Summary of the CIS Industry Conference Call Industry Overview - The smartphone market has shifted from incremental competition to stock competition, with extended user upgrade cycles and imaging technology upgrades becoming key competitive points [1][2] - CMOS Image Sensors (CIS) are at the core of imaging technology, categorized into front-illuminated, back-illuminated, and stacked structures, each with different light utilization rates and cost controls [1][3][4] Market Dynamics - The CIS industry is highly concentrated, with Sony, Samsung, and Huawei holding significant market shares. However, domestic manufacturers like Weir Shares are expected to rapidly catch up due to technological advancements and market demand [1][5][6] - Weir Shares, as a leading domestic CIS company, reported excellent performance in the first half of 2024, driven by demand from the smartphone and automotive markets, and plans to penetrate the high-end smartphone market and automotive electronics, especially in autonomous driving applications [1][6][20] - Domestic manufacturers like Huawei and Xiaomi are increasingly adopting Huawei-related CIS products, reflecting the growing competitiveness and innovation capabilities of local companies [1][19] Technological Developments - Sony and Samsung are undergoing strategic adjustments in CIS technology, shifting focus towards High Bandwidth Memory (HBM), which presents development opportunities for other companies [1][17] - The global CIS market is projected to reach $33 billion by 2025, with a compound annual growth rate (CAGR) of 12%. The automotive electronics and security monitoring sectors are expected to be the fastest-growing areas [10] Competitive Landscape - As of 2023, the top three players in the global CIS market are Sony, Samsung, and OmniVision, with market shares of 45%, 19%, and 11%, respectively, accounting for approximately 75% of the market [11] - Sony has made significant advancements in back-illuminated and stacked sensor technologies, enhancing data reading speeds and dynamic range [12] - Samsung has achieved notable progress in dual-transistor pixel technology and large-pixel CIS, leading the market in high-resolution products [13][14] Weir Shares Performance - Weir Shares reported that its image sensor business accounted for 77% of total revenue in the first half of the year, with a year-on-year growth of 36.5% and a net profit increase of nearly 8 times, driven by high-end smartphone and automotive market demand [18] - The company aims to continue penetrating the high-end smartphone market and expand its presence in automotive electronics, particularly in autonomous driving applications [20] Conclusion - The CIS industry is experiencing significant shifts due to technological advancements and strategic realignments among major players. Domestic manufacturers are poised for growth, leveraging innovation and market demand to enhance their competitive positions.

Viewpoint | Citi Research 12 Aug 2024 01:10:13 ET | 28 pages South Africa Economics and Equities Two-pot retirement reform to boost GDP with stock implications CITI'S TAKE We expect the two-pot retirement reform (effective 1 September 2024) to boost GDP growth to 2.0% by 2025. We see upside for South African equities given the expected positive impact on consumption, namely for consumer stocks, while the impact on banks is likely to be more nuanced given our expectation that the reform will lead to repaymen ...

Viewpoint | Citi Research 12 Aug 2024 03:13:20 ET | 26 pages UK Economics July Inflation Preview – Undershoots now, further questions into August CITI'S TAKE We expect the slew of data this week to show UK disinflation to be broadly on track. Friday's growth data will we think indicate an ongoing, supply-led recovery. We expect the labour market to have continued to soften, although uncertainties around the LFS will still merit caution. On the inflation side, we expect a downside surprise, with services inf ...

Viewpoint | Citi Research 11 Aug 2024 20:07:29 ET | 9 pages European Economics Week Ahead Week of 12 August CITI'S TAKE The data in Europe may continue to play second fiddle to global market developments next week. Nonetheless, a slew of top tier data in the UK – including inflation and labour market releases, merit close attention. ZEW investor expectations, the only relevant Eurozone data out next week, likely turned down in August, on market risk-off moves and global growth concerns. In the Scandies, the ...

