Investment Rating - The report maintains a forecast that the annual average growth of CPI is likely to be around 0.5% in 2024 and 1.5% in 2025 [2] Core Insights - The Consumer Price Index (CPI) increased from 0.2% in June to 0.5% in July, surpassing market expectations, while core CPI growth decreased from 0.6% to 0.4% [2] - The CPI growth was supported by a low base effect from the previous year, particularly in food prices, which saw a recovery due to rising pork prices [2] - The report anticipates a gradual recovery in CPI growth, projecting it to reach around 1.1% in 4Q24, driven by food price recovery and policies aimed at boosting durable goods consumption [2] Summary by Sections CPI Analysis - In the first seven months of 2024, the CPI index rose by 0.2%, and core CPI increased by 0.6% [2] - The food price index in July remained unchanged year-on-year, marking an end to a 12-month deflationary period [2] - Month-on-month, the CPI index grew by 0.5% in July, compared to an average of 0.2% from 2010 to 2019 [2] Factors Influencing CPI - The rainy season affected the supply of fresh vegetables and fruits, leading to a 9.3% month-on-month increase in fresh vegetable prices [2] - Travel prices surged by 9.4% month-on-month in July, indicating a recovery in travel consumption [2] - The downward pressure on CPI was attributed to declining auto prices and weak rent CPI, which fell by 0.3% in July [2] Producer Price Index (PPI) Insights - The Producer Price Index (PPI) growth declined by 0.8% year-on-year and 0.2% month-on-month in July [4] - The report notes that the recovery of PPI growth was milder than expected, with challenges stemming from weak property investment and industrial competition [4] - The PPI growth may face further declines in the coming months due to base effects [4]

Investment Rating - The report maintains an "Outperform" rating for the computer industry and a "Buy" rating for HUARUI PRECISION [12][24]. Core Insights - The domestic AI product traffic has surged, particularly in AI search products, while ChatGPT's monthly traffic has declined year-over-year. The market for AI products is still in an exploratory phase [11][13]. - The new procurement rules from the State-owned Assets Supervision and Administration Commission (SASAC) are expected to boost technological localization and innovation within central state-owned enterprises [11][13]. - In the real estate sector, Shenzhen Public Housing Group's initiative to purchase unsold homes for affordable housing is seen as a model that may influence other major cities like Beijing and Shanghai [18][20]. - The machine tool industry, represented by HUARUI PRECISION, has shown significant earnings recovery, with a projected net profit growth of 23.99% to 33.32% from 2024 to 2026 [33]. Computer Industry Summary - In July, domestic AI product traffic surged, with significant growth in AI search products, while the overall market remains exploratory [11][13]. - The SASAC's new procurement rules are expected to promote technological innovation and localization among central SOEs [11][13]. - Recommended stocks in the AI sector include DAMENG, NINESTAR, and KINGSOFT OFFICE, focusing on technology security and policy-driven sectors [13][15]. Real Estate Industry Summary - Shenzhen's city-wide purchase of unsold market-rate housing is a significant development, with potential replication in other major cities [18][20]. - The recent land auction in Shanghai set a new record for land prices, indicating strong demand from high-quality real estate companies [18][20]. - The CITIC Real Estate Index rose 2.65%, outperforming the broader market, suggesting a stabilization in the real estate sector [20]. Machine Tool Industry Summary - HUARUI PRECISION reported a revenue increase of 14.93% year-over-year, with significant improvements in profitability due to better margins and reduced costs [26][29]. - The company is expanding its mid-to-high-end product offerings and overseas distribution channels, which are expected to drive future growth [30][33]. - The projected net profit for HUARUI PRECISION is expected to reach RMB196 million, RMB250 million, and RMB334 million from 2024 to 2026, indicating strong growth potential [33].

