Key Points **Industry/Company Involved**: - The report focuses on the Multi-Industry & Electrical Equipment (MI/EE) industry, specifically analyzing the impact of China's stimulus measures on various companies within the sector. **Core Views and Arguments**: 1. **China Stimulus Measures**: The People's Bank of China (PBoC) announced a series of monetary policy measures to stimulate the Chinese economy, including rate cuts, reserve requirement ratio (RRR) cuts, and mortgage loan rate cuts. Additionally, fiscal policy measures were announced, including increased bond issuance and capital injections to state-owned banks. 2. **Impact on MI/EE Companies**: Most MI/EE companies indicated that business in China has stabilized sequentially, with Y/Y organic sales trends in China seeing a material sequential uptick from 4% growth in 1Q24 to 8.5% in 2Q24. However, this uptick is attributed to easing prior year comparisons rather than a measurable improvement in demand. 3. **China Revenue Exposure**: VRT, IR, and EMR have the highest China revenue exposure and would likely disproportionately benefit from a recovery in demand. BMI, HUBB, LII, SWK, SYM, and ZWS have no China revenue exposure. 4. **Share Price Performance**: Since the China stimulus announcement, share price performance within the MI/EE coverage universe has been mixed, with VRT (+11%), ZWS (+5%), and EMR (+4%) being the strongest performers, while DOV (-2%), LII (-2%), and SWK (-1%) being the weakest performers. 5. **Skepticism about China Recovery**: While the China recovery could be a theme for 2025, the report remains somewhat skeptical about a material recovery in China over the next 12 months, describing it as a 'free call option' for applicable companies within the group. **Other Important Points**: 1. **MI/EE Global Trading Comps**: The report provides a detailed analysis of MI/EE global trading comparisons, including key performance indicators (KPIs) and price performance charts. 2. **Commodities & Currencies**: The report includes an analysis of energy commodity performance, mined commodity performance, agriculture commodity performance, and currency performance. 3. **Macro/Industry Stats**: The report provides an overview of macroeconomic and industry statistics, including ISM readings, industrial production, capacity utilization, durable goods shipments, construction expenditure, and more. 4. **Company News**: The report includes updates on various MI/EE companies, including Airbus, A.O. Smith, Boeing, Carrier, Daimler Truck, Dover, Fastenal, Honeywell, Lincoln Electric, Middleby, Siemens AG, Supermicro, Symbotic, Trane Technologies, TRATON, Veralto, and more. 5. **Latest DB MI/EE Research**: The report includes insights from recent research reports on topics such as WEFTEC Water Quality Exhibition, Honeywell's Advanced Materials spin-off, Veralto's acquisition of TraceGains, and more. 6. **Valuation**: The report discusses the valuation of the MI/EE group, noting that it now trades at a median NTM P/E multiple of 25x, which represents an all-time high when looking back at valuation over the past decade. 7. **3Q24 Earnings Preview**: The report provides a preview of the 3Q24 earnings season for the MI/EE group, noting that the group is 'priced for perfection' going into the earnings season. 8. **Catalyst Calls**: The report includes catalyst calls for various MI/EE companies, including Rockwell Automation and Carrier. 9. **Water Tech. 3Q24 Earnings Preview**: The report provides a preview of the 3Q24 earnings season for water technology companies, noting that all five of the DB Water Tech. names are expected to post 3Q24 beats. 10. **Dover Catalyst Call**: The report includes a catalyst call for Dover, noting that the company's 3Q adj. EPS forecast sits in line with the Street, and there is downside risk to management's assessment that book-to-bill can surpass 1x in 3Q (and 2H24). 11. **Non-Resi Update**: The report discusses the non-residential construction market, noting that while data points remain mixed to cautious, the recent Fed cut has put a more optimistic spin on the outlook. 12. **DB vs. Consensus Ests**: The report compares Deutsche Bank's estimates with consensus estimates for various MI/EE companies, including EPS, sales, and other financial metrics. 13. **Equity Rating Dispersion and Banking Relationships**: The report provides information on equity rating dispersion and banking relationships for various MI/EE companies. 14. **Additional Information**: The report includes additional information on various topics, including conflicts of interest, investment strategies, and more.

