Investment Rating - The investment rating for Advanced Micro Devices (AMD) is Equal-weight [8][18][41] Core Insights - AMD has launched the new Zen 5 server architecture, which is expected to enhance its leadership position in the server market, particularly with the MI350 product [2][10] - The MI300 has performed well in its first year, contributing to a projected $4.5 billion in AI processor revenue, but the overall market for AI is anticipated to exceed $100 billion [6][12] - AMD's server opportunity is viewed positively, with expectations for share gains in 2025, although the pace of these gains will depend on the broader server refresh cycle [10][12] Summary by Sections Product Developments - AMD introduced the MI325X and previewed the MI350X, with the latter expected to support higher memory content and improved performance metrics [10][12] - The MI350X is projected to offer a significant uplift in inference performance, with AMD targeting a total addressable market (TAM) growth to $500 billion by 2028 [12][13] Market Position - AMD is seen as a strong competitor in the server market, with the potential for share gains against Intel, particularly as the server market recovers from previous lows [10][12] - The company has established partnerships with major cloud providers, which is expected to bolster its market presence [10][12] Financial Projections - The price target for AMD is set at $178, reflecting a P/E ratio of approximately 41x based on FY2025 estimates [15][20] - Revenue projections indicate growth from $22.68 billion in 2023 to $40.83 billion by 2026, with non-GAAP EPS expected to rise from $2.66 to $6.59 over the same period [21][22]

M Update Podcast | Metals & Mining Tracker | Europe October 11, 2024 09:44 AM GMT HRC tug-of-war China's HRC prices have rallied since the recent policy pivot, causing the EU-China HRC spread to fall significantly, disincentivising imports. While we note the impact of EU demand weakness, we argue that a positive dynamic in the seaborne market will have a far greater impact on EU prices/ margins. Play Audio Related Research: European Metals & Mining Tracker: HRC tug-of-war (October 10, 2024) | --- | --- | |- ...

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - Emerging Market Debt Dedicated (EMDD) funds experienced significant inflows of US$1.2 billion this week, a notable increase from US$52 million in the previous week [2] - Hard currency fund inflows increased to US$335 million from US$219 million, while local currency fund flows turned positive with inflows of US$689 million compared to outflows of US$52 million last week [2][3] - Year-to-date returns for hard currency and local currency stand at 7.5% and 2.3%, respectively [2] Summary by Sections EM Flows - EMDD funds saw inflows of US$1.2 billion this week, a significant increase from US$52 million the previous week [2] - Hard currency funds had inflows of US$335 million, up from US$219 million, while sovereign funds shifted to outflows of US$304 million from inflows of US$235 million [2] - Local currency funds saw inflows of US$689 million, a rebound from outflows of US$52 million [2] EM Credit Issuance - Total issuance for the week was US$15.1 billion, compared to US$9.7 billion the previous week [3] - Year-to-date sovereign issuance reached US$163.8 billion, which is US$52.2 billion higher than the same point in 2023 [3] ESG Issuance - There was US$3.5 billion in ESG-labelled bond issuance this week, bringing the year-to-date total to US$114.9 billion [6] - Hard currency ESG funds saw inflows of US$172 million, while local currency ESG funds experienced outflows of US$6 million [6] Cumulative Flows - Cumulative flows for EM debt dedicated funds show a significant divergence between hard currency and local currency flows, with hard currency flows remaining positive while local currency flows have fluctuated [13][16]

