下降、产品结构改善等因素，公司2Q24综合 毛利率的环比表现（+1.8ppts QoQ）优于我们预期（我们之前预测环比大 致持平）。 哪些因素推动公司2季度业绩好于行业平均水平？ 2Q24公司营业收入环比增长35%，基于公司数据推算，我们估计其光伏储 能 、 汽 车 类 、 数 据 中 心 以 及 工 业 类 应 用 的 季 度 收 入 环 比 分 别 增 长74%/55%/35%/30%，而消费电子应用环比则增长12%。2季度公司毛利 率为36. ...