Investment Rating - The report assigns a "Buy" rating for Envicool (002837.SZ) with a 12-month price target of RMB 50.6, indicating a potential upside of 63.2% from the current price of RMB 31.01 [10]. Core Insights - Envicool focuses on precision temperature control technology, which is increasingly adopted to enhance energy efficiency in data centers and energy storage systems, aligning with China's long-term goals of digital economy and carbon reduction [7]. - The company is experiencing strong demand from large-scale data centers and telecom operators, as well as from small and medium enterprises and edge computing projects [2]. - The growth in liquid cooling applications is expected to increase by the end of 2025 and into 2026, driven by domestic GPU manufacturers adopting this technology [2]. - The company aims for over 30% sales growth in 2025, although there are mixed signals regarding future growth drivers [2]. Data Center Cooling Business - Revenue recognition delays in data center projects impacted the overall performance in Q4 2024 and Q1 2025, with significant year-on-year growth in inventory and contract liabilities [2]. - The backlog of orders reached a record high in Q1 2025, indicating strong future demand [2]. - The gross profit margin for the data center cooling business was 27% in 2024, a decrease of 2 percentage points year-on-year, primarily due to changes in product mix [2]. Energy Storage Cooling Business - Sales growth for energy storage cooling products was below expectations, with a year-on-year increase of 23% in 2024, primarily due to price declines [5]. - The gross profit margin for this segment was 31% in 2024, showing a slight improvement, attributed to sales and marketing, supply chain, and cost optimization efforts [5]. - Tariffs imposed by the U.S. are expected to negatively impact the energy storage cooling business in the short term, as U.S. customers have paused direct shipments [5]. Financial Performance - In Q4 2024, the company reported a revenue of RMB 1,717 million, an 18% year-on-year increase, but net profit fell by 25% to RMB 100 million [6]. - The operating expenses increased significantly, with a year-on-year growth of 28% in 2024, primarily due to workforce expansion [5]. - The company plans to maintain capital expenditures between RMB 200 million and RMB 400 million annually to support long-term growth [5].

2025年4月23日 | 7:10AM CST 中国 光伏 双反终裁税率大幅提高；在马来西亚拥有产能的 企业处在相对有利的地位 最新事件：4月21日，美国商务部宣布了对生产并进口自四个东盟国家（马来西亚、 泰国、柬埔寨和越南）的光伏电池和组件的反倾销和反补贴调查的最终肯定性决定， "双反"终裁税率远高于初裁（较初裁税率提高11-526个百分点），达到 41%-660%。反倾销税/反补贴税的生效取决于：i) 美国国际贸易委员会(ITC) 6月2日 做出最终决定；ii) 6月9日发布命令。 在本报告中，我们主要分析了中国企业在美产能所受到的潜在影响，因为此前宣布的 初裁税率就已可能导致大部分东盟产能无法盈利，而且2024年一季度以来中国头部企 业大多开始采用"自东盟进口电池+美国组装组件"的模式来进入美国市场。 王梦雯 +86(21)2401-8932 | mengwen.wang@goldmansachs.cn 高盛（中国）证券有限责任公司 杜茜 +86(21)2401-8948 | jacqueline.du@goldmansachs.cn 高盛（中国）证券有限责任公司 n 相比初裁税率情景，终裁结果对应的单 ...

Investment Rating - The report maintains a "Buy" rating for specific developers, including China Resources Land, China Overseas, Greentown China, China Jinmao, and Longfor Group, due to their favorable positioning in the market [3][43]. Core Insights - The report has adjusted its forecasts for the real estate industry, predicting a delay in price stabilization for first and second-tier cities by 6-12 months, now expected around mid-2026 [1][11]. - The impact of the US-China trade tensions is anticipated to create short-term challenges for the housing market, particularly affecting the secondary market, where bid-ask spreads are expected to widen [2][13]. - Despite the downward adjustments, the report suggests that the long-term outlook for the real estate market remains positive, especially if structural reforms are prioritized [1][3]. Summary by Sections Industry Forecast Adjustments - The report has lowered the sales volume forecast for the secondary housing market by 13% for 2025-2027, with a price reduction of 2% [2]. - For the primary market, the sales volume forecast has been reduced by an average of 6% for 2025-2026, with a 2% decrease in investment predictions [2][21]. - The completion area forecast has also been adjusted downward, reflecting a trend that has not met expectations [2][21]. Developer Coverage - The core earnings per share (EPS) forecast for covered developers has been adjusted down by 4%-6% for 2025-2027, with target prices reduced by an average of 3% [2][47]. - Developers with significant land reserves in first-tier cities are expected to recover more quickly, with a focus on quality land acquisitions [3][32]. - The report highlights that state-owned enterprises (SOEs) are expected to maintain stable contract sales growth, contrasting with a projected decline for private-owned enterprises (POEs) [47]. Market Dynamics - The report indicates that the average daily new home sales in export-reliant cities have dropped by approximately 30% since the tariff announcement, compared to a 25% decline in other cities [7]. - The performance divergence among cities is noted, with top-tier cities showing stronger fundamentals and population growth compared to lower-tier cities [8]. - The report emphasizes that the secondary market is likely to face more significant challenges due to deteriorating supply quality and increased competition from new homes [14][18].

