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 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 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].

Investment Rating - The report indicates a dovish outlook for G10 policy rates through 2026, suggesting a significant decline in rates, particularly in the US, where 10-year Treasury yields are expected to reach 4.00% by the end of 2025 and just above 3.00% by the end of 2026 [6][27]. Core Insights - The report emphasizes that the US dollar is expected to weaken significantly, with the DXY forecasted to fall an additional 9% over the next 12 months to 91, driven by a convergence in US rates and growth to peers, alongside increased FX hedging flows [6][69]. - The report outlines a bearish outlook for global growth, particularly in the US, where real GDP growth is projected to decline from 2.5% in 2024 to 1.0% in both 2025 and 2026, influenced by tariffs and immigration restrictions [15][23]. - Inflation is expected to moderate globally, with core PCE in the US forecasted to reach 4.5% before declining, while the euro area is projected to undershoot the ECB's inflation target due to sluggish growth [23][34]. Interest Rate Strategy - In the US, Treasury yields are expected to range trade through 3Q25 before declining, with a forecast of 10-year yields at 4.00% by the end of 2025 and a larger decline in 2026 as the Fed is anticipated to cut rates by 175 basis points [3][27]. - The euro area is projected to see the 10-year Bund yield fall to 2.40% by 4Q25 and 2.20% by 4Q26, influenced by more ECB easing than currently priced in [3][35]. - In the UK, 10-year gilt yields are expected to end 2025 at 4.35% and 2026 at 3.80%, with the Bank Rate projected to decline further due to a slowdown in economic activity [41][43]. Currency & Foreign Exchange - The report forecasts continued weakness in the USD, with significant declines against safe-haven currencies such as EUR, JPY, and CHF, as the DXY is expected to fall to 91 by mid-2026 [8][69]. - Specific currency pairs are projected to move as follows: EUR/USD to rise to 1.25, GBP/USD to 1.45, and AUD/USD to 0.69 by mid-2026, reflecting various economic factors [8][69]. Inflation-Linked Bonds - In the US, breakevens are expected to remain elevated until 3Q25 due to tariff-induced inflation, with a tightening forecast around 2Q26 as inflationary pressures begin to cool [9]. Sovereign Supply Outlook - The report anticipates a decrease in net coupon bond supply across the G7, amounting to US$2.72 trillion in 2025, down 5% year-over-year, influenced by fiscal policy uncertainties [53][62].

Investment Rating - The report maintains a "Buy" rating for Miniso, with a 12-month price target of $23.10 for ADR and HK$45.00 for H-share, indicating an upside potential of 34.5% and 33.7% respectively [14][17]. Core Insights - Miniso is expected to experience sequential sales growth acceleration, with management confident in margin improvement and a peak in DTC-related expenses in the first half of the year [1][2]. - Same-store sales growth (SSSG) turned positive in May for Miniso China, and positive trends were also observed in the US and other overseas markets [1][7]. - The company plans to enhance its product offerings, focusing on both intellectual property (IP) products and value-for-money lifestyle products, with localized designs for overseas markets [1][10]. - Management aims to expand to over 1,000 stores in the US market, targeting a 20% operating profit margin in the mid to long term, despite potential short-term volatility [1][11]. Summary by Sections Sales Growth and Guidance - For Q2 2025, Miniso China is expected to achieve low teens percentage sales growth, while Miniso Overseas and Top Toy are projected to grow by 25%-30% and 70%-80% year-over-year respectively [8]. - If the SSSG recovery trend continues, operating profits are likely to turn positive in Q3, with full-year adjusted operating profits targeted at RMB 3.6 billion to RMB 3.8 billion [8]. Product Strategy - The company is enhancing its IP product quality and focusing on localized designs for international markets, while also improving the merchandising of value-for-money products [10][12]. - A dedicated zone for top-selling products has been added to increase conversion rates, and inventory management will be prioritized to avoid stockouts of best-sellers [11]. Market Performance - Year-to-date, Miniso China's SSSG has shown improvement, with positive trends in the US market and other overseas markets noted in April and May [7][11]. - The US market has seen the opening of approximately 20 new stores, primarily in plaza locations, achieving double-digit operating profit margins despite being in a low season [11]. Long-term Outlook - Miniso is positioned to become a leading global IP retailer, with catalysts for share price growth including accelerated store expansion, improved SSSG, and higher contributions from IP products [14]. - The market currently underappreciates Miniso's potential adjusted net income compound annual growth rate (CAGR) of nearly 20% from 2024 to 2026, excluding contributions from Yonghui [14].

