Investment Rating - The industry investment rating is "In-Line" [6]. Core Insights - The report anticipates a low-teens decline in earnings for PetroChina and CNOOC in 3Q24, with a more significant drop for Sinopec due to inventory loss [2][3]. - PetroChina is expected to outperform peers despite the decline, with a projected 7.8% dividend yield based on a flat year-over-year payout ratio [3]. - Sinopec's earnings are negatively impacted by inventory loss and intensified price competition in its downstream business, with a dividend yield of 6.5% based on current earnings forecasts [3]. - CNOOC is expected to maintain strong cost discipline and volume trajectory, but earnings are projected to decline by double digits due to falling crude oil prices [4]. - Wanhua Chemical's net profit has been stable but may see a decline in 3Q24 due to weak performance in TDI and commodity petrochemical products [4][5]. Summary by Company PetroChina - Anticipated low-teens decline in net profit for 3Q24, but expected to outperform peers [3]. - Downstream performance likely affected by inventory loss, though better than peers due to diversified feedstock sources [2]. Sinopec - Earnings negatively impacted by inventory loss and limited improvements in refined oil demand [3]. - Stock offers a 6.5% dividend yield based on current earnings forecast [3]. CNOOC - Expected to show outstanding cost discipline and volume trajectory, but earnings projected to decline due to crude oil price corrections [4]. Wanhua Chemical - Net profit has been stable around Rmb4 billion per quarter, but potential downside in 3Q24 due to weak TDI and commodity petrochemical product performance [4][5].

Investment Rating - The report assigns an "Overweight" rating to TSMC, indicating a positive outlook for the stock [6]. Core Insights - TSMC is expected to finish 2024 strongly, driven by increasing demand for AI semiconductors, with a projected revenue growth of 27% year-over-year in USD and a gross margin improvement to 55.5% in Q4 2024 [2][9]. - The stock appears attractive at 18x the estimated EPS for 2025, with potential for re-rating to 23x due to margin expansion and sustainable AI demand [9][36]. - TSMC's capital expenditures are projected to increase to US$38 billion in 2025, reflecting aggressive expansion plans to meet strong customer demand, particularly from Nvidia [3][19]. Summary by Sections Revenue and Margin Outlook - Q4 2024 revenue is expected to grow by 9% quarter-over-quarter, with full-year revenue growth of 27% year-over-year in USD [2]. - Gross margin is anticipated to improve to 55.5% in Q4 2024, supported by higher revenue scale despite margin dilution from 3nm technology and rising electricity costs [2][9]. Pricing Strategy - TSMC is successfully negotiating price hikes for advanced nodes, with expected increases of ≥10% for AI semiconductors and CoWoS, and 6% for HPC applications [4][30]. - The average price hike for 2025 is projected to be 4%-5%, which will contribute to gross margin improvements of 2-3 percentage points [4][30]. Demand Drivers - The report highlights strong demand for AI semiconductors, with expectations for revenue from AI semiconductors to double again in 2025 [3]. - TSMC is positioned to benefit from IDM outsourcing, particularly from Intel and Samsung, which is expected to contribute significantly to revenue growth [15][16]. Capacity Expansion - TSMC plans to expand its CoWoS capacity significantly, with expectations to reach 80k by the end of 2025, driven by strong demand from cloud AI applications [19]. - The company is also expanding its 3nm and 2nm capacities to meet increasing customer needs, particularly from major clients like Apple and AMD [23][24]. Long-term Growth Potential - TSMC is projected to achieve a revenue CAGR of 15%-20% over the next five years, supported by its leadership in AI semiconductor manufacturing [16][36]. - The report estimates that AI semiconductors will contribute approximately 20% of TSMC's revenue by 2027, highlighting the company's strong position in the AI market [38].

