Investment Rating - The report maintains a "Buy" rating for integrated players such as SF Holding, JD Logistics (JDL), and the leader ZTO, while adopting a "Neutral" rating for others like STO, Yunda, and J&T, and a "Sell" rating for YTO and Sinotrans-A/H [7][21]. Core Insights - The express delivery sector in China is experiencing intense price competition, leading to a decline in average selling prices (ASPs) and profitability across franchise-based players, while integrated logistics providers show resilience [1][21]. - The report revises the expected industry volume growth for 2025E from 18% to 20% year-on-year, driven by a shift towards lightweight and small parcels, and the growth of emerging eCommerce platforms [2][21]. - The report highlights that the competitive landscape will depend on strategic adjustments by incumbents and potential policy interventions to stabilize pricing [1][21]. Summary by Sections Industry Overview - The express delivery sector concluded 1Q25 with a 22% year-on-year volume growth but faced a 6-10% decline in ASPs across major players [21][22]. - The ongoing price competition is attributed to a trade-down trend in eCommerce goods and the need for express players to maintain capacity utilization [22][23]. Financial Performance - The report indicates that the group operating profit for Tongda players is expected to decline by approximately 12% year-on-year in 2025E, with SF being the only player projected to see double-digit profit growth [6][7]. - Adjusted net profit forecasts for franchise-based players are revised downwards by 9% to 19% below Bloomberg consensus [7][21]. Company-Specific Insights - SF Holding is noted for its strong performance, with a 20% year-on-year EBIT growth in 1Q25, benefiting from cost optimization and a diversified revenue stream [1][40]. - ZTO is highlighted as the only Buy-rated franchise-based express delivery name, expected to stabilize its market share despite near-term earnings weakness [7][21]. - Yunda and YTO are projected to experience low-to-mid teens year-on-year profit declines, while STO and J&T China are expected to see flat earnings [6][7]. Market Dynamics - The report anticipates continued competition in 2Q-3Q25, with potential for strategic adjustments or industry consolidation to mitigate pricing pressures [1][21]. - The ASP for express delivery services is forecasted to decline by 6% to 8% across major players in 2Q25E, reflecting a slightly easier base compared to 1Q [22][23]. Volume and Revenue Estimates - The report raises the industry volume estimate for 2025E to 20% year-on-year, factoring in strong growth momentum and a shift in parcel mix [2][21]. - Revenue estimates for ZTO are cut by 6% due to less-than-expected impacts from gross revenue bookings, while Yunda and YTO see slight revenue increases [2][6]. Valuation - The report continues to value China express delivery companies based on a 1-year forward EV/EBITDA multiple, which remains unchanged at an average of 7X [13][15].

Investment Rating - The report suggests a modest impact on corporate earnings and cash flows from the budget reconciliation bill, estimating a boost of around 5% for the S&P 500 in the next year [1][2]. Core Insights - The budget reconciliation bill is expected to have only a modest effect on the US fiscal balance and corporate earnings, with potential earnings boosts diminishing in subsequent years [1][2]. - The ECB is anticipated to cut rates by 25 basis points, with growth forecasts remaining unchanged at 0.9% for this year and a slight decline for next year [11]. - The report highlights the potential for renewed interest in European equities due to the Section 899 provision of the reconciliation bill, which may create uncertainty for US investments [2][5]. Fiscal Policy Focus - The budget reconciliation bill is projected to have limited effects on migration and economic activity, particularly for high-earning households [5]. - Fiscal policy in China is expected to support growth, with an estimated boost of 1.1 percentage points to real GDP growth this year [6]. ECB Projections - The ECB's growth forecast for this year is expected to remain at 0.9%, with a slight decline in next year's forecast [11]. - Inflation projections are likely to be downgraded, with headline and core inflation expected to decline to 1.7% and 1.8% respectively for next year [11]. US Jobs Report - The report estimates a below-consensus increase of 110,000 in nonfarm payrolls for May, with an unchanged unemployment rate of 4.2% [16]. - Average hourly earnings are forecasted to increase by 0.3% month-over-month [16]. Steel and Aluminum Tariffs - The doubling of US steel and aluminum tariffs to 50% is expected to negatively impact US steel demand from the manufacturing sector [16]. - There is a potential risk of tariffs being imposed on copper imports, which is currently underpriced in the market [16].