Investment Rating - Initiate at BUY with a target price of HK$21.41, representing an upside of 21.1% from the current price of HK$17.68 [3][14]. Core Insights - Rimag Group is the largest medical imaging service provider in China, leading the third-party medical imaging services market with significant growth potential [1][9]. - The medical imaging service market in China is expected to grow at a CAGR of 13.6%, reaching RMB661.5 billion by 2030, driven by unmet demand for quality services [1][9]. - Rimag's revenue increased at a CAGR of 25.3% from RMB592.0 million in 2021 to RMB928.9 million in 2023, with expectations of continued growth at a CAGR of 23.3% from 2023 to 2026E [1][30]. Summary by Sections Investment Thesis - The third-party medical imaging center market in China has large growth potential due to low imaging equipment per capita, resource imbalance, and high patient demand for quality services [8][9]. - Rimag is positioned to lead this market with a comprehensive suite of services and a strong operational model [9][10]. Company Overview - Rimag was established in 2014 and has become the largest medical imaging group in China, with 97 imaging centers across 17 provinces and over 220 advanced imaging equipment [10][18]. - The company holds 31 licenses for third-party medical imaging centers, accounting for 19% of the total licenses in China [18]. Financial Performance - Rimag's revenue from imaging center services was RMB638.1 million in 2023, accounting for 68.7% of total revenue, with a gross profit margin of 45.1% [40]. - The company achieved an attributable net profit of RMB44.4 million in 2023, with a net profit margin of 4.8% [30][12]. Business Model - Rimag operates a comprehensive medical imaging platform that provides end-to-end services, including imaging center services, imaging solution services, and Rimag Cloud services [24][27]. - The company integrates operational management, equipment configuration, and talent cultivation to enhance service delivery and efficiency [35][36]. Market Outlook - The third-party medical imaging center market in China is projected to reach RMB18.6 billion by 2030, growing at a CAGR of 30.7% from 2023 to 2030 [1][9]. - Favorable government policies and increasing private sector participation are expected to drive market penetration and growth [9][22].

9 August 2024 | 1:44AM HKT _ Hua Hong (1347.HK): 12'' new capacity to release in 1Q25; near-term recovery remains gradual Despite near-term margin challenges due to depressed pricing trend and rising depreciation, we maintain our long-term positive view on Hua Hong given local customers' rising demand on its specialty technology in a wide application across consumer electronics, computing, EV, new energy, and industrial. In recent quarters, management see solid demand for consumer electronics products (CIS ...

Investment Rating - The report maintains a "Buy" rating for Kuaishou Technology (1024.HK) with a revised target price of HK$70, down from HK$80 [2][4]. Core Insights - Kuaishou's growth estimates have been lowered, with 2024E GMV growth revised to 20% year-on-year from 25%, and revenue growth to 10% year-on-year [1][4]. - The company is expected to deliver above-consensus earnings and in-line revenue for 2Q24, driven by strong advertising growth and margin expansion [1][3]. - The report highlights a moderation in advertising revenue growth to 17% year-on-year, down from 22% in 2Q, attributed to softer GMV growth amid a challenging macro environment [3][4]. Summary by Sections Revenue and Profitability - Total revenue for 2024E is projected at RMB 125,348 million, reflecting a 2% decrease from previous estimates [7]. - Non-GAAP net profit for 2Q24 is expected to be RMB 4.2 billion, with a net margin of 14.1% [3][4]. Market Position and Growth - Kuaishou's GMV growth is anticipated to be 20% in 2024, with a significant focus on improving traffic monetization efforts [6][7]. - The company has consistently beaten consensus estimates on net profit by approximately RMB 500 million to 1 billion over the past ten quarters [3][5]. Advertising and E-commerce - Advertising revenue is projected to grow by 22% year-on-year, while e-commerce commission revenue is expected to see a growth of 21% year-on-year [3][4]. - The report notes a shift in the advertising mix, moving away from live streaming, which is expected to enhance margins [1][3]. Valuation Metrics - The report provides various valuation metrics, including a P/E ratio of 22.5 and an EV/EBITDA ratio of 14.3 for Kuaishou [2][4]. - The company's CROCI is noted at 45.9%, indicating strong returns on capital employed [2][4].

