Investment Rating - The report maintains a "Buy" rating for Hesai, with a 12-month price target of US$23.3, implying an upside of approximately 9% from the current price of US$21.45 [3][32]. Core Insights - Hesai's 1Q25 results showed revenue in line with expectations and a net profit that exceeded forecasts, primarily due to a higher gross margin of 41.7% and lower operating expenses [1][3]. - The adoption of LiDAR technology in the Chinese automotive market has accelerated, leading to an increase in projected automotive LiDAR volumes for 2025 and 2026 by 23% and 37%, respectively [2][8]. - The company is well-positioned to benefit from the growing demand for advanced driver assistance systems (ADAS) and autonomous mobility, with a significant market share of 37% in 2023 [33]. Financial Performance - In 1Q25, Hesai reported revenue of Rmb525 million, a 46% increase year-over-year, with a gross profit of Rmb219 million, reflecting a 57% increase year-over-year [7]. - The non-GAAP net profit for 1Q25 was Rmb9 billion, a significant improvement compared to previous estimates of a net loss [1][7]. - The company ended 1Q25 with Rmb2.3 billion in net cash, indicating a stable financial position despite longer receivable days [4][6]. Guidance and Future Outlook - For 2Q25, management expects revenue between Rmb680 million and Rmb720 million, representing a 53% year-over-year increase [30]. - Full-year guidance for 2025 remains unchanged, with projected revenue of Rmb3 billion to Rmb3.5 billion and total shipments of 1.2 million to 1.5 million units [30]. - The company anticipates maintaining a gross margin of around 40% and achieving GAAP net profit between Rmb200 million and Rmb350 million for 2025 [30][31]. Market Trends and Competitive Position - The report highlights the rapid adoption of LiDAR in premium and mass-market vehicle models, which is expected to drive further growth in the sector [2][8]. - Hesai has secured design wins with 23 OEMs globally, indicating strong demand for its products in the ADAS segment [30]. - The company is entering a new product cycle with its ATX series, which is expected to enhance revenue growth and profitability [33].

27 May 2025 | 3:31PM JST Calbee Inc (2229.T) Sell Earnings wrap: Lowering GSe to factor in cost increases; maintain Sell 2229.T 12m Price Target: ¥2,950 Price: ¥2,932 Upside: 0.6% Reflecting FY3/25 results and our updated forex assumption (¥145/US$ versus ¥150/US$ previously), we lower our FY3/26-FY3/28 operating profit estimates for Calbee by 4.6%/6.6%/4.6%. We lower our FY3/26 operating profit estimates by ¥1.2 bn for Japan and ¥0.2 bn for overseas. For Japan, we now factor in price hikes from September 2 ...

Investment Rating - The investment rating for YJ Semitech is "Sell" with a 12-month price target of Rmb100, indicating a downside potential of 21.9% from the current price of Rmb128.04 [8][10]. Core Insights - YJ Semitech is experiencing strong demand for its Continuous Wave (CW) lasers, particularly from key customers in the silicon photonics transceiver market, and is planning to ramp up shipments significantly in the coming quarters [2][8]. - The company is expanding its production capacity to meet the increasing demand for CW lasers and aims to reach a capacity of low tens of millions of units per year by 2026 [2][8]. - YJ Semitech's CW laser pricing is slightly below that of global peers, and its datacom segment gross margin was reported at 71% in 2024, driven mainly by customized products [4][8]. Summary by Sections CW Laser Ramp Outlook - Management maintains a positive outlook for CW laser shipments, driven by strong demand from key customers [2]. - The company is addressing supply tightness in CW and EML lasers by expanding output capacity through additional equipment and improved yield levels [2]. Competitive Barriers - The competitive landscape is characterized by high switching costs for customers, who evaluate suppliers based on product quality, reliability, delivery capability, and capacity scale [3]. Margins and Pricing Comparison - The gross margin for the datacom segment was 71% in 2024, while CW lasers are expected to have a gross margin below the segment average [4]. - The company is currently priced slightly below its global peers, indicating potential pricing power in the future [4]. 100G EML Outlook - YJ Semitech's 100G EML products have passed customer qualifications but are not yet in mass production due to prioritization of CW laser production [6]. - As capacity expands, the company anticipates more room for EML production, which will aid in ramping up EML products [6].

