Investment Rating - The report maintains a positive outlook on copper, forecasting a price rebound to $10,100 per ton for Q1 2025, with potential upside from China stimulus measures and inventory draws [2][4][20]. Core Insights - China stimulus is expected to positively impact copper demand, particularly if property prices stabilize, which could help boost domestic consumption [2][7][9]. - The recent pullback in copper prices incentivized demand in China, but rapid price increases could lead to demand destruction [3][10]. - The annual Treatment Charge (TC) for copper concentrate is projected to settle at a record low of $30 per ton for 2025 due to persistent concentrate tightness [4][22][25]. - The report highlights that smelter demand for copper concentrate is expected to outpace supply growth, with smelter demand rising at 6-7% per year compared to mine supply growth of only 2-4% [22][24]. Summary by Sections China Stimulus Impact - The report emphasizes that stimulus measures in China could help stabilize property prices and boost domestic consumption, which is crucial for copper demand [2][7][9]. - China's household saving rate remains high at 36.5%, which could be moderated by effective consumption support policies [7][9]. Demand Dynamics - The report notes that the Q2 copper price rally led to a buyers' strike in China, but demand has since rebounded as prices pulled back [3][10]. - China's apparent copper consumption has shown signs of recovery, with indicators such as grid tendering activity and rising physical premiums suggesting improved demand [14][18]. Supply and Treatment Charges - The report forecasts that the 2025 annual TC will be the lowest on record, driven by a tightening concentrate balance as smelter demand continues to exceed mine supply [4][22][25]. - The gap between spot and annual TCs indicates significant adjustments are likely in the upcoming negotiations [25][26]. Market Positioning - Current market positioning is noted to be biased towards long positions, with shorts at the lower end of the recent range, suggesting potential for price increases [4][20]. - The report indicates that while there is room for copper prices to rise, achieving all-time highs will require more aggressive stimulus from China and a recovery in global construction and manufacturing activity [20][22].

Investment Ratings - Semiconductor Industry: Attractive [3] - Semiconductor Capital Equipment: Cautious [3] Core Insights - The semiconductor industry is experiencing strength in AI and cloud sectors, while other areas are gradually bottoming out [1] - Texas Instruments (TXN) is expected to see a mixed setup with a seasonal decline forecasted for the December quarter, despite signs of a bottoming out in analog revenue [1][8] - Lam Research (LRCX) faces potential downward revisions for 2025 estimates due to NAND capex pushouts and risks associated with a slowdown in China [1][25] - Teradyne (TER) is anticipated to have a good year in 2025, but the extent of growth remains uncertain [1][17] - Western Digital (WDC) is expected to have a weak outlook due to ongoing strength in HDDs being offset by weaker NAND demand [1][38] Summary by Company Texas Instruments (TXN) - Forecasted revenue for the September quarter is $4.120 billion, reflecting a 7.8% increase quarter-over-quarter but a 9.1% decrease year-over-year [9] - December quarter revenue is projected at $3.986 billion, down 3.2% quarter-over-quarter and 2.2% year-over-year [9] Lam Research (LRCX) - Expected NAND shipments to increase by 47% year-over-year in 2025, but near-term increases in NAND spending are unlikely [1][25] - Revenue for the June quarter is modeled at $4.046 billion, with a gross margin of 47.0% [25][26] Teradyne (TER) - Anticipated revenue for the September quarter is $718 million, with a gross margin of 59.0% [18] - December quarter revenue is projected at $775 million, reflecting an 8.0% increase quarter-over-quarter [19] Western Digital (WDC) - September quarter revenue is expected to be $4.109 billion, with HDD growth of 3.0% quarter-over-quarter and NAND growth of 16.1% [40] - December quarter revenue is projected to increase to $4.274 billion, with HDD growth of 3.0% and NAND growth of 5.1% [40] ON Semiconductor (ON) - Revenue for the September quarter is modeled at $1.756 billion, with a gross margin of 45.5% [55] - December quarter revenue is projected at $1.770 billion, reflecting a slight increase quarter-over-quarter [55] General Semiconductor Industry Trends - The semiconductor industry is witnessing a gradual recovery, with specific segments like AI and cloud computing driving growth [1] - The overall outlook for 2025 remains cautious, with potential headwinds from geopolitical factors and market dynamics [1][25]

Investment Rating - The report indicates a long positioning bias for USD, with tactical investors being most long on USD (DXY) and NOK (versus EUR) while being short on EUR and JPY [1][7]. Core Insights - In the week ending October 18, investors reduced short positions in CAD and GBP, while adding short positions in NOK and SEK against EUR. In the futures market, short USD positions were reduced, and long positions in AUD and NZD were cut back [1][7]. - The options data suggests that tactical investors are predominantly long on USD (DXY) and NOK (versus EUR), while being short on EUR and JPY. In the futures market, positioning is long on EUR and GBP, and short on CAD and CHF [1][7]. Summary by Sections - **Options Positioning**: As of October 18, 2024, the net options positioning for DXY USD was at 47%, indicating a strong long bias among investors [2][11]. - **Futures Market Positioning**: Speculative USD futures positioning was reduced to -2.2% of open interest, a significant improvement from -11.2% the previous week, reflecting a shift in sentiment towards USD [13]. - **Daily Sentiment Index**: The Daily Sentiment Index showed the largest improvement for USD, while sentiment for EUR and JPY deteriorated the most among G10 currencies [13].

Investment Rating - The report maintains an "In-Line" rating for the Greater China Semiconductors industry [2]. Core Insights - The report anticipates a deep sub-seasonal fourth quarter for PC semiconductors, primarily due to ongoing inventory digestion outside of China, with a conservative outlook for the first half of 2025 [2]. - There is a slight pickup in PC demand in China, likely driven by government stimulus, but AI PC disappointments and high inventory levels in non-China markets are expected to pressure growth in Q4 2024 [2][3]. - Desktop semiconductors are viewed as more stable compared to notebook semiconductors, with a recommendation to stay Overweight (OW) on ASMedia and Underweight (UW) on Realtek and Parade [2]. Summary by Sections Market Demand and Supply - PC semiconductors are expected to show a sequential decline in Q4 2024, primarily due to ongoing inventory digestion and disappointing AI PC demand from key US SoC vendors [2]. - The report notes that while there are signs of demand recovery in China, it may not be sufficient to reverse the overall downtrend in the market [2]. Company Recommendations - ASMedia is recommended as Overweight due to stable chipset business for desktop PCs, while Realtek and Parade are rated Underweight due to weaker-than-expected demand [2][3]. - The report suggests that new server opportunities may emerge in the second half of 2025, which could provide a boost to certain companies in the semiconductor supply chain [2]. Earnings Forecasts - The report indicates that earnings forecasts for Realtek may see downside due to weaker-than-expected demand for PC semiconductors [2]. - Parade's premium notebook exposure might cushion some downside, but overall growth drivers outside of notebooks appear limited [2].

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]