Investment Rating - The report does not explicitly state an investment rating for the industry, but it provides insights into inventory trends and production data that may influence investment decisions. Core Insights - China's physical inventory trends for metals such as steel, iron ore, copper, aluminum, and zinc are being closely monitored, particularly following recent monetary policy loosening [1][2]. - Steel production in China has shown a slight increase of 2% week-over-week, with iron ore arrivals reaching the highest levels in over five years [1][2]. - Copper premiums in China fell by 20% last week, indicating a potential shift in demand dynamics [1][7]. - The report highlights that while steel inventories have decreased significantly, there is a risk of inventory buildup if production outpaces actual consumption [2][6]. Summary by Sections Steel Production and Inventory - CISA data indicates a 1.6% increase in steel production for the first ten days of October, with production now only 4% lower year-over-year [1]. - Preliminary data shows a 10% increase in steel exports for September compared to August, reaching an annualized rate of 124 million tons, the highest since June 2016 [1][12]. - Total steel inventory in China has decreased by 25% over the last two months, now at its lowest level since January 2024 [10]. Iron Ore Trends - Landed iron ore arrivals in China rose by 45% week-over-week to 30.43 million tons, marking a 6% year-over-year increase [2][4]. - Global iron ore shipments increased by 1% week-over-week but were down 2% year-over-year [4][11]. - Iron ore portside inventory in China is approximately 25 million tons above the normal seasonal average, but it has decreased by 5 million tons in the last month [11]. Copper and Aluminum Insights - Copper inventories in China have increased by 25,000 tons over the last two weeks, although they remain below the five-year average [7][12]. - Aluminum inventory de-stocking has slowed in October, but it remains slightly stronger than the five-year average [8][16]. - The report forecasts copper prices to reach $11,000 per ton in Q2 2025 and $11,500 in Q3 2025, approximately 15% above current spot prices [7]. Market Dynamics - The report notes that steel mill margins have improved to their highest levels in about two years, although margins for hot-rolled coil (HRC) have weakened recently [8][10]. - Overall steel demand in China remains 6% lower year-over-year, despite a 2% week-over-week increase in domestic consumption [1][6].

Investment Rating - The investment rating for Fuyao Glass Industry Group is "Equal-weight" with a price target of HK$40.00, indicating a potential downside of 29% from the current price of HK$56.60 as of October 18, 2024 [2][22]. Core Insights - Capacity utilization is expected to remain strong, with management anticipating an increase in utilization rate from approximately 85% in Q3 to higher levels in Q4 due to robust auto production in China and market share gains overseas [1][2]. - There is an upside risk to the gross margin target of 37-38%, with expectations that it could approach 40% in some quarters due to increased utilization, favorable product mix, and declining input costs, particularly soda ash prices [1][2]. - Fuyao aims to increase its market share in the US and Europe to 40% and 30% respectively, driven by new capacity additions and improved competitiveness against foreign players [2][3]. - The company is accelerating capacity construction to meet growing demand, with new capacity in the US expected to be completed by the end of the year and additional plants in Fujian and Anhui scheduled for completion by the end of 2025 [2][3]. Summary by Sections Financial Metrics - For the fiscal year ending December 2023, net revenue is projected at Rmb33,161 million, with EBITDA expected to be Rmb8,292 million [2]. - EPS is forecasted to increase from Rmb2.16 in 2023 to Rmb2.80 in 2024, and further to Rmb3.16 in 2025 [2]. - The company’s market capitalization is currently Rmb148,765 million, with an EV of Rmb150,245 million [2]. Market Position - Fuyao Glass Industry Group is positioned to gain significant market share in the automotive glass sector, with management highlighting the flexibility of production lines to increase output by adding shifts [1][2]. - The company has no immediate plans to establish production facilities in Europe, focusing instead on enhancing its existing operations in the US and China [2][3].

Investment Rating - JD Logistics (JDL) is rated **Overweight (OW)** with a price target of HK$20 for December 2025 [1][4][9] Core Investment Thesis - JDL has shown **fundamental improvements** and **margin expansion** since its IPO in May 2021, driven by business model recalibration and operating leverage gains [1][9] - Despite fierce competition in e-commerce and express parcel delivery, JDL has achieved **breakeven in 2Q23** and rapidly improved profitability in subsequent quarters [1][12] - JDL is expected to benefit from China's **trade-in policy**, which boosts home appliance sales, and its integration with Taobao/Tmall for logistics services [1][12][16] - The company is **undervalued**, trading at 3.9x FY25E EV/EBITDA, compared to the industry average of 5.5x [1][23] Financial Performance and Forecasts - JDL's revenue is expected to grow **6% YoY** in 3Q24, reaching Rmb44B, with net profit of Rmb1.1B and a net profit margin (NPM) of 2.5% [2][12] - Revenue from external customers is growing faster than from JD, with JD's contribution declining to around **30%** of total revenue [2][12][14] - JDL's **EBITDA margin** is forecasted to improve from 8.8% in FY23 to 11.5% in FY25, driven by cost optimization and scale leverage [8][12] Growth Drivers - JDL is poised to benefit from **Double 11** sales events, with Taobao/Tmall's integration expected to unlock growth in express parcel business [16][17] - The company plans to expand its **overseas warehousing** capabilities, doubling the gross floor area (GFA) by the end of 2025, focusing on regions like the Americas, Europe, and Southeast Asia [20] - JDL's partnership with JD is expected to drive **mutual growth**, particularly in home appliance sales, which surged 67% YoY during the October National Days Holiday [12][16] Valuation and Market Performance - JDL's share price has surged **52% YTD**, outperforming the HSCI index (+18%) and other Chinese logistics companies [1][21] - The stock is trading at **12.2x FY25E P/E**, with a forecasted EPS CAGR of 20% during FY24-26E [1][23] - JDL's valuation discount to Alibaba/PDD is aligned with its target EV/EBITDA multiple of 5.0x, which is below the industry average of 5.5x [1][9][23] Industry Comparison - JDL's **EV/EBITDA multiple** of 3.9x for FY25E is lower than peers like ZTO Express (8.0x) and Yunda Holding (4.4x) [26] - The company's **ROE** is expected to improve from 4.7% in FY23 to 12.4% in FY25, reflecting stronger profitability and operational efficiency [8][26]

