Investment Rating - Insurance Australia Group (IAG AU) is rated as Overweight (OW) with a price target of A$8.9, representing an 18% premium to the discounted cash flow (DCF) valuation of A$7.5 [3][6]. Core Insights - The recent approval of the RACQ merger is expected to be 6% accretive to earnings per share (EPS) by FY27, which strengthens IAG's position as a leading personal line consolidator despite near-term challenges from flooding in New South Wales [3][4]. - In Malaysia, inflation has increased slightly in April, but the forecast remains for a 50 basis point rate cut in 2025, which is seen as beneficial for Malaysian banks due to low current account savings account (CASA) ratios [3][9]. - The advancement of the GENIUS Act is causing a rally in Asian crypto stocks, although there are concerns about overly optimistic projections regarding the growth of the stablecoin market [3][10]. Detailed Highlights - The IAG-RACQ merger has received approval from the Australian Competition and Consumer Commission (ACCC), which is expected to solidify IAG's market share in personal lines, particularly as smaller competitors reduce home insurance commission rates [4]. - The substantial flooding in Northern New South Wales is impacting IAG's share price in the short term, with historical data indicating significant losses from similar events in the past [4][6]. - The Malaysian banking sector is experiencing a shift, with Harsh Modi upgrading PBK to Overweight while downgrading DBS to Neutral, reflecting a more favorable outlook for PBK's payout compared to DBS [3][9].

Investment Rating - The report maintains an "Overweight" rating for Boss Energy, indicating a positive outlook for the stock in the uranium sector [6][18]. Core Insights - The report highlights significant management changes in the mining sector, particularly noting the upcoming departure of Rio Tinto's CEO and the potential implications for strategic direction and M&A activity [1][9]. - The US renewables sector faces challenges due to amendments in the budget reconciliation bill that could strip ITC/PTC credits, negatively impacting companies like Hanwha Solutions and Enphase [2][9]. - JSW Steel is expected to report a 20% quarter-over-quarter growth in consolidated EBITDA, driven by higher volumes and lower coking coal costs, despite flat ASPs [14]. Detailed Highlights - **Rio Tinto**: CEO Jakob Stausholm will step down in 2025, prompting expectations for strategic changes and value unlock initiatives. The company is currently trading at a significant discount, with a target price indicating approximately 30% upside potential [9]. - **Renewables Whiplash**: The amended House reconciliation bill poses risks to the renewables sector, particularly affecting projects reliant on ITC/PTC credits. The focus now shifts to the Senate for potential adjustments [9]. - **JSW Steel**: Anticipated to show strong performance in EBITDA due to operational efficiencies and market conditions, with a focus on the implications of the Bhushan Power Asset situation [14]. - **Anglo American**: The company is executing a spin-off of its stake in Anglo American Platinum, which is valued at approximately $5.3 billion, with expectations of significant share distribution and market impact [15]. - **Boss Energy**: Following a recent pullback, the stock is upgraded to Overweight, with a new price target reflecting a 15% upside based on improved valuation metrics [18].

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].