Investment Rating - The report initiates coverage on DiDi Global Inc. with a "Buy" rating and a 12-month price target of US$7.20, indicating a 35% upside potential [1][27][34]. Core Insights - DiDi is positioned to capitalize on the growing global mobility market, particularly in autonomous driving and shared mobility, with a strong valuation compared to peers [1][27]. - The company is expected to achieve significant revenue and EPS growth, with projected CAGRs of 8% and 44% respectively from 2024 to 2027 [2][28]. - DiDi's market leadership in China, with a 70% market share, and its expansion into international markets, particularly in Latin America, are key growth drivers [27][31]. Summary by Sections 1. Domestic Mobility Growth - DiDi operates within a growing RMB 744 billion shared mobility total addressable market (TAM) in China, with expectations for continued growth in ride-hailing services [28][31]. - The company aims to improve profit margins by reducing user subsidies and leveraging operational efficiencies, with a target GTV margin of 6-7% by 2030-35 [31][32]. 2. Robotaxi Opportunity - The report views robotaxis as a significant growth opportunity rather than a threat, projecting that DiDi will capture a substantial share of the robotaxi market by 2030 and 2035 [34][35]. - DiDi's autonomous fleet is expected to contribute significantly to its overall trip volume and profit margins in the coming years [34][35]. 3. International Business Expansion - DiDi has established a strong presence in Latin America, particularly in Brazil and Mexico, with significant user bases and transaction volumes [28][31]. - The company is also diversifying into food delivery services, leveraging its existing rider network to compete effectively in the region [31][32]. 4. Valuation and Fundamentals - DiDi's current valuation at 14X domestic 2026E P/E is considered attractive compared to its peers, with potential for re-rating based on strong growth fundamentals [2][32]. - The report highlights that DiDi's discounted valuation is influenced by non-fundamental factors, including liquidity concerns and competitive pressures in the food delivery market [32][34].

Investment Rating - The report maintains a "Buy" rating for JD, Kuaishou, PDD, and Alibaba, while also recommending Meituan due to its significant market share despite profit declines [7][10][9]. Core Insights - The eCommerce landscape in China is experiencing heightened competition, particularly in food delivery and on-demand services, leading to revised earnings estimates for Alibaba and JD, with cuts ranging from -1% to -10% for 2025E-27E [1]. - June online retail goods GMV increased by 5% year-over-year, showing a moderation from 8% in May, with overall retail sales growing by 4.8% in June [2][28]. - The report anticipates profit declines across transaction platforms in the second half of 2025, with a potential inflection point for eCommerce share prices expected in the latter half of 2025 [7]. Summary by Sections eCommerce Tracker - Daily order volumes in the food delivery and on-demand retail industry peaked at approximately 250 million on July 12, with Meituan capturing significant market share through discounts [1]. - Alibaba is leveraging synergies between Taobao Instant Commerce and Ele.me, achieving over 80 million daily orders through its fulfillment network [1]. Market Performance - The national online retail goods GMV for June was reported at a 5% increase year-over-year, with a sequential moderation from 8% in May [2]. - The overall retail sales growth in June was 4.8% year-over-year, with notable strength in home appliances at 32% growth [28]. Parcel Volume Growth - The average daily parcel volume in July to date is approximately 531 million, maintaining a year-over-year growth rate of 15% [6][27]. - The report maintains a 2025E industry online GMV growth estimate at 6%, while adjusting the parcel volume growth estimate down to 17% from 19% [6]. Stock Implications - The report highlights a preference for sectors such as games, mobility, and internet verticals over eCommerce due to stronger near-term earnings setups [7]. - JD's market has largely priced in expected profit declines, while PDD is favored for its non-participation in the food delivery battle [9][10].

Investment Rating - The report indicates a strong positioning for the semiconductor sector, with Nvidia (NVDA) rated at 10 on a scale of 1-10, Microsoft (MSFT) at 9, and Meta (META) at 8.5, while Apple (AAPL) is rated at 4, indicating a significant underweight in the market [10][12][14][18]. Core Insights - The semiconductor sector is viewed as the cleanest expression of growing AI enthusiasm, with investor sentiment reaching new highs daily [2]. - Generalist inflows into the semiconductor group continue without signs of slowing, despite being well-held by various investor types [3]. - The internet sector is crowded, with notable year-to-date winners, but investors are now balancing high valuations against strong long-term narratives [4][5]. - The telecommunications/media sector has pockets of investor interest, with several companies like DIS and T showing increased long positions [6]. - Software sentiment is declining due to uncertainties surrounding the long-term impact of AI on enterprise/cloud software businesses [7]. - IT services and ad agencies are experiencing significant market negativity, with concerns about AI posing a cannibalistic threat [8]. Summary by Sector Semiconductors - The semiconductor sector is currently crowded with high investor interest, particularly in companies like NVDA, AVGO, TSM, and MU, which are among the most popular longs [19][20]. - The long/short ratio in this sector is at highs, consistent with positive market sentiment [19]. Internet - The internet sector has a high long/short ratio (~4.5x) but is in the middle of its recent range, indicating a balanced sentiment [24]. - Popular longs in this sector include META, SPOT, NFLX, and AMZN, while shorts include SNAP and LYFT [26]. Software - The software sector is experiencing a multi-year decrease in the long/short ratio, indicating negative sentiment [21][23]. - Popular longs include MSFT and ORCL, while shorts include ADBE and WDAY [23]. Telecommunications/Media - There is a notable increase in long positions in certain telecommunications/media stocks, despite the sector's historical negativity [6]. Overall Market Sentiment - The overall market sentiment is mixed, with strong enthusiasm in semiconductors and internet sectors, while software and IT services face challenges due to AI-related uncertainties [7][8].

