Investment Ratings - Power Finance has a Neutral recommendation on the 3.95% 2030 bonds [1] - Lenovo has a Neutral issuer rating, but is Overweight on LENOVO '32s [8] Core Insights - Power Finance reported strong profitability with a decline in the non-performing loan (NPL) ratio to 1.94%, down from 2.68% [2] - Lenovo's revenue growth accelerated across all segments, with Intelligent Device Group, Infrastructure Solutions Group, and Solutions and Services Group revenues increasing by 13%, 63%, and 18% year-on-year respectively [3] - GMR Airports reported robust preliminary earnings for Q4FY25, with Delhi Airport's passenger traffic increasing by 7.5% year-on-year and revenues surging by 24.1% [9][10] Power Finance Summary - Full-year net income rose by 23.7% year-on-year to INR 193.4 billion, driven by a nearly 40% increase in net interest income and a 151.6% rise in net fee and commission income [2] - The asset quality improved, with the NPL ratio hitting multi-year lows [2] - The total capital ratio decreased to 22.08%, while the debt/equity ratio increased to 6.15x [2] Lenovo Summary - Operating profit growth moderated to 3% year-on-year in CY1Q25, down from 12% in CY4Q24, primarily due to a 21% increase in R&D expenses [3] - Operating cash flow turned negative at -US$1 billion in Q1 [3] - Lenovo is exposed to geopolitical risks, particularly from tariffs and semiconductor restrictions [8] India Airports Summary - Delhi Airport's revenues increased by 24.1% year-on-year to INR 16.4 billion in Q4FY25, with total passenger traffic reaching 20.6 million [9][10] - Hyderabad Airport reported a 21.1% year-on-year increase in passenger traffic, with revenues up by 6.9% year-on-year [9][10] - Both airports have seen recent rating upgrades due to improving financial performance [10]

Investment Rating - HEI is rated Overweight (O/W) [3] - Evonik is also rated Overweight (O/W) [4] Core Insights - The upcoming Capital Markets Day (CMD) for HEI is anticipated to be a significant event, potentially clarifying the market's outlook on the CCS/Low Carbon Cement opportunity, which could provide up to 40% long-term upside. The core investment case is based on an improving European cement market structure, which is expected to enhance pricing and demand due to increased infrastructure spending [3] - The UK construction sector shows positive trends, particularly for companies adjacent to home builders, with performance exceeding both buy and sell-side expectations. UK mortgage rates are highlighted as a critical factor influencing sector sentiment, especially for larger renovation and maintenance activities [3] - Evonik's CMD revealed a bold vision to become the "Industry's Superforce" by focusing on sustainable innovation and operational excellence. The company aims for a pre-tax ROCE of 11% by 2027 and an adjusted EBITDA of €2.7 billion, which is 13% above current consensus estimates, with a projected CAGR of 9% from 2024 [4][11] Summary by Sections HEI and UK Construction - HEI's CMD is expected to provide significant insights into the CCS opportunity, with the potential for substantial long-term gains. The current share performance suggests a cautious market positioning ahead of the event [3] - The UK construction sector is launching a new corporate tracker that will provide timely updates on key trends and company performances, indicating a positive outlook for home builder adjacent companies [5] Evonik - Evonik's management is focusing on self-help measures to drive earnings growth, with a target of achieving a pre-tax ROCE of 11% by 2027. The company plans to achieve two-thirds of its EBITDA growth through cost savings, indicating a strong emphasis on operational efficiency [4][11] - The market is currently waiting for clear evidence of cost savings before fully pricing in the company's growth potential, suggesting a cautious approach from investors [4]

