8 October 2024 | 4:26PM EDT | --- | --- | --- | |-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Investment Rating - The report maintains a "Buy" rating on BHP, RIO, S32, CRN, CIA, DRR, LYC, and BSL, while holding a "Sell" rating on FMG and NHC [3][6]. Core Insights - The recent rally in the mining sector, driven by China stimulus, may fade due to weak demand in developed markets and a shift in China's focus towards property inventory destocking rather than construction [1][2]. - Iron ore is viewed as overvalued at approximately US$110 per ton, while met coal is favored at around US$200 per ton due to strong demand from India [2]. - Base metals, particularly copper, aluminum, and alumina, are preferred over the medium term, while battery materials are viewed negatively for the next 12-24 months [2]. Summary by Sections Market Overview - The mining sector experienced a significant rally, with the second-largest weekly increase in CFTC funds in about 15 years, but this momentum is expected to wane [1]. - Feedback from investor meetings indicates that while there may be short-term positive momentum, many investors are looking to fade the rally in the December quarter [1]. Commodity Price Forecasts - The report adjusts forecasts for various commodities, reducing base metal, steel, and met coal price expectations while upgrading alumina and thermal coal [4][8]. - Specific price forecasts include: - Iron ore (62% Fe) at US$108 per ton for 2023, declining to US$85 by Q4 2024 [8]. - Copper prices are projected to be around US$4.51 per pound in 2022, decreasing to US$4.00 in 2023 [8]. Company Valuations - Pure-play iron ore stocks are considered fully valued, with FMG trading at approximately 7.5x NTM EV/EBITDA and MIN at around 11x, which is a premium compared to major diversified miners [3]. - The report highlights the need for a sustained increase in developed market industrial production and construction activity to support a fundamental re-rating of metal prices in 2025 [2].

9 October 2024 | 12:30AM EDT _ | --- | --- | --- | --- | --- | --- | |----------------------------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | Global Economics Analyst | | | | | | n Core goods have been a key disinflation driver over the past 18 months, but the disinflationary impulse from supply-chain normalisation is mostly behind us. In this Global Economics Analyst we assess how much disinflation core goods will provide going forward. n We see several reasons why global core g ...

Investment Rating - The report maintains a "Buy" rating on Daqo and Flat H/Xinyi, while Longi is rated "Neutral" and GCL/Tongwei/TCL Zhonghuan are rated "Sell" [3][8]. Core Insights - The solar industry is experiencing a re-balancing of supply and demand, with upstream prices for Poly and Wafer seeing moderate increases, while downstream prices for Cell and Module are under intense competition, leading to a decline in profitability for these segments [1][11]. - Cash burn trends for covered companies are diverging, with Daqo expected to improve due to lower production and disciplined capital expenditure, while Tongwei and Longi are facing deterioration due to high capital expenditures and decreasing prices [2][5]. - A potential price rebound of 5%-10% across the solar value chain is anticipated by 2025, driven by continued supply cuts [3][8]. Summary by Sections Pricing Trends - In September, spot prices for Poly/Wafer increased by 1%, while Cell/Module prices decreased by 2% and 2% respectively, indicating a mixed pricing environment across the solar value chain [11][31]. - The average cash gross profit margin (GPM) for Poly improved slightly, while other segments like Wafer, Cell, and Module saw further declines [1][5]. Production and Inventory - Production for Poly, Wafer, Cell, and Glass decreased by 4%, 4%, 4%, and 8% respectively, while Module production remained flat [8][9]. - Inventory levels showed a moderate decline for downstream Cell and Module, but increased for Wafer and Glass, indicating ongoing inventory pressure [8][9]. Demand Dynamics - Demand for solar installations in China showed a sequential decline, with August installations down 22% month-over-month but up 3% year-over-year [31]. - Module exports remained flat month-over-month but increased by 23% year-over-year, with strong demand noted in the Middle East and APAC regions [31].

Investment Ratings - The report maintains a "Buy" rating on Will Semi and SG Micro, while assigning a "Neutral" rating to Kingsemi and Starpower [1][3][10][16][22]. Core Insights - The semiconductor industry in China is expected to see revenue growth of 12%-55% QoQ in 3Q24, driven by product expansions and improved demand following inventory corrections [1]. - Will Semi is projected to achieve a 25% YoY revenue growth to Rmb7.8 billion in 3Q24, supported by its penetration in the mid-high end smartphone CIS market and automotive applications [3]. - SG Micro is expected to sustain a 33% YoY revenue growth to Rmb978 million in 3Q24, benefiting from diversified product offerings and increasing domestic demand [10]. - Kingsemi anticipates a 29% YoY revenue growth to Rmb658 million in 3Q24, with new orders growing significantly [16]. - Starpower's revenues are expected to grow 21% YoY to Rmb1.1 billion in 3Q24, aided by a recovery in automotive IGBT shipments [22]. Summary by Company Will Semi - Revenue is expected to grow 25% YoY to Rmb7.8 billion in 3Q24, with a net income growth of 31% QoQ to Rmb1.1 billion [3]. - Earnings revisions for 2024-2027 show a 1%-2% increase due to better revenue outlook and product mix upgrades [3][5]. - The 12-month target price is raised to Rmb152.3 based on a 35X 2025 PE [5][9]. SG Micro - Projected 3Q24 revenue growth of 33% YoY to Rmb978 million, with a resilient performance amid industry downturn [10]. - Earnings revisions for 2024-2027 indicate a 1%-11% increase due to improved long-term revenue growth outlook [11][12]. - The 12-month target price is raised to Rmb117.6 based on a 55X 2025 PE [14][15]. Kingsemi - Expected revenue growth of 29% YoY to Rmb658 million in 3Q24, with significant new orders [16]. - Earnings revisions for 2024-2027 show a 1%-7% increase due to better revenue and gross margin outlook [16][17]. - The 12-month target price is raised to Rmb78.6 based on a 33X 2025 PE [17][21]. Starpower - Anticipated revenue growth of 21% YoY to Rmb1.1 billion in 3Q24, supported by automotive IGBT shipments [22]. - Earnings revisions for 2024 show an 18% decrease due to a 2Q earnings miss, but a 1%-2% increase for 2025-2027 [22][24]. - The 12-month target price is raised to Rmb101.5 based on a 19X 2025 PE [24][27].