Investment Rating - The report assigns a Neutral rating to Tesla Inc. with a 12-month price target of $260, indicating a potential upside of 9.3% from the current price of $237.97 [17][19]. Core Insights - The report presents a mixed view on Tesla's performance, highlighting weaker non-GAAP EPS of $0.27 compared to the Street's expectation of $0.41, alongside ongoing risks from tariffs and macroeconomic factors. However, some key metrics, such as new vehicle model production timing and automotive non-GAAP gross margin excluding credits, were better than feared [3][4]. - Tesla's revenue for 1Q25 was reported at $19.3 billion, which is 9% below the previous year and 3% below Goldman Sachs' estimate. Vehicle deliveries were approximately 337,000, down 32% quarter-over-quarter and 13% year-over-year [5][10]. - The automotive non-GAAP gross margin was reported at 12.5%, below Goldman Sachs' estimate of 13.0% but above the Street's consensus of 11.6%. This margin decreased from 13.6% in 4Q24 and 16.4% in 1Q24 [6][10]. - Tesla plans to start production of new lower-cost models in the first half of 2025 and aims to begin robotaxi operations by June in Austin, Texas [3][4][13]. Summary by Sections Financial Performance - Tesla reported 1Q25 revenue of $19,335 million, down 25% quarter-over-quarter and down 9% year-over-year, which was 3% below Goldman Sachs' estimate and 9% below the Street [5][10]. - The automotive revenue was $13,967 million, down 29% quarter-over-quarter and down 20% year-over-year, with an implied vehicle average selling price (ASP) of about $40,000 [8][10]. - Energy Generation and Storage revenue was $2,730 million, down 11% quarter-over-quarter but up 67% year-over-year, with energy being Tesla's highest margin business in 1Q [8][9]. Outlook and Guidance - Tesla indicated that the growth rate for the year will depend on various factors, including the acceleration of autonomy efforts and the production ramp at its factories. The company plans to revisit its 2025 guidance in the second quarter update [4][12]. - The company previously expected vehicle business growth in 2025, contrasting with Goldman Sachs' estimate of a 4% decline year-over-year and a consensus of a 2% increase for vehicle deliveries [4][12]. Key Metrics - The total company gross margin was reported at 16.3%, slightly below the Street's estimate of 16.4% but above Goldman Sachs' estimate of 15.6% [6][10]. - Free cash flow (FCF) for 1Q25 was $0.7 billion, with cash and cash equivalents increasing to $37.0 billion [11].

Investment Rating - The report maintains a cautious outlook on the fiscal situation in China, expecting further fiscal easing ahead due to ongoing economic challenges [1][9]. Core Insights - Fiscal revenue growth improved to +0.3% year-on-year in March from -1.6% in January-February, driven by stronger-than-expected activity data [2][5]. - Fiscal expenditure growth rose to +5.7% year-on-year in March from +3.4% in January-February, primarily due to increased spending in energy saving, environmental protection, and agriculture [6]. - The ongoing property downturn continues to negatively impact local government funding, with land sales revenue declining by -16.3% year-on-year in March [7][8]. Summary by Sections Fiscal Revenue and Expenditure - On-budget fiscal revenue growth was +0.3% year-on-year in March, a recovery from -1.6% in January-February, with tax revenue contraction narrowing to -2.2% [2][5]. - Fiscal expenditure growth increased to +5.7% year-on-year in March, up from +3.4% in January-February, driven by specific sectors [6]. Property Sector Impact - Property-related government revenue remained weak, with land sales revenue down -16.3% year-on-year in March, indicating continued pressure from the property market [7][8]. - The contraction in property-related tax revenue narrowed to -0.1% in March from -11.4% in January-February, suggesting some stabilization [7]. Augmented Fiscal Deficit (AFD) - The AFD metric narrowed to -10.9% of GDP in March from -11.6% in February on a 3-month moving average basis, while it widened slightly on a 12-month moving average basis [3][8]. - The forecast for the AFD metric is expected to widen by 4.1 percentage points of GDP to 14.5% in 2025, indicating a shift in fiscal policy from a growth drag to a potential driver [9].