Investment Rating - The report does not provide a specific investment rating for the industry or companies discussed [22][24][26]. Core Insights - The Ministry of Finance announced changes to the tax on financial transactions (IOF), which could generate R$20.5 billion in tax collection in 2025 and R$41 billion in 2026, impacting various sectors, particularly the local fund management industry [1]. - The increase in IOF for corporate credit is expected to be passed on to borrowers, potentially leading to higher credit costs and lower commercial credit growth [5]. - The changes in IOF for foreign investments and digital wallets may drive more allocation into local assets, although the overall sentiment in capital markets may worsen due to these measures [5][6]. Summary by Sections IOF Changes - Investments from funds into foreign assets will incur a new IOF of 3.5%, affecting local fund allocations in international assets and structured products [5]. - Remittances from non-residents under Res. 4,373 are not expected to be impacted, which may benefit certain fund structures [5]. - The government has increased the IOF for companies to align with individual rates, which could lead to higher credit costs and a shift towards capital market structures to avoid IOF taxation [5][6]. Specific Rate Changes - The IOF for funds investing abroad has changed from zero to 3.5% [7]. - The IOF for commercial loans has increased significantly, with maximum caps rising from R$188 to R$395 per year for R$10,000 loans [7]. - Digital wallets will see an increase in IOF from 1.1% to 3.5%, making local banks more competitive in foreign payment services [5][6]. Implications for Financial Institutions - The changes may lead to a more competitive environment for local banks regarding foreign payment services, potentially increasing card usage abroad [6]. - The report notes that rural credit remains exempt from these changes, which should alleviate some burdens on agribusiness portfolios [9].

Investment Rating - The report does not explicitly state an overall investment rating for the North American Utilities sector, but it highlights positive sentiments and growth prospects for several companies discussed. Core Insights - The AGA Financial Forum showcased a moderately positive tone regarding the ability to mitigate IRA risks, with a focus on electric utilities and positive discussions around gas utilities [1] - Key debates centered around the implications of IRA changes, regulatory dynamics, and growth opportunities across various companies [1][4] Summary by Company Ameren Corp. (AEE) - AEE anticipates a significant increase in load with a revision to 2.3GW of data centers under construction, supporting a future plan update [7] - The company expressed confidence in limited IRA exposure and expects positive revisions from the Senate [9] Atmos Energy (ATO) - ATO's management highlighted strong operational performance and growth, projecting 6-8% growth going forward [10] CMS Energy Corp. (CMS) - CMS expects a favorable MPSC order on storm accounting deferral before the next earnings call, indicating a positive stakeholder tone [11] - The company is preparing for its 2026 IRP filing, anticipating a need for additional generation resources [12] CenterPoint Energy Inc. (CNP) - CNP projects a 50% increase in peak demand by the end of the decade, with significant upward bias in capex [14] - The company is focused on reducing regulatory lag and has mixed sentiments regarding the unified tracker mechanism [15][16] DTE Energy Company (DTE) - DTE is optimistic about securing large data center deals by the end of 2025 and emphasizes the need for new gas generation [17] Duke Energy Corp. (DUK) - DUK's reliance on nuclear PTCs is seen as less exposed to potential IRA changes, with a focus on maintaining its FFO to debt target [20] - The company is optimistic about new legislation in SC and NC that could enhance cash flow recovery [21] Consolidated Edison (ED) - ED is focused on its rate case, with expectations for a constructive outcome despite political risks [22][23] Emera Inc (EMA) - EMA is making progress towards a Nova Scotia plan update and anticipates a US listing soon [26][28] Enbridge Inc (ENB) - ENB's messaging highlights its position as North America's largest gas utility, with significant capex needs driven by new power demand [30] NiSource Inc. (NI) - NI is navigating a genco settlement process, with ongoing discussions about infrastructure development pace [33] New Jersey Resources (NJR) - NJR reported positive sentiment in NJ gas utilities, with potential capex opportunities highlighted [36] NorthWestern Energy (NWE) - NWE is working on securing data center signings, which could significantly impact its growth trajectory [39] PG&E Corp (PCG) - PCG's GRC filing aims to keep residential customer bills flat, with a focus on affordability amid ongoing pressures [42] - The company is optimistic about legislative discussions surrounding wildfire fund frameworks [43] Public Service Enterprise Group Inc. (PEG) - PEG is addressing short-term bill pressures with proposals aimed at moderating customer impacts ahead of elections [47]