Investment Rating - The investment rating for COSCO SHIPPING Energy Transportation is Equal-weight with a price target of Rmb17.10 [1][2][3]. Core Views - The report anticipates an up-cycle in the crude tanker market over the next two years, driven by increased Chinese demand and higher oil production [2][3]. - The price-to-book (P/B) multiples are expected to rise, with a target P/B of 1.4x for 2025, reflecting a bullish sentiment towards the tanker market [3][4]. - Earnings forecasts have been fine-tuned downwards by -4%, -1%, and -2% for the years 2024-2026, respectively, following the 1H24 results [1][3]. Summary by Sections Earnings Forecasts - The earnings per share (EPS) estimates for COSCO SHIPPING Energy Transportation are projected to be Rmb0.70 for FY 2024, Rmb1.03 for FY 2025, and Rmb1.10 for FY 2026 [1][4]. - The revenue is expected to grow from Rmb23,093.1 million in 2024 to Rmb28,718.0 million in 2025 [4]. Market Dynamics - The report highlights a projected traffic growth of 7.3% in 2024, followed by 4.8% in both 2025 and 2026 [4]. - The average VLCC (Very Large Crude Carrier) gross profit per day is estimated to be US$21.2k/day for 2024 and US$23.3k/day for 2025 [3][4]. Risk and Reward Analysis - The report outlines a bull case price target of Rmb29.00, a base case of Rmb16.50, and a bear case of Rmb7.90 for COSCO SHIPPING Energy Transportation [3][4]. - The consensus rating distribution indicates that 79% of analysts are overweight on the stock, while 21% are equal-weight [3][4].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The sentiment among small and medium enterprises (SMEs) in Japan fell by 1.2 points to 47.8 in September, contrary to the forecast of a modest increase of 0.2 points, marking a decline after three consecutive monthly increases [1][5][11] - The decline is mainly observed in the household-related retail and services sectors, which decreased by 1.8 points and 3.5 points respectively, partially offsetting recent gains [1][5] - Despite concerns about persistent inflation, solid wage growth is expected to sustain strong consumption momentum [1][5] Summary by Relevant Sections SME Sentiment - Business-related SMEs saw an increase in sentiment by 0.9 points to 49.3, attributed to yen appreciation leading to lower input costs and improved profitability [2][11] - The manufacturing sector experienced a notable sentiment increase of 2.5 points, reaching a seven-month high of 48.6 [2][11] Economy Watchers Index - The Economy Watchers Survey Diffusion Index for current conditions was reported at 47.8 in September, down from 49.0 in August [7] - The household index decreased to 47.0, while the business index improved to 49.3 [7] - Employment sentiment remained relatively stable at 49.8, indicating a slight decline from previous months [7]

Investment Rating - The industry investment rating is In-Line, indicating that the performance of the industry is expected to be in line with the relevant broad market benchmark over the next 12-18 months [4]. Core Insights - The report discusses the potential impact of export controls on Chinese DRAM projects, outlining three scenarios with varying implications for investment and market dynamics [4][5]. - Advanced packaging in China is likely to face setbacks due to restrictions on high-bandwidth memory (HBM) and related tools, which could reduce the serviceable available market (SAM) for back-end equipment vendors [5][6]. - The risk of foreign business loss is perceived to outweigh the opportunities in advanced packaging, particularly for companies like JCET, which derive a significant portion of their revenue from overseas customers [6][7]. Summary by Sections Export Controls and Scenarios - Scenario 1: Full restriction on Chinese DRAM projects could lead to substantial downside risks for investment in 2025, benefiting specialty DRAM players like NTC and PSMC [4]. - Scenario 2: Minor changes in export controls may have a headline negative impact but could be positive for Chinese WFE players, as local supply chains would be relied upon more heavily [4]. - Scenario 3: Not including Chinese DRAM projects in the export control list would be favorable for China's WFE players but detrimental to specialty DRAM players [4]. Advanced Packaging and Market Dynamics - The current export controls primarily target wafer front-end equipment, leaving back-end tools unrestricted, which may change if new restrictions are imposed [5]. - Companies like CXMT are collaborating with local firms to develop HBM, indicating a strong domestic market for back-end equipment despite potential restrictions [5]. - JCET's revenue from advanced packaging is less than 5% of its total revenue, highlighting the limited impact of this segment compared to its overall business [6]. Revenue Exposure and Market Share - In 1H24, China accounted for 36% of ASMPT's revenue, yet there have been no TCB shipments to China, indicating a significant market opportunity that remains untapped [7]. - CXMT's local supply share is only 20%, which is lower than its peers, suggesting a need for improvement in product quality to compete globally [3].

