Summary of Key Points from the Conference Call Industry or Company Involved - The conference call primarily discusses the macroeconomic environment, focusing on the US Treasury market, UK gilt market, and foreign exchange dynamics, particularly the US dollar. Core Points and Arguments 1. **US Treasury Yields and Economic Outlook** - The 10-year US Treasury yields are approaching 5%, raising concerns about fiscal credibility and the potential for tighter financial conditions by central bankers [1][2][3] - The market is currently neutral on duration, with expectations of a rate cut at the January FOMC meeting being reconsidered due to stronger-than-expected nonfarm payroll data [3][55] 2. **UK Gilt Market Dynamics** - The 10-year gilt yield has risen approximately 20 basis points to around 4.85%, the highest since 2008, with the 30-year gilt at 5.40%, the highest since 1998 [27][28] - The recent sell-off in gilts is attributed to global factors and fiscal concerns, with a significant increase in net issuance expected, posing a headwind for valuations [35][36][41] 3. **Foreign Exchange and Currency Strategy** - The outlook for the US dollar (DXY) remains neutral for now, with expectations of weakness later in the year [4][44] - The correlation between GBP and gilt movements is being closely monitored, especially in light of potential early elections in Canada [4][44] 4. **Inflation-Linked Bonds and Breakevens** - Discussion on potential drivers of breakevens in the US and Japan, with a focus on core CPI fixing paths [5][5] 5. **Interest Rate Derivatives and Swap Spreads** - The analysis of conditional swap spread wideners is presented, suggesting that rate pricing may have deviated from economic fundamentals [7][57] 6. **Market Sentiment and Future Expectations** - The sentiment in the market is cautious, with a recommendation to maintain a neutral stance on UK duration and wait for stabilization in valuations [42][64] - The potential for further steepening in the yield curve is noted, with macro data expected to play a more significant role than supply considerations in the future [41][42] Other Important but Possibly Overlooked Content 1. **Regulatory Developments Impacting Markets** - The resignation of Federal Reserve Governor Michael Barr is expected to influence swap spreads and regulatory developments, with implications for bank capital requirements [82][92] - The potential for a pause in quantitative tightening (QT) could provide support for spreads, as spreads tend to tighten during QT periods [96] 2. **Historical Context and Comparisons** - Comparisons are drawn between the current bond sell-off and the September 2022 mini-Budget, highlighting differences in market dynamics and fiscal considerations [28][32][63] 3. **Investor Behavior and Market Dynamics** - The report discusses the behavior of foreign investors and their tendencies to engage in "buyers strikes" during specific periods, particularly around US presidential elections [58] 4. **Valuation Metrics and Market Positioning** - Current valuations in the Treasury market are noted to be attractive, with positive carry expected for the first time since June 2022 [76][78] 5. **Long-term Outlook for Bonds** - A bullish outlook for the government bond market in 2025 is suggested, with expectations of improved carry and rolldown profiles if the Fed follows through on anticipated rate cuts [75][78]

Economic Outlook - China's GDP growth is projected to decelerate to 4.5% in 2025 from 4.9% in 2024, influenced by property deleveraging and slower exports due to rising trade frictions with developed markets[2][9] - Nominal growth will be constrained by low inflation, with CPI at 0.8% and PPI at 0% for 2025, reflecting demand headwinds and stable global commodity prices[9][10] Market Performance - MSCI China and CSI300 are expected to appreciate by 15% and 13% respectively in 2025, driven by EPS growth forecasts of 7%-10%[2][4] - Housing sales are anticipated to decline by 9% in value and 4% in volume, extending a correction of 57% since 2021[9][10] Policy and Investment - A significant policy shift is underway, with augmented fiscal deficits projected to rise from 11.2% in 2024 to 13% in 2025 to support property destocking and consumption stimulus[2][21] - The government is expected to provide around RMB 8 trillion (approximately USD 1.1 trillion) in additional fiscal support, equating to 5.8% of 2025 GDP[21][26] Sector Insights - Consumption growth is forecasted to rebound to 5.0% in 2025, supported by targeted fiscal spending and improvements in service-oriented sectors[9][10] - The healthcare and broker sectors have been upgraded to Overweight, reflecting a broad consumption tilt in investment portfolios[2][4] Earnings Projections - Profit growth for MSCI China and CSI300 is forecasted at 7% and 10% respectively, below consensus estimates due to tariff risks impacting revenue and profitability[36][42] - Revenue growth is expected to align with nominal GDP growth, projected at 6% for 2025[36][42]

