Deutsche Bank Research 7T2se3r0Ot6kwoPa North America United States Industrials Multi - Industry & Electrical Equipment Industry DeBLASEing the Trail Date 22 September 2024 Industry Update The First (Fed) Cut Is the Deepest? | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------- ...

Europe Equity Research 23 September 2024 J P M O R G A N Source: Company reports. Source: J.P. Morgan. European Autos Global Truck / Construction Equipment Monthly (Sep'24): Mixed leading indicators | --- | --- | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Greater China IT Services and Software - **Current View**: Cautious outlook on the A-share software and IT sector, influenced by IT localization themes [2][3] Core Insights - **MIIT Policy**: The Ministry of Industry and Information Technology (MIIT) has mandated the replacement of 2 million sets of industrial software licenses and 800,000 industrial operating systems by 2027. This is part of a broader initiative to enhance supply chain resiliency and security [3][5] - **Recent Market Activity**: The China Securities Xinchuang Index (CSI931247) increased by 4% from September 18-20, compared to a 1% rise in the CSI300. This surge is attributed to geopolitical events and speculation regarding local government funding for IT localization [4][5] - **Investment Recommendations**: - Avoid investments in the Xinchuang theme until financial contributions become clearer due to a poor track record [2][5] - Preference for Baosight (EW) over ZWsoft (UW) for industrial software, and Kingsoft Corp (OW) over Kingsoft Office (UW) for localization [5] Financial Performance and Risks - **Bottlenecks**: Key challenges for IT localization include budget constraints for local governments and performance issues with domestic industrial software. Previous MIIT targets, such as those for cybersecurity growth, have been missed [5] - **Market Sentiment**: The current market environment resembles that of September 2022, where the software sector rallied on localization policies without subsequent financial benefits [5] Company-Specific Insights - **Kingsoft Corp Ltd (3888.HK)**: - Valuation based on a sum of parts approach, with online games valued at 10x 2024e P/E and WPS using DCF with a 9.0% WACC [7] - Risks include slower game revenue growth and competition in cloud services [8][9] - **Shanghai Baosight Software Co Ltd (600845.SS)**: - Valuation derived from a 10-year DCF model with a WACC of 10.5% [10] - Upside risks include faster customer utilization and potential M&A activity [11] - **ZWSOFT Guangzhou Co Ltd (688083.SS)**: - Valuation based on a 10-year DCF with a WACC of 10.8% [13] - Upside risks include stronger IP protection and technology evolution [14] - **Beijing Kingsoft Office Software Inc (688111.SS)**: - Valuation methodology aligns with other Chinese SaaS companies, applying a 10.2% WACC [16] - Risks include slower AI penetration and intensified competition [18] Additional Considerations - **Market Dynamics**: The software sector is experiencing high valuations despite being one of the worst-performing segments over the past two years, indicating a potential market correction if demand does not materialize [5] - **Investment Banking Relationships**: Morgan Stanley has disclosed its investment banking relationships with several companies mentioned, which may influence research objectivity [6][19] This summary encapsulates the critical insights and recommendations from the conference call, providing a comprehensive overview of the current state and outlook of the Greater China IT Services and Software industry.

North America Equity Research 22 September 2024 J P M O R G A N Apple Product Availability Tracker: Lead Times Expand Suggesting Healthy Demand, Albeit Softer on Higher End Than Last Year Overweight AAPL, AAPL US Price (20 Sep 24):$228.20 | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ...

Summary of the Conference Call on China Autos & Shared Mobility Industry Overview - **Sector Focus**: The discussion centers around the auto sector in China, particularly electric vehicles (EVs) and shared mobility solutions. Investor interest has increased following a recent market bounce, but there is uncertainty regarding the sustainability of this interest due to fragile macroeconomic conditions [1][2]. Key Insights - **Investor Sentiment**: There is a notable lack of conviction among investors, leading to a focus on short-term trading opportunities rather than long-term structural stories. The investor base is heavily skewed towards hedge funds (HF), while long-only (LO) investors remain cautious [2]. - **Seasonal Sales Expectations**: Anticipated better-than-expected sales in Q4, supported by local government subsidies for new energy vehicles (NEVs) and a strong pipeline of EV models, are contributing to improved sector sentiment [2]. - **Pricing Competition**: The ongoing price competition among EV manufacturers, particularly between domestic brands like Tesla, BYD, and Huawei, is a significant concern. There is skepticism about whether the recent truce in pricing strategies is sustainable [3]. Company-Specific Discussions - **BYD**: Continues to dominate discussions, accounting for about one-third of investor conversations. While the sentiment remains positive, it has cooled compared to previous months due to raised expectations for vehicle volume and profitability [5]. - **NIO**: Initially generated excitement around the L60 launch, but interest has waned. Investors are more concerned about supply issues than demand, with a conservative delivery guidance for December [5]. - **XPeng**: The upcoming launch of the P7+ is generating interest, especially with the successful introduction of the M03 model. The P7+ is crucial for maintaining margins [6]. - **Li Auto**: Viewed as a blue-chip among EV startups, but investors are waiting for clarity on battery electric vehicle (BEV) initiatives before committing further [6]. - **Geely**: Recent performance has led to a tripling of inquiries, driven by the successful launch of the Galaxy E5, with over 20,000 units delivered shortly after launch [8]. - **Great Wall Motor**: Recognized as a proxy for emerging markets, with expectations of 10% sequential growth in volume sales, although overseas sales may remain subdued until Q4 [8]. Additional Observations - **ZEEKR**: The newly launched 7X SUV has received over 58,000 pre-sale orders, but investor confidence in its ability to drive significant volume growth remains low due to competitive pressures [7]. - **Market Dynamics**: The auto sector is experiencing a mix of beta-driven and idiosyncratic moves, with investors looking to capitalize on trading opportunities as the year ends [1][2]. Conclusion The China auto sector is at a crossroads, with potential for seasonal sales boosts and new model launches, but overshadowed by macroeconomic fragility and intense pricing competition. Investors are cautiously optimistic, focusing on short-term opportunities while awaiting clearer signals for long-term investments.