Yulia Zhestkova Grigsby +1(646)446-3905 | yulia.grigsby@gs.com 26 May 2025 | 7:59PM EDT Oil Comment: GS Top Projects Takeaways: Strong Supply in 2025-2026, Tighter Later n We identify takeaways from our equity analysts' 2025 Top Projects review of the world's major upstream oil projects. This review supports our below-the-forwards Brent/WTI oil price forecasts of $60/56 for the remainder of 2025 and $56/52 in 2026, but has positive implications for prices in the long term. n 2025-2026: Strong Non-OPEC ex Sh ...

Investment Rating - The report downgrades the investment rating of Sumitomo Metal Mining from Buy to Sell [1][18]. Core Views - The report indicates a noticeable deterioration in margins for several of Sumitomo Metal Mining's products due to a global slowdown in Battery Electric Vehicle (BEV) demand, leading to significant impairment losses in its nickel and cathode materials businesses [1][15]. - The target price has been reduced to ¥3,100 from ¥4,100, reflecting a projected 8% downside compared to the current share price [1][18]. - The report highlights a shift in technological trends in cathode materials, which may hinder Sumitomo Metal Mining's competitive edge in the market [1][15]. Financial Estimates - The FY3/26 pretax profit estimate has been cut by 30% to ¥97 billion, which is below both the company's guidance of ¥100 billion and the Bloomberg consensus of ¥105 billion [2]. - The mineral resources segment is expected to perform better than guidance, with an estimate of ¥103.4 billion, while the smelting and refining segment is projected to incur losses of ¥5.6 billion [2][12]. - The report anticipates a significant decline in total revenue growth, projecting a decrease of 6.6% for FY3/26, followed by modest growth in subsequent years [12][20]. Business Segment Performance - The report notes substantial impairment losses of ¥57.3 billion in the cathode materials business due to a transition from nickel-cobalt-aluminum oxide (NCA) to nickel-manganese-cobalt oxide (NMC) technology [15][16]. - The mineral resources segment is expected to maintain a strong performance, while the materials segment is likely to remain in the red until a successful transition to mass production of NCM is achieved [16][20]. - The report emphasizes that the competitive landscape for NCM is challenging, particularly for Japanese manufacturers like Sumitomo Metal Mining [16][20]. Market Context - The report discusses the broader market context, noting that BEV demand is slowing, particularly in the US and Europe, which may impact the company's future performance [1][32]. - It highlights that the company's share price has underperformed significantly, declining 39% since April 2022, compared to a 47% increase in the TOPIX index [18][19]. - The report also mentions potential upside risks, including increased metal prices and a renewed acceleration in BEV demand, which could positively influence the company's performance [1][29][32].

Investment Rating - The report downgrades the investment rating of IMI Plc to Neutral from Buy, with a lowered 12-month target price of 2,120p, down from 2,220p [1][11]. Core Insights - The downgrade reflects revisions in estimates due to a sharp decline in US ISM manufacturing PMIs, updated capex trackers, IMI's 1Q25 trading update, and increased foreign exchange headwinds [1][11]. - The adjusted FY25 earnings per share (EPS) forecast is lowered from 133.1p to 129.8p, moving to the lower end of the group's guidance of 129p-136p [1][11]. - The report anticipates a balanced risk-reward scenario for IMI in the upcoming quarters, with expected growth in Climate Control and Life Science & Fluid Control businesses, despite headwinds in short-cycle businesses [2][11]. Financial Forecasts - FY25 revenue is projected at £2,238.1 million, with a reduction in sales, adjusted EBIT, and adjusted net income forecasts by approximately 5% each [1][8]. - The adjusted EBIT margin forecast remains unchanged at 20.1%, reflecting a shift towards the Automation segment [1][8]. - The report indicates a 9% reduction in FY25 free cash flow forecasts due to lower earnings and an increase in capex by approximately £10 million [1][8]. Segment Analysis - The Automation segment's growth forecast has been lowered, primarily due to a 7% year-over-year decline in Q1 and a significant drop in the US ISM manufacturing PMIs [12]. - The Life Technology segment's forecast reflects a modest recovery in demand, while the Transport business is under strategic review due to anticipated declines [13]. - The Climate Control segment is expected to grow by 4.2%, benefiting from ongoing demand for energy-efficient HVAC products [13].