Investment Rating - The industry investment rating is Attractive, with a strong appeal due to growth potential in IT and software sectors [5][9]. Core Insights - IT spending for digital transformation (DX) is booming, driven by the declining working-age population in Japan, which necessitates increased IT investment as a manpower substitute [9][24]. - The report highlights several investment themes, including cloud services (SaaS/data centers), Windows 10 upgrade demand, increased defense spending, and government digitalization initiatives [10][35][39]. Summary by Sections Industry Overview - The report anticipates minimal direct impact from the increase in US tariffs on the industry [2]. - Cash flow levels at firms have risen significantly, indicating strong financial health [3]. - The working-age population decline is exacerbating labor shortages, prompting a greater focus on digitalization among management [7]. Investment Themes - Key investment themes include: - Cloud business (SaaS/data centers) [10]. - Demand for Windows 10 upgrades as support ends in October 2025 [38]. - Increased defense budget, projected to rise to approximately ¥43.5 trillion [39]. - Government initiatives for digital transformation in public administration [39]. Financial Performance - The report notes that valuations in the industry do not appear overheated, allowing for a focus on fundamentals and thematic stocks [9]. - The expected growth in IT spending is projected at a 5-year CAGR of 8% through 2028, with software investment growing at 10% and IT services at 7% [23][26]. Company Focus - Preferred stocks include: - OBIC Business Consultants (OBC), with a strong shift to cloud business and high recurring revenue [11][40]. - NTT Data, expected to see significant profit increases from its data center business [47]. - NEC, benefiting from the defense budget expansion and government digitization projects [51]. Market Trends - The report indicates that cloud spending in Japan is only 12% of total IT spending, compared to 37% globally, suggesting substantial growth potential [38]. - The overall IT spending in Japan is projected to reach ¥8,491 billion by 2025, reflecting a growth of 9.5% [33].

Investment Rating - The report does not explicitly provide an investment rating for the energy sector Core Insights - The energy sector is fundamental to modern life, with global energy consumption exceeding 600 exajoules annually, including over 104 million barrels of oil per day and around 30 trillion watts of electricity [7][8] - The document serves as a primer for understanding the production, movement, and consumption of energy, aimed at both dedicated energy investors and generalist investors [8] - The energy ecosystem is highly integrated across two main supply chains: oil and fuels, and electricity, with oil production at approximately 104 million barrels per day globally [16][17] Summary by Sections Section I: Oil - Exploration and Production (E&P) companies are responsible for resource exploration, well design, drilling, and production management [23] - The largest oil fields include Ghawar in Saudi Arabia, with a productive capacity of approximately 3.8 million barrels per day [43] - The US shale boom has significantly increased production, shifting the US from a net importer to a net exporter of oil [54] Section II: Gas and NGLs - The largest natural gas basins in the US are in Appalachia and Haynesville, with significant production challenges due to regulatory constraints [56] - Natural gas production is often a by-product of oil production, with key players in Appalachia including EQT Corp. and Antero Resources [56] Section III: Electricity and Utilities - The US electric system is increasingly reliant on natural gas and renewables, with a focus on lower emissions [17] - The power generation mix has evolved over time, with independent power producers playing a significant role [15] Section IV: Renewables - The report discusses the components of solar energy systems, including solar panels and energy storage [15] - Government subsidies and policies are crucial for the growth of the renewables industry [15]