Economic Growth and Policy - China's real GDP growth is expected to decelerate from 4.9% in 2024 to 4.5% in 2025 due to increased US tariffs and domestic challenges[7][8] - Policymakers are anticipated to cut policy rates by 40bp and expand the augmented fiscal deficit by 1.8pp of GDP in 2025[7] - The property sector is projected to weigh on GDP growth by 2.0pp in 2025, continuing its multi-year drag[40] Trade and Tariffs - US effective tariff rate on Chinese goods is expected to increase by 20pp, reducing China's real GDP by 0.7pp in 2025[7][9] - Chinese exports to the US are likely to decline significantly, while exports to other countries may increase modestly, keeping total goods export volume flat[50][54] Inflation and Consumption - CPI and PPI inflation are forecasted to be 0.8% and 0% respectively in 2025, below consensus expectations[14][69] - Household consumption growth is expected to remain flat at 5.0% in 2025, supported by ongoing subsidy programs but weighed down by declining house prices[21][22] Labor Market and Wages - Youth unemployment reached 18.8% in August 2024, reflecting weak labor market conditions[27] - Urban wage growth slowed to 2.6% in Q3 2024, with expectations of modest improvement in 2025[31][32] Fiscal and Monetary Policy - The augmented fiscal deficit is expected to widen by 1.8pp of GDP to 13.0% in 2025, driven by increased local government special bond issuance[80] - The PBOC is likely to cut the 7-day OMO rate to 1.1% by end-2025, with additional RRR cuts expected to support fiscal expansion[109] Property Market - New home starts and government land sales revenue have declined by more than 70% and 60% respectively since the 2020-21 peak[34] - Recent housing easing measures may stabilize home prices in some large cities, but the nationwide property downturn is expected to persist[39][40]

Summary of the Conference Call on Moncler and Burberry Industry Overview - The discussion revolves around the luxury goods industry, specifically focusing on Moncler and Burberry, two prominent brands in this sector [3][5]. Key Points and Arguments Moncler and Burberry Acquisition Discussion - Moncler is reportedly considering a bid for Burberry, although Moncler has not confirmed this and labeled it as an unsubstantiated rumor [5][7]. - The Burberry brand is perceived to be undervalued in the market, with a need for a successful brand elevation strategy to unlock its true value [5][6]. - Moncler’s acquisition of Burberry could create a strong outerwear brand with opportunities to expand into ready-to-wear (RTW) and leather goods, diversifying Moncler's offerings beyond puffer jackets [7][8]. Financial Implications of the Acquisition - An acquisition would likely require significant share issuance, estimated at approximately £4.35 billion (€5.2 billion) to cover a 50% premium on Burberry's share price [14]. - Moncler would need to leverage the combined business to about 3.9x EBITDA for an all-cash takeover, which is considered risky in the current market environment [14]. - The financial feasibility of returning Burberry to historical EBIT margins (14.1%) by 2026 is crucial to avoid dilution of Moncler's earnings per share (EPS) [16][21]. Risks and Challenges - The acquisition could distract Moncler from its ongoing transformation of Stone Island, which is still in its early stages and requires further investment [8]. - There is a risk of cross-cannibalization between Moncler and Burberry due to differences in product pricing and market positioning, but this is viewed as manageable [7]. - The potential for Burberry's new collection under Daniel Lee to underperform poses a risk to the brand's turnaround strategy [34]. Strategic Partnerships - LVMH has recently taken a stake in Moncler, which could facilitate a partnership in the acquisition of Burberry, providing financial backing and strategic support [15][16]. Market Ratings - Bernstein rates Burberry, LVMH, and Moncler as "Outperform," indicating a positive outlook for these companies in the luxury goods market [25]. Additional Important Information - The discussion highlights the importance of brand positioning and the need for a realistic pricing strategy for Burberry to regain investor confidence [5][6]. - The luxury goods market is currently facing challenges, including shifts in consumer preferences and economic uncertainties, which could impact growth trajectories for both Moncler and Burberry [34][37]. This summary encapsulates the critical insights from the conference call regarding the potential acquisition of Burberry by Moncler, the financial implications, risks involved, and the overall market outlook for the luxury goods industry.