Investment Rating - The report does not explicitly state an investment rating for the transportation and logistics industry Core Insights - The report highlights a positive trend in U.S. imports, with a 6.1% week-over-week increase as of May 18, outperforming seasonal expectations by 980 basis points and showing a 2.8% year-over-year increase [2] - Spot rates for truckload transportation have surged, with dry van rates increasing by 6.1% week-over-week, outperforming historical averages [3] - There are concerns regarding potential freight demand impacts due to tariffs, with expectations of a flat outlook for dry van spot rates in 2026 [6] Summary by Sections Import & Congestion Monitor - Container bookings from China to the U.S. are at five-year lows, down 27% compared to 2023, indicating subdued future demand [2] - The report notes a recovery in container imports at the Port of LA/LB, which increased by 24% week-over-week [2] Truckload and Rail Data - Spot rates for dry van, reefers, and flatbed have all increased week-over-week, with dry van rates now 4% higher year-over-year [3] - The dry van load-to-truck ratio increased by 57% week-over-week, indicating a tightening market [6] - Rail management teams express skepticism about the feasibility of transcontinental mergers due to regulatory barriers [7] Airfreight & Surface Transportation - Airfreight rates have been monitored closely due to tariff implications, with significant declines observed in key freight lanes, particularly the China-U.S. lane, which fell by 6% week-over-week [10] - The overall airfreight market is experiencing broad-based weakness, with all major lanes underperforming seasonal expectations year-to-date [10] Rail Performance - The report card for railroads indicates varying performance levels, with some railroads rated as excellent while others are fair or poor [9] - Regulatory challenges are highlighted as a significant barrier to potential mergers in the rail industry, with environmental impact studies being particularly burdensome [7]

Specialist Sales APAC Specialist Sales 22 May 2025 J P M O R G A N Xiaomi (N PT HK$53.20): new 3nm AP (application processor) for mobile + MTK modem – Gokul Hariharan link • Hanmi Semi (O/W, PT W100k) 1Q: key is de-escalating SK Hynix tensions – Jay Kwon link • Xiaomi (N PT HK$53.20): new 3nm AP (application processor) for mobile + MTK modem – Gokul Hariharan link • Lenovo (O/W PT -> HK$13): ISG (server) profit improvement – Albert Hung link • ASML (O/W PT EU 970): mainly receiving orders from TSMC, SK Hyni ...

Investment Rating - The report maintains an Overweight rating for BayCurrent, reflecting its long-term growth potential despite limited short-term upside [1][4]. Core Insights - The price target for December 2025 has been raised from ¥8,000 to ¥8,600, indicating a 5% upside as of May 22 [1][10]. - The consulting market is experiencing significant growth, and BayCurrent's recruitment efforts are expected to stabilize project assignments [1][9]. - The company is projected to maintain a return on equity (ROE) of at least 40% from FY2026, supported by a new capital policy that includes a dividend payout ratio of 40% and a total return ratio of about 60% [1][6]. Financial Estimates - For FY2025, revenue is forecasted to grow by 25% year-over-year to ¥144.6 billion, with operating profit increasing by 23% to ¥52.3 billion [6][8]. - The three-year compound annual growth rates (CAGRs) for sales and operating profit are expected to be around 20%, with consultant headcount growth at 17% [6][8]. - The report anticipates a gross margin of 53.7% and an EBITDA margin of 36.8% for FY2026 [8][15]. Market Position and Client Trends - BayCurrent's core clients include major companies like Nissan and Honda, which together accounted for approximately 11% of sales in FY2024 [6][9]. - The report notes that concerns regarding investment by Japanese exporters due to potential US tariffs have eased, which may positively impact BayCurrent's business [6][9]. - The company is expected to benefit from synergies with NTT Group, potentially leading to increased sales contributions [6][9].