8 August 2024 | 5:49PM CEST _ Big Oils Assessing Big Oils cash returns in a lower oil price environment; Screening for resilience Brent spot oil prices are down 5% over the past week, and the 2025 Brent futures curve has fallen below the $75 floor of this year's trading range and our commodity analysts' $75-90 range. While we still believe our $80/bbl oil price forecast for 2025 will withstand macro headwinds, given the consistent OPEC+ support of this oil price level over the past two years, we have attemp ...

Investment Rating - The report indicates a mixed sentiment with specific companies receiving upgrades and downgrades, reflecting a cautious approach towards the market [14]. Core Insights - The report highlights a significant amount of deleveraging across the risk complex, suggesting forced risk transfer among market participants [3]. - There is an expectation of continued economic expansion rather than recession, supported by a recent increase in labor supply and healthy labor market indicators [4]. - The report notes that momentum factors are diverging from consensus secular themes, indicating a shift in market dynamics [5]. Company-Specific Summaries TMT Sector - ARM ADRs upgraded to Outperform with a price target of $130 [9]. - BMBL downgraded to Hold with a price target of $6.50 due to poor growth [9]. - HUBS raised to Sector Weight, indicating positive sentiment despite macro headwinds [9]. Healthcare Sector - CRL downgraded to Neutral with a price target of $191 [10]. - NVRO upgraded to Peerperform, reflecting improved outlook [10]. - MCK lowered FY25 revenue growth guidance, indicating potential challenges ahead [10]. Consumer Sector - KVYO upgraded to Overweight with a price target of $33, reflecting strong performance [11]. - MNST missed expectations and flagged a category slowdown, indicating potential headwinds [11]. - BROS downgraded due to a downturn in growth outlook and lower unit development guidance [11]. Industrials/Mats Sector - ASH upgraded to Neutral with a price target of $89, indicating a more favorable outlook [12]. - WLK rated New Outperform with a price target of $170, suggesting strong potential [12]. - TXT downgraded to Equal-Weight with a price target of $95, reflecting a cautious stance [12].

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Investment Rating - The investment rating for SMIC is Neutral [2][6][8] Core Insights - SMIC is the largest foundry in China, covering technology from 0.35um to 14nm process nodes, with a diverse application range including smartphones and consumer electronics [6] - The company expects a revenue growth of 13% to 15% quarter-over-quarter for Q3 2024, with a gross margin guidance of 18% to 20%, indicating a faster recovery than anticipated [2][6] - Despite positive long-term growth prospects driven by local fabless customers, short-term profit growth is expected to be slow due to industry down-cycle and weak demand from smartphones and consumer electronics, which constitute about 50% of SMIC's revenue [6][7] Revenue and Margin Guidance - Q3 2024 revenue is projected to be between US$2,148 million and US$2,186 million, exceeding previous estimates [2][3] - The gross margin for Q3 2024 is expected to improve to 18% to 20%, compared to 13.9% in Q2 2024, which is higher than previous estimates [2][3] Recent Performance - In Q2 2024, SMIC reported revenues of US$1.9 billion, a 9% increase quarter-over-quarter and a 22% increase year-over-year, slightly above guidance [3][5] - The gross margin for Q2 2024 was 13.9%, significantly higher than the guidance of 9% to 11% and previous estimates [3][5] Financial Metrics - The company’s operating income for Q2 2024 was US$87 million, with a net profit of US$165 million, reflecting a 129% increase quarter-over-quarter [3][5] - Capacity increased to 837.0k wpm by Q2 2024, with utilization rates improving to 85.2% [3][5] Price Target - The 12-month target price for SMIC's H-share is set at HK$21.40, based on a P/E ratio of 26x for 2025 estimates [7][8] - The A-share target price is set at Rmb53.70, reflecting a 273% premium over the H-share target price [7][8]

_ 8 August 2024 | 5:00PM BST | --- | --- | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------| | | | | GS SUSTAIN: Circular Economy Our Circular Economy Ecosyste ...