20 September 2024 Asia Commercial Real Estate Equities Real Estate Why we are bullish on India office Asia ◆ We are bullish on India's fast-growing office market, and there are no signs of an asset bubble forming ◆ The value of Singapore's office market will soon be worth more than HK's, which may be in the last phase of correction; in mainland China, office yield spreads are at a decade high ◆ Our preferred stocks are Buy-rated Embassy Office Park REIT, Brookfield India REIT, CICT and Swire Properties Don' ...

Summary of Key Points from the Conference Call Industry Overview: China Oil & Gas Key Insights - **Gas Demand Growth**: The forecast for China's gas demand growth has been revised down to 4% per annum for FY25, from a previous estimate of 5.8% for FY24, due to weaker GDP growth and decelerated demand from industrial sectors [1][3][4] - **GDP Impact**: The macroeconomic team has cut the FY24 GDP forecast to 4.8%, which is expected to impact gas demand negatively [1][3] - **Demand Drivers**: Despite the slowdown, there are still solid demand drivers including: - Residential and heating supply, accounting for approximately 25% of total consumption - Increasing adoption of LNG trucks, which are economically beneficial compared to diesel trucks (RMB1.4/km lower) - Rising demand for gas power generation to support new energy initiatives [1][3][4] Production and Supply - **Production Capacity**: China's gas production capacity is expected to grow steadily, reaching 247 billion cubic meters (bcm) in FY24 and 262 bcm in FY25, reflecting a growth rate of 6.1-7.2% per annum [1][4] - **Storage Capacity**: By the end of FY23, China's gas storage capacity is projected to reach 6% of demand, with plans to increase this to align with global averages in the medium term [1][4] - **Import Dependency**: The import dependency for natural gas is expected to decrease to 38% by FY25-26, down from 40% in FY24 [1][4] Market Dynamics - **Long-term Contracts**: China is expected to secure long-term LNG contracts from the US and Qatar, which will reduce reliance on spot imports [1][4] - **Price Stability**: Near-term gas prices are expected to stabilize, with a projected 2% year-on-year increase in average selling price (ASP) for 2H24 [1][4] - **Profitability of Major Players**: PetroChina reported a loss of RMB4 billion in its imported gas business in 1H24, while Sinopec achieved a profit of RMB380 million [4][6] Demand Forecasts - **Revised Demand Growth**: The revised forecasts for gas demand growth are 5.8% for FY24, 3.9% for FY25, and 3.0% for FY26, reflecting a downward adjustment from previous estimates [3][4] - **Apparent Demand**: In the first eight months of 2024, China's apparent gas demand was 280 bcm, representing a 9.6% year-on-year increase, with real demand growth estimated at 6-8% [4][6] Conclusion - The outlook for the China oil and gas industry indicates a mixed scenario with slower growth rates due to economic factors, but sustained demand from residential and industrial sectors, alongside strategic long-term contracts, may provide stability in the market [1][3][4]

August 2, 2024 07:04 AM GMT Semiconductors | Asia Pacific M Update Thoughts on recent industry concerns TSMC should be able to catch up on NVIDIA's Blackwell production timing, even with some re-spin. B200A in 1Q25 addresses SME customers demand and utilizes TSMC's CoWoS- S capacity. What's new? Investors have been asking us if there's any design or production issues with NVIDIA's Blackwell, that might potentially cause a few months delay. After our foundry supply chain checks, we think there could be aroun ...

BlackRock. FOR PUBLIC DISTRIBUTION IN THE U.S., CANADA, LATIN AMERICA, HONG KONG, SINGAPORE AND AUSTRALIA. FOR INSTITUTIONAL, PROFESSIONAL, QUALIFIED INVESTORS AND QUALIFIED CLIENTS IN OTHER PERMITTED COUNTRIES. Tech still likely to deliver on earnings • U.S. stocks retreated last week, led by technology. We see some bouts of volatility ahead over the short term. Stocks of smaller-sized firms rose further. A tech-driven pullback has hit stocks this month as investors piled into segments like smaller compani ...

Group 1: Macroeconomic Outlook - Major central bank rate cuts mark a turning point for investors, shifting focus towards supporting growth[24] - There is a 55% chance of a US economic soft landing and a 25% chance of a no-landing scenario in the next 12 months[24] - The Fed is expected to cut rates in H2 2024, influenced by slowing rents and softening labor markets[24] Group 2: Investment Strategy - Overweight equities over bonds and cash, favoring US and Indian equities[24] - Balanced foundation allocations comprising equities, bonds, and alternative assets are likely to outperform income-oriented strategies[24] - Gold and Emerging Market (EM) USD bonds are recommended as diversifiers[24] Group 3: Performance Review - The Balanced allocation has risen 6.7% year-to-date, outperforming income-oriented strategies[24] - The Multi-Asset Income (MAI) model allocation has delivered a 4.4% YTD return, benefiting from strong corporate earnings and a broadening equity rally[75] - Gold has risen 14.4% YTD, driven by a tight demand/supply balance rather than falling bond yields[49]