Investment Rating - The report highlights 44 Buy-rated stocks that are expected to benefit from the AI/data center power surge, including Quanta Services, GE Vernova, Xcel, Cameco, and NextEra [3][54][57] Core Insights - Strong demand and government actions are driving an average cost increase of 23% for new power generation capacity additions in the US, with a focus on reliability and affordability in power sourcing [1][12] - The Green Reliability Premium, which accounts for redundancy in power solutions, is projected to rise significantly if IRA renewables incentives are eliminated, impacting the overall cost structure for data centers [2][42] - The report anticipates a 160% increase in global data center power demand (AI + non-AI) by 2030 compared to 2023, equivalent to adding another top 10 power-consuming country [21][27] Summary by Sections Green Reliability Premium - The Green Reliability Premium is estimated to be $40/MWh with current IRA incentives, increasing to $55/MWh if these incentives are removed, representing a modest impact on hyperscaler EBITDA [42][44] - The report emphasizes that the cost of power is not seen as a constraint to data center growth, although regional power reliability and affordability will influence siting decisions [21][46] Power Demand and Supply - The US power demand is expected to grow at a CAGR of 2.5% through 2030, with data centers contributing approximately 100 basis points to this growth [22][24] - The report outlines diverse drivers of upward cost pressure across power generation, including tariffs and demand for natural gas, which could lead to significant increases in levelized costs [12][19] Investment Opportunities - The report identifies a bullish outlook for infrastructure contractors, regulated utilities, and industrials due to the rising demand for reliable power amid aging infrastructure and extreme weather events [3][54] - It highlights the importance of an all-of-the-above approach to power sourcing, considering the variability in supply availability and time to market [1][46]

USA: ADP Employment, ISM Services Below Expectations; S&P Services PMI Revised Up; Lowering Payroll Growth Forecast to +110k BOTTOM LINE: According to the ADP report, private sector employment increased by 37k in May, below expectations, and employment in April was revised down. The ISM services index declined by more than consensus expectations in May. In the ISM services press release, respondents highlighted that the tariffs had led to cost increases in their industries. The S&P Global services PMI was r ...

3 June 2025 | 9:27AM EDT US Monthly Inflation Monitor: May 2025: The Tariff Boost Remains Small for Now but Should Rise From Here (Rindels) Goldman Sachs & Co. LLC n Recent inflation trends: n Factors influencing core goods prices: Jan Hatzius +1(212)902-0394 | Goldman Sachs & Co. LLC Alec Phillips +1(202)637-3746 | Goldman Sachs & Co. LLC David Mericle +1(212)357-2619 | david.mericle@gs.com Goldman Sachs & Co. LLC Ronnie Walker +1(917)343-4543 | ronnie.walker@gs.com Goldman Sachs & Co. LLC Manuel Abecasis ...