Investment Rating - The investment rating for Innolight is "Buy" with a 12-month price target revised to Rmb105 from Rmb115, indicating an upside potential of 32.7% from the current price of Rmb79.14 [13][20]. Core Insights - Innolight's 1Q25 net profit was Rmb1.58 billion, aligning with pre-announced expectations, while revenue was Rmb6.67 billion, which was 5% below expectations due to supply chain constraints [1]. - The gross margin (GM) improved to 36.7% in 1Q25, reflecting a 3.9 percentage points year-over-year increase and a 1.6 percentage points quarter-over-quarter increase, driven by better yield and product mix [1][2]. - The company anticipates a robust near-term outlook into 2Q25, supported by the commencement of 1.6T batch shipments and the ramp-up of 800G volume [1]. Summary by Sections Financial Performance - 1Q25 revenue was Rmb6.67 billion, indicating a 2% quarter-over-quarter growth, but the growth has slowed for three consecutive quarters [9]. - The company expects gradual improvement in supply constraints into 2Q/3Q25 as new supplier capacity comes online [9]. Margin Outlook - The gross margin has shown a consistent improvement over the past five quarters, with expectations for further upside in 2Q25 and 2H25 due to a favorable product mix and efficiency improvements [2]. - The ongoing increase in silicon photonics transceivers and the ramp-up of 1.6T transceivers, which have higher gross margins compared to the company average, are expected to contribute positively to margins [2]. Tariff Impact - Innolight's production base in Thailand allows it to mitigate tariff impacts, as transceiver shipments from Thailand to the US are exempt from tariffs, contrasting with shipments from China that face a 27.5% tariff [8]. - The company has established sufficient capacity in Thailand to meet US demand, which has significantly contributed to its revenue growth [8]. Future Projections - Revenue estimates for 2024, 2025E, and 2026E have been adjusted to Rmb23.86 billion, Rmb27.98 billion, and Rmb31.22 billion respectively, reflecting a downward revision due to slower shipment growth expectations [15]. - Net profit estimates have been revised upwards by 12% and 4% for 2025 and 2026E respectively, indicating a positive outlook despite revenue adjustments [12][15].

Investment Rating - The investment rating for Jiangsu Nhwa Pharmaceutical Co. is Neutral, with a 12-month price target of Rmb28, indicating an upside potential of 25.2% from the current price of Rmb22.37 [6][2]. Core Insights - Jiangsu Nhwa Pharmaceutical Co. is a leading manufacturer of psychiatric drugs and anesthetics in China, with growth drivers including the ramp-up of its licensed-in asset TRV-130 and newly approved generic drugs [2]. - The company's 1Q25 results showed revenue of Rmb1,511 million, representing an 11% year-over-year increase, and a net profit of Rmb301 million, up 13% year-over-year, which were in line with expectations [1]. - The report indicates that only 0.4% of the company's total revenue in 2024 was from overseas markets, with minimal exposure to the US market, suggesting limited tariff impact [1]. Financial Projections - Revenue projections for Jiangsu Nhwa Pharmaceutical Co. are as follows: Rmb5,697.6 million for 2024, Rmb6,531.9 million for 2025, Rmb7,513.2 million for 2026, and Rmb8,698.0 million for 2027 [6]. - EBITDA estimates are projected to be Rmb1,376.4 million for 2024, Rmb1,583.4 million for 2025, Rmb1,862.9 million for 2026, and Rmb2,206.4 million for 2027 [6]. - Earnings per share (EPS) estimates are Rmb1.13 for 2024, Rmb1.29 for 2025, Rmb1.50 for 2026, and Rmb1.77 for 2027 [6]. Key Catalysts - Important events to monitor include the ramp-up pace of TRV-130 and the potential for volume-based procurement (VBP) in anesthetics, which could impact the company's growth trajectory [2].

Investment Rating - The report indicates a mixed sentiment in the market, with significant foreign selling in EM Asia ex-China, particularly in Taiwan, Korea, and ASEAN, while India saw some buying activity [26][30]. Core Insights - Foreign Institutional Investors (FII) sold US$2.9 billion in EM Asia ex-China markets, with Taiwan leading the outflows at US$2.3 billion, followed by Korea at US$1 billion and ASEAN at US$0.9 billion. In contrast, India experienced inflows of US$1.3 billion [26][30]. - The Chinese National Team has increased its support for the A-share market, with approximately US$100 billion of buying via onshore ETFs in the second quarter to date [7][17]. - Southbound buying has moderated to US$3 billion week-to-date, but year-to-date, it has reached US$78 billion, indicating strong interest from mainland investors in HK-listed stocks [6][19]. Summary by Sections Foreign Selling and Buying Trends - EM Asia ex-China markets experienced FII selling of US$2.9 billion week-over-week, with Taiwan, Korea, and ASEAN seeing significant outflows [26][30]. - India was an exception, attracting US$1.3 billion in FII buying [26]. ADR Delisting Risks - US institutional investors hold around US$250 billion in Chinese ADRs, with an estimated 20% of these holdings potentially unable to trade in Hong Kong, which could lead to increased selling pressure on companies with high retail ownership [7][12]. National Team and Southbound Buying - The Chinese National Team has stepped up its buying efforts in the A-share market, contributing to a total of approximately US$100 billion in support through onshore ETFs [7][17]. - Southbound investors have been active, with cumulative buying reaching US$78 billion year-to-date, reflecting a growing representation in the HK market [19][21].