Investment Rating - The report assigns a "Buy" rating to Anta Sports Products with a 12-month price target of HK$117, indicating an upside potential of 30.3% from the current price of HK$89.80 [16][18]. Core Insights - Anta's operational update for 2Q25 shows retail sales growth for its core brand at +LSD% year-over-year, while Fila and other brands performed better, with Fila growing at +MSD% and Descente and Kolon exceeding +40% and +70% respectively [1][12]. - The management expressed confidence in the recovery of the Anta brand in 2H25 following restructuring efforts in 2Q25, with a full-year growth target of HSD% for Anta core, MSD% for Fila, and over 30% for other brands [1][12]. - The report highlights the solid performance of Fila and smaller brands, which are expected to offset any potential weaknesses in the Anta brand, thus providing a positive outlook for the overall group [1][12]. Operational Updates - In 2Q25, Anta's core brand faced challenges due to management restructuring and weaker offline traffic, leading to a slower sales growth compared to previous quarters [7][8]. - The e-commerce channel showed growth at +LSD%, while offline sales also recorded similar growth rates, indicating a balanced performance across channels [7][8]. - The management has initiated a "Light-house Store Campaign" to enhance store performance in lower-tier cities, which involves optimizing underperforming stores and potentially closing some temporarily [8][12]. Brand Performance - Fila's retail sales grew by +MSD% year-over-year in 2Q25, with the core Fila brand achieving +HSD% growth, indicating strong brand momentum [11][12]. - Other brands like Descente and Kolon reported impressive growth rates, with Descente achieving over 40% and Kolon over 70% year-over-year [11][12]. - MAIA, still in its incubation stage, posted over 30% growth in 2Q25, driven by an expanding offline presence and innovative retail formats [12]. Margin and Cost Control - Management noted some headwinds on gross profit margins due to a shift towards online sales channels, which typically involve deeper discounts [13]. - Operating expenses for the Anta brand were well-controlled in 1H25, with expectations for increased marketing expenses in 2H25 due to planned events [13]. - The overall margin outlook remains positive, supported by stronger growth in smaller brands that typically carry higher operating profit margins [13].

Investment Rating - The report maintains a positive outlook on the Robotaxi industry growth, raising the Total Addressable Market (TAM) estimates for China by 9% to 35% for the years 2026 to 2035, expecting the market to reach US$14 billion by 2030 and US$61 billion by 2035 [1][11]. Core Insights - The report highlights several factors driving the growth of the Robotaxi industry, including advancements in technology, new riding experiences, support for online ride-hailing mobility, and the emergence of new business models for fleet owners [1]. - The penetration rate of Robotaxis in China is projected to reach 10% by 2030 and 29% by 2035, with fleet size estimates increasing from 474,000 to 535,000 for 2030 and from 1.9 million to 2.3 million for 2035 [11][14]. Summary by Sections Market Overview - The report indicates that Robotaxi operators in China are optimistic about long-term growth, with significant advancements in software and hardware improving safety and user experience [1]. - The report notes that the shift to Robotaxis can alleviate the expected retirement of 4 million human drivers by 2035, providing a solution to fill the gap in the labor market [1]. Financial Projections - The revised TAM for the Robotaxi market in China is expected to grow to US$14 billion in 2030 and US$61 billion in 2035, reflecting increases of 20% and 31% from previous forecasts [11][13]. - The report also details the expected revenue per vehicle in Tier-1 cities, projected to increase to US$32,000 by 2035, up from US$10,000 in 2024 [16][17]. Fleet Size and Penetration - The report raises the fleet size estimates for Robotaxis, projecting 535,000 units by 2030 and 2.3 million by 2035, representing 10% and 29% of the shared mobility fleet, respectively [11][14]. - The report emphasizes the acceleration of commercialization efforts by leading Chinese Robotaxi companies, with significant fleet expansions and partnerships, such as Pony AI's goal of 1,000 vehicles by 2025 and Baidu's plans for large fleets in Dubai and Abu Dhabi [10][11].

