Flash | 28 Oct 2024 00:36:46 ET │ 12 pages China Steel Supply Side Reform 3.0? CITI'S TAKE Per Cailian(25-Oct), China Iron and Steel Association (CISA) is discussing a basket proposal in terms of supply discipline in the steel space, including phasing-out inefficient capacity and encouraging M&A to consolidate the market and improve economies of scale. Although the market has rallied since, we don't see upside risk to fundamental improvement, as (1) it is not new news for the gov to promote consolidation in ...

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: The conference call primarily discusses the **China Technology & Communication** sector, with a specific emphasis on **smartphones**, **semiconductors**, **AI**, and **software** industries [1][6][7]. Core Insights and Arguments - **Investor Sentiment**: There is increasing interest among institutional investors in **China tech** compared to other Asian markets, particularly in **ITS** and **software** sectors, ahead of the Politburo meeting [1]. - **Smartphone Demand**: Expectations for the **iPhone 16** are low due to order cuts, while the **iPhone 17** cycle and specifications upgrades are seen as crucial for supporting the iPhone supply chain [2]. - **AI and Optical Transceivers**: There is heightened interest in **optical transceivers** players like **Innolight**, driven by demand from US players and potential catalysts from US CSP capex [6]. - **Software Sector**: Post China's stimulus plan, there is growing interest in the software sector, although fundamentals are expected to remain weak in the second half of 2024 [7]. **Kingdee** is highlighted as a key pick due to its solid fundamentals and improving profitability [8]. Company-Specific Insights - **Xiaomi**: Identified as a structural long-term investment opportunity due to promising growth in the **EV** market and a recovering smartphone landscape [1][8]. - **ASMPT**: Despite concerns over order cuts, it is viewed as a buying opportunity post its 3Q24 results, with potential benefits from **CoW** and **HBM** opportunities [3][8]. - **Apple Supply Chain**: The Apple supply chain remains a focus, with companies like **AAC**, **Cowell**, and **Goertek** expected to benefit from the iPhone 17 upgrade [8]. - **Kingdee**: Remains a key pick in the **SaaS** sector due to its solid fundamentals and potential macro recovery [8]. Additional Important Points - **Semiconductor Concerns**: The decline in **ASML** orders indicates a potential oversupply in the semiconductor market, with risks of US bans on certain Chinese memory and advanced equipment makers [3]. - **AI Sentiment Recovery**: The recovery in AI sentiment is expected to support a re-rating of the supply chain, particularly benefiting companies involved in AI smartphones [2][8]. - **Market Dynamics**: Investors are concerned about the weakening demand for Android devices in the second half of 2024, following a restocking phase in the first half [2]. Conclusion The conference call highlights a cautious yet optimistic outlook for the **China Technology & Communication** sector, with specific focus on the smartphone and semiconductor industries. Key companies like **Xiaomi**, **ASMPT**, and **Kingdee** are positioned as potential investment opportunities amidst a backdrop of evolving market dynamics and investor sentiment.

V i e w p o i n t | 28 Oct 2024 12:00:28 ET │ 16 pages China Diversified Utilities High Power Demand in Sept; We like Pinggao, Sieyuan & Goldwind CITI'S TAKE PRC power demand rose 8.5% yoy to 847.5M MWh in September, accelerating from +7.9% yoy in 8M24, with high increments from residential sector (+27.8% yoy) and servicing industries (+12.7% yoy). Since 2021, PRC power demand growth has been high at 1.4-1.6x of PRC GDP growth (except in 2022 due to COVID) with greater demand from AI, data centers, electric ...

28 October 2024 | 8:42AM HKT _ China Spirits Tracker: Sentiment holds up post peak season; Full Oct shipment led to Feitian Moutai's wholesale price volatility The 111th China Food & Drinks Fair is being hosted in Shenzhen on Oct 29-31, and we are seeing spirits consumption largely hold up or slightly sequentially improve post policy stimulus, evidenced by retail terminals/distributors not seeing significant weaker demand post the recent peak season, unlike the same period in 2023. Nevertheless, in line wit ...

27 October 2024 | 6:38PM HKT | --- | --- | --- | |-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

CSC Research Daily Highlights August 13, 2024 Research Department China Securities Co., Ltd This compilation is an abndged translation of the corresponding Chinese reports Please refer to the important statement on the last page Daily Highlights * This complation is distributed by China Securities Co., Ltd. in the People's Republic of China (for the purposes of this Report only, excluding Hong Kong, Macao and Taiwan), and subject to applicable laws and regulations, this compliation may be distributed by Chi ...

Investment Rating - The report maintains an "Outperform" rating for the computer industry and a "Buy" rating for HUARUI PRECISION [12][24]. Core Insights - The domestic AI product traffic has surged, particularly in AI search products, while ChatGPT's monthly traffic has declined year-over-year. The market for AI products is still in an exploratory phase [11][13]. - The new procurement rules from the State-owned Assets Supervision and Administration Commission (SASAC) are expected to boost technological localization and innovation within central state-owned enterprises [11][13]. - In the real estate sector, Shenzhen Public Housing Group's initiative to purchase unsold homes for affordable housing is seen as a model that may influence other major cities like Beijing and Shanghai [18][20]. - The machine tool industry, represented by HUARUI PRECISION, has shown significant earnings recovery, with a projected net profit growth of 23.99% to 33.32% from 2024 to 2026 [33]. Computer Industry Summary - In July, domestic AI product traffic surged, with significant growth in AI search products, while the overall market remains exploratory [11][13]. - The SASAC's new procurement rules are expected to promote technological innovation and localization among central SOEs [11][13]. - Recommended stocks in the AI sector include DAMENG, NINESTAR, and KINGSOFT OFFICE, focusing on technology security and policy-driven sectors [13][15]. Real Estate Industry Summary - Shenzhen's city-wide purchase of unsold market-rate housing is a significant development, with potential replication in other major cities [18][20]. - The recent land auction in Shanghai set a new record for land prices, indicating strong demand from high-quality real estate companies [18][20]. - The CITIC Real Estate Index rose 2.65%, outperforming the broader market, suggesting a stabilization in the real estate sector [20]. Machine Tool Industry Summary - HUARUI PRECISION reported a revenue increase of 14.93% year-over-year, with significant improvements in profitability due to better margins and reduced costs [26][29]. - The company is expanding its mid-to-high-end product offerings and overseas distribution channels, which are expected to drive future growth [30][33]. - The projected net profit for HUARUI PRECISION is expected to reach RMB196 million, RMB250 million, and RMB334 million from 2024 to 2026, indicating strong growth potential [33].