China/HK - trades and charts Pullback in momentum this week especially towards the end, with both onshore and offshore China shares recording their first down week since Jan, HSTECH snapped its 6-week winning streak after a 5% loss. Trump's escalatory stance in terms of trade and national security reminded some investors that geopolitical uncertainties shouldn't be written off, and the painful momentum unwind in US tech space post NVDA numbers also triggered some unwind in Asia. The glass-half-full view her ...

风险。边缘。定位。表现。流动。 Following 以下 All Follows 所有跟随 Jamie Briggs Commentary 评论 APAC Execution Services: The Week Ahead APAC Flows Weekly - Mixed China flows ahead of NPC; Selling across East Asia Tech suppliers 亚太执行服务：下周展望 03 Mar 2025, 亚太资金流向周报 - NPC 前夕中国资金流向混合；东亚 科技供应商间的销售 | 食品 - 新动 亚太地区股票流动：关注点转向中国两会 3-Mar-2025, 00:21 2025 年 3 月 3 日，00:21 03 Mar 2025, 2025 年 3 月 3 日 HK & China Performance & Flows Summary Commentary 评论 香港与中国表现及资金流向概览 瑞士信贷期货周一市场前瞻 US 10 year yields broke lower on Friday to close at 4.2% with the ...

Investment Rating - The report maintains a "Buy" rating for Snowflake (SNOW) and Salesforce (CRM), while Occidental Petroleum (OXY) is rated as "Sell" [9][11][17]. Core Insights - The report highlights a significant momentum rollover in the market, particularly with a high beta momentum basket down 15% during the recent drawdown, largely influenced by NVIDIA's (NVDA) 8.5% drop, equating to a market cap loss of approximately $320 billion [4][6]. - The upcoming imposition of a 20% tariff by the US on certain imports is a key focus, with expectations of further market volatility [4][14]. - The report notes that hedge funds (HFs) are experiencing considerable pain, with a loss of over 250 basis points in performance over the five trading sessions leading up to NVIDIA's earnings report, marking the worst stretch since August [4][6]. ETF Flows - The report indicates that the Germany ETF (EWG) is experiencing its best month of flows since February 2023, while the IWM ETF is on track for its worst month since January 2024 [7]. - Emerging markets (EEM) have seen their first inflows since May 2024, suggesting a potential shift in investor sentiment [7]. Company-Specific Updates - Millrose Properties (MRP) is initiated with a "Buy" rating due to strong cash flows and attractive yield, projecting an average EPS growth of 11% from 2025 to 2027 [12]. - Madrigal Pharmaceuticals (MDGL) is also rated "Buy" following strong Q4 results, driven by the successful launch of Rezdira [13]. - BP Plc (BP.L) is rated "Buy" as it focuses on capital discipline and net debt reduction [17].

Investment Rating - The report indicates a positive investment outlook for Asia-focused fundamental long/short managers, with performance metrics showing significant gains in February 2025 [4][7][10]. Core Insights - Asia-focused fundamental long/short managers are up +2.8% month-to-date (MTD) and +4.0% year-to-date (YTD), driven by strong performance in China and favorable asset selection [4][10]. - China-focused managers have seen a +3.9% MTD and +6.5% YTD increase, primarily due to concentrated longs and technology sector tilts [4][10]. - Japanese managers are slightly down -0.6% MTD, with YTD returns at +0.4%, reflecting mixed performance across sectors [4][10]. - The report highlights that Asia is currently the most overweight region compared to MSCI World AC weights, with net allocations at +6.2% overweight and gross allocations at +2.6% overweight [20]. Performance Metrics - Gross leverage for Asia fundamental long/short managers is at 190%, which is in the 80th percentile over the past five years, while net leverage is at 60%, in the 78th percentile [15]. - Asian equities are experiencing the highest monthly risk-on activity in three years, with notable inflows from China/Hong Kong and Japan [4][17]. - Japanese equities have seen moderate net selling, but hedge funds are increasing their gross allocation to 6.4% (94th percentile) and net allocation to 5.7% (99th percentile) [31]. Sector Highlights - The industrials sector is the most net bought sector in February, with significant buying activity across Japan and China [41]. - Financials is the second most net bought sector, with inflows from both China and Japan, although allocations remain at multi-year lows [44]. - Technology, Media, and Telecommunications (TMT) stocks have seen modest net buying, with the highest risk-on activity in the region, particularly in China and Hong Kong [47]. Regional Allocations - China and Hong Kong equities have experienced strong risk-on flows, with gross allocations increasing by +0.8% to 5.4% and net allocations increasing by +1.5% to 8.5% [25][22]. - Positioning in Emerging Markets (EM) Asia excluding China has remained relatively flat, with moderate buying in Korea and Taiwan offset by selling in India [36].