Investment Rating - The report maintains a "Buy" rating on PDD, indicating favorable risk-reward dynamics due to its non-participation in the food delivery competition and potential growth from new user traffic and general merchandise strength [10]. Core Insights - The report highlights a potential resumption of Nvidia H20 chip supply, which could positively impact China's cloud service providers' capital expenditures starting from Q3 2025, with an expected 44% quarter-over-quarter increase in aggregate capex [1]. - There is a notable increase in generative AI adoption among Chinese enterprises, with over 40% having pilot-tested generative AI tools, up from 8% last year [1]. - The performance gap between US and Chinese AI models is narrowing, with new releases from various internet platforms and AI startups [1]. - The report emphasizes steady progress in monetization of AI applications, with Chinese models achieving scalable annual recurring revenue (ARR) for their AI products [1]. Summary by Sections AI Application Trends - China's top AI applications showed healthy user engagement trends in June, with a 6% month-over-month increase in domestic AIGC application engagement, driven by strong growth in Doubao and DeepSeek [8][10]. - The overall time spent on the top 400 mobile apps increased by 7% year-over-year in June 2025, with significant growth in eCommerce and social engagement [7][10]. Capital Expenditure Forecasts - The report forecasts a drop in combined capex from China CSPs in Q2 2025, followed by gradual improvement in Q3 and Q4 2025, driven by the resumption of Nvidia shipments and domestic chip ramp-up [15]. Monetization and Revenue Growth - The ARR of various AI operations in Chinese companies shows significant figures, with Kuaishou's Kling AI expected to reach over US$400 million in total annual revenue by 2027 [20][21]. - The report notes that subscription-based productivity tools and advertising-based AI search engines are contributing to the monetization of AI applications [1]. Competitive Landscape - Competition in video-generative models is intensifying, with Kuaishou's Kling AI projected to achieve substantial revenue growth, alongside other models from ByteDance and Alibaba [1][6]. - The report highlights the increasing capabilities of Chinese AI models, which are closing the performance gap with US counterparts [33][34].

Investment Rating - The report maintains a Neutral rating on Pop Mart (9992.HK) with a 12-month target price of HK$260.00, reflecting a downside of 1.2% from the current price of HK$263.20 [10][19]. Core Insights - Pop Mart's 1H25 profit alert indicates a sales increase of no less than 200% year-on-year, translating to at least Rmb13.7 billion in revenue, surpassing Goldman Sachs' estimate of 187% growth [1][15]. - The group profit is expected to rise by no less than 350% year-on-year, suggesting a net profit of Rmb4.5 billion in 1H25, which is above the previous estimate of Rmb3.8 billion [1][15]. - The robust performance is attributed to strong IP popularity, particularly the Labubu IP, and significant growth in both mainland China and overseas markets [2][3]. Financial Forecasts - Revenue projections for Pop Mart have been revised upwards for 2025-2027, with expected revenues of Rmb32.8 billion in 2025, Rmb42.3 billion in 2026, and Rmb49.1 billion in 2027, reflecting growth rates of 152%, 29%, and 16% respectively [5][16]. - The adjusted net profit for 2025 is forecasted at Rmb10 billion, indicating a growth of 213% [16]. - The report highlights a significant EBITDA growth forecast, with expected figures of Rmb14.8 billion in 2025 and Rmb22.7 billion in 2027 [5][10]. Market Performance - Pop Mart's stock has shown substantial price performance, with an absolute increase of 588.1% over the past 12 months [11]. - The company has a market capitalization of HK$350.6 billion and an enterprise value of HK$336.7 billion [5]. Growth and Margins - The report indicates a notable expansion in net profit margin (NPM), expected to reach around 30% in 1H25, compared to 20% in 1H24 and 26% in 2H24 [1][3]. - The EBITDA margin is projected to improve to 45.1% in 2025, with continued growth in subsequent years [10][13]. Strategic Outlook - The report emphasizes the importance of extending IP popularity beyond Labubu and expanding the product category to maintain growth momentum [3][20]. - The potential for further customer base expansion is highlighted as a key driver for future earnings growth [3][20].