Investment Rating - The report indicates a bearish outlook for the iron ore market, with price forecasts suggesting a decline to $92/t by December 2025 and $87/t by December 2026, reflecting a decrease of 3% and 8% from the current front-month prices [3][4]. Core Insights - The report highlights a consensus among industry players regarding a bearish iron ore price outlook, driven by factors such as slowing global economic growth, reduced steel demand in China and beyond, and increased supply from projects like Mineral Resources' Onslow and the Simandou Project [4][5]. - The forecast for Q4 2026 suggests a price of $80/t, which is at the lower end of expectations, influenced by rising iron ore port stocks in China, a projected 2% year-over-year decline in domestic steel demand in 2025, and an anticipated appreciation of the CNY/USD exchange rate [5][8]. - The report notes that prices need to remain around $80/t for an extended period to eliminate less price-responsive supply from the market, particularly as global seaborne demand is expected to decline significantly [8]. Summary by Sections Price Outlook - The report anticipates iron ore prices to range between $95-100/t for Q2-Q3 2025, followed by a decline to $90/t in Q4 due to various economic factors [4]. - The bearish sentiment is reinforced by expectations of further price declines in 2026, with most forecasts clustering in the $80-90/t range [5]. Supply and Demand Dynamics - A significant decline in China’s domestic iron ore production is expected, with projections of an 8% decrease in 2025 and a further 16% decrease in 2026, attributed to lower demand despite initiatives to boost production [14]. - The report emphasizes that while there is a structural decline in China’s steel output, no strict government-mandated production cuts are anticipated in the near term due to improved steelmaking margins [9]. Export Factors - The strength of China’s steel exports is identified as a critical factor influencing steel production, with expectations of a decline in direct steel exports due to anti-dumping duties and base effects [10][11]. - Despite a projected decline in net exports, the report suggests that China may still manage to sustain higher export levels by shifting focus to long and semi-finished steel products [11].

Investment Rating - The report indicates a real GDP growth forecast for China of 4.6% in 2025, revised from 4.0% due to changes in US tariffs and economic conditions [3][4]. Core Insights - There has been no significant shift from external to domestic demand in China's economy, with exports remaining strong despite higher US tariffs [3][8]. - Retail sales growth has improved, largely driven by a government-subsidized consumer goods trade-in program, with some categories seeing sales growth exceeding 20% year-on-year [11][8]. - The property sector has shown signs of weakness, with new property starts down approximately 75% from peak levels and property sales dropping by about 50% [16][21]. - The labor market is currently very weak, with employment sub-indices indicating significant slack, particularly in construction and small businesses [17][21]. - The Chinese Yuan (CNY) is expected to begin a multi-year strengthening path against the USD, as it is considered significantly undervalued [22][23]. Summary by Sections Economic Overview - The US effective tariff rate on Chinese goods is projected to remain around 40% for the remainder of the year, impacting growth forecasts [3][7]. - Despite higher tariffs, export volume increased by 13% year-on-year in April, indicating resilience in the export sector [3][8]. Retail Sector - Retail sales growth improved to 4.7% year-on-year in January-April 2025, compared to 3.5% in the same period of 2024, primarily due to the trade-in program [9][11]. Property Market - The property market has weakened, with new property starts and sales significantly declining, indicating a destocking process to clear excess inventory [16][21]. Labor Market - Employment indices from various PMIs show that the labor market is extremely weak, particularly in construction and small businesses, with many indices below the 5th percentile of historical performance [17][21]. Currency Outlook - The CNY is expected to strengthen against the USD, supported by undervaluation and competitive manufacturing factors, with a revised 12-month forecast of 7.00 for USDCNY [22][23][28].

Investment Rating - The report designates Sagimet Biosciences (SGMT) as an Early-Stage Biotech with a focus on denifanstat for acne treatment [10]. Core Insights - Positive topline results from a Phase 3 trial of denifanstat in moderate to severe acne were announced, showing statistically significant improvements over placebo on all primary endpoints [1][2]. - The trial involved 480 patients and demonstrated a treatment success rate of 33.2% for denifanstat compared to 14.6% for placebo, with significant reductions in total and inflammatory lesion counts [7][8]. - The favorable safety profile of denifanstat was noted, with comparable rates of treatment-related adverse events (TRAEs) between denifanstat and placebo [5][6]. Summary by Sections Trial Results - The Phase 3 trial was randomized, double-blind, and placebo-controlled, evaluating denifanstat's efficacy and safety over a 12-week period [2]. - Key primary endpoints included the percentage of patients achieving treatment success, percentage reduction in total lesion count, and percentage reduction in inflammatory lesion count [3][5]. - Denifanstat achieved a 57.4% reduction in total lesion count and a 63.5% reduction in inflammatory lesion count compared to 35.4% and 43.2% for placebo, respectively [7]. Regulatory and Financial Implications - Ascletis plans to submit for regulatory approval in China imminently, which could lead to milestone payments of up to $122 million for SGMT [1][8]. - SGMT retains rights to denifanstat outside of China, allowing for potential development in the U.S. market, although regulatory pathways remain uncertain [8][9]. Future Development - The data from the trial supports SGMT's internal efforts with its next-generation FASN inhibitor, TVB-3567, which is currently in a Phase 1 trial for moderate to severe acne [9]. - The U.S. acne market is estimated to have a patient population of approximately 50 million, with SGMT expressing enthusiasm for the potential of TVB-3567 [9].