Financial Data and Key Indicators Changes - The most recent jobs report was much weaker than expected, triggering the Sahm rule, indicating a potential recession as the unemployment rate's three-month average rose by 0.53 percentage points [3][12] - Goldman Sachs economists believe the Fed will cut its benchmark rate by 25 basis points in September, November, and December, with a 20% chance of a US recession in the next 12 months [5][6] Business Line Data and Key Indicators Changes - The labor market shows mixed signals, with hiring rates and quit rates declining, indicating a weakening demand for workers [21][25] - Payroll gains are still solid but are slowing, raising concerns about the direction of the economy [27][30] Market Data and Key Indicators Changes - The unemployment rate is rising gradually, but income and consumer spending are still growing, suggesting the economy is not in contraction [13][30] - The Sahm rule's trigger indicates a potential recession, but the broader context suggests the economy may not be in a recession yet [12][38] Company Strategy and Development Direction and Industry Competition - The Fed's strategy is to manage inflation while maintaining employment levels, with a focus on avoiding unnecessary recession through careful interest rate adjustments [32][49] - There is a concern that the Fed may be behind the curve in responding to economic changes, which could lead to a recession if not addressed [32][48] Management's Comments on Operating Environment and Future Outlook - Claudia Sahm expressed concern that if the Fed continues to push down on the economy, it could lead to an unnecessary recession, indicating a need for decisive action [32][34] - Bill Dudley believes the odds of a recession are between 50% to 60% over the next 12 months, emphasizing the need for the Fed to shift to a neutral monetary policy more quickly [44][49] Other Important Information - The Sahm rule is a statistical indicator that has historically been reliable in predicting recessions, but its application in the current context may not be straightforward [40][41] - The Fed's ability to cut rates provides a buffer against economic downturns, with the potential for a mild recession if necessary [55] Q&A Session Summary Question: Is the Fed behind the curve? - Claudia Sahm stated that if a recession occurs in the next year, it would be a huge unforced policy error, indicating that the Fed needs to act decisively [32] - Bill Dudley expressed that the Fed is behind the curve in reducing interest rates in response to increased risks, suggesting a need for quicker action [48] - Rob Kaplan noted that if the Fed is behind, it is only by a meeting or two, emphasizing the importance of not overreacting to single data points [62]

Investment Rating - The investment rating for Viridian Therapeutics Inc. (VRDN) is "Buy" with a 12-month price target of $25.00, indicating an upside potential of 70.1% from the current price of $14.70 [9]. Core Insights - Viridian Therapeutics Inc. (VRDN) is well-positioned with its VRDN-003 product, which is expected to have best-in-class potential in the subcutaneous (SC) treatment of thyroid eye disease (TED) due to its dosing regimens and autoinjector properties [5][8]. - SLRN has refocused its pipeline strategy to prioritize lonigutamab for TED, moving directly to Phase 3 development by Q1 2025, which increases competitive pressure on VRDN-003 [2][3]. - VRDN plans to initiate Phase 3 trials for VRDN-003 in August 2024, with topline data expected in the first half of 2026, ahead of SLRN's timelines [3][5]. Summary by Sections Pipeline Strategy - SLRN has discontinued investments in HS/PsA and reduced its workforce by 33% to extend its cash runway to mid-2027, focusing solely on lonigutamab for TED [2]. - Early Phase 1/2 data for lonigutamab showed promising results, but VRDN-003's half-life extension and autoinjector features are seen as significant commercial advantages [2][5]. Clinical Development - VRDN-003's Phase 3 REVEAL-1/REVEAL-2 trials are set to begin in August 2024, with topline data expected in 1H26 and a BLA filing by the end of 2026 [3][5]. - SLRN's decision to skip Phase 2b/3 studies and move directly to Phase 3 could intensify competition, but VRDN-003 is anticipated to deliver data from its primary endpoints before SLRN [3][5]. Safety and Efficacy - Updates on tinnitus effects from SLRN's trials indicate that hearing adverse events are mostly transient and manageable, aligning with VRDN's observations [4][5]. - The Phase 3 studies for both VRDN and SLRN may reveal different occurrences of hearing adverse events due to their varying study durations [4].