Investment Rating - The report indicates a positive outlook for Hong Kong's IPO market, suggesting potential investment opportunities in newly listed companies and sectors with high demand [2][3]. Core Insights - Hong Kong's IPO market has seen a resurgence with 51 companies listed year-to-date, raising HK$124 billion, compared to 77 listings raising HK$88 billion in 2024 [3][4]. - The increase in IPO activity is attributed to a robust market rally, a slowdown in A-share IPOs, and more accommodating listing rules by HKEX [2][4]. - Cornerstone investors contributed 42% of the capital raised in IPOs, with two-thirds coming from foreign investors, indicating strong international interest [42][43]. - Newly listed companies in 2024/25 have shown significantly higher post-IPO returns compared to previous years, driven by substantial cornerstone investor ownership and growth potential [52][53]. Summary by Sections 1. IPO Market Activity - The resurgence in Hong Kong's IPO market is driven by improved market performance, with HSI and HSTECH gaining 20% and 17% year-to-date [4][26]. - The IPO pipeline remains strong, with over 200 companies in the application process [3][4]. 2. Dual Listings - A-share companies are pursuing dual listings in Hong Kong to access overseas financing and mitigate delisting risks, with regulatory support encouraging this trend [8][10]. - Approximately 80% of US institutional investors in ADRs already have exposure to the Hong Kong market, facilitating smoother transitions for companies [10][12]. 3. Investor Participation - The participation of cornerstone investors has been significant, with their ownership ranging from under 10% to over 80% in recent IPOs [42][43]. - Retail interest in IPOs has reached a multi-year high, reflecting improved risk appetite among investors [47][49]. 4. Post-IPO Performance - Newly listed companies in 2024/25 have delivered an average return of 10% on the first trading day and 41% within the first three months [52][56]. - Companies with cornerstone investor ownership between 30% and 50% tend to outperform, highlighting the importance of investor confidence [53][57]. 5. Spillover Effects - Active IPOs in Hong Kong positively influence A-share market performance, with sectors experiencing new listings generally seeing their peers outperform [63][64]. - The correlation between robust IPO activity and favorable performance in A-share markets suggests a beneficial spillover effect [63][64]. 6. Index Inclusion and Liquidity - New listings that meet specific criteria are eligible for fast-track index inclusion, potentially attracting significant passive investment [66][67]. - Southbound inclusion allows Hong Kong-listed companies to access onshore liquidity, enhancing their market appeal [67][72].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - June core CPI rose 0.23% month-over-month, slightly below consensus expectations, with a year-over-year rate of 2.93% [1][2] - Lower hotel prices and used car prices negatively impacted the core CPI, while increases in household furnishings, recreation commodities, apparel, and auto parts prices provided a positive boost [1][2] - The Empire manufacturing index increased significantly in July, indicating stronger-than-expected growth in employment, new orders, and shipments [1][6] Summary by Relevant Sections Core CPI Analysis - The month-over-month core CPI increase of 0.23% was below the median forecast of 0.3%, while the year-over-year rate reached 2.93% [2] - Declines in lodging prices (-2.9%), used car prices (-0.7%), and new car prices (-0.3%) weighed on the core CPI [2][4] - Positive contributions came from household furnishings (+1.0%), video and audio prices (+1.1%), and medical care services (+0.6%) [4] PCE Price Index Estimation - The core PCE price index is estimated to have risen 0.29% in June, with a year-over-year rate of +2.75% [1][5] - The headline PCE price index is expected to have increased by 0.32% in June, corresponding to a year-over-year increase of 2.55% [5] Empire Manufacturing Index - The Empire manufacturing index rose by 21.5 points to 5.5 in July, surpassing consensus expectations [6] - Key components such as employment, new orders, and shipments all showed significant increases, indicating robust manufacturing activity [6]

Investment Rating - The report assigns a "Buy" rating for Innolight with an updated 12-month target price (TP) of Rmb182, increased from Rmb160 [1][4]. Core Insights - Innolight's net profit for Q2 reached Rmb2.4 billion, marking a 79% year-over-year increase and a 53% quarter-over-quarter increase, indicating a re-acceleration in growth [1]. - The company anticipates strong demand for its products, particularly in the 800G and 1.6T segments, driven by cloud service providers and AI applications [2][11]. - Margin expansion is attributed to a better product mix and improved yields, contributing significantly to the strong Q2 performance [3][10]. Summary by Sections Financial Performance - Revenue estimates for 2025E-2027E have been revised up by 6% to 12%, and net profit estimates have been increased by 12% to 22% following better-than-expected Q2 results [4][8]. - The gross margin is projected to improve to 40.1% in 2025E, up from a previous estimate of 38.5% [8]. Demand Outlook - The company has reaffirmed a strong demand outlook from US cloud service providers for 800G products heading into the second half of 2025 and 2026, with some customers increasing orders to support AI applications [2][11]. - Innolight plans to expand its production capacity in Thailand to meet the anticipated demand [2]. Margin Improvement - The report highlights that margin improvement is driven by a shift towards higher-margin products such as 800G/1.6T optical transceivers and silicon photonics modules [3][10]. - The company is experiencing better yields, which further supports margin expansion [3]. Competitive Position - Innolight is positioned as a leading supplier in the optical transceiver market, particularly benefiting from the growth in AI and data center expansions [10][11]. - The company's strong execution in ramping up capacity and developing new products is seen as a key competitive advantage [11][13].