Investment Rating - The report indicates a negative outlook for the manufacturing sector, as reflected by the Caixin manufacturing PMI falling to 48.3 in May, below the neutral level of 50, suggesting contraction in the industry [1][3]. Core Insights - The Caixin manufacturing PMI decreased significantly from 50.4 in April to 48.3 in May, marking the lowest level since September 2022 and missing market expectations [2][3]. - Major sub-indexes showed declines, with the output sub-index dropping to 47.5 from 51.6, the new order sub-index falling to 47.4 from 50.5, and the employment sub-index decreasing to 48.4 from 49.0 [3][4]. - The divergence between the Caixin and NBS manufacturing PMIs may be attributed to survey timing differences, as the Caixin PMI is typically conducted earlier in the month [1][9]. Summary by Sections Manufacturing PMI - The Caixin manufacturing PMI fell to 48.3 in May, indicating a contraction in the manufacturing sector, contrary to market expectations of an increase [2][3]. - The output sub-index and new order sub-index experienced the most significant declines, reflecting deteriorating demand conditions [3][4]. Trade-Related Sub-Indexes - The new export orders sub-index decreased to 46.2 in May, the lowest since July 2023, indicating weakened international demand [4]. - Inventory levels showed an increase, with raw materials inventory rising to 50.1 and finished goods inventory increasing to 50.3, suggesting a buildup of stock [4]. Price Indicators - Disinflationary pressures were noted, with the input price index falling to 48.8 and the output price index declining to 48.6, indicating reduced pricing power for manufacturers [4].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Fiscal easing has been the primary driver of China's cyclical policy in recent years due to weak private demand and muted monetary policy transmission [3][4] - The estimated short-term fiscal multiplier for China ranges from 0.2 to 1.9, with a mean of 0.7 and a median of 0.6 for a one-year horizon [13][16] - The report estimates China's fiscal multiplier to be around 0.5, indicating that a 1 percentage point widening in the augmented fiscal deficit (AFD) would boost real GDP by 0.5 percentage points after four quarters [6][24] - The AFD is projected to widen to 13.0% of GDP in 2025 and 13.5% in 2026, which is expected to increase real GDP growth by 1.1 percentage points in 2025 and 0.6 percentage points in 2026, compared to a 0.5 percentage point drag in 2024 [6][41] Summary by Sections Fiscal Multiplier Estimates - Recent literature suggests a wide range for China's fiscal multiplier, with discrepancies attributed to different sample periods and estimation techniques [13][14] - The report's analysis indicates a cumulative fiscal multiplier of approximately 0.2-0.3 in the first two quarters after a fiscal shock, rising to around 0.5 in the subsequent quarters [28][39] Augmented Fiscal Deficit (AFD) - The AFD has averaged over 11% of GDP in the past three years, while nominal GDP growth has been below 5% [17] - The report highlights a shift towards increasing the official government debt since the onset of COVID-19, enhancing the proportion of on-budget fiscal deficit in the AFD [17][21] Economic Growth Impact - The report anticipates that fiscal policy will significantly support GDP growth in the coming quarters, with a peak incremental fiscal boost expected in Q4 2025 [41][42] - The estimated growth impact of AFD widening is projected to be 1.1 percentage points in 2025 and 0.6 percentage points in 2026, with a quarterly incremental effect diminishing after the fourth quarter [41][44]

Investment Rating - The report indicates a bearish outlook for the aluminium market, with expectations of a surplus extending through 2027, leading to lower price forecasts [8][12][20]. Core Insights - The global aluminium demand forecast for 2025 has been raised from 1.1% y/y to 1.8% y/y due to less severe impacts from the trade war, but forecasts for 2026 and 2027 remain largely unchanged [3][8]. - Indonesian aluminium production is expected to grow faster than previously anticipated, contributing to a market surplus of 1 million tonnes in 2026, the largest since 2020 [8][12][13]. - Cost deflation from lower alumina and energy prices is expected to exert downward pressure on aluminium prices, with forecasts indicating a decline to $2,100/t in early 2026 [8][27][28]. Summary by Sections Demand Forecast - The report has adjusted the global aluminium demand forecast for 2026 and 2027 downwards due to reduced solar demand, resulting in a decrease of 0.3/0.6% in total aluminium demand [3][20]. - The solar sector's demand for aluminium is expected to decline significantly due to new policies affecting solar installations in China [20][24]. Supply Outlook - The supply forecast for Indonesia has been upgraded, with three new smelters expected to be operational by mid-2026, increasing the supply forecast by 750/550kt in 2026/2027 [12][13][14]. - Indonesia is projected to account for 9% of ex-China aluminium production by 2030, up from 2% in 2024 [13]. Price Forecast - The aluminium price is expected to fall to a low of $2,100/t in early 2026, with a trading range of $2,150-2,550/t anticipated in subsequent years [8][27]. - Average price forecasts for 2026 and 2027 have been lowered to $2,230/t and $2,500/t, respectively, reflecting a more bearish outlook [8][35].