Investment Rating - The industry investment rating is "In-Line" [5] Core Insights - Domestic slots are expected to decline by 1% year-over-year (YoY) for the Winter/Spring season, while international passenger slots are projected to grow by 5% YoY, reaching 77% of 2019 levels [2][3] - Chinese airlines are reducing domestic slots to improve execution ratios amid profitability challenges, with regional slots at 94% and international slots at 88% of 2019 levels [3] - Major airports like Shanghai and Guangzhou are seeing varying recovery rates, with Shanghai's international routes just 8.5% below 2019 levels, while Guangzhou's domestic slots are 21% above 2019 levels [4][5] Summary by Sections Capacity and Slot Plans - CAAC's slot plans for the 2024 Winter/Spring season indicate a 1% decline in domestic slots YoY, while international slots are set to increase by 5% YoY [2] - Non-domestic capacity is recovering to pre-Covid levels, with adjustments possible during the flight season [2] Airline Performance - Domestic slots for Chinese airlines are projected to decrease by 7% YoY, with the Big 3 airlines seeing a decline of 4% to 2% YoY [3] - Compared to 2019, the Spring season shows a 51% increase in domestic slots for all Chinese airlines [3] Airport Insights - Shanghai's international routes are recovering faster than foreign airlines, with total non-domestic slots approximately double that of Beijing and Guangzhou [4] - Guangzhou's domestic slots are 21% above 2019 levels, while international routes for Chinese airlines are 20% below 2019 levels [4] - Beijing's domestic slots are 26% above 2019 levels, but international routes remain significantly below 2019 levels [4]

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Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The IMF has reduced interest rates for its lending under the General Resources Account (GRA), benefiting countries like Argentina, Ukraine, Egypt, Pakistan, and Ecuador with total estimated savings of around US$1 billion in 2025 [1][11] - The basic charge margin has been lowered from 100 basis points (bp) to 60 bp, and the level-based surcharge threshold has been raised from 187.5% of quota to 300% [5][6] - The effective interest rate for countries with surcharges is expected to decrease by 1.2 percentage points (pp), translating to an average saving of 18% of interest charges due to the IMF in 2025 [12][15] Summary by Sections Changes in IMF Lending Rates - The IMF's review of charges and surcharges primarily affects borrowing under the GRA, which is used by larger emerging market borrowers [3] - The basic charge margin is reduced from 100 bp to 60 bp, benefiting all countries with GRA credit outstanding [5][8] - The level-based surcharge threshold is increased to 300% of quota, meaning some countries will no longer incur this surcharge [6][10] - The time-based surcharge is lowered from 100 bp to 75 bp, effective from November 1, 2024 [6] Estimated Savings and Beneficiaries - Total estimated savings from the changes are around US$1 billion for 2025, with US$936 million going to 19 countries that currently face surcharges [11] - Argentina is projected to save US$346 million, followed by Ukraine with US$130 million and Egypt with US$127 million [11][16] - The savings for countries that will no longer pay the level-based surcharge are relatively small, totaling around US$32 million [10] Impact on Effective Interest Rates - The effective interest rate for the 19 countries with current surcharges is expected to fall from a range of 3.9-7.0% to 2.7-5.8% [12][15] - On average, the savings amount to 0.04% of GDP for 2025 [14][15] - The changes, while beneficial, may not meet the expectations of borrowers who sought more substantial reductions [13][15]

M Update Sunny Optical | Asia Pacific October 13, 2024 09:00 PM GMT September: Handset Lens Shipments to Beat while CCM to Miss in 2024? With mix improvement the top priority, handset CCM still recorded weak shipments. Handset lenses delivered solid growth, and shipments appear highly likely to beat the target. Key Takeaways Handset CCM YTD growth rate decelerated from +3% in Jan-Aug to -1% in Jan- Sep. Handset lenses recorded +6% YoY growth in Sep and +20% in Jan-Sep. Vehicle lenses' YTD growth slightly im ...