Financial Data and Key Metrics - Automation order/sales YoY growth for September remained subdued, showing slight further deceleration compared to August [3] - New energy market decline could narrow from October as the base for new energy demand softened materially in 4Q23 [4] - Yizumi and Haitian International reported healthy order growth in September, with overseas orders growing faster than domestic orders [5] - Inovance suffered a -3% YoY order decline in September, while Airtac posted a -5% sales decline due to fewer working days [5] - Hiwin's YoY sales growth returned to flat in September after declines YTD, benefiting from a low base [5] - Yaskawa's Motion Control sales in China remained at -10% YoY in CNY terms in September [5] Business Line Data and Key Metrics - Traditional end-markets (textile, packaging, machine tool, and electronics) grew positively, while the new energy (solar and battery) market remained in contraction [4] - Plastic injection molding machine OEMs (Haitian and Yizumi) continued to see healthy orders at 20-30% YoY in September [5] - Estun delivered +10% growth for its domestic orders, driven by electronics, automotive, and metal processing [17] - Airtac experienced sales growth from electronics, textile and clothing, machine tool, and automotive markets, despite a -5% YoY sales decline in September [18] - Hiwin's order visibility is currently 2-3 months, with gradual improvement in orders since November 2023 driven by semiconductor, automation, aerospace, infrastructure, machine tools, and NEV demand [19] Market Data and Key Metrics - China's Manufacturing PMI in September was 49.8, indicating a slight contraction in the manufacturing sector [31] - China's PPI decline widened to -1.8% YoY in August, reflecting ongoing deflationary pressures in the manufacturing sector [31] - Yaskawa's Motion Control sales in China declined -10% YoY and -7% MoM in CNY terms in September [20] - ABB's inverter sales in China declined -23% YoY but improved +69% MoM in CNY terms, with low-voltage inverter orders soft at -5% YoY in 9M24 [21] Company Strategy and Industry Competition - Inovance expects better order growth in 4Q24 as the base for new energy becomes lower, with comps expected to be lower from November onwards [14] - HCFA believes order decline could narrow from October onwards, as the base for new energy (especially solar) becomes lower [15] - Haitian International reported 30%+ YoY order growth in 3Q24, with domestic orders growing +20% YoY and overseas orders growing 50%+ [16] - Hiwin expects sales to be similar to the 3Q level in 4Q, suggesting a -1% YoY sales decline for 2024, slightly worse than the positive sales growth guidance [19] Management Commentary on Operating Environment and Future Outlook - Management of Inovance expects better order growth in 4Q24 due to a lower base for new energy [14] - HCFA management believes order decline could narrow from October onwards as the base for new energy becomes lower [15] - Airtac acknowledges that shipments in 3Q24 were lower than expectations but still expects 4Q24 to be better than 3Q24 [18] - Hiwin management expects sales to be similar to the 3Q level in 4Q, with gradual improvement in orders driven by various end-markets [19] Other Important Information - The China automation market continues to show disparate growth between traditional and new energy end-markets, with traditional markets outperforming since 2H23 [13] - The global industrial automation sector faces headwinds from soft global manufacturing PMIs and FX movements, particularly for Japanese names [8] - Taiwanese names like Airtac and Hiwin reported disappointing 3Q24 sales declines of -2.4% and -3.5%, respectively, with concerns over Hiwin's expensive valuation and intensifying competition in China [9] Summary of Q&A Session - No specific Q&A session details were provided in the document

Financial Data and Key Metrics Changes - Average spot TCE rates across the tanker segment decreased significantly, with VLCC rates down 36% to ~$29,000/day, Suezmax down 25% to ~$33,250/day, and Aframax down 21% to ~$29,700/day [2] - LR2, LR1, and MR rates also saw declines of 42%, 40%, and 31%, averaging ~$26,275/day, ~$18,350/day, and ~$19,850/day respectively [2] Business Line Data and Key Metrics Changes - Product tanker rates experienced a more significant decline compared to crude tankers, attributed to normal seasonality and domestic demand weakness in China [3] - Approximately 37 million barrels of clean products were transported by VLCCs and Suezmax tankers, marking a 43% increase in volume quarter-over-quarter [4] Market Data and Key Metrics Changes - Chinese refined product export quotas for 2024 remain at ~54 million metric tons, consistent with 2023 levels but seasonally lower than last year's quotas [3] - The crude tanker orderbook-to-fleet ratio increased from 2.87% to 9.6% since April 2023, indicating a potential for minimal net fleet growth in the coming years [13] Company Strategy and Development Direction - The company plans to prioritize share repurchases over dividend increases, especially if shares trade below NAV estimates [19][20] - The upcoming easing of OPEC production cuts is expected to positively impact crude tanker demand, particularly in the VLCC segment [9] Management Comments on Operating Environment and Future Outlook - Management expressed caution regarding the geopolitical landscape, noting that tensions in the Middle East could affect tanker rates and demand [7][8] - The company anticipates that the normalization of trade patterns related to Russia/Ukraine and the Red Sea will significantly influence the tanker market [23] Other Important Information - The company reported QTD spot earnings of ~$44,000/day for LR2, ~$34,000/day for MR, and ~$25,000/day for Handymax, indicating a downward trend in rates for the remainder of the quarter [18] - The company has entered into several vessel sales agreements expected to close in Q4, with total proceeds estimated at ~$158.5 million [19] Q&A Session Summary Question: What are the expectations for the tanker market in 2025? - Management indicated that geopolitical tensions could either support or hinder tanker rates, making future predictions uncertain [7][8] Question: How is the company managing its fleet and asset values? - The company noted that secondhand asset values remain firm, with significant increases year-to-date across various tanker segments [10] Question: What is the outlook for dividends and share repurchases? - The company is expected to announce a dividend of ~$0.68/share, maintaining a similar payout ratio as the previous quarter, while prioritizing share repurchases [21]