Investment Rating - The investment rating for the industry is "Buy" on Sanhua, "Neutral" on Leaderdrive, Best Precision, and Moons' Electric based on valuation [8][15]. Core Insights - The technology inflection point for humanoid robots remains unclear due to insufficient capability in handling multiple generalized tasks, with a projected shipment of 76,000 units by 2027 and 502,000 units by 2032, which is slower than market expectations [8]. - Investment opportunities are currently seen in supply chain component names, particularly actuator assemblers and harmonic gear suppliers, due to higher product adoption certainty and stronger technology barriers [8]. Summary by Sections Humanoid Robots - Unitree's H1 humanoid robot demonstrates robust hardware performance and strong autonomous self-balancing but is limited by having only 19 degrees of freedom, making it incapable of complex tasks [2][4]. - The company anticipates that humanoid robots will not achieve the same efficiency as human workers within the next 2-3 years, with meaningful applications expected in 5-10 years [2]. Robot Dogs - Unitree's GO2 robot dog showcases advanced gait control algorithms, with the company holding a 60-70% market share in the global quadruped robot market and generating 50% of its revenue from overseas [3][4]. - The robot dogs are primarily used for patrol, inspection, and hazardous task substitution, with thousands of units shipped annually [3]. Technology Development - The humanoid robot has undergone significant technology iterations, improving performance metrics by 2-3 times with each generation [7]. - Current hardware design limitations necessitate further software and hardware iterations for large-scale applications [4].

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies involved Core Insights - The National Security Presidential Memorandum (NSPM) signed by US President Trump on February 21, 2025, aims to promote foreign investment while safeguarding national security interests, particularly concerning China [8][9] - The NSPM does not impose new restrictions on the investability of Chinese securities for US investors but highlights areas of potential policy uncertainty and increased portfolio flow restrictions [7][9] - US-China tensions are expected to resurface, especially as investor concerns regarding US tariffs have moderated recently [7][20] - The report emphasizes the importance of implementing strong macro policy stimulus to support domestic growth and drive sustainable equity gains [7][20] Summary by Sections What's Happened - The NSPM outlines measures to facilitate investments from allied nations while countering evolving threats associated with foreign investment [8] - The memorandum directs government agencies to work on regulatory processes related to foreign investments [8] What's New & What to Watch - The NSPM builds on previous actions taken by President Trump to protect American innovation [9] - It highlights potential areas for increased restrictions on US outbound investments into China, particularly in sectors like semiconductors and artificial intelligence [9][10] Investment Implications - The report indicates that while immediate legal consequences from the NSPM may not arise, it underscores the potential for rising US-China tensions, which could negatively impact Chinese equity performance [20] - The Chinese A-share market is expected to react more favorably to domestic policy stimulus compared to external policy risks [20][21] - The report forecasts that A shares may outperform H shares in the coming months, driven by domestic policy support and less sensitivity to external factors [21][34]

Investment Rating - The report maintains an "Overweight" (OW) rating on equities and bonds, while being "Underweight" (UW) on credit and commodities/cash [3][20]. Core Insights - Chinese equities have significantly outperformed the S&P 500 and European markets in February, driven by a supportive stance from President Xi towards the private sector [2][3]. - Despite the positive performance of Chinese equities, domestic mutual fund and ETF flows have not matched this trend, indicating a cautious sentiment among local investors [2][11]. - The "Two Sessions" event scheduled for March 4th/5th is expected to confirm a supportive expansionary stance for domestic listings, which could further enhance A-share returns [3][19]. Summary by Sections Market Performance - The report highlights a major reversal in equity performance, with low volatility and value stocks outperforming carry and momentum strategies [1]. - Asian markets, excluding Japan, and European equities have outperformed US equities, driven by improved sentiment regarding geopolitical issues and fiscal policies [1][2]. Sector Analysis - The technology and consumer discretionary sectors have shown strong performance in H-shares compared to A-shares, with notable gains in stocks like Alibaba (+65% YTD) and Xiaomi (+50% YTD) [3][9]. - The report indicates that sectors such as industrials, energy, and utilities have underperformed relative to IT and cyclicals [3][10]. Investment Strategy - The report emphasizes a focus on diversification across assets and regions due to lower expected returns and increased risks [3][20]. - There is a noted tactical risk of equity corrections due to bullish sentiment and elevated valuations, prompting a focus on hedges [3][20].