Investment Rating - The report assigns a "Buy" rating to PDD Holdings with a 12-month sum-of-the-parts (SOTP) based target price of US$152, indicating an upside potential of 27.5% from the current price of US$119.24 [9][10]. Core Insights - PDD Holdings reported mixed results for 1Q25, with a 10% year-over-year increase in net revenues, but a significant 36% decline in adjusted EBIT. The online marketing revenue grew by 15% year-over-year, aligning with expectations [1][2]. - The negative market reaction, with a 17% drop in pre-market trading, was primarily due to a profit miss attributed to higher-than-expected Selling & Marketing expenses during a typically low season [1][2]. - The company is focusing on investments in its platform ecosystem to support small and medium-sized enterprises (SMEs), allowing them to compete effectively on pricing [1]. Revenue Performance - Online marketing revenue for 1Q25 was reported at RMB 48.722 million, reflecting a 15% year-over-year growth, which was in line with Goldman Sachs estimates and above the Visible Alpha consensus [2][10]. - Transaction commission revenue grew by only 6% year-over-year, falling short of expectations due to a shift in Temu's business model and ongoing investments in the platform ecosystem [2][10]. Future Outlook - Key discussion points for the results call include Pinduoduo's growth drivers, the impact of ongoing investments, and the differentiation of Temu's revenue outlook amidst changing market conditions [3]. - The report highlights potential challenges such as geopolitical headwinds, increased competition, and the need for reinvestments to sustain growth, which may affect core profit margins [9].

Meituan - Investment Rating: Buy [1] - Core View: Meituan reported a solid profit beat in 1Q25, but faces challenges due to increased competition in food delivery, leading to elevated subsidies that will impact near-term profits [1] - Revenue Forecasts: 2Q core local commerce revenue growth is forecasted at +11% year-on-year, while profit is expected to decline by -35% year-on-year [1] - Adjusted EBIT: For FY25, adjusted EBIT is estimated at Rmb44.7 billion, a decrease of -15% year-on-year [1] - Target Price: The 12-month target price is lowered to HK$172 [1] Varun Beverages - Investment Rating: Initiate at Buy with a 12-month target price of Rs600 [2] - Market Position: Varun Beverages is positioned to grow in India's RTD beverages market, with Pepsi's market share increasing from 28% in 2015 to 38% in 2024 [2] - Profitability: The company has a strong track record of improving profitability in acquired territories, particularly in Africa [2] - Free Cash Flow: An inflection in free cash flow is expected over CY24-27 due to steady growth in operating cash flow and moderated capital expenditures [2] BYD - Investment Rating: Buy [4] - Promotion Impact: The impact of BYD's "618" promotion is expected to be less severe than feared, with an average price reduction of Rmb10,000 on 12 models [4] - Revenue Impact: The promotion is estimated to have a Rmb2.6 billion impact on BYD's top line, equivalent to 5% of 2025E net profit [4] - Target Price: The 12-month target price is adjusted down by 3% to Rmb424/HK$416 [4] WiseTech Global - Investment Rating: Buy [4] - Acquisition: WiseTech announced the acquisition of E2open for US$2.1 billion, which is expected to be accretive to FY27E EPS by +8% to 10% [4] - Growth Outlook: The acquisition is seen as a significant step towards WiseTech's goal of becoming the operating system for global trade and logistics [4] - Target Price: The 12-month target price is A$126 [4] Trip.com - Investment Rating: Buy [7] - Strategic Initiatives: Trip.com aims to enhance its position as a leading OTA in Asia through overseas investments and a full-funnel marketing strategy [7] - Customer Focus: The company emphasizes excellent customer service and innovation in tourism services [7] - Target Price: The 12-month target price is US$78/HK$608 [7] Mitsui Fudosan - Investment Rating: Buy [7] - Overseas Expansion: Mitsui Fudosan is looking to expand its overseas business and address rising construction costs [7] - Target Price: The 12-month target price is ¥1,500 [7] Toray Industries - Investment Rating: Buy [7] - Profit Growth: Toray expects strong profit growth supported by structural reforms and a focus on ROIC management [7] - Target Price: The 12-month target price is ¥1,030 [7]

