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

Investment Rating - The investment rating for Industrial and Commercial Bank of China (ICBC) is "Overweight" with a price target of HK$5.60 [1][3][11]. Core Viewpoints - The report indicates that ICBC is well-positioned for earnings growth due to strong balance sheet liquidity and a healthy net interest income growth trend [2][5]. - The earnings forecast has been revised down due to expected net interest margin (NIM) contraction influenced by mortgage rate cuts and LPR cuts, leading to a net profit growth forecast of -2.2% in 2024 [1][4]. - The report maintains a long-term view on the bank's performance despite recent pressures, with a focus on fintech investments to improve efficiency [3][5]. Summary by Sections Earnings Forecast - The net interest margin is projected to decrease to 1.40% in 2024, 1.36% in 2025, and 1.39% in 2026 [4]. - Total asset growth is expected to be 7.7% in 2024, 5.7% in 2025, and 5.7% in 2026 [4]. - The cost-income ratio is forecasted to remain stable around 32.3% in 2024 [4]. Investment Drivers - A good balance sheet mix and growth trend are expected to support healthy net interest income growth [5]. - Efficiency improvements from fintech investments are anticipated to enhance pricing capability [5]. Risk and Reward Analysis - The report outlines a bull case price target of HK$8.30, a base case of HK$5.87, and a bear case of HK$2.03 [3][4]. - The implied probabilities for reaching the price targets are 12.3% for HK$5.60 and 0.2% for HK$8.30 [3]. Valuation Methodology - The valuation is based on a three-stage dividend discount model with a discount rate of 10.5% in the base case [6].

October 10, 2024 03:47 AM GMT M Update | --- | --- | --- | --- | --- | --- | --- | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--- ...

M Update Multi-Industry | North America October 10, 2024 04:35 AM GMT 3Q24 Preview: Easy to Find Beats, Harder to Find Revisions Note includes detailed write-ups and modeling on company specific set-ups into Q3 EPS along with key macro debates. We have re-connected with all of our Corporates post Laguna Conference. We model beats across our US multi-industry coverage into Q3 – the macro has tracked sideways, in line w/ corporate expectations and we see margins as the clearest source of EPS upside in the qua ...

Investment Rating - The industry investment rating is Attractive [1]. Core Insights - Steel apparent consumption is increasing following the National Day Holiday, with long products showing a significant rise in output due to low inventory and improved profitability [1][1]. - Steel inventory has decreased at both traders and mills, with traders' inventory down by 205 kt (2.2% WoW) and mills' inventory down to 3,954 kt (2.1% WoW) as of October 10 [1][1]. - Iron ore inventory at small- and medium-sized mills decreased by 19.7 kt (9.6%) from September 25, indicating a tightening supply [1][1]. Summary by Sections Steel Consumption and Inventory - Apparent consumption of long and flat products increased by 25.5% WoW and 3.3% WoW, respectively, but decreased by 8.6% and 0.4% YoY [1]. - The inventory at traders decreased by 205 kt, with long products down 3.4% WoW and flat products down 1.4% WoW [1]. Iron Ore Market - Iron ore inventory at ports decreased by 1.5% WoW to 143.8 mt as of September 27, with the operating rate at sample mines increasing to 63.3% [1]. - Combined shipments from Australia and Brazil fell by 2.2 Mt week-on-week, primarily due to softer shipments from Rio Tinto [1]. Production Insights - The utilization rate of 247 mills increased by 0.39 ppts WoW to 84.5%, with CISA member mills' production at 1.99 mnt per day, up 2.7% from the preceding 10 days but down 6.8% YoY [1]. - Weekly output for long products rose by 3.8% WoW to 3.28 mnt, while flat products fell by 0.3% WoW to 5.36 mnt [1].

M Update China Equity Strategy | Asia Pacific October 10, 2024 09:00 PM GMT Source: CEIC, Bloomberg, Wind, RIMES, Morgan Stanley Research. Data as of October 9, 2024. A-Share Sentiment Hit Record High Amid Policy Expectation Swings Record-high trading volume and MS A-share sentiment reading reflected exuberant expectations for policy stimulus. However, near-term uncertainty remains; we focus on earnings visibility and dividend plays as we await further policy comments. A-share investor sentiment off the cha ...