7 October 2024 | 8:13PM HKT | --- | --- | --- | --- | --- | --- | --- | --- | --- | |--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------|-------|----------- ...

Investment Rating - The investment rating for CSPC Pharma is "Buy" with a 12-month price target of HK$10.03, representing an upside of 40.9% from the current price of HK$7.12 [5][6][11]. Core Insights - CSPC Pharma has entered into its first overseas business development deal by licensing a pre-clinical metabolism drug, YS2302018, to AstraZeneca for an upfront payment of US$100 million, potential development milestone payments of up to US$370 million, sales milestone payments of up to US$1,550 million, and tiered royalties based on net sales [1][2]. - This collaboration is seen as a significant step for CSPC's global expansion and validates its early-stage innovative pipeline, which is not yet reflected in its current valuation [1][2]. - CSPC aims to close 1-2 more business development deals by the end of 2024, indicating a proactive approach to enhancing its pipeline under new R&D leadership [1]. Summary by Sections Licensing Deal - CSPC has licensed out YS2302018, a small molecule inhibitor targeting lipoprotein(a), to AstraZeneca, marking a strategic collaboration that could enhance CSPC's global presence [1][2]. - The deal includes an upfront payment of US$100 million, which is significant for a pre-clinical asset, along with potential milestone payments totaling up to US$2.42 billion [1]. Product Potential - YS2302018 is positioned as a differentiated oral TKI targeting lipoprotein(a), which is linked to cardiovascular diseases, with a high prevalence in older populations [2]. - The drug's oral administration is a competitive advantage over existing therapies that require injections, making it more suitable for chronic disease management [2]. Financial Projections - CSPC's revenue projections for the upcoming years are Rmb 31,450.1 million for 2024, increasing to Rmb 38,080.8 million by 2026, with corresponding EBITDA growth [5]. - The company is expected to maintain a P/E ratio that decreases from 13.0 in 2024 to 10.1 by 2026, indicating improving profitability [5].

Investment Rating - The report maintains a "Buy" rating for Bilibili Inc. (BILI) with a 12-month price target of $22.60, indicating a potential downside of 14.6% from the current price of $26.46 [1]. Core Insights - The report emphasizes the sustainability of the game "Sanguo NSLG" and its expected contribution to gaming revenue in Q3 and Q4, alongside the company's capabilities in video and advertising business [1][4]. - Bilibili is expected to achieve a profit margin of 10-15% by 2026, driven by improved business mix and operating leverage from new game contributions [1][12]. - The advertising business is projected to outperform industry peers, with expectations of over 20% year-on-year growth in 4Q24/2025, supported by increased ad load and new advertising formats [6][8]. Summary by Sections Financial Projections - Revenue is forecasted to grow from RMB 22,527.9 million in 2023 to RMB 34,673.7 million by 2026, with EBITDA expected to rise from a loss of RMB 654.7 million in 2023 to RMB 6,315.0 million in 2026 [1][3]. - The normalized gross margin for 2026 is estimated at 39%, with a net margin of 12% anticipated [11][12]. Game Performance - "Sanguo NSLG" is expected to generate over RMB 1 billion in revenue recognition for Q3 2024, with a grossing run-rate of at least RMB 0.4 billion in September [1][4]. - The game is projected to maintain a 30% operating profit margin due to lower channel costs and disciplined marketing expenses [5]. Advertising Business - Bilibili's advertising revenue is expected to grow from RMB 1,669 million in Q1 2024 to RMB 2,358 million in Q4 2024, reflecting a year-on-year growth of 31% [10]. - The company is enhancing its ad technology infrastructure and expanding ad slots, which is anticipated to improve monetization efficiency [6][8]. Valuation - Bilibili is currently trading at a 20X 2026E P/E ratio, which is a premium compared to the China internet average of 15X, justified by its higher growth rate [12]. - The implied 2026E P/E for Bilibili ranges from 16X to 22X in various scenarios, indicating a reasonable valuation compared to historical peaks [12].

9 October 2024 | 6:41AM EDT Aerospace & Defense 3Q24 earnings preview Our 3Q24 A&D earnings preview provides our current thoughts on each sub-market and single stock ideas into the results period. Aerospace OE is challenged by the Boeing strike and supply chain hurdles. We expect companies to speak to slower output through year-end, but only modestly, with an aim to ramp quickly in 2025. Unit and price growth are both likely still strong in the aftermarket, and only extended by OE challenges; we expect stro ...

9 October 2024 | 5:34PM EDT _ What's Top of Mind in Macro Research: Even brighter US macro picture, Middle East energy supply risks, more US/China equity upside This week: n US: an even brighter macro picture n Middle East: energy supply risks n Equities: more upside in the US and China Transcript US: an even brighter macro picture We lowered our 12m US recession odds by 5pp to the historical unconditional average of 15% and became more confident that the Fed will deliver 25bp rate cuts at the next few FOMC ...