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]

Investment Rating - Industry View: In-Line [4] Core Insights - The AI supply chain is expected to see strong demand for GB200 NVL72 racks in 2025, followed by simpler designs for AI inference and enterprise segments into 2026 [1] - Liquid cooling solutions and high-speed data transmission are highlighted as key areas for technological enhancement [1] - Nvidia's GB200 NVL72 has been confirmed as the primary focus, with the NVL36 phased out [2][3] - The MGX GB200 NVL2 server, launched recently, is designed for inference applications and may transition to a 4U form factor due to thermal issues [3] - Wistron showcased its own design for the GB200 NVL72 compute tray, differing from Nvidia's reference design, which aims for better heat dissipation [5] - The absence of ZT Systems from the GB200 NVL72 partners indicates potential risks in partnerships following its acquisition by AMD [6] - OCP is promoting simplified power supply designs to accelerate AI server rack deployment, with a focus on high power rack solutions [7] - Integrated liquid cooling solutions are gaining traction, with several vendors offering comprehensive designs to improve performance [7]

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]

Investment Rating - The industry investment rating is "In-Line" [4] Core Insights - YTO led year-over-year (YoY) volume and revenue growth in September 2024, likely benefiting from a low base [2] - SF's international revenue increased by 23% YoY, driven by rising seaborne shipping rates and growing air cargo demand [2] - A mild month-over-month (MoM) average selling price (ASP) improvement suggests that more profit from price hikes is being allocated to network partners rather than headquarters [2] - On a two-year compound annual growth rate (CAGR) basis, YTO, STO, Yunda, and SF's volume increased by 22%, 28%, 17%, and 9%, respectively [2] Volume Summary - YTO recorded the fastest volume growth at 28% YoY, followed by STO and Yunda at 22% each, while SF's volume grew by 13% YoY [2][3] - In 3Q24, YTO outperformed with 28.1% YoY volume growth, followed by STO at 27.9%, Yunda at 23.7%, and SF at 14.5% [3] Revenue Summary - YTO led with 20% YoY revenue growth, followed by STO and Yunda at 17% and 7%, respectively, while SF's express revenue grew by only 5% YoY [3] - In 3Q24, revenue growth for STO and YTO was approximately 21% YoY, while Yunda and SF saw growth of 11% and 8%, respectively [3] ASP Summary - Yunda experienced the largest YoY ASP drop of 12.5%, while YTO and SF saw declines of 7% each, and STO's ASP dropped by 4% [3] - On a MoM basis, the ASP for Yunda, STO, and YTO improved by 0.6-1.0%, while SF's ASP grew by 2% [3] Market Share Insights - In September 2024, YTO achieved a market share of 15.4%, gaining 1.2 percentage points YoY, while SF's market share declined by 0.4 percentage points to 7.6% [5] - On a two-year CAGR basis, market share changes for YTO, STO, Yunda, and SF were 1.2ppt, 0.4ppt, 0.4ppt, and -0.4ppt, respectively [2][5]

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 ...

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The report discusses a "5R" reflation strategy focusing on restructuring and rekindling economic growth, with limited efforts on economic rebalancing [2] - Significant one-time debt swaps are estimated to resolve implicit local debt amounting to Rmb6 trillion over multiple years [2][8] - The report highlights the need for strong policy stimulus to address the current weak economy, particularly in the housing and capital markets [4] Summary by Sections Local Debt Resolution - Policymakers have pledged large-scale local debt relief to reverse fiscal austerity [8] - A significant one-time debt swap is expected to reach Rmb6 trillion or more over multiple years [8] Housing Market Initiatives - The first official endorsement of using Local Government Special Bonds (LGSB) to buy back housing inventory has been made [2] - A cash resettlement program for 1 million units under urban village redevelopment is underway [3][12] Fiscal Policy and Economic Stimulus - A cumulative Rmb2 trillion supplementary budget is expected in Q4 2024, including Rmb200 billion for infrastructure and Rmb1 trillion for bank recapitalization [7] - The report anticipates a net Rmb2-3 trillion stimulus every year to support economic recovery [10] Social Welfare and Birth Subsidies - The report emphasizes the need for social welfare reform to boost household consumption, suggesting that exempting social security contributions could unleash a trillion yuan [14] - Financial pressures are identified as a major concern behind declining birth rates, with new births significantly dropping [16]

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 | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Investment Rating - The report assigns an "Overweight" (OW) rating to Apple, indicating an expectation that the stock will outperform the average total return of its coverage universe [10]. Core Insights - The report highlights a demand improvement for the iPhone 16 series, with average lead times now in line with the iPhone 15, suggesting a recovery in demand momentum following the initial weeks post-launch [1][2]. - Delivery lead times for the iPhone 16 series have moderated slightly, with a 3-day reduction in aggregate lead times compared to the previous week, while specific models show varied changes in lead times across different regions [1][2]. - The US accounts for approximately 32% of iPhone shipments, while China accounts for about 20%, indicating significant market shares in these regions [1][2]. Summary by Region US Tracker - In the US, lead times for the iPhone 16 and 16 Plus are now 3 days each, down from 4 days, while Pro and Pro Max lead times are 15 and 21 days, respectively [1][2]. - Almost all variants of the iPhone 16 series were available for in-store pickup as of October 18 [1][2]. China Tracker - In China, lead times for the iPhone 16 and 16 Plus have increased to 4 days each, while Pro and Pro Max lead times are 14 and 19 days, respectively [1][2]. - Most variants of the iPhone 16 series were available for pickup on October 19 [1][2]. Europe Tracker - In Germany, lead times for the iPhone 16 and 16 Plus remain stable at 3 days each, while Pro and Pro Max lead times have moderated to 19 and 24 days, respectively [2]. - In the UK, lead times for the iPhone 16 and 16 Plus are 4 and 5 days, while Pro and Pro Max lead times are 16 and 22 days, respectively [2].