Investment Rating - The report indicates a bullish outlook for aluminium prices, forecasting a rise to $3,100/t by Q4 2026, which is 14% above current forwards [3][47][68]. Core Viewpoints - China's aluminium production is expected to peak in 2026, necessitating higher prices to stimulate new supply from other regions, particularly Indonesia and India, to avoid significant deficits in 2027-2028 [3][8][47]. - The analysis is based on three main pillars: low inventories, solid green demand, and the peak of Chinese supply [9][10][16]. Summary by Sections Low Inventories - As of the end of 2024, reported inventories were only sufficient to cover 9 days of consumption, a decrease from 20 days in 2019 [10][11]. - Total inventories covered 49 days of demand, which is just above the lows seen in 2006-2007 [10][11]. Solid Green Demand - The report forecasts a 2% average annual growth in aluminium demand through 2028, slightly below the 3% average from 2015-2024 [16][19]. - Demand from electric vehicles (EVs) is projected to increase significantly, with aluminium content in EVs expected to rise from 4.6 million tonnes to over 12 million tonnes by 2030 [19]. - Solar energy has been a major growth driver, contributing 3.3 million tonnes of demand growth from 2019-2024, accounting for 40% of total global demand growth [19][20]. China Supply Peak - China's aluminium production capacity is capped at 45.4 million tonnes per annum, a limit established in 2017 to address overcapacity [27][28]. - The report anticipates that this cap will be reached by early 2026, after which production will not exceed this level [28][32]. - The policy has led to improved profitability for Chinese aluminium smelters, as higher prices benefit the industry without increasing capacity [29][41]. Price Forecast - The forecast indicates that aluminium prices will initially face headwinds due to cost deflation, dropping to $2,500/t by June 2025, before rising to $2,650/t by December 2025 [47]. - By late 2026, margins are expected to rise to around 30%, near historical highs, before new investments in India and Indonesia bring the market back into balance [47][50].

Investment Rating - The report downgrades Eutelsat to Sell due to competitive pressures, execution risks, and rising debt burdens, while AT&T, BT, Cellnex, DT, Elisa, T-Mobile US, and Verizon are rated as Buy due to their strong market positions and satellite partnerships [37][48][50]. Core Insights - The number of Low Earth Orbit (LEO) satellites is projected to increase from approximately 7,000 today to around 30,000 by 2030 and 78,000 by 2035, assuming most new satellite companies meet their launch targets [4][12][51]. - Satellite services are viewed as more of an opportunity than a threat to telecom operators, with the potential for augmented satellite-wireless services to enhance revenue for terrestrial telecom providers [5][31]. - Capacity constraints will limit the competitive threat from satellite broadband, with estimates suggesting that only about 8% of the US population could be served competitively by satellite broadband by 2035 [19][80]. Summary by Sections Satellite Launch Projections - If new satellite companies achieve their targets, LEO satellites could increase significantly, with projections of 30,000 by 2030 and 78,000 by 2035 [4][12][51]. - There are concerns regarding the feasibility of these targets due to regulatory, economic, and sustainability issues [15]. Competitive Landscape - The report indicates that the risk to telecom operators from satellite communication services is limited due to capacity constraints and regulatory concerns [11][18]. - Existing wireless and broadband services are expected to outperform pure satellite services in most scenarios, particularly in urban areas [26]. Market Opportunities - The report highlights that satellite services could provide significant benefits in rural areas and for specific applications such as military and emergency services [26][31]. - Partnerships between terrestrial telecom providers and satellite operators are increasing, suggesting a trend towards complementary service offerings rather than direct competition [31][36]. Eutelsat's Position - Eutelsat is seen as vulnerable due to competitive pressures and execution risks, leading to a downgrade in its rating [37][48]. - The company faces challenges from new entrants like Starlink and Amazon's Project Kuiper, which are expected to disrupt the existing satellite market [37].

Investment Rating - The report maintains a "Buy" rating for Microsoft Corp. (MSFT) with a 12-month price target of $500, representing a potential upside of 22.5% from the current price of $408.21 [1][22]. Core Insights - Microsoft is positioned to capitalize on long-term trends such as Gen-AI, public cloud consumption, SaaS adoption, and digital transformation, which are expected to drive sustainable EPS growth [17][20]. - The company is adjusting its capital expenditures (CapEx) towards shorter-lived assets, indicating a prudent investment strategy in AI capacity with a focus on returns [1][17]. - Microsoft’s cloud business is projected to reach nearly $250 billion by FY27, representing a compound annual growth rate (CAGR) of approximately 22% from FY24 levels [17][20]. - The report highlights Microsoft's strong competitive position across all layers of the cloud stack, which is expected to enhance customer retention and lifetime value [18][20]. Financial Projections - Revenue is forecasted to grow from $245.1 billion in FY24 to $361.2 billion in FY27, with EBITDA increasing from $131.7 billion to $201.6 billion over the same period [2][11]. - EPS is expected to rise from $11.80 in FY25 to $18.30 in FY27, reflecting a robust growth trajectory [2][11]. - The report anticipates a significant increase in AI revenue, projected to scale to a $13 billion run rate, representing a year-over-year growth of 175% [1][17]. Market Positioning - Microsoft is trading at a discount compared to Oracle, with a 30x CY25 EV/FCF ratio versus Oracle's 49x, indicating potential value for investors [1][22]. - The company has a strong balance sheet with approximately $300 billion in remaining performance obligations (RPO) and a net debt/EBITDA ratio of (0.3), showcasing financial strength [1][2][11]. - The report emphasizes Microsoft's efficient capital allocation strategy, which includes successful acquisitions and share repurchases, contributing to a compelling total return story [17][20].