Investment Rating - The report assigns an "Overweight" rating to ASML with a price target of €1,100.00 for December 2025 [4][21]. Core Insights - The market sentiment towards ASML has become overly bearish, primarily due to Intel's capex cuts, slow recovery in the consumer semiconductor market, and concerns regarding China restrictions. However, the long-term outlook remains positive with expected growth of approximately 25% in 2025 and double-digit growth in 2026 [1][22]. - The report emphasizes that lithography intensity in memory is set to rise due to the shift towards High Bandwidth Memory (HBM), which is lithography-centric, and the anticipated transition to High NA EUV technology in 2026 [1][22]. - ASML's revenue guidance for 2025 is projected to be between €30 billion and €40 billion, with current market expectations leaning towards the mid-point of €33-€36 billion [1][10]. Summary by Sections 1. Revenue and Orders Expectations - ASML is expected to report 3Q24 revenue of €7 billion, reflecting a 12.2% quarter-over-quarter growth and a 4.9% year-over-year growth, slightly below consensus estimates [2][14]. - The anticipated 3Q24 orders are projected at €5 billion, which is 9.2% below consensus [2][14]. 2. Market Position and Valuation - ASML's P/E premium over US peers is near a 10-year low, currently at approximately 35%, indicating a market perception that lithography intensity may decline [2][17]. - The report argues that the current bearish sentiment is short-term, as the demand for HBM and High NA EUV will drive future growth [17][22]. 3. Growth Drivers - The transition to EUV technology in both logic and DRAM sectors is expected to increase ASML's market share in lithography to over 80-89% [22][26]. - The report highlights that the shift from NAND to HBM as the growth memory will positively impact lithography intensity, as HBM is more lithography-intensive [11][12]. 4. Financial Adjustments - The report revises FY25 revenue estimates down by 7% due to Intel's capex cuts and potential delays in memory equipment deliveries, while FY26 estimates remain unchanged [15][27]. - The adjusted EPS for FY25 is expected to decline by 6%, reflecting the lower revenue estimates [15][27]. 5. Long-term Outlook - Despite short-term challenges, ASML is expected to see year-on-year growth in FY26, with EPS likely exceeding €30 [10][12]. - The report suggests that if ASML's guidance for FY25 is not at the low end, the market will shift focus to FY26, which is anticipated to show significant growth [10][12].

Investment Rating - The industry investment rating is classified as Attractive [1]. Core Insights - Heavy-duty truck (HDT) sales in September were reported at 58,000 units, reflecting a significant decline of 32% year-on-year and 7% month-on-month, which is below both Morgan Stanley's and market expectations [1]. - Domestic HDT sales reached approximately 34,000 units, down 45% year-on-year and 7% month-on-month, attributed to sluggish demand even during the traditional peak season [1]. - New energy HDT sales showed robust growth, increasing by 110% year-on-year to 6,600 units, with an 18% penetration rate supported by trade-in policies [1]. - LNG HDT retail sales fell to 9,800 units, a decrease of 60% year-on-year and 30% month-on-month, with penetration dropping below 25% from 51% in July [1]. Summary by Sections Sales Performance - Heavy-duty truck sales in September were 58,000 units, down 32% year-on-year and 7% month-on-month [1]. - Domestic sales were approximately 34,000 units, a decline of 45% year-on-year and 7% month-on-month [1]. - New energy HDT sales increased by 110% year-on-year to 6,600 units, achieving an 18% penetration rate [1]. - LNG HDT retail sales were 9,800 units, down 60% year-on-year and 30% month-on-month, with penetration below 25% [1].

Investment Rating - The investment rating for the Semiconductor Production Equipment industry in Japan is classified as Attractive [2][3]. Core Insights - The global technology team anticipates that NVIDIA's Blackwell production revenue may exceed that of Hopper in the first quarter of 2025, which could significantly benefit Japanese SPE companies such as Advantest and DISCO [2][3]. - The transition to Blackwell is expected to increase demand for high-speed SoC testers, with Advantest holding a dominant position in the AI GPU tester market [2][3]. - Advantest is projected to derive approximately 45% of its total tester sales from AI GPUs and HBM by the fiscal year ending March 2025, while DISCO is expected to see around 25% from similar sources [3]. Summary by Sections Semiconductor Production Equipment Market - The shift to Blackwell will require longer testing times, leading to increased demand for high-speed SoC testers [2][3]. - Blackwell's chip output is estimated to reach 250-300k units in Q4 2024, generating revenue between $5-10 billion, with projections of 750-800k units in Q1 2025, nearly tripling from the previous quarter [2][3]. - The price of Blackwell chips is expected to be 60-70% higher than that of Hopper, contributing to the anticipated revenue surpassing [2][3]. Company-Specific Insights - Advantest is expected to have a high exposure (approximately 45%) to AI GPUs and HBM in the fiscal year ending March 2025, while DISCO is projected to have around 25% [3]. - Advantest dominates the HBM tester market, DISCO leads in the grinder market, and Tokyo Electron is the key player in wafer bonders and debonders [3].