Investment Rating - The report maintains an Overweight rating on ASM International, indicating a positive outlook for FY25 with continuing share gains [15]. Core Insights - The European semiconductor market is showing signs of recovery, although the recovery is not as significant as typically expected due to macroeconomic uncertainties and higher than normal inventory levels [15][17]. - Infineon Technologies reported positive current trading with no signs of tariff impact, and the auto market is showing early signs of an up-cycle [15][17]. - Nokia is expected to see steady improvement, particularly in its Network Infrastructure business, with low potential tariff impact due to flexible manufacturing [15][17]. - Future's management emphasized a focus on audience growth, diversification, and monetization, with a compelling valuation narrative for a turnaround [15][17]. Summary by Sections European TMT Conference Highlights - The conference featured discussions with 11 telco management teams, highlighting key takeaways from companies such as Cellnex, Inwit, and Vodafone [15][17]. - BT Group's FY results showed a revenue of £5,049 million, slightly below consensus, with a mixed KPI performance [15][17]. Semiconductor Insights - Companies at the conference indicated that the inventory correction in the semiconductor market is nearing its end, but visibility for FY25 remains constrained [15][17]. - ASM International is optimistic about mid-term trends and has not seen changes in customer behavior due to the macro environment [15][17]. Company-Specific Feedback - Infineon Technologies expressed confidence in current trading, with no deterioration in orders despite tariffs [15][17]. - Nokia's growth in the hyperscaler market is expected to continue, aided by the integration of the Infinera sales team [15][17]. - Future's management is committed to P&L efficiency and capital allocation, setting the stage for potential value creation [15][17].

Specialist Sales APAC Specialist Sales 22 May 2025 J P M O R G A N Rio unification, ONGC miss, FMG update, Strong Refining vs Weak Crude Anmol Mehta +852 2800 8896 anmol.mehta@jpmorgan.com Key Highlights Today Commodities Price Action | Best Movers | | | | --- | --- | --- | | Ticker | Last Price | %1D | | Alumina (RMB/t) | 3230.0 | 1.5 | | LME ZINC 3MO ($) | 2710.5 | 1.3 | | Aluminium ($/t) | 2465.3 | 0.8 | | China Li2Co3 (Rmb/t) | 62500.0 | 0.6 | | US NatGas ($/mmbtu) | 3.4 | 0.2 | | Best Movers | | | Wors ...

Investment Rating - The report upgrades Emerging Market (EM) equities to Overweight (OW) while maintaining a cautious stance on the energy sector [4][7]. Core Insights - Nippon Steel plans to invest an additional $14 billion in U.S. Steel, with $11 billion allocated for infrastructure through 2028, raising concerns about financial health due to increased debt levels [7][10]. - Rio Tinto has formed a joint venture with Codelco to develop a lithium project in Chile, which is expected to expand its lithium strategy without impacting earnings forecasts until 2029 [6][10]. - Hindalco's upcoming report is anticipated to focus on EBITDA per tonne, with expectations of a 6% growth in Q4 compared to Q3, driven by alumina expansion [9][10]. Summary by Sections Nippon Steel - Plans to invest $14 billion in U.S. Steel, including $4 billion for a new steel mill, contingent on regulatory approval [7]. - Concerns about financial health as debt-to-equity ratio could rise to 1.1x if the deal is fully debt-financed [7]. Rio Tinto - Joint venture with Codelco for lithium project in Salar de Maricunga, with initial funding of $350 million and potential construction costs of $500 million [6][10]. - Current lithium output forecast to grow from 75,000 tons per annum in 2024 to 460,000 tons per annum by 2029-2033 [6][10]. Hindalco - Focus on EBITDA per tonne in the upcoming report, with a forecasted 6% growth in Q4 [9][10]. - Concerns about alumina exposure, but analysis suggests limited impact on share prices [10].