Investment Rating - The report has downgraded Emerging Market (EM) equities to Underweight in a global context due to growing macro headwinds and increased risks associated with the potential re-election of Trump [4][6]. Core Insights - The MSCI EM index is currently about 10% off its highs, with a projected upside of approximately 8% to a target of 1130 by mid-2025, based on an expected 8% EPS growth and flat valuations [4][7]. - The report emphasizes a tilt towards quality in EM country strategy, favoring India and Taiwan while being Underweight on Brazil and downgrading Korea to Neutral [4][10]. - The political landscape in the US, particularly the potential for a Trump 2.0 scenario, poses significant risks for EM equities, especially for countries like China and Brazil, which are more exposed to US trade policies [9][20]. Summary by Sections EM Equity Strategy - The report summarizes top-down views and insights from various strategists, indicating that recent market corrections have led to a more realistic pricing of EPS outcomes in EM [4][5]. - The report suggests that while the worst may be behind, volatility is expected to persist as market positioning has not fully unwound [4][5]. Key Theme: Trump 2.0 - The US political backdrop is fluid, with prediction markets assigning a roughly 50% chance of a Trump win, which could lead to heightened trade policy uncertainty and negatively impact EM equities [9][22]. - The report highlights that approximately 13% of MSCI EM revenues come from the US, with significant exposure in Asia Tech, making markets like India and Mexico appear less vulnerable to Trump-related risks [9][37]. EM Allocation Model - The allocation model reflects a preference for quality and defensiveness, with Overweight positions in the US and specific EM countries, while downgrading others based on macroeconomic conditions and election-related risks [6][10]. - The report indicates a shift towards sectors and regions with strong EPS momentum, particularly in India and Taiwan, while downgrading Korea and Brazil [10][14]. Quantitative Strategy - The report notes that despite the recent sell-off, the MSCI EM is trading at a forward PE of 12x, near its long-term average, suggesting that EM equities remain relatively cheap compared to developed markets [7][46]. - EPS growth forecasts for 2024 are stronger in EM compared to developed markets, with a focus on sectors like technology and basic materials [43][51]. EM Countries: Insights from Local Strategists - Country preferences are adjusted based on EPS momentum and exposure to US economic conditions, with upgrades for Poland and downgrades for China and Brazil [10][14]. - The report emphasizes that while Korea shows EPS recovery, its cyclical characteristics and exposure to Trump risks warrant a Neutral rating [14][69].

Investment Rating - The report maintains a positive outlook on US equities, lifting the year-end target for the S&P 500 to 5600 and EPS estimate to $250, with a further target of 5800 for 2025 based on $270 of EPS [6][8]. Core Insights - The earnings momentum remains positive, with a beats-to-misses ratio of 4.6:1, indicating strong performance relative to expectations [5][6]. - The Levkovich Index shows a significant week-over-week decline, indicating a shift towards a more balanced sentiment, although it remains in the euphoria zone [5][25]. - The report highlights the influence of the "Magnificent 7" stocks, which have contributed to two-thirds of the S&P 500 gains this year [6]. Market Outlook - Price remains negative due to flat equity markets and a slight increase in 10-year yields, leading to cross-asset valuation imbalances [4]. - Liquidity is positive, with continued inflows into domestic equity funds and ETFs [4]. - Sentiment is negative, but there is potential for a neutral reading in the coming weeks if current conditions persist [5][6]. Sector Recommendations - Real Estate and Financials have been upgraded to Overweight, joining Consumer Discretionary, while Industrials have been lowered to Market Weight [7]. - Health Care and Materials remain Underweight, indicating a cautious stance on these sectors [7]. Earnings Performance - Over 90% of the S&P 500 has reported Q2 earnings, with aggregate EPS surprising to the upside by 2% compared to expectations [5][33]. - The report details sector-specific performance, with notable earnings growth in Consumer Discretionary and Financials [33][34]. Valuation Metrics - The S&P 500 is currently trading at a P/E ratio of 22.4, which is in the 89th percentile historically, indicating high valuations [14]. - Forward 1-year returns based on current valuation metrics suggest a median return of 6.6% for the S&P 500 [14]. Economic Indicators - The report notes that corporate preparedness for an economic slowdown and improvements in supply chains could positively impact market performance [18]. - The potential for downside surprise inflation prints without weaker macro data is highlighted as a positive market influence [18].

Roundup | Prepared for Philip Hu The SMID Point Friday, 09 August 2024 Company | Industry Company Nevro Corp (NVRO.N) - Upgrading to Neutral: Enthusiasm at a Trough, Guidance Seems Reasonable but Uncertainty Is High With the 2Q24 print (link), we are upgrading NVRO to Neutral from Sell. While the quarter itself was fairly benign, the full-year revenue guidance cut to $400- $405M from $435-$445M was unexpected, sending shares down 44% post print. With shares now down 73% YTD and trading at <0.5x NTM revenue, ...