Investment Rating - The report maintains an "Overweight" (OW) rating on China Online Travel Agencies (OTAs) due to resilient travel demand and favorable comparisons ahead, with potential upside from consumption recovery [1][5]. Core Insights - Domestic tourism and receipts increased by 5.9% and 6.3% year-over-year, respectively, adjusted for the number of holiday days [2]. - Daily air passenger volume rose by 11% compared to 2023 and 22% compared to 2019, indicating strong growth in domestic air travel [2]. - The report anticipates a solid performance in 3Q24, projecting 13% revenue growth and 21% growth in non-GAAP operating profit for Trip.com Group (TCOM) [4][8]. - The report forecasts a 20% core OTA revenue growth and a 37% growth in non-IFRS adjusted profit for Tongcheng Travel Holdings in 3Q24 [4][8]. Summary by Sections Domestic Travel Performance - Domestic tourists and receipts rose 5.9% and 6.3% YoY, respectively [2]. - Daily air passenger volume increased by 11% YoY and 22% compared to 2019 [2]. Outbound and Inbound Travel - Daily average visitors for outbound and inbound travel grew by 26% YoY, with mainland tourists increasing by 33% YoY [3]. - International flight recovery reached 84% of 2019 levels, with Southeast/East Asia accounting for approximately 77% of total flight volume [3]. 3Q24 Financial Expectations - TCOM is expected to achieve 13% revenue growth and 21% non-GAAP operating profit growth, with a flat non-GAAP profit YoY due to tax normalization [4][8]. - Tongcheng is projected to have a 20% core OTA revenue growth and a 37% non-IFRS adjusted profit growth in 3Q24 [4][8]. Valuation and Price Target Adjustments - Price targets for TCOM and Tongcheng have been raised to US$73 and HK$24, respectively, reflecting a switch to DCF valuation [5]. - TCOM and Tongcheng are trading at 15x and 12x 2025 estimated P/Es, respectively, which is considered attractive compared to the internet average NTM P/E of approximately 16x [5].

Investment Rating - The industry investment rating is classified as Attractive [1]. Core Insights - Demand outlook is improving due to property sales recovery during the holiday period, with increased demand for steel and cement [1]. - Production and sales of industrial goods are showing positive trends, with notable increases in daily crude steel output and passenger vehicle sales [1]. - Local government special bond issuance has reached Rmb3.6 trillion year-to-date, indicating strong infrastructure investment [1]. Summary by Relevant Sections Demand Tracker - Property sales improved during the National Day Holiday, with a 77% year-on-year increase in weekly primary unit sales in 50 cities [1]. - Steel and cement demand is picking up, with apparent cement shipments in eastern China improving post-holiday [1]. Production and Sales - The national operating rate of alumina producers was 86.70%, up 0.8 percentage points week-on-week [1]. - Daily crude steel output at major producers was 2.01 million tons in late September, reflecting a 1.3% increase compared to mid-September [1]. Infrastructure and Investment - In the first nine months of 2024, China railway completed fixed asset investment of Rmb561.2 billion, up 10.3% year-on-year [1]. - Local government special bond issuance totaled Rmb128 billion in October, bringing the year-to-date figure to Rmb3.6 trillion, which is approximately 93% of the total quota [1]. Building Materials Activity - Cement prices in eastern China increased by Rmb30-100 per ton, and apparent consumption of long and flat steel products rose by 25.5% week-on-week [1]. - Glass inventory decreased by 18.3% week-on-week due to restocking at processing plants [1].

China Property More policy support from MOF/takeaways from expert call The MOF press conference on 12 October laid out three policies for the property sector. Although no concrete number/scale was given, the direction (i.e. allowing special LGB for purchasing idle land/unsold units and lowering tax rates) is mostly in line with our expectation. Theoretically, these moves, albeit not game changers per se, help optimize the supply/demand dynamics, but practically we see hurdles in execution. That said, with V ...