Investment Rating - The report assigns a Neutral rating to AutoZone Inc. (AZO) with a 12-month price target of $3,811, indicating a downside potential of 0.4% from the current price of $3,826.46 [9][11]. Core Insights - AutoZone reported a 3Q25 EPS of $35.36, which was below the Goldman Sachs estimate of $35.91 and consensus of $37.11. The total company same-store sales increased by 5.4%, exceeding the GS/consensus estimates of 3.1%/3.2% [1][8]. - Domestic same-store sales rose by 5.0% year-over-year, while international same-store sales (excluding foreign exchange) increased by 8.1%. The report estimates that DIFM same-store sales grew by 9.8% year-over-year, while DIY sales increased by 3.0% [1][4]. - The EBIT margin decreased by 185 basis points year-over-year to 19.4%, which was below the GS estimate of 20.8% and consensus of 20.5%. This decline was attributed to a gross margin decrease of 77 basis points to 52.7% and an increase in SG&A as a percentage of sales to 33.3% [1][4][8]. Summary by Relevant Sections Financial Performance - AutoZone's total sales for 3Q25 were reported at $4,464 million, reflecting a sales growth of 5.4% compared to the previous year. The gross profit was $2,354 million, with a gross margin of 52.7%, which was below expectations [8]. - SG&A expenses increased by 8.9% year-over-year to $1,487 million, with the SG&A ratio at 33.3%, slightly above the GS estimate of 32.4% [4][8]. Inventory and Debt - The company ended the quarter with $6,823 million in inventory, representing a 10.8% year-over-year increase. The accounts payable to inventory ratio was 115.6%, down from 119.7% in the prior year [4][7]. - AutoZone's adjusted debt to EBITDAR ratio remained stable at 2.5x, consistent with the previous year and quarter [7]. Market Expectations - The report anticipates a negative market reaction to the earnings miss, particularly due to the lower-than-expected gross margin. Key areas of focus for future commentary include gross margin expectations for 4Q, inventory availability, and the health of the DIY consumer [6].

Investment Rating - The investment rating for Nomura Research Institute is Neutral [6][8]. Core Insights - The management meeting highlighted that while some manufacturing customers are cautious about investments, the overall business environment in Japan remains solid, with limited negative impact on earnings [4][6]. - NRI plans to gradually implement generative AI in systems development from the second half of 2025 to 2026, although the positive earnings impact is expected to take time [4][5][6]. - NRI is not actively pursuing domestic acquisitions but is exploring joint ventures and acquisitions of companies with intellectual property assets as future options [5][6]. Business Environment - NRI's sales exposure to cautious manufacturing customers is low, limiting the negative impact on overall earnings [4]. - The domestic demand environment is solid for both consulting and system integration, while overseas operations, particularly in Australia, face challenges [4][6]. - A business model shift is planned for the Australian market to improve profitability over the next few years [4][6]. Innovation in Production - NRI is ahead of the industry in applying generative AI to systems development, with gradual implementation expected from 2H25 to 2026 [4][5][6]. - The application of AI in various phases of development is progressing, but a consistent process will take time to establish [4][5]. Industry Reorganization and Corporate Acquisitions - NRI is not currently looking to acquire overseas companies due to a challenging business environment [5][6]. - The company is exploring potential joint ventures with customers and acquisitions of companies with IP assets to strengthen its business platform [5][6].