Investment Rating - The report does not explicitly state an investment rating for the theater industry or specific companies like Cinemark and IMAX Core Insights - Domestic Box Office (DBO) is tracking +26% Year-to-Date (YTD) through May 2025 compared to the previous year, but remains -28% YTD compared to 2019 levels [4] - The second quarter DBO is projected to be $3.0 billion, representing a +55% increase YoY and -8% compared to 2019 [4] - Cinemark's attendance is up +18% YTD through May, with fluctuations in market share observed [3][30] - Consumer sentiment metrics indicate that Cinemark outperforms peers in areas such as pricing and concessions, although it has lost some ground in screen and sound quality [9][60][66] Box Office Performance - The DBO for May 2025 showed a significant increase of +76% YoY [13] - Major titles like "Sinners," "Final Destination: Bloodlines," and "Lilo & Stitch" have performed well, while big action titles like "Thunderbolts" and "Mission Impossible 8" have underperformed [4][39] - The report anticipates a total DBO of $9.5 billion for 2025, with an increase in expectations for 2Q25 DBO by +$90 million [10] Attendance and Market Share - Cinemark's mobile app downloads increased by +86% YoY in May, with monthly active users (MAUs) up +33% [49][51] - Attendance data from Placer AI indicates that Cinemark's theater attendance is +54% YoY in May [30] - Cinemark has maintained market share gains post-COVID, attributed to investments in quality and loyalty programs [21] Consumer Sentiment - Net Purchase Intent (NPI) for Cinemark remained flat month-over-month in April 2025, indicating positive consumer sentiment compared to peers [9][60] - Cinemark has consistently outperformed competitors in consumer sentiment metrics related to pricing and concessions [60][64] Film-by-Film Estimates - The report includes detailed film-by-film estimates for 2024-2026, indicating a strong pipeline of upcoming releases that could impact box office performance [71]

Investment Rating - The report maintains an "Overweight" (OW) position on cash, equities, credit, and bonds, while being "Underweight" (UW) on commodities for the next three months [3][21]. Core Insights - Emerging Market (EM) equities have shown resilience despite tariff uncertainties, with a projected earnings growth of 10% to 11% for CY 2025/26, which is 2-3 percentage points higher than previous forecasts [2][6]. - The S&P 500 had its best May performance since 1990, outperforming EM equities year-to-date, although EM equities have generally outperformed US equities in the same period [2][7]. - A weaker US Dollar is expected to support EM outperformance, as EM equities have historically benefited from a weaker Dollar [2][14]. Summary by Sections Economic Outlook - The report highlights the importance of upcoming economic data and decisions from G4 central banks, with expectations of a 25 basis point rate cut by the ECB and stable unemployment rates in the US [1][2]. Market Performance - The S&P 500's performance in May 2025 was notably strong, while EM equities have shown positive macro surprises, contrasting with muted US macro surprises [2][9]. Asset Allocation - The report suggests a diversified approach, advocating for international diversification in equities and bonds, and highlights the potential benefits of EM equity and local rates [3][6][21]. Correlation Analysis - The correlation between MSCI EM and the US Dollar has turned more positive, indicating a decoupling of EM rates from US rates, which may provide investment opportunities [16][18].