M Update Greater China Technology Hardware | Asia Pacific October 20, 2024 08:24 PM GMT Postcard from 2024 OCP Global Summit AI supply chain at OCP suggests strong demand for GB200 NVL72 racks in 2025 followed by less complex design (NVL2, MGX 4U) for AI inference and enterprise segment into 2026. Liquid cooling solutions and high-speed data transmission are two areas shown on the technology enhancement roadmap. The Open Compute Project (OCP) Global Summit was hosted in San Jose, US on October 15-17. Out of ...

Investment Rating - The report assigns a Neutral rating to China Tower [1][9][16] Core Insights - China Tower's 3Q24 results were mixed, with total revenue growth decelerating from 4% year-over-year (yoy) in 2Q24 to 2% in 3Q24, primarily due to a slowdown in the TSP business, despite steady performance in the Two Wings segment [1][9] - EBITDA growth improved slightly from 3.4% to 3.7% yoy in 3Q24, attributed to stringent cost control measures, while net profit growth rebounded from 9% to 13% yoy due to slower depreciation and amortization (D&A) expense increases and reduced finance costs [1][9][2] - The report anticipates a positive short-term reaction in China Tower's share price due to solid earnings improvement, although it expresses concerns that consensus earnings estimates may be overly optimistic, leading to potential downward revisions that could negatively impact the share price in the medium term [1][7][9] Summary by Sections Revenue Performance - Total revenue growth slowed from 4% yoy in 2Q24 to 2% in 3Q24, driven by a notable slowdown in the TSP business [1][9] - TSP revenue growth decreased from 4% yoy in 2Q24 to 1% in 3Q24, with tower leasing and DAS revenue growth dropping significantly [3][9] Earnings and Profitability - EBITDA growth increased from 3.4% to 3.7% yoy in 3Q24, supported by reduced repair and maintenance expenses [2][9] - Net profit growth accelerated from 11% in 1Q24 and 9% in 2Q24 to 13% in 3Q24, benefiting from improved EBITDA, slower D&A expense increases, and lower finance costs [2][9] Business Segments - The Two Wings business showed mixed results, with energy operations experiencing a decline for the first time, while Smart Tower revenue increased from 14.5% yoy in 2Q24 to 17% in 3Q24 [4][9] - Overall, the Two Wings business maintained steady growth at approximately 10% yoy in 3Q24 [4][9] Market Expectations - The consensus for China Tower's 2024 revenue, EBITDA, and earnings stands at RMB 98 billion, RMB 66 billion, and RMB 11 billion respectively, implying growth rates of 7%, 5%, and 18% for 4Q24 [6][9] - The report suggests that these consensus numbers are likely to be revised downward following the latest results [6][9]

M Update China Express | Asia Pacific October 20, 2024 03:46 PM GMT Market Analysis for September 2024 We see a mild MoM ASP improvement following industry price hike, likely indicating more profit was allocated to network partners, in our view. YoY revenue growth decelerated in low season. YTO outperformed on a low base. Key Takeaways YTO led YoY volume and revenue growth in Sep-24, likely on a low base. SF's international revenue rose 23% YoY on rising seaborne shipping rates, growing air cargo demand and ...

M Global Foundation Sunday Start | What's Next in Global Macro October 20, 2024 06:00 AM GMT Looking Back from Over There After a week speaking with clients in London, I am struck by both the parallels and contrasts with my conversations here in New York. Everyone there wanted to talk about the Fed and the US election, and while the questions on the Fed were familiar, the election discussions were vastly different. As in New York, conversations about Europe covered a pastiche of topics rather than a single ...

October 20, 2024 08:26 PM GMT M Foundation Investor Presentation | Asia Pacific Bazooka in the Making, or Fizzle Out? Morgan Stanley Asia Limited Robin Xing Chief China Economist Robin.Xing@morganstanley.com +852 2848-6511 Jenny Zheng, CFA Economist Jenny.L.Zheng@morganstanley.com +852 3963-4015 Bull vs. Bear: Fiscal Bazooka in the Making, or Fizzle Out? (18 October 2024) Nominal GDP Stayed Subdued (18 October 2024) For important disclosures, refer to the Disclosure Section, located at the end of this repor ...

Asia Pacific Equity Research 20 October 2024 J P M O R G A N Eyes on Asia Consumer Rising capital interest in Asia retail space; LVMH & L'Oréal slowdown; our recent sector views across Asia | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

North America Equity Research 20 October 2024 J P M O R G A N Apple Product Availability Tracker: iPhone 16 Average Lead Times Now In line with iPhone 15, Further Reassuring Overweight | --- | --- | --- | |-------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...