Investment Rating - The investment rating for Sunny Optical is Overweight, indicating that the stock's total return is expected to exceed the average total return of the industry coverage universe over the next 12-18 months [4][20]. Core Viewpoints - Sunny Optical is positioned as the largest player in the vehicle lens market, which is anticipated to be a multi-year growth driver due to strong electric vehicle (EV) sales and increasing Advanced Driver Assistance Systems (ADAS) penetration [2][4]. - September vehicle lens shipments reached 9,314 million units, reflecting a year-over-year increase of 12.7% and a month-over-month increase of 10.4%. Aggregate shipments for the first three quarters of 2024 totaled 79,798 million units, up 11.6% year-over-year [1][2]. Summary by Sections Investment Rating - Stock Rating: Overweight [4] - Price Target: HK$72.00, with a 30% upside potential from the current price of HK$55.25 [4]. Financial Metrics - Market Capitalization: RMB 54,964 million [4]. - Revenue (Net): Expected to grow from RMB 31,681 million in FY23 to RMB 44,398 million by FY26 [4]. - EPS (Earnings Per Share): Projected to increase from RMB 0.99 in FY23 to RMB 3.04 in FY26 [4]. Shipment Data - Monthly vehicle lens shipments in September 2024 were 9,314 million units, with a year-over-year growth of 12.7% and a month-over-month growth of 10.4% [1][2]. - Total shipments for the first three quarters of 2024 reached 79,798 million units, marking an 11.6% increase year-over-year [1][2]. Industry Outlook - The vehicle lens segment is expected to benefit from the growing demand for EVs and ADAS, which require more cameras per vehicle [2][4].

Global Research 11 October 2024 J P M O R G A N EM Money Trail Records Smashed as China Optimism Lifts EM Boats EM Equities saw unprecedented inflows this week at +$9.8bn - the highest weekly amount in our tracking history since Oct 2000, from +$7.2bn last week. The subscriptions continue to be entirely driven by ETFs (+$10.1bn, the highest weekly inflow on record) while non-ETFs posted outflows of -$292mn. Among regional funds, the buying was concentrated in Asia ex-Japan at +$9.2bn, also the highest weekl ...

Investment Rating - The report assigns an "Underweight" rating to Tesla Inc with a price target of $130.00 for December 2025 [4][10]. Core Insights - The report highlights a substantial risk of multiple compression for Tesla shares following a significant rally, driven by investor enthusiasm for the recent Robotaxi Day event, which did not meet expectations regarding vehicle sales, earnings, or cash flow [1][2]. - Despite a 68% increase in Tesla's share price since April 22, 2024, the outlook for vehicle sales and earnings has deteriorated, with 2024 vehicle sales estimates down 8% and EBIT down 13% [2][9]. - The report emphasizes that Tesla's valuation appears to be pricing in optimistic growth expectations that may not materialize, particularly in the context of expanding into lower-priced segments [9][12]. Summary by Sections Financial Performance - For FY 2023, Tesla's revenue is projected at $96.77 billion, with an adjusted EBITDA of $13.56 billion and an adjusted net income of $10.88 billion, resulting in a net margin of 11.2% [8]. - The adjusted EPS for FY 2024 is estimated at $2.25, with a decline in free cash flow expected to drop by 49% from $3.9 billion to $1.9 billion [2][5]. Valuation Methodology - The price target of $130.00 is based on a 50/50 blend of discounted cash flow (DCF) analysis and multiples-based analysis for 2026 estimates [10][14]. - The DCF analysis suggests a value per share of $115, while the multiples-based analysis indicates a value of $144 [31][19]. Market Expectations - The report notes that investor expectations were overly optimistic, particularly regarding the rollout of Tesla's robotaxi program, which is now seen as a longer-term prospect rather than an immediate opportunity [1][11]. - The anticipated launch of the Cybercab and Robovan has raised questions about the economic viability of selling these vehicles externally, which may not align with previous expectations of Tesla operating a dedicated robotaxi fleet [11][12].