Investment Rating - ANTA Sports Products is rated **Overweight** with a price target of HK$117.00, implying a 17% upside from the current price of HK$100.10 [5] Core Views - The market reaction to 3Q24 earnings is expected to be neutral to negative due to FILA's sales miss, partially offset by strong Golden Week sales [2] - ANTA brand's new initiatives are showing positive results, with Descente and Kolon continuing strong growth [2] - Management remains confident in achieving its 2024 profit target, contingent on 4Q sales performance [3] Financial Performance - ANTA brand saw mid-single-digit% retail sales growth in 3Q24, with ANTA Core and Kids both growing by mid-single-digit% [4] - FILA brand's 3Q retail sales declined by low-single-digit%, with FILA Classic flat but dragged down by FILA Kids and Fusion [8] - Outdoor brands (Descente and Kolon) grew 45-50%, with Descente up 35-40%+ and Kolon up 65-70% [8] Sales Channels and Inventory - ANTA's offline sales declined by low-single-digit%, while e-commerce grew over 20% [4] - FILA's online sales grew by high-single-digit%, but offline sales declined by mid-to-high-single-digit% [8] - Inventory levels for both ANTA and FILA were below 5 months [4][8] Golden Week Performance - Golden Week sales exceeded management's target, with ANTA and FILA both achieving above teens levels of growth [9] - ANTA's performance was driven by strong same-store sales growth and new store openings (~300 new stores before Golden Week) [9] Full-Year Guidance - Management sees uncertainties in achieving full-year sales targets (10% growth for ANTA and high-single-digit% for FILA) due to 3Q sales miss, but remains focused on inventory and business quality [9] 4Q Outlook and Growth Drivers - The company does not anticipate significant discounting pressure in 4Q due to healthy inventory levels [10] - ANTA Superstore is expected to be a new growth driver, with plans to open ~50 stores by year-end, targeting Rmb20mn+ annual store productivity [10] Valuation and Market Share - The base case valuation assumes a 25x target P/E multiple on 2024 EPS estimates, supported by market share gains through a diversified brand portfolio [12]

Investment Rating - The investment rating for S.F. Holding Co Ltd is "Equal-weight" with a price target of Rmb40.60, indicating a downside of approximately 3% from the current price of Rmb41.65 as of October 10, 2024 [4][17]. Core Insights - S.F. Holding Co Ltd has proposed an interim dividend of Rmb0.4 per share, representing a 40% payout ratio for the first half of 2024, an increase from 35% in 2023. Additionally, a special dividend of Rmb1 per share is planned before the Hong Kong listing, totaling Rmb4.8 billion, which implies a yield of 2.4% based on the latest closing price [2]. - The company has also executed share buybacks amounting to Rmb1 billion in the first phase and Rmb758 million in the second phase, which could provide an additional 0.9% return to shareholders if fully canceled [2]. Financial Metrics Summary - For the fiscal year ending December 2023, the estimated revenue is Rmb258,409 million, with projected growth to Rmb286,643 million in 2024 and Rmb304,883 million in 2025 [4]. - The earnings per share (EPS) is projected to increase from Rmb1.47 in 2023 to Rmb1.84 in 2024, and further to Rmb2.08 in 2025 [4]. - The company’s P/E ratio is expected to decrease from 27.5 in 2023 to 22.6 in 2024, indicating improved valuation metrics [4]. - The dividend yield is projected to rise from 1.5% in 2023 to 2.0% in 2024, and further to 2.4% in 2025 [4].

Investment Rating - The report assigns an "Overweight" rating to Zhejiang Huahai Pharmaceutical Co. Ltd. with a price target of Rmb22.00, indicating a potential upside of 15% from the current price of Rmb19.20 [5]. Core Insights - The strong performance of Huahai is attributed to market share gains, gross margin expansion due to a change in product mix, and successful product launches [3]. - The China formulation segment has shown the best performance, followed by API exports and US formulations [3]. - The report highlights a significant growth inflection in China's pharmaceutical export sector since May 2024, following a prolonged de-stocking cycle post-COVID-19 [3]. - The investment thesis is based on three observations: the beginning of an up-cycle in China's API industry, successful forward integration by Huahai leading to margin stabilization and expansion, and a low profit base in 2023 [3]. Financial Summary - Huahai reported a net profit range of Rmb239 million to Rmb297 million for 3Q2024, reflecting a year-over-year increase of 57% to 95% [2]. - Revenue projections for the fiscal years ending December 2023 to December 2026 are Rmb8,309 million, Rmb9,820 million, Rmb11,055 million, and Rmb12,341 million respectively [6]. - The expected EPS for the same period is projected to grow from Rmb0.57 in 2023 to Rmb1.23 in 2026 [6]. - The report indicates a P/E ratio decreasing from 25.7 in 2023 to 15.6 in 2026, suggesting improving valuation metrics over time [6].

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies within it [3]. Core Insights - The report highlights a trend of net redemptions in Emerging Market (EM) Equity ETFs, with total EM experiencing net redemptions of US$1 million on October 9, 2024. Notably, Mexico and India saw significant redemptions of US$17 million and US$46 million, respectively, while China experienced strong subscriptions amounting to US$216 million [1][2]. Summary by Sections Total EM Flows - Total EM recorded net redemptions of US$1 million on October 9, 2024, following a series of fluctuating flows over the previous days [1]. - Year-to-date (YTD) flows for Total EM stand at US$7.31 billion, indicating a significant increase compared to the previous year [2]. Regional Performance - EM Broad also faced net redemptions of US$1 million on the same date, with a YTD performance of -US$124 million [2]. - In contrast, China showed a robust performance with net subscriptions of US$216 million, contributing to a YTD total of US$855 million [2]. Country-Specific Flows - Mexico and India reported substantial net redemptions of US$17 million and US$46 million, respectively, indicating potential concerns in these markets [1][2]. - Brazil and South Africa had mixed results, with Brazil showing a slight subscription of US$2.5 million on October 8, 2024, while South Africa remained stable with no significant changes [2].