Investment Rating - The industry investment rating is classified as Attractive [1]. Core Insights - The report highlights that the domestic bauxite market in China is tight, with year-to-date production down 16%. Alumina supply is also constrained, despite 1 million tons of new capacity starting this month. High-profit alumina plants are operating at high utilization rates without proper maintenance, leading to increased maintenance activities. The inventory of alumina at aluminum plants is only 12 days, down 22% year-over-year. Near-term bauxite and alumina prices in China are expected to receive support from supply tightness [1]. - Major beneficiaries identified in the report are Chalco and Hongqiao, both of which are net long in alumina and possess their own bauxite supply [1]. Summary by Sections Supply Issues - A large bauxite mine in Guinea is experiencing shipment issues due to a dispute with the government over increased logistics-related fees. This mine currently ships 7 million tons to China annually. A resolution is expected, but at a higher cost. Chinese alumina plants have an average bauxite inventory of approximately 1-2 weeks, indicating that prolonged shipment disruptions could impact alumina supply [1]. Market Conditions - The report notes that the alumina supply in China remains tight, with the inventory at aluminum plants only covering 12 days. This situation is exacerbated by the high utilization of alumina plants and ongoing maintenance activities [1]. Company Ratings - The report provides specific ratings for companies within the industry, including: - Aluminum Corp. of China Ltd. (601600.SS) - Overweight - China Hongqiao Group (1378.HK) - Overweight - Chalco and Hongqiao are highlighted as major beneficiaries due to their positions in the alumina market [1][16][17].

Investment Rating - The report assigns an "Attractive" rating to the Asia Pacific industry view, with specific preferences for Macau and ASEAN gaming, and India property sectors [5]. Core Insights - Macau gaming stocks are experiencing a downturn, down 6% year-to-date, and underperforming the Hang Seng Index by 36%. However, Sands China is highlighted as a top pick due to potential market share gains and a favorable dividend outlook starting February 2025 [11][12]. - The report indicates that despite strong visitation numbers in Macau, the market is likely to focus on a projected 8% quarter-over-quarter decline in EBITDA for Q3 2024, leading to negative revisions for 2024 and 2025 estimates [3][17]. - In Hong Kong, residential property sentiment is improving, with significant sales recorded, while retail and office rental momentum has weakened [2][30]. Summary by Sections Macau Gaming - Strong visitation to Macau was reported, with a 29% year-over-year increase, and daily gross gaming revenue (GGR) reaching MOP 1.1 billion, although a decline in EBITDA is expected [3][15]. - Sands China is favored for its potential market share gains and attractive valuation metrics, trading at 10.6x EV/EBITDA, significantly below historical averages [11][12]. - The report anticipates a negative revision in EBITDA estimates for 2024 and 2025, with Sands and Wynn Macau being preferred stocks heading into Q3 earnings [17][19]. Hong Kong Property - The residential property market shows signs of recovery, with SHKP achieving a 100% sell-through rate for its new development, while retail and office sectors are facing declines in rental rates [30][35]. - The report suggests a preference for residential properties over retail and office spaces, indicating a more favorable outlook for residential stocks [30][35]. - Retail rental rates in Hong Kong declined by 3% quarter-over-quarter, reflecting ongoing challenges in the retail sector [30]. India Property - Godrej is highlighted for exceeding pre-sales estimates by 24%, achieving 50% of its FY25 target in the first half of the fiscal year, indicating strong demand in the residential sector [4][42]. - Phoenix Mills reported a 25% year-over-year growth in tenant sales, with expectations for continued strong performance in the upcoming quarters [4][42]. - The report maintains an "Overweight" rating on Godrej and Phoenix, anticipating robust growth in pre-sales and overall performance [42][46].