Industry and Company Overview * **Industry**: Solar Outlook, Clean Technology * **Region**: North America, United States * **Date**: 7 October 2024 Key Topics 1. **US Presidential Elections and Solar Sector**: The upcoming US presidential elections are a pivotal moment for the solar sector. A Democratic victory is seen as positive, with minimal risks to residential demand and incentives. A Republican win could lead to the fading/removal of incentives and dampen sentiment. 2. **Residential Demand Trends**: Demand in the US is stable, with California recovering post NEM 3.0. Southern states are performing well. Europe's demand is lagging, down ~10%+ YoY. 3. **Inverters Update**: Under shipments are expected to be fully done for ENPH in 3Q24. SolarEdge faces challenges in Europe, but US under shipments should clear after 3Q. 4. **Macro Environment**: Interest rates are coming down, benefiting residential solar companies and the market. 5. **Equity Ratings**: Buy-rated First Solar (PT $280), Hold rated on ENPH, SEDG, RUN, and NOVA. Company-Specific Updates * **First Solar (FSLR)**: Expected to report 3Q24 results on October 29. Revenue forecasted at $1.09bn, with ASP of 28c/w and shipments of 3.90GW. Costs forecasted at $113m, leading to operating income of $385m and net income of $356m. * **Enphase Energy (ENPH)**: Expected to report 3Q24 results on October 22. Revenue forecasted at $387m, with GAAP net income of $52m and GAAP EPS of 38c. * **SolarEdge (SEDG)**: Expected to report 3Q24 results on October 30. Revenue forecasted at $274m, with GAAP gross margin of negative 2%. * **Sunrun (RUN)**: Expected to report 3Q24 results on October 30. Revenue forecasted at $559mm, with cash generation of negative $4m. * **Sunnova (NOVA)**: Expected to report 3Q24 results on October 30. Revenue forecasted at $241m, with adj. EBITDA of $209m. Additional Information * The report includes graphs and charts on solar power generation, energy costs, and company financials. * The report also includes important disclosures and analyst certifications.

7T2se3r0Ot6kwoPa Deutsche Bank Research Global Foreign Exchange FX Blog Date 7 October 2024 What is driving high-frequency FX? Main highlights of the High-Frequency monitor: n Our statistical tests show that connectivity from other asset classes to FX has dropped slightly despite higher FX volatility. However, there remains a strong connectivity from US equities, European equities and US rates to FX. Among individual pairs, AUD/JPY has become the currency pair most driven by other asset classes. n Contempor ...

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - China's fiscal sector is experiencing both near-term and long-term challenges, with slower public sector activity negatively impacting economic growth [2] - The government has maintained an expansionary fiscal stance, with a deficit around 7% of GDP, but local fiscal spending has contracted due to declining tax and land sales revenue [2][7] - A budget revision is deemed necessary, as fiscal spending may drop by an additional -2.5% YoY without policy changes, while an increase in the deficit could allow for a 3% YoY increase in spending [2][25] Summary by Sections Fiscal Challenges - The revenue-to-GDP ratio in China has declined by almost 10% over the past decade, now at approximately 22% of GDP, significantly lower than G7 (36%) and OECD (39%) averages [15] - The public sector's growth was only 3.4% in H1 2024, the second lowest among all sectors, indicating a slowdown in public sector activity [5] - Fiscal revenue dropped by -5% YoY in the first seven months of 2024, attributed mainly to an -18% YoY decline in land sales and a -5% YoY decline in major taxes like VAT and corporate income tax [10][13] Long-term Strategies - Broadening the tax base on high-end consumption is suggested as a practical approach to reverse the downward trend in fiscal revenue [3] - Local government financing has become increasingly reliant on borrowing or central government transfers, highlighting the need for reforms to boost local revenues [20] - The government's plan to increase revenue through consumption tax is seen as prudent, with current consumption tax revenue at 1.3% of GDP, below the OECD average of 2.9% [27]

Deutsche Bank Research 7T2se3r0Ot6kwoPa Asia Economics Asia Week Ahead Date 2 September 2024 What you need to know: 2 - 6 Sept | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------| | | Juliana Lee | | Week ahead | Chief Economist | | We expect BNM to remain on the sidelines as growth surprised to the upside, and | +65-6423-5203 | | inflation is likel ...