Investment Rating - The report indicates a forecast of three more rate cuts in 2024 and one additional cut in 2025, leading to a terminal rate of 2.75% [4][8]. Core Insights - The Riksbank's Executive Board maintained the policy rate at 3.75% during the last meeting, with guidance suggesting potential cuts if inflation prospects remain favorable [4]. - Recent inflation data shows that July core inflation was 2.2% year-over-year, aligning with Riksbank's projections, while the activity picture remains subdued with a Q2 GDP decline of -0.8% quarter-over-quarter [5][7]. - The report anticipates a 25 basis point cut to 3.5% in the upcoming meeting, with expectations for further cuts in August, September, and November [8]. Summary by Sections Monetary Policy Outlook - The Riksbank's policy rate is projected to decrease to 3.33% in Q4 2024 and 2.94% in Q2 2025, reflecting a cautious approach due to global developments and economic activity slowdown [4]. - The majority of the Executive Board members are open to delivering three more rate cuts this year, citing favorable inflation prospects and a slowing economy [4]. Inflation Trends - Core inflation metrics have shown mixed progress, with July's core inflation at 2.2% year-over-year and a sequential increase of 0.37% month-over-month [5][6]. - The trade-weighted krona has remained stable since the June meeting, indicating a lack of significant volatility [6]. Economic Activity - The economic activity remains subdued, with a flash GDP print of -0.8% quarter-over-quarter for Q2, following a growth of 0.7% in Q1 [7]. - Unemployment rates have stabilized at 8.2%, and consumer confidence has shown signs of improvement, suggesting potential for economic recovery in Q3 [7].

Investment Rating - The report does not explicitly provide an investment rating for the Polish inflation outlook but indicates a more dovish long-term outlook compared to the National Bank of Poland (NBP) [3]. Core Insights - The final July inflation estimate confirmed a rise from +2.6% year-on-year (yoy) in June to +4.2% yoy in July, primarily driven by higher utility inflation, which increased from -1.6% yoy in June to +10.1% yoy in July due to the partial expiry of energy price shields [2][4]. - Food inflation also rose for the third consecutive month, from +2.5% yoy to +3.2% yoy in July, while core inflation slightly increased from +3.6% yoy to +3.8% yoy [2][4]. - The report forecasts lower-than-expected Polish inflation in the medium term, attributing this to external factors, the recent appreciation of the zloty, and favorable food prices [3]. Summary by Sections Inflation Overview - July inflation rose to +4.2% yoy from +2.6% yoy in June, with a month-on-month (mom) increase of 26.2% (seasonally adjusted, annualized) [2][4]. - Core inflation increased to +3.8% yoy in July from +3.6% yoy in June, with a mom increase of 6.6% (seasonally adjusted, annualized) [4]. Key Figures - Utility inflation surged to +10.1% yoy in July from -1.6% yoy in June, while food inflation rose to +3.2% yoy from +2.5% yoy [4]. - The report highlights significant changes in various inflation components, including a dramatic increase in electricity, gas, and other fuels, which saw a yoy increase of +10.1% [4]. Long-term Outlook - The long-term outlook remains dovish, with expectations of a temporary rebound in inflation due to the expiry of energy price caps, but overall disinflation is anticipated in the second half of 2024 [3][7].