Investment Rating - The report maintains a cautious stance on the oil market, with a near-term Brent forecast increase due to geopolitical risks, but a reduction in longer-term forecasts, projecting Brent prices to be $70/bbl for 2H 2025 [2][3][6]. Core Insights - Heightened geopolitical risks have driven oil prices higher, but the underlying supply-demand balance is weakening, with a projected surplus of 1.3 mb/d in 2025 [2][3][5]. - Demand has been weaker than expected, while supply has been stronger, leading to an increase in the surplus forecast from 0.7 mb/d to 1.3 mb/d [3][5][12]. - The report suggests that without a supply disruption, the expected surplus in 2025 remains unresolved, and prices may need to fall to drive rebalancing [2][3][6]. Supply/Demand Balance - The oil market is currently experiencing a significant imbalance, with a forecasted surplus of 1.3 mb/d in 2025, which is considered substantial and historically rare [3][28]. - The report indicates that the oil market is expected to be in a small deficit of 0.1 mb/d in 2024, followed by a surplus in 2025 due to demand growth of 1.1 mb/d and non-OPEC supply growth of 1.6 mb/d [26][30]. - The consensus forecast for non-OPEC production growth has been revised down from 1.1 mb/d to 0.3 mb/d for 2024, driven by lower-than-expected production in the US, Brazil, and Russia [17][21]. Price Forecasts - The report has increased the Brent price forecast for 4Q24 to $80/bbl, reflecting short-term supply concerns, but anticipates a decline to $70/bbl by the end of 2025 due to the expected surplus [4][6][30]. - Historical data suggests that when a supply-demand imbalance is well understood in advance, the market often adjusts, preventing the forecasted surplus from materializing [30][31]. Geopolitical Risks - Geopolitical tensions, particularly in the Middle East, are expected to continue supporting oil prices in the short term, but without actual supply disruptions, the market may face downward pressure [2][31]. - The report emphasizes that the likelihood of demand destruction becoming necessary is low, given the current supply situation and OPEC+ spare capacity [10][12].

Investment Rating - The stainless steel sector is rated as In-Line, with specific companies receiving varied ratings: Acerinox (Overweight), Aperam (Equal-weight), and Outokumpu (downgraded to Equal-weight) [6][27]. Core Insights - The report indicates a preference for carbon steel over stainless steel due to better risk-reward dynamics following China's policy changes, with expectations of delayed benefits for stainless steel [2][26]. - Q3 EBITDA is forecasted to remain stable, with a projected 7% increase in Q4 across the stainless sector [3]. - There are anticipated downgrades to 2024 consensus EBITDA for US-heavy companies like Acerinox and Outokumpu, with a similar trend expected for 2025 [3][40]. - The stainless sector is currently trading at an EV/normalized EBITDA of 3.7x, which is approximately a 40% discount to its long-term average of 6.1x, although earnings recovery remains muted [3][19]. Summary by Company Acerinox - Acerinox is expected to report Q3 EBITDA of €119 million, which is 7% below consensus estimates, with a forecast of €109 million for Q4 [33][40]. - The company is viewed positively due to its focus on alloys, which are expected to contribute approximately 30% of EBITDA once the Haynes acquisition is finalized [3][29]. Aperam - Aperam's Q3 EBITDA is forecasted at €93 million, in line with consensus, with a projected increase in net debt to €651 million [35][40]. - The outlook for Q4 EBITDA is also stable, with expectations of €105 million, consistent with consensus [35]. Outokumpu - Outokumpu is projected to report Q3 EBITDA of €61 million, significantly below consensus estimates of €75 million, with a cautious outlook for Q4 at €77 million [37][40]. - The company has faced operational challenges and is expected to experience the greatest earnings pressure among its peers [27][25]. Market Dynamics - The report highlights that EU and US stainless spreads are currently below historical averages, which may limit earnings recovery prospects [8]. - EU stainless imports are noted to be below historical levels, but there are indications of a potential increase post-summer [10]. - Chinese stainless inventories remain elevated due to persistent oversupply, impacting market dynamics [14].