Investment Rating - The report indicates a positive outlook for the Chinese market, suggesting a potential technical rebound in the stock market with an estimated 10% upside [1][4]. Core Insights - The report highlights a significant policy shift in response to deflationary pressures, with expectations of a supplementary budget of 1-2 trillion RMB to support consumption and a potential interest rate cut of 10-20 basis points by the end of the year [1][4][10]. - It emphasizes that while the government is beginning to address deflation, the path to sustained re-inflation will be challenging and may require substantial fiscal stimulus exceeding 1 trillion USD over the next two years [8][13]. Summary by Sections Policy Changes - The report notes that the government is expected to implement a supplementary budget aimed at boosting consumption, providing financial support to low-income groups, and assisting local governments in maintaining their operational expenditures [4][10]. - It anticipates that the central bank will adopt a more aggressive stance on interest rate cuts, with a potential reduction of 20 basis points by year-end [4][10]. Economic Outlook - The report forecasts a gradual improvement in GDP growth rates, projecting a rise from 3% in Q2-Q3 to approximately 5% in the coming quarters due to the anticipated policy measures [1][11]. - It also indicates that the deflationary cycle is becoming more entrenched, necessitating stronger policy interventions to break the cycle [10][11]. Market Strategy - The report suggests that investors should focus on stocks with dividend yields significantly above the borrowing cost of 2.25%, as well as A+H shares that may benefit from policy support [1][15]. - It provides specific stock screening criteria for potential beneficiaries of the anticipated monetary and fiscal policies [16]. Long-term Considerations - The report warns that achieving sustainable re-inflation will require addressing structural issues in the economy, particularly in the real estate sector and consumer spending [13][14]. - It draws parallels with Japan's historical challenges in combating deflation, emphasizing the need for comprehensive and coordinated policy measures [13][14].

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - The report suggests that corporate M&A may recover quicker in the current rate-cutting cycle compared to previous cycles, particularly in the US and Europe [7][35][87]. - The US economy is expected to remain resilient without a significant recession, which typically accompanies rate cuts [3][87]. - Corporates have accumulated significant cash reserves during the pandemic, with approximately $4.5 trillion in private capital available for deployment [5][178]. - The report highlights a growing number of stressed M&A targets, indicating potential opportunities for acquisitions [6][86]. Summary by Sections Executive Summary and Macro Backdrop - The report anticipates no recession or material economic slowdown, which is often associated with rate-cutting cycles [3]. - Corporates have deleveraged during the market downturn in 2022, benefiting from tight credit spreads that allow for potential borrowing [4]. - The report notes that deal-making tends to rise with equity markets, which are expected to remain strong in the absence of a recession [7][96]. What Happens When Rate Cuts Start? - In the US, corporate M&A typically slows as interest rates fall due to recession fears, while European corporates are less affected by rate changes due to a bank-dominated debt environment [7][35][59]. - The report indicates that M&A activity in Europe may benefit from falling rates, as the market is less tech-heavy and more diversified [40][41]. Corporate Capital Allocation in an Election Year - Corporates are beginning to invest more, with a focus on M&A deals that promise strong immediate cash flow [134]. - The report highlights that large cash balances are prevalent across various sectors, not just in technology [111][117]. Dealmaking Trends - The report notes a rebound in buyout deals and private credit activity, indicating a strong momentum in deal-making [47][48]. - It emphasizes that US corporate deal-making is negatively affected by market volatility, which has been decreasing, leading to more certainty post-election [93][96]. - The report also mentions that valuations remain resilient during rate cuts, with the exception of the Global Financial Crisis [101][104]. Market Forecasts - The S&P 500 is projected to reach 5750 by Q4 2024, with expectations for stable credit spreads and oil prices [32][96]. - The report anticipates that the overall theme will support risk assets, albeit with some volatility [32]. Private Capital and Fundraising - Private capital fundraising has slowed, but the total AUM stands at approximately $14 trillion, with around $4.5 trillion in dry powder available for investment [178]. - The report indicates that large deals are recovering first, supported by a risk appetite in private credit [181]. Sector Performance - The report highlights sector-specific performance, noting significant year-over-year changes in deal values across various sectors, with technology and media showing notable activity [167][168]. Conclusion - The report concludes that the current environment presents unique opportunities for M&A, particularly in light of the available capital and the expected resilience of the economy [87][96].