Investment Rating - The report maintains a "Buy" rating for Zhejiang Dingli Co Ltd. (603338.SS) with an upside potential of 56.2% to a target price of Rmb51.85 [1][3][21]. Core Insights - The investment thesis for Zhejiang Dingli is based on several factors including the accelerating adoption of aerial working platforms (AWPs) in China, a significant under-penetrated market, driven by rising labor costs, a construction worker shortage, and increasing safety awareness [21]. - The company is expected to benefit from a product mix upgrade towards higher-ASP and higher-barrier-to-entry boom lifts, where it has established a substantial technology gap compared to domestic peers [21]. - Despite the challenges posed by US-China trade tensions and anti-dumping duties, Dingli's competitiveness is expected to grow due to product differentiation, particularly in electrified boom technology [21]. Financial Projections - Revenue projections for Zhejiang Dingli are as follows: Rmb6,312.0 million for 2023, Rmb7,435.9 million for 2024E, Rmb8,421.7 million for 2025E, and Rmb9,548.8 million for 2026E [3][21]. - EBITDA is projected to grow from Rmb1,912.8 million in 2023 to Rmb3,198.1 million by 2026E [3][21]. - The report anticipates a core EPS CAGR of +22% from 2023 to 2025E, with EPS expected to be Rmb3.69 in 2023, increasing to Rmb5.47 by 2026E [3][21]. Market Context - The report highlights a normalization in the rental market, with softened fleet utilization and cautious demand from rental companies, indicating a potential peak in the cycle [1][10]. - The AWP segment in North America saw a growth of 6-7% year-over-year, but there were declines in other regions, particularly Europe [14][16]. - The overall market dynamics suggest a cautious outlook for the construction sector, with uncertainties related to interest rates impacting demand [11][21]. Valuation Metrics - The target price of Rmb81.0 is based on a 16.5X 2024E DACF, reflecting a ~45% discount to its long-term historical average [22]. - The report projects a P/E ratio of 20.2X for 2024E and 16.8X for 2025E, justified by the expected growth in core EPS [22]. Competitive Landscape - The report notes that Zhejiang Dingli is one of the largest suppliers of AWPs in China, with significant growth potential in both domestic and international markets [21]. - The company faces competition from both local and international players, but its focus on product differentiation and technology leadership is expected to provide a competitive edge [21].

Investment Rating - The report maintains a "Buy" rating for both Yue Yuen and Pou Sheng, with a 12-month target price of HK$17.2 for Yue Yuen and HK$1.00 for Pou Sheng [20][23]. Core Insights - Yue Yuen's OEM business has shown sequential order improvement, with management raising full-year order volume growth guidance to low double digits year-over-year, indicating better visibility on second-half orders [3][12]. - Pou Sheng's retail business faces challenges due to weak consumption power in China, but effective margin control and cost optimization strategies are expected to support stability [5][8]. Summary by Sections OEM Business Overview - Order Outlook: Full-year order volume growth guidance raised to low double digits year-over-year from mid-single to high-single digits, with improved visibility for second-half orders [3][12]. - Margin Expectations: Gross profit margin (GPM) in Q2 was 18%, below expectations, but management anticipates stability or a marginal increase in GPM for the second half [14]. - Capacity Expansion: Ongoing capacity expansion in Bangladesh, Indonesia, and Cambodia, with plans for a new production base in India [15][16]. Retail Business Overview (Pou Sheng) - Sales Performance: Sales declined by 11% year-over-year in July, with management expecting similar trends to continue in the second half [5][7]. - Margin Management: Despite sales pressure, Pou Sheng achieved a gross profit margin of 34.2% in Q2, with expectations for stabilization in the second half [8][10]. - Cost Control Initiatives: Continuous efforts in optimizing SG&A costs have led to savings, including adjustments in labor and rental costs [5][8]. Earnings Revisions - For Pou Sheng, net income estimates for 2024 have been revised up by 9%, while estimates for 2025-2026 have been increased by 0%-2% due to better gross profit margin improvement and operational efficiency [6][19]. - For Yue Yuen, slight adjustments to gross profit margin forecasts have been made, reflecting recent results and new factory ramp-up [6][17]. Strategic Initiatives - Pou Sheng is enhancing its digitalization efforts and multi-channel strategies to counteract offline sales softness, with a focus on improving operational efficiency in high-tier cities [9][10]. - New brand collaborations and outlet-formatted stores are being pursued to drive growth and improve sales performance [10][11].