Investment Rating - The report assigns a "Buy" rating for the overall market outlook, indicating a positive expectation for investment returns in the near term [73]. Core Insights - Global PMIs show signs of softening, with the manufacturing PMI slightly below 50, indicating a potential contraction, while the services PMI remains above 50, signaling solid activity [10]. - A global easing cycle is underway as central banks, including the Bank of England and the Bank of Canada, have started to cut rates, with expectations for further cuts from the Fed and ECB [15]. - The US economy may already be in a recession, as indicated by rising unemployment rates and a cyclical slowing in the labor market [18]. - Geopolitical tensions in the Middle East have escalated, increasing the risk of further conflict, which could impact global markets [21]. - The Bank of Japan is expected to delay further rate hikes until at least May 2025 due to recent economic volatility [25]. - The JPY carry trade is under pressure, with expectations of a significant correction in USDJPY, potentially falling below 140 in 2025 [37]. Summary by Sections Global Economics - Global PMIs indicate a slight pullback, with manufacturing PMIs in developed markets below 50, while services PMIs remain robust [10]. - Central banks are beginning a global easing cycle, with inflation risks appearing more contained than in previous quarters [15]. US Economics - The unemployment rate rose to 4.25% in July, suggesting the US economy may be entering a recession [18]. - The Federal Reserve is expected to cut rates by 125 basis points by mid-2025, responding to subdued inflation and a weakening labor market [19]. European Economics - Recent events in the Middle East have heightened the risk of regional conflict, which could have broader implications for global markets [21]. Japan Economics & Rates - The Bank of Japan is likely to maintain its current monetary policy for now, with expectations for a rate hike delayed until May 2025 [25]. G10 FX - The report anticipates a significant correction in JPY carry trades, with USDJPY expected to decline substantially over the next few years [37]. Commodities - Oil prices may rebound from recent lows due to geopolitical tensions and potential weather-related disruptions, with Brent prices projected to bounce back to the low-to-mid $80s [44]. US Equity Strategy - The report discusses potential tax policy changes depending on the outcome of upcoming elections, which could impact corporate earnings and market positioning [46]. European / Global Equity Strategy - The report notes a recent correction in global equities, with positioning still vulnerable to negative news, suggesting a cautious approach to buying into weakness [48]. Global Macro Strategy - Concerns about a hard landing for the economy are prevalent, with a neutral equity position recommended until clearer signals emerge [52].

Investment Rating - The report does not explicitly state an overall investment rating for the industry but provides individual ratings for specific companies such as Banco Santander (Neutral), Concha y Toro (Buy), and CMPC (Buy) [5][18]. Core Insights - In July, Chilean Institutional Investors, particularly Pension Funds and Mutual Funds, were net buyers of local equities, with net purchases of US$65.3 million and US$34.4 million, respectively [3][4]. - The sectors favored by Pension Funds included Real Estate, Consumer Discretionary, and Materials, with notable investments in Banco Santander, Cencosud, and CMPC [3][5]. - Year-to-date, Pension Funds have net bought US$358 million in Chilean equities, while Mutual Funds have net bought US$339 million [4][5]. Summary by Relevant Sections Pension Funds - Pension Funds had a net buying of US$65.3 million in local equities during July, with total assets under management increasing by 1.7% month-over-month to US$186 billion [3][4]. - The exposure to local equities decreased to 6.4% from 6.6% in June, remaining below the 10-year average of 7.2% [17][18]. - The preferred sectors for Pension Funds were Real Estate, Consumer Discretionary, and Materials, while they were net sellers in the Utilities sector [4][5]. Mutual Funds - Mutual Funds were net buyers of US$34.4 million in local equities during July, with total assets under management reaching US$76 billion, an increase of 2.8% month-over-month [4][14]. - The exposure to local equities remained stable at 2.1%, which is below the 10-year average of 2.7% [17][18]. - The largest inflows for Mutual Funds were seen in Banco Santander, Bci, and Concha y Toro, while outflows were noted in Cencosud and Entel [16][18]. Combined Flows - The largest combined net flows for companies under coverage were in Banco Santander (+US$29.6 million), Concha y Toro (+US$3.7 million), and CMPC (+US$1.8 million) [5][15]. - The largest outflows were recorded for Cenco Malls (-US$1.1 million), Entel (-US$1.3 million), and Parque Arauco (-US$1.7 million) [5][15].

Point | The Global Point Asia DBS Group (DBSM.SI) - 2Q24 beat on NII/fees, DPS S$0.54 flat; higher 2024 guidance offers some relief before focusing on 2025 guidance DBS reported PBT S$3,219m, in-line with Citi (S$3,206) but 6% ahead of consensus (S$3,047) driven by higher NII +3%qoq and fees income stable qoq. 2Q24 quarterly DPS S$0.54 as we had expected. Key positive extended from OCBC results was better asset quality sequentially; NPL ratio stable on lower absolute NPA. Outlook: Mgmt. cautiously optimisti ...