Investment Rating - The report assigns an "Overweight" rating to Asia Vital Components Co. Ltd. (AVC) with a price target of NT$875.00, indicating a potential upside of 45% from the current price of NT$605.00 [6][18]. Core Insights - AVC is expected to increase its AI infrastructure exposure to 25% of total revenue and 35% of total profit by 2026, driven by a full range of cooling solutions including server chassis and liquid cooling systems [2][3]. - The company has a strong position in the market for 3D vapor chambers and is expected to maintain its dominance in upcoming server platforms, which will enhance its supply relationships with major cloud service providers [3][20]. - Significant revenue growth is anticipated from liquid cooling systems, with a projected increase in AI-related revenue by 42% in 2025 and 47% in 2026 due to higher cold plate module supply share [4][30]. Summary by Sections Revenue and Profit Projections - AVC's revenue is projected to grow from NT$59,194 million in FY23 to NT$104,101 million by FY26, with a corresponding increase in EPS from NT$14.11 to NT$35.03 [6][30]. - AI server-related revenue is expected to rise significantly, reaching NT$26,186 million by 2026, contributing 34.7% to total gross profit [23][30]. Product Offerings and Market Position - AVC provides a comprehensive range of thermal solutions, including passive and active cooling components, which are essential for consumer electronics and industrial applications [19][21]. - The company is a major supplier of cold plates for NVIDIA's GB200 server rack liquid cooling systems, with expectations to capture over 50% of the total cold plate market share by 2025 [24][48]. Capacity and Production - AVC's production capacity for cold plates is currently at 50,000 units per month in China and is expected to expand to 100,000 units in Vietnam by the end of 2024 [26][30]. - The company has initiated production of 3D vapor chambers in Vietnam, with daily production expected to reach 5,000 to 8,000 units [25][30]. Market Trends and Future Outlook - The total addressable market (TAM) for liquid cooling related to the GB200 server rack system is projected to grow significantly, reaching US$2.6 billion in 2025 and continuing to expand in subsequent years [45][46]. - AVC's ongoing operating margin is expected to improve to 18% by 2026, up from 12.5% in 2023, supported by strong demand for AI-related products [30][30].

October 10, 2024 04:18 AM GMT M Update | --- | --- | --- | --- | --- | --- | --- | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------|--------- ...

Investment Rating - The investment rating for China Construction Bank Corp. is Overweight [1][22]. Core Views - The report indicates a price target of HK$7.10, with a current share price of HK$5.73, suggesting an attractive investment opportunity [1][3]. - The earnings forecasts for China Construction Bank have been revised down due to expected NIM contraction and weaker fee income growth, with net profit growth projected at 0.9%/0.3%/1.4% for 2024/25/26 [1][5]. - The bank's long-term stability is supported by a strong track record in bond trading and well-managed asset quality [5][6]. Summary by Sections Earnings Drivers - Net interest margin (NIM) is forecasted to decline to 1.52% in 2024 and 1.46% in 2025, influenced by mortgage rate cuts and LPR adjustments [1][9]. - Total asset growth is expected to moderate to 8.4% in 2024 and 7.0% in 2025 [9]. - Credit costs are projected to decrease to 0.51% in 2024 [9]. Revenue and Profitability - Revenue growth estimates have been revised down to -0.8% in 2024, 2.1% in 2025, and 8.1% in 2026 [1][5]. - Fee income growth is expected to decline by -7.2% in 2024, followed by modest growth in subsequent years [1][5]. Valuation and Price Target - The price target is derived from a dividend discount model, with a long-term dividend payout ratio of 32% and a discount rate of 10.5% in the base case [6][5]. - The report highlights an attractive valuation with a 7.7% dividend yield for CCB-H compared to approximately 5.6% for CCB-A [5][6]. Risk Reward Themes - The report indicates positive pricing power for the bank, with a 100% Overweight rating distribution [6][9]. - The bull case scenario assumes a quick recovery in the property market and strong global demand, leading to resilient ROE [6][7]. - The base case reflects moderating credit growth and higher NPL formation, while the bear case anticipates prolonged NIM pressure and asset quality deterioration [7][6].